Self Employment Tax Lawyers in Atkinson

In Atkinson, New Hampshire, a few different taxes are levied on employees, and subtracted from their gross pay during each pay period. The examples that most people are acquainted with are the taxes imposed to fund Medicare and Social Security, which get their funding mostly from these relatively small pay deductions.

It's essential to note that if you are self-employed, you're still responsible for those taxes, and it's your responsibility to figure out what you owe.

In most cases, employers make all the necessary calculations to determine how much needs to be deducted from an employee's check to pay these taxes. It's typically very simple, and any decent payroll software can automate this process. But the self-employed are liable for figuring this out for themselves, or hiring an accountant to do it.

Self-Employment tax obligations in Atkinson, New Hampshire

If you own a sole-proprietorship, or work mainly as an independent contractor, you need to pay the "self-employment tax" if you derive any substantial amount of income from self-employment. You must pay these taxes if your income from self-employment is more than annually.

For usual employees, Social Security and Medicare payments are made in equal parts by the employee and employer. This essentially means that every employee's contribution to his or her future Medicare and Social Security benefits is matched by the employer.

But, the self-employed in Atkinson, New Hampshire are responsible for making the employer AND employee contributions to those programs, essentially doubling what they would have to pay if they were employed by someone else.

The self-employment tax rate is 15.3% of all self-employment income, assuming your income from self-employment exceeds per year in Atkinson, New Hampshire. But half of your self-employment tax liability can be deducted from your income tax. This results in a slightly reduced income tax bill, which partially offsets this additional tax burden. It essentially means that the self-employment tax only applies to 92% of your income, as opposed to all of it. This means that your effective self-employment tax rate is about 14%, as opposed to over 15%.

Can a Atkinson, New Hampshire Tax Attorney Help?

If you are self-employed in Atkinson, it's extremely important for you to be diligent in keeping records of your income and expenses, to ensure that you pay all the self-employment taxes that you owe (and also to make sure you don't over-pay). You may one day need a tax attorney to advise you with a legal issue, and they can help you far more efficiently if you are able to quickly present them with all the relevant information.

If you have any difficulty calculating your self-employment tax liability, an efficient Atkinson, New Hampshire tax attorney would likely have very little trouble assisting you figure it out. A reliable lawyer can also give you practical legal advice, which can help you avoid more egregious tax law issues in the future, by dealing with them before they become problematic.