Self Employment Tax Lawyers in Sandown

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

It's important to note that if you are self-employed, you're still liable 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 usually very simple, and any decent payroll software can automate this process. But the self-employed are responsible for figuring this out for themselves, or hiring an accountant to do it.

Self-Employment tax obligations in Sandown, New Hampshire

If you primarily work as an independent contractor, or are the owner of a sole proprietorship, you have to pay what's commonly referred to as the "self-employment tax," if your annual income from self-employment is over .

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

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

The total self-employment tax (note that this is completely distinct from the income tax) is set at 15.3%, if your income from self-employment in Sandown, New Hampshire exceeds . However, half of this tax is deducted from your income, for income tax purposes. So, this means that, at most, the self-employed only have to pay income on 92% of their total income, and that amount may be lowered with additional deductions for which you may be eligible. This means that, effectively, the self-employment tax rate is only 14%, as opposed to 15.3%

Can a Sandown, New Hampshire Tax Attorney Help?

If you are self-employed in Sandown, it's essential that you keep good records of your income and expenses, because a tax attorney will only be able to help you to the extent that you help yourself.

With all that said, if you are having difficulty determining just how much money you owe in Medicare and Social Security taxes from self-employment in Sandown, New Hampshire, and keep good financial records, it should be relatively easy for a decent tax attorney to help you. And, if you end up facing a more serious legal issue over your self-employment tax liability, a tax attorney may prove to be invaluable.