Self Employment Tax Lawyers in Gahanna
In Gahanna, Ohio, 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.
But what if you're self-employed? You're still obligated to pay these taxes, since you will also be qualified for those retirement programs. It's also your responsibility to determine what your tax liability is.
Normally, it's the employer who makes all these calculations, and the employee doesn't have to think about it. Most larger employers have payroll departments to take these matters, making it pretty simple for them. But, if you are self-employed, it's up to you to accurately determine what you have to pay in self-employment taxes
Self-Employment tax obligations in Gahanna, Ohio
If you work as an independent contractor, or operate a sole proprietorship, you are deemed to be "self employed." You are required to pay the self-employment tax if your total income from self-employment exceeds per year.
For people who are employed by another person or company, the employer normally matches the employee's contributions to Medicare and Social Security. This basically means that, when you look at your Medicare and Social Security tax statements on your paychecks, you can know that those programs are actually getting double what's shown there - with your employer covering the other half.
But, the self-employed in Gahanna, Ohio are responsible for making the employer AND employee contributions to those programs, basically doubling what they would have to pay if they were employed by someone else.
The total self-employment tax (note that this is totally distinct from the income tax) is set at 15.3%, if your income from self-employment in Gahanna, Ohio exceeds . But, half of this tax is deducted from your income, for income tax purposes. Therefore, 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 further deductions for which you may be eligible. This means that, basically, the self-employment tax rate is only 14%, as opposed to 15.3%
Can a Gahanna, Ohio Tax Attorney Help?
If you work for yourself in Gahanna, you have to stay on top of your self-employment taxes, to avoid facing severe legal and financial issues later on. This means you need to keep superb records of all your income and expenses, in case you need to seek the advice of a tax attorney: the more information you can provide your lawyer, the better he or she can help you.
Anyone having difficulty with figuring out what they owe in self-employment taxes in Gahanna, Ohio should seek the help of a seasoned tax attorney. Most tax attorneys also have a good understanding of accounting, so making this determination probably won't be too hard for them. And on top of that, a qualified tax attorney can give you objective and useful legal advice, which can help prevent more egregious issues from forming in the future.