Self Employment Tax Lawyers in Munroe Falls

In Munroe Falls, Ohio, a few different taxes are enforced 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 required 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.

Usually, 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 handle 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 Munroe Falls, Ohio

If you are an independent contractor, or run a sole proprietorship (a company which you own, and which is not incorporated as a separate legal entity), you must pay the so-called "self-employment tax" if your income from self-employment is greater than per year.

Employees in a regular employer/employee relationship do enjoy one significant perk that the self-employed do not: their Social Security and Medicare contributions are matched by their employers. So, if you pay in Social Security and Medicare taxes with every paycheck, your employer has to match that. This effectively doubles your contribution to these programs, without doubling their financial burden on you.

However, if you are a self-employed business owner in Munroe Falls, Ohio, you are responsible for both the employee and employer contributions to Medicare and Social Security. This essentially doubles your self-employment tax rate.

Currently, the self-employment tax rate in the United States is 15.30% of all income earned from self-employment in Munroe Falls, Ohio. Nonetheless, half of your hypothetical self-employment tax liability can be deducted from your income. This means that you only pay self-employment tax on about 92% of your income, which creates an effective self-employment tax rate of just over 14%.

Can a Munroe Falls, Ohio Tax Attorney Help?

If you work for yourself in Munroe Falls, you have to stay on top of your self-employment taxes, to avoid facing serious legal and financial issues later on. This means you need to keep excellent 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.

So, if you have some trouble figuring out what you owe in self-employment taxes, for whatever reason, chances are good that a qualified tax attorney in Munroe Falls, Ohio can help you with much trouble, and can provide you with good legal and financial advice, which can help you head off much more serious legal and financial issues.