Self Employment Tax Lawyers in Okmulgee
In the U.S., including in Okmulgee, Oklahoma, taxes are enforced on employees, which are usually deducted from their paychecks. The ones that most people are acquainted with are the Medicare and Social Security taxes. The idea is that workers pay into these programs during their entire working lives, and then enjoy the benefits they provide once they retire.
Individuals who are self-employed are still liable for these taxes, and are responsible for figuring out how much they owe.
Most often, employers handle all of these calculations. With regular salaried and hourly employees, this is an easy procedure, and any decent payroll computer software can do it automatically. But, if you work for yourself, it is your responsibility to figure out exactly what you owe.
Self-Employment tax obligations in Okmulgee, Oklahoma
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.
People who are not self-employed, and work for another person or company, have their contributions to Medicare and Social Security matched by their employers. This means that these programs are obtaining, on your behalf, twice as much money as what's deducted for your paycheck, with your employer covering the other half.
But, if you are self-employed in Okmulgee, Oklahoma, you are liable to pay both the employee and employer share of the employment tax. Effectively, this means that the employment tax for self-employed individuals is double what it would be for regular employees.
The self-employment tax rate is 15.3% of all self-employment income, assuming your income from self-employment exceeds per year in Okmulgee, Oklahoma. 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 Okmulgee, Oklahoma Tax Attorney Help?
Self-employed individuals in Okmulgee must ensure that they keep good, thorough financial records. This makes it much easier to determine what you owe, and, if you need a tax attorney, it makes it easier for them to help you with your legal tax issues.
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 Okmulgee, Oklahoma 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.