Self Employment Tax Lawyers in Chesterbrook

In the U.S., including in Chesterbrook, Pennsylvania, taxes are placed on employees, which are normally deducted from their paychecks. The ones that most people are familiar 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 accountable for these taxes, and are responsible for figuring out how much they 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 normally very simple, and any decent payroll software can automate this process. But the self-employed are accountable for figuring this out for themselves, or hiring an accountant to do it.

Self-Employment tax obligations in Chesterbrook, Pennsylvania

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

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.

However, the self-employed in Chesterbrook, Pennsylvania 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.

Currently, the self-employment tax rate in the United States is 15.30% of all income earned from self-employment in Chesterbrook, Pennsylvania. However, 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 Chesterbrook, Pennsylvania Tax Attorney Help?

If you work for yourself in Chesterbrook, 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.

If you have any difficulty calculating your self-employment tax liability, an accomplished Chesterbrook, Pennsylvania tax attorney would probably have very little trouble helping you figure it out. A brilliant lawyer can also give you practical legal advice, which can help you avoid more severe tax law issues in the future, by dealing with them before they become problematic.