Self Employment Tax Lawyers in West Pittston

In the U.S., including in West Pittston, Pennsylvania, taxes are levied on employees, which are typically 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.

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

Self-Employment tax obligations in West Pittston, Pennsylvania

If you work as an independent contractor, or operate a sole proprietorship, you are deemed to be "self employed." You are obliged to pay the self-employment tax if your total income from self-employment exceeds per year.

Workers who are employed by someone else enjoy at least one perk that the self-employed do not: their employer matches their Social Security and Medicare contributions, essentially doubling the amount of money that's contributed to these funds on the employee's behalf.

But, the self-employed in West Pittston, Pennsylvania are responsible for making the employer AND employee contributions to those programs, essentially doubling what they would have to pay if they were employed by someone else.

The self-employment tax rate is 15.3% of all self-employment income, assuming your income from self-employment exceeds per year in West Pittston, Pennsylvania. 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 West Pittston, Pennsylvania Tax Attorney Help?

If you are self-employed in West Pittston, it's extremely important for you to be diligent in keeping records of your income and expenses, to ensure that you pay all the self-employment taxes that you owe (and also to make sure you don't over-pay). You may one day need a tax attorney to advise you with a legal issue, and they can help you far more efficiently if you are able to quickly present them with all the relevant information.

Anyone having difficulty with figuring out what they owe in self-employment taxes in West Pittston, Pennsylvania should seek the assistance of a reliable tax attorney. Most tax attorneys also have a good familiarity of accounting, so making this determination probably won't be too hard for them. And on top of that, a skilled tax attorney can give you objective and useful legal advice, which can help prevent more egregious issues from rising in the future.