Self Employment Tax Lawyers in Mission

In the U.S., including in Mission, Texas, taxes are imposed on employees, which are usually 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.

But what if you're self-employed? You're still required to pay these taxes, since you will also be eligible for those retirement programs. It's also your responsibility to determine what your tax liability is.

Usually, it's the employer who does all the calculations, determining what deductions need to be made from a worker's paycheck to cover his or her tax liability. But if you are your own boss, you have to do this, and ensure that your figures are accurate.

Self-Employment tax obligations in Mission, Texas

If you work as an independent contractor, or operate a sole proprietorship, you are deemed to be "self employed." You are obligated 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, effectively doubling the amount of money that's contributed to these funds on the employee's behalf.

But, if you are a self-employed business owner in Mission, Texas, you are responsible for both the employee and employer contributions to Medicare and Social Security. This basically 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 Mission, Texas. 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 Mission, Texas Tax Attorney Help?

If you work for yourself in Mission, 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.

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