Self Employment Tax Lawyers in South Salt Lake
In the U.S., including in South Salt Lake, Utah, taxes are enforced on employees, which are normally 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.
But what if you're self-employed? You're still obligated 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.
Most commonly, 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 clearly what you owe.
Self-Employment tax obligations in South Salt Lake, Utah
If you mainly work as an independent contractor, or are the owner of a sole proprietorship, you have to pay what's usually referred to as the "self-employment tax," if your annual income from self-employment is over .
Employees in a regular employer/employee relationship do enjoy one considerable 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 basically doubles your contribution to these programs, without doubling their financial burden on you.
However, self-employed workers in South Salt Lake, Utah must make both the employee and employer contributions. Therefore, this means that the Medicare and Social Security tax liabilities apply doubly to the self-employed.
Currently, the self-employment tax rate in the United States is 15.30% of all income earned from self-employment in South Salt Lake, Utah. 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 South Salt Lake, Utah Tax Attorney Help?
If you're self-employed in South Salt Lake, you need to keep complete records of all your income and expenses from the operation of your business. This will make it much easier for you to calculate your taxes when they come due, and it will make it simpler for a tax attorney to give you good, useful advice, should you eventually need it.
Therefore, if you have some trouble figuring out what you owe in self-employment taxes, for whatever reason, chances are good that a reliable tax attorney in South Salt Lake, Utah can assist you with much trouble, and can provide you with good legal and financial advice, which can help you head off much more severe legal and financial issues.