Self Employment Tax Lawyers in Dumfries

In the U.S., Dumfries, Virginia included, almost everyone who is employed during most of their adult life is qualified for Social Security and Medicare benefits when they retire. These programs are supported by taxes deducted from the paychecks of most employees.

Individuals who are self-employed are still accountable for these taxes, and are responsible for figuring out how much they owe.

Normally, 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 Dumfries, Virginia

If you primarily work as an independent contractor, or are the owner of a sole proprietorship, you have to pay what's typically referred to as the "self-employment tax," if your annual income from self-employment is over .

For normal employees, Social Security and Medicare payments are made in equal parts by the employee and employer. This basically means that every employee's contribution to his or her future Medicare and Social Security benefits is matched by the employer.

However, the self-employed in Dumfries, Virginia 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.

The self-employment tax rate is 15.3% of all self-employment income, assuming your income from self-employment exceeds per year in Dumfries, Virginia. But half of your self-employment tax liability can be deducted from your income tax. This results in a slightly lower 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 Dumfries, Virginia Tax Attorney Help?

If you are self-employed in Dumfries, it's necessary that you keep good records of your income and expenses, because a tax attorney will only be able to assist you to the extent that you help yourself.

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 Dumfries, Virginia 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.