Self Employment Tax Lawyers in Marion

In the U.S., Marion, Virginia included, almost everyone who is employed during most of their adult life is suitable 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 responsible for these taxes, and are responsible for figuring out how much they owe.

Typically, it's the employer who does all the calculations, deciding 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 confirm that your figures are accurate.

Self-Employment tax obligations in Marion, Virginia

If you derive even a small percentage of your income from running your own business, or working as an independent contractor, you have to pay the "self-employment tax." This tax applies to everybody who makes more than per year from self-employment.

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.

However, self-employed workers in Marion, Virginia must make both the employee and employer contributions. Thus, this means that the Medicare and Social Security tax liabilities apply doubly to the self-employed.

Self-employed workers in Marion, Virginia pay a self-employment tax rate of 15.3% of their income that's derived from self-employment. But, half of whatever they end up paying in self-employment tax is deductible from income tax. This essentially creates a tax deduction of nearly 8% of one's income, requiring you to only pay taxes on 92% of what you earn. Further tax deductions may lower that number further. When this deduction is taken into account, the self-employment tax rate is effectively 14%, as opposed to over 15%.

Can a Marion, Virginia Tax Attorney Help?

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

Thus, if you have some trouble figuring out what you owe in self-employment taxes, for whatever reason, chances are good that a knowledgeable tax attorney in Marion, Virginia can advise you with much trouble, and can provide you with good legal and financial advice, which can help you head off much more significant legal and financial issues.