Self Employment Tax Lawyers in Stowe
In the U.S., Stowe, Vermont 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.
Most commonly, employers handle all of these calculations. With regular salaried and hourly employees, this is an easy process, and any decent payroll computer software can do it automatically. However, if you work for yourself, it is your responsibility to figure out clearly what you owe.
Self-Employment tax obligations in Stowe, Vermont
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 everyone who makes more than per year from self-employment.
For people who are employed by another person or company, the employer normally matches the employee's contributions to Medicare and Social Security. This basically means that, when you look at your Medicare and Social Security tax statements on your paychecks, you can know that those programs are actually getting double what's shown there - with your employer covering the other half.
But, if you are a self-employed business owner in Stowe, Vermont, you are accountable 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 Stowe, Vermont. 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 Stowe, Vermont Tax Attorney Help?
If you are self-employed in Stowe, 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 assist you with a legal issue, and they can help you far more effectively if you are able to quickly provide them with all the relevant information.
If you have any difficulty calculating your self-employment tax liability, an accomplished Stowe, Vermont tax attorney would probably have very little trouble helping you figure it out. A brilliant lawyer can also give you practical legal advice, which can help you avoid more severe tax law issues in the future, by dealing with them before they become problematic.