Self Employment Tax Lawyers in Marshfield

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

It's essential to note that if you are self-employed, you're still liable for those taxes, and it's your responsibility to figure out what you owe.

Typically, the employer makes all the necessary calculations and deductions from a person's paycheck. If you are self-employed, however, you are required to make this determination, and to ensure that it's accurate.

Self-Employment tax obligations in Marshfield, Wisconsin

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

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, the self-employed in Marshfield, Wisconsin are responsible for making the employer AND employee contributions to those programs, effectively doubling what they would have to pay if they were employed by someone else.

Self-employed workers in Marshfield, Wisconsin 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 effectively 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 Marshfield, Wisconsin Tax Attorney Help?

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

So, if you have some trouble figuring out what you owe in self-employment taxes, for whatever reason, chances are good that a qualified tax attorney in Marshfield, Wisconsin can help you with much trouble, and can provide you with good legal and financial advice, which can help you head off much more serious legal and financial issues.