Self Employment Tax Lawyers in Mayville
In the U.S., Mayville, Wisconsin 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.
It's essential to note that if you are self-employed, you're still responsible for those taxes, and it's your responsibility to figure out what you owe.
Normally, 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 Mayville, 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, essentially doubling the amount of money that's contributed to these funds on the employee's behalf.
But, the self-employed in Mayville, Wisconsin are responsible for making the employer AND employee contributions to those programs, essentially doubling what they would have to pay if they were employed by someone else.
Self-employed workers in Mayville, 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 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 Mayville, Wisconsin Tax Attorney Help?
If you are self-employed in Mayville, 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 advise you with a legal issue, and they can help you far more efficiently if you are able to quickly present them with all the relevant information.
That said, if you are encountering trouble figuring out precisely how much self-employment tax you owe in Mayville, Wisconsin, a competent tax attorney shouldn't have any trouble helping you on that front. Likewise, if you end up in a dispute with the government over your self-employment tax requirement, a good tax attorney can give you the best possible chance of getting a favorable result.