Self Employment Tax Lawyers in Racine County

In the U.S., Racine County, 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 important 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 Racine County, Wisconsin

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.

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, self-employed workers in Racine County, Wisconsin must make both the employee and employer contributions. So, this means that the Medicare and Social Security tax liabilities apply doubly to the self-employed.

In Racine County, Wisconsin, self-employed business owners pay a self-employment tax rate of 15.3%. This is, of course, separate from, and additional to, whatever they pay in income tax. In an effort to partially offset this additional tax burden, half of what one pays in self-employment taxes can be deducted from their income when filing their income taxes. This means that the self employed pay income taxes on, at most, 92% of their income. And it's probably less, thanks to all the other deductions they might qualify for. This deduction lowers the effective self-employment tax rate to 14%, rather than the "official" rate of over 15%.

Can a Racine County, Wisconsin Tax Attorney Help?

If you are self-employed in Racine County, 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.

If you have any difficulty calculating your self-employment tax liability, an experienced Racine County, Wisconsin tax attorney would probably have very little trouble helping you figure it out. A good lawyer can also give you practical legal advice, which can help you avoid more serious tax law issues in the future, by dealing with them before they become problematic.