Self Employment Tax Lawyers in La Crosse
In the U.S., La Crosse, 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 crucial 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 La Crosse, Wisconsin
If you primarily work as an independent contractor, or are the owner of a sole proprietorship, you have to pay what's typically 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.
However, if you are self-employed in La Crosse, Wisconsin, you are responsible to pay both the employee and employer share of the employment tax. Essentially, this means that the employment tax for self-employed individuals is double what it would be for regular employees.
Self-employed workers in La Crosse, Wisconsin pay a self-employment tax rate of 15.3% of their income that's derived from self-employment. However, 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. Additional 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 La Crosse, Wisconsin Tax Attorney Help?
Self-employed individuals in La Crosse must ensure that they keep good, accurate financial records. This makes it much easier to determine what you owe, and, if you need a tax attorney, it makes it easier for them to advise you with your legal tax concerns.
That said, if you are having trouble figuring out precisely how much self-employment tax you owe in La Crosse, 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 obligation, a good tax attorney can give you the best possible chance of getting a favorable result.