The freedom of being their own boss is a reality for the 15 million self-employed people in the U.S., according to 2015 data from the Bureau of Labor Statistics. What comes with that work structure is the impact on filing taxes. ZP Tax, Inc. in Silver Spring, MD, specializes in providing professional tax help to this unique group.
You are generally considered self-employed if you own your business as a sole proprietor or as part of a limited liability company (LLC). This distinction can determine how you file your federal and state income tax returns each year.
One way being self-employed can affect your taxes is applying the current 15.3% tax rate for this filing category. The rate consists of 2.9% for Medicare costs and 12.4% for Social Security. The latter percentage is typically capped at a certain amount, which can change from year to year. Ask the tax help team at ZP Tax, Inc. how the rate is used to calculate your taxes.
Another way income returns are impacted by self-employment is how taxes are used on the IRS Schedule SE form. Tax filers use the form to determine the amount of taxes they are required to pay. Profits or net earnings are one of the calculations used to show how much the filer owes come tax season.
The self-employed also use calculations set forth by the Self-Employed Contributions Act to figure their taxes. After the filer’s taxable income is calculated along with Schedule SE figures, half of the amount is then deducted from the person’s taxable income. The remaining amount of the self-employment tax is finally included in what is owed. A bit confusing? That’s why ZP Tax, Inc. offers expert tax help for all types of business structures!
One more way self-employed individuals file their taxes differently is paying on a quarterly schedule. While most tax filers complete pay once a year if they owe, the self-employed tend to pay their taxes every three months so they don’t owe a huge bill on April 15.
If you’re self-employed, you won’t have to stress over filing your own taxes! As Silver Spring’s leading tax preparation firm, ZP Tax, Inc. has the professional team and experience to walk you through your income return filings.
Get prepared for next year’s tax season today by calling the tax help specialists at ZP Tax, Inc. at (301) 587-4829. Please visit the website for additional information on a range of services, including sole proprietorship taxes and LLC tax prep.