Landwehr Financial Solutions is a highly experienced provider of accounting and tax solutions in St. Cloud MN. By taking a holistic approach, we are able to benefit individuals and small businesses with superior service and individualized education. If you are a business in the St. Cloud MN area, Landwehr Financial Solutions should be your first call for all your tax preparation needs.
What Is Self Employment Tax?
When you are employed by a company, you will notice that there are deductions listed on your paystub for Social Security and Medicare taxes. However, when you own your own business, those deductions don’t just simply appear. Self-employment taxes take the place of those deductions. Instead of those payments coming from each paycheck, those who are self-employed calculate what they must pay in to the government in conjunction with their annual federal income tax return.
What Does It Mean For Me?
Tax laws for self-employment tax are complicated. There are numerous factors that affect how self-employment tax will affect you. First, it is important to know what type of self-employment status you fall under. Also, you need to know the laws regarding your role in that entity. It is also important to remember that detailed records should be kept to determine what is eligible as income, what expenses can be deducted, and other important considerations. You need to use the correct forms for your situation. Furthermore, you need to navigate both federal statutes, as well as those by the State of Minnesota. For many, the time and effort needed to successfully manage this becomes overwhelming.
How Is My Self-Employment Tax Calculated?
To the IRS, the self-employed individual is considered both an employer and an employee. To compensate, the tax rate is calculated at twice the amount of employed individuals. While that sounds pretty negative for the self-employed, the good news is that your tax responsibility is not calculated on your gross wages, as it is for the employed. Instead, it is based on your net earnings. That means that your business expenses are deducted before calculating your tax. This makes it exceptionally important that proper tracking of your income and expenses throughout the year are carefully recorded.
Why Choose Landwehr Financial Solutions?
A professional and experienced tax preparer like Landwehr Financial Solutions can manage your self-employment taxes to ensure that they are done correctly and any eligible deductions are found. We are dedicated to assisting small businesses in the greater St. Cloud MN area and our approach to providing our services ensures that we will fully understand your specific situation and take care of the details so you are free to focus on what you do best. While small businesses are concerned about the cost a professional tax preparer charges deciding to attempt the process alone can be disastrous. Our charges are reasonable and the investment often will pay for itself by having a properly prepared return.
Protect your company and free yourself from the confusing and complicated world of self-employment tax. Contact us today to learn more about our services, and experience first-hand the level of care we give to all our clients in the St. Cloud, MN area, not only at tax time, but throughout the entire year. We are happy to discuss your tax needs, as well as any other financial services you require.