Within the last few months we have received several questions regarding the changes in the payroll tax obligations and payroll taxes in general. Below you will find a table identifying and explaining the fundamentals of payroll taxes.
Minnesota Self-Employment Tax Attorney
If you are self-employed, it is important that you understand self-employment tax law to make sure that you are paying the proper taxes and so that problems do not arise if you are audited.
Self-employment tax exists because individuals that are self-employed according to federal standards are potentially taking in profit but are not being taxed by a business, so they are responsible for personally paying tax on their profits. You must file an income tax return if your net earnings from self-employment are $400 or more. You are also responsible for paying quarterly taxes which are estimated tax that are used to pay Social Security and Medicare taxes and income tax since there is not an employer withholding these.
Overall, if you are self-employed and you are at all confused about what taxes you should be paying, you should contact a professional immediately to ensure that you not held responsible in the future.