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What Are My Self-Employed Tax Obligations?

Zuckerman Law, LLC April 19, 2023

Self Employment Tax Written on A Memo StickAccording to the Bureau of Labor Statistics, about 16.2 million people are currently self-employed in the United States as of January 2023. In the United States, individuals who are self-employed, including independent contractors and business owners, are required to file their taxes annually and estimated tax quarterly. In addition, you must pay your self-employment tax. Failure to fulfill your tax obligations can result in fines, penalties, and other potential issues with the IRS. 

At Zuckerman Law, LLC, I'm committed to offering knowledgeable guidance and advocacy to clients in tax law-related matters. As a seasoned tax law attorney, I can enlighten you about the kind of taxes you're required to pay being self-employed. In addition, I can help prepare and file your taxes and ensure that you remain compliant with your tax obligations. My firm proudly serves clients across Fort Lauderdale, Florida, and throughout South Florida, including Miami, Hollywood, Boca Raton, and Sunny Isles. 

Do I Count as "Self-Employed"? 

Self-employment involves working for yourself or running your own business instead of working for a specific employer who pays you a wage. According to the IRS, you may be considered self-employed if any of the following apply to you. 

  • You perform a business or trade as a sole proprietor or an independent contractor. 

  • You are a member of a partnership that performs a business or trade. 

  • You are into business to benefit yourself (including a gig worker or a part-time business owner). 

If you are self-employed in the United States, you have a duty to pay your taxes when due. An experienced attorney can enlighten you about the kind of taxes you need to pay and guide you through the procedures involved. 

What Kind of Taxes Do I Need to Pay? 

Self-employed are required to pay the following kind of taxes: 

Self-Employment Tax 

The self-employment tax can be described as a Social Security and Medicare tax that is designed for individuals working for themselves. If your net profit or net earnings from your business or self-employment is $400 or more, you are required to file an income tax return and pay your self-employment tax. The self-employment tax rate is 15.3%. 

Quarterly Payments 

Quarterly payments are estimated tax payments that individuals who are self-employed will make to the tax authorities throughout the year. Rather than making a single payment in a year, you can pay your income taxes four times a year. You can file your quarterly taxes using Form 1040-ES. 

Annual Return 

In addition, individuals who are self-employed must also file their annual tax returns. This allows you to report your income, expenses, and losses from the business throughout the tax year. You can file your annual tax return using Schedule C. 

Other Relevant Taxes for Self-Employed People 

There are some other taxes for self-employed people depending on the state and county in which they're operating their business. Here are some Florida taxes for self-employed people: 

Florida State Taxes  

There is no self-employment tax in Florida. Regardless, you are still required to pay the federal self-employment tax of 15.3%. This will include 12.4% for Social Security and 2.9% for Medicare. 

Sales and Use Tax 

This is a tax paid on the goods and services you offer in the state. Florida's sales tax rate is 6%. Local sales taxes often range between 0% and 2%. You are required to pay sales taxes monthly to the Florida Department of Revenue. 

Excise Tax 

If your business involves heavily-regulated products, such as alcohol, fuel, cigarettes, cell phones, or other products that require special permits, you must charge and pay excise taxes at the required rates. 

Florida Corporate Income Tax 

Also, corporations in Florida are required to pay taxes on profits generated because they exist and trade as a business entity. Florida's corporate income tax rate is 5.5%. 

Possibility of Business Deduction 

When filing your taxes, you may qualify for some business deductions. These include professional and legal fees that are directly related and necessary to keep running your business. Examples of business deductions include business meals, insurance, bank fees, vehicle use, moving expenses, utilities, and depreciation. 

Possibility of Home Office Deduction 

If you use a section in your home to run your business or as your office, you may be eligible to deduct certain expenses for using your home for your business. 

Personal & Professional Tax Guidance 

Preparing and filing federal, state, or local taxes and other taxes often involves a lot of complexities. Besides fulfilling your tax obligations, you also need to be very accurate with your tax filings to avoid possible issues with the IRS. Therefore, when filing your taxes while self-employed, consulting with a practiced tax attorney is crucial for detailed guidance and to navigate key decisions. 

At Zuckerman Law, LLC, I have the knowledge and experience to assist and guide self-employed people and sole proprietors through the complex procedures involved in filing taxes. As your attorney, I can enlighten you about your tax obligations and determine your eligible deductions. Also, I can help prepare and file an accurate income tax return to avoid a tax audit

Contact me at Zuckerman Law, LLC today to schedule an initial consultation with a trusted tax lawyer. I can offer you the experienced legal counsel and dedicated advocacy you need in your tax matters. My firm proudly serves clients across Fort Lauderdale, Florida, and throughout South Florida, including Miami, Hollywood, Boca Raton, and Sunny Isles.