2 min read
What the self-employed need to know about employment taxes
In addition to income tax, you must pay Social Security and Medicare taxes on earned income, such as salary and self-employment income. The 12.4%...
As the year-end approaches, it’s a good time to start thinking about some additional taxes that may be owed and moves that will help lower your tax bill. Higher income earners need to be aware of the 3.8% tax on certain unearned income and the additional 0.9% Medicare tax. The 3.8% tax can begin to come into play when income exceeds $125,000. The 0.9% Medicare tax can apply when wages and self-employment income exceed $125,000. When a married couples total wages exceed $250,000, this additional Medicare tax will apply. Other actions to consider include:
- Realize losses on stock while substantially preserving your investment position. There are several ways this can be done and we can help with planning.
- Postpone income until 2016 and accelerate deduction into 2015.
- Make traditional or Roth IRA contributions.
- Possibly defer a bonus into 2016.
- Make any eligible contributions to your health savings account (HSA).
Please be sure to give our office a call at 1-866-287-9604, and we will be glad to discuss these and other strategies to try to lower your income taxes as much as possible.
Posted by Chris Hatcher, CPA/CFF, CFE, CVA, CGMA
Learn how the new tax laws affect you
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