Frequently Asked Questions About Accounting Services

Self-employment taxes include contributions to Social Security and Medicare. Typically, employees and employers split the Social Security tax of 6.2% each up to an annual earnings cap, which adjusts yearly based on wage trends. Medicare tax, however, is 1.45% on all earnings without a cap, shared equally by employees and employers. If you're self-employed, you'll cover the full 12.4% for Social Security and 2.9% for Medicare. The good news? You can deduct the employer-equivalent portion of these taxes. Additionally, an extra 0.9% Medicare tax applies to income exceeding $200,000 for single filers, $250,000 for joint filers, and $125,000 for those married but filing separately. Use an online tax estimator to calculate your exact self-employment tax.

The tax treatment of interest payments depends on the type of interest involved. Some interest may qualify as tax-deductible, which can reduce your overall tax bill. To determine how much of the interest you've paid might be deductible and how it could impact your taxes, try using an interest tax calculator or consult a tax professional for personalized advice.

Launching a new business requires careful financial planning. You'll need to account for both one-time startup expenses and recurring monthly costs. Additionally, it's wise to maintain a reserve of working capital to cover your initial months until revenue starts flowing in consistently. Creating a comprehensive budget can help ensure you're fully prepared for your new venture.

When financing closing costs as part of your mortgage, your monthly payments will typically be higher compared to paying those costs upfront. Lenders often use an annual percentage rate (APR) calculation to help borrowers compare loans, which considers both the interest rate and associated fees, including closing costs.

Mortgage interest is often deductible for those who itemize their tax returns. This deduction can lead to significant tax savings. To find out how much you might save with your mortgage, use a tax savings calculator or consult with a tax professional. Always verify the deductibility of interest with your tax advisor.