Is there a self employment tax in NJ?

Asked almost 2 years ago - Paterson, NJ

if someone is self employed in NJ, does he have to pay a self employment tax, and does he have to pay disability and unemployment tax on his income?

Attorney answers (4)

  1. Michael T Millar

    Pro

    Contributor Level 19

    4

    Lawyers agree

    Answered . The "self employment tax" is federal - it is for social security and medicare. For 2012, the self employment tax is 13.3 per cent of your gross income.

    All S Corps and LLCs must maintain workers comp insurance (it is a crime not to have it)

    A sole proprietorship that has employees other than the owner must also carry workers comp.

    You would not pay unemployment - but neither would you be eligible for unemployment benefits.

    You may want to look into the NJ Self Employment Assistance ("SEA") program which helps people start new businesses in the state.

    This answer is for general education purposes only. It neither creates an attorney-client relationship nor... more
  2. Christopher Michael Larson

    Pro

    Contributor Level 19

    3

    Lawyers agree

    Answered . As the previous attorneys point out, you have to pay self-employment taxes no matter where you are in the US. Most states do not tax these sources but levy other employment related taxes which can be directly correlated with payroll, etc.

    Christopher Larson
    Insight Law

  3. Thomas Walton Dallas

    Contributor Level 7

    3

    Lawyers agree

    Answered . Self employment tax is a federal tax and applies to all states including Jersey.

  4. Curtis Lamar Harrington Jr

    Contributor Level 20

    2

    Lawyers agree

    Answered . self employment tax

    Self employment tax is basically a sole proprietor's self+employer's contribution to social security/medicare.

    disability
    This can be covered with an elective insurance policy.

    unemployment tax

    This is a state tax to be paid on a taxpayer's workers. If a sole proprietor usually not, an LLC is disregarded for a single owner. But if the self employed has a "c" corp and pays himself an active salary, he will likely have to have the corp make payments to him as if he were any other regular employee.

    Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal... more

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