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  • Family Employee Under 15 [Ask The Experts Q & A]
    Payment Details Expert Questions Email Subscriptions Membership Directory Tax Blog Your resource for small business tax advice Family Employee Under 15 Ask The Experts Q A by User Not Found Nov 07 2011 Q I have following questions regarding a family employee child who is under 15 yrs What s the best method of payment direct deposit payroll or checks or cash Can we claim him as DEPENDENT for tax purposes if the annual income paid is under the limit 4 750 applicable for year 2011 For our LLC we have been filing tax returns as a sole proprietor along with individual tax returns Do we have to file additional form for child income A The new employee your child should be treated basically the same as any other non related employee even though there are certainly some differences in how the wages are taxed Whether the employee wishes to be compensated via a direct deposit via a paper payroll check or via cash will not change the overall tax implications nor any of the withholding requirements So that decision is really one of convenience and one of choice between the employee and the employer From the company standpoint paying cash as payroll would be somewhat unusual and I would prefer having all payroll run through the company s bank account via a check or a direct deposit debit to the account But that is a record keeping parameter and does not change any tax implication You can pay them any way you like but I would recommend against having any payroll transactions complete with cash The wages that you pay to any employee are required to be reported on periodic payroll tax returns Even if the only employee you have is your child you will still be required to

    Original URL path: http://selfemployed.nase.org/business-help/get-help/tax/tax-blog/self-made/2011/11/07/Family_Employee_Under_15_Ask_The_Experts_Q_A (2016-02-14)
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  • Small Business Jobs Act Of 2010 Vs. HRA 105 [Ask The Experts Q&A]
    Calculator Helpful Links ASBDC Member Directory Search My NASE About Me Account Benefits Optional Benefits Payment Details Expert Questions Email Subscriptions Membership Directory Tax Blog Your resource for small business tax advice Small Business Jobs Act Of 2010 Vs HRA 105 Ask The Experts Q A by User Not Found Oct 20 2011 Q Today I read NASE President Kristie Arslan s testimony to the Senate Committee on Small Business Entrepreneurship regarding extending the Small Business Jobs Act of 2010 I am curious to know what the difference is between the Small Jobs Act of 2010 and the HRA 105 benefit I do not fully understand the Act but I do have a pretty good grasp on the HRA 105 and to me they sound very similar A The Small Business Job Act of 2010 was a comprehensive act that affected many more areas than just health care costs but I assume you are interested in how the bill s provisions affect the use of an HRA 105 One key provision of the bill was the expansion of the Self Employed Health Insurance Deduction Before this bill the Self Employed Health Insurance Deduction was only available on page one of your form 1040 so that the premiums were only useful in reducing taxable income for federal income tax but did nothing to reduce taxable earnings for Self Employment Tax The Small Business Jobs Act extended the deduction to Self Employment Tax as well but only for the 2010 tax year One of the benefits of an HRA plan does something similar to that particular part of the Small Business Job Act in that having an HRA 105 plan in effect makes those premiums deductible for SE tax purposes by moving that deduction from page one of your 1040 over to

    Original URL path: http://selfemployed.nase.org/business-help/get-help/tax/tax-blog/self-made/2011/10/20/Small_Business_Jobs_Act_Of_2010_Vs_HRA_105_Ask_The_Experts_Q_A (2016-02-14)
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  • How Do I Account For Gratuities In My Payroll? [Ask The Experts Q&A]
    Not Found Sep 13 2011 Q We own a small restaurant and I am unsure how to account for tips which the staff declares in the Point of Sales System at the end of the day How do I deal with the tips per pay period For example we have two GMs bartenders who each make 250 a week no hourly I have figured out how to deal with payroll taxes on this set amount but how do I account for the tips that they get on credit cards A Your question is a very good one and one that I personally always thought was cumbersome The first key point is that tips are taxable income to the employee and should be included on their W 2 at the end of the year Secondly the tips are subject to federal income tax withholding and are also subject to FICA Medicare and FUTA tax withholding That is the cumbersome part since much of the tip income is in cash and you may never know about it So the first key point is that the employee is required to report to the company the tips that they receive The tips that they report are included on IRS Form 4070 Employee s Report of Tips to Employer It can be a different form if that is easier the IRS just gives us this form so that we don t have to come up with one on our own The employee is supposed to provide that information to you by the 10th of the following month You will then use that report to complete your payroll calculations You are required to withhold all taxes from those amounts as well but you don t have the cash on the front end You therefore simply withhold

    Original URL path: http://selfemployed.nase.org/business-help/get-help/tax/tax-blog/self-made/2011/09/13/How_Do_I_Account_For_Gratuities_In_My_Payroll_Ask_The_Experts_Q_A (2016-02-14)
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  • Still Doing 2010 Taxes And Trying To Obtain Health Insurance Deduction [Ask The Experts Q & A]
    last Tax 1040 Tax Calculator Payroll Deductions Calculator Self Employment Tax Calculator Helpful Links ASBDC Member Directory Search My NASE About Me Account Benefits Optional Benefits Payment Details Expert Questions Email Subscriptions Membership Directory Tax Blog Your resource for small business tax advice Still Doing 2010 Taxes And Trying To Obtain Health Insurance Deduction Ask The Experts Q A by User Not Found Aug 31 2011 Q I am doing my 2010 taxes and told my tax preparer about the one time business deduction for health insurance premiums for 2010 However she still records it as an adjustment to income How do I convince her that this is okay for 2010 A The IRS accounted for the new deductibility differently than most people expected The deduction for federal income tax is still accounted for in the same way as in previous years by including the qualified premiums on page one of Form 1040 Line 29 This is an adjustment to income as you mentioned and is indeed the same as in previous years so that part of your tax preparer s efforts is most likely correct The new part for 2010 is that the deduction is also eligible for reducing Self Employment Tax The SE tax deduction is the new part and is accounted for separately on Schedule SE Self Employment Tax The amount that is included on Line 29 will also be used in the calculation at Line 3 on the Schedule SE So take a look at the Schedule SE and make sure that you see that the total includes the deduction from page one of the 1040 I know it is kind of weird since the amount isn t listed separately but Line 3 just says Combine lines 1a 1b and 2 Subtract from that total the

    Original URL path: http://selfemployed.nase.org/business-help/get-help/tax/tax-blog/self-made/2011/08/31/Still_Doing_2010_Taxes_And_Trying_To_Obtain_Health_Insurance_Deduction_Ask_The_Experts_Q_A (2016-02-14)
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  • What Are Consumption Taxes?
    Consumption Taxes There were two panels of witnesses at this last hearing The first panel included the former presidential candidate and governor Mike Huckabee economic experts Larry Kotlikoff and David G Tuerck and former policy advisor Bruce Bartlett They discussed the FairTax a proposal to replace existing federal income taxes with a national retail sales tax The second panel including multiple economists and policy advisors discussed the VAT While the FairTax only taxes the end consumer the VAT is a consumption tax that would tax the buyers of goods even if they are not the end consumer In essence the VAT would tax a good little by little as it progresses through the supply chain The Main Obstacles The allure of a simpler more efficient tax code is a tantalizing goal for U S lawmakers However the path to getting there is littered with obstacles One of the main obstacles is the issue of regressive taxation At the hearing Democrats in the Ways and Means Committee expressed this as one of their main concerns with consumption taxation Critics consider consumption tax methods to be regressive taxation lower socioeconomic groups pay more as a percentage of their income than the rich However proponents of consumption taxes say they are proportional taxes as those with higher income pay more taxes because they are taxed at the same rate that they consume Huckabee also argued that the current method of taxation through income is an arbitrary standard without incentives for economically smart behavior The progressiveness or regressive ness of the VAT system or the FairTax system can be affected when different classes of goods are taxed at different rates To maintain the progressive nature of total taxes on individuals countries currently implementing VAT have reduced income tax on lower income earners as well as instituted rebates or direct transfer payments to lower income groups resulting in lower tax burdens on the poor The FairTax or the VAT Even if you are a proponent of consumption taxes the question then becomes which system Economically both proposals have the same effects The key differences would be the administration of these tax reforms and their incentives for compliance The VAT would probably create more accounting procedures as a business would have to measure the value added during the production distribution and sales processes Generally value added is measured as the difference between the price for which a business sells a good or service and the costs of the inputs the businesses incurred to produce it Opponents of the VAT believe that it is a confusing tax system with extra accounting required by those in the middle of the supply chain Proponents counter that this disadvantage of VAT is balanced out by the application of one tax rate Each member of the production chain would be taxed the same rate regardless of its position in the supply chain and the position of its customers reducing the effort required to check and certify statuses and tax rates Because

    Original URL path: http://selfemployed.nase.org/business-help/get-help/tax/tax-blog/self-made/2011/08/01/What_Are_Consumption_Taxes (2016-02-14)
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  • Getting a Loan While Self-Employed
    the bank that held his mortgage Because his company was set up as an S corporation part of his salary was recorded as a distribution and the bank would not include this as income Mine is a very small business that employs only me and my wife All of the income of the business minus expenses becomes my income In excluding the distributions portion they halved my income and disqualified us from refinancing They said that we could not afford to pay the new mortgage repayments even though they were to be lower than what we were paying to them at the time and on which we had never missed a payment They were effectively forcing us to pay higher interest rates After two years of trying to work with his bank Dix was finally able to refinance with another institution One exception is depreciation on business related purchases which can be added back into the borrower s net income to help them qualify For example if you write off depreciation on a car that was purchased for the business you can write off some depreciation but because it is a paper loss not a real cash loss you can add that depreciation back into your net income That will help to increase your overall net income This brings up a very important point to discuss with your tax professional if you know that you will be looking to borrow money in the near future It may be worthwhile to not take every possible business deduction on your taxes in order to show a larger net income You will have to pay more taxes but it will allow you to show more income to lenders If you need to borrow the money now and can t wait two or three years to show greater income then you can consider amending past tax returns You will have to pay taxes on the amended return but again it will help to show a greater net income An accounting professional can advise you on how to do this correctly But note that the IRS has a three year statute of limitations on amending returns Finding the Right Lender for You Choosing the right lending institution will make a big difference for the self employed Big box banks usually have a neat little computerized mortgage loan program that requires all the boxes to be checked That may be difficult for someone who is self employed since they do not have a W 2 to show or may have to produce extra documentation It is likely that you will be turned down by these big banks because they are either not willing or not set up to deal with non traditional borrowers It may behoove a self employed borrower to look into smaller banks and lending institutions Local banks with lenders that understand the area and know their customers may be a more willing option They do not have to play by the strict rules

    Original URL path: http://selfemployed.nase.org/business-help/get-help/tax/tax-news/2013/06/03/getting-a-loan-while-self-employed (2016-02-14)
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  • Ask The Experts: Health Insurance for Employees
    Action Center Business Help Ask the Experts Taxes Business Strategy Business Law Marketing 101 Finance Accounting Health Care Reform Marketing Advertising Real Estate Information Technology NASE Minute Get Help Tax Healthcare Reform Health Marketing 101 Business Management Marketing Advertising Real Estate Calculators Business Breakeven Analysis Calculator Cash Flow Calculator Equipment Buy vs Lease Investment Annual Rate of Return Calculator Mortgage Mortgage Loan Calculator Retirement Savings and Planning 401 k Calculator How long will my retirement savings last Tax 1040 Tax Calculator Payroll Deductions Calculator Self Employment Tax Calculator Helpful Links ASBDC Member Directory Search My NASE About Me Account Benefits Optional Benefits Payment Details Expert Questions Email Subscriptions Membership Directory Tax News Your resource for small business tax advice View all NASE news Ask The Experts Health Insurance for Employees Monday June 03 2013 Comment Your name Click to add Email optional Click to add Comment RadEditor HTML WYSIWYG Editor MS Word like content editing experience thanks to a rich set of formatting tools dropdowns dialogs system modules and built in spell check RadEditor s components toolbar content area modes and modules Toolbar s wrapper Content area wrapper RadEditor hidden textarea RadEditor s bottom area Design Html and Preview modes

    Original URL path: http://selfemployed.nase.org/business-help/get-help/tax/tax-news/2013/06/03/ask-the-experts-health-insurance-for-employees (2016-02-14)
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  • Ask The Experts: Employee or Independent Contractor
    working as employees will the business be required to carry workers compensation insurance even if they re part time A The key to your question is that the classification of a new worker is not a matter of choice and is not determined by the gross amounts paid to the worker A new worker is either an employee or an independent contractor The key factor in making this determination is control who controls the work product If you are in charge and you tell the worker when to come to work what to do at work how to do the work and you provide the tools computers etc to do the work then you most likely control the work product and therefore the worker is an employee If on the other hand you only control the end result meaning that the worker provides their own tools decides how to do the work where and when to do the work and most likely has other clients besides you then they are most likely an independent contractor So you can t just choose which classification you want based on the ease of reporting Instead the underlying facts and circumstances that indicate classification thus dictate the reporting requirements If the new worker is an employee then taxes must be withheld There is no minimum based on the number of hours worked per week You must verify employment eligibility report the new hire to your state and withhold FICA and Medicare taxes even if they only work an hour or two per week If the new worker is an independent contractor you must report payments you make for services if you pay that worker at least 600 per year as you know As for workers comp insurance that will depend on a number of

    Original URL path: http://selfemployed.nase.org/business-help/get-help/tax/tax-news/2013/05/02/ask-the-experts-employee-or-independent-contractor (2016-02-14)
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