Do you practice safe tax py
11
Get Protection: Do You Practice Safe Tax? Presented by: Tammy S. J. Schneider, CPA Director of the Women in Business Practice at Glass Jacobson
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tax questions you need to answer to start and run a successful business
Transcript of Do you practice safe tax py
Get Protection:Do You Practice Safe Tax?
Presented by:Tammy S. J. Schneider, CPA
Director of the Women in Business Practiceat Glass Jacobson
What are self employment taxes?
Self employment taxes consist of Social Security and Medicare taxes primarily for individuals who work for
themselves.
The 2011 self employment rate is 13.3% and consists of two parts:
10.4% for Social Security and 2.9% for Medicare.
What type of business entity should I select?
The most common options include:Sole Proprietorship, Partnership, Limited Liability Company, S Corporation and C
Corporation.
Do I have to payestimated taxes andwhen are they due?
If you are filing as a sole proprietor, partner, S corporation shareholder, and/or a self-employed
individual, you generally have to make estimated tax payments if
you expect to owe tax of $1,000 or more when you file your
return.
Estimated tax payments are typically due quarterly onApril 15, June 15, September 15 and January 15.
What is a legitimate business expense?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one
that is common and accepted in your trade or business. A necessary expense is one that is helpful
and appropriate for your trade or business.
Generally, you cannot deduct personal expenses. However, if you have an expense for something that is
used partly for business and partly for personal purposes, divide the total cost between the two and
deduct the business part.
Can I take a deduction for my home office?
If you use part of your home regularly and exclusively for business, you may be able to deduct expenses for the business use of your home. These expenses may
include mortgage interest or rent, insurance, utilities, repairs, etc. You do not have to be a home owner to
take this deduction.
What do I need to do when I hire employees?
Register with the state for withholding and unemployment tax accounts.
Have your employees complete the appropriate paperwork.
Decide if you want to prepare the payroll and required reports yourself or hire a payroll service.
What is a 1099 and who do I give one to?
An information report required to be issued to unincorporated entities that you pay more
than $600 in any year for services performed by people not categorized as your employee.
What records do I need to keep for my business?
The official word from the IRS is:“You may choose any recordkeeping system suited to your
business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects
the type of records you need to keep for federal tax purposes.”
What does that really mean?
Other Frequently Asked Questions:
Do I need an EIN?What is a capital asset?What is depreciation?What is the difference between cash and
accrual accounting?What is EFTPS?How long do I need to keep my tax
information?
