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Archives for March 2015

Small Business Tax Preparation Tips that Help Take the Stress Out of the Season

Tax Preparation

During the first quarter of the year, small business owners have much to contend with. As the stress level increases, many Florida small business owners are looking high and low for receipts they have accumulated throughout the year, while hoping all the while to not get audited.

So with March 15 and April 15 on the horizon, here are some tax preparation tips to help make tax season easier.

– IRS Forms make the tax world go ’round. Each type of deduction, income, loss, expense, etc., needs a different form. The same goes for employees. Each classification requires a different form. Knowing what form you need will greatly improve your tax experience.

– Got a home office? Deduct the associated expenses. Home office deductions yield small business owner’s tons of savings each year. Anyone who forgets, or simply neglects this deduction, are missing out.

– Properly classified office equipment expenditures means business savings you can use. The biggest aspect in regards to capital expenditures is to not deduct them as supplies. Supplies, which are pens, paper, and printer ink, are in a different category. 

– Insurance premiums that are directly connected to liability, malpractice, and worker’s compensation can usually be deducted as business expenses. The same is true for commercial vehicle insurance and life insurance premiums.

– Time is of the essence, but if crunch time came up too fast, you can file for an extension. However, simply filing for an extension won’t save you the cost of interest and penalties if you owe money. To curb this, calculate what you owe, and include that payment with your extension. 

Overwhelmed by tax season? Don’t hesitate to contact us for more information on how we can take the stress out of your taxes.

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Payroll Tax Service Discusses What Constitutes Taxable Compensation

Payroll Tax Service

All employers, large and small, are required to pay federal payroll tax. Similarly, any time an employer withholds compensation benefits or pays Social Security and Medicare, there are taxes involved. 

It may seem like an easy task to determine what is taxable, but there is often much more than meets the eye with the IRS and the determination they use. What is taxable, is often based on contingencies that are hidden in the small print.

The definition of what is taxable, in accordance with how payroll tax is calculated, is typically defined as payment made in the form of wages compensating an employee for work. But how wage is defined is not incredibly narrow. Thus making if difficult to characterize definitively what is taxable compensation.

Further, what constitutes a wage doesn’t hinge on labels. So no matter what moniker you give it (wage, fee, etc.), what makes it a taxable depends on several factors (just have a look at the terms and definitions the IRS has on just Medicare).

However, a good rule of thumb in deciding whether a payment made to an employee is taxable or not is simple, and can be applied in most situations: whenever something of value is given, transferred, whatever to an employee as “compensation” for a service provided, you have most likely made a taxable wage payment, and need to log it as such. Once logged, it is then much easier for payroll tax services to quantify and qualify.

Here are some common types of compensation that may fall under the exception to the rule:

– Loans

– Gifts

– Fringe benefits

– Business expenses

– Vacation and time-off pay

– Tips

In most, if not all of these cases, there is no concrete definition of whether these types of payment are taxable forms of payment — as we defined above. And again, it’s important to note that dollar amount doesn’t mean it can be called a taxable wage. It will instead fall under a different tax law (meaning it will still be taxable, just not as a payroll tax).

We offer payroll services for small business. For more information on how we can help you, contact us 954-596-9966 any time.

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