Working for yourself can be a great way to earn a living. You may enjoy greater freedom about when and where you work or about the field in which you work. If you plan it carefully, you might even get to pick a career that you truly love. However, taxpayers who work for themselves can also fall into complicated tax scenarios, especially when they pay for costs that benefit them both personally and professionally. To avoid dealing with IRS tax audits, it's important to learn how to keep your personal and business taxes separate.
Home business owners are responsible for keeping up with several income tax forms each year. Depending on the type of business they operate, these entrepreneurs may have to file many forms and schedules along with their Form 1040. Since each form carries a separate set of instructions, the thought of learning how to complete them all can be overwhelming.
If you own and operate a retail business, you might consider hiring seasonal employees to help you get through the shopping rushes in the summer and around the holidays. The good thing about using seasonal help is that you can get the assistance of a full-time employee without having to make the long-term commitment.
If you're a small business owner who is looking to hire on a few workers, you may be searching for ways to reduce your payroll budget. It's no secret that hiring employees can be costly, especially considering employers are responsible for paying federal payroll taxes, unemployment taxes, and health benefits. Some companies have used a workaround by hiring independent contractors or temporary employees, rather than full-time employees, to their workforce. While it may seem that independent contractors and temporary workers are interchangeable, they are not. The two statuses are very different, and they should be treated differently by business owners.
Seasonal employees are workers who take jobs that only last for a few weeks or a couple of months during a specific season. Most commonly, these employees are hired on to give a business additional help during a busy period such as the summer season or the retail holiday season. In many cases, seasonal employees are students who work during school breaks or adults who are supplementing their full-time pay with part-time work. No matter their individual situations, it's important for seasonal employees to understand their tax implications so that they can avoid paying tax penalties with their returns.
Many workers love the idea of being self-employed, but working as an independent contractor can carry its own concerns. While independent contractors are entitled deduct taxes for their businesses, they must also keep up with their own Social Security and Medicare tax payments. By the end of the year, this tax liability can cause them to incur an estimated tax penalty. Avoiding these and other important tax mistakes can help independent contractors save at tax time. Here are the top five mistakes that independent contractors make.
During periods of high sales activity, business owners may need to hire seasonal employees. For example, businesses that operate only during the summer, such as amusement parks, may rely on seasonal workers to handle day-to-day operations. On the other hand, year-round companies such as department stores or malls may only need seasonal workers during the holiday shopping season when revenue is at an all-time high. In either case, company owners who consider hiring seasonal employees should take care to comply with payroll tax procedures to make sure that they are following the law. Here are a few payroll pointers for seasonal business owners.
When the tax deadline approaches, many business owners may be worrying about the IRS fines and penalties they could face. Some of these fees are associated with the IRS filing process itself, but others may be assessed after an IRS review of a completed return. What are some of these fines? How can an entrepreneur avoid these penalties? Here are some small business tax suggestions for escaping the most common IRS penalties.
Are you a freelancer who is dreading the income tax deadline this year? If so, your concern is understandable since freelancers are among the most frequently audited taxpayers. The good news is that you can successfully navigate your way through the income tax code and avoid the traps that catch so many of your colleagues.
Do you own and operate your own business? Did you have income left over after you subtract your operating expenses and tax deductions? If so, you will have to pay self-employment taxes to the IRS along with your federal tax return. While self-employment taxes represent a significant portion of the government's annual revenue, they also serve a beneficial purpose for the entrepreneurs who pay them. What are these taxes? How does the IRS decide how much you owe? How do you go about paying self-employment taxes?
