You hire independent contractors to help you with specialized or contract work. But if you find yourself engaging in what may be considered an employer-employee relationship with your independent contractor hires, you may be contacted by the EDD and the IRS for a potential mislabeling claim. Mislabeling is one of… [Read more]
Federal Net Investment Income Tax
The Net Investment Income Tax of 3.8% (IRC 1411) applies to unearned income – i.e. income from interest, dividends, annuities, royalties, rents (not derived from the ordinary course of trade or business). The tax, however, does not apply to interest from tax-exempt bonds, veteran’s benefits. This tax does applies to… [Read more]
Ways to Mitigate Your Risk of an EDD Audit
If you utilize contractors in your business, you are responsible for all of their financial, legal, and administrative paperwork. One of the most important responsibilities you are in charge of is withholding employment taxes and remitting them to the appropriate agencies. Failing to do so (or improperly filing) can result… [Read more]
What is Form SS-8 and When Do I Need to Use It?
Each industry has to follow specific hiring procedures and paperwork, particularly for tax and benefit purposes. When working with independent contractors, you must correctly label them for your business tax purposes. Yet determining who is an independent contractor and who is an employee can be challenging. If you accidentally mislabel… [Read more]
I Missed the Deadline to File Taxes: What Do I Do Now?
If you’ve missed the official deadline to pay your taxes, don’t stress. Getting back on track with your taxes is, in many cases, simpler than most people think. Whether you owe individual taxes or taxes for your small business, the easiest solution is to pay your taxes as soon as… [Read more]
Response to Article: “Are You Ready to Be Audited”
Laura Saunders wrote a wonderful article published in The Wall Street Journal titled “Are You Ready to Be Audited?” The article provides great insight into factors that influence why the IRS selects certain taxpayers to be audited based on income and errors reported on a return. This blog dissects the… [Read more]
When Can the IRS Come After a Business Personally?
Tax season can be an impersonal, bureaucratic nightmare for many business owners. But there’s a personal side to taxes, too. That’s because when you’re a business owner, there can be a high level of personal risk involved. Your time, energy, and money all go towards keeping your business afloat, and… [Read more]
The Top 5 Ways to Reduce Your Risk of a Tax Audit
If there is anything business owners dread more than tax season, it’s being audited by the IRS. There are many reasons why the IRS or the state may come knocking on your door for an audit. These reasons can include: Accidentally (or deliberately) fudging a figure: Taxation software has made… [Read more]
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