Category Archives: Employment Accounting

TAX TIPS FOR WORKERS IN THE GIG ECONOMY

Gig Economy

The gig economy, also called sharing or access economy, is defined by activities where taxpayers earn income providing on-demand work, services, or goods. This type of work is often carried out via digital platforms such as an app or website. There are many types of sharing economy businesses including two of the most popular ones: ride-sharing, Uber and Lyft, for example, and home rentals such as Airbnb. Continue reading

TAX CONSIDERATIONS WHEN HIRING HOUSEHOLD HELP

Help

If you employ someone to work for you around your house, it is important to consider the tax implications of this type of arrangement. While many people disregard the need to pay taxes on household employees, they do so at the risk of paying stiff tax penalties down the road. Continue reading

IT’S NEVER TOO EARLY TO CHECK TAX WITHHOLDING

Paycheck

While it might seem like tax season just ended, it is never too early to do a “Paycheck Checkup” to make sure the right amount of tax is withheld from earnings – and avoid a tax surprise next year when filing your 2020 tax return. As a reminder, because income taxes operate as a pay-as-you-go system, taxpayers are required by law to pay most of their tax as income is received. Continue reading

2020 Tax Witholding: The New Form W-4

EmployeeForm W-4, Employee’s Withholding Certificate, has been redesigned for 2020. Previously, income tax withholding was based on an employee’s marital status and withholding allowances or tied to the value of the personal exemption. With the revised Form W-4, however, income tax withholding is generally based on the worker’s expected filing status and standard deduction for the year. Furthermore, workers can also choose to have itemized deductions, the Child Tax Credit, and other tax benefits reflected in their withholding for the year.

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It’s Not Too Late to Check Paycheck Withholding

check paycheckDid you know that the average tax refund was $2,729 for tax year 2018? While some taxpayers may find it advantageous to get a large tax refund, others may wish to have more of their money show up in their paychecks throughout the year. No matter which preference taxpayers choose, they should remember that they can make adjustments throughout the year that will influence the size of their refund when they file their tax return next spring. Continue reading

What to Do If You Receive and IRS CP2000 Notice

form from IRSAn IRS CP2000 notice is mailed to a taxpayer when income reported from third-party sources such as an employer, bank, or mortgage company does not match the income reported on the tax return. Continue reading

Choosing a Legal Entity for Your Business

starting a new businessIf you’ve decided to start a business, one of the most important decisions you’ll need to make is choosing a legal entity. It’s a decision that impacts many things–from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you could face. Even if you’ve been in business for a number of years, it’s a good idea to periodically reevaluate your business structure because, as we all know, tax laws can change and that business entity you chose when you first started out may not be the best option ten years later. For example, if you operate your business as a sole proprietor, you must pay a self-employment tax rate of 15% in addition to your individual tax rate; however, if you were to revise your business structure to become a corporation and elect S-Corporation status you could take advantage of a lower tax rate thanks to tax reform. Continue reading

Tips for Getting Paid on Time

paid on timeHave you found that collecting on your accounts receivables has become more challenging? If so, strengthening your collection procedures may allow you to improve collection rates and shorten the aging days of your accounts receivables. While some tips discussed here may not be suitable for every business, most can serve as general guidelines to give your company more financial stability. Continue reading