Self Employment Tax

An S corporation could cut your self-employment tax

If your business is organized as a sole proprietorship or as a wholly-owned limited liability company (LLC), you’re subject to both income tax and self-employment tax. There may be a way to cut your tax bill by conducting business as an S corporation. Fundamentals of self-employment tax. The self-employment tax is imposed on 92.35% of …

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How business owners may be able to reduce tax by using an S corporation

Do you conduct your business as a sole proprietorship or as a wholly-owned limited liability company (LLC)? If so, you’re subject to both income tax and self-employment tax. There may be a way to cut your tax bill by using an S corporation. Self-employment tax basics. The self-employment tax is imposed on 92.35% of self-employment …

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Do you want to go into business for yourself?

Many people who launch small businesses start out as sole proprietors. Here are nine tax rules and considerations involved in operating as that entity. 1. You may qualify for the pass-through deduction. To the extent your business generates qualified business income, you are eligible to claim the 20% pass-through deduction, subject to limitations. The deduction …

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The next estimated tax deadline is September 16: Do you have to make a payment?

If you’re self-employed and don’t have withholding from paychecks, you probably have to make estimated tax payments. These payments must be sent to the IRS on a quarterly basis. The third 2019 estimated tax payment deadline for individuals is Monday, September 16. Even if you do have some withholding from paychecks or payments you receive, …

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When are LLC members subject to self-employment tax?

Limited liability company (LLC) members commonly claim that their distributive shares of LLC income — after deducting compensation for services in the form of guaranteed payments — aren’t subject to self-employment (SE) tax. But the IRS has been cracking down on LLC members it claims have underreported SE income, with some success in court. SE …

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