If you’re an employer with a business where tipping is customary for providing food and beverages, you may qualify for a federal tax credit involving the Social Security and Medicare (FICA) taxes that you pay on your employees’ tip income. Basics of the credit. The FICA credit applies with respect to tips that your employees […]
Businesses with employees who receive tips may be eligible for a tax credit Read More »
The Social Security Administration recently announced that the wage base for computing Social Security tax will increase to $147,000 for 2022 (up from $142,800 for 2021). Wages and self-employment income above this threshold aren’t subject to Social Security tax. Background information. The Federal Insurance Contributions Act (FICA) imposes two taxes on employers, employees, and self-employed
Employers: The Social Security wage base is increasing in 2022 Read More »
Have you heard of the “nanny tax?” Even if you don’t employ a nanny, it may apply to you. Hiring a house cleaner, gardener or other household employees (who isn’t an independent contractor) may make you liable for federal income and other taxes. You may also have state tax obligations. If you employ a household
You may owe “nanny tax” even if you don’t have a nanny Read More »
As a business owner, you should be aware that you can save family income and payroll taxes by putting your child on the payroll. Here are some considerations. Shifting business earnings. You can turn some of your high-taxed income into tax-free or low-taxed income by shifting some business earnings to a child as wages for
Tax advantages of hiring your child at your small business Read More »
The subject of payroll has been top-of-mind for business owners this year. The COVID-19 pandemic triggered economic changes that caused considerable fluctuations in the size of many companies’ workforces. Employees have been laid off, furloughed, and, in some cases, rehired. There has also been crisis relief for eligible businesses in the form of the Paycheck
Now more than ever, carefully track payroll records Read More »
If your small business is planning for payroll next year, be aware that the “Social Security wage base” is increasing. The Social Security Administration recently announced that the maximum earnings subject to Social Security tax will increase from $137,700 in 2020 to $142,800 in 2021. For 2021, the FICA tax rate for both employers and
The 2021 “Social Security wage base” is increasing Read More »
On March 27, President Trump signed into law another coronavirus (COVID-19) law, which provides extensive relief for businesses and employers. Here are some of the tax-related provisions in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Employee retention credit. The new law provides a refundable payroll tax credit for 50% of wages paid
The new COVID-19 law provides businesses with more relief Read More »
Are you an employer who owns a business where tipping is customary for providing food and beverages? You may qualify for a tax credit involving the Social Security and Medicare (FICA) taxes that you pay on your employees’ tip income. How the credit works. The FICA credit applies with respect to tips that your employees
Do your employees receive tips? You may be eligible for a tax credit Read More »
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
Do you want to go into business for yourself? Read More »
Operating a business as an S corporation may provide many advantages, including limited liability for owners and no double taxation (at least at the federal level). Self-employed people may also be able to lower their exposure to Social Security and Medicare taxes if they structure their businesses as S corps for federal tax purposes. But
Should you elect S corporation status? Read More »
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