The Small Business Tax Help Blog

Archive for May, 2010

Question: what tax forms do i have to fill out to hire someone to coach my sports class for 1 week in california?

I own a sports coaching business and am going away and need someone to teach my classes for a week. How do i pay them? i guess they will be hired as an independent contractor!

Answer: I agree with Josh.
However, before the payment you need to have the person complete a W9. It’s basically a statement that says the person understands they are an independent contractor and their tax id (SSN or Corporate ID)

POLITICAL HOT TOPICS: Friday, May 14, 2010

The CNN Washington Bureau’s morning speed read of the top stories making news from around the country and the world. WASHINGTON/POLITICAL For the latest political news: www.CNNPolitics.com CNN: Congressman to launch inquiry on how much oil is gushing into Gulf A U.S. congressman said he will launch a formal inquiry Friday into how much oil [...]

You vs. IRS part 1

Question: Self Employment Tax, 1040EZ?

What tax form(s) should I file if I made $1,579 from self-employment part time. I already have a W-2 from another job. Should I just file 1040EZ or are there others? I don’t think i’m a sole proprietor because I don’t have a business license.

Also, If you know, how do I figure estimated tax for the quarterly tax payment for self-employment. Do I also have to pay State Tax for this? I live in Missouri and am a Single Dependent.

Thanks!

Answer: You can’t file Form 1040-EZ with self-employment income.

You must file Form 1040. Attach Schedule C or C-EZ to report the income and business expenses. If the net profit is $400 or more, attach Schedule SE to calculate the self-employment tax.

You only need to make Estimated Tax Payments if your tax liability is expected to exceed $1,000 for the year. That equates to around $7,000 in self-employment income.

You need to file a MO return if your gross income is $7,250 or more. There isn’t a separate self-employment tax in MO though.

George Soros Q1 Portfolio Update

Billionaire investor George Soros just released his Q1 portfolio holdings. As usually, Soros has large portfolio turnovers. Among the 821 stocks he owns, 280 are new positions from the first quarter. These are the details. Read more » »

Umbrella Company — Urgent update for ALL Contractors

Question: calculator for how much home I can afford?

Does anyone know of an online calculator to estimate how expensive a house I can afford TAKING INTO ACCOUNT THE TAX DEDUCTABILITY OF INTEREST PAYMENTS? It seems like all the calculators I’ve looked at leave this factor out. Thanks.
Thanks everyone. And thanks especially for your concerns that I’ll overspend. I’m financially conservative to start so finding the theoretical max is more of an interesting thought experiment.
Regarding the 28% rule from jim06744, how much should go to a car payment? (since I live in NYC and can presumably wrap the transportation allocation, minus the token $76 monthly subway fare, to my home expense budget).

Answer: The reason you do not find the interest calculation in online estimators is that home lenders do not take that into account when figuring your mortgage. You can’t use the interest deduction to your advantage on your home loan application, so it doesn’t help you afford more home.

Hope this helps.

Home equity loan may beat cash-out refinance

The math suggests one homeowner should choose a home equity loan over a cash-out refinance.

A conversation with ‘One-term Byrne’

The governor who preserved the Pinelands and brought us the income tax and Atlantic City casinos talked to the Press recently about the challenges facing New Jersey today and the legacy he has left behind:

Question: Estimated quarterly tax payments…?

One of my friends lives in MA and is only due to make about $6600/$6700 this year. Does he owe any state and federal tax? As well as S.S., Medicare and Self employment tax? If so, when does he have to pay the SE and FICA tax and how des he go about doing that? He’s paying federal tax payments through tax vouchers. Any help for him, thanx…

Answer: 6,600-6,700 should not generate a lot of taxes.

If he’s already paying federal via estimated tax vouchers (1040ES), then he should be okay, based on the income amount. By the way, self-employment tax (FICA is part of SE tax) is combined with income tax to make the Estimated Tax Payments.

You can have your friend read over publication 505 on estimated taxes:

http://www.irs.gov/publications/p505/index.html

MA should have similar publication on estimated taxes. Do a quick google search.

Letters: End of Labour

Brown’s rule at an end