The Small Business Tax Help Blog

Archive for June, 2010

Question: Do you pay payroll taxes to partners in a California LLC?

There are four partners who work and all own a share of our California LLC. Do we pay taxes to the EDD for Payroll, or do we pay Self-Employment taxes at the end of the year, or do we do both?
Note: The four partners are the only employees of the LLC.

Answer: Members (what you refer to as “Partners”) of LLC’s are not considered employees, and thus do not pay payroll tax. Each member will be issued a K-1 at the end of the year w/ their share of the LLC’s income/loss which each member will report on their own individual income tax return.

The one thing to beware of is that LLC’s in CA have a tax that is calculated on gross receipts and not net income. If your gross receipts are greater than $5M, you will be taxed $11,700, regardless of whether you actually have any net income. So if you are in that situation, there may be other entity structures that would provide more tax efficiency.

Going into business with a foreign partner

To avoid adverse tax consequences, the owners of the LLC interest should be corporations.

Lawline.com Legal Tip of the Day: Advantages of an S Corporation

Question: Would this be an excellent version of “Hell” to send politicians to?

Day in, day out, for eternity, they need to file taxes for me:

Married filing jointly, 2 kids
One of us owns a small business
Income in 2 states (one being New York)
Home office deductions
Meals and travel expenses related to small business
Capital gains realized from stock sales
401k distribution from an old employer who corrected some math

They need to do all of this without the benefit of a tax professional or software to help. Just the IRS and it’s lovely forms and publications.

After spending a weekend doing our taxes – WITH help – I am certain this would be a special version of Hell which would make politicians wonder why they have created this crazy complicated monster.
It was both created and has evolved.

Every little stupid step and extra hoop is someone’s election promise brought to life.

Answer: Love it!
You forgot to depreciate your vehicles and other equipment.

When The Tax Man Cometh (In Person)

Only a small percentage of taxpayers face a full-fledged IRS audit. If you’re picked for one, it’s a serious matter. Here’s what to expect.

Self Employed Federal Tax Deduction Tips for 2009, 2010.mov

Question: what are the rates for business income tax in Nevada?

I am making a business plan… but in my proyected finances… I don’t know how to calculate the income tax expenses… what are the rates in the state of nevada….

Thanks

Answer: Nevada has no state income tax, not for personal or for corporate
so,, to answer your question,, 0.00%

Tax Extenders Bill Fails In Senate

Financial regulation reform and tax change bills affecting traders, investment managers and professi

Future of your tax, taxation, business success and profit

Question: TAX QUESTION,, Im self employed in PA,, Did i pay too much in taxes or no? I am a self contractor,Please help?

Hi,,
Im self employed in PA. as a self contractor. I just got all of my taxes done, and i am thinking the final number doesnt sound right. I asked numerous people what they though, and i got different answers but alot say a paid way too much. This is my first year filing under self-employment
Ok,, I made a total of est.,, $36,000 throughout the year. I had numerous write-offs,, thse numbers are close estimates –
**DUMPSTERS, ETC., and material needed for the job- about $6,500, which i believe are 100% write offs, **AUTO-GAS-INSURANCE – about $1,600 **TOOLS – about $1,900 ***INSURANCE for WORK- $500 **ENTERTAINING- about $300 , I believe there were another $1000 in write -offs in which the accountant added since i forgot.
Anyway,, I ended up paying the government somewhere around $5,000 , i thought it was only going to be no more than $3,000. Did i or my accountant screw up somewhere? I would appriciate any kind of help,, Thanks!!

Answer: First of all, the numbers sound right for just the federal. I’m guessing we’re not counting Pennsylvania state tax, local income tax, or mercantile tax (if your town has one).

And yes, friends and newspapers are both bad sources of tax advice.

Textron Reports $0.27 Earnings per Share from Continuing Operations for Second Quarter 2010

PROVIDENCE, R.I.—-Textron Inc. today reported second quarter earnings from continuing operations of $0.27 per share, compared to a $0.23 per share loss in last year’s second quarter.

Tax Forms & Deductions : How to File a 1099 Form

Question: Will the Turbo Tax Home and Business edition help on quarterly payments?

Will Turbo Tax Home and Business edition help me to determine whether or not I have to make quarterly tax payments?

Will it help me determine what amounts those quarterly payments should be and how to make them?

Answer: yes. It will base estimates on the assumption that the following year will be a lot like the previous year as far as income, dependents and deductions and credits.

Useful tax tool

Many are the reasons – we didn’t say excuses, now did we? – advanced by North Carolina business interests who think a penalty that’s used to boost compliance with state tax law should be thrown overboard.

Making WI Business Tax Payments and Printing – Updated – My Tax Account