The Small Business Tax Help Blog

Archive for March, 2011

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‘Drastic’ postal lockout forced feds to take action: Raitt

Labour Minister Lisa Raitt said “an erosion” at the bargaining table between Canada Post and its union forced the government to serve notice it will table back-to-work legislation if the two sides can’t reach a deal.

House Session 2010-04-15 (18:26:35-19:26:58)

Question: With the new roth 401k, how do the deductions calculate? does it take xx% of whats left after your taxes…?

For example, you have $1000 gross paycheck – you withold 3% for regular 401k, and 3% for roth 401k to be deducted. Say for example taxes are $250. So, for the regular 401k the employer would withhold $30 …so after taxes and regualr 401k, the net woudl be $720. Does the Roth 401k calculate based off of the $720, or $750, or $1000?

Answer: $30 would be put into the Traditional 401 (k), reducing taxable income to $970. Less your example of $250 taxes you have a net of $720. Then the 3% for the Roth is taken out or $21.60 thus giving you a net paycheck of $698.40.

So to answer directly your XX% is taken out of your after tax amount.

Big tax refund? Consider adjusting withholding

Your taxes are done and you’re excited about getting a $3,000 refund. It’s hard to resist thinking about a big-screen television, a mall shopping spree or a vacation.

Basic Explanation of W-4 tax Form : Two Earners & Multiple Jobs: W-4 Tax Form

Question: Can you help me out fill the form W 4 2009?

Call me stupid or whatever, but I get confused with this part:

5
Total number of allowances you are claiming (from line H above or from the applicable worksheet on page 2)
6 $
6
Additional amount, if any, you want withheld from each paycheck
7
I claim exemption from withholding for 2009, and I certify that I meet both of the following conditions for exemption.
c Last year I had a right to a refund of all federal income tax withheld bec ause I had no tax liability and
c This year I expect a refund of all federal income tax withheld because I expect to have no tax liab ility.
7
If you meet both conditions, write “Exempt” here

What numbers should I input there? Please help, this is the first time I fill one of these forms.

Website: http://www.irs.gov/pub/irs-pdf/fw4.pdf (The part I’m asking for is almost at the bottom of the first page.

Answer: On line 5 you put down whatever number you have on line H, unless you needed to do the worksheet, in which case you take the number off the worksheet. You haven’t asked anything about how to do the worksheet or how to fill out lines A-H.

Leave line 6 blank unless you used the second worksheet or you have lots of income from sources other than wages.

You don’t say how much you expect to earn in 2009 from all jobs and other sources. Unless we know that we can’t begin to tell you whether you are exempt.

Critics question impact of proposed Longmont airport expansion

The ongoing battle about whether to extend the runway at the Vance Brand Municipal Airport in Longmont is poised to take off again.

Taxes 101 for Your 2009 Income Tax Return

Christmas Lights Gone Wild

Question: What’s the easiest way to reduce self employment tax?

Can I still put money in an IRA for my 2007 taxes?

And if so, can I get the savers credit with another credit to reduce my taxes even further?

I am under the income limit to qualify for the savers credit.

Any tips appreciated!

Answer: SE tax is calculated on net business profit period. Nothing changes that. IRA can potentially lower your income tax. SE tax is 15.3% and is social security and medicare payments not income tax. When you work for someone you get 7.65% taken out of your check and your employer matches that 7.65%. When you work for yourself you have to pay the whole 15.3%. The savers credit will only lower income tax, not SE tax. There are only 3 things to offset SE tax and they are called “refundable credits”. The Earned Income Credit, The Additional Child Tax Credit, and Excess Social Security Taxes paid on having 2 or more jobs and exceeding the annual maximum contribution. Sorry. And yes, you can still put money in an IRA before you file your taxes, it will lower your adjusted gross income and possibly your income tax – not your SE tax.

Community Calendar

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Tax Tips for the Self-Employed – TurboTax Video 2010