The Small Business Tax Help Blog

Archive for the ‘Tax Withholding’ Category

Question: Why did my federal withholding decrease?

I’m doing my taxes this year, and when I’m done I realize I owe federal $2,500. Last year I owed only about $500. In reviewing both my wife’s and my W-2’s, I found that the federal withholding was significantly less for both of us than it was last year. Anybody know why that would be? Both my wife and I has similar incomes as the year before, well under $250,000. Does that mean I now have to calculate a penalty?
Same salary, didn’t change the w-4’s. Wierd, huh?

Answer: Because of the stimulus, last year beginning in April less taxes were being taken out of everybodys paychecks. Should have only added up to $400 per person, but if you had multiple jobs it could have been happening to every paycheck. That was a big fault in the program. Also, did you do anything with your W4’s? And yes, you’ll have to pay an underpayment of tax penalty. Won’t be too much though (definitely under $100).

And yes, you will pay a penalty. The second answerer doesn’t seem to think so but you will, because you didn’t pay enough taxes through out the year. Thats how it works. It goes on the second page of your form 1040.

Related Information

1.1.1. Income Tax Rate. The general statutory corporate income tax rate for entities incorporated in Argentina including branches or permanent establishments of foreign companies is 35%.

Former IRS Agent Acquitted of Tax Crimes

Question: What happens if you don’t give CafePress your social security number?

I know that it’s supposed to be safe, and they need the social security number for tax purposes and everything, but it says:

“If we do not have this information on file, the IRS requires us to withhold a percentage of commissions due to you.”

Does this mean they’ll still send me some money, but keep the rest for tax purposes?

Answer: What? I bought something from there and IDT I gave them that.

New Laws Effective January 1, 2010

The following legislation will take effect beginning Jan. 1, 2010.

Payroll Software withholding tax for 2010

Question: CA tax return 540, line 38…Real Estate Withholding. Form 593-B and 594. Can anyone explain.?

since my mother pays taxes on properties, does line 38 apply?
[She did not sell any real estate]

Answer: No, it only relates to sales of real estate.

More info:

http://www.sfaa.org/0710schultz.html

Analysis: Recent California newspaper editorials

Aug. 4

Tax Tips & Information : About W4 Tax Withholding Forms

Question: How much should this person get taken out for federal withholding tax weekly?

Single person, with 8 allowances. Earns $1600 weekly. We had a secretary doing mess ups with the company, and when I try to calculate this persons federal taxes for payroll, I am confused due to the high earning and the percent crap you have to do. Does anyone know how I calculate this for federal withholding taxes, or where online can I get a calculator to help me?? Anything would be helpful…thanks.

Answer: That’s $83,200 a year. So that would put them in the 25% federal income tax bracket, plus a 7.65% payroll tax.

That’s $27,164.80 in total taxes, so that’s $522.40 total withholding every week. I hope this helps.

Six tips for students with a summer job

Schoolâs out and many students now have a summer job. Some students may not realize they have to pay taxes on their summer income. Here are the six things the IRS wants everyone to know about income earned while working a summer job.

Question: Do I Need Them To Submit W-9 Form?

I have a LLC (Limited liability company) business and I pay people for displaying ads on their website.

Now my question is, since I my company is LLC do I still have to withhold their taxes for IRS or is not required?

Answer: When you go to fill out 1099-Misc forms you are going to have to list their SSN/EIN, their mailing address and the name of the individual/company you paid. Where do you think you’re going to get that information from.

Thus the purpose of the W-9 form. You use the info off the W-9 to prepare the 1099s with. It is not your responsibility to “audit” the W-9 to ensure the information is accurate and up-to-date. Keep the W-9s on file for at least 3 years. If you get your tax return examined for these payments the first thing the IRS examiner is going to ask for is your W-9 forms. Since you are required by law to acquire the information and retain the W-9s, the IRS can disallow your claimed expenses outright if you cannot produce the forms.

G’Luck…

Mike Womack, Sr. Partner
Zero Degrees Tax LLP
Moore, OK
Lawton, OK

Porter County employee contracts, fringe benefits questioned in IRS audit

Porter County attorney Gwenn Rinkenberger is trying to buy some time in resolving issues in an audit report on county expenditures that was conducted over the past year by the Internal Revenue Service.

Backup Withholding for Form 1099-MISC