The Small Business Tax Help Blog

Posts Tagged ‘business’

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Question: Does an “investment club” type partnership have to pay for Self employment tax?

A regular partnership is required to pay both an income tax and a self employment tax on profits generated by the partnership at the federal level. What about an investment club type of partnership- where the only profit generated is purely from investments?

Answer: The income from the partnership flows to the partners in the same classification as it was generated. Unearned income is reflected as such on the K-1s and is taxed that way — no SE taxes are due.

Do make sure that your partnership agreement is iron clad on it’s purpose and how income will be generated within it. If any income other than unearned income is generated, it must be reflected as such on the K-1s and may be subject to SE taxes.

THE MAGIC OF THINKING MICRO: The Future of Enterprise Learning and Support in the UK?

These last weeks I’ve taken quite a lot of stick from the enterprise support community. First there was the launch of Start Up Britain (StartUpBritain) http://www.startupbritain.org/ criticised for being a sales pitch for the large corporates, and now they seem generally unhappy with the government backed mentorsme mentorsme http://www.mentorsme.co.uk …

LLC Nonwage Income Ch1

Question: Cellular One problem?

I tried to log in to the Cell One Usa website and it needs the “Last 4 of the SSN or,
Federal Tax ID” What is that?

Answer: they’re asking for the last 4 digits of your Social Security Number (SSN). Federal Tax ID is for company cell phone plans.

REALSearch – ID Verification DISCOVER – VERIFY – COMPLY

Question: For those that hate the new high alcohol tax so much……………..?

Why dont you just stop buying the alcohol if you hate the high taxes and prices of it so much? Why do the people that complain about the high alcohol and cigarette tax act like they can force or strongarm businesses to lower the prices. If its their store they can keep the price at whatever they want. Why do you act like booze and cigarettes is a right? Instead of buying garbage, why not buy healthy things like vegetables and water and live a healthy life?
I heard that now or very soon there is going to be a new record high tax on alcohol like they are now doing with the cigarettes.

Answer: Small amounts of alcohol are not unhealthy, and there is some evidence of health benefits for small quantities of red wine (and possibly other drinks).

Your question is quite naive, people drink, and smoke because they like to. I dont smoke, but I do sometimes drink. People make choices, and alcohol is one choice that millions of people make, and enjoy. Why should I only buy vegetables and water? Why shouldnt I buy fine wine, or a nice car, or a nice house, or anything else I want?

There should be a range of taxes, sales tax, income tax, alcohol tax, fuel taxes. People dont complain about alcohol and cigarette taxes as such, they complain when those taxes are disproportionate.

It is worth remembering that places with very high tobacco and alcohol taxes see huge levels of smuggled or grey imports.

BUSINESS TIPS: Meeting ADA rules key for a business

By the year 2030, I will be one of 71.5 million baby boomers over the age of 65.

Small Business Tax Credit: Part 2

Question: How do you estiamte how much taxes to pay for self-employment?

A friend of mine is going to hire my sister to do some daycare for her. I’m trying to figure out what the taxes are going to be when she files as self employed next year. She still has a full time job and this will be limited amount of hours on the weekends and such but my friend will be paying her well for the work and intends to claim the daycare expense on her taxes and my sister obviously wants to do the right thing and claim the income. I’m just trying to figure out if the rate is worth it after the taxes involved with self emloyment. Can someone help me to understand what’s involved?

Answer: Withholding extra from her regular job is the easiest way.

Self-employment is taxed at your regular tax rate PLUS 15.3% of your NET income (total income less expenses).

If she’s sitting for your friend at your friend’s house, then technically, your friend is a “household employer” and should file Sch H on her personal tax return and pay over the taxes she withholds (7.65% of gross) and match that same amount. This increases the friend’s tax return, but that’s the rules.

If your sister is picking up a child from one daycare or school and keeping her at her own house, then mileage is deductible from the total income. She should keep track of her miles driven. For 2008, the standard mileage rate is 50.5 cents per mile. Also, any snacks/meals she might furnish are Deductible Expenses if the mother doesn’t reimburse her.

A portion of her home is also deductible on Form 8829. You can find this form on my website http://www.TaxEfilers.com

Good Luck!

Chamber shares important news for business

Back in February, Gary Hayden with Hayden Financials and a long time Chamber member and the Chamber co-sponsored a seminar on the changes to the Cobra laws.

Sacramento & Co. Showcases How to Legally Protect All Your Assets

Maya Avraham – Ein Li Od Makom