The Small Business Tax Help Blog

Posts Tagged ‘business’

Question: Independent Contractor And Taxes?

I Know being an independent contractor that I do need to file taxes, question is, how do I go about doing this correctly?. If someone can give me a step by step process and a list of the forms I will need..it will be appreciated. I have used search engines to help answer some of my questions but their written very confusing.

TIA

Answer: 1040 and your 1099 form showing your income.

Listing of any tax payments you made.

www.irs.gov

Determining the Legal Status of Your Workers: Independent Contractor vs. Employee

Question: SS4 form – fiscal tax year on March?

I wanna apply for for EIN for my company. If I’ll chose in SS4 closing month of calendar year 3/31, – do I must send to the IRS income tax report for few weeks!?

Answer: If your business fiscal year is from 4/1/07-3/31/08, your first required filing would be a 2007 tax return due 6/15/08.

Note that an S-Corp is required to have a 12/31 year end.

Question: Why does my tax return go down when I enter a second W-2?

I entered my first W-2 and my wages were 27.5k with 2.9k federal withheld. I got an estimated tax return and then entered my second W-2 ( I am a restaurant manager and got shifted temporarily) which made 2.9k with 350.00 federal withheld. Both federal amounts are roughly the same %, around 11, so why did my estimated return go from 650 to 500 after entering the second? Something similar happened to me last year.

Answer: Because your whole exemption and standard deduction were already taken out from the first W-2, so there was nothing left for the second one and it was ALL taxed.

The refund amount means nothing at all until all of your info is entered. It’s only what you would get if you didn’t have anything more to enter.

Rice and Curry (Black And Yellow Remix) Parody LOL (Indian Version)

Question: I need to find out if I am withholding enough taxes. I make $63,000 a year,have a child and wife to claim. ?

I also have a mortgage with claimable interest. This is my first year in this tax bracket. About 25% of my pay goes to taxes. I pay MD state tax.

Answer: Go to www.irs.gov and click on the individual tab. There is a withholding calculator that can help you out a lot in determining what your refund/payment will be. You just need your last paycheck and a bit of other information. I have used it over the last few years and find it very helpful.

I put the whole link in the source area.

Investing & Personal Finance Tips : How to Calculate Salary After Taxes

Question: A 501 (c)(3) non-profit org compliance question?

Under IRS 501 (c)(3), an organization is tax-exempt as long as it meets the requirements set forth in IRC 509(a)(2).

The “One-Third Limit On Gross Investment Income and Unrelated Business Income” test set out in IRC 509(a)(2) states that “An organization will meet this test only if it normally receives not more than one-third of its total support in each taxable year from gross investment income”

If a non-profit received $29 million dollars in donations last year, and earned another $26 million on investments from an endowment fund, has it violated the terms of the “One Third Limit”?
Tro, I’m afraid I’m not very good with the definitions. I do know that the principal began with money from donations and that more money is added from current donations and interest on the fund each year.

The non-profit claims that the fund was created to accumulate funds against the day when fund raising postage costs become prohibitive.

Answer: The answer to your question partially depends on whether or not the organization is a public charity or a private foundation. A 501(c)(3) that is a private foundation is not restricted to the limits under 509(a)(2).

If, however, the organization is a public charity, a violation has not necessarily happened just because the limit is exceeded in one year. Typically, the IRS looks at things in 5 year windows. As long as the organization on average stays within limits, it is OK.

One more wrinkle: not every public charity qualifies as a 501(c)(3) under 509(a)(2). Many are 509(a)(1) and 509(a)(3) organizations and are subject to different criteria altogether.

Confusing? I do this for a living and its confusing. Hope this helps!

PNM Business Cashbook Video