The Small Business Tax Help Blog

Posts Tagged ‘self employment tax’

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HMRC Guide: Self-Employed Childminders

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: 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

Question: 2009 tax amendment: wrong form?

I have a S-corporation. In my individual tax return, I reported income form business on line 12 and included schedule C. Now, I figured out, I should report it on line 17 and include schedule E. I recently received an e-mail from IRS for self-Employment Tax Liability. But, since I am employed in the S-corp and pay myself salary I don’t report any self-employment tax. So, Now how I can amend 2009 tax return or how to correct the mistakes. Thanks.

Answer: Did you file a return for the S-corp, or just put everything on your personal return? If you didn’t file for the s-corp, you need more help than the short answers on this forum can provide, see a CPA or enrolled agent. If you filed properly for the s-corp, you’d have gotten a K-1 from the s-corp showing you what to put where on your personal return, and could use that info to do a corrected personal return.

Ignore Tro’s wrong answer, as usual.

Ben. Re Quiggin, is there a

In reply to The Carbon Tax We Had To Have : Ben. Re Quiggin, is there a misunderstanding here? My point is that the much derided economist class have been considered only progressive insofar as they became non-economists and wore a political mantle, but this is and always has been unfair. Maybe the bad press will disappear as the Greens and others embrace what Garnaut, Stern, Stiglitz and others …

Self Employment — from the Kiplinger Family Records Organizer

Question: Forms to file with my taxes….?

I completed my taxes today and TaxAct printed the following:
Form 1040
Schedule C “Profit or Loss from Business”
Self-Employment Tax
Tuition and Fees Deduction

Ok I know I have to file 1040 and Schedule C, but I’m not sure about the other two… should I file them too….?

Thanks…

Answer: You need to file both.

The self employment tax form printed out because you received a 1099 and are filing a schedule C. The Self Employment Tax Form calculates the amount of Social Security Tax that your employer would have paid into your SSN.

Tuition and fees Deduction means that you are trying to write off the amount you paid for your tuition in college. If you do not include that form your deduction will be disallowed.

Don’t forget to staple your 1099 to your 1040. And if necessary your state form as well.

Categories

When the mayor talks, Joseph R. Fusco Jr. listens. Again a candidate for Rome’s top elected job, Fusco was in the audience and taking notes when Mayor James F. Brown delivered his eighth State of the City message on May 24.

Tips for Filing Taxes : Real Property Taxes