The Small Business Tax Help Blog

Posts Tagged ‘tax rate’

Offshore tax havens: much bigger problem than people realize 2.

Question: Missed Estimated Tax Payments from contract work, what to do now?

Earlier in 2010, I worked as an independent contractor for 2 separate companies. I received payments for these jobs in July. I didn’t realize I had to make tax payments for that until recently. The total payments I received was $3738.75 so I don’t think I’ll be exempt from estimated payments. I’ve also been working full time now, and I have taxes withheld from each paycheck.

So, what do I do now? I believe I have to pay 15% self employment tax on that in addition to about 20 ish % for my effective tax rate for the entire year. I know I also have to pay about 8 or 9% to California. Do I send a check to the IRS and to the California government?

Answer: You might be safe if you’ve satisfied either of the following:
a) You’ve had enough of your full time pay withheld to cover 90% of the total taxes you end up owing for the year.
b) You’ve paid sufficient taxes in each quarter to cover your tax obligations from 2009. This is called safe harbor. As long as you cover your obligations from the previous year, it’s ok.

Labor’s Last Stand

The Nation — Emboldened by November’s election results, corporations and their right-wing allies have launched what they hope will be their final offensive against America’s unions.

California Life Insurance … Cheap Term Life Insurance Quotes

Question: If I start my Own company Is an LLC the way to go?

Im going to start a small business as a general contractor, Doing small remodels, home repairs and maintenance. I will be the only employee anyone else will be contracted, Whats the best way to go Sole Proprietor or LLC? Does operating as an LLC make doing taxes more difficult? Will my insurance rates be different even though the business structure is the same?

Answer: As others pointed out, setting up a separate entity (LLC or corporation) does help to limit your liability. HOWEVER, it will NOT protect you in the case of negligence. Even a corporation won’t protect you in that case.

As for taxes, the IRS does not recognize the LLC form so you have to elect how you report the business’ activity. If it is a single member LLC (only you and no one else as shareholders), you can elect to report the activity on the Schedule C (sole proprietor on 1040). If there are more than one member, you must elect a different form, such as 1065 (partnership) or 1120/1120S (corporation/sub-chapter S corporation).

As for “anyone else will be contracted”, you need to review the IRS guidelines regarding what constitutes a sub-contractor. The IRS is cracking down on companies (especially construction) that skirt the payroll laws by classifying workers as sub-contractors. The “employee” can file Form SS-8 which asks the IRS to step in and determine their status. Also, the state’s department of industrial accidents will shut you down if you do not include subcontractors on your workers comp insurance or have proof they have their own.

Answers to Your Tax Questions

David Cay Johnston answers your questions about the new tax law.

WILLIAM VILLARICA PAWNSHOP OWNER BUYS P26 MIL LAMBORGHINI YET NOT PAID INCOME TAXES FOR 8 YRS

Question: What is the provincial tax rate for a small business in Alberta?

I found the Federal Tax on CRA’s website, but I can’t find the Provincial Tax in Alberta.

Answer: The Alberta corporate income tax rates vary depending on the type of business and its net income. The combined federal / provincial corporate income tax rate is 32.12% for general businesses and 16.12% for small businesses. The small business threshold (the amount of income eligible for the small Business Tax rate) is $400,000. Alberta does not have any provincial capital or payroll taxes, which are common in many other provinces.

On the other hand, for sole proprietorships and partnerships, your business income, or share of the business income, in a partnership, is taxed personally, and the tax rate depends on your income amounts. You may have to pay your income tax by instalments.

http://www.canadabusiness.ca/servlet/ContentServer?cid=1099919424552&pagename=CBSC_FE%2Fdisplay&lang=en&c=GuideInfoGuide

Top budget travel destinations for 2011

We analyzed a year’s worth of news, trends, and statistics to identify the world’s best value destinations for 2011. From China to our own backyard, here are 10 places that you can’t afford to miss.

EEP100 – Lecture 4

Is America the sick man of the globe?

Manufacturing and American middle-class pays the penalty after a ‘Roman orgy’ of debt. But the government can still take lessons from the German experience

Governor Daniels’ 2010 State of the State