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Types of Taxes

Overview, #101 Summary of Tax Brief One of the biggest challenges of any business is paying taxes. Not only are taxes due, there are penalties for missed payments, or filing deadlines, or inaccurate information. Many business owners use an accountant or payroll service to reduce some of the burden. Even if you select a third party to handle these services, you still will need to stay on top of them to make sure that the work gets…

Capital Gains and Losses, #102 Summary of Tax Brief Just about everything you own and use for personal or investment purposes is a capital asset. Examples are household furnishings, your home and stocks or bonds you personally own. You have a capital gain or a capital loss whenever you sell a capital asset. the difference between the amounts you sell it for and your cost or basis determines whether you have a capital gain or a capital loss. You have…

Payroll, #103 Summary of Tax Brief If you are an employer and pay wages, you must pay and/or collect employment taxes. Employment taxes consist of the following: Federal Income, Social Security, and Medicare taxes. Federal Income Tax You are required to withhold federal income tax from your employee’s wages. To figure how much federal income tax to withhold from each wage payment, use the employee’s Form W-4 and the methods described in IRS Publication 15. Report taxes…

Federal Income Tax, #104 Summary While some states do not have an income tax, all residents and all citizens of the United States are subject to the federal income tax. Not everyone, however, must file a return. The requirements for filing are found in 26 U.S.C. 6011. The federal income tax is a tax on the taxable income of U.S. citizens and residents. It also applies to the income of corporations, partnerships, estates and trusts. …

Social Security, #105 Summary Social Security protects more than 150 million workers and pays benefits to more than 45 million people. You and your family are protected by Social Security and you pay taxes that help make the system work. Self-employed people must report their earnings and pay the taxes directly to the IRS. You report your earnings for Social Security when you file your federal income tax return. If your net earnings are $400 or more…

Alternative Minimum, #106 Summary The alternative minimum tax attempts to guarantee that all individuals pay at least a minimum amount of tax. What Is the Alternative Minimum Tax? The tax laws give favored treatment to certain kinds of income and allow special deductions and credits for certain kinds of expenses. The alternative minimum tax attempts to level the playing field and guarantee that all individuals who benefit from these tax advantages pay at least a minimum amount of…

Types of Taxes - Inflation-Adjusted Tax Numbers for 2007, #107 Tax numbers change frequently. This tax brief lists certain inflation-adjusted numbers as of April 2006 and are for use in preparing 2006 tax returns. Be sure to review the instructions for any tax form you are completing to confirm these numbers and to check for any other numbers that might have been adjusted.

Tax Strategy, #108 Summary In setting a tax strategy, keep in mind that a dollar saved on taxes is worth much more than a dollar saved on expenses. Thus, it is always a good idea to investigate whether a particular business decision or course of action can help you reduce your tax liability. …

Estimated Tax: Computation and Payment, #109 Summary Whether you operate your business as a sole proprietorship, S or C Corporation, limited liability corporation, or other entity, it is important to accurately estimate your personal tax liability. Every major business and investment decision you contemplate should be taken with the consequences on your taxes in mind. Additionally, by properly estimating your taxes, you will be able to determine whether your business will be subject to the alternative minimum tax at tax return…

Self-Employment, #110 Summary The self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. To pay SE tax, you must have a social security number or an individual taxpayer identification number. The SE tax rules apply no matter how old you are and even if you are already receiving Social Security…