| Tax Help - The More You Know, The More You | | | | partnership, you should definitely find professional help. |
| Save | | | | It is best to pay your income tax and FICA on a |
| It's no wonder that people need tax help. After all, the | | | | quarterly basis, and to save a set percentage of your |
| Internal Revenue code is tens of thousands of pages | | | | gross proceeds in a special bank account in order to |
| long and grows longer by hundreds of pages each | | | | be prepared for when these tax burdens become due. |
| year. | | | | Tax Help Tip #2 - Consider Incorporating Your |
| Nobody can ever achieve complete mastery of the | | | | Business |
| tax code. In fact, the tax code is complex and varied | | | | If you own and operate a small business, you should |
| that even most accountants have to look to others in | | | | definitely consider incorporating. By doing so, you |
| their profession for specialized help. | | | | create another legal entity, the corporation, which is |
| Everyone should receive some form of tax help from | | | | responsible for its own taxes. You, the individual, only |
| an accredited professional. For high income earners, | | | | pay taxes on the salary or investment income you |
| business owners, and the self-employed, professional | | | | receive from the corporation. |
| help is especially necessary. | | | | Clearly, anyone choosing to incorporate needs |
| But first, you must help yourself. It is important to | | | | professional help. But there is a common |
| develop a basic knowledge of tax help strategies | | | | misconception, even among tax help professionals, that |
| before setting foot in your accountant's office. | | | | incorporating results in "double taxation." |
| Armed with an understanding of some tax law basics, | | | | In reality, a corporation pays taxes at a rate of just 15 |
| you will be able to get much more out of your | | | | percent on its first $50,000 in profits, and of course, |
| accountant and the help that he or she provides. | | | | corporate profits are not subject to the dreaded |
| Tax Help Tip #1 - Income Tax vs. Payroll Tax | | | | payroll tax. |
| If you are a wage earner, you may not give much | | | | Furthermore, any dividends paid to you, while taxable |
| thought to taxes. Sure, you may notice that the federal | | | | as corporate income (15 percent for the first $50,000) |
| government takes a healthy chunk of your pre-tax | | | | and personal income, are taxed at a maximum |
| pay, but since you never see this money in the first | | | | personal rate of 15 percent - and that's only if your |
| place, you barely miss it. | | | | personal income puts you in the highest tax bracket. |
| Employees, particularly those without sources of | | | | Best of all, dividends are not subject to the payroll tax |
| income outside of their day jobs, need the least help of | | | | either. |
| all. But certain life events, such as an inheritance, the | | | | Tax Help Tip #3 - Make Sure Your Tax Professional |
| sale of a home for profit or loss, or an unexpected | | | | Is On Your Side |
| influx of cash definitely require professional tax help, | | | | The tax help industry - accounting, bookkeeping, |
| and thus, it is important for employees to understand | | | | lawyers specializing in tax law - is the fastest growing |
| tax basics. | | | | field of business in the United States. As more colleges |
| Furthermore, if you are an employee thinking about | | | | expand their offerings of courses designed to train |
| making a jump into the ranks of the self-employed, | | | | future tax professionals, the quality and character of |
| general knowledge of the tax code is essential. | | | | people dispensing tax help advice is becoming more |
| Self-employed people definitely know the difference | | | | diverse. |
| between income tax and FICA. FICA, named for the | | | | In this case, diversity is a bad thing, as trustworthy and |
| Federal Insurance Contribution Act, is also known as | | | | highly trained tax specialists have been joined by |
| the payroll tax. | | | | people who just want to make a quick buck in the tax |
| The revenue generated by this tax pays for Social | | | | help industry. They are just going through the motions - |
| Security and Medicare benefits, and is assessed at | | | | they have no real passion to serve. |
| 7.65 percent of employee earnings. Employees of | | | | True tax professionals understand the difference |
| corporations can see that 7.65 percent of their pay is | | | | between tax evasion and tax avoidance. The IRS is |
| being taken from each paycheck, but they might not | | | | clear - you are fully entitled to do everything within the |
| know that their employers are required to match their | | | | law to avoid taxes. It is only when you break the law |
| FICA contributions. | | | | that you are guilty of tax evasion, a very serious crime. |
| Self-employed people definitely know this, because | | | | Make sure that your tax help professional is on your |
| since they are their own employers, they have to pay | | | | side, and that all tax advice he or she dispenses is |
| both halves - that's 15.3 percent, and it can be painful. | | | | designed to legally save you as much money as |
| If you are self-employed or the owner of a small | | | | possible. |
| business operating as a sole proprietorship or general | | | | |