| Let's face it, taxes are complicated,
| |
| | fees can be enormous and can cause
|
| especially if you own a small business.
| |
| | businesses to fail if they cannot afford
|
| Read below about tax concerns to avoid
| |
| | to pay the fees.
|
| some of the most common pitfalls
| |
| | Another common tax issue is
|
| experienced by small business owners
| |
| | misclassifying workers. Workers are
|
| today.
| |
| | usually classified as either regular
|
| As your business grows, you will probably
| |
| | employees or independent contractors.
|
| need to hire employees. Some of the most
| |
| | Business owners have payroll tax
|
| common tax concerns involve employee tax
| |
| | withholding and reporting obligations for
|
| issues. When you hire employees, you
| |
| | all of their employees; however, business
|
| have to file timely payroll tax returns
| |
| | owners don't have to withhold or make
|
| and make the required tax deposits.
| |
| | contributions for payroll taxes for true
|
| Payroll taxes include three types of
| |
| | independent contractors.
|
| taxes:
| |
| | Calling someone an independent contractor
|
| - Income Tax-You must withhold the proper
| |
| | saves a lot of time complying with IRS
|
| amount of income tax from each employee's
| |
| | reporting requirements. It also saves
|
| paycheck throughout the year.
| |
| | money-you don't have to make the
|
| -Social Security and Medicare Tax or
| |
| | employer's share of the FICA
|
| FICA-You must withhold the employee's
| |
| | contributions and you won't have to pay
|
| share of FICA taxes from each paycheck
| |
| | unemployment compensation. It costs a
|
| and you must match that amount.
| |
| | business 20 percent to 40 percent more
|
| -Federal Unemployment Tax or FUTA-This
| |
| | per worker to treat them as employees.
|
| tax goes to the unemployment insurance
| |
| | While it may be tempting to use
|
| system and is paid by the employer. The
| |
| | independent contractors rather than
|
| employee pays no part of FUTA.
| |
| | employees, the IRS is very aware of the
|
| Always pay your payroll taxes in full and
| |
| | benefits of misclassifying an employee as
|
| on time. If you don't, the IRS adds
| |
| | an independent contractor and will impose
|
| interest and large penalties. The
| |
| | stiff penalties for those who break the
|
| interest and penalties can quickly grow
| |
| | rule.
|
| if you don't pay them immediately. These
| |
| |
|
