Recent Articles

Employment Taxes

This section explains the basic tenets of employment taxes and the respective reporting guidelines.  In addition to compliance parameters, we explain the differences between sub-contractors and employees.  Compliance issues are presented along with the associated deadlines.

If you have any comments or questions, e-mail me at dave (insert the usual ‘at’ symbol) businessecon.org.  I would love to hear from you.  If interested in my services as an accountant/consultant; click on My Services in the footer of this article.

If you find these articles helpful, please consider a donation to the site.  The donation button is just to the right.  Even if you don’t make a contribution, I encourage you to read more articles on the website to help you become a better business entrepreneur.

FEATURE ARTICLES:

  • Year-End Preparation

    I dread January of every year. I have to spend so much time preparing the year-end payroll reports prior to the January 31 deadline. Not only must your quarterly’s and monthly’s tie together, but it has to match the general ledger at year-end. So if you do these steps now in early December, then you only ...
  • Form 941 – The Basics

    form 941Form 941 is the employer’s quarterly federal tax return.  It reports how much federal income taxes were withheld; Social Security taxes and Medicare taxes that are due and how much was paid in deposits to the Internal Revenue Service.  The report is filed every three months for each of the four calendar quarters.  If you ...
  • FUTA – An Explanation to the Federal Unemployment Tax Act

    Federal Unemployment Tax Act or FUTA for short is a part of the Internal Revenue Code and is an employer tax on wages paid to employees.  It is used to fund unemployment benefits.  The tax is paid on the first $7,000 of wages paid to every employee.  It is reported via Form 940 http://businessecon.org/resources/ .  ...
  • Time for Those W-2’s

    For us accountants January brings the greatest payroll function of the year; printing the year end payroll reports.  These include the W-2’s, W-3 and Form 940.  They all must tie to the combined total of the quarterly 941 reports and the deposits made to the Internal Revenue Service. Each year the Internal Revenue Service requires employers ...
  • The 1099 Subcontractor

    The Internal Revenue Service promulgates rules and regulations concerning the employment status of workers.  In general, workers are classed as W-2 employees and certain tests must be met to have the worker classed as a 1099 subcontractor.  All 1099 subcontractors should be issued a Form 1099 in January of each year for the prior calendar ...
  • Simple Retirement Plan – Section 408(p)

    There are several different retirement plans available to the small business owner.  But no plan offers so many advantages to small business as the Simple retirement plan.  The positive attributes include: 1) Easiest to understand, 2) Least amount of paperwork, 3) No compliance reporting and 4) Plenty of flexibility.  If you are in business and ...
  • Owner Compensation in an S-Corporation

    One of the tax attributes of an S-Corporation over other forms of tax entities is the ability to reduce the overall tax obligation.  Naturally the lower the overall tax requirement the more profit generated for the owner(s).   The S-Corporation allows an owner to reduce their tax responsibility via the compensation package assigned to the owner.  ...