For tax purposes, the IRS treats independent contractors as self-employed individuals. That means you’re subject to a different set of tax payment and filing rules than employees. What Is An Independent Contractor? Since you are not an employee of any business, the IRS views independent contractors as self-employed. As an independent contractor, you can operate as a sole proprietor, a limited liability company (LLC), or an S-corporation. The key characteristic of an independe
The IRS has an unlimited amount of time to access unfiled tax returns. Technically speaking, taxpayers should keep their tax records for a long period of time, maybe even forever but in practice, the IRS really doesn't go back more than six years when enforcing filing requirements. The IRS may ask you to file returns that are older than six years old. Take A Head Count Of How Many Past Tax Returns You Owe The first step to making amends with your unfiled years is to get a cle
Some of the worst tax penalties that the IRS and states impose are related to unfiled tax returns with an outstanding balance. Failure to file a tax return might result in the loss of a tax refund even if no taxes were owed. What Paperwork And Documents Do I Need To Gather? Getting documentation and records together is the first step in filing your taxes. Obtain your W-2s and 1099 documents for each of the years that you did not file a return. You can contact your employers t
So, you've got the news that every taxpayer hates to hear: You owe the government money! Thankfully, the IRS permits eligible taxpayers to settle their obligations through an installment arrangement. What Is Tax Debt Relief? The IRS Fresh Start Program is referred to as a government program that helps taxpayers and businesses reduce their tax liabilities and burdens. Tax relief can broadly refer to tax credits, deductions, or exclusions that might lower your tax liabilities.
We are currently in the middle of the 2022 tax return filing season, and we get frequently asked for filing advice. Best practices for submitting income tax forms and interacting with the IRS, state taxing agencies, and municipal taxing authorities. Use E-File And Choose Direct Deposit. You'd be shocked at how many people still rely on paper returns, despite the fact that this may seem like common sense, especially given the current backlog of paper returns. Use e-File whenev
Owing money to the IRS or state could be quite a daunting aspect, especially when terms like liens, levies, and wage garnishments are used. The IRS Fresh Start Initiative offers tax debt relief services to lessen the stress of dealing with the IRS or the state. Our tax professionals are familiar with and know the ins and outs of the audit process, the tax language that tax authorities speak, and the rules and laws of governing paying back unpaid taxes and tax debt collection.
The IRS announced on June 9, 2022, that it would raise the standard mileage rate for business mileage for the final six months of 2022 from 58.5 cents per mile to 62.5 cents per mile due to the high cost of gas. Mid-Year IRS Mileage Rates Increase The normal mileage rate for business travel will be 62.5 cents per mile for the latter six months of 2022, an increase of 4 cents from the rate in place at the beginning of the year. For the balance of 2022, the new rate for deducti
As a business owner, you probably have to consider the decision of leasing or buying a car more than an ordinary person aiming to buy or lease a car. There are all the usual questions and considerations when deciding whether to lease or buy, but there is also another factor that everyone wants to know: what are the tax benefits? The Cost Differences When it comes to choosing between leasing and purchasing a vehicle, pricing is often the decisive factor for small businesses. H
When you’re self-employed, you’re the boss. But because you're the boss, that also means you’re the one stuck with the big tax bill. When tax season rolls around, make sure to double-check all the tax deductions and tax benefits that will help lower your tax bill. Here are 5 tax deductions self-employed individuals should take advantage of. #1: Home Office Deduction You can write off the cost of any workspace you use frequently and solely for your business whether you rent or
Self-employed people are responsible for paying the Self-Employed Contributions Act (SECA) tax. They contribute to the cost of Social Security and Medicare by paying tax on a part of their net income. How Does The SECA Tax Work? The U.S. government levies the Self-Employed Contributions Act (SECA) tax on those who work for themselves rather than a third party. The Federal Insurance Contributions Act (FICA) tax, which supports Social Security and Medicare, mandates that self-e
Taxpayers can determine their IRS debt depending on their annual income and tax bracket by using marginal and effective tax rates. The terms marginal tax rates and effective tax rates are frequently used during tax season and they sometimes can lead to confusion so when it comes to understanding an individual's tax situation, it's crucial to understand the distinctions between the two. What Is An Effective Tax Rate? Depending on their income and the deductions they claim, eac