5 business strategy: tax and its payment arrangements and maintenance records

Payroll accuracy and tax record keeping are critical to your business. Bottom line. Here are 5 strategies to help you.

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 - Pay the payroll tax on all commissions.

Commissions represent tax-deductible dollars and are paid directly to individuals based on their performance. These include sales commissions, based on the value of sales revenue generated, and piece-rate commission commissions based on production-based manufacturing units. Although the tasks are essentially intrinsic, they are indisputably representative of individual wages or salaries to pay their wages. Therefore, your business must treat the payment as a "payroll" and deduct the applicable payroll tax, pay the employer's social security match [maximum applicable limit], pay federal and state unemployment [up to the applicable limit] and all Other payroll tax related expenses.

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 - Keep the federal tax schedule due schedule as a guide to timely tax returns.

Exclusive management, some federal taxes that companies or partnerships may have to bear are listed below in the "Federal Tax Schedule Due Date Table" for your use. If the deadline is Saturday, Sunday or a statutory holiday, it will be postponed until the second day of the non-Saturday, Sunday or statutory holiday [the statewide statutory holiday deadline, only when your IRS office is needed]. ]

You may be responsible for the following taxes:

- income

- Self-employment

-Estimated

- Annual income return

- Social Security [FICA] and withholding tax

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 - Make all the necessary federal "expected taxes"

The reason behind the US Internal Revenue Service [IRS] rules regarding projected payments is that they want to provide tools for federal income and self-employment taxes that are currently paid, rather than through withholding taxes. In general, the expected payment is equal to the estimated dollar income and self-employment tax that must be paid, more than any outstanding tax credits from previous years plus the current withholding tax.

The requirements for making an "estimated tax" fall into two categories:

1. Individual - Note: Personal rules include:

- sole proprietor

- "S" company shareholder

- Partners in the partnership

This is true because, according to each of the above forms of corporate ownership, the business ' profit or [loss] flows directly to each owner's "personal" income tax return. A sole proprietorship, "S" company or partnership does not have a "commercial entity" tax liability.

2. "C" [conventional] company

Each of these two categories will be discussed in turn.

1 person:

Penalties for failing to pay taxes will apply to individuals [business owners] who meet one of the following exemptions:

Exemption #1:

If any applicable credits and withholding taxes are applied, the tax due this year is less than $500.

Exemption #2:

If the taxpayer does not have a [$0] liability for the previous tax year, the premise is that the previous year was 12 months. Individuals who do not meet these two exemptions can be penalized for failing to pay the estimated tax in two ways:

- At least 90% of tax liabilities are shown in the tax return for the current year. Egypt

The previous year's tax return shows a total tax of -100%. Note: The "Special Rules" apply to individuals who have "Augmented Total Revenue" [AGI] equal to or more than US$150,000 [married individuals submit US$75,000] in the previous tax year. In order for these high-income earners to qualify for the "safe harbor of the previous year" to avoid any penalties for failing to pay the estimated tax, they must pay a lower amount:

- At least 90% of total liabilities are shown in the return for the year.

- or 10% of the total tax liabilities shown in the previous year's tax return, not 100% of the taxpayers required by other individual taxpayers.

All required payments can be made by withholding or estimated tax payment. The personal estimate of the tax due date is:

Staging date

April 1st, 15th

June 2

September 3

January 4 [the following year]

If the due date is a weekend or federal holiday, payment should be made on the next business day. If the taxpayer submits its 1040 form return, there is no need to pay the fourth tax year and pay the balance of the arrears on or before January 31 of the following year.

For the payment of the estimated tax, the individual should attach the appropriate payment to the 1040-ES Form Voucher [one for each estimated tax [installation]].

2. "C" [conventional] company

If you expect your "C" company to have a current year-end federal income tax liability [bill] of $500 or more, the company must estimate its federal income tax liabilities for the current year and pay quarterly "in the current tax year" [using the form] 8109-B] Estimated installment payments.

"C" companies can avoid penalties if each estimated installment amount is at least equal to 25% of the lower of the following: 100% or 100% of the total tax liabilities shown in the company's current income tax return The total tax liability shown in the income tax return for the previous tax year, [provided: shows positive tax liabilities, considered 12 months in the previous year]

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 - Keep IRS records for three years - five years if you are payroll information .

You need to keep a sales tax record for three years before the business expiration date. This is the latter, or from the date of return of the declaration. These three years of requirements are consistent with the US Internal Revenue Service's statute of limitations for tax returns. You need to keep a five-year salary record.

Once your business has passed a three-year statute of limitations [a payroll tax rebate for 5 years], it is not affected by the IRS audit unless:

- Your business underestimated its income by more than 25%, in which case the statute of limitations was extended to six [6] years. Egypt

- You have implemented tax fraud, in which case the statute of limitations does not apply.

- You are prohibited from submitting a revised tax return after the statute of limitations has expired.

- Your business records include but are not limited to the following:

Tax records: tax returns, financial statements, any financial statements / bank statements, check stubs / cancellation checks, sales invoices, purchase invoices and expense receipts [cheques and cash].

PAYROLL TAX RECORDS: payroll records [such as schedules] and payroll taxes.

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 - Avoid unintentional taxable business income.

A "constructive receipt" that avoids income. One way to implement a tax plan for your business is to delay charging your customers, but you must have a "defensive business reason" to perform this operation [except for tax planning], otherwise the IRS will claim that your business is here. There is constructive income during the period. The current tax year, even if these dollars are not actually received until the next tax year. In addition, if your business receives a check on the last day of the tax year but continues to the next "tax year" deposit, the IRS will consider your business "constructively received" revenue in the current tax year. .

Avoid the defendant's interest in the loan that your business owner provides to your business and/or the loan from your business to its owner.

If you fail to state a reasonable interest rate on any of these business-related loans, the IRS will "estimate" or allocate interest rates to the loan. This means that the individual or entity providing the loan may be subject to income tax liabilities for interest that has never been received, but is accused by the IRS to create taxable income.

Do not display investment income on the schedule "C". Investment income, such as interest, dividends and/or capital gains, is not subject to self-employment tax. All Schedule "C" [sole proprietorship] income is subject to self-employment tax, unless it is received during your trading or business income as a stock or other securities dealer.

If you display this investment income on schedule "C", you will pay a self-employment tax that usually does not require taxable income. Please use "B" instead.

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