payroll tax – Bregante+Company LLP

Tax Benefits from Hiring Children to Work in the Family Business

As a business owner, you have the opportunity to save income tax and payroll tax (when looking at the family as a whole) by putting your children on the payroll. In doing so, you may be able to turn high-taxed income into tax-free or low-taxed income, achieve social security tax savings (depending on how your business is organized), and even make retirement plan contributions for your child. In addition, employing a child age 18 (or if a full-time student, age 19-23) may be a way to save taxes on the child’s unearned income, as explained below. Here are the key considerations.

Turning High-Taxed Income into Tax-Free or Low-Taxed Income

You can turn some of your high-taxed income into tax-free or low-taxed income by […]

By Jeff Belingheri|July 9th, 2015|Categories: Business Operations, Business Tax, Individual Tax, Retirement Planning|Tags: business expense, Business Owner, business tax, Child, child employment, earnings, family taxes, FICA, FUTA, income, IRA, low-taxed, payroll tax, retirement planning, SEP, social security, tax-deductible, tax-free, wages|Comments Off

Accountable Plans and the IRS

In a 2010-2012 audit initiative, the IRS found many businesses were either not familiar with the accountable plan rules, or were not following them. It seems likely, therefore, that the IRS is going to apply more scrutiny to the issue of accountable plans when auditing businesses and their owners.

An accountable plan is a business plan for expense reimbursement or advances that satisfies the following requirements:

(1) Reimbursements/advances are only made for deductible business expenses incurred in the performance of employee duties;

(2) Reimbursements/advances are substantiated through an expense report, diary, log, trip sheets, or similar record such as a detailed receipt;

(3) Excess advances are returned to the business (except for cases where an allowance doesn’t exceed per diem rates); and

(4) Substantiation and returns of […]

By Coben Tistadt|April 30th, 2015|Categories: Business Operations, Business Tax, IRS|Tags: 2010, 2012, accountable plan, business operations, bussiness, deductible business expense, Internal Revenue Service, IRS, payroll tax, reimbursement, taxable compensation|Comments Off

San Francisco Payroll/Gross Receipts Tax Changes

The City of San Francisco passed The Gross Receipts Tax and Business Registration Fees Ordinance (i.e., Proposition E) on November 6, 2012. Beginning in 2014, the calculation of the SF Payroll Tax changes in two significant ways: (1) the tax begins its transition to the gross receipts tax, so there is a declining payroll tax component and an increasing gross receipts tax component, and (2) the tax is due in quarterly installments, instead of bi-annual installments, with the first installment due on April 30. For more information click here and here.