Federal Taxes
Let us take care of it for you.
The federal tax deadline remains one of the most stressful times for business owners. Good bookkeeping is the foundation of accurate tax filings related to the business numbers, whether they’re on Schedule C or a corporate return. Even with good numbers, there is nuance in the many required federal forms, non-financial questions, and ever-changing laws. As always, accurate documentation is essential.
If you are new to business, watch out for “self-employment” taxes—an additional 7.65% you will pay as a sole proprietor—and the need to manage your tax liability with zero withholding on your income. If you are a seasoned pro, consider intelligent entity organization and tax planning throughout the year to avoid surprises.
Our focus is corporate and individual returns for business owners. We can also prepare tax returns for non-profits, trusts, and estates. We use Drake Tax software to process returns and can e-file as well as e-pay or refund.
Best Practices for Client:
- Organize your books and records and give proper care at intake. The easier it is for us to find required information, the fewer hours will be needed to complete your return.
- Make estimated tax payments to the IRS to avoid penalties or surprises at year-end
- Plan to file an extension, as well as estimate payment, as deadlines approach
- Review your return before filing. We are expert advisers and service providers, but your tax return is ultimately your responsibility.
- Learn about long-term tax planning strategies, such as hiring your children, using a home office, or structuring multiple businesses under a holding company
Business Taxes
State & Local Excise
- There are different versions of this tax. Depending on where you live, you may need to get a state and/or local business license and file regularly. This tax is normally calculated off your business’ gross revenue, payroll, or some combination.
Federal & State Payroll
- If you have employees, you’ll need to pay withholding from their paychecks to the IRS and state agencies.
- Worker’s compensation is required in many states.
- Unemployment insurance is also required in some jurisdictions.
- New and creative taxes, such as Washington’s Paid Family and Medical Leave will likely continue to crop up in the future.
Income
- It is important to understand that ONLY C-corporations pay an income tax. If you operate as any other legal entity, you will only pay individual taxes.
Individual Taxes
Federal & State Income
- You pay based on the graduated tax brackets that the IRS updates each year.
Self-Employment
- You pay 15.3% for Social Security (12.4%) and Medicare (2.9%), with some limitations and thresholds. Normally, employer pays half and employee pays half. As a self-employed individual, you get to pay both.