Free Online Article Directory. For Article Authors & Publishers
A CPA Helps Business Owners Understand Payroll Taxes
Payroll taxes can be a headache for business owners. Employers are required to withhold some types of payroll taxes from an employee's paycheck. Some must be paid by both the business owner and the employee, while some are the responsibility of the business owner alone. Along with understanding the different types, employers must stay up-to-date on the amount of each tax, as well as the most current legislation regarding taxes. Many business owners consult a CPA to make it easier.
What Are Payroll Taxes?
There are federal and state payroll taxes. A CPA can help business owners understand both types, but state payroll taxes usually create more problems for employers because the requirements are different depending on the location. In Nevada, there are no state income taxes. Individuals and business owners are only required to pay federal income taxes, social security, and Medicare. Like most states, Nevada does have an unemployment tax that business owners must pay. Nevada also requires many employers to pay an additional payroll tax, known as the Modified Business Tax.
Federal Payroll Taxes
The amount of federal income tax that a business owner takes out of an employee's paycheck is determined by an IRS W-4 form. Employers are required to have every employee complete a W-4. Generally, social security and Medicare (FICA) are shared equally by the employer and the employee. But in 2011, the employee tax contribution rate was lowered to 4.2% for social security. Business owners are still required to pay 6.2% on all wages less than $106,800. Medicare tax rates are still 1.45% for both parties.
Unemployment Taxes
Unemployment taxes are collected by the federal government, as well as individual state governments, to fund the unemployment program. Most business owners are required to pay unemployment taxes by filing a Form 940 with the IRS. As of July 1, 2011, the federal unemployment rate is 6%, but a credit of 5.4% is available for employers who pay state unemployment taxes. In Nevada, the state unemployment tax is referred to as unemployment insurance tax, or UI tax. Calculating the UI rate depends on several factors that are best explained by a Nevada CPA.
UI Tax Rate
Any business owner in Nevada who pays at least $225 in wages within one calendar quarter is subject to UI taxes. The amount of the tax is a percentage of every employee's wages, up to $26,400 (2012 wage limit). New businesses pay 2.95% for the first 14 to 17 quarters in operation. After this period, the UI tax rate is determined by Nevada's 'experience rating.' Depending on how much a business pays in UI taxes and the unemployment benefits its employees receive, the UI tax rate can range from 0.25% to 5.4% of the total taxable wages the business has paid.
Modified Business Tax
On October 1, 2003, the state of Nevada made it a requirement for owners to also pay an excise tax on their paid wages. The Modified Business Tax is quarterly based on an employer's gross wages and paid to the Nevada Department of Taxation. This is in addition to the UI tax that is paid to the Employment Security Commission. The current rate is 0.63%, and there are no wage limits or caps to benefit the business owner. There are deductions available. Most of these credits are associated with health care payments.
Many owners are unsure of the legislation concerning payroll taxes, but failing to comply with state and federal laws can be detrimental to a company. An experienced Nevada CPA is the best resource for learning more about federal payroll taxes, as well as current information on the UI and Modified Business taxes.
Author Resource:-
Reno CPA Tim Nelson has been helping individuals and businesses with their tax preparation and financial planning for years. Tim has a passion for numbers, so that you don't have to. Visit Tim Nelson's Website to download the FREE Business and Tax Preparation Organizer.
To see what else Tim is talking about, visit Tim's Blog.
Nobody likes doing their taxes and everybody dreads the approach of tax season. Take some of the apprehension away by being prepared in advance so that you can get your taxes done early.
If you own a small business, you may be pleasantly surprised to learn how your company can take advantage of the R&D (Research and Development) tax relief scheme.
How often can you say that your bank mailed you money? Thanks to a federal law that governs mortgages and escrow accounts, It happened to me. In 2011 my property taxes went down due to the housing crash (parts of Florida were hardest hit in the nation). Lenders calculate how much to collect each month for escrow based on the previous year's bills.
Payroll taxes can be confusing for business owners. There are many different types of payroll taxes, including both federal and state withholdings. In Nevada, individuals and businesses are not required to pay a state income tax, but business owners are responsible for several state payroll taxes, like the UI Tax and the Modified Business Tax.
Nearly everybody recognizes lottery winnings can utterly improve a individual's way of living. Individuals often dream about winning huge lottery jackpots to enable them to cease being tied down to ajob and spend their days and nights having fun on luxurious luxury yachts, taking a journey around the world, or anything else that captivates their soul.
Do you have piles of papers, stacks of statements and drawers stuffed with receipts? Part of preparing for tax season is being organized. The last few days of the year are as good a time as any to invest a few hours in organizing your piles.
This article describes the nature of the 2001 and 2003 Bush administration tax cuts and details the history of the legislation. It explores economic projections about the cuts and the current Obama administration proposals.
Whether it's your home or your business the truth is that doing taxes yourself is never fun. This is especially true if you are dealing with complex issues, which most people are when they get to a certain age. How do you know what amount of money goes where on a tax form, or what counts as a write-off.
The everyday use of professional income tax software is becoming vastly popular. Using a tax software makes filing your taxes to the IRS fast and easy. This may be a reason that it is becoming popular or because people like to keep files on their taxes which most softwares do for you. Tax softwares normally come with files that you fill out. Such as family, house, and marriage files.
Owing money to the IRS can have destructive consequences if action isn't taken. Hiring a CPA can be the best way to avoid losing your home to the government. A qualified CPA can file the necessary forms, develop the best strategy, and represent you before the IRS. With the aid of a CPA, you can reduce the amount of taxes that you owe.
![[Valid RSS feed]](http://www.articlelisted.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Tim Nelson's Author Feed
Print This Article
Add To Favorites 