For proper tax withholding, tax reporting, and payroll processing, business owners need to correctly determine whether individuals' providing business services should be classified as employees or independent contractors. Misclassifying workers can lead to a business being liable for employment taxes for that worker and possible tax penalties. Learn characteristics for proper employment classification.
There are several reasons why the IRS assesses tax filing penalties. Note that the IRS is legally bound, under Internal Revenue Code (IRC) § 6601, to charge interest when a tax filer fails to pay the full amount of tax due to the IRS on time. Additionally, the IRS is entitled to charge interest on assessed penalties. Interest and penalties will continue to accrue until the outstanding tax due, interest, and penalties are paid in full. Learn about tax filing requirements and representation in the event that tax penalties and interest are assessed.
Knowing which self-employed business expenses qualify as tax deductions can have a significant impact on a business's tax liability. Possible self-employed tax deductions include health insurance, transportation, education, and home office expenses. Learn about self-employed individual tax deduction considerations and requirements.
There are tax requirements that need consideration to ensure tax reporting compliance and eligibility for the maximum number of credits and deductions. Tasks such as selecting the appropriate business entity, establishing a tax reporting year, applying for an Employer Identification Number, and having employees complete required tax withholding forms are some of the requirements. Learn about business entity and tax filing considerations and requirements when starting a business.
As we reach the end of the 2021 tax year, now is the time to start sorting your tax documents for an on-time individual income tax return filing. View a listing of items to consider when preparing for the filing of your individual tax return. Each item listed could have a significant impact on the amount you must pay to the IRS or the tax refund you are eligible for.
If you, or those that claimed you as a dependent, incurred education-related expenses during the year, or for education that is scheduled to start within the first three months of the following year, those expenses may qualify as a deduction or credit. Eligible filers, including students and parents, may be able to take advantage of tax credits and deductions if they paid education expenses, even if the expenses were paid with a student loan. Learn more about how Education Tax Credits and Deductions can reduce your tax liability.