Posts Tagged ‘income’

More and more individuals are working as freelancers and independent contractors these days—and the IRS is not particularly happy with that.

The problem is that it is sometimes difficult to determine whether an individual is an employee or an independent contractor—and this can lead to disputes with the IRS. Regardless of what label you put on a relationship, the key issue as far as taxes are concerned is control—the more control a company has over the work, the greater the chance the worker should be classified as an employee instead of an independent contractor.

The IRS is working hard to find lost revenue.  Non-reported or under reported income by restaurant workers is under scrutiny. Restaurants owners have the critical tasks of keeping records on tips received and compelling employees to report tips.

All employees receiving $20.00 or more a month in tips must report 100% of their tips to their employer and are required to pay taxes on all their wages including tips.

According to Texas Comptroller Susan Combs a slow economy means more Texas families may qualify to claim the Earned Income Tax Credit (EITC) on their federal income tax.

EITC refunds are based on family size and income. For 2009:

• Families that earned less than $48,279 and have three or more children may qualify for a tax credit up to $5,657
• Families with two children and income less than $45,295, may qualify for a tax credit up to $5,028
• Families with one child and an income less than $40,463 may qualify for a tax credit up to $3,043
• Families with no children and earning less than $18,440, may qualify for a tax credit up to $457

More information about the EITC, printable materials for businesses and community organizations to distribute can be found on the Comptroller’s Web site at http://www.window.state.tx.us/taxinfo/eitc/.

A new deduction for qualifying motor vehicles taxes.

The recently enacted American Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5) provides a new deduction for qualifying motor vehicles taxes.

1. Who can claim the deduction for motor vehicle taxes?

The Recovery Act makes the deduction available to purchasers of “qualified motor vehicles” after February 18, 2009, and before January 1, 2010 [IRC Sec. 164(a)(6) and Sec. 164(b)(6)(G)]. A qualified motor vehicle is a new passenger vehicle, light truck, or motorcycle that has a gross vehicle weight rating of 8,500 pounds or less, or a motor home of any gross vehicle weight [IRC Sec. 164(b)(6)(D)(i)].

These Four Things are Critical to Running Your Business.

Many small business owners treat bookkeeping as as task they hire an accountant to do just before the final tax deadline.

In actuality, keeping up-to-date books is essential to helping small business owners run their operations more efficiently and cost-effectively.

Whether you do your own books or use a professional service, these four (4) simple tips can help keep you on track.