The question is an important one. Failure to properly classify your workers may subject your business to large financial penalties. Tax Implications Employees and independent contractors are treated differently for income-tax withholding and employment-tax purposes. With an employee, the business generally must withhold income taxes from the employee’s pay and remit those taxes to the federal (and state, if applicable) government. The business and the employee share the responsibility for Social Security a
To claim a deduction for a charitable donation, you must have certain documentation. The current tax law requirements are summarized in the table below. Additional Tips Here are some other points to keep in mind. Multiple contributions. If you make multiple contributions of less than $250 to the same charity during the year, you generally should treat each contribution separately in determining the amount of the contribution and the supporting records you should have. Donations of clothing and household i
You aren’t in business to lose money. So there’s not much to like about an unprofitable year. But if your company is an S corporation, there may be a tax upside — the corporate loss may give rise to a personal tax deduction. Computing Your Basis Standing between you, as an S corporation shareholder, and the loss deduction is a tax computation known as “adjusted basis.” Under the tax law, your loss deduction will be limited to your adjusted basis in your corporate stock and in any debt the company owes you.
Once you retire, you’ll be ready to start using those savings you’ve worked so hard to accumulate. Adopting a random approach of simply withdrawing the amount you need for the year’s living expenses is risky. It’s far better to have a plan for making your money last. Here are some potential strategies. Invest your savings and live on the investment income (dividends and interest). This plan has one major advantage: You’re practically guaranteed not to outlive your savings. You have control over your investm
If you have a child going off to college next fall, here’s some good news. A study* conducted by Ipsos for Sallie Mae, a financial services company specializing in education, found that the average family spent 9% less on college expenses for the 2010-2011 academic year than for the prior year. High-income families reported the biggest drop; middle-income families also spent less. New Trends? Tuition and other college costs continue to rise. So how did families trim their spending? Here are some contributin