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A corporation is a legal fiction. It is an entity created and regulated by state law. For all extensive purposes, it is an individual with all the rights and obligations of an individual. It will have its own EIN (employer ID #) which serves it the same as a social security number. It is taxed […]

Yes. Wage Levies/Garnishments are a common means of collecting taxes from taxpayers who have an outstanding tax liability and have not responded to the IRS previously and made alternative arrangements to get current with the IRS.  An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can garnish wages, […]

The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done. Small businesses should consider all evidence of the degree of control and independence in the employer/worker relationship. Whether a worker is an independent contractor or employee depends […]

The Internal Revenue Service (IRS) is the revenue service of the United States federal government. The government agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue, who is appointed for a five-year term by the President of the United States. The IRS is responsible for collecting taxes and administering the Internal Revenue Code, the […]

NO! The IRS views this as stealing from the government and from your employee. These funds are being held in trust for the employee to pay his/her taxes. This is the most common way that small businesses with employees get in trouble with the IRS. While the small business owner may view his activities in […]

Unreported income is huge deal to the IRS. The agency recently estimated that the U.S. loses hundreds of billions per year in taxes due to unreported income. Considering the amount of lost revenue, it’s not surprising that the IRS has a process for determining unreported income. The IRS is more than happy with just about any method you […]

Most employers are required to file Form 941, Employer’s Quarterly Federal Tax Return, to report both the federal income taxes you withheld and the FICA taxes you withheld and paid during a calendar quarter. (Employers who qualify for annual reporting/payment, file Form 944.) Form 941, Employer’s Quarterly Federal Tax Return. Employers use this for to: report income taxes, social security tax, or Medicare tax withheld from employee’s paychecks, […]

April 15 is the annual deadline for most people to file their federal income tax return and pay any taxes they owe. By law, the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline. Here are eight important points […]

Income Tax W2 – This is employee wage income. Withholding is usually held by the employer to pay off the employees taxes. Try to be accurate in the amount of exemptions (deductions) you take. 1099 (1099-MISC) – This is income earned by independent contractors. A persona receives a 1099 at the end of the year, […]

NO! … but there are options. If you want to keep the business open and not make any changes whatsoever, you have to either pay in full or enter into an installment agreement. The IRS can and will work with you as long as the payment arrangements can pay off the IRS as quickly as […]