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Self-Employed
And Small Business Tax Preparation Areas of Small Business Specialization
Understanding the small business and self employment taxes, can be a tough process, if you choose to go at it alone. At Phoenix Accounting Services, we specialize in Small Business Tax Accounting and individuals who are Self-Employed. We can provide Tax Accounting Services to include: "Specialized Business Accounting", "Strategic Tax Planning", "Financial Planning Services", "Auditing Services" and "Consulting Services". ___________________________________________________________________________________ WHO IS SELF-EMPLOYED?
According to the IRS, you are considered self-employed if any of the following apply:
Simply put, this guidance means that anyone who is in business to make money is considered to be self-employed. This can be a freelancer, consultant or small business, but not a large corporation. It is also important to note that self-employment doesn’t have to be something that is full time. Self-employed individuals report earnings to Social Security when they file federal income taxes on a form Schedule SE which is required when net earnings exceed $400 each year. What if I am self-employed and an employee? Some individuals are both employees and self-employed. For example, let’s say you run a local cake baking service while working full-time as a nurse for a hospital. You must pay taxes on income from all sources. This means you will pay SECA on your cake business and your portion of FICA (your employer pays the other half of the FICA tax due). Just like FICA taxes, there is no limit for SECA. However, remember there is a limit for Social Security. Small Business Structures
Establishing the right business entity for your operation is one of the most important considerations as it relates to taxes. The five main types of business entities are:
Forming a Limited Liability Company (LLC) and electing to file as an S corp will allow the business owners to avoid double taxation and separates liability from the owner. This structure also allows you, as the business owner, to collect a salary and is especially beneficial if your business is highly profitable. For instance, if you earned $100,000 as a graphic designer in 2017 and filed as a sole proprietor, you would have paid self-employment taxes on the entire amount. However, had you created an LLC, and paid yourself a reasonable salary based on national or local benchmarks, only the salaried portion would be subject to self-employment tax. What is An EIN? Most businesses need to obtain an Employer Identification Number (EIN) from the IRS. A taxpayer needs to get one if they:
The fastest and easiest way to get an EIN is online at IRS.gov. Type “EIN” in the search box. The IRS issues the EIN immediately after validating the applicant’s information. Who Must File Taxes? All small businesses who have been in existence since the beginning of the tax year or any part of the year, must file an income tax return whether or not they have taxable income. If you have a US Company doing business in the US, your company is subject to IRS tax rules. If you are not a resident of the US, and you own a US company, or are a foreign company doing business in the US, then your company is also subject to United States IRS tax rules. Bookkeeping and Payroll Services All companies whether a Corporation or an LLC must keep financial records. It can be extremely difficult to keep a business running without proper bookkeeping. Our Accounting experts can provide quality and reliable bookkeeping services. If you have employees working on salary taxes must be deducted and reported to the IRS on a quarterly basis. Accounting Services Our Accounting Department offers a wide range of accounting services to small businesses. To help you keep records, Phoenix Accounting Services is a Quickbooks Advisor. By engaging in the services we offer, we will then be able to help you and your business create and implement financial strategies to achieve your goals. Audit & Appeal Representation We possess the expertise and experience to represent taxpayers before tax authorities. Our tax professionals understand the dispute resolution and appeals process and work diligently to obtain you the most favorable results. Other Tax Services Financial accounting for income taxes can be complex. Our professionals have the technical skills and experience to help our clients navigate through these complex requirements and create efficient income tax accounting and reporting. We also help companies stay up-to-date with regulatory guidance and disclosure requirements. The services we offer allow our clients to minimize year-end surprises and reduce risk related to reporting. These services include:
Tax Updates We keep our clients up-to-date on the latest federal and state tax issues through newsletters, website postings and face-face to meetings. By staying ahead of tax issues, we can communicate how they will impact your operations quickly and address them in a timely manner. Review - Limited Assurance Less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures we apply to the financial statements, and various inquiries we make of your company's management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures. A review doesn't require us to study and evaluate your company's internal controls or verify data with third parties or physically inspect assets. Rather, a review report expresses limited assurance in the form of the statement: "We are not aware of any material modifications" for the financial statements to be in conformity with the Generally Accepted Accounting Principles (GAAP). Reviewed financial statements must include all required footnotes and other disclosures. Business Valuation Business valuations enable you to accurately determine the value of a business and its components. It is essential that you know what a business is worth whether you are buying, selling, involved in litigation or planning your estate. Our highly trained and experienced professionals work with attorneys, other accountants and financial institutions to ensure you are represented fairly. Our business valuation team is comprised of Certified Valuation Analysts (CVA), Accredited Senior Appraisers (ASA) and accountants Accredited in Business Valuation (ABV). Additionally, they are experienced in testifying in both Federal and State courts. |
Business Location #1 Phoenix Accounting Services
5501 N 7th Ave, Ste 103 Phoenix, AZ 85013 602-680-7612 Email: info@phxaccts.com Fax: 1-800-480-1551 Google Map Location
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Business Location #2
Phoenix Accounting Services
1550 E University Dr, Ste 2L, Mesa, AZ 85203 480-993-3138 Email: info@phxaccts.com Fax: 1-800-480-1551 Google Map Location
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