BHT&D Certified Public Accountants Blog

Are You An S Corporation Stockholder? Are You Taking Reasonable Compensation In The Form Of Wages?

Posted by Joe Turnes on Fri, Feb 15, 2019 @ 05:00 AM

S corporation compensation requirements are often misunderstood and abused by owner-shareholders. An S corporation is a type of business structure in which the business does not pay income tax at the corporate level and instead distributes (passes through) the income, gains, losses, and deductions to the shareholders for inclusion on their individual income tax returns. If there are gains, these distributions are considered return on investment and therefore are not subject to self-employment taxes.

However, if stockholders also work in the business, they are supposed to take reasonable compensation for their services in the form of wages, and of course, wages are subject to FICA (Social Security and Medicare) and other payroll taxes. This is where some owner-shareholders err by not paying themselves a reasonable compensation for the services they provide, some out of unfamiliarity with the requirements and some purposely to avoid the payroll taxes.

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Tags: Small Business Accounting, Payroll Tax, Individual Tax, Business Entity, Tax Liability

Will Your 2018 Withholding Be Right?

Posted by Joe Turnes on Tue, Feb 13, 2018 @ 07:00 AM

One of the first trouble spots of the new tax reform is the W-2 withholding for 2018. Passage of the new law in late December hasn’t given the IRS much time to develop new withholding tables. This can be a big issue, as the recent Tax Cuts & Jobs Act (TCJA) substantially altered the tax rates and standard deductions, did away with exemption deductions, and increased the child tax credits—all elements of how the withholding allowances and tables have been structured in the past. 

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Tags: Payroll Tax, Small Business, Tax Reform, Individual Tax, TCJA

Will My Gift To My Employees Be Subject To Payroll Taxes?

Posted by Lori Shepard on Tue, Dec 05, 2017 @ 03:00 PM

This is the time of year when many employers give deserving employees a reward for a job well done.  For FICA and income tax withholding purposes, wages don’t include gifts that are classified as de minimis fringe benefits.  Tax-free de minimis fringes are benefits provided by employers that are offered infrequently and have a fair market value so small that it is impractical and unreasonable to account for them.  The following are treated as de minimis fringes: 

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Tags: Business Tax, Payroll Tax, Small Business, Gifts

Employer's Annual Federal Tax Return Available For Liability Under $1000

Posted by Lori Shepard on Thu, Jan 28, 2016 @ 08:00 AM

Small employers who have been filing Form 941 - Employer’s Quarterly Federal Tax Return - and expect that their employment taxes for the 2016 calendar year will be $1,000 or less may contact the IRS to request  to file annually on Form 944.  

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Tags: Payroll Tax, Small Business, Employment Tax, Form 944

What Are The New Filing Deadlines for 2016 Payroll Forms?

Posted by Lori Shepard on Mon, Jan 18, 2016 @ 08:00 AM

There are big payroll tax changes coming in 2017 as a result of the tax extenders bill, Protecting Americans from Tax Hikes (PATH) Act of 2015:

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Tags: Payroll Tax, Tax Extenders Bill, Protecting Americans from Tax Hikes Acts of 2015,, PATH

Do I Have To Pay Overtime To My Salaried Employees?

Posted by Aric Salgat on Mon, Dec 28, 2015 @ 08:00 AM

Since 2004, the Department of Labor has not updated the regulations pertaining to white collar workers and the overtime pay provisions. 

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Tags: Payroll Tax, Minimum Wage

Can I File Michigan Sales Use and Withholding Tax Online?

Posted by Lori Shepard on Fri, Nov 28, 2014 @ 08:00 AM

The MTO (Michigan Treasury Online) is a new service available for filing and paying the SUW taxes.

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Tags: Small Business Accounting, Business Tax, Payroll Tax