Employee or contractor, hiring family members, fringe benefits, accountable plans, and what changes when your team works in another state.
47 guides, each reviewed by a CPA licensed in the US and Canada.
An accountable plan allows S-Corp owners to reimburse themselves tax-free for business expenses paid personally (mileage, home office, phone, travel).
Small Business & BookkeepingAn accountable plan allows an S-Corp to reimburse the owner-employee for business expenses tax-free. Under the TCJA (2018-2025.
Small Business & BookkeepingAn accountable plan under IRC 62(c) and Reg. 1.62-2 allows an S-Corp or C-Corp to reimburse employees (including owner-employees) for business expenses.
Small Business & BookkeepingAn accountable plan under Treas. Reg. 1.62-2 allows employers to reimburse employees for business expenses tax-free (excluded from the employee's W-2.
Small Business & BookkeepingA captive insurance company is a licensed insurance company owned by the business (or business owner) it insures. Micro-captive insurance (IRC 831(b)).
Small Business & BookkeepingWhen a business provides a vehicle to an employee (including an owner-employee). Personal use valuation methods:. Covers key rules, filing requirements,.
Small Business & BookkeepingA defined benefit plan allows a business owner to contribute (and deduct) far more than any other retirement plan. Defined benefit plan contribution.
Small Business & BookkeepingBusiness-related education is deductible if it maintains or improves skills in the current business. Deductible (maintains or improves current skills):.
Small Business & BookkeepingBusiness owners can claim the clean vehicle credit (up to $7,500 for new EVs, $4,000 for used), plus Section 179 or bonus depreciation on the vehicle.
Small Business & BookkeepingEmployee fringe benefits are one of the most tax-efficient ways for business owners to compensate themselves and their employees because many fringe.
Small Business & BookkeepingThe ERC program ended for new claims as of January 31, 2024. Businesses that already filed ERC claims should check their status through the IRS processing.
Small Business & BookkeepingThe IRS has paused processing of most new ERC claims and is auditing previously paid claims. The Employee Retention Credit (ERC) was a pandemic-era.
Small Business & BookkeepingThe Employee Retention Credit (ERC) under IRC 3134 was one of the largest business tax credits in US history. ERC eligibility requirements.
Small Business & BookkeepingMisclassifying workers costs businesses back taxes, penalties, and interest.
Small Business & BookkeepingEmploying family members gives sole proprietors FICA exemptions for children under 18 and income-splitting benefits for spouses. The work must be real.
Small Business & BookkeepingAn HSA offers the only triple tax advantage in the tax code: contributions are tax-deductible, growth is tax-free. 2025 HSA contribution limits: |.
Small Business & BookkeepingHiring your child (under 18) in a sole proprietorship or partnership saves FICA (15.3%) and shifts income to the child's 0% bracket.
Small Business & BookkeepingHiring your spouse, children, or parents in your business creates legitimate tax savings. Family employee tax rules: Children under 18 (working for a sole.
Small Business & BookkeepingA sole proprietor can hire their child under 18 and the wages are exempt from FICA and FUTA. The tax math: - The business deducts the wages on Schedule C.
Small Business & BookkeepingHiring children to work in a family business is one of the few strategies that creates a deduction for the parent while generating tax-free income.
Small Business & BookkeepingHiring the first W-2 employee triggers new tax obligations: payroll taxes, withholding, workers' comp, unemployment insurance.
Small Business & BookkeepingHiring your children or spouse can save thousands in FICA taxes each year. Children under 18 working for an unincorporated parent pay zero FICA.
Small Business & BookkeepingHiring a spouse as an employee creates access to employer-sponsored health insurance, doubles retirement plan contributions.
Small Business & BookkeepingA well-drafted independent contractor agreement protects the business from worker misclassification claims and clarifies tax obligations.
Small Business & BookkeepingThe independent contractor tax picture: 1. Self-employment tax: 15.3% on net earnings. Self-employment tax: 15.3% on net.
Small Business & BookkeepingMisclassifying employees as independent contractors triggers back taxes, penalties, and interest. Worker classification is one of the highest-stakes.
Small Business & BookkeepingAn S-Corp accountable plan allows the corporation to reimburse the shareholder-employee for business expenses (home office, vehicle, phone.
Small Business & BookkeepingAn accountable plan lets an S-Corp reimburse its owner-employee for business expenses (mileage, home office, supplies, travel) tax-free.
Small Business & BookkeepingA remote employee or independent contractor in another state can create income tax nexus for the business. Before 2020. Covers economic nexus thresholds,.
Small Business & BookkeepingHiring family members provides significant tax benefits. Children under 18 employed by a parent's sole proprietorship are exempt from FICA (IRC.
Small Business & BookkeepingSeveral federal tax credits reward businesses for hiring employees from specific targeted groups. Work Opportunity Tax Credit (WOTC) targeted groups: |.
Small Business & BookkeepingBusinesses can claim tax credits of $2,400-$9,600 per eligible hire under the Work Opportunity Tax Credit (WOTC). Covers federal and state requirements,.
Small Business & BookkeepingHiring remote employees in other states creates tax nexus for the employer. Hiring a remote employee in another state triggers multiple state tax.
Small Business & BookkeepingHiring your first employee triggers employer tax obligations: Form 941 quarterly, FUTA (Form 940), state unemployment, workers' comp, and W-2 filing.
Small Business & BookkeepingHiring remote employees in other states creates payroll tax, income tax withholding, unemployment insurance.
Small Business & BookkeepingHiring remote workers in other states creates nexus for income tax, payroll withholding, and sales tax.
Small Business & BookkeepingHiring family members is one of the most underutilized tax strategies for small business owners because it accomplishes multiple objectives.
Small Business & BookkeepingSmall businesses can offer tax-deductible benefits that cost less than equivalent salary increases: health insurance (100% deductible).
Small Business & BookkeepingThe tax code provides a list of fringe benefits that employers can provide to employees tax-free (excluded from the employee's gross income) under IRC 132.
Small Business & BookkeepingCertain fringe benefits are deductible by the business and tax-free to the recipient. Fringe benefits are compensation paid in a form other than cash.
Small Business & BookkeepingCertain fringe benefits are excludable from employee income under IRC 132.
Small Business & BookkeepingThe tax code allows employers to provide certain benefits to employees completely tax-free, meaning no income tax, no FICA, and no FUTA.
Small Business & BookkeepingFringe benefits are non-cash compensation that employers provide to employees. Major tax-free fringe benefit categories:.
Small Business & BookkeepingThe WOTC provides a tax credit of $2,400-$9,600 per eligible new hire from targeted groups (veterans, SNAP recipients, ex-felons, long-term unemployed).
Small Business & BookkeepingThe Work Opportunity Tax Credit (IRC 51) provides employers a credit of up to $9,600 per qualified veteran hired and $2,400-$9,000 per hire.
Small Business & BookkeepingWorkers' compensation premiums are fully deductible as a business expense. Workers' compensation rate formula: Premium = (Payroll / $100) x Rate per.
Small Business & BookkeepingWorkers' comp premiums are fully deductible business expenses. Benefits received by injured employees are tax-free. Workers' comp tax treatment: 1.