Glossary: S-corporation
S-corporation is a tax term that refers to a corporation or an LLC that elects to be taxed under the rules of Subchapter S of the Internal Revenue Code.
Glossary: Audit (Of Financials)
In financial accounting, an audit refers to a CPA firm reviewing a company’s financials and internal controls, and reviewing documentation to verify the amounts shown on the financials.
The Difference Between Not-for-Profit and Tax-Exempt
The difference between not-for-profit and tax-exempt is: one is a term relating to state law, while one is a tax term.
Glossary: Hobby Loss Rules
The hobby loss rules are important to know about, especially if you operate a side business.
Choosing a Business Entity: What is Basis?
What is basis? Basis in a business can be thought of as a person’s stake in that business.
Things a Business Owner Needs to Know Before Hiring Employees
There are many things a small business owner needs to know before they hire their first employee.
Does a Sole Proprietorship Need a Balance Sheet?
Does a Sole Proprietorship Need a Balance Sheet?
Why is Self-Employment Tax Based on 92.35% of Self-Employment Income?
A question I’ve had in my mind for a long time now is: why is self-employment tax for a sole proprietor based on 92.35% of self-employment income instead of the whole amount? I’ll attempt to explain in this post. SE Tax vs. FICA Tax FICA taxes are withheld from employee wages and fund the employee’s […]
Choosing a Business Entity: Partnership
Choosing a business entity: a brief discussion of the tax characteristics of partnerships.
Self-Employment Tax Calculation: The Basics
Here’s a basic overview of the self-employment tax calculation for self-employed people. These are the steps for the calculation: Determine your net self-employment income. For most self-employed people, this will be the net profit from their Schedule C. Multiply by 92.35% (.9235). Multiply that result by 15.3%. This gives you the amount of self-employment tax […]