Jul 252012
 

The IRS is continuing to go after taxpayers who attempt to use S corporations to avoid payroll taxes.  Generally speaking, a wage-earning taxpayer is subject to a variety of payroll taxes, which can include income, Social Security, Medicare, and unemployment taxes.   Sometimes, business owners reach the conclusion that they can pay themselves very little in terms of salary and then call the rest of the company’s earnings a distribution, in order to escape payroll taxes. The problem with this strategy is that the IRS will aggressively pursue taxpayers whom they feel are paying themselves an “unreasonably” low salary in an More…

Nov 112011
 
Florida Employers Could See Major Unemployment Tax Hike

If the Florida legislature fails to act soon, Florida business owners could see a significant increase in their unemployment tax bill.  Business owners will see their bill go up to $172 starting Jan. 1, 2012 as the state continues to feel the effects of a lingering recession, sluggish payroll growth and double digit unemployment.  While certainly disturbing, the tax hike is not altogether unexpected, because it was supposed to occur two years ago.  Employers were initially bracing for a large tax hike in 2010, but state legislators decided to stall the increase in the hopes that the economy would recover. More…

Sep 272011
 
IRS Launches Voluntary Compliance Settlement Program In An Effort To Resolve Past Worker Classification Issues

The IRS has recently announced the launch of its new Voluntary Compliance Settlement Program (VCSP); an effort to enable employers to resolve past worker classification issues by paying a reduced tax in exchange for reclassification of independent contractors as employees in the future.  According to IRS Commissioner Doug Shulman, “this settlement program provides certainty and relief to employers in an important area.  This is part of a wider effort to help taxpayers and businesses to help give them a fresh start with their tax obligations.” The proper classification of a worker as either an independent contractor or employee is an More…