What is a Member-Managed LLC? There are two types of management structures a limited liability company (LLC) can adopt: member-managed LLC and manager-managed LLC. In a member-managed LLC, all members – or owners – equally assume the management duties and daily operations of the business. Also, each member has the authority to act and make […]
What is Self-Employment Tax? If you work for yourself, you’re required to pay a self-employment tax, which comprises Social Security and Medicare taxes. When you work for a business, your employer takes out 7.65% of your gross income to pay the federal government to fund Medicare and Social Security, while your employer pays the other […]
What is an S Corporation? When you’re a business owner, you can elect to have your entity be classified as an S corporation for federal tax purposes using Form 2553. An S corporation is a pass-through entity, which means your business does not pay income tax at a corporate level. Instead, you and your shareholders are […]
What is a Single-Member LLC? A limited liability company (LLC) is a business structure registered in the state where your company conducts business. Owners of an LLC are called members, so a single-member LLC is composed of just one owner. As an owner of a single-member LLC, you are not considered an employee. To pay […]
What is Bookkeeping? In general terms, bookkeeping is the process of organizing, recording, and classifying financial transactions. The purpose of bookkeeping is show yourself, clients, and investors the current financial position of your company and how your business has performed over time — whether successfully or poorly. Utilizing a bookkeeping software such as ours is […]
What is a Sole Proprietorship? A sole proprietorship is a business that you own and control by yourself. What makes a sole proprietorship an appealing business structure is its simplicity, easy setup and inexpensive cost. When starting a sole proprietorship, you do not have to fill out any formal paperwork or register with your state. […]
What is Form W-4? When starting a new job, you’ll be presented with Form W-4, or Employee’s Withholding Allowance Certificate. Essentially, this form tells your employer how much money needs to be withheld from your paycheck for state and federal taxes. The withheld amount is based on your marital status, the number of allowances or dependents […]
Form W-7 is used to apply for or renew an Individual Taxpayer Identification Number, or ITIN. This nine-digit number allows non-citizens who are ineligible to receive a Social Security Number and lack U.S work authorization to file tax returns to the IRS. What is Form W-7? A Form W-7 is a tax form application for an individual to […]
First enacted in 1939 in the aftermath of the Great Depression, the Federal Unemployment Tax Act (FUTA) was established to support involuntarily unemployed individuals. Imposing an unemployment tax on employers, this federal law supports states that need additional money to pay out benefits to their residents. FUTA taxes are not withheld from employee wages but […]
Here are a few tax tips you might consider before the end of the year, which could potentially reduce your taxes when Uncle Sam comes knocking in April. Generally, you want to lower income and accelerate deductions now if you expect next year’s tax situation to be similar to this year’s. Donate to charity: The IRS […]
