ruggedlynx63 said:Pretty much, yeah... unless you've got some carried-over losses from previous years or specific tax credits to write off, then it gets a bit more complicated than that...
Exactly! 😁 I’ve got a backup plan ready whenever I'm traveling, 🙂
Richard Howard55 said:A colleague was asking me how year-end contributions are calculated. She’s got an office for her licensed engineering practice on top of her regular full-time job. I guess it gets complicated. Maybe. Carol Price4 explained it all to me. I thought I had everything figured out until yesterday... Honestly, I’m just completely lost today. Nothing makes sense anymore.
As I understand it, contributions are calculated at year-end based on the difference between total income and expenses. I guess. Can I find out my totals? And if so, how do I actually pay them? Also... which accounts am I supposed to be using here? 🤔 ), So, what’s next? How am I supposed to handle this in the KPI? Is this actually following the cash principle, or is it more like an exception—kind of like how we deal with depreciation? I guess I need to know if this gets recorded in the KPI for 2015, even though the filing isn't due until February 28, 2016. Maybe that's the catch. Fellow accountants, I need some help here. This poor bookkeeper is in a bit of a bind. 😵 🙂
For self-employed contributors, you pay those in 2016—it follows the cash basis, so once the payment goes out, it hits the expenses, 😉 meaning it doesn't count until the following year...
Arthur Lopez3 said:Is this a mistake, or are we actually going to have to file Form 941 for income tax prepayments too? I can't find any extra details anywhere. Every single resource I look at only mentions payroll taxes (starting in February for January's figures)
It’s not an error—that's just RIPUP's text. I haven't dug deep into the proposed tax code changes yet, but they probably tucked that in somewhere; I doubt they just made it up out of thin air...
Ethan Bailey18 said:Which article covers the exemption for item 1)? If it's Article 46, then we're looking at an acquisition. Double-check that they didn't accidentally tack tax onto item 2); I see that mistake all the time with my vendors. If they are registered in the system, they apply to both goods and services. (I suspect the services fall under Article 26)
Turns out you were totally right—they messed up the calculation. They sent over the corrected invoice without the sales tax today using the reverse charge method, 👍
The W-2 for payroll tax and health insurance contributions uses the actual payment date if you pay by the 15th—but if the filing happens after the 15th, the date defaults to the 15th since that's when the contributions actually become due... I think I read that somewhere, let me try to dig it up...
I was honestly pretty surprised by what Milivoj wrote regarding those advance payments... it seems like total nonsense! Based on the logic above, it should be the payment date if settled by month-end, or the last day of the month if filed later 🤔🤔 ...that’s just my take on it, though, so don't hold me to it...
I'll do some digging, and if I find anything useful, I'll post it here, 🙂
Small business owners are going to be in such a mess now. They're used to having a bit of wiggle room, and now they're being squeezed tight—again, and once again, it's us taking the hit. Honestly, we should be asking for early retirement benefits after all this crap they've piled on our shoulders!
Man, if the proposed amendments actually strip out non-taxable income under section 39—meaning the W-2 will only cover per diems and travel reimbursements moving forward—then woohoo! At least there's one decent thing happening!
Starting January 1, 2016, anyone running their own business—whether they're reporting based on gross income or net profit—is responsible for calculating their own payroll tax and health insurance contributions.
- These folks handle their own math, put together monthly reports—basically their W-2 filings—and send them straight to the IRS - The payment deadlines haven't shifted, so you'll still need to have those contributions paid up by the 15th of each month for the previous month's work
Here’s how the monthly bases for self-employment insurance contributions look for 2016:
Small business owners (gross income) = $1741 (using a 0.65 multiplier) Small business owners (net profit) = $2947 (using a 1.1 multiplier) Freelancers (gross income) = $2947 (using a 1.1 multiplier)
Due to some updates in the regulations regarding how government revenue and mandatory contributions are handled, new specific tax codes for self-employed individuals were added, effective January 1, 2016.
8230 Social Security contribution (Part I) 2330 Social Security contribution (Part II) 8796 Employment tax 8605 payroll tax and health insurance contributions 8133 payroll tax and health insurance contributions
Annual Tax Return
- In Attachment UPO under section 971, we're looking at determining the income tax prepayments for self-employment for the upcoming tax year. - They also updated the "Long-term Asset List." - There's a new required form—Form P-PPI—which is basically a summary of all business income and expenses for the year; freelancers have to attach this to their annual return (Form DOH).
- Self-employed taxpayers pay their determined income tax when they file their annual return (which is due by February 29, 2016). - For those specifically covered under Article 18, once the deadline for filing the 2015 annual return passes, any previous notices regarding income tax prepayments become void. - Starting in March 2016, monthly prepayments will be calculated based on the numbers from the filed 2015 annual return. - You'll start paying this monthly prepayment starting March 2016, which is also when you submit your W-2 (funds move from account 1430 to 1619).
- Income tax prepayments are due monthly by the last day of the following month, based on what was reported in the previous year's annual return—essentially, the 2015 tax liability is just split across the months you actually worked. - If a taxpayer lists other types of income alongside their self-employment earnings on the annual return, the prepayment for the next period is only calculated based on the self-employment portion. - These monthly prepayments cover the months immediately following the annual return deadline (so for 2016, that means March 2016 through February 2017).
Ethan Bailey18 said:Which article covers the exemption for item 1)? If it's Article 46, then we're looking at an acquisition. Double-check that they didn't accidentally tack tax onto item 2); I see that mistake all the time with my vendors. If they are registered in the system, they apply to both goods and services. (I suspect the services fall under Article 26)
Well, there isn't even a section listed, which is the worst part... I'll have to give them a call, I've got a feeling they messed up the invoice...
Nancy Jones said:Thanks so much! Since I originally brought the car into the business personally and it's already been fully depreciated, would it work if I just drafted a formal decision and issued an invoice directly to myself as the owner?
If you're counting the car as a business asset, you can just file a decision to pull it out of the company holdings—then it just shows up under receipts...
feralwolf31 said:Hey everyone, I could really use some help here. I’m working over at Synesis, and I’ve run into a bit of a puzzle regarding how to book incoming invoices from foreign suppliers based in other USA states when they don't fall under standard tax reporting requirements.
If you're dealing with invoices where tax is already calculated—or even items that aren't taxed at all—you just book them into the regular accounts payable, assuming they don't need special handling.
Just convert everything to dollars using the average exchange rate from the Federal Reserve based on the invoice date.
All he really cares about is whether you have a valid Tax ID or not—he just needs to be able to run it through the system... just give him the number, and once he checks it, all his info will pop up right there so he can write down whatever he needs...
cosmictinker24 said:Right, okay... I found that bit online.. But does that only apply to corporate income tax filers? We're dealing with individual income tax here! How is the official decision supposed to look, and how does one actually record this in the books? I'm looking for actual examples, you know... real-world practice..
Ah, an income earner... well—just close out the accounts, record the payment in kind under receipts, and toss in a note saying the entity was struck from the registry, or whatever else works...
Elizabeth Hill52 said:I currently have subscriptions active on accounts 2003, 8109, 8400, 8443, and 8559. I’m looking to transfer those over to my "new" accounts: 2283, 8168, 8486, 8508, and 8630. Could someone please walk me through the process for doing this?
Just double-check with your caseworker first to make sure all the tax forms were actually filed—you wouldn't want the credit to be stuck because of missing paperwork... since overpayments on payroll taxes are pretty rare.
cosmictinker24 said:Anyone happen to have an answer for this?
Basically, any write-offs from previous tax periods that were claimed as deductions get added back into your income—unless you've actually sued them, started a collection action, filed them in a debtor's bankruptcy, or settled through restructuring/bankruptcy proceedings (assuming the debtor isn't just some individual or a related party).
There’s also a little exception—you can write off expired debts if they don't exceed $750 per non-individual debtor in any single tax period.
Patrick Peterson49 said:I was on Chase all day from 7:30 to 4:00—checked at least five times—and everything worked fine for me once I updated Java this morning...
The digital certificates definitely weren't working—I checked. My client actually had to head down to the local Bank of America branch because payroll wouldn't go through, and the teller told them it’s absolute chaos over there right now since the system crashed and the certificates are blocked... I honestly don't know how you managed to get those payments through, but none of my clients using Chase have been able to. Since most of them are newer companies, they probably have more recent certificates... maybe that's where the glitch is.
jadenomad24 said:Hey there, I’m not having any trouble with the IRS site, but for some reason, my bank's portal isn't working on any browser I try today. The applet just won't load, so I'm feeling a bit stuck here.. Windows 8 A pop-up appears... I click allow, and then the whole menu just vanishes...
Chase had a system crash today and it locked up all their certificates...they're scrambling to fix it right now...it'll probably be back up tomorrow.
It’s actually Edge—not Bing—that comes as the default browser with Windows 10, but you can totally switch it over to Internet Explorer to get things running normally—yeah, I forgot to mention that part...