If I had to identify the single most important decision a business must make regarding how an individual is to be paid for the services he or she provides it would be classification of the individual as an employee or as an independent contractor.

Improperly classifying employees as independent contractors can create serious long-term liabilities for a business. If an individual that the business treated as an independent contractor is later determined to have been an employee by the IRS or the state of Florida, the employer can be held responsible for the payroll taxes that should have been withheld from the individual along with the employer taxes that would have been due, and the penalties for failure to pay these taxes.

Many new businesses look to reduce their costs by using independent contractors rather than employees to perform vital services.

By using independent contractors they save on payroll taxes, workers compensation insurance, and employee benefits. Properly used independent contractors can save a business money, but be careful, just because you call someone an independent contractor does not mean they are one.

In general, an independent contractor is an individual who is in business for him or herself and maintains independence from the business he or she is performing the service for, whereas an employee works for and performs services under the control of the business receiving the service.

The IRS and the state of Florida base worker classification on “common-law” factors designed to gauge the amount of control the business has the right to exercise over the worker. Two frequently cited factors of an employee-employer relationship are that the business is maintaining the right to discharge the worker at will and / or the business is providing the worker tools and a place to work.

By comparison, individuals who are truly independent contractors generally provide their own tools and work place, they have business licenses, and are engaged to complete specific projects and cannot be terminated without cause from a specific project. There are no hard-and-fast rules as to who is an employee and who is an independent contractor. All possible factors pertaining to the business’s control and the worker’s autonomy must be taken into account.

As you can see, there is no easy answer as to when an individual qualifies as an independent contractor. There is however no penalty or liability for misclassifying independent contractors as employees. As a general rule when in doubt the safest classification may be to choose employee.

The small business retirement plan is something that gives the owner something to look forward to in the future. The plans offer some security, and the family can find some relief from funeral, and related experiences after your death. Since each plan is different, it pays to examine the plans closely before signing papers.

One of the best ways to learn about small business plans is by searching the Internet. You can use the search tools online to search through the many providers, plans, prices, and other related subjects. Small businesses can open business accounts online that offer them tools for managing their finances, including their retirement monies. Another alternative is the Simplified Employee Pensions. These plans are the most effective and have the lowest fees on plans. Employees have a few advantages with this plan.

Joint Ventures, independent contractors and sole proprietors, etc, can choose the SEPS plans. This simplified plan has Secretarial fees that are commonly lower than some of the IRA plans. That Is the individual retirement accounts. There is minimal recording keep with these plans.
SEP give employers’ larger contribution options, some people prefer the Uni-K plans if they are sole proprietors. SEP has some disadvantages. One of the disadvantages is that the plans are complex for business owners with employees.

Some of the basic Uni-K plans include the 401k solo, single, personal, individual, and the plans available for special practitioners. Home workers may prefer this plan as well. SEP contributions put into an account goes into a 100% vest right away. Tax deferments grow on employees’ SEP account, which builds up from the contributions. The employees do not need to worry about tax owed to the IRS. There aren’t any taxes on the dividends, gains from capital, or interest incurred. Once the employee begins to make withdraws from the account however, then they will have to pay taxes.

With the small business retirement plan, the employees must deduct funds from the account after he or she turns 70 1/2. The employers can make contributes up until then. If anyone “59 1/2″ draws funds from the account, they may have to pay up to 10% on penalties. There is a maximum limit on contributions, which are subject to change each year.

You can set more money aside on the Simplified plans than you can on typically individual retirement accounts. Moreover, employers can enjoy deductibles on taxes. The taxes are excluded from salary as well, since it is not considered a recompense or reimbursement.

Small business owners before did not have many retirement options available. Today, because so many people are getting into small business, there are plenty of insurance plans available. If you are searching for small business retirement plan then go online and do some research. It pays to read all the details on a given plan and compare the plan with other small business plans to ensure you get the most coverage for the best price possible.

Every year we need to pay our taxes. Sometimes however we are not sure about how to pay. People who wanted to pay 2008 taxes late came into this problem this year. Now they are wondering about going online versus seeing an accountant. Let’s take a look at this situation together and see what their best options would be for paying their 2008 taxes.

Are online accountants as reliable for taxes as seeing an accountant at their office? Of course. When you wish to it is just as reliable as seeing an accountant face to face. In fact, the IRS gives certified tax website E-file badges to display to show their reliability and that they aren’t just scam artists trying to steal your information.
Is it more expensive to pay my 2008 taxes online rather through an online tax service rather than through payment offline? This is a little more complicated. The amount on the taxes you have to pay for your taxes is based on your income and is going to remain the same on or offline. However, to calculate how much you will have to pay on your 2008 taxes will be much cheaper than doing it offline. So the answer is that the actual tax price service is the same, but the payments for services will vary greatly. Almost always to pay 2008 taxes online is much cheaper speaking from my own experiences with paying taxes on and offline.
Will there be a penalty for paying now and not in the beginning of the year? If you did not ask for a tax extension, then there will be a penalty and you will have to more to the IRS which may also affect your tax refund. It is still better to pay your 2008 taxes sooner than later.
What If I do not pay my taxes for 2008? This is the most disastrous thing which you can do! If you avoid your taxes, you will eventually have to pay back taxes and you may go to prison for tax evasion. Always pay your taxes. Nobody liked it when they had to pay the 2008 taxes or any of them. In recent times, thanks to the new advancements in technology, finding a good online tax preparer to help you pay 2008 taxes as well as any back taxes possibly owed. Paying taxes is no longer a chaotic mess, but a simple process. After all, who doesn’t enjoy getting a tax refund?

I recently had the privilege of discussing credit card counseling with a local banker. Among the things he mentioned one of them stood out in the report. After review it became know that people in debt are seeking credit counseling programs to seek debt relief.

The problem however is the long time frame associated with the programs. The monthly payments remain the same as well causing the same issue to arise being the strain of the monthly payments on household budgets. Many people have even enrolled in CCCS programs paid the fees and then dropped out. This is where the problem lies.

Ethics should come into play in this scenario. When dealing with an indebted consumer many credit card counseling companies act like debt collecting sharks to gain enrollments. Pushing the consumer by pointing out the non-profit status of the company to enroll in the program. After this shaky enrollment process they deduct the first monthly payment that goes entirely to fees for the service.

If the next month the client fails to make a payment there is no follow up done to see why. The reason being that the credit counseling company is paid for and sponsored by the credit card companies themselves. The IRS has done much research into the non-profit CCCS programs but have had little success with completely eradicating predatory credit counselors. Additionally the credit counseling firm is paid a “fair share” usually between 7-12% of the debt directly back to the credit counseling agency.

Consult with a banker or an attorney to see if credit counseling or debt settlement is best for your financial needs.

The Tax Code Reads as Follows:

Any United States person who has a financial interest in or signature authority, or other authority over any financial account(s) in a foreign country is required to file a Report of Foreign Bank and Financial Accounts (FBAR), if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.

A potential nightmare all begins with Line 7 of Schedule B.

Line 7 of Schedule B directly ask a taxpayer if he/she have a foreign bank account. It then tells you the filing requirements for Form TD F 90-22.1. The next question ask if “Yes” enter the name of the foreign country.

Line 7 of Schedule B is at the bottom of the page, most Americans and a lot of Tax professionals just breeze right past it and continue with the return.

RED FLAG: Failure to file a TD-90-22.1 is a FELONY, punishable by a 5 year prison term.

If you are unsure of how to handle Line 7 of Schedule B, continue to read this article and then contact a Tax professional as soon as possible.

No extensions are allowed for this form. Taxpayers who have earned interest in Canada must comply as well.

There are ways for IRS to find out if you have an offshore bank account or have a financial interest in a foreign account.

One way for IRS to find out, is if you spend more then you report as income. Often times people do this by using a credit card associated with an offshore account or a foreign account.

Another way for IRS to find out is: IRS pays informers to report tax cheaters. Informers can use Form 211 to report tax evasion and receive 8% of the first $100,000 IRS collects from the tax cheater. Of course IRS investigates the informer as well.

Keep in mind that Line 8 of Schedule B has consequences as well. If you have a foreign Trust, you are required to complete Form 3520.

It is highly recommended that if you must complete Line 7 or 8, of Schedule B, that you contact a Tax Attorney or an Enrolled Agent.

The Way In Which to Comply With the Foreign Accounts Law: Check the block on Schedule B of Form 1040 Complete Form TD F 90-22.1 Mail the completed form by June 30th to the US Dept of Treasury, PO Box 32621, Detroit, MI 48232-0621