Is withholding required on damages or settlements for claims for personal physical injuries or sickness?

Payroll Service For Small Businesses – Generally, no. The amount of any damages (other than punitive damages) received as the result of a suit or settlement agreement on account of personal physical injuries or physical sickness are excluded from gross income. Accordingly, FICA, FUTA and income taxes are not withheld on such damages. Considering a Tax Professional? For no obligation free consultation contact us today!
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Are tips subject to employment taxes?

Yes. However, tips paid in cash and received by an employee are exempt from FICA, FUTA and income tax withholding if the aggregate amount of tips received during any calendar month is less than $20. Generally, an employee is required to report tips to his or her employer by the 10th day of the month following the month in which the tips were received. The employer must then report and withhold FICA and income taxes on tips that are reported by the employee from non-tip wages paid to the employee. To the extent the employee has failed to report required amounts, or if the amount required to be withheld exceeds the employee’s other wages or funds, withholding is not required. . Considering a Tax Professional? For no obligation free consultation contact us today!
ABA Tax Accounting
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Are contributions made to qualified retirement plans subject to FICA, FUTA and federal income tax withholding?

Payroll Service For Small Businesses – Generally, no. Employer contributions to a qualified pension, annuity, profit-sharing or stock bonus plan, simplified employee pension (SEP), and §403(b) plans are not subject to FICA, FUTA and federal income tax withholding. However, salary reduction contributions made by an employee to a §401(k) plan, a §403(b) plan, a SIMPLE retirement account, a pick-up plan or a §457(b) plan are included in the definition of wages for purposes of FICA and FUTA taxes. Considering a Tax Professional? For no obligation free consultation contact us today!
ABA Tax Accounting
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WHAT IS THE NET INVESTMENT INCOME TAX?

Income Tax Service For Small Businesses – The Net Investment Income Tax is a 3.8% tax on certain net investment income of individuals, estates, and trusts with income above statutory threshold amounts, referred to as modified adjusted gross income (MAGI). Keep reading to learn more about this new tax and how it might affect you at http://www.abatax81.blogspot.com.
ABA Tax Accounting
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What are the common law rules for determining whether a service provider is an employee or an independent contractor?

Payroll Service For Small Businesses – The common law tests are subject to various formulations but control by the service recipient over the service provider is the primary factor that establishes an employer-employee relationship. The IRS has provided 20 factors indicating whether sufficient control is present to establish an employer-employee relationship, including whether full-time work is required and the amount of instruction given to the service provider. The degree of importance of each factor varies depending on the occupation of the service provider and the factual context in which the services are performed. Considering a Tax Professional? For no obligation free consultation contact us today!

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What are the employment tax consequences of a worker being classified as an employee instead of an independent contractor?

Payroll Service For Small Businesses – If the worker is an employee, the employer may be required to withhold federal income tax, Social Security and Medicare tax and may have to pay federal unemployment tax. If the worker is an independent contractor, the worker pays his or her own Social Security and Medicare taxes in the form of self-employment tax. Additionally, independent contractors may be prohibited from participating in certain employee benefit plans. Considering a Tax Professional? For no obligation free consultation contact us today!
ABA Tax Accounting
651-621-5777
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http://www.abataxaccounting.com
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