Taxes 101. Dennis P. Williamson, CPA 3986 Main Street Hilliard, OH

Transcription

1 Taxes 101 Dennis P. Williamson, CPA 3986 Main Street Hilliard, OH

2 What we will cover today: Introduction Employer Related Taxes Payroll Taxes FICA Medicare State Unemployment Federal Unemployment Commercial Activity Taxes Workers Compensation Premiums Financial Statements/Bookkeeping

3 Dennis P. Williamson, CPA B.S. Business Administration, OSU, 1979 MBA, specialization in Finance, OSU, 1983 Passed CPA exam on first attempt in 1980

4 Dennis P. Williamson, CPA Deloitte Haskins & Sells, CPA s, (Audit Mgr.) Started DPW, CPA in early 1990 s Serves all types of businesses, for-profit and not-for-profit Certified Quickbooks ProAdvisor

5 Dennis P. Williamson, CPA Worked with payroll tax related issues since 1980 Has seen what can happen when you don t comply with federal, state, and local tax requirements

6 Dennis P. Williamson, CPA Worked with payroll tax related issues since 1980 Has seen what can happen when you don t comply with federal, state, and local tax requirements

7 Dennis P. Williamson, CPA Worked with payroll tax related issues since 1980 Has seen what can happen when you don t comply with federal, state, and local tax requirements

8 FICA FICA (a/k/a social security) Employee has 6.2% withheld, employer matches Employer remits these funds to Social Security Administration Deadlines for remitting the funds penalties are harsh Payments done online through EFTPS

9 FICA IRS has authority to shut down your business, confiscate/sell your assets if you do not remit the funds IRS has authority to pursue individuals that are officers of the company and authorized check signers and confiscate their personal assets as well Quarterly tax return (Form 941) Annual returns is part of W-2 filing process

10 Medicare Employee has 1.45% withheld, employer matches (no cap, unlike FICA) Medicare surtax charge for rich people starting in 2013 Everything else is the same as FICA

11 Ohio Unemployment Compensation Tax Ohio employers required to pay tax based on a % of gross wages up to $9,000 per employee New employer rate 2.7% Rate changes annually based on history of claims filed against the employer Quarterly payments made with filing of tax return

12 Ohio Unemployment Compensation Claims Any terminated employee can file a claim Employer is notified of a claim by mail Employer can contest the claim Make sure you contest the claim timely or you lose! Ohio Dep t of Job and Family Services is very pro-employee

13 Federal Unemployment Compensation Tax Employers required to pay tax based on a % of gross wages up to $7,000 per employee per year Tax rate varies depending on which state you are located 1.2% in 2013 for Ohio Payments made quarterly electronically through EFTPS or at end of year with filing of Form 940

14 Workers compensation premiums Technically not a tax it is insurance Provides health insurance coverage to employees incurring work-related injuries Employers required to have an active workers compensation policy if they have employees If employee files a claim on an employer without an active policy employer is responsible for all costs related to claim

15 Workers compensation premiums Premiums based on gross pay per category of employees times experience rate for that category of worker Gross pay for officers has a cap Experience rates based on history of claims for that category of worker and history of claims for the employer Semi-annual report of wages either online or hardcopy The silent killer of business in Ohio

16 A Note About Independent Contractors Employers are trying to categorize workers as independent contractors to avoid payroll taxes and impact of Obamacare Worker classification the 20 question IRS test IRS is hiring many auditors to ensure compliance with Obamacare will be looking at this area closely

17 Commercial Activity Tax (CAT) Replaced corporate franchise tax and personal property tax in 2005 Does not apply to businesses with Ohio gross receipts of less than $150,000 in a calendar year Does not apply to not-for-profit entities

18 Commercial Activity Tax (CAT) Ohio gross receipts greater than $150,000 but less than $1,000,000 pay $150 (annual filing) Greater than $1,000,000 pay $150 plus.26% of gross receipts greater than $1,000,000 (quarterly filing and depositing)

19 Financial Statement Preparation Cannot effectively run your business without timely and accurate financial statements If you want to get bank financing in today s environment, you will have to have this

20 Quickbooks The leading accounting software used for bookkeeping and financial statement preparation by American businesses, by far Inexpensive Easy to use Desktop and online version