Hours of Operation: Mon - Fri 8:00am - 8:00pm

SSK ACCOUNTING SERVICES, LLC

SELF-EMPLOYMENT TAXES


If you own an unincorporated business, you pay self-employment tax. Self-employment taxes can be greater than income taxes.


The self-employment tax consists of


a 12.4 percent Social Security tax up to an annual income ceiling ($147,000 for 2022) and 

a 2.9 percent Medicare tax on all self-employment income. 


These amount to a 15.3 percent tax, up to the $147,000 Social Security tax ceiling. If your self-employment income is more than $200,000 if you are single or $250,000 if you are married filing jointly, you must pay a 0.9 percent additional Medicare tax on self-employment income over the applicable threshold for a total 3.8 percent Medicare tax.


You pay the self-employment tax if you earn income from a business you own as a sole proprietor or single-member LLC, or co-own as a general partner in a partnership, an LLC member, or a partner in any other business entity taxed as a partnership. (There is an exemption for limited partners.)


You do not pay self-employment tax on personal investment income or hobby income. For example, you do not pay self-employment tax on profits you earn from selling stock, your home, or an occasional item on eBay.


The tax code bases your self-employment tax on 92.35 percent of your net business income.
That means your business deductions are doubly valuable since they reduce both income and self-employment taxes. In contrast, personal itemized deductions and “above-the-line” adjustments to income do not decrease your self-employment tax. 


Some types of income are not subject to self-employment tax at all, including


most rental income

most dividend and interest income

gain or loss from sales and dispositions of business property

S corporation distributions to shareholders.


You calculate your self-employment taxes on IRS Form SE and pay them with your income taxes, including your quarterly estimated taxes.


You can set up an S Corporation to mitigate the self-employment tax. If you are willing to go to some trouble to potentially minimize the self-employment tax bite, consider operating as an S corporation. Please call to discuss.



SSK Accounting Services, LLC



Image About the company 1



SSK Accounting Services is your number one source for professional service. We surpass the competition, in not only price, but value as well. We provide a full range of services from your traditional bookkeeping and tax needs to forensic analysis.

SSK Accounting Services believes in providing the best possible service. Most meetings will be held at your home or place of business, making it unnecessary to travel with your documents.  All phone calls, texts and emails will be returned within 24 hours.


We have over 30 years of knowledge and experience in the field of accounting.  In addition, we have over 15 years of experience in the specialties of fraud and litigation support.  There is considerable stress involved in litigation and we can help alleviate your fears and confusion. Please take the time to review our services and see the many ways we can help you.  


STACY SEIDEN,  CPA, CFE, FCPA, CCFC

Owner





ACCOUNTING SERVICES

INDIVIDUALS

  • PERSONAL BUDGETS: In these economic times it is vital to create and follow a budget
  • TAXES: Preparation of your Federal, State and Local Income Tax Returns; Preparation of  your quarterly estimates;  Help in resolving delinquent tax situations
  • BILL PAYMENTWe can help you simplify and streamline your bill payment system, i.e. set up recurring payments and online BillPay


SMALL BUSINESS

  • BOOKKEEPING: I can advise and help train your staff in the use of Quickbooks
  • TAXES: Preparation of the annual corporate tax return (S-Corp and LLC)
  • INTERNAL CONTROL: Fraud is a concern of every company, often it is difficult in small companies to provide adequate internal controls. I evaluate your company’s system and discuss ways to improve procedures.
  • BUDGETS, FORECASTS AND PROJECTIONS: Every company needs a business plan, including forecasts and projections. Budgets are a tool to help you evaluate your business’ performance. I can prepare these reports and help you use them.
  • CONSULTING: 

    Meet with you monthly, quarterly, annually or on an as needed basis, including but not limited to forming a new business; financing options; buy/sell agreement; expansion plan; succession plan; etc.

LITIGATION SUPPORT

      DIVORCE

      • Divorces frequently require the services of a forensic accountant. In the dissolution of a marriage a thorough review to determine the income and assets of the parties is necessary to calculate alimony, child support and equitable distribution. We investigate financial information by examining documents, develop questions and consult in depositions, investigative interviews and conduct lifestyle analyses.  


      FRAUD

      • Fraud is on the rise in the current economic climate.  If you or your company is the victim of fraud and would like to pursue the perpetrator SSK Accounting Services can help to quantify your financial loss.  We will review your company’s financial data and discuss with you our findings. A comprehensive report will be provided, which you can submit to the authorities. 

       

      OTHER

      • The area of litigation support is not limited to divorce and fraud. We also provide services including but not limited to damage analysis, shareholder disputes, buy-sell agreements and solvency review  


      TAX TIPS


      Alimony- is it taxable?  

      The Tax Cuts and Jobs Act changed the treatment of alimony for federal taxes.  In prior years alimony was taxable to the recipient and deductible by the payor.  Now unless your divorce agreement was dated before December 31, 2018 alimony is not taxable to the recipient and not deductible by the payor.  Regarding the taxation of alimony on the state level, it varies depending on which state the recipient resides. It important to consult with your tax accountant. 


      Child Support is not taxable income

      The calculation of taxable income can become confusing if you are receiving child support and alimony. Often child support and alimony are paid in one payment; therefore it is important an accurate allocation be made in order to pay the correct amount of taxes. This can become particularly confusing if the individual responsible for paying the child support and alimony gets behind in their payments because all payments are applied to child support first. Please consult with your tax accountant.


      New deduction on Qualified Business Income

      The Tax Cuts and Jobs Act created a new 20% deduction of qualifying business income.  There are complicated rules for eligibility and a complex calculation of the deduction. Do not assume you are entitled to the 20% deduction, consult your tax professional.


      Income is more than a W-2

      Income available for support is one of the key financial items in a divorce. This number is the basis for child support and alimony. Due to the complexity of this calculation a forensic accountant is often retained. The spouse receiving support will want to make sure all elements of income have been captured.


      Business Owners-what is their income


      Some business owners don’t take their salary in the form of W-2 income. They may make draws periodically throughout the year. They may pay for personal expenses, i.e. cell phones, cars, meals using company funds. It is the job of the forensic accountant to review these expenses and determine if they are business or personal.


      Where’s the money?

      Additional bank accounts may be set up to hide funds. There are various ways these accounts may be titled. The important thing to determine is where the money came from to fund these accounts. Was the money removed from a joint account? Was the money from the sale of a marital asset? Forensic accountants are trained to trace the path these funds take.

      Protect yourself-Retain your team of advisors

      Divorce is an emotional and life changing event. Most individuals going through divorce are not at their best mentally. Do not make decisions about your financial future without the best information. Let those who are trained help you make informed and educated decisions. You think you feel betrayed now, imagine how you’ll feel if after you are divorced you are barely making ends meet and your ex is taking a vacation every couple months because you lacked necessary income information.

      Documents Needed to Prepare Tax Return

      Personal Information

      ·         Copy of driver’s license

      ·         Your social security number or tax ID number

      ·         Your spouse's full name and social security number or tax ID number

      ·         Amount of any alimony paid and ex-spouse's full name and social security number

      ·         Divorce agreement

      ·         Your tax returns for the previous year

      Information About Other People Who May Belong on Your Return

      ·         Dates of birth and social security numbers or tax ID numbers

      ·         Childcare records (including the provider's tax ID number) if applicable

      ·         Income of other adults in your home

      ·         Form 8332 showing that the child’s custodial parent is releasing their right to claim a child to you, the noncustodial parent

      Third Stimulus Payment-Notice 1444-C from the IRS, if you don’t have the letter give me the amount received (it is not taxed but does need to be listed on the tax return)

      Education Payments

      ·         Forms 1098-T from educational institutions

      ·         Receipts that itemize qualified educational expenses

      ·         Records of any scholarships or fellowships you received

      ·         Form1098-E if you paid student loan interest

      Income

      ·         Forms W-2

      Self-Employment Information

      ·         Forms 1099-MISC, Schedules K-1, income records to verify amounts not reported on 1099s

      ·         Records of all expenses — check registers or credit card statements, and receipts, Access to Quickbooks or other accounting software

      ·         Business-use asset information (cost, date placed in service, etc.) for depreciation

      ·         Office in home information please discuss with me

      Business Use of Vehicle Information

      ·         Log showing total miles driven for the year (or beginning/ending odometer readings), total business miles driven for the year (other than commuting), and the business purpose of the mileage

      ·         Amount of parking and tolls paid

      ·         If you want to claim actual expenses, receipts or totals for gas, oil, car washes, licenses, personal property tax, lease or interest expense, etc.

      Rental Property Income

      ·         Records of income and expenses

      ·         Rental asset information (cost, date placed in service, etc.) for depreciation

      Retirement Income

      ·         Pension/IRA/annuity income (1099-R)

      ·         Social security/RRB income (1099-SSA, RRB-1099)

      Savings and Investments

      ·         Interest, dividend income (1099-INT, 1099-OID, 1099-DIV)

      ·         Income from sales of stock or other property (1099-B, 1099-S)

      ·         Dates of acquisition and records of your cost or other basis in property you sold (if basis is not reported on 1099-B)

      Virtual Currency (i.e. Bitcoin)-At any time during the year, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?

      Other Income

      ·         Unemployment, state tax refund (1099-G)

      ·         Gambling income (W-2G or records showing income, as well as expense records)

      ·         Amount of any alimony received

      ·         Health Savings Account and long-term care reimbursements (1099-SA or 1099-LTC)

      ·         Jury duty records

      ·         Hobby income and expenses

      ·         Prizes and awards

      ·         Other 1099

      Other Deductions and Credits

      ·         Form 1095-A Health Insurance Marketplace Statement

      ·         Receipts for classroom expenses (for educators in grades K-12)

      ·         Form 5498-SA showing HSA contributions

      ·         Forms 1098 or other mortgage interest statements

      ·         Amount of state/local income tax paid (other than wage withholding), or amount of state and local sales tax paid

      ·         Real estate and personal property tax records

      ·         Invoice showing amount of vehicle sales tax paid

      ·         Cash amounts donated to houses of worship, schools, other charitable organizations

      ·         Records of non-cash charitable donations

      ·         Amounts paid for healthcare insurance and to doctors, dentists, hospitals

      ·         Amounts of miles driven for charitable or medical purposes

      ·         Employment-related expenses (dues, publications, tools, uniform cost and cleaning, travel)

      ·         Receipts for energy-saving home improvements

      ·         Record of estimated tax payments made

      ·         Record of IRA or SEP contributions

      MONTHLY NEWSLETTER

      AUGUST 


      Roth IRA versus Traditional IRA: Which Is Better for You?
      Roth IRAs tend to get a lot of hype, and for good reason: Because you pay the taxes upfront, your eventual withdrawals (assuming you meet the age and holding-period
      requirements) are completely tax-free. While we like “tax-free” as much as the next person, there are more times than you would imagine when a traditional IRA will put more money in your pocket than a Roth would.

      If you are looking for tax savings in the short term, the Traditional IRA will give you that. Contributing to a Traditional IRA (within the limits) will decrease your current year’s federal income tax. While we are all looking for tax savings do not be short-sighted, in the long run usually the Roth IRA is the better choice.

      Some of the advantages of the Roth IRA
      1) For the Roth, your marginal tax rate at the time of your payout does not matter because you paid your taxes before the money went into the account. The whole
      amount, even the growth is now yours, with no additional taxes due. The contribution, as well as the growth for a traditional IRA, are all taxed at withdrawal.

      2) No required minimum distributions (RMDs). When you have a traditional IRA, the IRS requires you to start taking distributions by April 1 following the year you
      turn 72, and by December 1 in subsequent years. The withdrawals are mandatory. Because there is no RMD requirement with a Roth, it is an excellent vehicle for continuing to grow your wealth and, if you so desire, passing it on to your children.

      3) Longer period to contribute. Not only do you have to start taking RMDs when you hit 72 with a traditional IRA—but you are also barred from making additional
      contributions when you hit that magic age. With a Roth, you may contribute at any age, as long as you have taxable compensation. (There are income limits for
      Roth contributions)

      4) More flexibility with withdrawals. You can withdraw your contributions to a Roth anytime, without penalty. And if you are over age 59½, distributions of earnings from your Roth are also not taxable—because, again, you paid the taxes upfront. You just need to satisfy the five-year waiting period requirement, meaning the distribution must occur after the five-year period starting with the first taxable year for which a contribution was made to the Roth.

      Roth IRAs offer a lot of tax advantages for your future self, while traditional IRAs give you the tax breaks now. The trade-off is an uncertain tax liability decades from now, possibly after you have stopped working. And given enough time and/or a high rate of return, you are better off with a Roth anyway.





      CONTACT US

      For more information on our services and what we can do for you, feel free to contact:

       Stacy Seiden, CPA, CFE, FCPA, CCFC

      SSK Accounting Services, LLC

      Stacy@SSKAccounting.com

      215-622-8955

      Fax 877-580-2093

      PO Box 122

      Spring House, PA  19477

      or submit a request for information on services below.