December 15, 2025 • 45 mins
TaxTalk4U.com : Small Business News, Taxes, Payroll, Tips & Advice. What you need to know about business, trucking taxes. One Big Beautiful Bill Act, OBBBA to reduce taxes. Getting all your deductions that save you money on taxes. For truckers, tax requirements differ significantly depending on whether you are a company driver or an independent owner-operator. Payroll requirements filing paying taxes, Social security & Medicare, as well as federal withholding taxes. Trust fund Penalties.
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Tax Talk 4 U is broadcast live Mondays at 10AM ET and Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Tax Talk 4 U is viewed on Talk 4 TV (www.talk4tv.com).
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Episode Transcript
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Speaker 1 (00:00):
The topics and opinions express in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
or products mentioned on air or on our web. No
liability explicitor implies shall be extended to W FOURCY Radio
or its employees are affiliates. Any questions or comments should
be directed to those show hosts. Thank you for choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:28):
Barry G.
Speaker 3 (00:28):
Fouler EA brings you tax talk for you right here
on W four CY Radio and talk for TV. As
an enrolled agent and a national leader in tax resolution
as well as Trucker bookkeeping and tax planning. With over
thirty years of experience, Barry will break down taxes, bookkeeping,
(00:49):
tax planning, and tax relief for individuals and businesses just
like you. So let's have some tax talk for you
with your host, Barry G.
Speaker 2 (00:59):
Foul Or.
Speaker 4 (01:02):
Hey, welcome, it's another great Monday to be here and
talking small businesses, businesses, business taxes, business news, pay roll,
i RS problems, and you name it. If you've got
questions we're going to answer it. You know, when we're
winding down twenty twenty five and I have clients asking
(01:24):
us all the time, what can we do to reduce taxes?
You know, there's different techniques to reducing taxes from you know,
investing in new business property or equipment, or you know,
spending money. But sometimes, you know, we listen to the
recommendations other people make and it doesn't make business sense.
(01:49):
So you kind of got to look at everything with
the business perspective. Even if we're winding down the year,
and yes, we're trying to save money on taxes. Yes
we're trying to do things that prevent Uncle Sam from
getting more money than you should be getting from you.
But you know, more, the first thing you want to
(02:10):
start with is making sure that you have good salid
sound bookkeeping, And that's the first place to start. Are
you getting all the deductions that you should be getting
for your business? Are you capturing every ordinary necessary business expense?
You know, I looked at somebody's bookkeeping the other day
that came to us and said, hey, can you take
(02:33):
over our bookkeeping? And I said, well, first off, let
me do a quick review of what you've got and
a quick review where you're at and to see, you know, hey,
maybe you've got a good bookkeeper and you know, you
can continue to rely on them and then we can
do your taxes and do some tax strategies stuff for you.
(02:53):
And we were looking at their books and we noticed
glaring expenses. Now, some of them don't seem to be
that big. I mean, simple as telephone expense. Do you
have a telephone line in your business? I mean, whether
it's your a cell phone, whether it's a landline, you know,
whatever it is, you're using a phone out there for
(03:16):
your business? Correct, Well, yeah, that's one place it was minor.
You know, that could be you know, five hundred dollars
a month or four hundred dollars a month, and it's
still a four thousand dollars deduction that you should be
getting out there, or even six thousand dollars deduction that
you should be getting for your business, and you've missed it,
(03:37):
which means you're now paying that with after tax money
instead of pre tax money. And if you are a
sole proprietor, you know, not only does that cost you
fifteen point three percent for self employment tax, but it
also costs you your federal income tax rate, So depending
on where you're at, you know, they could be a
total of thirty five percent tax. And then if you
(03:59):
have a live in a state that taxes you income taxes,
well add that to it. So you know, that was
lost money. Now not that big of a deal because
we could find that and easily make those adjustments. But
then we started looking at other expenses and it just
didn't line up. You know, are you in the trucking business,
You know, maybe fuel expenses aren't where they should be.
(04:23):
Maybe they're not looking at your settlement statements and getting
all the deductions for insurance or tolls or scales or
the other deductions that they may be taking on your
settlement statement. And so you know, you need to be
consciously aware of what's on your financials, what's being done
(04:44):
for your bookkeeping for it to make sense for you.
You know, some of the little expenses may not seem
that little, but they do add up. You know, if
you're missing only thousand dollars and expenses, again, it costs
you your money. If you're missing ten or fifteen or
twenty thousand dollars some expenses because your bookkeeping isn't done
(05:06):
right well then it's now costing you a lot more money.
It's not pennies, it's not nickels or diamonds, it's hundreds
of dollars. You'd be thousands of dollars. So you want
to make sure you're getting every single deduction that is
allowed by law and not just jumping to hey, this
is what it is. Now. We've had somebody come to
(05:29):
us and said, hey, I was talking to my CPA,
my bookkeeper and my tax prepayer or whatever whoever it was,
and they told me to go out and buy new
equipment before the end of the year. Okay, hey, that's
great if you need it, if it's going to help
you in business, But just to buy equipment to save
money on taxes, now, let's let's just throw out a
(05:51):
big number out here. Okay, we're going to go out
and buy a new tractor for one hundred thousand dollars,
and yes, we're going to be able to take that deduction,
and maybe we'll be able to take Section one seventy
nine on the whole amount. And you are self employed,
so yes, it saves you possibly you know, fifteen three
hundred dollars on your taxes just for self employment, it
(06:13):
saves you maybe twenty percent out there's another twenty thousand,
so it saves you thirty five thousand, but you're still
out one hundred thousand, so net effect, you're out sixty
five thousand. Now, if you need the piece of equipment
and you're going to buy it in January, when I
take advantage of it today. But if you're not in
need of this new equipment, or your net income isn't
(06:36):
high enough to justify buying this new equipment to get
you the full tax write off, then maybe it's not
the right time to do it. Or maybe you're buying
a piece of equipment and you're buying some manufacturing equipment
but you're not going to put it into use until
the end of next year. Well, hasn't gone into use,
so therefore you're not getting advantage of tax right off.
(06:56):
It's got to be put in use as well. So
if you're just going to buy a piece of equipment
to get the rite off, well that's not the right
way to do it. So it makes you makes the
tax person look good because you're going to save money
on your taxes, but it surely doesn't help your pocket book,
which is really at the end of the game is
end of the day. The game is to keep as
(07:17):
much money for yourself as possible. So maybe that means
using retirement account. Maybe it means adjusting the way you
do business and instead of being a self proprietor maybe
you need to be a multi member partnership, maybe you
need to be escort. All different options to help avoid
(07:38):
the payment of certain taxes that are out there. You know, yes,
when you're a partnership or multi member LLC, you know
you've got to have a guaranteed payment, guaranteed reasonable wage
for the owners that actually work in the business. Yes,
as an escort, you've got to have a reasonable salary
(07:59):
for the things that you as a business owner does
for the business. Now that you know, there's ways to
look at it and analyze your job. You know, are
you doing secretarial work, are you doing administrative work, are
you doing janitorial work, are you doing CFO work, are
you doing your CEO work, are you doing mid level
(08:21):
manager's work, or you know somebody else lower in the
food chains work. And then you can say, hey, this
is what I would pay for this part of this
job janitorial, this is what I would pay for this
administrative part of the job, and this is what I
would pay for, you know, mid level management part of
(08:43):
the job. And then this is what i'd pay for
CFO CEO work. And then how many hours each week
are you doing each one of those jobs, And then
you can come down to hey, this is what my
pay should be. And then that there gives you your
reasonable salary for the work that you are doing. So
(09:05):
if your truck driver, you drive the truck, but yet
you manage your business, and yet you do administrative work
as well, and yet you may do a cleaning of
your truck, sanatorial work, so your salary can be adjusted
based on the kind of work that you do. So
the one big beautiful bill that was passed here in
(09:27):
June July of twenty twenty five gives you different options
on how to save money on taxes, and year in
is a perfect time to make sure that you're taking
advantage of everything that was in this law to optimize
your income, optimize your savings, make sure that you're taking
(09:49):
full advantage of the QBI Qualified Business Income Deduction, and
that deduction is now permanent, so you know there's different
variables that you you have to strategically time income expenses
for your business, especially at a year end. So maybe
you have invoices out there and you don't really want
(10:11):
to get out and collect them really hard. Maybe you
want to be paid in January instead of paid in December,
so you're moving money from this year to next year.
There's a lot of different ideas we can come up
with for timing or making things better and reducing your taxes.
And we're going to keep discussing reducing your taxes for
twenty twenty five right after this.
Speaker 3 (10:33):
We have only scratched the surface of today's show. Please
stand by as Barry Chief Power will be right back
with tax talk for you. If you owned the IRS
or are going through an IRS audit, don't go at
it alone. Called Taxation Solutions tax Relief at eight eight
(10:54):
eight nine three zero one zero one six. We are
your solution for IRS debts, audits, back taxes, garnishments, leans
and levees. Whether you're an individual or business, you need
a solution and a strong aggressive tax resolution.
Speaker 2 (11:14):
Don't let the IRS walk all over you.
Speaker 3 (11:16):
Stop the IRS now call eight eight eight nine three
zero one zero one six or go to Taxationsolutions dot
net now for a free no obligation consultation. Let's get
back to tax stock for you with more tax stock
(11:37):
once again.
Speaker 2 (11:38):
Here's your host, Barry G. Feller.
Speaker 4 (11:43):
Hey, welcome back. You know here today we're talking about
small business news, taxes, aarro, tips and advice. It's a
real nice thing at your end of finding ways to
keep more money in your pocket, reduce use your taxes,
because this is the name of the game, is paying
(12:04):
the least amount of taxes allowed by law and how
do we do this and how do we accomplish this,
Especially in twenty twenty five, as the years winding down,
you know, it's the critical time for small business owners
to capitalize that significant tax and benefits, especially those that
(12:24):
were introduced by the One Big Beautiful Bill Act. You know,
we were talking about accelerating investments, maximizing deductions, you know,
talking about making qualifying capital purchases to reduce your tax
bill income. But only if the equipment is necessary to
(12:48):
improve or help your business. If you're just doing it
for the tax right off, and you're not going to
it's not going to improve your business. It's not something
you would normally buy. There's not a huge reason to
do so. Therefore, business wise, I'm not a fan of
just doing that to reduce taxes. I want to see
the business reason strategy behind it before you make that
(13:12):
investment into machinery, equipment, software, whatever it may be. That's
going to have a large capital outlay, and that's money
out of your pocket that you're having to spend to
buy this equipment. So make sure it makes business sense.
We were talking about strategically timing things for the business. Now,
(13:36):
if you operate as a cash business, you really should
consider accelerating deductible expenses. You know, if you're buying office
applies anyway, and you can buy office supplies here this
month for next year, you can take that as a
write off paying future bills and bills come in that
aren't due till next year, you can pay immediately and
(13:59):
take advantage of of maybe the discount on the invoice
because maybe it's ten percent. You get ten percent off
if you pay within the first ten days or something.
You can also take advantage because you get the rite
off this year or something you could have waited to
pay next year. So it keeps more tax money in
your pocket, money that you've already committed to spending. But
(14:20):
it's you know, time is running out to do those
kind of things. You've got fifteen sixteen days left this
month to take advantage of paying things early to get
the ride offs for twenty twenty five. So if you're
sitting on a bunch of invoices to pay and you
have a large net income, get them paid before you're
in get that check out and in the mail before
(14:42):
December thirty first, so that you can use those expenses
to lower your net income. Now, just remember, you know,
this is the strategies that you need to use to
help lower your net income at the end of the year,
and then it would also improve your d come so
far for twenty twenty six at the beginning. That's the
(15:03):
same with what we were talking about in the first segment,
is maybe not pursuing elections on those accounts receivables are
at year end. Granted, you'd rather get the money in
because you'd rather have it, and especially before they spend
it and can't afford to pay you anymore. But if
you're dealing with businesses that you can count on reliably
(15:24):
to pay you in a timely manner, then them paying
you next year. Delaying getting the invoices out so they
don't cut you a check before the end of the year.
Might be a strategy you can use here at year
and to save yourself money on the tax on that
income that's coming in, and then you collect it next
(15:47):
year and then it becomes you're added to your income there.
Now when you're in business and sometimes you're doing these
things to strategically time things, it does lower your net income.
So if you're simply going after mortgage loan or you're
going after other loans for your business, a lower net
income isn't always the thing that a bank or lender
(16:10):
wants to see either. So you've got to have strategic
thinking behind what you're doing, including the timing of the
income and expenses for your business. So you know, that's
one of the things that when we talk to people
is hey, you know, we're talking about it from a
(16:31):
tax strategy, but sometimes you've got to talk about it
from a business strategy as well, and applying what is
projected for the future. So if your projection's out to
the future, as you're going to borrow some money, you
may need higher net income in twenty twenty five to
(16:51):
get the loans that you need. To buy the equipment
or get the financing and stuff like that that you
need for your business as well or even for your
personal as we've seen where people have done things to
keep expenses or keep the income down so they're not
paying as much in taxes, and then they go to
apply for mortgage and they don't have the income to
(17:12):
support the mortgage. That sometimes can become an issue for
you in your business. You know, you've got to put
the strategies out there and see, you know, hey, is
this going to make sense for me? Is this going
to be a issue. Is this going to be a problem. Yes,
(17:36):
it's nice to save that fifteen point three percent on
self employment taxes, but then again, you know you've got
the offset of what's going on out there now. One
of the beauties we were talking about is escorts and
partnerships or multi member LLC's that file as a partnership.
(17:57):
You can save money on self employment tax is based
on whatever your reasonable wage is for your business. And
we always have to sit down and look at it
and do an analysis. Is it right to move from
a sole proprietorship a single member LLC to an escort
or to opening a multi member LLC, maybe a husband
(18:21):
and wife LLC that can report as a partnership. And
you know, we've always got to look at what that
reasonable wage is versus what your net income is from
your business, because there's not always a great reason to
move and become an escort unless it's going to do
what save you money on taxes, and that savings is
(18:44):
usually comes from self employment taxes. So if you're netting
one hundred thousand dollars in net income but your reasonable
wage with ninety, well you know there's only about a
fifteen hundred dollars savings on self employment taxes. Bye, not
worth the hassle to go do payroll in a whole
new tax form. So you'd have to file eleven twenty s,
(19:07):
you'd have to do payroll, you'd have to do nine
forty one, nine forties W Two's well, you only save
fifteen hundred dollars and you now have to do all
these other things. But if your net income is two
hundred thousand, even if your reasonable salary was one hundred thousand,
you're talking good savings fifteen point three percent and about
(19:30):
eighty thousand dollars. That's nothing to sneeze at. That gives
you savings. It puts money in your pocket that you're
going to be able to keep a year after years,
as long as your net income is that much higher
than what your reasonable wage is. And maybe you're in
the trucking business. Maybe a reasonable wage for you to
drive a truck for your own business is fifty thousand
(19:52):
dollars and you're net eight one hundred. Well you get
to save fifteen point three percent on the other fifty thousand,
so that's seventy five hundred dollars. Is what keeps in
your pocket less what the burden is to do payroll
and do you know, file the other tax return, So
there are savings out there for you. It works kind
(20:13):
of the same way with the multi member partnership or
a multi member LLC, is that you file a partnership return,
but you don't have to do payroll, So that's a
nice part. It saves you from having to do payroll
and payroll taxes and payroll tax forms and stuff. So
there's some beauty into that. So that multi member LLC
(20:36):
filing as a partnership can save you even more money,
depending on your reasonable wage that you've got to have,
and then that reports it as a guaranteed payment versus
actually having to do payroll for you and whoever else
is a member of the partnership with you. So some
of those things are things that you should keep in
(20:58):
mind when you're doing an analysis, especially coming here at
the end of the year, moving into next year, because
you only have so March fifteen to make that election
ESCORP status for twenty twenty six. Hey, when we're speaking
about payroll and small business payrol, we're going to keep
talking about payroll on things you've got to do and
when you do do payroll. Right after this quick.
Speaker 3 (21:19):
Break, we have only scratched the surface of today's show.
Please stand by as Barry Chief Fowler will be right
back with.
Speaker 2 (21:29):
Tax talk for you.
Speaker 3 (21:33):
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Speaker 2 (22:12):
The experts keep you trucking.
Speaker 3 (22:17):
Let's get back to tax stock for you with more
tax stock once again.
Speaker 2 (22:22):
Here's your host, Barry chief Fallum.
Speaker 4 (22:27):
Welcome back. Payroll, payroll, payroll, payroll, payroll, payroll. Who likes payroll?
Go up as an employee? You love payroll. That's how
you get paid. You know. The amazing part is is
you don't feel the pain after you're your first check
or two. What do I mean by pain? Well, if
(22:48):
you take my kids, for example, their first job when
they got out, they got a check. They may have
been working for let's say ten dollars an hour and
they work twenty hours and they should be getting they
calculated I should be getting two hundred dollars.
Speaker 2 (23:02):
Yeah.
Speaker 4 (23:03):
Then they saw the payroll taxes come out and they went,
what is this the government's way of taking money and
enforcing collections. That's what it is. And that first check
it was painful, you know, and it may have only
been you know, fifteen dollars coming out of their check
for Social Security and medicare. But it was painful, painful
(23:25):
to them because they were counting on that two hundred
dollars and now all of a sudden they figured out
the government's taking their money. In their case, they were like,
it's stealing, stealing our money, dad. Well, yeah, it's probably
stuff you're never going to see in your lifetime, or
you're going to get a very little hood back. It
would be better if we all invested our own money
(23:46):
and say, for our own retirement and never touched it.
But that just doesn't happen. Ask people who have four
own k's that they've withdrawn from to do certain things.
They paid bills whatever it may be, or they cashed
out iras and paid the penalty. So we all know
how life goes. But it is the world we live in.
You know, payroll nobody likes doing as an employer. Managing
(24:10):
payroll taxes to be paid by you the employer is
one of the most complex aspects of running a business,
but it is a responsibility that every business owner must.
It has to get right. You know, we're going to
go through some things that happen with payroll. We're going
to go through some good, bad, and ugly with payroll.
(24:33):
But let's just start with the basics of payroll. There
are types of different types of payroll taxes that you
have to pay in and we all know the Federal
income tax that is withheld from your employees' wage based
on their W four form. You the employer are responsible
to withholding and remitting this amount to the federal government.
(24:57):
And there's no matching to this one. This is strictly
withheld from your employees check. Then BIKA Federal Insurance Contributions Act.
It's a shared responsibility between you, the employer and the
employee funding Social Security and Medicare. The Social Security tax
(25:20):
for both you, the employer and the employees at six
point two four six point two percent, which totals to
twelve point four on wages up to the annual limit,
which for this year twenty twenty five was one hundred
and seventy six one hundred dollars. So yes, you you
pay as an employer six point two percent. The employee
(25:44):
pays as well six point two percent, So you're withholding
from theirs and you're contributing from the company. So that's
part of cost of employment. Medicare tax both the employer
and the employee each pay one point four five percent
a total two point nine percent on all wages. Now,
(26:05):
employees who earn over the two hundred thousand dollars annually
must pay in an additional point nine percent towards the
Medicare tax. The employers don't have to match that. Now,
when we talk about trust funds, we talk about the
money that you're withholding from your employees checks. So that's
the federal income tax, and that's your fight at tax,
(26:28):
solid Security and Medicare that you withhold from their check.
So remember that that's a trust fund, meaning that that
money was pulled out of their teck in trust to
you to pay to the federal government. Then, as an employer,
you're also going to be responsible for the federal unemployment tax.
It's paid solely by you, the employer. So when you're
(26:50):
doing hiring, you know you've got to think about what
taxes the company's paying in addition to what you're paying
your employee, because that is the cost of employment, at
least part of it. So the federal unemployment tax is
paid solely by you, the employer, to fund federal unemployment programs.
(27:11):
That full rate is six percent on the first seven thousand. Yeah,
you got worried there, didn't you? Six percent on whatever
you're paying them. No, it's only on the first seven
thousand of each employees wages. But you can get a
credit for paying state unemployment taxes timely, typically going to
reduce the effective rate down to point six percent. So, yeah,
(27:36):
we sweat it out. When you start thinking about six
percent of my employees wages, oh my gosh, and then
you find out it's only on the first seven thousand.
Then you find out that you can reduce it down
to about six if you're paying your state unemployment. Now,
state unemployment and local taxes very significantly by state location.
(27:58):
Also based on on your track record in history. If
you don't have a lot of hiring firing of people,
then your state unemployment race can keep coming down. Here
in taxes, it starts like at two point nine percent,
you can get down to like a one percent based
on the first nine thousand dollars of wages, and then
(28:21):
after that there's no tax. So it's all the things
that we've got to think about. Is you know again
that you federal withholding that fight a tax matching, uh,
the employer's side, a federal unemployment that the only employers have,
and then state and local taxes which could be stayed withholding,
and then the state unemployment taxes as well. And so
(28:45):
when you're looking at it, you've got to go through
and figure this out. Now, the state unemployment taxes is
only tax to the employer, is not tax to the employee,
so again that adds to the cost of having and
and then if you offer any benefits to the employee,
that also adds to the cost of employeer. So you
(29:07):
can sit down and figure out what your cost is
of each and every employee that you have using the
Social Security Medicare tax, your federal unemployment tax, and then
your state unemployment taxes as well. Now some of the
things you as an employer really got to sit down
(29:27):
and look at and make sure you're responsible. Because a
lot of people want to classify workers, and this is
really a big one worker classification. One to classify workers
as independent contractors because then they don't have to pay
so security and medicare matching, They don't have to pay
federal unemployment or state unemployment on them. So it does
(29:48):
reduce the cost of having that worker working for you
if they're an independent contractor. But you've got to make
sure you're looking at what classifies somebody as a worker
as an elployee versus a contractor. That's out there, and
we maybe will do that next week in the next
episode is talking more about work classification. You as an
(30:10):
employer are responsible for withholding and making payments. So you've
got to calculate and withhold the correct amounts from your
employees checks, and then you've got to make timely deposits
to the iers and timely deposits the state agencies. These
payments that you're making to the state into federal are
(30:32):
typically made either monthly semi weekly, depending on the tax liability,
and then you have to do it via Electronic Federal
Tax Payment System. May hear it as the EFTPS system
that you would have to make the payments through that system.
(30:52):
Then you've got to report it. You've got to file
the required tax forms quarterly nine annually W twos, so
you've got to make sure you're making those filings. Then
if you're filing for the state, you may have quarterly
filings with the State and Employment Office, and then when
(31:14):
you file your W two's, you got to do the
state reporting as well. And then you know you're nine
to forty, which is your federal unemployment tax, and you've
got to make that reporting in January of every year.
And then maybe you're a small small business and you
only have nine four annual filing. Don't get all these
(31:35):
things confused. Make sure you're reading your documentation and your
letters from the IRS. It says, hey, this is how
we've got to file. As well as in January, the
IRS sends you a letter that says, hey, this is
how you've got to make your deposits for federal taxes
as well. So you've got to read a lot of
(31:56):
this stuff is read, read, read. Hey, we got to
take short. We're going to continue talking about payable taxes,
but we're going to talk about what happens if you
don't make these payments or meet these deadlines, and do
that right after.
Speaker 3 (32:09):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. As an owner operator, you
already spend too much time away from your family. Stop
spending time doing paperwork. Go to Trucker tax tools dot com,
(32:30):
a solution filled specifically for truckers Trucker Tax Tools dot
Com makes your life run smoothly. Let's get back to
tax talk for you with more tax talk once again.
Speaker 2 (32:45):
Here's your host, Barry G. Foller.
Speaker 4 (32:50):
Hey, welcome back. Finally got some questions came in, and
you know the question is, is I'm a sofaprider single
member SEE and I don't have employees. Do I need
to do payroll for myself? No? No, no, So if
you're a sole proprietor you're a single member l SE
and you have no employees, you do not manage payroll
(33:14):
taxes in the traditional sense, meaning you don't do payroll
single member ll SEE, no employees, there is no payroll.
You pay self employment tax at the time of filing
your federal tax return, which covers both employee and employer
(33:35):
portions of Social Security and medicare, totaling that fifteen point
three percent. However, you do need to make estimated tax
payments as off your ten forty so that you are
paying taxes in quarterly, but there are no nine forty ones,
nine forties, W two's or anything else to file if
(33:57):
you have no employee, so your self employment tax again
is reported on your net income off your schedule see
of your personal tax return on the ten forty. So
payrolls if you have employees, or maybe you're an escort
and you have to run payroll, or c corp And
(34:18):
you have to run payroll, you've got to file all
those forms. Now, what happens when you don't do this?
Taxation Solutions has worked with many, many companies that have
failed at this one job, and that's doing payroll tax returns.
That's doing their filing or their payroll taxes and paying
(34:40):
it in. Now, remember we talk about trust fund. Trust
fund is the money that you withhold from your employees.
Check the federal income tax, you withhold, social Security and
Medicare that you withhold from their pay are considered to
be trust fund. And then you have the company taxes,
(35:00):
the federal unemployment, state unemployment, You're social Security and Medicare
in that match. Excuse me. See I get choked up
over people that don't pay their payroll taxes because this
becomes a nightmare, a nightmare. See, when you're withholding money
from your employees, check the IRS is trusting the fact
(35:23):
that you're going to pay that back to the IRS timely,
almost immediately. We tell most of our employers that if
we do payroll for you, we're going to do your
payroll and immediately transfer the money to the IRS for
the payroll taxes both sides, because you know, one, we
don't want you to wait till next month and then
(35:45):
you can't afford to do it. But when you get
into that situation, sometimes people find it the easiest thing
to do is to not pay the payroll taxes, and
then you have a problem. And then once the IRS
catches on that you didn't pay your payroll taxes, guess what. No, No,
they're not coming out and arresting you immediately. No, they're
not going to come out and arrest you for doing
(36:07):
this unless you've committed fraud. What they're going to do
is hit you with the trust fund penalties. They're going
to hit you in the business with penalties and interest.
They're going to hold you, the business owner and any
signers in the business libel for these taxes because you
(36:30):
pulled it out of there. Your employer employees check in
trust to send to the government, and you fail to
do your job, and therefore they hit you personally for
the trust fund taxes. They hit your business for the
trust fund taxes. They're going to set you both up
on a payment plan to pay back the trust fund
(36:53):
taxes and the other taxes. So you're going to see
if you got to hit with trust fund penalties, you're
going to see you making payments on the trust fund
part of the tax personally, and your business making payments
on all the taxes for the business. So you're held responsible. Now,
that doesn't mean that hey, they've doubled dip. Now, it
(37:16):
just means they're finding ways to collect the money from you,
even if you and your business are running together, they're
finding the way to get the money from you. You
ever hear the term can't get blood from a turnip.
I think this is where they're getting blood from a turnip.
You know, they're milking it both ways, coming and going. Now,
(37:39):
maybe you're not a business owner and you were a
signer on the checking account, you were a manager, You
had responsibilities. They come after you as well, and now
they're collecting from you for something that you had no
access to additional money for you weren't the business owner,
but you were considered to have responsibilities and making sure
(38:00):
those taxes were paid and paid timely, and so they're
helding you accountable. Hey, Marjorie, your question was right on.
You as a manager, are being held liable for the
trust fund penalties that the company chose not to pay? Yes,
you're held responsible for those. Now give us a call
(38:23):
eight eight eight nine three zero one zero one six.
Let us help you through that. Let us find ways
to maybe resolve this issue with the IRS and get
you out from underneath those trust fund penalties, especially if
you didn't have representation, or maybe you the company said
they were going to represent you and they did a
terrible job of representation and you got stuck right along
(38:45):
with the owners of the business for the trust fund penalties,
and now the IRS is collecting from you. We need
to get this stop, and we need to either prove
to the IRS that you didn't have that responsibility or
you couldn't make those decisions, or hey, maybe you just
can't afford to make these kind of payments and we
need to get this out. We're back where we need
to work with your employer to get these things paid
(39:07):
and reimburse you for the expension you're having to go
through for them. See, this is a bad thing. We
represented a client who actually managed a bar. He came
to us and got hit with trust fund penalties for
his former employer. Those He hadn't been with his employer
for a couple of years, and before the third year
(39:28):
was up, he got hit with responsibilities for trust fund
penalties because he was a signer on one of the accounts.
Now we were able to go back in and prove
that he only signed on this small cash account and
they only put money into the account enough to cover
the bar tab with the deliveries and everything happening at
(39:51):
the bar, so he could cover just that. It was
basically a petty cash account. But they bought all their
bar supplies and everything there for the restaurant, the bar
and grill, and he had no other responsibilities besides that.
He was never even made aware of didn't know anything
about payroll, never even processed payroll, never was in the
(40:15):
corporate office, and they did everything at the corporate office
at the corporate level, but not at the individual barn
in Carill. That's there. So maybe Marjorie, that is your
case as well. We can look at it and do
the analysis to make that decision what's the best thing
to help you. But when you're in this situation, you
know It can be really devastating because you know, they
(40:40):
hit you with taxes for not paying, not paying timely,
not filing, if you didn't file the nine forty ones,
you name it, the penalty as and interest continue to accrue.
And you know, it's hard enough when you're running a
business and you're behind as it is on bills and
you're hind on payroll. This just compounds the issue. But
(41:05):
first thing we want to do is make sure we
get your backing compliance, making sure those taxes continue to
be paid, and if any way at all, to get
those trust fund penalties paid off so that it gets
off your personal record as quick as possible. Or if
you have other employees on there that are being hit
with trust fund penalties, we can get that off their
(41:25):
back as well. So i RS is looking for as
many backs to get themselves attached to, and you know,
unfortunately this is just the way things will go. You know,
this is a hard part of doing payroll. Taxes and
(41:46):
doing payroll. I've seen many people go it alone. The
fees that you're going to get charged seem to be
a little bit high, but the fees that you get
charged are well worth it because they make sure you
get your filing quarterly filings done, make sure you get
your annual filings done. They will make sure that you're
making the deposits properly for payroll taxes. Now, if you
(42:08):
don't have the funds there, there's nobody can help you. Okay,
really just there's nobody that's going to help you be
able to do that. So you're going to want to
make sure that, hey, the funds are there for your
business so that when you do pay payroll, the taxes
are being paid and everything is being done timely, you know.
(42:30):
So those are the kind of things that you need
to do when you're doing payroll out there and making
sure things are there. Again, if you get hit and
you have and page your payroll taxes, you haven't kept
it to date, maybe even with your federal income taxes.
All taxation solutions dot net tax relief again, it is
(42:50):
taxation solutions, dot net tax relief. Get the relief from
the taxes that you deserve. To stop the irn us
in the tracks, stop their collection activity here today. Don't
let them trample all over you because you don't know
the rules and regulations and the laws that they've got
(43:11):
to follow. And you should be following call us at
eight eight eight nine three zero one zero one six
again eight eight eight nine three zero one zero one six. Man.
Time flies when we're having fun, doesn't it talking taxes? Hey?
Next week we're going to continue talking about your end
and taxes and what you can do to help your business,
(43:32):
help yourself, or maybe we'll even continue talking about what
you should do in twenty twenty six to help improve
your business make yourself a bigger success.
Speaker 2 (43:42):
Hey.
Speaker 4 (43:42):
But all as always, you should follow us over at
tax Talk for you dot com so you never miss
an episode, and if you do, you can get our
podcasts over there at tax talkforu dot com. Follow us
on Facebook both at truck or tax Tools, Taxations Solutions,
tax Relief and tax Talk for You, But never miss
(44:04):
an episode. We're always here Monday's ten am Eastern Time
on W four CY Radio W four cy dot com.
Don't miss us, and if you do, check our podcasts out.
We're on all the major podcasts. Again, it's tax Talk
for you dot com. We'll see you next week. Have
a god blessed, glorious week.
Speaker 3 (44:26):
Are you an individual or business that wants to understand
taxes and how they affect you. Are you looking for
specific tax advice for self employed business owners and truckers.
Are you behind on taxes and your bookkeeping? Are you
dealing with dirs and ready to have some relief, Then
(44:47):
you need Tax Talk for You, hosted by tax and
trucker expert Barry g.
Speaker 2 (44:53):
Fouer EA.
Speaker 3 (44:54):
Tune in ten am the Eastern Time every Monday right
here on W four CY Radio Talk for TV. Don't
forget to check this and past episodes at text talkforuth
dot com. See you next week at W four c
Y dot com.
Speaker 4 (45:12):
M HM
The topics and opinions express in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
or products mentioned on air or on our web. No
liability explicitor implies shall be extended to W FOURCY Radio
or its employees are affiliates. Any questions or comments should
be directed to those show hosts. Thank you for choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:28):
Barry G.
Speaker 3 (00:28):
Fouler EA brings you tax talk for you right here
on W four CY Radio and talk for TV. As
an enrolled agent and a national leader in tax resolution
as well as Trucker bookkeeping and tax planning. With over
thirty years of experience, Barry will break down taxes, bookkeeping,
(00:49):
tax planning, and tax relief for individuals and businesses just
like you. So let's have some tax talk for you
with your host, Barry G.
Speaker 2 (00:59):
Foul Or.
Speaker 4 (01:02):
Hey, welcome, it's another great Monday to be here and
talking small businesses, businesses, business taxes, business news, pay roll,
i RS problems, and you name it. If you've got
questions we're going to answer it. You know, when we're
winding down twenty twenty five and I have clients asking
(01:24):
us all the time, what can we do to reduce taxes?
You know, there's different techniques to reducing taxes from you know,
investing in new business property or equipment, or you know,
spending money. But sometimes, you know, we listen to the
recommendations other people make and it doesn't make business sense.
(01:49):
So you kind of got to look at everything with
the business perspective. Even if we're winding down the year,
and yes, we're trying to save money on taxes. Yes
we're trying to do things that prevent Uncle Sam from
getting more money than you should be getting from you.
But you know, more, the first thing you want to
(02:10):
start with is making sure that you have good salid
sound bookkeeping, And that's the first place to start. Are
you getting all the deductions that you should be getting
for your business? Are you capturing every ordinary necessary business expense?
You know, I looked at somebody's bookkeeping the other day
that came to us and said, hey, can you take
(02:33):
over our bookkeeping? And I said, well, first off, let
me do a quick review of what you've got and
a quick review where you're at and to see, you know, hey,
maybe you've got a good bookkeeper and you know, you
can continue to rely on them and then we can
do your taxes and do some tax strategies stuff for you.
(02:53):
And we were looking at their books and we noticed
glaring expenses. Now, some of them don't seem to be
that big. I mean, simple as telephone expense. Do you
have a telephone line in your business? I mean, whether
it's your a cell phone, whether it's a landline, you know,
whatever it is, you're using a phone out there for
(03:16):
your business? Correct, Well, yeah, that's one place it was minor.
You know, that could be you know, five hundred dollars
a month or four hundred dollars a month, and it's
still a four thousand dollars deduction that you should be
getting out there, or even six thousand dollars deduction that
you should be getting for your business, and you've missed it,
(03:37):
which means you're now paying that with after tax money
instead of pre tax money. And if you are a
sole proprietor, you know, not only does that cost you
fifteen point three percent for self employment tax, but it
also costs you your federal income tax rate, So depending
on where you're at, you know, they could be a
total of thirty five percent tax. And then if you
(03:59):
have a live in a state that taxes you income taxes,
well add that to it. So you know, that was
lost money. Now not that big of a deal because
we could find that and easily make those adjustments. But
then we started looking at other expenses and it just
didn't line up. You know, are you in the trucking business,
You know, maybe fuel expenses aren't where they should be.
(04:23):
Maybe they're not looking at your settlement statements and getting
all the deductions for insurance or tolls or scales or
the other deductions that they may be taking on your
settlement statement. And so you know, you need to be
consciously aware of what's on your financials, what's being done
(04:44):
for your bookkeeping for it to make sense for you.
You know, some of the little expenses may not seem
that little, but they do add up. You know, if
you're missing only thousand dollars and expenses, again, it costs
you your money. If you're missing ten or fifteen or
twenty thousand dollars some expenses because your bookkeeping isn't done
(05:06):
right well then it's now costing you a lot more money.
It's not pennies, it's not nickels or diamonds, it's hundreds
of dollars. You'd be thousands of dollars. So you want
to make sure you're getting every single deduction that is
allowed by law and not just jumping to hey, this
is what it is. Now. We've had somebody come to
(05:29):
us and said, hey, I was talking to my CPA,
my bookkeeper and my tax prepayer or whatever whoever it was,
and they told me to go out and buy new
equipment before the end of the year. Okay, hey, that's
great if you need it, if it's going to help
you in business, But just to buy equipment to save
money on taxes, now, let's let's just throw out a
(05:51):
big number out here. Okay, we're going to go out
and buy a new tractor for one hundred thousand dollars,
and yes, we're going to be able to take that deduction,
and maybe we'll be able to take Section one seventy
nine on the whole amount. And you are self employed,
so yes, it saves you possibly you know, fifteen three
hundred dollars on your taxes just for self employment, it
(06:13):
saves you maybe twenty percent out there's another twenty thousand,
so it saves you thirty five thousand, but you're still
out one hundred thousand, so net effect, you're out sixty
five thousand. Now, if you need the piece of equipment
and you're going to buy it in January, when I
take advantage of it today. But if you're not in
need of this new equipment, or your net income isn't
(06:36):
high enough to justify buying this new equipment to get
you the full tax write off, then maybe it's not
the right time to do it. Or maybe you're buying
a piece of equipment and you're buying some manufacturing equipment
but you're not going to put it into use until
the end of next year. Well, hasn't gone into use,
so therefore you're not getting advantage of tax right off.
(06:56):
It's got to be put in use as well. So
if you're just going to buy a piece of equipment
to get the rite off, well that's not the right
way to do it. So it makes you makes the
tax person look good because you're going to save money
on your taxes, but it surely doesn't help your pocket book,
which is really at the end of the game is
end of the day. The game is to keep as
(07:17):
much money for yourself as possible. So maybe that means
using retirement account. Maybe it means adjusting the way you
do business and instead of being a self proprietor maybe
you need to be a multi member partnership, maybe you
need to be escort. All different options to help avoid
(07:38):
the payment of certain taxes that are out there. You know, yes,
when you're a partnership or multi member LLC, you know
you've got to have a guaranteed payment, guaranteed reasonable wage
for the owners that actually work in the business. Yes,
as an escort, you've got to have a reasonable salary
(07:59):
for the things that you as a business owner does
for the business. Now that you know, there's ways to
look at it and analyze your job. You know, are
you doing secretarial work, are you doing administrative work, are
you doing janitorial work, are you doing CFO work, are
you doing your CEO work, are you doing mid level
(08:21):
manager's work, or you know somebody else lower in the
food chains work. And then you can say, hey, this
is what I would pay for this part of this
job janitorial, this is what I would pay for this
administrative part of the job, and this is what I
would pay for, you know, mid level management part of
(08:43):
the job. And then this is what i'd pay for
CFO CEO work. And then how many hours each week
are you doing each one of those jobs, And then
you can come down to hey, this is what my
pay should be. And then that there gives you your
reasonable salary for the work that you are doing. So
(09:05):
if your truck driver, you drive the truck, but yet
you manage your business, and yet you do administrative work
as well, and yet you may do a cleaning of
your truck, sanatorial work, so your salary can be adjusted
based on the kind of work that you do. So
the one big beautiful bill that was passed here in
(09:27):
June July of twenty twenty five gives you different options
on how to save money on taxes, and year in
is a perfect time to make sure that you're taking
advantage of everything that was in this law to optimize
your income, optimize your savings, make sure that you're taking
(09:49):
full advantage of the QBI Qualified Business Income Deduction, and
that deduction is now permanent, so you know there's different
variables that you you have to strategically time income expenses
for your business, especially at a year end. So maybe
you have invoices out there and you don't really want
(10:11):
to get out and collect them really hard. Maybe you
want to be paid in January instead of paid in December,
so you're moving money from this year to next year.
There's a lot of different ideas we can come up
with for timing or making things better and reducing your taxes.
And we're going to keep discussing reducing your taxes for
twenty twenty five right after this.
Speaker 3 (10:33):
We have only scratched the surface of today's show. Please
stand by as Barry Chief Power will be right back
with tax talk for you. If you owned the IRS
or are going through an IRS audit, don't go at
it alone. Called Taxation Solutions tax Relief at eight eight
(10:54):
eight nine three zero one zero one six. We are
your solution for IRS debts, audits, back taxes, garnishments, leans
and levees. Whether you're an individual or business, you need
a solution and a strong aggressive tax resolution.
Speaker 2 (11:14):
Don't let the IRS walk all over you.
Speaker 3 (11:16):
Stop the IRS now call eight eight eight nine three
zero one zero one six or go to Taxationsolutions dot
net now for a free no obligation consultation. Let's get
back to tax stock for you with more tax stock
(11:37):
once again.
Speaker 2 (11:38):
Here's your host, Barry G. Feller.
Speaker 4 (11:43):
Hey, welcome back. You know here today we're talking about
small business news, taxes, aarro, tips and advice. It's a
real nice thing at your end of finding ways to
keep more money in your pocket, reduce use your taxes,
because this is the name of the game, is paying
(12:04):
the least amount of taxes allowed by law and how
do we do this and how do we accomplish this,
Especially in twenty twenty five, as the years winding down,
you know, it's the critical time for small business owners
to capitalize that significant tax and benefits, especially those that
(12:24):
were introduced by the One Big Beautiful Bill Act. You know,
we were talking about accelerating investments, maximizing deductions, you know,
talking about making qualifying capital purchases to reduce your tax
bill income. But only if the equipment is necessary to
(12:48):
improve or help your business. If you're just doing it
for the tax right off, and you're not going to
it's not going to improve your business. It's not something
you would normally buy. There's not a huge reason to
do so. Therefore, business wise, I'm not a fan of
just doing that to reduce taxes. I want to see
the business reason strategy behind it before you make that
(13:12):
investment into machinery, equipment, software, whatever it may be. That's
going to have a large capital outlay, and that's money
out of your pocket that you're having to spend to
buy this equipment. So make sure it makes business sense.
We were talking about strategically timing things for the business. Now,
(13:36):
if you operate as a cash business, you really should
consider accelerating deductible expenses. You know, if you're buying office
applies anyway, and you can buy office supplies here this
month for next year, you can take that as a
write off paying future bills and bills come in that
aren't due till next year, you can pay immediately and
(13:59):
take advantage of of maybe the discount on the invoice
because maybe it's ten percent. You get ten percent off
if you pay within the first ten days or something.
You can also take advantage because you get the rite
off this year or something you could have waited to
pay next year. So it keeps more tax money in
your pocket, money that you've already committed to spending. But
(14:20):
it's you know, time is running out to do those
kind of things. You've got fifteen sixteen days left this
month to take advantage of paying things early to get
the ride offs for twenty twenty five. So if you're
sitting on a bunch of invoices to pay and you
have a large net income, get them paid before you're
in get that check out and in the mail before
(14:42):
December thirty first, so that you can use those expenses
to lower your net income. Now, just remember, you know,
this is the strategies that you need to use to
help lower your net income at the end of the year,
and then it would also improve your d come so
far for twenty twenty six at the beginning. That's the
(15:03):
same with what we were talking about in the first segment,
is maybe not pursuing elections on those accounts receivables are
at year end. Granted, you'd rather get the money in
because you'd rather have it, and especially before they spend
it and can't afford to pay you anymore. But if
you're dealing with businesses that you can count on reliably
(15:24):
to pay you in a timely manner, then them paying
you next year. Delaying getting the invoices out so they
don't cut you a check before the end of the year.
Might be a strategy you can use here at year
and to save yourself money on the tax on that
income that's coming in, and then you collect it next
(15:47):
year and then it becomes you're added to your income there.
Now when you're in business and sometimes you're doing these
things to strategically time things, it does lower your net income.
So if you're simply going after mortgage loan or you're
going after other loans for your business, a lower net
income isn't always the thing that a bank or lender
(16:10):
wants to see either. So you've got to have strategic
thinking behind what you're doing, including the timing of the
income and expenses for your business. So you know, that's
one of the things that when we talk to people
is hey, you know, we're talking about it from a
(16:31):
tax strategy, but sometimes you've got to talk about it
from a business strategy as well, and applying what is
projected for the future. So if your projection's out to
the future, as you're going to borrow some money, you
may need higher net income in twenty twenty five to
(16:51):
get the loans that you need. To buy the equipment
or get the financing and stuff like that that you
need for your business as well or even for your
personal as we've seen where people have done things to
keep expenses or keep the income down so they're not
paying as much in taxes, and then they go to
apply for mortgage and they don't have the income to
(17:12):
support the mortgage. That sometimes can become an issue for
you in your business. You know, you've got to put
the strategies out there and see, you know, hey, is
this going to make sense for me? Is this going
to be a issue. Is this going to be a problem. Yes,
(17:36):
it's nice to save that fifteen point three percent on
self employment taxes, but then again, you know you've got
the offset of what's going on out there now. One
of the beauties we were talking about is escorts and
partnerships or multi member LLC's that file as a partnership.
(17:57):
You can save money on self employment tax is based
on whatever your reasonable wage is for your business. And
we always have to sit down and look at it
and do an analysis. Is it right to move from
a sole proprietorship a single member LLC to an escort
or to opening a multi member LLC, maybe a husband
(18:21):
and wife LLC that can report as a partnership. And
you know, we've always got to look at what that
reasonable wage is versus what your net income is from
your business, because there's not always a great reason to
move and become an escort unless it's going to do
what save you money on taxes, and that savings is
(18:44):
usually comes from self employment taxes. So if you're netting
one hundred thousand dollars in net income but your reasonable
wage with ninety, well you know there's only about a
fifteen hundred dollars savings on self employment taxes. Bye, not
worth the hassle to go do payroll in a whole
new tax form. So you'd have to file eleven twenty s,
(19:07):
you'd have to do payroll, you'd have to do nine
forty one, nine forties W Two's well, you only save
fifteen hundred dollars and you now have to do all
these other things. But if your net income is two
hundred thousand, even if your reasonable salary was one hundred thousand,
you're talking good savings fifteen point three percent and about
(19:30):
eighty thousand dollars. That's nothing to sneeze at. That gives
you savings. It puts money in your pocket that you're
going to be able to keep a year after years,
as long as your net income is that much higher
than what your reasonable wage is. And maybe you're in
the trucking business. Maybe a reasonable wage for you to
drive a truck for your own business is fifty thousand
(19:52):
dollars and you're net eight one hundred. Well you get
to save fifteen point three percent on the other fifty thousand,
so that's seventy five hundred dollars. Is what keeps in
your pocket less what the burden is to do payroll
and do you know, file the other tax return, So
there are savings out there for you. It works kind
(20:13):
of the same way with the multi member partnership or
a multi member LLC, is that you file a partnership return,
but you don't have to do payroll, So that's a
nice part. It saves you from having to do payroll
and payroll taxes and payroll tax forms and stuff. So
there's some beauty into that. So that multi member LLC
(20:36):
filing as a partnership can save you even more money,
depending on your reasonable wage that you've got to have,
and then that reports it as a guaranteed payment versus
actually having to do payroll for you and whoever else
is a member of the partnership with you. So some
of those things are things that you should keep in
(20:58):
mind when you're doing an analysis, especially coming here at
the end of the year, moving into next year, because
you only have so March fifteen to make that election
ESCORP status for twenty twenty six. Hey, when we're speaking
about payroll and small business payrol, we're going to keep
talking about payroll on things you've got to do and
when you do do payroll. Right after this quick.
Speaker 3 (21:19):
Break, we have only scratched the surface of today's show.
Please stand by as Barry Chief Fowler will be right
back with.
Speaker 2 (21:29):
Tax talk for you.
Speaker 3 (21:33):
As an owner operator, you already spend too much time
away from your family. Trucker Tax Tools handles all your
bookkeeping and taxes. No matter what level trucker you are.
Life on the road can be taxing, but that doesn't
mean that your wallet or time with your family should suffer.
Trucker Tax Tools makes your life run smoothly.
Speaker 2 (21:54):
Go to Trucker tax Tools dot.
Speaker 3 (21:56):
Com for a free guide that will give you the
tools to never worry about your taxes again. Call Trucker
Tax Tools eight seven seven nine sixty six two four
seven seven or go to Trucker tax tools dot com
now and let.
Speaker 2 (22:12):
The experts keep you trucking.
Speaker 3 (22:17):
Let's get back to tax stock for you with more
tax stock once again.
Speaker 2 (22:22):
Here's your host, Barry chief Fallum.
Speaker 4 (22:27):
Welcome back. Payroll, payroll, payroll, payroll, payroll, payroll. Who likes payroll?
Go up as an employee? You love payroll. That's how
you get paid. You know. The amazing part is is
you don't feel the pain after you're your first check
or two. What do I mean by pain? Well, if
(22:48):
you take my kids, for example, their first job when
they got out, they got a check. They may have
been working for let's say ten dollars an hour and
they work twenty hours and they should be getting they
calculated I should be getting two hundred dollars.
Speaker 2 (23:02):
Yeah.
Speaker 4 (23:03):
Then they saw the payroll taxes come out and they went,
what is this the government's way of taking money and
enforcing collections. That's what it is. And that first check
it was painful, you know, and it may have only
been you know, fifteen dollars coming out of their check
for Social Security and medicare. But it was painful, painful
(23:25):
to them because they were counting on that two hundred
dollars and now all of a sudden they figured out
the government's taking their money. In their case, they were like,
it's stealing, stealing our money, dad. Well, yeah, it's probably
stuff you're never going to see in your lifetime, or
you're going to get a very little hood back. It
would be better if we all invested our own money
(23:46):
and say, for our own retirement and never touched it.
But that just doesn't happen. Ask people who have four
own k's that they've withdrawn from to do certain things.
They paid bills whatever it may be, or they cashed
out iras and paid the penalty. So we all know
how life goes. But it is the world we live in.
You know, payroll nobody likes doing as an employer. Managing
(24:10):
payroll taxes to be paid by you the employer is
one of the most complex aspects of running a business,
but it is a responsibility that every business owner must.
It has to get right. You know, we're going to
go through some things that happen with payroll. We're going
to go through some good, bad, and ugly with payroll.
(24:33):
But let's just start with the basics of payroll. There
are types of different types of payroll taxes that you
have to pay in and we all know the Federal
income tax that is withheld from your employees' wage based
on their W four form. You the employer are responsible
to withholding and remitting this amount to the federal government.
(24:57):
And there's no matching to this one. This is strictly
withheld from your employees check. Then BIKA Federal Insurance Contributions Act.
It's a shared responsibility between you, the employer and the
employee funding Social Security and Medicare. The Social Security tax
(25:20):
for both you, the employer and the employees at six
point two four six point two percent, which totals to
twelve point four on wages up to the annual limit,
which for this year twenty twenty five was one hundred
and seventy six one hundred dollars. So yes, you you
pay as an employer six point two percent. The employee
(25:44):
pays as well six point two percent, So you're withholding
from theirs and you're contributing from the company. So that's
part of cost of employment. Medicare tax both the employer
and the employee each pay one point four five percent
a total two point nine percent on all wages. Now,
(26:05):
employees who earn over the two hundred thousand dollars annually
must pay in an additional point nine percent towards the
Medicare tax. The employers don't have to match that. Now,
when we talk about trust funds, we talk about the
money that you're withholding from your employees checks. So that's
the federal income tax, and that's your fight at tax,
(26:28):
solid Security and Medicare that you withhold from their check.
So remember that that's a trust fund, meaning that that
money was pulled out of their teck in trust to
you to pay to the federal government. Then, as an employer,
you're also going to be responsible for the federal unemployment tax.
It's paid solely by you, the employer. So when you're
(26:50):
doing hiring, you know you've got to think about what
taxes the company's paying in addition to what you're paying
your employee, because that is the cost of employment, at
least part of it. So the federal unemployment tax is
paid solely by you, the employer, to fund federal unemployment programs.
(27:11):
That full rate is six percent on the first seven thousand. Yeah,
you got worried there, didn't you? Six percent on whatever
you're paying them. No, it's only on the first seven
thousand of each employees wages. But you can get a
credit for paying state unemployment taxes timely, typically going to
reduce the effective rate down to point six percent. So, yeah,
(27:36):
we sweat it out. When you start thinking about six
percent of my employees wages, oh my gosh, and then
you find out it's only on the first seven thousand.
Then you find out that you can reduce it down
to about six if you're paying your state unemployment. Now,
state unemployment and local taxes very significantly by state location.
(27:58):
Also based on on your track record in history. If
you don't have a lot of hiring firing of people,
then your state unemployment race can keep coming down. Here
in taxes, it starts like at two point nine percent,
you can get down to like a one percent based
on the first nine thousand dollars of wages, and then
(28:21):
after that there's no tax. So it's all the things
that we've got to think about. Is you know again
that you federal withholding that fight a tax matching, uh,
the employer's side, a federal unemployment that the only employers have,
and then state and local taxes which could be stayed withholding,
and then the state unemployment taxes as well. And so
(28:45):
when you're looking at it, you've got to go through
and figure this out. Now, the state unemployment taxes is
only tax to the employer, is not tax to the employee,
so again that adds to the cost of having and
and then if you offer any benefits to the employee,
that also adds to the cost of employeer. So you
(29:07):
can sit down and figure out what your cost is
of each and every employee that you have using the
Social Security Medicare tax, your federal unemployment tax, and then
your state unemployment taxes as well. Now some of the
things you as an employer really got to sit down
(29:27):
and look at and make sure you're responsible. Because a
lot of people want to classify workers, and this is
really a big one worker classification. One to classify workers
as independent contractors because then they don't have to pay
so security and medicare matching, They don't have to pay
federal unemployment or state unemployment on them. So it does
(29:48):
reduce the cost of having that worker working for you
if they're an independent contractor. But you've got to make
sure you're looking at what classifies somebody as a worker
as an elployee versus a contractor. That's out there, and
we maybe will do that next week in the next
episode is talking more about work classification. You as an
(30:10):
employer are responsible for withholding and making payments. So you've
got to calculate and withhold the correct amounts from your
employees checks, and then you've got to make timely deposits
to the iers and timely deposits the state agencies. These
payments that you're making to the state into federal are
(30:32):
typically made either monthly semi weekly, depending on the tax liability,
and then you have to do it via Electronic Federal
Tax Payment System. May hear it as the EFTPS system
that you would have to make the payments through that system.
(30:52):
Then you've got to report it. You've got to file
the required tax forms quarterly nine annually W twos, so
you've got to make sure you're making those filings. Then
if you're filing for the state, you may have quarterly
filings with the State and Employment Office, and then when
(31:14):
you file your W two's, you got to do the
state reporting as well. And then you know you're nine
to forty, which is your federal unemployment tax, and you've
got to make that reporting in January of every year.
And then maybe you're a small small business and you
only have nine four annual filing. Don't get all these
(31:35):
things confused. Make sure you're reading your documentation and your
letters from the IRS. It says, hey, this is how
we've got to file. As well as in January, the
IRS sends you a letter that says, hey, this is
how you've got to make your deposits for federal taxes
as well. So you've got to read a lot of
(31:56):
this stuff is read, read, read. Hey, we got to
take short. We're going to continue talking about payable taxes,
but we're going to talk about what happens if you
don't make these payments or meet these deadlines, and do
that right after.
Speaker 3 (32:09):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. As an owner operator, you
already spend too much time away from your family. Stop
spending time doing paperwork. Go to Trucker tax tools dot com,
(32:30):
a solution filled specifically for truckers Trucker Tax Tools dot
Com makes your life run smoothly. Let's get back to
tax talk for you with more tax talk once again.
Speaker 2 (32:45):
Here's your host, Barry G. Foller.
Speaker 4 (32:50):
Hey, welcome back. Finally got some questions came in, and
you know the question is, is I'm a sofaprider single
member SEE and I don't have employees. Do I need
to do payroll for myself? No? No, no, So if
you're a sole proprietor you're a single member l SE
and you have no employees, you do not manage payroll
(33:14):
taxes in the traditional sense, meaning you don't do payroll
single member ll SEE, no employees, there is no payroll.
You pay self employment tax at the time of filing
your federal tax return, which covers both employee and employer
(33:35):
portions of Social Security and medicare, totaling that fifteen point
three percent. However, you do need to make estimated tax
payments as off your ten forty so that you are
paying taxes in quarterly, but there are no nine forty ones,
nine forties, W two's or anything else to file if
(33:57):
you have no employee, so your self employment tax again
is reported on your net income off your schedule see
of your personal tax return on the ten forty. So
payrolls if you have employees, or maybe you're an escort
and you have to run payroll, or c corp And
(34:18):
you have to run payroll, you've got to file all
those forms. Now, what happens when you don't do this?
Taxation Solutions has worked with many, many companies that have
failed at this one job, and that's doing payroll tax returns.
That's doing their filing or their payroll taxes and paying
(34:40):
it in. Now, remember we talk about trust fund. Trust
fund is the money that you withhold from your employees.
Check the federal income tax, you withhold, social Security and
Medicare that you withhold from their pay are considered to
be trust fund. And then you have the company taxes,
(35:00):
the federal unemployment, state unemployment, You're social Security and Medicare
in that match. Excuse me. See I get choked up
over people that don't pay their payroll taxes because this
becomes a nightmare, a nightmare. See, when you're withholding money
from your employees, check the IRS is trusting the fact
(35:23):
that you're going to pay that back to the IRS timely,
almost immediately. We tell most of our employers that if
we do payroll for you, we're going to do your
payroll and immediately transfer the money to the IRS for
the payroll taxes both sides, because you know, one, we
don't want you to wait till next month and then
(35:45):
you can't afford to do it. But when you get
into that situation, sometimes people find it the easiest thing
to do is to not pay the payroll taxes, and
then you have a problem. And then once the IRS
catches on that you didn't pay your payroll taxes, guess what. No, No,
they're not coming out and arresting you immediately. No, they're
not going to come out and arrest you for doing
(36:07):
this unless you've committed fraud. What they're going to do
is hit you with the trust fund penalties. They're going
to hit you in the business with penalties and interest.
They're going to hold you, the business owner and any
signers in the business libel for these taxes because you
(36:30):
pulled it out of there. Your employer employees check in
trust to send to the government, and you fail to
do your job, and therefore they hit you personally for
the trust fund taxes. They hit your business for the
trust fund taxes. They're going to set you both up
on a payment plan to pay back the trust fund
(36:53):
taxes and the other taxes. So you're going to see
if you got to hit with trust fund penalties, you're
going to see you making payments on the trust fund
part of the tax personally, and your business making payments
on all the taxes for the business. So you're held responsible. Now,
that doesn't mean that hey, they've doubled dip. Now, it
(37:16):
just means they're finding ways to collect the money from you,
even if you and your business are running together, they're
finding the way to get the money from you. You
ever hear the term can't get blood from a turnip.
I think this is where they're getting blood from a turnip.
You know, they're milking it both ways, coming and going. Now,
(37:39):
maybe you're not a business owner and you were a
signer on the checking account, you were a manager, You
had responsibilities. They come after you as well, and now
they're collecting from you for something that you had no
access to additional money for you weren't the business owner,
but you were considered to have responsibilities and making sure
(38:00):
those taxes were paid and paid timely, and so they're
helding you accountable. Hey, Marjorie, your question was right on.
You as a manager, are being held liable for the
trust fund penalties that the company chose not to pay? Yes,
you're held responsible for those. Now give us a call
(38:23):
eight eight eight nine three zero one zero one six.
Let us help you through that. Let us find ways
to maybe resolve this issue with the IRS and get
you out from underneath those trust fund penalties, especially if
you didn't have representation, or maybe you the company said
they were going to represent you and they did a
terrible job of representation and you got stuck right along
(38:45):
with the owners of the business for the trust fund penalties,
and now the IRS is collecting from you. We need
to get this stop, and we need to either prove
to the IRS that you didn't have that responsibility or
you couldn't make those decisions, or hey, maybe you just
can't afford to make these kind of payments and we
need to get this out. We're back where we need
to work with your employer to get these things paid
(39:07):
and reimburse you for the expension you're having to go
through for them. See, this is a bad thing. We
represented a client who actually managed a bar. He came
to us and got hit with trust fund penalties for
his former employer. Those He hadn't been with his employer
for a couple of years, and before the third year
(39:28):
was up, he got hit with responsibilities for trust fund
penalties because he was a signer on one of the accounts.
Now we were able to go back in and prove
that he only signed on this small cash account and
they only put money into the account enough to cover
the bar tab with the deliveries and everything happening at
(39:51):
the bar, so he could cover just that. It was
basically a petty cash account. But they bought all their
bar supplies and everything there for the restaurant, the bar
and grill, and he had no other responsibilities besides that.
He was never even made aware of didn't know anything
about payroll, never even processed payroll, never was in the
(40:15):
corporate office, and they did everything at the corporate office
at the corporate level, but not at the individual barn
in Carill. That's there. So maybe Marjorie, that is your
case as well. We can look at it and do
the analysis to make that decision what's the best thing
to help you. But when you're in this situation, you
know It can be really devastating because you know, they
(40:40):
hit you with taxes for not paying, not paying timely,
not filing, if you didn't file the nine forty ones,
you name it, the penalty as and interest continue to accrue.
And you know, it's hard enough when you're running a
business and you're behind as it is on bills and
you're hind on payroll. This just compounds the issue. But
(41:05):
first thing we want to do is make sure we
get your backing compliance, making sure those taxes continue to
be paid, and if any way at all, to get
those trust fund penalties paid off so that it gets
off your personal record as quick as possible. Or if
you have other employees on there that are being hit
with trust fund penalties, we can get that off their
(41:25):
back as well. So i RS is looking for as
many backs to get themselves attached to, and you know,
unfortunately this is just the way things will go. You know,
this is a hard part of doing payroll. Taxes and
(41:46):
doing payroll. I've seen many people go it alone. The
fees that you're going to get charged seem to be
a little bit high, but the fees that you get
charged are well worth it because they make sure you
get your filing quarterly filings done, make sure you get
your annual filings done. They will make sure that you're
making the deposits properly for payroll taxes. Now, if you
(42:08):
don't have the funds there, there's nobody can help you. Okay,
really just there's nobody that's going to help you be
able to do that. So you're going to want to
make sure that, hey, the funds are there for your
business so that when you do pay payroll, the taxes
are being paid and everything is being done timely, you know.
(42:30):
So those are the kind of things that you need
to do when you're doing payroll out there and making
sure things are there. Again, if you get hit and
you have and page your payroll taxes, you haven't kept
it to date, maybe even with your federal income taxes.
All taxation solutions dot net tax relief again, it is
(42:50):
taxation solutions, dot net tax relief. Get the relief from
the taxes that you deserve. To stop the irn us
in the tracks, stop their collection activity here today. Don't
let them trample all over you because you don't know
the rules and regulations and the laws that they've got
(43:11):
to follow. And you should be following call us at
eight eight eight nine three zero one zero one six
again eight eight eight nine three zero one zero one six. Man.
Time flies when we're having fun, doesn't it talking taxes? Hey?
Next week we're going to continue talking about your end
and taxes and what you can do to help your business,
(43:32):
help yourself, or maybe we'll even continue talking about what
you should do in twenty twenty six to help improve
your business make yourself a bigger success.
Speaker 2 (43:42):
Hey.
Speaker 4 (43:42):
But all as always, you should follow us over at
tax Talk for you dot com so you never miss
an episode, and if you do, you can get our
podcasts over there at tax talkforu dot com. Follow us
on Facebook both at truck or tax Tools, Taxations Solutions,
tax Relief and tax Talk for You, But never miss
(44:04):
an episode. We're always here Monday's ten am Eastern Time
on W four CY Radio W four cy dot com.
Don't miss us, and if you do, check our podcasts out.
We're on all the major podcasts. Again, it's tax Talk
for you dot com. We'll see you next week. Have
a god blessed, glorious week.
Speaker 3 (44:26):
Are you an individual or business that wants to understand
taxes and how they affect you. Are you looking for
specific tax advice for self employed business owners and truckers.
Are you behind on taxes and your bookkeeping? Are you
dealing with dirs and ready to have some relief, Then
(44:47):
you need Tax Talk for You, hosted by tax and
trucker expert Barry g.
Speaker 2 (44:53):
Fouer EA.
Speaker 3 (44:54):
Tune in ten am the Eastern Time every Monday right
here on W four CY Radio Talk for TV. Don't
forget to check this and past episodes at text talkforuth
dot com. See you next week at W four c
Y dot com.
Speaker 4 (45:12):
M HM
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