As a self-employed individual, planning for retirement can be challenging, especially when it comes to deciding which retirement plan to choose. Two popular options available are Simplified Employee Pension (SEP) and Savings Incentive Match Plan for Employees (SIMPLE).
Posts in the Bob Steele CPA category:
Non- Employee Compensation & Other Business Income – Income Tax 2023
Income tax can be a complex topic, but it is essential for anyone who runs a business to have a basic understanding of the rules and regulations. In this blog post, we will be focusing on line one income of the income tax formula, which is essentially an income statement. We will also be looking at the Schedule C, which is an income statement in and of itself, and how it relates to the overall income tax formula.
Health Insurance Discussion for Self-Employed Individuals- Income Tax 2023
Starting and growing a business requires a lot of decisions, including the type of business entity to form. This decision can have significant implications for the taxes you pay and the liability you face. There are several types of business entities to choose from, including sole proprietorship, partnership, LLC, and S corp.
Interest, Uncollectible Loans & Unstated Interest- Income Tax 2023
Understanding Income and Interest for Small Businesses
For small businesses, understanding the intricacies of taxes can be a challenging task. One important aspect to consider is the income tax formula, where the first half of the formula is essentially an income statement, with line one representing income.
Itemized Deductions – Gifts to Charity Example 5162 Income Tax Preparation 2022 – 2023
Now, let’s take a look at the 60% limitation I mentioned earlier. This means that for most charitable contributions, you can only deduct up to 60% of your adjusted gross income. So, for example, if your adjusted gross income is $100,000, the most you can deduct for charitable contributions is $60,000.
Discussing Capital Gain or Loss Part 1
When we have gains that have accumulated over a long period of time, it could be argued that they’re more like an investment in that they’re not just simply income earned from labor or from a job, but rather they represent a return on an investment that’s been held for a significant amount of time.
Accounting for your Income Discussion- Income Tax 2023
Be aware of these types of transactions and ensure that you’re accurately reporting all income that you earn. Another important aspect to consider is deductions. Deductions are expenses that are incurred in the course of running your business, and can be subtracted from your total income to arrive at your taxable income.
Excise Taxes 6180 Income Tax Preparation 2022 – 2023
Income Tax and Excise Taxes: A Brief Overview
As taxpayers, it is important to understand the different types of taxes that we may be subject to. Two common types of taxes are income tax and excise tax. Income tax is a tax on the income that individuals or businesses earn, while excise tax is a legislated tax on specific goods or services at the time they are purchased.
Qualified Medical Expenses & Health Deductible Plan – Income Tax 2023
Qualified medical expenses for Archer MSA purposes or unreimbursed medical expenses that could be deducted on Schedule A Form 1040 include amounts paid for medical care, such as doctor visits, surgeries, prescription medications, and medical devices.
Dental and vision expenses may also be considered qualified medical expenses, as well as certain types of therapy and mental health services. Menstrual care products are also treated as paid for medical care. Insurance premiums are generally not considered qualified medical expenses, unless they are for long-term care insurance, health care continuation coverage, or health care coverage while receiving unemployment compensation under federal or state law.
To be eligible for an Archer MSA, an individual must have a High Deductible Health Plan (HDHP). An HDHP is a health plan that meets certain requirements, including a minimum annual deductible and maximum annual out-of-pocket expenses.
It’s important to note that an individual with an Archer MSA and their spouse cannot have any health coverage other than an HDHP, unless it is for limited exceptions such as coverage for accidents, disability, dental care, vision care, or long-term care.
It’s also important to refer to the instructions for Schedule A Form 1040 and publication 502 for more information on what qualifies as a medical expense and the limitations for deducting medical expenses on Schedule A. While there may be some gray areas, it’s important to ensure that any expenses claimed as qualified medical expenses meet the necessary requirements.
Moving Expenses, Deductible Part of Self-Employment Tax, & Self-Employed SEP. . . 4050
For all others, you would also attach form 3903 if you are deducting moving expenses. The deductible part of the self-employment tax is calculated on Schedule SE, which is then reported on Schedule 1. And for self-employed individuals, there are two types of retirement plans that can be used to reduce taxable income: simple plans and qualified plans. Simple plans are usually for businesses with fewer than 100 employees, while qualified plans are for larger businesses.