Presented by Paystrubmakr.com By John Wolf and Tom Cullen CPA
Final insurance conclusions
PAYSTUB MAKER team brings you the final part of the conclusions about insurance and Payroll.
10 Tax Benefits For The Self-Employed by Forbes
Federal Insurance Contributions Act (FICA)
Understanding the Federal Insurance Contributions Act (FICA)
FICA contributions are mandatory, and rates are set annually, although not necessarily changed every year—they remained stable between 2020 and 2021, for example. The amount of the FICA payment depends on the income of the employee: the higher the income, the higher the FICA payment.
However, for Social Security contributions there’s a maximum wage base, after which no contributions are levied on additional income. The federal government withholds Social Security taxes up to the annual wage base, which was set at $137,700 in 2020 and $142,800 in 2021.
Home office for self-employed, Paystub maker client.
65. Various types of insurance plans are available for businesses to provide to employees. However, which of the following is so common that employees often overlook its economic and tax implications?
a. business travel accident insurance.
b. disability income insurance.
c. employer-paid health or medical insurance plans.
d. key person life insurance.
66. For estate planning purposes, sole shareholder corporations may find key person life insurance to be highly appealing. What is a tax consequence for such a corporation?
a. The premiums are taxable to the insured, not the corporation.
b. At death, stock holdings receive no step-up in basis.
c. At death, there is an increase in the corporation’s net worth.
d. Capital gains tax is imposed on the proceeds received by the estate.
67. Severance pay plans were impacted by legislation Congress passed to regulate VEBAs. How were such plans impacted?
a. Such plans have been eliminated for small closely held corporations.
b. Employers must maintain separate accounts for key employees.
c. Such plans are not subject to the nondiscrimination rules.
d. The account is limited to a percentage of average annual qualified direct costs.
What kind of records should I keep? by IRS
With PAYSTUB MAKER and basic home office, you can have payroll done.
After reading Chapter 7, participants will be learning Objectives-to:
1. Identify non-qualified and qualified deferred compensation plans noting their benefits and contributions limits and recall the current and deferred advantages and disadvantages of corporate plans including fiduciary responsibilities and prohibited transactions.
2. Specify the requirements of three basic forms of qualified pension plans.
3. Determine the differences between defined contribution and defined benefit retirement plans and specify five types of defined contribution plans noting their impact on retirement benefits.
4. Recognize self-employed plans from qualified plans for other business types and owners.
5. Identify the requirements of IRAs, SEPs, and Samples, and define tax-free Roth IRA distributions noting strategies to maximize plan benefits.
9 tax tips for the self-employed by USA Today
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Disclaimer: John Wolf and paystubmakr.com are making a total effort to offer accurate, competent, ethical HR management, employer, and workplace advice. We do not use the words of an attorney, and the content on the site is not given as legal advice. The website has readers from all US states, which all have different laws on these topics. The reader should look for legal advice before taking any action. The information presented on this website is offered as a general guide only.