State or IRS Back Tax Wage Levy / Settlement - What is Self Employment Income?

US-WIDE, US-wide - April 15, 2013 - PRLog -- While operating as a "self employed" (SE) individual sounds scary, it has its pros and cons to weigh what best fits for you. As a self employed taxpayer, no one can tell you how to do your work, when to do work and where you do you work. A real perk  is that a SE taxpayer can dictate his or her own hours, be the boss, work hard, manage crisis or delegate authority or, goof off with the kids at the zoo. Fun right?

Fun only if you can bring yourself to conform with Federal and State tax codes and its complexities to correctly translate your business into a maximized tax return.

SE business owners, please be aware of your business deadlines, recordkeeping and ability to save to anticipate and meet the taxes due on earned income. Here at DWK Tax everyday small business owners are puzzled and are unclear of what actually needs to be done to keep the ship from capsizing in turbulent seas. Everyone knows how to make a buck, but are you able to keep your company alive without counting on payroll taxes withheld from employee paychecks to keep the company afloat? The business practice could be construed as criminal behavior in the form of a trust fund recovery case initiated by the IRS.

Not having a separate checking account designated for business transactions is construed as a illegal act of "commingling" funds.

Need to resolve a business tax problem? Small or large, it does not matter, look to the trusted, the respectful and efficiency of DWK Tax Group and its no non-sense tax attorneys and enrolled agents. Dial 1 - 8 6 6 - 2 2 6 - 6 1 0 2 for a detailed analysis of your scenario. Or, visit http://dwktaxgroup.com/ for more information.

The following is considered self employment:

1) Non employee compensation

2) Income from a sole proprietorship

3) Income as an independent contractor

4) Corporate director fees

5) Partnership income from a partnership operating a business (unless limited partner)

6) Trade or Bartering income

7) Real estate rent (if received as a real estate dealer)

8) Income paid to retired insurance agents based on commission prior to retirement

9) Newspaper vendor's income over the age of 18 years old

10) Net earnings of the clergy (unless a vow of poverty is taken)

11) Gains and losses by a dealer in options or commodities

12) A professional fiduciary who administers a deceased person's estate.

The classic tax problem rearing its ugly head for the SE is "estimated tax payments" usually due on a quarterly basis. The purpose of estimated tax payments is to collect monies to be funneled to the Department of Treasury, Social Security Administration and Medicare. Very often no one wants to pay this "ETP" but when the taxpayer turns 65 guess who is looking for a SS benefit to collect from?

Also word to the wise, have a clear understanding of what business dealings your spouse is authorizing, the corporate vail cannot protect a spouse from inheriting tax debt generated by partnerships and corporations. The tax balance will revert to the non participating spouse much to his or her dislike upon death...

The concept to resolve a tax problem is quite simple, either pay what you owe today or pay a larger amount later with accruing penalties and interest. You decide, get the tax problem resolved today, DWK will set you up for long term success tomorrow.