Tax norms applicable to individuals working as a contract laborer

US tax form 1040 with pen and calculator.

A contract laborer is often considered to be a self employed person. So the IRS has brought out Form 1099 along with the Form 1040 to help them to file their tax properly. Individuals working as contract laborers are responsible to pay their own taxes unlike the regular employees whose payroll taxes are deducted from the paycheck.

Usually, a contract laborer gets his/her full payment without facing any tax deduction from paycheck. As they work independently so the onus is on them to pay Social Security and Medicare taxes jointly with their income taxes. Overall they have to pay self employment tax of about 15.3% in comparison to regular workers where the firm owners bear the responsibility of paying remaining tax amount.

Many stump metal roofing companies hire contract laborers for avoiding added tax and to skip responsibility of payroll tax collection. In this way they can also get relief from obligation of spending money on other benefits like medical insurance. But there are firms who often consider their employees as contract workers to escape from prescribed responsibilities. In such scenario they must complain to state labor department.

 

 

March 10, 2016

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Options that can be utilized after missing the prescribed deadlines of tax filing

 

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There is no need for you to be worried if you have missed the deadline for filing your tax returns. It is because filing such returns has become comparatively easier and you have to include returns whose payments are still pending. Whether you are able to pay it or not, you must file it for avoiding strict legal actions from the tax authorities. There are many available options that you can utilize for filing returns after the lapse of the fixed deadline.

You can use the platform of cashier’s check, digital fund transfer, money order, credit card and so on in case of filing late returns. But if you do fail to take the initiative of late filing then you may have to suffer from severe legal complications including criminal prosecution. According to IRS norms, citizens unable to file any required return or not responding to the request of late return have to face the relevant legal punishments.

Once you have failed to file your returns within the prescribed time limit, you can use the medium of e-filing which offers an extension of six months after the lapse of the original time period. Here also if you fail to utilize the prescribed period then the server shall be shut down by the competent authority.

You can also file your returns late in case you are travelling out of the city. In such a scenario, you will be granted an extension of two months to clear all your dues. If you are not satisfied with the stipulated extension, then you have the opportunity to request for extra four months to clear all tax related dues. You need to clearly state all your problems before the tax official, so as to get an exemption.

 

March 7, 2016

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Making taxing filing easier and avoiding late fines

 

Tax Refund - Orange Button on Computer Keyboard. Internet Concept.

People often have to experience tremendous pressure while filing tax at the last moment. It is not due to lack of advanced preparations but because of lack of proper knowledge that is preventing them from filing tax much easily. So it is better to be thoroughly acquainted with the tax filing procedures before you get down to the task.

There are plenty of options that can be utilized by people for filing the tax in a relaxed manner. They can use the option of e-file which is the most popular, easiest, accurate and safest way of tax return filing. People whose income is below $57,000 have the chance of using special tax software. Those earning above $57,000 and can file their own return have the scope of using electronic paper forms of IRS.

People who face the problem to prepare their returns within 15th April are entitled for an automatic extension of additional six months. During such extension period they can download several online tax forms to prepare their returns without committing any mistake. But after the lapse of the extension tenure they need to file them for avoiding tax penalties.

In case there is tax due and you are unable to pay the exact amount even during the stipulated deadline even then you should make sure you make it within the due date. It will then reduce your interest charges and penalties. You can also request for an installment agreement for reducing the burden of paying the entire amount. Before forwarding such request, you need to have relevant documents to prove your actual financial conditions. You can contact with professional agencies that are specialized in filing various tax returns on behalf of their clients.

 

 

March 7, 2016

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Prescribed tax norms that can help you as a blogger

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Blog writing is becoming a popular profession around the world. Every year people across the globe are earning sufficient amount of money for writing quality blog articles in various domestic and international websites. So like other professions, it is also subjected to specific tax laws where individuals need to pay as per their income limits.

It is the freelance bloggers who actually face difficulty of taxpaying than those working as a regular employee of any firm. Though they do not have to suffer from unjust taxation but unlike other employees, these professionals need to pay a separate self employment tax amount. However they have the scope of taking advantage of specific deduction rules for lowering their tax bills.

They can get rid of paying this tax if they manage to show their investment on office furniture, advertisement, insurance, electronics and other services and goods that are closely linked with their business requirements. As per tax laws of United States, people engaged in blogging profession are required to pay an estimated tax on a quarterly basis. You can easily avoid paying it if your income is lower than $1,000 or there are no other tax liabilities on your shoulder.

You will also receive tax relief if you are successful in portraying your blog business as a hobby. For claiming such deductions, you need to convey the tax officials that you are operating a genuine business. For that you need to show your profits that you have incurred so far. Other factors that can play a major role in tax exemption is the duration and circumstances that brought you in this business. The officials shall also assess whether it is your only source of income or not before granting you taxation relief.

 

 

 

March 7, 2016

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