What are Supplemental Wages and What Methods are Used to Withhold Their Taxes?

Supplemental wages include, but are not limited to: bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, reported tips, retroactive pay increases, and payments for nondeductible moving expenses. As you can probably gather, supplemental wages more or less function as a catchall for income paid by your employer or [...]

IRAs, Roth IRAs, and 401(k)s – What can you contribute?

This post has to do with what you can contribute in the realm of the three most common types of retirement accounts, those being the traditional and Roth individual retirement accounts (IRAs) and 401(k) plans. Generally, people that rely on an IRA to save for retirement aren’t covered by a 401(k). Conversely, those that rely [...]

Businesses Owned by Spouses and Employee Family Members

(Note: When this article mentions the term “employment,” it means formal employment arrangements where a worker receives a Form W-2 at the end of the year, and therefore, as used in this article, does not include independent contractors that receive Forms 1099-MISC. If you want to keep things in the family, and I suggest that [...]

Employer Obligation to Obtain Employee Name and Social Security Number

(Note: The tax treatment discussed herein pertains to employees who receive Forms W-2 and does not apply to hired contractors who receive Forms 1099-MISC at year’s end.) As an employer, you’ll need to get a lot of information from your employees in order for them to start work. Besides their names, for tax purposes the [...]

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