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Payroll Made Simple
Finance and Freedom ^ | January 13, 2014

Posted on 01/31/2014 10:52:55 AM PST by GarthVader

Eight different taxes. That’s what I had to compute every time I wrote a paycheck back when I was running a small business on the side. Eight taxes: •Federal income tax •State income tax •Federal unemployment tax •State unemployment tax •Medicare – employer’s portion •Medicare – employee’s portion •FICA – employer’s portion •FICA – employee’s portion

At least I “only” had to send the payments to four different government agencies.

...

Yes, the governments provided some nice hefty books. The IRS provided a 67 page two column guide. My state’s employer guide was only 59 pages. Keep in mind that these were just for the purpose of computing and delivering withholding taxes. The (sole proprietorship) business itself had its own tax guides – for income, FICA, Medicare, and sales taxes.

I think I spent more time dealing with government paperwork/payments than my part time employee spent working for the business. I definitely would have better off doing the work myself, save that I wanted to do the experiment. Jobless people take note.

For full time business owners with full time employees, this overhead is a smaller fraction of doing business, but it is still a significant headache. A big corporation like Wal-Mart can hire specialists to handle payroll headaches. The really big ones can optimize the process and even have their own specialized software designed. For a Mom and Pop business, or a small startup, these headaches occupy the owner(s). Keep this in mind all ye anti-Wal-Mart/buy local lefties. All this government-imposed overhead gives the big corporations an advantage over locally owned businesses.

And in the case of computing payroll taxes, it is all very unnecessary!

(Excerpt) Read more at financeandfreedom.org ...


TOPICS: Business/Economy
KEYWORDS: taxes
For those who own a small business, it is theoretically possible to simplify employee withholding even with the current complicated tax code. It just requires a bit of reorganization.
1 posted on 01/31/2014 10:52:56 AM PST by GarthVader
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To: GarthVader

hire a payroll company, that way when there are mistakes you can blame them. and there will be mistakes. big ones


2 posted on 01/31/2014 10:55:33 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: GarthVader
Bring back American employment.

JOBS. Now.

3 posted on 01/31/2014 10:55:37 AM PST by 1rudeboy (snort)
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To: GarthVader

The best small business is where you are the only employee. The rest don’t exist because they are paid under the table.


4 posted on 01/31/2014 10:56:38 AM PST by cuban leaf
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To: GarthVader

FairTax

The 16th amendment is repealed as part of the legislation.


5 posted on 01/31/2014 11:04:04 AM PST by listenhillary (Courts, law enforcement, roads and national defense should be the extent of government)
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To: listenhillary

a reinstated the day after the scam is passed.

The prebate is another entitlement check.

The fairscam provides for the GOVERNMENT to determine was is or is not a family.

Mandatory regisration to recieve your living prebate.

Mandatory registration to prove you don’t have to pay the national sales tax.

current irs is replace with NuIRS.

This scam is dead and should stay dead.

There are so many other better flat tax concepts. Perhaps all should include a ballanced budget amendment.


6 posted on 01/31/2014 11:10:12 AM PST by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: 1rudeboy
Bring back American employment. JOBS. Now.

Nice cheerleading. Completely without a plan. But nice.

7 posted on 01/31/2014 11:14:25 AM PST by DannyTN (A>)
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To: DannyTN

Just havin’ some fun. I lifted the sloganeering from someone you might know.


8 posted on 01/31/2014 11:15:14 AM PST by 1rudeboy
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To: driftdiver

I took payroll accounting years ago and it was an eye opener about the absurd laws and regulations.

Everyone should have to take a class like that but that might open too many eyes and minds.


9 posted on 01/31/2014 11:17:22 AM PST by wally_bert (There are no winners in a game of losers. I'm Tommy Joyce, welcome to the Oriental Lounge.)
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To: 1rudeboy

I can guess who. But when he posts it, it’s usually in support of specific actions.


10 posted on 01/31/2014 11:21:20 AM PST by DannyTN (A>)
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To: 1rudeboy

I can guess who. But when he posts it, it’s usually in support of specific actions.


11 posted on 01/31/2014 11:21:20 AM PST by DannyTN (A>)
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To: DannyTN

Oh, really. LOL


12 posted on 01/31/2014 11:28:04 AM PST by 1rudeboy
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To: cuban leaf

Exactly.


13 posted on 01/31/2014 11:31:00 AM PST by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set...)
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To: wally_bert

The worst one I’ve heard recently is that we can’t put the annual salary on offer letters. If we put the annual salary on the offer letter and then let the person go for any reasons then we are still on the hook for the full years salary.


14 posted on 01/31/2014 11:33:53 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: cuban leaf

Until they get caught not paying taxes and tell the IRS they were your employee.

Guess who gets to pay all the taxes then?


15 posted on 01/31/2014 11:35:07 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: listenhillary

I would like a fair tax but I think a flat tax is more doable. You cannot repeal an amendment(16th) through legislation. It has to be done through the process spelled out in Article V of the Constitution.


16 posted on 01/31/2014 11:35:15 AM PST by mc5cents (Pray for America)
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To: driftdiver

Haven’t heard that one but it wouldn’t surprise me.


17 posted on 01/31/2014 11:37:53 AM PST by wally_bert (There are no winners in a game of losers. I'm Tommy Joyce, welcome to the Oriental Lounge.)
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To: wally_bert

We went to employee leasing for the medical insurance. They made us change the offer letters.


18 posted on 01/31/2014 11:38:57 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: GarthVader
How about the following outline, as part of a broad flat tax reform?

Federally Chartered Small Business

- To qualify for FCSB status requires gross sales of under 50 million dollars (create something similar for the next category up.)

- An FCSB withholds 20% of employee salaries and remits to the Treasury to cover all payroll tax liabilities. No further assessments by the IRS are allowed.

- An FCSB remits 5% Federal Sales Tax on all transactions, which is in turn disbursed to the state in which the FCSB operates. Neither state nor local taxes may be levied on an FCSB's sales, nor may the tax remitted be retained by the Federal Government for any other purposes (I know, this is a tough one...maybe FedEx should collect and process the money, instead...)

- An FCSB pays 10% corporate tax on any net profit. No "fishing" audits nor assessments by the IRS are permitted without enough proof of wrongdoing to file criminal charges and obtain a warrant from a Federal judge.

- An FCSB must meet general Federal guidelines for its type of activity and zoning (i.e., no chicken farms next to Macy's at an indoor mall).

- An FCSB is subject to a limited set of EPA/OSHA/ADA rules, not to exceed ten total pages of regulations.

- An FCSB is exempt from all other state and local laws governing business operations.

- An FCSB is not subject to state and local minimum wage laws. The Federal minimum wage for FCSB employees is set at $5/hour.

- An FCSB is a Right to Work entity, and all employment is At Will.

Stops the creeping Communism (as well as the even worse state and local tax corruption) in its tracks.

19 posted on 01/31/2014 11:59:08 AM PST by Mr. Jeeves (CTRL-GALT-DELETE)
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To: Mr. Jeeves

Not sure that your idea is either politically feasible or constitutional. If a business is truly small, it is probably intrastate. Federal charter and intrastate is a bit of a contradiction.

And it probably takes more than 10 pages of regulations for businesses which involve dangerous materials. Accountability through liability is a great replacement for regulations involving money and property damage. Doesn’t work so well for dead people or malformed babies.


20 posted on 01/31/2014 12:08:40 PM PST by GarthVader
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To: driftdiver

Your suggestion is a good one for dealing with the current system. But we could do better.


21 posted on 01/31/2014 12:09:48 PM PST by GarthVader
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To: listenhillary

The Fair Tax has much to be said for it, but I doubt it can be passed any time soon. The proposal I linked to has the possibility of bipartisan support — rather useful when the other side controls the presidency.


22 posted on 01/31/2014 12:11:29 PM PST by GarthVader
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To: driftdiver
Until they get caught not paying taxes and tell the IRS they were your employee.

Hmmm. Not that I ever did something like the following, but how about this: I ask someone if they would consider doing certain tasks, such as raking mowing and clearing gutters, and in return they can borrow a specified debit card and use x-amount on the card and return it the next day. The debit card is limited in how much it has in the account so it is in little danger of being misused, and if the person borrowing it misuses it in any way then they will never again get the opportunity to repeat their actions and word will spread about their unreliability.

No contracts are signed, no "employment" is established, and both parties come away with experiences for the better. Kind of like the way a couple of friends worked out how to not-sell a firearm some years ago...

23 posted on 01/31/2014 12:16:07 PM PST by Utilizer (Bacon A'kbar! - In world today are only peaceful people, and the mooslimbs trying to kill them-)
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To: driftdiver

Until they get caught not paying taxes and tell the IRS they were your employee.

Guess who gets to pay all the taxes then?


Honduras is warm.


24 posted on 01/31/2014 12:31:28 PM PST by cuban leaf
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To: Utilizer

I agree with your point but am a bit jaded. The govt will ALWAYS side with the ‘employee’ or at least in 99.99% of cases.

The contract protects you because if you don’t have one then the “employee” can make any claim. Plus they are tracking every single dollar.


25 posted on 01/31/2014 12:36:13 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: GarthVader

Oh I agree its a crappy solution but the best I could come up with. Next try to get $5 million in liability insurance and tell them you work with sensitive data.


26 posted on 01/31/2014 12:37:54 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver
The contract protects you because if you don’t have one then the “employee” can make any claim. Plus they are tracking every single dollar.

Well, good to know, but any claim made must be substantiated. No written contract, no proof. Even the courts say that an oral contract is only worth the paper it is written on.

A debit card is usually placed under one name. If someone else uses it, say a family member (or friend/acquaintance) any transactions will take place on the card bearing that name and no others, so any tracking will only show that and nothing else. Give it to a niece to run to the store to buy some milk (and herself a bottle of pop) and the transaction is still tracked only to that one name, so I think anyone with a bit of common sense will know that they can not realistically call that "employment".

27 posted on 01/31/2014 12:58:58 PM PST by Utilizer (Bacon A'kbar! - In world today are only peaceful people, and the mooslimbs trying to kill them-)
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To: GarthVader

Years ago when I had to deposit payroll taxes, I was able to make that deposit at 3:59 in the afternoon on the date they were due. Now after our gubmint decreed we need to deposit them electronically at super fast lightning speed, my deposit needs to be transmitted 2-3 days early for “processing”.


28 posted on 01/31/2014 1:03:16 PM PST by Cyman (We have to pass it to see what's in it= definition of stool sample)
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To: Utilizer
Until they get caught not paying taxes and tell the IRS they were your employee.

Freelance contract labor. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Defined
29 posted on 02/01/2014 11:49:03 AM PST by Svartalfiar
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To: Svartalfiar

Still not “income”. Same as if I allowed a niece to borrow a vehicle for a set period of time (to go to the store) in order to pick up that milk (and her bottle of pop) in exchange for using the debit card for the groceries. Closest definition would be a form of barter, and since the debit card would be the means to purchase the necessary item(s), which would not be in her name, no income can be claimed. Same as in the other example.


30 posted on 02/01/2014 1:03:43 PM PST by Utilizer (Bacon A'kbar! - In world today are only peaceful people, and the mooslimbs trying to kill them-)
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