100%(6)6 out of 6 people found this document helpful
This preview shows page 6 - 8 out of 8 pages.
tax returns. However, since the entity is an S-Corporation, neither Mr. Jones nor his daughter willbe liable for self-employment taxes on S-Corporation distributions (Internal Revenue Service (b),2016). Payroll ChecksWhen payroll checks are written from the business to Mr. Jones and his daughter, the business becomes liable for all state and federal payroll taxes. In the state of Florida, the businesswill match the Social Security and Medicare taxes withheld from employee payroll checks
MILESTONE ONE: BOB JONES, CLIENT 7(Internal Revenue Service (a), 2015). Then, the business will pay Florida reemployment taxes of up to 5.4% of the first $7,000 of each employee’s wages (Stranburg, 2015). As a result, the business is also liable for Federal Unemployment Taxes at the rate of 0.8% of the first $7,000 of each employee’s wages (Internal Revenue Service (a), 2015). While these payroll taxes are deductible expenses for the company, they do add an additional burden to the cash flow of the business for payment of these taxes.
MILESTONE ONE: BOB JONES, CLIENT 8ReferencesInternal Revenue Service (a). (2015, December 23). Publication 15: Circular E: Employer’s tax guide. Retrieved from .Internal Revenue Service (b). (2015, December 23). 2015 Instructions for Schedule E (Form 1040).Retrieved from .MacDonald, W. A. (2016). Texas seller closing costs and net proceeds calculator. Retrieved from.Stranburg, M. (2015). 2016 Reemployment tax rates fact sheet. Florida Department of Revenue. Retrieved from .Thomson Reuters. (2015). RIA federal tax handbook 2016. Hoboken, NJ: Thomson Reuters.