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  • 23rd September 2017

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FAQ

What is the difference between an employee vs. contractor?
The IRS focuses on three factors to determine whether a worker should be a contractor or an employee: behavioral control, financial control, and type of relationship. If you control both what and how a task is to be done, you should probably classify your worker as an employee. If you can control only the results you want, you may be able to classify the worker as a contractor. For additional information check out https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee

If I want to give and employee a bonus, can I just write them a check?
Bonuses are subject to payroll deductions just like any other payroll check. If you write a check for $1,000 to an employee, you will be liable for taxes on the gross-up, and this ranges between 20% to 30%. So that $1,000 bonus just turned into $1,200 or $1,300. You would be better off running the bonus through the employees paycheck and have the taxes calculated from there.

How long do we have to keep tax documents?

Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
1. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
2. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
3. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
4. Keep records indefinitely if you do not file a return.
5. Keep records indefinitely if you file a fraudulent return.
6. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

Sales Tax: Is it required to pay sales tax on items purchased from another state?

The FL Department of Revenue has been auditing companies, and individuals, that are purchasing items outside of the State of Florida and not paying sales tax. These items could be for business or personal use.
Examples include purchases made over the internet, mail-order catalog, purchases made in another country or furniture purchased from dealers located in another state.
Florida law states that you are required to report and pay 6% use tax on those items purchased outside of Florida, if you did not pay sales tax at the time of purchase. If an out-of-state seller fails to collect sales tax, it is your responsibility to comply with Florida law and report the purchased items to the department of revenue.

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