Massage & Bodywork

January/February 2012

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BEST PRACTICES BUSINESS SIDE Keep More of Your Money at Tax Time By Laura Allen That time of the year is upon us again. The deadline for filing 2011 taxes is Monday, April 16, 2012. If you're the type who is well-informed about tax deductions, careful about record keeping, and diligent about meeting deadlines, you have no reason to dread tax day. If that doesn't describe you, don't be stressed, but do get ready to take some positive action. When it comes to filing income tax, being proactive is everything. Fortunately, there's still time to whip yourself into shape. WHO GETS WHICH TAX FORMS? If you're an employee, at the time you're hired you should fill out a Form W-4 for your employer. This tells the employer how much tax should be deducted from your paycheck. Your employer should give you a Form W-2 no later than January 31, showing how much money you earned and how much was deducted. If you're an independent contractor, at the time you're hired you should fill out a Form W-9 for the person contracting your services. You are basically a self-employed individual who does your work in someone else's space. The Form W-9 signifies to the Internal Revenue Service (IRS) that you are not subject to withholding, and that you are responsible for making your own tax payments to the federal and state revenue departments. Your employer should provide you with a Form 1099, a statement of how much you've earned, no later than January 31. If you're self-employed as a sole proprietor or in a partnership, or have your business incorporated, you are also responsible for making your own tax payments. Independent contractors and self-employed individuals should file quarterly estimated taxes, using Schedule SE (Self-Employment Tax). THE IRS IS YOUR FRIEND It might be stretching the truth just a little to say the IRS is your friend, but the folks there have actually made this process as painless as possible. You can download the necessary forms from their website, and you can file—and pay—electronically on the website at www.irs.gov. The IRS has one of the most comprehensive, user-friendly websites on the Internet. Any piece of information you could possibly want from the tax code is there. Do you need to find out if you really are an independent contractor, or if you're employing one? Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, will tell you. If you need to file for an extension, ask for a payment plan, or even ask the IRS to figure your taxes for you, it's on the website. The website also has a calendar so you'll know what dates you are supposed to file your estimated quarterly tax, information on what's deductible 24 massage & bodywork january/february 2012

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