When employing an independent contractor in CA establishes sales or income tax nexus for a Seattle company?

My answer to When can employing an independent contractor in CA establish sales or income tax nexus for a Seattle c… Answer by Wray Rives: Just using an independent contractor in California would not create nexus in CA; however, there are several common, potential issues that typically come up in this scenario. If the independent Read more about When employing an independent contractor in CA establishes sales or income tax nexus for a Seattle company?[…]

Why do I pay higher taxes being self employed than when I was working for a corporation.

Answer by Wray Rives: Self-employed individuals might pay more tax for the same pay. The biggest tax difference between self employment and working as an employee is self-employment tax, income tax rates are the same for the same taxable income. FICA/Medicare tax When you are an employee you pay 7.65% FICA and Medicare tax and Read more about Why do I pay higher taxes being self employed than when I was working for a corporation.[…]

Does an U.S. citizen who lives abroad and is a partner in a foreign entity taxed as partnership owe self-employment taxes?

Answer by Wray Rives: Yes you do owe self employment tax on foreign taxable self employment.  You may avoid some US taxation if there is a totalization agreement between the US and your resident country.  Self employment income that is exempt from US income tax due to the foreign earned income exclusion (What is earned Read more about Does an U.S. citizen who lives abroad and is a partner in a foreign entity taxed as partnership owe self-employment taxes?[…]

Under what circumstances should you file Tax Form 941?

Answer by Wray Rives: You file a Form 941, if during the previous quarter you had any of the following: Wages you paid. Tips your employees received. Federal income tax you withheld. Both the employer's or the employee's share of social security and Medicare taxes you withheld. Additional Medicare Tax withheld from employees. Current quarter's Read more about Under what circumstances should you file Tax Form 941?[…]