Self-Employment

COVID-19: Significant Payroll and Self-Employment Tax Relief

If you are in business for yourself—say, as a corporation or self-employed—payroll taxes and self-employment taxes are likely two of your biggest tax burdens.

Due to the COVID-19 pandemic, individuals and businesses are suffering. Congress wants to help you individually and also keep small businesses afloat.

To do this, Congress decided that in addition to other measures, it should give you payroll tax and self-employment tax relief, as we describe in this article.

We’ll tell you how the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act will give you payroll and self-employment tax relief.

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Self-Employed During the Pandemic? Washington Did Not Forget You

You report your business income as self-employed on Schedule C of your Form 1040 if you

  • receive 1099 income,
  • operate your business as a single-member LLC and did not elect corporate status,
  • operate a retail establishment or professional practice as a sole proprietor, or
  • report your W-2 income on a Schedule C because you are a statutory employee.

In the past, when times were bad, your government made no special effort to help you as a self-employed individual. For example, you had no “safety net” such as existed for employees who lost their jobs. You were just supposed to suck it up until things got better.

But this time, with COVID-19, it’s different.

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Include Gig Economy Income on Tax Returns

The gig economy is also referred to as the on-demand, sharing, or access economy. People involved in the gig economy earn income as a freelancer, independent worker or employee. Typically, an online platform is used to connect people with potential or actual customers to provide goods or services. Examples include renting out a home or spare bedroom and providing meal delivery services or rides.

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Self-Employed Can Claim Sick & Family Leave Tax Credit

A new form is available for self-employed individuals to claim sick and family leave tax credits under the Families First Coronavirus Response Act (FFCRA). The FFCRA, passed in March 2020, allows eligible self-employed individuals who, due to COVID-19, are unable to work or telework for reasons relating to their own health or to care for a family member to claim refundable tax credits to offset their federal income tax.

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Choosing a Business Entity

When you decide to start a business, one of the most important decisions you’ll need to make is choosing a business entity. It’s a decision that impacts many things—from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face, and with the passage of the Tax Cuts and Jobs Act of 2017, it’s more important than ever to choose the business entity that benefits your business.

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Should my business be an S corp

Ask Bob: Should My Business Be an S Corporation? 6 Myths and Facts

CPA Robert Russo Breaks Down the Question: Should My Business Be an S Corp?

Ever since the Tax Cuts and Jobs Act was signed into law in late 2017, the team at Robert P. Russo, CPA has been getting questions about which business entity will allow them to best take advantage of the law. One question that keeps coming up is: should my business be an S corp? We get this question from LLCs and sole proprietorships – even employees wondering if now’s the time to launch that startup.

The answer to “should my business be an S corp”? It depends. There are benefits to becoming an S corporation (taking a distribution of dividends exempt from self-employment tax). But there are also pitfalls – if you don’t follow S corp requirements (take too large a distribution, and you could hear from the IRS).

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Tax Tips for Workers in the Gig Economy

The gig economy, also called sharing or access economy, is defined by activities where taxpayers earn income providing on-demand work, services, or goods. This type of work is often carried out via digital platforms such as an app or website. There are many types of sharing economy businesses including two of the most popular ones: ride-sharing, Uber and Lyft, for example, home rentals such as Airbnb, and TaskRabbit.

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COVID tax relief

4 Tax-Saving Provisions for S Corporations Under COVID-19

To help your small business, Congress created a lot of new tax-saving provisions due to the COVID-19 pandemic.

Many of my clients own and operate S corporations and expect the tax law to treat them differently, as it does with their health insurance deduction.

Perhaps you, too, would like us to help clarify which of the COVID-19 tax benefits the S corporation owner can use to put cash in his or her pocket. Here’s a list as of 5/6/2020.

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COVID-19 Tax News

Self-Employment COVID-19 Relief and Tax Benefits

If you are in business for yourself—say, as a corporation or self-employed—payroll taxes and self-employment taxes are likely two of your biggest tax burdens.

Here’s some possible good news: Congress decided to give you significant relief from these taxes due to the COVID-19 pandemic. We’ll tell you what relief options are available and whether or not you qualify.

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