Payroll tax debate creates trouble for entrepreneurs and business owners
As lawmakers continue to debate the extension of the federal payroll tax breaks, which is set to expire at the end of February, employers and the self-employed are trying to deal with the uncertainty.
Fluctuating tax and benefit changes are presenting hardships for small business owners and entrepreneurs, who are being forced to adjust budgets, hiring plans and insurance offerings in accordance with the variation, radio station K2 reports.
According to the source, if the tax break isn't extended on February 29, owners and employers will need to recalculate their self-employment tax, if applicable, as well as the quarterly amount sent to the Internal Revenue Service.
"Self employment tax is going to be effected those two months," Keith Hall, tax advisor with the National Association for The Self-employed, told the source in an interview. "If they have employees the pay check calculations are going to be different beginning March 1st. So in the same year we're gonna have to go through two sets of calculations, both as the worker and as the boss."
As the debate continues, Democratic lawmakers have now proposed taxing carried interests at a rate of 35 percent rather than classifying it as capital gains.
Fluctuating tax and benefit changes are presenting hardships for small business owners and entrepreneurs, who are being forced to adjust budgets, hiring plans and insurance offerings in accordance with the variation, radio station K2 reports.
According to the source, if the tax break isn't extended on February 29, owners and employers will need to recalculate their self-employment tax, if applicable, as well as the quarterly amount sent to the Internal Revenue Service.
"Self employment tax is going to be effected those two months," Keith Hall, tax advisor with the National Association for The Self-employed, told the source in an interview. "If they have employees the pay check calculations are going to be different beginning March 1st. So in the same year we're gonna have to go through two sets of calculations, both as the worker and as the boss."
As the debate continues, Democratic lawmakers have now proposed taxing carried interests at a rate of 35 percent rather than classifying it as capital gains.
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