Blog Archives

Get to Know the Health Care Law’s Employer Shared Responsibility Payment

6/21/2015

Under the Affordable Care Act, applicable large employers – those with 50 or more full-time employees, including full-time equivalent employees – are required to take some new actions. To prepare for 2016, if your organization is an ALE, you need to track information each month in 2015, including:

Whether you offered full-time employees and their dependents minimum essential coverage that meets the minimum value requirements and is affordable
Whether your employees enrolled in the minimum essential coverage you offered

You need to track this information because you could be subject to an employer shared responsibility payment if your organization falls into either of these circumstances:

You offered coverage to fewer than 70 percent of your full-time employees and their dependents in 2015 and at least one full-time employee enrolled in coverage through the Health Insurance Marketplace and receives a premium tax credit. The 70 percent threshold is for 2015, after 2015 this increases to 95 percent.
You offered coverage to at least 70 percent of your full-time employees and their dependents in 2015, but at least one full-time employee receives a premium tax credit because coverage offered was not affordable, did not provide minimum value or the full-time employee was not offered coverage. After 2015, this threshold increases to 95 percent.

For more information about reporting requirements, visit the Employer Shared Responsibility Provisions Questions and Answers page on IRS.gov/aca.

0 Comments

Tax Tips for Students with Summer Jobs

6/21/2015

Students often get a job in the summer. If it’s your first job it gives you a chance to learn about work and paying tax. The tax you pay supports your home town, your state and our nation. Here are some tips students should know about summer jobs and taxes:

Withholding and Estimated Tax. If you are an employee, your employer withholds tax from your paychecks. If you are self-employed, you may have to pay estimated tax directly to the IRS on set dates during the year. This is how our pay-as-you-go tax system works.
New Employees. When you get a new job, you will need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use it to figure how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on IRS.gov can help you fill out the form.
Self-Employment. Money you earn doing work for others is taxable. Some work you do may count as self-employment. These can be jobs like baby-sitting or lawn care. Keep good records of your income and expenses related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction can cut taxes.
Tip Income. All tip income is taxable. Keep a daily log to report them. You must report $20 or more in cash tips in any one month to your employer. And you must report all of your yearly tips on your tax return.
Payroll Taxes. You may earn too little from your summer job to owe income tax. But your employer usually must withhold social security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count for your coverage under the Social Security system.
Newspaper Carriers. Special rules apply to a newspaper carrier or distributor. If you meet certain conditions, you are self-employed. If you do not meet those conditions, and are under age 18, you may be exempt from social security and Medicare taxes.
ROTC Pay. If you’re in ROTC, active duty pay, such as pay you get for summer camp, is taxable. A subsistence allowance you get while in advanced training is not taxable.
Use IRS Free File. You can prepare and e-file your tax return for free using IRS Free File. It is only available on IRS.gov. You may not earn enough money to be required to file a federal tax return. Even if that is true, you may still want to file. For example, if your employer withheld income tax from your pay, you will have to file a return to get a tax refund.

Visit IRS.gov for more about the tax rules for students.

Additional IRS Resources:

Student's Page - High School
Student's Page - Higher Education

IRS YouTube Videos:

Part-Time and Summer Jobs – English
IRS Withholding Calculator – English | Spanish | ASL

IRS Podcasts:

IRS Withholding Calculator – English | Spanish

What Taxes Do I Pay If I Start A Business?

6/19/2015

0 Comments

The taxes you pay will depend on the type and form of business you have. Here are a few basics:

FEDERAL INCOME TAX
Business income after expenses is subject to federal income tax, much like wages and interest income are. The amount you pay will depend on what tax bracket your overall income falls within.

SELF=EMPLOYMENT TAX
Self-employment tax of 15.3% of 92.35% of net business income is also charged on your individual income tax return. This tax covers your social and medicare taxes normally withheld from and paid by an employer when you are a wage earner. If you form your business as a corporation, you would be paying yourself a wage, thus this tax would be withheld from your wages rather than charged on your tax return.

STATE INCOME TAX
Business income after expenses is subject to Hawaii income tax, much like wages and interest income are. The amount you pay will depend on what tax bracket your overall income falls within.

GET
All businesses pay general excise tax (GET) in the State of Hawaii. GET is 4% of gross retail sales/services and 1/2% of gross wholesale sales and services to/for an intermediary plus an GET passed on to your customers. GET is a tax for the privilege of doing business in the State of Hawaii.

TAT
If your business involves vacation or short-term rentals, you will also be subject to transient accommodations tax (TAT) in the State of Hawaii. TAT is 9.25% of the room rate charged your guests.

0 Comments

Newsline

Get to Know the Health Care Law’s Employer Shared Responsibility Payment

Tax Tips for Students with Summer Jobs

What Taxes Do I Pay If I Start A Business?

Archives