Lewisville, TX (PRWEB) December 21, 2005
December marks tax time again for small businesses and, as such, many business owners are turning to the Internet in search of ways to reduce the painful bite they are about to experience. One such Web site is PayrollonaBudget.com.
Recently featured on the news television series, "Heartbeat of America," this Web site provides business owners with helpful tips, advice and services to legally cut their business' payroll and taxes. During his interview, Charles J. Read, President of PayrollonaBudget, was asked to discuss problems that business owners face in handling their payroll while maintaining compliance with the country's burdensome tax regulations. The eight-minute episode aired November of 2005.
Read is now offering several tips to the public on how to avoid paying estimated income tax and estimated tax penalties.
"For those business owners who haven't yet made the estimated tax payments they should have made and are looking at penalties on their 1040 there is still a way out," he says. "You know that the IRS says you have to pay estimated taxes on income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You have to make quarterly payments and if you have not made them on time there are penalties even if there is no tax due.
"What you may not know is the IRS treats all W2 withholding as if it is made ratably through out the tax year," he adds. "So if you pay your entire tax liability the last day of the year as Federal Income Tax Withholding (FIT) you have no problem with penalties due to the underpayment of estimated taxes. If you can have your payroll increased, you can run it up to the amount necessary to cover any missing estimated payments and have the entire amount deposited as FIT withholding. That withholding will show on your W2 as if it had been made through out the year. Even if you can’t increase your payroll at will, you still can take the last or last several payrolls and have all the wages withheld to cover any short estimate payments for the year."
Read also notes that a number of high income individuals make only a yearend payroll run to cover their entire estimated liability for the year.
“It is perfectly legal,” he says, “I have seen it done for many years. This way the taxpayer is not giving the IRS use of his money for the year. It is one more tactic to reduce overall cost of taxes. The money is not even due to the IRS in 2006 until the third or fifth of January and some not until the 31st of January. If you have estimate taxes due during the year and you can manage your cash flow you are better off investing that money during the year and paying only when you have to through FIT. Invest the money and don’t give an interest free loan to the IRS."
For more tips and advice regarding payroll and taxes he suggests visiting his company's website at http://www.PayrollonaBudget.com.
PayrollonaBudget.com is an outgrowth of RMARK Services Inc., a company that has been in the small business payroll service offering payroll solutions since 1991. It is member of the Better Business Bureau and is not a CPA firm. The founder and current president of the company is Charles J. Read. He is a CPA with a BBA and MBA from the University of North Texas. He is also a long time Rotarian, a treasurer of the Dallas Rotary Club, and a member of the Lake Cities Chamber of Commerce and the American Payroll Association. In addition he teaches school as a volunteer at the Lake Dallas High School.
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