Liz Smith, CPA, MSTFP

Self-employment tax consists of Social Security (12.4%) and Medicare (2.9%), for a total of 15.3%. It is assessed on income earned and must be paid even if you don’t receive a 1099-MISC for your services. If you’re a sole proprietor, freelancer, general partner, or independent contractor making $400 or more in self-employment income then you’ll…

The filing of Form 1120S is required annually for every S corporation (S-corp). The return includes a combination of financial data and questions about the nature and operations of the business. We’ll cover how to enter the financial information and do an in-depth dive into the questions required on Schedule B. Step 1: Gather the…

If you meet the criteria to complete Schedule C—an attachment to Form 1040—you will use it to report your business income and expenses for the year. To do so, you’ll need your profit and loss (P&L) report or any other report that consolidates the income you received and expenses you incurred during the year. Who…

Independent contractors pay federal, state, and local taxes. At the federal level, independent contractors are subject to income tax and self-employment tax on their net earnings. Most independent contractors also pay income tax in the state where they live and work. In addition, some cities and counties assess additional business taxes, along with fees for…

The tax treatment of vacation rental property depends on how many days you rent it out and how much you use it yourself. If you rent your vacation property for less than 14 days a year, then you don’t have to report the rental income—plus you don’t deduct the expense of renting. However, if you…

TaxAct Professional is a thorough and affordable professional tax software program. Combined with strong customer support options, it is an excellent choice for high-volume tax preparers of returns with medium to low complexity. Its pay-per-return pricing starts at $150 per return plus a $25 filing fee for individual returns and $249 plus a $40 filing…

The Dividends Received Deduction (DRD) is a tax break available to a C corporation (C-corp) that receives dividends from other corporations in which it is a shareholder. The DRD’s main purpose is to protect corporate income from being subject to multiple layers of taxation. A corporation can claim a specific amount of DRD based on…

ProConnect Tax Online, a personal favorite for cloud-based professional tax preparation software, is particularly useful for firms using QuickBooks Online Accountant. It provides powerful features, such as missing data review and document management, and is priced on a pay-per-return basis with no annual fee. It also has a K-1 package and a tax planner with…

Lacerte Tax is Intuit’s premier tax solution. It can be used for complicated tax returns, such as oil and gas company filings. It can also import balances from QuickBooks Accountant Desktop and integrate with Intuit Practice Management. While pay-per-return pricing is available, you must contact a sales representative for other pricing information. A free version…

Drake Tax is a sound, affordable software choice that I recommend for professional tax preparation of low-volume individual and state tax returns. Useful features like DoubleCheck and LookBack will help streamline the tax return preparation and filing process. LookBack helps you compare prior and current year activity, while DoubleCheck assists tax preparers with the review…

While similar, each of these forms has a distinct use. Schedule F: For farmers who are operating farms on their own land or materially participate in crop-sharing arrangements. Schedule E: For farmland owners who lease their farmland for fixed cash rent. Form 4835: For farmland owners who lease their farmland as part of a crop-sharing…

ProSeries Tax, a versatile tax preparation software from Intuit, is designed for professional tax preparers. With strong user reviews, ProSeries is known to be a solid choice for professional tax preparation. It provides features such as e-file management, K-1 data transfers, and an assortment of firm management tools. ProSeries Tax software pricing for the pay-per-return…