Important Things You Need to Know About Personal Income Taxes
There's nothing quite like the feeling of dread that comes with doing your personal income taxes. Every year, you grudgingly pull out your paperwork and start crunching the numbers, hoping you'll get a refund this time. But let's be honest - personal income taxes are one of the most confusing and frustrating things about being an adult.
With all of the different deductions and credits, it's no wonder many people end up owing money to the government come tax time. But even though it may not be our favorite thing to do, paying personal income taxes is an important part of being a responsible citizen. So next time tax season rolls around, take a deep breath and tackle those forms - you might get a little bit of money back in the end.
However, if you're like most business owners, the difference between payroll taxes and personal income taxes probably isn't all that clear. But understanding the distinction is important because how you report your income can affect how much you owe in taxes. So what's the difference?
Here's a quick overview
Payroll taxes are imposed on employers, not employees. The biggest payroll tax is Social Security, which covers old-age, survivors, and disability insurance. Medicare is another big one. These taxes are used to fund social welfare programs like Social Security and Medicare.
On the other hand, personal income taxes are imposed on employees only. They cover things like federal income tax, state income tax, and local income tax. The money collected from personal income taxes goes into the government's general fund, which can be used for any purpose lawmakers see fit.
Other things to know about personal income taxes
Are you dreading tax season? You're not alone. Filing taxes can be confusing and stressful, but it doesn't have to be. Here are three things you should know about personal income taxes:
The deadline for filing taxes is April 15th
Springtime is a busy time for business owners, with personal income tax deadlines. One thing you can do to ease their burden is to remind them that the filing deadline for personal income taxes is April 15th. A friendly reminder from you could help them avoid penalties and interest charges. And who knows, they might even be so grateful that they'll give you a discount on your next purchase!
You can file your taxes electronically or by mail
As a small business owner, it's important to stay on top of your personal and business taxes. Filing electronically is one way to make the tax-filing process a little less painful. The IRS offers several e-filing options for businesses, and they're generally pretty easy to use. Plus, you can often get your refunds faster when you e-file.
Of course, some business owners prefer the old-fashioned paper-and-envelope method. And that's OK - be sure to allow enough time for your return to reach the IRS by the April deadline. Whichever way you choose to file, staying on top of your taxes is essential to keeping your business running smoothly.
You may be eligible for certain tax deductions and credits
As a business owner, you're always looking for ways to save money. And what better way to save money than by taking advantage of tax deductions and credits? But how do you know which deductions and credits you're eligible for?
The best way to find out is to talk to your accountant or tax advisor. They can help you determine which deductions and credits you qualify for and make sure you take advantage of them all. So don't wait any longer; pick up the phone and give your accountant a call today!
If you owe money to the IRS, you can set up a payment plan
Understanding these three things about personal income taxes can make tax season a little less stressful. And who knows, maybe even a little bit of fun!