Do I still need a CPA to help file my taxes if I have Money Pro?

  • Although it is not required to work with a CPA to file your business taxes, it is recommended, as ZenBusiness cannot provide legal or tax advice to its customers.

  • ZenBusiness has partnered with 1800-Accountant in order to provide CPA services to customers. However, the customer is responsible for paying the fees associated with the 1800-Accountant contract should they choose to move forward.

Does Money Pro file my taxes for me?

  • Tax filing is provided as a DIY service through TaxSlayer. ZenBusiness does not provide human-assisted services to guide customers through the filing process, answer tax questions (e.g., provide tax or financial advice), or explain how tax filing works for their specific situation.

  • Customers who have purchased ZenBusiness Money Pro receive a free annual tax filing for individuals who file as self-employed through TaxSlayer (https://www.taxslayer.com/). This includes filing federal taxes plus one state.

Will someone be able to help me if I have problems with taxes?

  • If there are issues with the ZenBusiness Money application, we can help. But if there are issues with filing taxes or issues with the filing once submitted and filed with the IRS, the customer will need to work with TaxSlayer (if used to file) or a tax expert.

  • We can provide this contact information to customers who have used our TaxSlayer services:

    • Call TaxSlayer at 706-922-6741 (from 9 am to 10 pm EST).

Can I claim my current vehicle as a business vehicle?

  • You may be able to deduct mileage if you use your personal vehicle for your business. You should review your use of your vehicle with a tax professional to see if you’re eligible for a deduction.

  • Current rate is 62.5 cents per mile.

    • Track your mileage with ZenBusiness Money Pro.

What are the tax implications of having an S-Corp status?

Consult a CPA to understand if an S-Corp election would be advantageous for your LLC.

How do I pay myself as an LLC owner?

Typically, if it’s a single-member LLC, you pay yourself through an owner’s draw. If it’s a multi-member LLC, you can pay yourself through an owner’s draw or guaranteed payments. If the LLC has opted to be treated as an S-Corp, you would need to pay yourself a salary. All of these payments have tax consequences, so we encourage you to talk to your tax professional.

What are the tax benefits of an LLC vs. Sole Proprietor?

LLCs are taxed as sole proprietorships by default. In some scenarios, it may be advantageous to elect to be taxed as a corporation, but best to consult a CPA.

Tax benefits of putting a rental property under an LLC?

Consult a CPA to understand the tax benefits of putting a rental property under an LLC.

When do I have to start paying taxes for my business?

Generally, you pay taxes on income. So once you start receiving income for your business, you need to think about making a tax payment whether that’s on an estimated basis or with your annual return. Talk to a CPA to better understand your tax obligations.

Timing of starting an LLC regarding taxes? Is there a better time of year?

The best time to start a business is when you’re prepared. Some folks do like to start businesses in January so that you begin the new year with a clean slate for bookkeeping purposes but, ultimately, it comes down to your planning and preparation.

If I have already been operating and receiving payments, can I backdate the income to count under the LLC for taxes?

Consult a CPA to discuss this.

How do I know if I should pay quarterly or annually?

You are only required to pay taxes annually by the tax filing deadline set by the IRS. However, If you make above a certain amount in 1099 income, it’s recommended that you make estimated tax payments every quarter so that the IRS doesn’t charge you a penalty.

https://www.irs.gov/payments/pay-as-you-go-so-you-wont-owe-a-guide-to-withholding-estimated-taxes-and-ways-to-avoid-the-estimated-tax-penalty

(Resource)

What are the tax implications of having a spouse/partner as another owner?

One of the advantages of operating your own business is hiring family members. However, the employment tax requirements for family employees may vary from those that apply to other employees. You may want to read this article from the IRS: https://www.irs.gov/businesses/small-businesses-self-employed/married-couples-in-business

What forms do I need to file my taxes?

There are several schedules and forms you should be aware of if you’re self-employed:

  • Schedule C - this is the main schedule people fill out to report how much money they made or lost in their business activity. It’s where you enter your deductible expenses.

  • Schedule SE - this schedule is filled out to calculate how much taxes you owe.

  • Schedule K-1 - to report pass-through taxation for a business partnership, S-corp or rental property investment, this schedule is used by people who own any percentage of these businesses or investments.

1099s - this is an informational tax form used to report certain types of non-employment income to the IRS. People who are self-employed should receive this if they were paid by someone other than an employer.

Do I get a W-2 or a 1099?

  • If you receive a W-2 from your employer, then you’re an employee, and income taxes are likely already withheld from your paycheck. If you receive a 1099 instead, then you’re an independent contractor and need to plan to pay income taxes on this income.

  • If you receive a K-1 from a pass-through entity that you’re an owner in, such as an LLC or LLP, you too, are self-employed and need to plan to pay income taxes if the business is profitable.

What’s the current self-employment tax rate?

How to calculate it:

  • 12.4% (social security) + 2.9% (medicare) = 15.3%

The formula above is for informational purposes only.

What are estimated taxes?

If you make above a certain amount in 1099 income, it’s recommended that you make estimated tax payments every quarter so that the IRS doesn’t charge you a penalty.

  • ZenBusiness Money Pro calculates the tax estimates in real time.

What are the tax quarters and when are payments due?

Q1: January - March. Payment due in mid-April

Q2: April - May. Payment due in mid-June

Q3: June - August. Payment due in mid-September

Q4: September - December. Payment due in mid January

How are my taxes calculated by ZenBusiness?

  • The ZenBusiness tax engine calculates your estimated tax liability based on rates and statutes published each year by the CRA. The tax calculation is only an estimate, based solely on the numbers you have tracked in ZenBusiness Money Pro.

  • Two types of taxes that are calculated by Hurdlr:

    • Federal Income Tax

    • Provincial Income Tax

What business expenses can I write off?

Here is the top 10:

  • Marketing & Advertising

  • Tools & Equipment

  • Travel

  • Education & Training

  • Health Insurance

  • Business Insurance

  • Professional Services

  • Mileage

    • You can deduct mileage if you use your personal vehicle for your business.

    • Current rate is 62.5 cents per mile!

    • Track your mileage with ZenBusiness Money Pro.

  • Meals & Entertainment

    • You can deduct 50% of your meal costs, including beverages, as long as they are business-related (dine-out and ordering in).

    • This year, as part of the Consolidated Appropriations Act signed into law on December 27, 2020, food and beverages will be 100% deductible if purchased from a restaurant.

    • You can’t deduct entertainment expenses, such as taking clients to a sporting event.

    • Payroll

    • The Home Office Deduction

      • If you run your business primarily out of your home office, then you should take advantage of the home office deduction.

      • Using the Simplified Method, you may be eligible for a deduction up to $1,500.

        • You can deduct $5 per square foot of the space you use for your business, up to a maximum of 300 square feet.

      • To be eligible for this deduction, your home office must be 1) exclusively used for your business, 2) regularly used for your business and 3) the primary place of your business.

Did this answer your question?