If you want to know how much your payroll tax liability is, familiarize yourself with how to calculate payroll taxes for employer share below. Yes, self-employed individuals are responsible for paying both the employee and employer portions of Social Security tax. This is known as self-employment tax, and it covers both Social Security and Medicare taxes. Although nonresident aliens employed in the U.S. normally pay Social Security tax on any income they earn here, there are some exceptions. Mostly, these apply to foreign government employees, students, and educators living and working in the country on a temporary basis and possessing the correct type of visa. 15-B contains information about the employment tax treatment of various types of noncash compensation. Most states and some cities and counties impose income taxes as well, and these amounts are paid directly to their coffers. In addition, employers, but not employees, also pay federal unemployment taxes for each of their employees. The Social Security Administration (SSA) provides benefits such as old-age benefits, benefits to disabled workers, and benefits to spouses and dependents. These benefits may be subject to federal income tax depending on your filing status and other income. Payroll taxes are the taxes employees […]

On a company’s balance sheet, retained earnings or accumulated deficit balance is reported in the stockholders’ equity section. Stockholders’ equity is the amount of capital given to a business by its shareholders, plus donated capital and earnings generated by the operations of the business, minus any dividends issued. Retained earnings refer to the portion of a company’s net income or profits that it retains and reinvests in the business instead of paying out as dividends to shareholders. It’s an equity account in the balance sheet, and equity is the difference between assets (valuables) and liabilities (debts). The amount of retained earnings is calculated by subtracting total dividends paid to shareholders from the total net income in a fiscal year. Step 1: Prepare the Statement Heading Alternatively, companies take the net income for the period to the retained earnings account first. Subsequently, they subtract any declared dividends from that balance. Because expenses have yet to be deducted, revenue is the highest number reported on the income statement. During a specific financial period, it reports the business’s revenue, liabilities, and numbers for the shareholders’ equity section. This document is essential as you learn how to calculate retained earnings and other equities. It […]

The cash is received in April, but the revenue is what is a bond sinking fund correctly recorded in March. Using accounts receivable posts the revenue in the month earned, and your accounting records are consistent with the accrual basis. The accounts payable balance is the total amount of unpaid bills owed to third parties. On the other hand, the receivable account represents amounts your business is owed. Once they start the work on an outstanding invoice, minimal time and effort are required on your part. They even adjust their approach based on how important the specific relationship is to you. Accept payments Accounts receivable management refers to the process of handling and tracking the amount a customer owes to you for the goods purchased on credit. It includes functions such as monitoring invoices, collecting payments, evaluating and mitigating credit risks, and resolving customer disputes. Also, dealing with delinquent clients who ignore your reminders may frustrate many business owners to the point where they give up and write off the invoice. By offering a range of payment options, you enhance convenience for your customers, eliminating the need for them to disrupt their daily routines to fulfill payment obligations. Accounts receivable […]