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Description/Scope 
Skill Level Time Estimate Materials Equipment-Tools Library Resources Pre-requisite Knowledge
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PurposeWho This Applies to:
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This entire site is for educational or informational purposes only. You are not to use the forms, concepts, strategies, or knowledge without assistance from a professional. The author, the corporation, the ISP, Bob Parrish CPA, Bob Parrish CPA, P.C. or other parties related to those or this site do not guarantee or warrantee in any manner the suitability, usefulness, accuracy, timeliness, or results of any portions of this site, nor the links contained in this site which link to other areas. At times, information is taken from other sources and is believed to be accurate, but no verification or confirmation is performed. Furthermore, if any federal or state law invalidates a portion of this disclaimer, the other portions still apply. In addition, any allegations or actions are restricted to arbitration only and must be arbitrated by the Better Business Bureau in Sarasota Florida. Reading of these pages constitutes complete acceptance and agreement with all disclaimer provisions on all pages of this site. .......
Thursday, February 22, 2007 01:34 AM
What it does:
Why it works:
Law (commentary and citation)
Regs (commentary and citation)
Cases (commentary and citation)
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This is about Activity Based Taxplanning - maximizing deductions, minimizing cash outlay and maximizing the amount of cash retained and the net worth. Activity Based Taxplanning (ABT) is a methodology developed by Bob Parrish CPA, that assists people with the tax issues by focusing on the activity (or actions - events) that are being undertaken or contemplated (or have already taken place). The, research is compiled from the myriad of sources to help you complete the activity with the least tax cost, while maintaining compliance the the tax laws, other laws and regulations and place yourself in a position to protect your objectives.
Tax is a subject that many view in order to cut costs. Taxes are a cost just as any other cost. It happens this cost is somewhat intangible and is defined by legislation without a tangible item to view and control. The money is spent and the control of the expenditure is more appropriately administered by someone trained in the law.
This is about Activity Based Costing - methods to cut costs, management accounting, management information systems, decision support systems - in general about being a manager.
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Entrance Interview
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Exit Interview |
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From Banking Records |
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From Customer Records |
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From Signed Documents |
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From Your Other Business, or Financial Records |
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From Corporation or Organization Records (meetings, etc.) |
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Assistance - What to do |
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Forms - Checklists - Etc. |
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Financial Statement Presentation |
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Notes to Financial Statements |
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How to Make Entries |
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What Kind of Records to Keep |
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Bookkeeping Methods - Cash, Accrual and Other |
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How the Business Entity Affects the Recording
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Compliance Checklist
The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. An employee usually has income tax withheld from his or her pay. If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. If you are not required to make estimated tax payments, you may pay any tax due when you file your return.
Estimated tax. Generally, you must pay taxes on income, including self-employment tax, by making regular payments of estimated tax during the year.
Sole proprietors, partners, and S corporation shareholders. You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Use Form 1040–ES, Estimated Tax for Individuals, to figure and pay your estimated tax. For more information, see Publication 505, Tax Withholding and Estimated Tax.
Corporations. You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. Use Form 1120–W, Estimated Tax for Corporations, to figure the estimated tax. You must deposit the payments as explained under Depositing Taxes. For more information, see Publication 542.
| Sole Proprietor | |
| You May Be Liable For: | Use Form: |
| Income tax | 1040 and Schedule C1 or C–EZ (Schedule F for farm business1) |
| Self-employment tax | 1040 and Schedule SE |
| Estimated tax | 1040–ES |
| Employment Taxes: | |
| - Social security and Medicare taxes and income tax withholding | 943 for farm employees, 941 for all others |
| - Federal unemployment (FUTA) tax | 940 or 940–EZ |
| - Depositing employment taxes | 81092 |
| Excise taxes | See Excise Taxes |
| Partnership | |
| You May Be Liable For: | Use Form: |
| Annual return of income | 1065 |
| Employment taxes | Same as sole proprietor |
| Excise taxes | See Excise Taxes |
| Partner in a partnership (individual) | |
| You May Be Liable For: | Use Form: |
| Income tax | 1040 and Schedule E3 |
| Self-employment tax | 1040 and Schedule SE |
| Estimated tax | 1040–ES |
| Corporation or S corporation | |
| You May Be Liable For: | Use Form: |
| Income tax | 1120 or 1120–A (corporation), 1120S (S corporation) |
| Estimated tax | 1120–W (corporation only) and 81092 |
| Employment taxes | Same as sole proprietor |
| Excise taxes | See Excise Taxes |
| S corporation shareholder | |
| You May Be Liable For: | Use Form: |
| Income tax | 1040 and Schedule E3 |
| Estimated tax | 1040–ES |
1 File a separate schedule for each business.
2 Do not use if you deposit taxes electronically.
3 Various other schedules may be needed.
For more information on excise taxes, see Publication 510.
Form 720. The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories including the following.
Form 2290. There is a federal excise tax on trucks, truck tractors, and buses used on public highways. The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Report the tax on Form 2290, Heavy Vehicle Use Tax Return. For more information, see the Instructions for Form 2290.
Form 730. If you are in the business of accepting bets or running a betting pool or lottery, you may be liable for the federal excise tax on wagering. Use Form 730, Tax on Wagering, to figure the tax on the bets you receive.
Form 11–C. Use Form 11–C, Occupational Tax and Registration Return for Wagering, to register any wagering activity and to pay the occupational tax on wagering.
ATF forms. If you produce, sell, or import guns, tobacco, or alcohol products, or if you manufacture equipment for their production, you may be liable for one or more excise taxes. Report these taxes on forms filed with the Bureau of Alcohol, Tobacco, and Firearms (ATF).
Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Medicare tax pays for benefits under the hospital insurance part. You withhold part of these taxes from your employee's wages and you pay a matching amount yourself. To find out how much social security and Medicare tax to withhold and to pay, see Publication 15.
Which form do I file? Farm employers report these taxes on Form 943, Employer's Annual Tax Return for Agricultural Employees. Other employers use Form 941, Employer's Quarterly Federal Tax Return.
Which form do I file? Report federal unemployment tax on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Or, if you qualify, you can use the simpler Form 940–EZ instead. See Publication 15 to find out if you can use this form.
Mail or deliver deposits with completed deposit coupons to an authorized financial institution or a Federal Reserve bank for your area unless you make the deposits electronically as discussed later.
To be on time, mailed deposits must arrive at the depositary by the due date. You may be charged a penalty for not making deposits when due, unless you have reasonable cause.
TIP To help ensure proper crediting of your account, include the following on your check or money order.
Deposit coupons. Form 8109, Federal Tax Deposit Coupon, is used for depositing taxes. On each coupon, you must show the deposit amount, the type of tax, the period for which you are making a deposit, and your telephone number. Use a separate coupon for each tax and period. You must include a coupon with each deposit you make.
Five to six weeks after you receive your employer identification number (EIN), as discussed earlier, the IRS will send you the coupon book. If you have a deposit due and there is not enough time to obtain a coupon book, you can get a blank coupon (Form 8109–B) by calling 1–800–829–1040.
If you have not received your EIN and must make a deposit, mail your payment with an explanation to the Internal Revenue Service Center where you file your return. Make your check or money order payable to the United States Treasury. On the payment, write your name (exactly as shown on Form SS–4), address, kind of tax, period covered, and date you applied for an EIN. Do not use Form 8109–B in this situation.
Electronic deposit of taxes. Generally, taxpayers whose total deposits of social security and Medicare taxes and withheld income tax during previous years exceeded certain amounts are required to deposit taxes through the Electronic Federal Tax Payment System (EFTPS).
Taxpayers not required to make deposits by EFTPS may enroll in the system, which will allow tax deposits without coupons, paper checks, or visits to an authorized depositary. For more information, see Publication 15.
Form I–9. You must verify that each new employee is legally eligible to work in the United States. Both you and the employee must complete the Immigration and Naturalization Service (INS) Form I–9, Employment Eligibility Verification. You can get the form from INS offices. Call the INS at 1–800–755–0777 for more information about your responsibilities.
Form W–4. Each employee must fill out Form W–4, Employee's Withholding Allowance Certificate. You will use the filing status and withholding allowances shown on this form to figure the amount of income tax to withhold from your employee's wages.
Form W–5. An eligible employee who has a qualifying child is entitled to receive advance earned income credit (EIC) payments with his or her pay during the year. To get these payments, the employee must give you a properly completed Form W–5, Earned Income Credit Advance Payment Certificate. You are required to make advance EIC payments to employees who give you a completed and signed Form W–5. For more information, see Publication 15.
Employing your child. Payments for the services of your child under the age of 18 who works for you in your business are not subject to social security and Medicare taxes. If these services are for work other than in your business, such as domestic work in your private home, they are not subject to social security and Medicare taxes until your child reaches 21.
Payments for the services of your child under the age of 21 who works for you whether or not in your business are not subject to FUTA tax.
The above rules apply even if you pay your child regular wages. The wages for these services are not subject to social security, Medicare, or FUTA taxes. But they may still be subject to income tax withholding.
Employing your spouse. If your spouse works for you in your business, the wages you pay to him or her are subject to income tax withholding and social security and Medicare taxes, but not to FUTA tax. However, the services of your spouse employed by you in other than your business, such as domestic service in your private home, are not subject to social security, Medicare, and FUTA taxes.
Employing your parent. If your parent works for you in your business, the wages you pay to him or her are subject to income tax withholding and social security and Medicare taxes. Social security and Medicare taxes do not apply to wages paid to your parent for services not performed in your business, but they do apply to domestic services if both the following conditions are met.
Action Checklist
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Alerts & Dangers - Risks |
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Asset Protection |
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Your Defense |
