What will the IRS do when you owe back taxes?

You’re expecting a large tax bill.  You are afraid of the big bad IRS.  The IRS will take your car in the middle of the night.  The IRS will possess your home and leave you with no place to live.  The IRS will wipe out your bank account and garnish your wages.  The IRS will make it impossible for you to earn a living.  How does the IRS expect you to pay the taxes owed if you can’t earn a living?

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Lansing Front Page Article

Thanks to tax season, articles written by firm president, A.J. Gross, are published on the front page of the Lansing New Citizens Press.  Check out the bottom left hand corner!

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Can I pay myself wages if I am self employed?

This is a common question.  You are self-employed or owner of a business.  You do not want to deal with paying quarterly tax estimates to the IRS.  There are many companies offering payroll services.  The payroll company can manage all your payroll needs for you.  If you pay yourself sufficient wages, you will get a refund at the year. Seems easy.  Well it is.  But are you are unsure if you can put yourself on payroll.

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Independent Contractor Trap

In our previous article, we reviewed the advantages and disadvantages of hiring independent contractors compared to employees.  Small business will want to treat all workers as independent contractors. It is less expensive and less work.  Conversely, workers prefer to be treated as employees.  The worker will pay less tax and it is less hassle.  The small business and the workers have conflicting interest.

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Independent Contractor or Employee Decision

Small businesses decide how to treat workers, employees or independent contractors. This decision has major impacts to both the small business and the worker.  For the business, it is less work and less expensive to hire an independent contractor.  For the worker, it is less work and less expensive to be treated as an employee.

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