IF YOU’RE SELF-EMPLOYED, HIRE YOUR SPOUSE FOR A TAX ADVANTAGE FTR TAX TIP OF THE MONTH
Do you own a small family business? If you do, or have a friend who does, odds are it’s not really a one-person job. Most married business owners have spouses who help, even if
FIG CAPRESE SALAD
they don’t get separate paychecks or consider themselves employees. These partnerships can be great, but often, they’re missing out on the tax advantages of officially hiring that spouse when filing a Schedule C. Taking that step is smart for three reasons. First, your spouse will get credit toward Social Security, so they can possibly qualify for a higher monthly payout when they retire. Second, if you’re a Wisconsin resident, you’ll qualify for the full $480 married couple’s tax credit on the state tax return, assuming you each have at least $16,000 of earned income annually. Third, you’ll be able to structure both of your health insurance premiums in your newly employed spouse’s name with the health insurance provider, so the premiums can be deducted as an employee benefit on the Schedule C. This deduction will decrease the amount of your self-employment income subject to self-employment tax (approximately 15%). If your spouse is going to be your first employee, you’ll need to set up a payroll account. Luckily, it’s easier than you might think, and you don’t even have to be a corporation or LLC. All you need to do is apply for an employer identification number (EIN) with the IRS and a withholding tax account number from your state Department of Revenue. I recommend Patriot Software as a payroll processing provider. The cost for one employee is $34 per month, and Patriot will make all of your payroll tax deposits with the IRS and the state and file all of your required payroll tax returns. This past tax season, I had three new clients who were self-employed and had spouses who helped with their businesses. I recommended this strategy, and all three implemented it. Now, they’ll receive significant tax savings when I prepare their 2020 tax returns next spring! If you have any questions about how employing your spouse can save you from overpaying your federal and state taxes, please contact me for a free, no-obligation consultation. And if you’re not an entrepreneur, pass this article on to a friend who is! No one should overpay their taxes.
Inspired by BonAppetit.com
It’s sweet. It’s savory. It’s the embodiment of summer!
8 oz buffalo mozzarella or fresh mozzarella 8 oz ripe fresh figs, quartered lengthwise Handful of basil leaves, roughly chopped
Flaked sea salt, to taste
Coarse ground black pepper, to taste
Olive oil, to taste
1. Tear mozzarella into bite-size pieces. Arrange on a platter.
Place quartered figs, flesh up, around mozzarella.
3. Sprinkle basil leaves over top.
4. Season with salt and pepper to taste.
5. Drizzle with olive oil.
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