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by Kary’s Accounting & Tax Services, LLC
What is Active vs Passive Income and Why is it Important for Tax Purposes?
Do you know the difference between active and passive income? Most people don’t, but understanding the difference can make a huge impact on your taxes. It’s important to understand what active and passive income are and how they are viewed by the IRS to ensure that you pay the correct amount of taxes each year. Let’s take a closer look at what active and passive income mean for tax purposes.
Passive income includes money earned from interest, dividends, or rental property. Generally speaking, this type of income is not subject to ordinary tax rates as long as it falls within certain limits set by the IRS. However, passive income may be subject to other types of taxes such as capital gains taxes or self-employment taxes.
Active income includes wages, salaries, commissions, tips, bonuses, and any other payment you receive for services performed in exchange for money or something else of value. This type of income must be reported on your tax return and is generally subject to standard tax rates. It may also be subject to additional taxes such as self-employment taxes or health insurance premiums if applicable.
It’s important to understand the difference between active and passive income because each type of income has different rules when it comes to filing your taxes. Knowing these rules will ensure that you pay the correct amount of taxes each year so that you don’t end up owing more than you should when filing your return. Additionally, knowing which type of income you have will help you determine which deductions are available to you so that you can maximize your deductions and minimize your tax liability. Understanding the difference between active and passive income is key when it comes time to file your taxes with the IRS. By understanding what type of income, you have—whether it’s active or passive—you can ensure that you’re filing correctly and paying only what’s due according to IRS regulations. Doing so will not only help minimize your tax burden but also help put more money back in your pocket come April 15th!
We understand how stressful tax preparation can be, which is why we strive to provide personalized attention and understanding while taking care of every detail during processing. Our team of experts work hard to ensure that everything is filed properly on time every time – no surprises or messes here! Contact us today!
Benefits of Professional Payroll Management for Your Kirkland Area Business
When you run a business, maximizing your time is an essential part of your responsibilities. If you have been doing payroll yourself, you know how time-consuming it can be and how hard it is to meet deadlines. Knowing some of the benefits of professional payroll management can help you make the most of your work hours.
Free Up Important Staff
Oftentimes, business owners will have their accounting and bookkeeping departments take care of payroll. The issue is this task takes up valuable time they could be using to keep your business on track. Getting a professional payroll manager can free up their time.
If there are any mistakes on your payroll, you could end up facing costly fines and penalties. Your responsibility as an employer is to make sure your staff gets paid correctly and on time. Having a dedicated payroll team ensures that you won’t have to deal with expensive issues down the line.
When you hire a professional payroll management team, you get access to tools you might not otherwise be able to use. They will utilize software and tracking programs that will ensure you don’t have any payroll problems, allowing you to relax and focus on serving your clients and employees well.
Need Payroll Management Near Kirkland?
Only the best will do for your personal finances or business when you need to work with a tax professional in Bellevue. At Kary’s Accounting & Tax Services, we take a detailed approach to every job, regardless of size. With services including bookkeeping and accounting, payroll management for big and small businesses and tax filing and advisory, you can depend on us for all your financial management needs. So contact us today to check out our packages!
Professional Payroll Management Near Kirkland
Serving Bellevue, Kirkland, Redmond, Seattle, Woodinville, Bothell, Edmonds, Mountlake Terrace, Lynnwood, SeaTac, Burien & Everett
Posted on January 15, 2023 | Published by Ignite Local | Related Local Business