Accounting: Lesson 7
Why it Matters
Jennifer Phipps, owner of Phipps CPA, will be discussing taxes and why they matter.
Topics:
- Taxes are Mandatory and Will Be Enforced
- What are Taxes Imposed On?
- Credits and Social Program Benefits
- How Do You Manage Taxes?
Test Your Knowledge
To receive credit for taking this course through TSBDC, watch the video and take the quiz that will appear below to demonstrate your knowledge.
Video Lesson Topics
- 0:25
- Taxes are Mandatory and Will Be Enforced
Taxes are mandatory and individuals do not get to decide to voluntarily contribute to the government. Enforcement on taxes can be done monetarily through penalties, interest imposed, and levies. Most commonly a levy will be taken from some sort of property you have especially cash in bank accounts that they are aware of. The government may also impose criminal charges and/or jail time in the most severe situations. These situations usually contain fraudulent activity or negligence. Make sure to consider the consequences of not filing when it comes to your business. Banks may not let you get a loan if you do not file or have outstanding tax liabilities. When it comes to business taxes to renew your business licenses, the state or local taxing authorities may walk into your establishment and shut your doors.
- 3:12
- What are Taxes Imposed on?
Taxes are imposed on gross revenue, net profit, property that you own, consumer goods that you purchase, and even on your estate in the event of your passing.
- 3:31
- Credits and Social Programs
Credits are available to individuals who are working but do not meet government thresholds for poverty levels. These are called Earned Income Credits in which taxpayers report what they have earned and receive and opportunity to get a refund back. This is based upon various data that is input. The Cares Act from 2021 allowed taxpayers to receive stimulus payments to assist with the challenges of the pandemic. These payments were paid out through the IRS by check, but if you were an individual who did not receive one; you could report this on your tax return. By reporting this, you could receive a credit and cash back.
Social security and medicare are collected via payroll taxes. These fund social programs including retirement funding for seniors, life insurance for beneficiaries, and funding to assist those with disabilities. Medicare has provided hospital services, skilled nursing, and assisted those with disabilities to an amount of 63 million helped in the most recent year.
- 5:39
- How Do You Manage Taxes?
Individuals wanting to tackle taxes on their own should visit irs.gov where there is an approved list of organizations that can help with taxes. There are many scams out there that try to take advantage of taxpayers, so make sure to go to irs.gov for safe tax filing. For state purposes, individuals can receive assistance through the department of revenue website or by calling their office.
If you do not want to tackle taxes on your own, you can receive assistance from an enrolled agent, a tax preparation service, a CPA, or a tax attorney.
Topics & Lessons
Each Below Topic Contains a Video Lesson and Helpful Downloadable Information
Basic Accounting
Financial Statements
Common Accounting Questions and Errors
Accountants, CPAs, and Bookkeepers
Accounting Systems and Software
Taxes (Links to Taxes/IRS Videos)
Why it Matters
Types of Tax Obligations
Franchise & Excise Taxes
Payroll Taxes
Sales Tax
IRS and State Tax Resources and Due Dates
Selecting a Business Tax Professional
Want to learn more about how this topic relates to your business?
Schedule a meeting with one of our consultants! All counseling sessions offered by the TSBDC are no-cost and provided by our staff of professional business consultants.
