Small Business Management - Exam 4

Medicare

A federal program of health insurance for persons 65 years of age and older. 1.45% and no base limit.

W-4

A federal tax form filled out by an employee to indicate the amount that should be withheld from his/her paycheck for taxes.

1099 Form

A form that documents income from various projects/clients for self-employed individuals.

W-2

A statement of an individual's annual wages and taxes provided by an employer that must be included with the employee's federal, state, and city income tax returns. Must be sent by January 31st.

Net Pay

Amount of income left after taxes and deductions have been taken out.

Federal Income Tax/Income Tax Withholding

Federal law that requires employers to withhold certain amounts from the total amount of earnings from each employee.

15-30%

How much of gross revenue from small businesses goes to payroll?

State Unemployment Tax Act (SUTA)

Levied only on employers in most states. This tax is to raise funds to pay unemployment benefits. The rate is set by congress yearly.

Federal Unemployment Tax Act (FUTA)

Only levied on employers. This tax is to raise funds to administer the combined federal/state unemployment compensation program. The rate is set by congress yearly.

The Self-Employment Contributions Act (SECA)

Requests that self employed individuals earning net self-employment income of $400 or more must pay self employment taxes.

Employer FICA Taxes

Taxes levied on employers at the same rates and on the same earnings bases as the employee FICA taxes.

Gross Pay

The total amount of an employee's earnings before deductions and taxes are taken out.

1. Allocate resources 2. Develop a customer-focused website 3. Digitize your customer experience 4. Create customer-focused platforms 5. Create Content 6. Engage with customers

What are Peter Billingham's steps to build a successful and growing digital business?

Total earnings, martial status, number withholding allowances claimed, and length of pay period.

What are some factors that can determine how much is taken from someone's pay?

State income taxes, wage garnishments, court settlements, insurance, savings and retirement plans, donations, and dues.

What are some other deductions you might see?

One for personal withholding allowance, one for a spouse who doesn't claim an allowance, and one for each dependent.

What are some reasons someone gets exemptions for withholdings?

Accounting, Funeral home management, merchandise and service, and memorializations.

What are some ways softwares can be utilized to help a business run more efficiently?

Social security and medicare.

What do FICA taxes include?

Double the social security and Medicare rates with the same wage base. (12.4% and 2.9%) totaling 15.3% tax.

What is a self-employed person's contributions to FICA?

Payroll

What is one of the largest expenses of most businesses?

The Fair Labor Standards Act (FSLA)

What requires employers to pay overtime at 1.5x the regular rate of pay to any hourly employee who works over 40 hours a week?

Salaried employees

Who is generally exempt from FLSA Rules and aren't paid overtime?

Social Security

federal program of disability and retirement benefits that covers most working people. 6.2% with a base limit of 147,000.