About Our Business
B. Joe Rosa is a California CPA Serving Truckers &
other Owner Operators since 1977.
SINCE 1977 We have been serving Self Employed, Owner Operators, long haul
Truckers throughout the USA keeping taxes low as legally possible.
We help you keep more of your hard earned money by using the tax laws to your
Self employment tax reduction strategies that work.
Our mission statement: SAVING YOU MONEY IS OUR BUSINESS!
What's New for 2013
The following items highlight a number of administrative
and tax law changes for 2013. They are discussed in more
detail throughout the publication.
Standard mileage rate. For 2013, the standard mileage
rate for the cost of operating your car, van, pickup, or
panel truck for each mile of business use is 56.5 cents.
See chapter 4.
Simplified method for business use of home deduction.
The IRS now provides a simplified method to determine
your expenses for business use of your home. For more
information, see Schedule C (Form 1040), Part II, and its
instructions. See chapter 4.
Increased section 179 expense deduction dollar limits.
The maximum amount you can elect to deduct for most
section 179 property you placed in service in 2013 is
$500,000. This limit is reduced by the amount by which
the cost of the property placed in service during the tax
year exceeds $2 million. See chapter 7.
Extension of special depreciation allow-ance for certain
qualified property acquired after December 31, 2007. You
may be able to take a 50% special depreciation allowance
for certain qualified property acquired after December 31,
2007, and placed in service before January 1, 2014. See
Expiration of the 3-year recovery period for certain race
horses. The 3year recovery period for race horses two
years old or younger will expire for such horses placed in
service after December 31, 2013. See chapter 7.
Tax rates. For tax years beginning in 2013, the social
security part of the selfemployment tax increases from
10.4% to 12.4%. As a result, the selfemployment tax is
increased from 13.3% to 15.3%. See chapter 12.
Maximum net earnings. The maximum net selfemployment
earnings subject to the social security part (12.4%) of the
selfemployment tax increased to $113,700 for 2013. There
is no maximum limit on earnings subject to the Medicare
part (2.9%). See chapter 12.
Net investment income tax. For tax years beginning in
2013, individuals, estates, and trusts may be subject to
the net investment income tax (NIIT). If you are a trader
in financial instruments and commodities and required to
file Schedule C (Form 1040), your investment income (for
purposes of the NIIT) may be reduced by your interest
and other investment expenses to the extent those
expenses are not used to reduce your selfemployment
income. For information about NIIT and the special rule
for traders in financial instruments and commodities, see
the Instructions for Form 8960.
Social Security and Medicare Tax for 2013. The employee
tax rate for social security is 6.2%. The employer tax rate
for social security remains unchanged at 6.2%. The social
security wage base limit is $113,700.
The Medicare tax rate is 1.45% each for the employee and
employer, unchanged from 2012. There is no wage base
limit for Medicare tax. See chapter 13.
Additional Medicare Tax. For tax years beginning in 2013,
a 0.9% Additional Medicare Tax applies to your Medicare
wages, Railroad Tax Act (RRTA) compensation, and
selfemployment income above a threshold amount. Use
Form 8959, Additional Medicare Tax, to figure this tax. For
more information, see the Instructions for Form 8959 and
the Instructions for Schedule SE (Form 1040).
In addition to withholding Medicare tax at 1.45%, you
must withhold a 0.9% Additional Medicare Tax from
wages you pay to an employee in excess of $200,000 in a
calendar year. You are required to begin withholding
Additional Medicare Tax in the pay period in which you
pay wages in excess of $200,000 to an employee and
continue to withhold it each pay period until the end of
the calendar year. Additional Medicare Tax is only
imposed on the employee. There is no employer share of
Additional Medicare Tax. All wages that are subject to
Medicare tax are subject to Additional Medicare Tax
withholding if paid in excess of the $200,000 withholding
For more information on what wages are subject to
Medicare tax, see the chart, Special Rules for Various
Types of Services and Payments, in section 15 of
Publication 15 (Circular E), Employer's Tax Guide. For
more information on Additional Medicare Tax, visit IRS.
gov and enter “Additional Medicare Tax” in the search box.
See chapter 13.
Leave-Based donation programs to aid vic-tims of
Hurricane Sandy. Under these programs, employees may
donate their vacation,
sick, or personal leave in exchange for employer cash
payments made before January 1, 2014, to qualified
taxexempt organizations providing relief for the victims of
Hurricane Sandy. The donated leave will not be included
in the income or wages of the employee. The employer
may deduct the cash payments as business expenses or
charitable contributions. See chapter 13.
Work opportunity tax credit for qualified tax-exempt
organizations hiring qualified veterans extended. The
work opportunity tax credit is now available for eligible
unemployed veterans who begin work before January 1,
2014. Qualified taxexempt organizations that hire eligible
unemployed veterans can claim the work opportunity tax
credit against their payroll tax liability using Form 5884C,
Work Opportunity Credit for Qualified TaxExempt
Organizations Hiring Qualified Veterans. For more
information, visit IRS.gov and enter “work opportunity
credit” in the search box. See chapter 13.
Estimated tax. For tax years beginning in 2013, the Net
Investment Income Tax (NIIT) may need to be included
when calculating your estimated tax. Also, when figuring
your estimated tax, you may need to include the 0.9%
Additional Medicare Tax applicable to Medicare wages,
Railroad Retirement Tax Act (RRTA) compensation, and
selfemployment income above the threshold amount
based on your filing status. For more information, see
What's New for 2014
Maximum net earnings. The maximum net selfemployment
earnings subject to the social security part of the
selfemployment tax for 2014 will be discussed in the 2013
Publication 334. See chapter 12.
Social security and Medicare tax for 2014. The employee
and employer tax rates for social security and the
maximum amount of wages subject to social security tax
for 2014 will be discussed in Publication 51 (Circular A),
Agricultural Employer's Tax Guide (For use in 2014). The
Medicare tax rate for 2014 will also be discussed in
Publication 51 (Circular A) (For use in 2014). There is no
limit on the amount of wages subject to Medicare tax.
See chapter 13.
EMAIL JOE NOW CLICK HERE
B. JOE ROSA, CPA
MY TRUCKIN' BOOKKEEPER & TAX ADVISOR, SELF
EMPLOYMENT TAX STRATEGIES FOR REDUCTION