Jerry Newman, CPA
Your San Mateo CPA

JerryNewmanCPA.com - burke5010@yahoo.com - (650) 342-0979

Frequently Asked Tax Questions

1. QUESTION: Do you know how much each withholding on your W-4 will drop your salary? I'm getting 41% taken out of my paycheck for S-1.
   ANSWER: Each withholding is about $750.00 to $1,000 less withholding over the course of a year. Again, as you move through the wage brackets, you can jump from 15% withholding to 28% withholding to 31% withholding + state 2 to 5% (or more), and FICA and Medicare withholding (7.65% withheld). It all depends upon your individual wage situation as to how much Tax the government wants from you. Remember, the FICA is enforced retirement savings for YOU.
2. QUESTION: Last year I started a small business. I only grossed $1,000 over that period. I've spent roughly $10,000 on equipment What can I deduct on my taxes?
   ANSWER: In this case, you can deduct only up to the earned net income of the business in that first year. If you elect to expense all $10,000, you can carry forward $9000 to the next year of net income. If you do this, you would not get a depreciation deduction, since you are expensing the whole amount in the first year , and carrying over the remaining balance until the second year.