Tax Season

Tax Problems With Small Business Owners

tax, tax return, tax returns, kenosha, racine, westosha, milwaukee, wisconsin, business, businesses, small businessMany of the tax problems we help resolve at Rizzo & Diersen, S.C. involve small business owners who know how to provide a service but do not appear to understand the concept of self-employment taxes and their effect on the business.  Several years ago, I wrote a short article discussing the importance for small business owners to understand this concept, properly plan for self-employment taxes, and timely pay them.  Those principles are still true today, and with tax time already here, business owners who have not adequately planned or have not been paying throughout the year are in for a rude awakening.

Social Security Payments

As an employee, to receive social security payments when you retire, you and your employer must pay into the Social Security system during your working years.  The Federal Insurance Contribution Act (FICA) is the federal legislation that requires that contributions be made by both the employee and the employer into the Social Security fund.  This is usually done by the employer withholding from your paycheck 6.2% of your wages that are subject to Social Security tax (up to a certain limit) and 1.45% of your wages that are subject to Medicare tax for a total deduction from your paycheck of 7.65%.  Your employer is then required to match this 7.65% for a total payment to the Internal Revenue Service of 15.3% of wages.  It is important to note here that this is in addition to federal and state income tax withholding.

The Self-Employed

For the self-employed, usually sole proprietors and single-member entities, there is corresponding federal legislation called the Self-Employed Contribution Act (SECA).  This is a double whammy to the self-employed because you are both the employee and the employer and, therefore, are responsible for the entire 15.3% on any earnings that your company makes, subject to the upper limit on the Social Security tax.   These taxes are also subject to the estimated tax payment rules, the same as income tax.

Trust Funds Cannot Be Discharged In Bankruptcy

Failure to pay these taxes can be devastating for both your business and you personally.  That is because these types of taxes are considered “Trust Fund” taxes which means they cannot be discharged in bankruptcy and will be assessed against you.  This means all your assets will become subject to levy and seizure in addition to your business assets.

Careful Planning Is Essential

Careful planning throughout the year will minimize the self-employment tax.  Accountants and financial planners can counsel small business owners and assist business owners in implementing various strategies to minimize self-employment tax liability.  A common strategy used is to increase your business-related expenses, as this will cause a reduction in net income, and correspondingly reduce the amount of self-employment tax.   Contrary to some beliefs, regular deductions, such as the standard deduction or itemized deductions, will not lower self-employment tax. Similarly, deductions for health insurance, IRA contributions, or 401(k) contributions will not reduce self-employment tax liability.

The Self-Employment Tax

Same as many other taxes, whether we like it or not, self-employment tax is here to stay.  Timely payments, planning, and learning how to minimize it will ensure that they do not become unmanageable.

Contact our tax attorneys today.

Wisconsin Lowering Drinking Age to 19?

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Wisconsin Republican lawmakers are circulating a bill to lower the minimum drinking age to 19. That’s a good start, but it really should be the age of maturity — 18.

What Can Be Termed A Crime?

The Wisconsin Libertarian Platform of Beliefs reminds us that, “Because only actions that infringe on the rights of others can properly be termed ‘crimes,’ we favor the repeal of federal, state and local laws restricting our fundamental freedom to govern our own lives.”

The 21 Drinking Age

Who came up with the 21 drinking age anyway? It was a “highway safety” bureaucracy in Washington, not Congress. What other Western nations have a 21-year-old drinking age? None. A handful of other countries on the planet have such a high minimum age including Indonesia, Kazakhstan, Oman, Pakistan, Palau, and Sri Lanka. The 21-year-old semi-prohibition law has created several problems.

Underage Drinking At Underground Parties And Booze-Cans

Safe and Legal Winter Driving

Driving For Weather Conditions

wisconsin, racine, kenosha, westosha, milwaukee, driving, weather, weather conditions, conditions, drive, driver, drivingDriving safely can be a challenge in the winter. Cold weather, early sunset and massive snow accumulation can make it easy to accidentally break some very simple traffic laws. For example, it is common for headlights and taillights to burn out because the sun sets much earlier and we do a greater amount of driving at night.  Another example is how bumpers with integrated steps, such as those on trucks and SUVs, allow snow to accumulate and obscure the vehicle’s license plate. And since nobody likes to be out in the cold for longer than they must, snow often sits on a car without being removed, sometimes covering essential equipment like headlights and tail lights.

Traffic Offenses

We have all experienced one or more of these situations. Usually, they are innocent mistakes. But even if you accidentally break the rules, your innocent mistake is often not a defense. Many traffic offenses are strict liability offenses, meaning that your intent is not something that must be proven for you to be found guilty. And even a minor ticket carries a fine that is substantially more expensive than simply replacing a burnt out light bulb.


The worst case scenario is that an accidental violation of a simple traffic rule can lead to more serious charges, such as Operating While under the Influence (OWI). A traffic stop for a serious offense like OWI only needs to be supported by an officer’s reasonable suspicion that any law is being broken. It is therefore not uncommon for a burnt out tail light to be the entire basis for a traffic stop that leads to an OWI arrest and possibly even a conviction.

Safe Driving

Safe driving is just as important as legal driving. Following other cars too closely and driving at an excessive speed is illegal but also frequent causes of accidents. In many instances, prosecutors are less likely to negotiate in situations where the defendant caused an accident because of his driving. So even though winter can make driving a challenge, remember to be safe and drive legally. Many things are quite simple and totally within your control. If you decide to drink, drink responsibly. Give yourself extra time to get to your destination, especially if the weather is bad. Check your headlights, tail lights, license lamps, and your registration sticker. License lamps, in particular, are easy to miss when inspecting your vehicle and every single one must be working correctly. Make sure that your car is in good working order with a good battery, decent tires, and good brakes. You should frequently do all of these things, but be especially sure to make an extra check if you plan to go out to dinner or the bars.  If you still happen to get into an accident and need a car crash attorney, contact Rizzo & Diersen today!

Contact our traffic lawyers today.

Alpine Valley Drug/Criminal Charges

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Wisconsin law enforcement is actively involved in preventing drug possession and delivery, underage drinking and other offenses that may occur at Alpine Valley. Unfortunately, many people who attend concerts at Alpine Valley are arrested for relatively minor offenses and face the possibility of a criminal record. They may tell you it is only a ticket, but it is VERY SERIOUS.

If you were arrested while at Alpine Valley, contact Rizzo & Diersen, S.C. We handle misdemeanor offenses, felony offenses, and traffic violations.

Contact our criminal attorneys today.