The 1099-MISC form is used by the Internal Revenue Service as a tax return document for payments to non-employees such as contractors.
Below is a chart to help you decide whether or not you need to provide a 1099-MISC for a vendor you conduct business with.
For assistance providing a 1099-MISC to someone in your business!
For savings on 1099’s & other Tax Forms!
Small business owners may think doing their taxes is just another task to cross off their to-do list. However, speeding through taxes could leave you open to mistakes when filing taxes.
Failing to comply with tax laws, violating tax codes, or filling out forms incorrectly can leave your small business open to penalties. To avoid these kinds of errors, we recommend using IRS Free File or to hire a CPA.
Underpaying Estimated Taxes
Small Business owners should make estimated tax payments if they expect to owe tax of $1,000 or more. You may be charged a penalty if you don’t pay enough taxes through withholding.
Depositing employment taxes
Small Business owners with employees must deposit the taxes they withhold, as well as the employer’s portion of those taxes. If these taxes are not deposited correctly and on time, you may be charged a penalty.
Filing late
Business tax returns must be filed in a timely manner. To avoid late filing penalties, you should be aware of all filing deadlines for their type of business.
Not separating business and personal expenses
Not separating business and personal expenses could cause errors when claiming deductions and become a problem if the taxpayer or their business is ever audited.
For assistance with tax planning!
For savings on QuickBooks Checks, Tax Forms and more!
The “Tax Cuts and Jobs Act”, which offers a 20% deduction of Qualified Business Income to pass-through entities, has finalized the qualifications for real estate rental enterprises. The IRS calls it the “Safe Harbor” for Section 199A. This proclamation defines what level of activity approves a rental business.
Here is what you need to know if you want to qualify:
What constitutes a rental service?
What is not considered a rental service?
For more help with tax decisions contact us at http://compassconsulting.net/contact/
Need checks for your business? https://compasschecks.com/products/checks/
What to know about the Educator Expense Tax Deduction
The school year is back again. Parents buy supplies for their children. The school system buys supplies for the school. Who is left buying supplies for the students? Teachers. Fortunately, teachers may be eligible to deduct some of these expenses when tax time comes. It’s called the Educator Expense Tax Deduction.
Qualified educators who currently work in schools may deduct up to $250 of expenses not already reimbursed for. Married couples, who file jointly, and meet the criteria below can deduct up to $500.
· Teach any grade from kindergarten through twelfth grade.
· Are a teacher, instructor, counselor, principal or aide.
· Work at least 900 hours during the school year.
· Are employed by a school that provides elementary or secondary education.
· Professional development courses.
· Books.
· Supplies.
· Computer equipment including related software and services.
· Supplementary materials.
· Athletic supplies only for health and physical education.
Requirements
The Protecting Americans from Tax Hikes (PATH) Act of 2015 provides a requirement for employers to file their copies of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by Jan. 31.
The 1099-MISC, Miscellaneous Income form, filed with the IRS to report non-employee compensation to independent contractors are also due at this time.
Employers & businesses will have to file these forms correctly and timely to avoid penalties.
Pointers to help filers prepare
Employers should verify employees’ information. This includes names, addresses, and Social Security or individual taxpayer identification numbers.
Automatic extensions of time to file Forms W-2 are not available. Don’t wait too long, the income statement deadlines will come and go before you know it!