Just a reminder- the deadline for S-Corp, C-Corp, fiduciary, and partnership tax returns is due September 15, 2010! In order to have your returns filed timely, we must have all your documents in our office by August 15, 2010.
The deadline for individual income tax returns is October 15, 2010. We must have all your documents in our office by September 15, 2010, in order to timely file your returns.
Please contact us if you have any questions!
The Patient Protection and Affordable Care Act passed in March 2010 includes a provision that dramatically changes the 1099 reporting requirements for businesses. The new law effective January 1, 2012, now requires businesses to report ALL purchases of BOTH GOODS and SERVICES from ANY vendor which total over $600 per year. Did your business purchase 10 tanks of gas? A new computer? An airline ticket? According to the new law, all of these purchases are now reportable.
Do you buy gas at Shell? Do you think that you have filled up more than 12 times at the Shell on the corner? If you pay for gas with a debit card, then you may have to issue Shell a 1099… Can you imagine having to go into the convenience store and asking the minimum wage clerk for the exact address, legal name of the station, and Taxpayer Identification Number?
The new requirements are completely misdirected at the wrong target. Rather than improving the tax gap from individual to business transactions, the new law targets business to business transactions. Not to mention, the effects of the new reporting requirements would create an administrative maelstrom and would have a devastating economic impact on small businesses. Here are the biggest issues with the new law:
· Complete overhaul of current accounting systems. Accounting systems in use today are not set up to segregate payments by vendor and method. Modifying the accounting software could be more costly in administrative burden and expense than the Y2K conversion.
· Filing Costs. With the new law, business and government agencies are expected to file more than 250 information returns through the IRS FIRE system, a special software designed for large businesses. Most small businesses do not have access to the IRS FIRE system and will have to outsource the filing to data processing companies who typically charge $3-4 per form.
· Accuracy. Forms 1099 cannot be prepared without federal identification numbers, legal business names and legal addresses. The current on-line Taxpayer Identification Number matching program will be inadequate because the filer does not have the complete information. Providing the complete information will increase the risk of fraud and identity theft. Additionally, many issues remain unclear about who the recipient of the 1099 should be. For example, you, the employer reimburse an employee for a business purchase. Would you issue the 1099 to the original vendor or to the employee?
· Meeting the Deadline. The above named issues subject businesses to making several errors on the information returns, which can be costly. Even if you filed error-free information returns, you still have to meet the January 31st deadline, which is the same deadline as payroll reports. This adds a greater burden to small businesses.
· Exclusion of Credit Card Payments. The new law will exclude credit card payments from the reporting requirements, which will force businesses who do not take credit cards to do so. Businesses will be forced to incur additional fees to process simple transactions. Many new businesses do not have the credit rating to qualify for credit card payments and will be forced to follow the reporting requirements.
Despite the long list of obvious issues with this regulation, the biggest concern with the new law is that it will cost businesses as well as the IRS at least 100 times more than the previous information reporting requirements.
To avoid the administrative nightmare and devastation to small businesses, speak out! Contact our elected representatives in DC!
In March, Congress passed the HIRE Act, which benefits employers who hire previously unemployed workers this year. As we reported in May, employers who qualify are eligible for a 6.2% payroll incentive, which can save you a lot! In order to qualify for the incentive, employers must have the new hire fill out Form W-11. Form W-11 confirms the new hire’s previous status as unemployed. Employers need to retain the Form W-11 with their payroll and tax records .
Make this a part of your new hire packet. Along with having them complete their initial application and tax withholding elections, have them complete Form W-11.
Make sure you give Form W-11 to your payroll processer to be sure that you get this credit.
In this tough economy, every penny counts. Our clients have already saved thousands of dollars!
