Forget what you think you know about Form 1099…here’s what you need to know!

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By Candace S. Spencer, CPA Let’s break down the What, the Who and Why the IRS will penalize you if you don’t file 1099s. What do you need to know about 1099s in a nutshell? The general rule states that if you are engaged in a trade or business you are REQUIRED to file 1099s. So if Owner, President, CEO, Entrepreneur is on your business card, you are responsible for 1099 filings. The only exception to this rule is if the expenses were paid via credit card. We recommend that before engaging in business with new vendors, you ask them to complete Form W-9, which can be found on the Internal Revenue Service (IRS) website at www.irs.gov. They should fill this out and return it to you before payments are rendered. Actually, the rules state that you’re required to get this form from them before making a payment. Otherwise, you as the business owner are required to do Backup Withholding (an entirely different topic) Who gets a 1099? All individuals and partnerships including certain … [Read more...]

How To Select a Tax Preparer

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  It’s everyone’s favorite time of year again - tax time! Although you may not enjoy the process, it is a necessary evil. Hopefully finding the right tax preparer can make it less painful. Nearly 2/3 of all taxpayers use a tax preparer. However, it still may not be appropriate for you. There are multiple free filing software options accessible through the IRS’s website if your income is below $57,000, and 70 percent of all taxpayers make less than $57,000. But if you’re not in this category, then it may be prudent for you to hire a professional. A good tax preparer will help you stay in compliance with the law as well as minimize taxes for your specific set of circumstances. The IRS has some important minimum requirements you should look for in a tax preparer at http://www.irs.gov/uac/Ten-Tips-to-Help-You-Choose-a-Tax-Preparer. However, there are some other characteristics that could be important to you as well. When selecting a preparer it is important to: 1)    Be an … [Read more...]