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Little Known Tax Deductions That Can Save You Big
When you say "end of the year", most small business owners think of two things immediately. The *second* is the holidays. The *first* is taxes! While almost all of us pay taxes quarterly, we still have to file in January. That means November and...
Military Reservists, Enlistees May Get Deferral Of Back Taxes
Reservists called to active duty and enlistees in the armed forces may qualify for a deferral of taxes owed if they can show that their ability to pay taxes was affected by their military service.
The deferral covers active duty members of the...
Negotiating real estate deals to win-win
If you’ve spent some time on homekeys.net, you probably noticed we generally don’t carry a torch for tradition or conventional wisdom. Having said that, the well-worn cliché above still holds true, especially in real estate transactions. Many...
Seven Key Tax Deductions for the Self Employed
As a sole proprietor, it*s wise to familiarize yourself with the some key deductions that may reduce your tax bill for 2004. Small-business consultants generally recommend that you hire an accountant to prepare your tax returns, payroll and...
This Year, Try Using Tax Software to File Your Taxes
Every year, we citizens of the United States have to "pay our
dues" so to speak, in the form of filing our income tax
documentation with the federal, state, and in some cases,
municipal government. For many years, people and businesses...
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Deadlines Approaching For Filing 1099s For Independent Contractors
While the middle of January may seem a bit early to begin
thinking about taxes, 1099-MISC filing deadlines are looming
for businesses. Generally speaking, IRS 1099-MISC is the
form used to report miscellaneous income that you paid to
persons during 2004 in the course of your trade or business.
Does This Apply To My Business?
The 1099-MISC forms must be issued to any person that you
have paid at least $600 in rents, services or other income
payments. Typically, you should issue the form to any
independent contractor that you paid $600 to during 2004.
For example, if you paid a designer $1,500 to build and
maintain a website in 2004 for your business, a 1099-MISC
filing would be required. As with practically any IRS
filing, there are additional situations that require a 1099
filing [ex: any fishing boat proceeds], so make sure you
cover your bases by looking at the relevant instructions.
Generally, you are not required to report payments to a
corporation.
When and What Must Be Filed?
The 1099-MISC form is a multi-layered carbon form, so make
sure the information you provide appears clearly on all of
the copies. Once you have filled out the form, you must
provide Copy B to the person that you are reporting to the
IRS by January 31, 2005. Using our previous example, you
would mail Copy B to your website designer before the end of
January.
Copy A of the 1099-MISC form is intended for the IRS. You
are required to file it by February 28, 2005 if you are
sending the form by mail. If you prefer to file
electronically, you have until March 31, 2005 to file the
form.
Associated Websites
Revealing a particular flair for red tape, the IRS requires
you to file an additional form if you are filing Copy A of
the 1099-MISC by mail. In such a situation, you must file an
"Annual Summary and Transmittal of U.S. Information Returns"
form. This summary is better known as Form 1096 and you
should have already received a copy of it in the mail from
the IRS.
Where To Find These Forms
To the surprise of many people, the IRS has an excellent
website containing information and tax forms. Unfortunately,
the site is fairly useless when it comes to obtaining tax
forms that you can actually file. You cannot download and
use any 1099 form from the website. If you try to print
forms from the site and use them, you run into two problems.
First, the IRS computers will not be able to read the forms
and will reject them. Second, it is doubtful that you will
be printing on multi-layered carbon paper, which means you
will have no Copy B of the 1099. Obviously, either situation
can attract unwanted attention from the IRS.
You can order forms from the IRS by calling 1-800-tax-form
or ordering them off of the IRS website [do not download].
The IRS suggests it typically takes at least two weeks for
the forms to be delivered, but keep in mind that it may take
longer. If you need the forms sooner, you usually can find
them at libraries and post offices.
About the Author
Richard Chapo is CEO of Business Tax Recovery - Obtaining tax refunds for small businesses by finding
overlooked tax deductions and credits through a free tax return review.
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