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1099s review can start TODAY!

By | 1099, Cloud Accounting Option and Reviews, Procedures, Uncategorized

Counting today, we are only 79 DAYS away from the 1099s filing deadline (box 7).

Therefore, it is much better to be prepared and ready, than to wait for the deadline, which is never a good idea! 

 

So, Quickbooks Online finally opened up the review option for the current year.  Just last week we were only able to view last year’s 1099’s reports. But, as of this month, we are now able to review the current year, and get ready ahead of the time for the upcoming tax season!

To review your 1099s, Go to your Quickbooks Online (QBO) file, and navigate to (1) Expenses > (2) Vendors > (3)Prepare 1099s*

(3*) One button is housing two other options, and if you don’t see the “Prepare 1099s” option, then click on the down error next to the “Pay Bills” or “Order Checks’ and you will be able to see Prepare 1099s option*

On the very next page, you will be able to read more about the 1099s filing, deadlines, and read through FAQs. It is a very good idea to read through at least once a year:

On the next page you will be able to review the following:

  1. Name of the company, business address, and Tax ID

2. Review, add or modify accounts that are currently checked for the 1099 reporting. Here you can also make sure that the correct accounts are marked correctly ( i.e. Legal Expenses are not marked in the Nonemployee Compensation group.. etc)

3. View the list of ALL vendors and confirm that all 1099’s vendors are marked to be tracked. Also, it is a VERY GOOD IDEA to add emails for each contact as the email delivery of the 1099’s forms can be 1/10th of the cost of the snail mail delivery of the 1099’s.

Make sure you do have:

W9 from any vendor, regardless of the amount you have paid the vendor in one year!

4.  It’s now time to preview (review) the 1099s

Pay attention to:

  1. The correct year is selected!
  2. Gather the missing information for the vendors listed in red
  3. Review the amounts in boxes
  4. Review why there is a difference between the ALL PAYMENTS and the BOX (that was reported) (if any

 

Books LA is jumping on the review for all of our clients! And so should you!

We can never be too prepared.

Tips:

  • Ask for a fresh W9 every 3 years. It is always a good idea to have current W9 as the addresses, entity types or DBA names can change.
  • Obtain a W9 regardless of the amount! NO exception. Why? Besides many other reasons here are two very important ones:
    • Failure to report 1099 for the lack of W9 can result in the 28% in backup withholding, plus penalties, plus interest! That $1000.00 expense that was a good deal is now costing you $280.00 +( pen.+int%) * years!
    • Vendor received less than $600.00 this year, but the next one he receives over $600.00. A few months later it’s time to do 1099’s and the vendor is MIA. They got their money, and don’t feel its urgent to comply. What do you do? Refer to the previous bullet point, and be ready to pay!

So, GET THE W9!!!!

Happy Tax Season (almost)!

 

 

Meal and Entertainment – Travel meals – Employee meals – Office parties

By | Dining, Procedures, Uncategorized

What is the difference? Is there a difference? Why does it matter?

Mike Russo, from Less Taxing Services, LLC wrote a good, entertaining and clear guide when in comes to meals and the deduction parentage.

 

“When I talk to clients about the need for professionals being involved in their finances, I describe a box of donuts.

That simple box of donuts can be coded 10 different ways (another group came up with 11 or 12, but I can’t find that list…some of them were WAY off the wall, though, so we’ll stick with 10). Once coded, the donuts could then show up on at least 7 different tax forms. (Schedule C, 1120, 1120S, 1065, 990, Form 2106 and Schedule A)

It’s never as simple as just buying a box of donuts.

 

– No Deduction – I buy a box of donuts and eat the whole thing while in town at my tax home. (Note, this would be 50% deductible if you were out of town traveling for business.)

– 50% Deductible Business Expense – I buy a box of donuts and share them with the 10 people in my first sales meeting of the day

– 50% Deductible Non-Reimbursed Employee Expense – Same as above, but now I’m an employee and my employer requires me to supply food in my business meetings but doesn’t reimburse me for it. (While this is still 50% deductible, it’s an itemized deduction and won’t even begin to count until you’ve crossed the threshold of 2% of your income.)

– 100% Deductible Business Expense – I buy a box of donuts, takes them to my first sales call and leave them in their lobby by the coffee for all to enjoy…even people off the street.

– 100% Deductible Non-Reimbursed Employee Expense – Same as above, but now I’m an employee and my employer requires me to supply food in my business meetings but doesn’t reimburse me for it. (While this is still 50% deductible, it’s an itemized deduction and won’t even begin to count until you’ve crossed the threshold of 2% of your income.)

– 80% Deductible Business Expense – I buy a box of donuts that I use as breakfast and lunch while driving my big rig across the country. (I’m subject to DOT rules.)

– 80% Deductible Non-Reimbursed Employee Expense – Same as above, but now I’m an employee and my employer don’t have any provision for meals while I drive. (While this is still 50% deductible, it’s an itemized deduction and won’t even begin to count until you’ve crossed the threshold of 2% of your income.)

– 100% Deductible Personally – I buy a box of donuts and donate them to the church bake sale. (This is deductible, but it’s only on the personal return…even if you did this for a Corp, it would still pass through to the shareholders and wouldn’t be deductible at the corp level.)

– 100% Deductible as COGS – I buy a box of donuts to resell.

– 100% Deductible as an Ordinary and Necessary Business Expense – I buy a box of donuts to use as a prop during a tax talk where I discuss the ways a box of donuts can be coded. 🙂

Now, who wants a donut? :)”

 

The 33 Best Donut Shops in America –Huffington Post