1099 REPORTING REQUIREMENTS
Every business, person conducting business and nonprofit organizations have 1099 reporting requirements and must file informational returns (Federal Forms 1099) with the Internal Revenue Service for certain payments made during the course of the calendar year.
These payments include, but are not limited to:
- Payments to persons, including partnerships and limited liability companies (excluding corporations and S-Corps) of at least $600 for services (i.e. casual labor) in the course of a trade or business.
- Payments to persons, including partnerships and limited liability companies (excluding corporations and S-Corps) of at least $600 for rents in the course of a trade or business.
- Payments to persons including partnerships and limited liability companies (excluding corporations and S-Corps) of at least $10 for interest (i.e. interest on officer’s loans) in the course of a trade or business.
- Gross proceeds of $600 or more paid to attorneys, including corporations, for services in the course of a trade or business.
These informational returns generally must be provided to the recipients or postmarked by January 31st. Since the 31st is a Saturday this year (2015) you have until February 2nd. The Federal filing generally must be postmarked for filing with the IRS by February 28th but since that also lands on a Saturday this year (2015) you have until March 2nd.
Failure to file these returns can result in a penalty for each 1099 return not filed.
To properly report the information required on Form 1099, you need to have the provider’s taxpayer identification number (TIN). It is best to require the provider to fill out and give you a Form W-9, Request for Taxpayer Identification Number and Certification, before work is done or paying for the services. Trying to get this information after the fact can be difficult especially if there is no-longer a business relationship. W9
The following payments are NOT REQUIRED to be reported on 1099’s, although they are taxable to the recipient: Continue reading
What Charitable Contributions are Tax Deductible?
This is a generous time of year when I am often asked what charitable contributions are tax deductible. Even if not a qualified donation for a tax deduction giving is a wonderful thing for the giver and the receiver 🙂
A charitable contribution is a donation or gift to, or for the use of a qualified organization. To be a donation it must be a true gift. That is a voluntary transfer of money or property without receiving anything in return or expecting to receive anything in return (accept that tax deduction you may receive).
Generally donations to qualified tax exempt organizations are deductible by individuals and businesses as charitable donations. As an individual if you itemize deductions (on Schedule A) you can deduct donations to charity. If you don’t itemize there is no tax benefit. For businesses often payments to qualified organizations may actually be qualified business expenses fully deductible and not subject to limitations.
Donations can be made by cash, check, debit card, credit card or giving of any item (household items, clothing, car, boats, stocks or bonds etc.) to a qualified organization. The donations is considered made when delivery occurs. This means when a check is mailed, a credit card is charged or an item is sent, transferred or delivered to the qualified organization. Regardless of how the donations is made Continue reading