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Tag Archive for Form 1099-MISC

IRS Form 1099-misc Due Date Approaching – Facts

John Dundon

As many of us who hang our own shingle are painfully aware, IRS Form 1099-misc is due NEXT WEEK. YIKES! I’m still shaking off the holidays.

The failure to timely file this ‘informational return’ has gone up this year. So you really do NOT want to miss this deadline, particularly if you are a contractor that needs to get 50 or so of these out.

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IRS Form 1099-misc Filing Requirements Defined As Per IRC 6041

I was talking with a taxpayer the other day who registered as an LLC with Colorado Secretary of State. She developed an intriguing business model that is doing remarkably well according to the financial statement. As part of a tax planning conversation our discussion surrounding gross receipts digressed into how the billing function works. Interestingly enough the response caused my jaw to drop.

After pressing further in my quest for knowledge, turns out services were ultimately bid out using a decision support system basically attempting to identify the likelihood as to whether the ‘customer’ would issue IRS Form 1099-misc or not. YIKES!

Knowing this person to be fundamentally good yet previously misguided I informed her Read more

Mysterious Form 1099-MISC- Unveiled!

My first interesting encounter with the Form 1099-MISC was many, many years ago when I worked with a big box tax prep company. A guy walked in with literally a shoe-box full of these forms all made out to him under his Social Security Number. We spent quite a huge chunk of time getting through those but boy did I learn fast on the ins & outs of this mysterious form!

What is Form 1099-MISC?:

Form 1099-MISC, Miscellaneous Income, is issued to a person if any of the following situations occur, when a trade or business or some other qualified organization pays:

• If at least $10 in royalties or broker payments are paid to a person Read more

5 Payroll Tax Mistakes To Avoid

If you have at least one employee, you are responsible for payroll taxes. These include withholding federal (and, where appropriate, state) income taxes and FICA tax from employees’ wages as well as paying the employer share of FICA tax and federal and state unemployment taxes. The responsibility is great and the penalties for missteps make it essential that you do things right.

1. Misclassifying workers

Perhaps the hottest audit issue today is misclassifying workers. There’s incentive to treat workers as independent contractors rather than employees because payroll taxes and employee benefit costs are high; a company’s only tax responsibility for an independent is Read more

Independent Contractor Versus Employee?

contvsemp2Is it better to be an independent contractor or an employee? For a small business owner (SBO), the question mostly is, how to determine what business relationship exists between the person providing the services & the SBO; and if that relationship is that of an independent contractor or an employee.

So how is that determination made?

Common Law Rules fall into 3 categories. Behavioral: Does the company have the right to control what the worker does & how he does it?; Financial: Are the business aspects of the worker’s job controlled by the payer?; And the Type of Relationship: Are there written contracts or employee type benefits?

•The general rule of thumb is that one is an independent contractor if the payer (of the fees) has the right to control or direct only the result of the work and not what will be done and how it will be done.

•Hence you are not an independent contractor if you perform services that can be controlled by an employer (what will be done & how it will be done). You may have freedom of action but the employer has the legal right to the details of how the services will be performed.

An independent contractor is considered self-employed and employee is not. Read more