Tax Deadlines Ahead

Don’t Miss the Deadline to Issue 1099’s

1099-MISC Thresholds and Reporting Requirements

File this form for each person to whom you have paid during the year.In general, companies must send 1099-MISC forms if they’ve paid a nonemployee $600 or more during the year. But, there are other requirements depending on the type of payments and the relationship between the payor and payee. According to IRS guidance, a form 1099-MISC may be required if a company makes the following types of payments:

  • Royalties: At least $10 in royalties .A common example of a royalty payment is a payment made to an author for the right to publish or distribute the author’s work.

At least $600 in:

  • Rents: In most cases, this is where rental payments are reported if your business rents property, such as equipment, cars or real estate
  • Services performed by someone who is not your employee: Examples of services are professional fees paid to attorneys, accountants, engineers, directors, speakers, etc.; repairs to office machines, equipment, etc.; installation services, landscaping services, marketing services, etc.
  • Prizes and awards: This applies to general prizes and contest winners that your business has awarded. Yes, even winners may have to pay taxes on prizes.
  • Other income payments: These type of payments are also reported in box 3. A common example is payments for punitive damages.
  • Medical and health care payments: You must report any payments made in the course of your trade or business to doctors or other suppliers/providers of medical services.” Examples include payments for lab work, physical exams, hospital fees/charges, etc. Unlike several other payments types, medical and health care payments must be reported even if paid to corporations. Payments to tax-exempt hospitals are not reportable, only payments to for-profit hospitals are reported.
  • Attorney fees: Payments made to an attorney in the context of a legal settlement are typically reported in Box 14. For any legal services given directly to a company/payor, then the service fees to an attorney are typically reported in Box 7.

The deadline to file is January 31st; you are almost guaranteed an audit or tax notice if you fail to report a Form 1099.
Reach out to your accountant TODAY if you are unsure if you need to issue 1099s.

2019 Tax Deadlines for Filing 2018 Business Returns
Partnership Tax Deadlines: Due Date:
Original tax deadline for partnerships (Form 1065) March 15, 2019
Extension tax deadline for partnerships (Form 1065) September 16, 2019
S Corporation Tax Deadlines: Due Date:
Original tax deadline for S Corporations (Form 1120S) March 15, 2019
Extension tax deadline for S Corporations (Form 1120S) September 16, 2019
C Corporation Tax Deadlines: Due Date:
Original tax deadline for C Corporations (Form 1120) April 15, 2019
Extension tax deadline for C Corporations (Form 1120) October 15, 2019
Sole Proprietor Tax Deadlines: Due Date:
Original tax deadline for sole proprietors and individuals (Form 1040) April 15, 2019
Extension tax deadline for sole proprietors and individuals (Form 1040) October 15, 2019
Nonprofit Tax Deadlines: Due Date:
Original tax deadline for exempt organizations (Form 990) May 15, 2019
Extension tax deadline for exempt organizations (Form 990) August 15, 2019

 

Advertisements

Don’t End Up Owing Taxes for 2018

Recent new tax laws have brought a slew of changes that could impact how much you owe for your 2018 taxes.  The Government Accountability Office recently issued a report with a warning that many taxpayers may come up short if they don’t act now and adjust their withholdings. No one wants to end up owing more than they thought so here are some tips and suggestions to help.
The new tax laws will limit or even eliminated many itemized deductions claimed by millions of taxpayers. The biggest contributors to this are the new limits on state and local tax deductions (the SALT deductions), a restriction on the amount you can deduct for home mortgage interest and the elimination of the deduction for job-related expenses.
Those most likely to owe tax for 2018 are those who itemize deductions.  The IRS recommends that taxpayers who itemize should do some planning now to avoid the sticker shock of a large tax bill for 2018.
If you are concerned, a good tool to use is the Withholding Calculator found on the IRS website.  This free tool will ask you to enter estimated values for your income in 2018, the number of children you would claim, an estimate of your itemized deductions and the amount of federal tax withheld on your last paycheck. It only takes a few minutes — all you’ll need is your most recent pay statement. But having your 2017 tax return handy can help to speed up the process. 
The calculator will not allow you to enter any amount that exceeds $10,000 as a deduction. If your calculated results indicate you will owe, you can save money now for your tax bill and put it in a money market fund that could help you earn some interest. You can revise your W-4 and increase your amount of tax withheld.  Also, consider any additional income that you are not currently paying taxes on such as a side business, interest or dividends. Don’t be caught unprepared.
Information summarized from: “Millions of taxpayers could wind up owing for 2018” By RAY MARTIN MONEYWATCH September 10, 2018, 5:00 AM.  https://www.cbsnews.com/news/millions-of-taxpayers-could-wind-up-owing-for-2018/

Tasha S. Barnes, MBA, MHA 

Get out of Debt by Rolling Over!

Have you ever heard you can get out of debt by rolling over? No, this does not mean flipping from one side to the other but rather the payment rollover method. Dave Ramsey, a well-known financial advisor calls it the Snowball method. It is very useful and will amaze you at how fast your debts will disappear if followed and adhered to.

The concept is easy. Say you are paying off furniture, a credit card, school loans, and a mortgage. You pay at least the minimum monthly payment on each except the smallest one, which in this case is the furniture expense. On the furniture, you pay as much as you can afford above and beyond the minimum monthly payment. Once you have paid off the furniture, you roll over that payment and combine it with your minimum payment of the next smallest debt such as the credit card. This process continues until you are paying all the previous payments onto only one such as the mortgage which will greatly increase the speed of paying off the balance. Like a snowball, as you start rolling, you gain momentum and size.

So, how do you get started?

Step 1: List your debts from smallest to largest. Step 2: Make minimum payments on all your debts except the smallest. Step 3: Pay as much as possible on your smallest debt. Step 4: Once the smallest debt is paid off, roll the amount you were paying on that to the next smallest debt and so on.

Here is an example.

Monthly Expenses:

Mortgage:                     $1,500.00

Student Loan:              $250.00

Credit Card:                  $75.00

Furniture:                      $33.00

($25.00 is the minimum but I can swing an extra $8.00 a month)

I get my furniture monthly expense paid off and now my payments look like the following because I have ROLLED OVER my furniture payment.

Mortgage:                     $1,500.00

Student Loan:              $250.00

Credit Card:                  $108.00

My monthly amount I am paying has not changed but the rate I am now paying off my credit card has. This method has been attributed with being the most cost effective, fastest, and emotionally satisfying ways to get out of debt.

Tasha S. Barnes, MBA, MHA

Benefits of a Budget

budget blogAre you tired of hitting the 20th of the month and realizing your bank account is empty? Living from paycheck to paycheck is never fun but with the help of a well set budget, you should be able to find some breathing room to make it to the end of the month.

A budget is a financial plan laid out indicating where you will spend money each week. It breaks down expenses into line items including mandatory payments such as rent/mortgage, utilities, groceries, car expenses, taxes, child care, etc. and then optional expenses such as entertainment, eating out, travel, etc. Budgets give control over your money and help you to spend your earnings with intent. Another benefit is that it keeps you focused on your money goals, allowing you to not overspend, possibly save for a rainy day or for that vacation you want to take down the road. The biggest benefit is being able to know where your money is at all times and how it is working for you. Money no longer disappears.

The key to a well-established budget is to write down every expense you encounter in a month or week and then to rank them in order of necessity. Don’t forget to incorporate the quarterly or yearly expenses also. Rent, food and utilities are requirements but not all expenses are. If your funds seems tight, make sure all the requirements are covered first. This may mean cutting some of the nice to have expenses such as eating out or the daily coffee from your favorite local shop.  Sometimes budgets get a negative connotation because they may feel limiting, but if planned out correctly and followed, you will find that it ends up creating a lot of financial freedom down the line. It is a delayed gratification technique that will lead to further success. Without a budget, it is easy for little purchases add up, keeping you from something bigger you have always wanted. By sticking to a budget, you will be amazed at the control you will gain over your expenses.

 

Tasha S. Barnes, MBA, MHA