News & Articles

Form 1099 Filing Alert

Posted on Tue, Nov 15, 2016

The IRS has been focusing on taxpayer compliance when it comes to reporting taxable income on Form
1099 and Congress has been increasing the penalties for non-compliant taxpayers. New this year,
penalties can range from $100 to $500 per 1099 return if filing with the Internal Revenue Service is
not completed by the compressed deadline of January 31, 2017.

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Tags: Tax, Business, IRS, Business Owner, Form 1099

Get Ready Businesses: Some Filing Due Dates are Changing

Posted on Mon, Nov 14, 2016

Thanks to recent legislation, the due dates have been changed for some information returns and related statements and for some business tax returns. Here's what you need to know.

Two Laws Are Responsible for the Changes

1. The Protecting Americans from Tax Hikes (PATH) Act. Enacted on December 18, 2015, the PATH Act extended or made permanent a number of "tax extenders" (provisions with expiration dates that had been routinely extended by Congress on a one- or two-year basis). It also contained a number of other provisions, including the changed due dates for W-2s and some 1099s.

2. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. This new law was primarily designed as a three-month stopgap extension of the Highway Trust Fund and related measures. But it includes a number of important tax provisions, including the revised due dates for partnership and corporation tax returns. President Obama signed it into law on July 31, 2015.

Earlier Due Dates for Forms 1099-MISC and W-2

When a business pays non-employee compensation aggregating to $600 or more to a single payee in a tax year, the business must file a Form 1099-MISC to report the payments to the IRS. Similarly, employers must report wages paid to employees on Forms W-2. Copies of these forms (called payee statements) must also be supplied to payment recipients. 

Before a law passed last year, Forms 1099-MISC and W-2 were required to be filed with the IRS and the Social Security Administration (SSA) by the last day of February or by March 31 if filed electronically. (See "Two Laws Are Responsible for the Changes" at right.) Now, the due dates have been accelerated.

Starting with returns for the 2016 calendar year (which must be filed in early 2017), the due date for IRS and SSA filings is advanced to January 31 of the following year. The March 31 due date for electronic filings is no longer available. So the deadline for filing 2016 Forms 1099-MISC and W-2 with the IRS and the SSA is January 31, 2017.

Note: For filing 2016 Forms 1099-MISC and W-2 with the IRS and the SSA, one 30-day extension is allowed. To obtain an extension, you must file Form 8809, "Application for Extension of Time to File Information Returns," by no later than January 31.

The deadline to supply payee statements to recipients remains January 31 with no extensions allowed.

Reason for the New W-2 and 1099 Deadline

The goal of the new earlier deadline is to:

  • Give the IRS more time to spot errors on tax returns.
  • Make it easier for the tax agency to verify the legitimacy of returns and properly issue refunds to taxpayers eligible to receive them.

Reducing tax refund fraud has been a priority of the federal government in recent years.

Later Due Dates for 2016 Corporate Federal Income Tax Returns

For many years, C corporation federal income tax returns on Form 1120 were due two and a half months after the end of the corporation's taxable year (March 15, adjusted for weekends and holidays, for a calendar-year corporation). Form 1120 could be automatically extended for six months (through September 15, adjusted for weekends and holidays, for a calendar-year corporation).

However, a law passed last year established new due dates for Form 1120. For tax years beginning after December 31, 2015, the due date is generally moved back one month to three and a half months after the close of the corporation's tax year (to April 15, adjusted for weekends and holidays, for a calendar-year corporation).

Automatic five-month extensions are allowed (to September 15, adjusted for weekends and holidays, for a calendar-year corporation). You must file Form 7004, "Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns," to obtain an automatic extension.

The Form 1120S due date for S corporations is unchanged.

Note: Under a special transition rule for C corporations with fiscal years ending on June 30, the due date change won't kick in until tax years beginning after 2025. Until then, the traditional due date of September 15 (adjusted for weekends and holidays) for these corporations will continue to apply, with automatic seven-month extensions allowed.

Earlier Due Dates for 2016 Partnership and LLC Returns

For many years, partnership federal income tax returns on Form 1065 have been due three and a half months after the end of the partnership tax year. So for a calendar-year partnership, the filing deadline was April 15 of the following year (adjusted for weekends and holidays).

The Form 1065 due dates have also now been changed. For partnership tax years beginning after December 31, 2015, the Form 1065 due date is accelerated by one month, to two and a half months after the close of the partnership's tax year (March 15 for calendar-year partnerships). The same deadline applies to limited liability companies (LLCs) that are treated as partnerships for federal tax purposes.

Automatic six-month extensions are allowed (to September 15, adjusted for weekends and holidays, for a calendar-year partnership or LLC). File Form 7004 to obtain an automatic extension.

Need Help with Compliance?

If you have questions about the new filing deadlines for tax returns or information returns, or you want to file an extension, contact your EHTC Tax Advisor.

 

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Tags: Tax, Business, IRS, IRS Filing, Small Business

Year-End Tax Strategies for Small Businesses

Posted on Fri, Nov 11, 2016
It's not too late to take steps to significantly reduce your 2016 business income tax bill and lay the groundwork for tax savings in future years. Here's a summary of some of the most effective year-end tax-saving moves for small businesses under the existing Internal Revenue Code. After President Obama hands over the baton to his successor and new members of Congress are sworn into office in January, the tax laws could change. But here's what we know now.

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Tags: Year-End Tax Planning Strategies, Business, Year-End, Year-End Planning, Small Business, Business Owner

Managing the Ups and Downs of Seasonal Business

Posted on Mon, Nov 07, 2016

What do pumpkin patches, ski resorts, ice cream shops and accounting firms have in common? They're all seasonal businesses that experience a surge in revenues during their busy seasons that tapers off in the slow season. Seasonal peaks and troughs present challenges that require creative planning and fiscal prudence.

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Tags: Business, Season Hiring, Small Business, Business Owner

Seize Trade Show Opportunities

Posted on Wed, Nov 02, 2016
For some company sales representatives, being on a trade show floor can be uncomfortable: You're surrounded on all sides by competitors and judged by browsing shoppers.

But it's also a prime sales tool for those who know how to grab hold of every potential opportunity. After all, the average trade show features 573 exhibiting companies where more than 14,000 professional attendees drop in to chat, according to industry statistics. There's no way you could cram that many appointments into a normal two or three-day period.

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Tags: Business, Marketing, Trade Show

Increase Your Chances of Success

Posted on Tue, Sep 27, 2016
If you want your business to grow and remain competitive, a solid financial plan and a well-conceived strategy can mean the difference between boom and bust.

The obvious place to start is with a cash-flow analysis.

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Tags: Business, Financial Management, Cash Flow Statement

Free Speech Limits in the Workplace

Posted on Mon, Sep 12, 2016

Employees who make comments and express opinions that irritate, offend or anger their colleagues are a major source of workplace conflict. The same is true of employees who argue with supervisors, using inflammatory or profane language.

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Tags: Business, Harassment, Free Speech

B2B Advertising: Sell the Steak

Posted on Thu, Sep 08, 2016
There's an old saying in advertising: "Sell the sizzle, not the steak." Appeal to emotions, be entertaining and keep it short because no one has time to read anymore. The idea is that if your ads stand out for their sizzling originality, you'll get customers to eat more steak.

Many successful consumer campaigns are built on selling the sizzle. But in business to business (B2B) advertising, you're probably better off selling the steak. Sure, you can be creative and unique, but your main goal is to tell decision makers how your product or service will solve their problems.

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Tags: Business, Advertising, B2B

How Consumer Protection Laws Affect Your Business

Posted on Tue, Sep 06, 2016
In the "good old days," owners of honestly-run businesses had little reason to fear. "Caveat emptor," or let the buyer beware, was the norm. Contract laws, particularly those involving warranties, provided consumers with the ability to sue under some circumstances, but it was relatively easy for companies to avoid the long arm of the law.


How Federal Regulators Enforce Consumer Laws

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Tags: Business, FTC, Advertising

No Current Deductions Before Business Commences

Posted on Wed, Aug 24, 2016
Starting up a business and wondering about how tax deductions will be handled? The most important thing to understand is that most expenses incurred before a business begins functioning cannot be deducted or amortized until the year when the business does become active.

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Tags: Internal Revenue Code, Expenses, Business, Section 162, Section 195