by Tina on March 28, 2011
One of the things I discovered early in my business is that my world is often full of distractions! Some of them are opportunities and some are temptations and some are just…distractions! I find myself torn in many directions, sometimes on a daily basis. I have learned that time is a precious commodity. Time is something we cannot get back, so use it wisely. It is so hard to believe that we are almost through the first quarter of 2011. Everyday I hear people ask “where does the time go?’
So, what do you need to do to stay on track. First, be organized and have a plan. You already have a business plan (if not, you need one) but also have a plan for your week ahead. A perfect time to do it is on Sunday evening, develop your plan for the coming week. Organize your day in to blocks of hours dedicated to the important things you need to accomplish. Second, don’t give in to the distractions, stick with your plan each and every day. Third, make sure you have goals. How did you do with your first quarter goals?
The main indicators in predicting the success of your business :
1. Planning – start with your business plan which answers questions related to marketing and financials and simply , how big should the business be? What are the growth plans? You may want to remain small and that is OK if that it the plan.
2. Organization - This is not the same as planning. Think of the plan as a road map and being organized as how you make the plan a reality. Being organized is how you control your activity and how you work to achieve the goals.
3. Responsibility – I like to think of this as taking the task to a successful conclusion. The business owner is ultimately responsible for his own success. Hold yourself accountable and learn not to make excuses, learn to do things better.
We all struggle at times but never be afraid to seek help. Working with a good coach often makes goal setting easier and working with a good accountant makes the financial part of the business run smoother. Sometimes an advisory board is the way to success. Remember, avoid distractions but don’t operate in a vacuum. Calling upon professionals and people in your social circle or in your community can help your business be more successful. You cannot be expected to know everything, so do not try. Locate experts in various fields when you need a boost!
Tagged as:
organize,
plan,
success factors
by Tina on January 20, 2011
As we approach January 31, I am spending a good deal of time assisting my clients in processing their 1099s. Have you taken the time BEFORE year end to evaluate the information in your accounting system to determine if you have all the data necessary to prepare the annual Forms 1099-MISC? It is not a good idea to wait until the last minute, but I know many businesses do so. You should be having your vendors complete a W-9 form when you begin doing business with them. W-9s are available and can be both printed and downloaded from the Irs web site (IRS.gov).
Form 1099-MISC is an information return used to report “non-employee” compensation that exceeded $600 during the year. Many are unsure on who should receive a 1099. Here are some guidelines:
Form 1099-MISC should be filed for each person to whom you have paid:
- At least $600 in any combination of rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments not under a qualified plan, and a number of other items listed in the instructions, but which are unlikely to apply to you.
This information return must be filed with the IRS with a covering Form 1096. Another copy of Form 1099-MISC, containing the information provided to the IRS, must also be sent to the recipient or “non-employee” and should be postmarked by January 31.
The Following are some basic tips that can be helpful during the preparation process:
- Prior to making a payment, obtain taxpayer identification numbers (TIN) for all vendors. There is a penalty for filing incorrect 1099s, and a missing TIN constitutes an incorrect 1099. The penalty varies between $15 and $50 per 1099, depending on how quickly you correct the mistake or provide the missing TIN. The penalty is abated if you can show reasonable cause, and the best reasonable cause would be documented evidence that you requested the TIN, and the payee failed to provide it.
- By far, the best way to document the your request for a TIN is by sending out IRS Forms W-9 to all payees whose TIN’s you don’t already have on record. The IRS doesn’t require W-9s (it merely “suggests” them), but these forms strengthen your position in a number of ways.
- Don’t wait until year-end to send out W-9s. Send them while you still have leverage over the payee. W-9s also have the virtue of giving the payees an opportunity to assert that they are exempt from 1099 reporting, which in turn gives you “reasonable cause” evidence in case the IRS tries to penalize you.
- If a payee fails to furnish you with his or her TIN, you are required to deduct backup withholding at a 30% rate. If a payee disputes the withholding, you will be in a far better position if you can show that you sent them a W-9 and they did not respond, or didn’t provide the number. Backup withholding is reported in Box 4 on the 1099-MISC.
- There is an exception from reporting for payments made to corporations, but this does not apply to payments for legal services
- There are two types of tax identification numbers. A social security number (SSN) is for an individual and has nine digits separated by two hyphens. An employer identification number (EIN) is also nine digits but is separated by one hyphen. Just because a taxpayer provides you an EIN number does not mean they do not need to receive a 1099 for services rendered. Sole proprietors and LLCs, which are required to receive a 1099, may provide an employer identification number instead of a social security number.
- Employee bonuses, and all other taxable compensation to employees except for certain retirement payments, should be reported on Form W-2 not on Form 1099-MISC.
- Expense reimbursements paid to non-employees should not be included in determining if they have met the $600 threshold and should not be included in any IRS reporting, as long as the non-employees account for the expenses in the same manner as your employees do for their non-taxable expense reimbursements.
There are many other issues that may arise in connection with this reporting. For further information you may want to contact your tax accountant. In addition the Internal Revenue Service provides detailed instructions and information on how and what to report on Form 1099 through their website, www.irs.gov.
Tagged as:
1099 Misc
