HERE ARE SOME 1099MISC GUIDELINES:
- Who are you required to send a Form 1099 MISC? You are required to send Form 1099MISC to vendors or sub-contractors during the normal course of business you paid more than $600 by check/cash, and that includes any individual, partnership, Limited Liability Company (LLC), Limited Partnership (LP) or estate.
- Who are considered vendors or sub-contractors? Essentially, this is a person or company you have paid for services that isn’t your employee.
- What are the exceptions? The list is fairly lengthy, but the most common is that you don’t need to send a 1099MISC to:
- Vendors operating as S or C-Corporations (you’ll find their status out when you get a W-9…see below)
- LLCs or partnerships (ONLY if they are taxed as an S or C-Corp . . . again, see the W-9 below)
- Sellers of merchandise, freight, storage or similar items.
- Payments of rent to or through real estate agents (typically property managers). However, keep in mind you need to issue a 1099MISC to a landlord you are paying rent, unless they meet another exception.
- Don’t worry about credit card payments and PayPal. The IRS allows taxpayers to exclude from Form 1099-MISC any payments you made by credit card, debit card, gift card or third-party payment network such as PayPal. (These payments are being reported by the card issuers and third-party payment networks on Form 1099-K.)
- Lawyers get the short end of the stick. Ironically, the government doesn’t trust that lawyers will report all of their income, so even if your lawyer is ‘incorporated’, you are still required to send them a Form 1099MISC if you paid them more than $600.
- The W-9 is your best friend. Some of you may be frustrated that you don’t have the information you NEED to issue the 1099. One of the smartest procedures a business owner can implement is to request a W-9 from any vendor you expect to pay more than $600 before you pay them. Using this as a normal business practice will give you the vendor’s mailing information, Tax ID number and also require them to indicate if they are a corporation or not (saving you the headache of sending them a 1099MISC next year). You can download a W-9 here and you can also search online for ‘form W-9’.
- Both the IRS copy and recipient copies are due by January 31, 2019. E-filing the IRS copy is required for 250+ vendors. Additional rules may apply.
- Please contact us if you receive any notices from the IRS related to 1099s as penalties may apply.
If you were a victim of the recently announced Equifax hack, you need to take action to mitigate any negative impact it may have on your finances and credit. If you’re not sure if you were affected, you can use Equifax’s Potential Impact tool to find out. You will need to input your last name and the last six digits of your social security number to use this tool.
Unfortunately, hacks like this one are likely to happen again, so it’s vital to prepare by protecting your digital information as much as possible. Here are some steps you can take to begin the process:
- Set up fraud alerts with the three major credit reporting agencies (Equifax, Experian and TransUnion) to alert you if someone tries to apply for credit in your name.
- Use the fraud alerts that are available for your credit and debit cards, if you don’t already.
- Consider credit freezes to lock your credit files to stop any new credit information releases. This will prevent any new accounts being opened in your name by an identity thief.
- Check your credit report. You can get one free credit report every year from all three major reporting agencies at annualcreditreport.com. It is advisable to check in every four months, using one of your “freebie” reports rather than using them all at once. When you get your credit report, look for any suspicious activity. This should be a regular part of your financial self-monitoring.
- Consider a credit monitoring service. Equifax is offering one free year of credit monitoring. However, before signing up you should review the terms of the agreement—and those of any other credit monitoring services that you may consider.
The Equifax hack is one more reminder of how critical it is to regularly monitor your financial and personal information for potential theft and misuse. If you do suspect that your information has been compromised, contact one of the credit reporting agencies mentioned above and the FTC Identity Theft Hotline at (877) IDTHEFT (438-4338).
The IRS has identified several new variations of standard tax scams involving fake tax bills and demands for payments. Many of these scams involve purchasing and transferring information using a gift card or iTunes card. Other scams to be aware of include:
Electronic Federal Tax Payment System (EFTPS) Scam
This scam involves con artists claiming to be from the IRS. Scammers call and demand immediate tax payment and threaten arrest if a payment is not made immediately by a specific prepaid debit card. Victims are also warned that they should NOT talk to their tax preparer, attorney or local IRS office until after the payment is made.
“Robo-call” Messages Demanding Payment
It is important to remember that the IRS does not call and leave prerecorded messages requesting a call back, but scammers do! According to the IRS, scammers tell victims that if they do not call back, a warrant will be issued for their arrest. Those who do respond are told they must make immediate payment either by a specific prepaid debit card or by wire transfer.
Private Debt Collection Scams
The IRS recently sent letters to taxpayers whose overdue federal tax accounts are being assigned to one of four specific collection agencies. Scammers are aware of this and are now calling taxpayers posing as private collection firms. If you receive a call like this and you have not been notified by the IRS about a tax debt, it is safe to consider the call a scam.
Protect Yourself: Know the Signs of a Scam
Given the level of sophistication and perseverance of scammers, it is sometimes difficult to determine legitimate contact by the IRS (and its authorized private collection agencies) versus ploys to get your money and personal information. Protect yourself by understanding that the IRS will:
- Never contact you initially by phone or demand immediate payment by prepaid debit cards, gift cards or wire transfers.
- Never threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for non payment.
- Never demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
- Never ask for credit or debit card numbers or other sensitive information over the phone.
Remember, the IRS will mail a bill to taxpayers who owe. All tax payments should only be made payable to the U.S. Treasury and never to third parties.
If you are contacted via phone by a scammer this summer, do not give out any information. Hang up immediately and report the scam to the Treasury Inspector General for Tax Administration at https://www.treasury.gov/tigta/contact_report_scam.shtml or call the hotline at 800.366.4484. If you are unsure about any potential outstanding tax obligations, it is also a good idea to check with your tax preparer.
Jay E. Sharpe, CPA, CFE and Evan Rives, CPA to attend the 2017 NC Government Finance Officers Association Conference
Partners, Jay E. Sharpe, CPA, CFE and Evan Rives, CPA, of Rives & Associates, LLP will be attending the Summer 2017 Conference hosted by the North Carolina Government Finance Officers Association. This conference will be held from July 16-18, 2017 at Wrightsville Beach at the Holiday Inn Resort.
With over 20 years of experience working with governmental entities, Rives & Associates, LLP is excited about making new connections in the industry. If you are planning on attending the conference, please stop by our booth.
To learn more about the conference please visit here: http://www.ncgfoa.org/Data/Sites/1/media/past-conferences/2017summerconference/brochure_web2.pdf
Rives & Associates, LLP has been placed on the shortlist for the 2017 Captive Awards sponsored by Captive Review. The awards recognize and reward providers of captive insurance products and services who have excelled over the past 12 months. The awards will be held in Hilton Burlington, Vermont on August 7, 2017. Rives & Associates, LLP are on the list for CPA Firm of the Year and Captive Tax Specialist awards.
CPA Firm of the Year finalist will be judged based on their efficiencies in areas such as GAAP, statutory accounting, auditing, and tax reporting.
Captive Tax Specialist finalists will be judged based on their excellence in technical tax advice,tax reviews, and compliance.
It is such an honor to be a candidate for this year’s awards.
Tips for Implementing a Successful Flex-time Schedule this Summer
Now that summer/vacation season is here, your business may be enjoying a more relaxed vibe with employees taking time off or leaving early. If you’ve ever thought about implementing a flexible work program, now may be the time to pilot one, especially if your business is a bit slower this time of year. To help, we offer the following tips:
Start with a strategy—Think through which departments and job functions can successfully work on a flex schedule. Then create a strategy that identifies which positions are suitable for flex time, the levels of flex time to be offered, and who will manage flex-time arrangements.
Make metrics matter—Studies have shown that flex-work arrangements are great for employee retention and engagement. However, these arrangements also have to support your business productivity. Be sure to identify which metrics you will track to ensure your flex schedule is beneficial for everyone.
Take a trial run—Before adopting a full-scale flex program, perform a trial run in one department or with a few select employees. This will help you work out issues related to technology, connectivity and communication—as well as help you gauge overall impact on your business before launching the program business wide.
Train your managers—Managing a flexible workforce is very different than managing employees on-site. Make sure managers know how to motivate remote and flex-time workers and understand how to best communicate with remote employees. In addition, encourage managers to hold regular meetings to keep your business on track.
Flexible work programs are a highly valued benefit for most employees. This kind of program also has many benefits for businesses, including cost savings, lower employee turnover and higher productivity. Consider using the tips above to trial your own flex work program this summer.
Four Money-Saving Mid-Year Financial Planning Tips
It’s almost exactly the mid-point of the year, which makes it prime time for a mid-year financial review. If you need some monetary motivation for evaluating your financial progress so far this year, you may want to think of mid-year planning as a series of potential money-saving opportunities, for example:
- Save tax dollars by evaluating your 401(k). Take a look at your current 401(k) contributions to see if you are on track to maximize your annual contributions. Making the maximum contributions this year is not only good for your retirement fund, but will also save you money by lowering your tax bill.
- Trim your budget. Make one or two small changes to your weekly or monthly expenditures. Skipping a meal out or your daily coffee run can save you a lot of money over the next six months.
- Fight financial fatigue from fees. Banks and credit card companies (not to mention all those online subscriptions you have) are always changing their fee structures—which may mean you aren’t even aware of some of the things you are paying for. Now is the time to take stock and cancel or downgrade the services you no longer need. Doing so will help you reduce fees and may save you considerable money.
- Ask about your tax estimate. You may be thinking that April wasn’t that long ago—and you are right—but the end of the year is already half-way here, and after that, you can’t impact your 2017 taxes. Now is the time to talk to our firm about your current tax situation and make any changes to increase your tax savings.
These are just four financial planning tips that can save you money before the end of the year. There are many other mid-year planning strategies that can increase your savings, too. Not sure where to start with your plan? Let us help you. Contact our firm today.
The recent “Wanna Cry” ransomware attack that paralyzed several large organizations in the U.S. and Europe is a solemn reminder that the risk of cyber security breaches is real. Every business owner should take steps to assess the type of cyber security threats their business could be subject to and how to avoid them. The tips below are a good place to start:
- Don’t underestimate the risks. Many small business owners are too busy taking care of day-to-day responsibilities to keep cyber security top of mind. This is a mistake—the greatest weapon against attacks is awareness and having a plan in place to prevent them. Reinforce prevention by incorporating a plan into employee onboarding and offering ongoing training.
- Make updating software a priority process. As the “Wanna Cry” attack taught us, updating your computer software is an essential prevention strategy. Many of the infected computers at large organizations were not updated—leaving entire networks vulnerable when just a single computer was compromised. A regular schedule and protocols for updating software can help mitigate cyber security risks.
- Learn the signs of an attack and what to do about them. The most effective way to avoid falling victim to another Wanna Cry-like attack is to be aware of the type of emails that may contain ransomware or other viruses. These emails typically include an attachment (often a .zip file) that you didn’t ask for, and may come disguised as an email from someone you know. If in doubt, the best course of action is to delete the email immediately.
With the risk of cyber attacks growing by the day, it’s time to take action to protect your business. Educating your employees is key, as is updating your software on a regular basis. You may also want to ask an IT professional to help you evaluate and mitigate risk in this area.
Window washing, carpet cleaning, garden grooming—these are all popular spring cleaning chores for homeowners. However, with year-end and tax season behind you, this time of year is also perfect for spring cleaning at the office. These tips will help you and your staff get—and keep—that “just cleaned my office” feeling:
Start with a clean sweep of your desk. Take an hour or two and ruthlessly cut the clutter by emptying all of your desk drawers, sorting out only what you need, and shredding or recycling the rest of your papers.
Knock-out the knick-knacks. If your desk “mementos” are covered with dust and rarely given a glance, you know what to do: take them home or, if appropriate, donate them to a charity.
Digitize your documents. If you haven’t already, move your files to cloud storage. Make a list of the documents you need to store or access on a regular basis, then evaluate your cloud-based file storage options to see which platform will best suit your needs.
Corral your online credentials. LastPass and other online password-saving applications can save you time, while also eliminating the need to keep sticky notes and paper lists of passwords on your desk.
Declutter your desk daily. Once you have invested the time to spring clean your desk and office, spend a minute or two at the end of each day to do a quick tidy up in order to preserve your pristine work area.
Spring cleaning your office is not just a feel-good activity. Studies have shown that a neat and orderly office space leads to improved productivity and efficiency, which means you may be able to leave the office a few minutes early to enjoy warmer weather or to continue your cleaning spree at home.
We’ve performed services for more than 300 insurance companies, and this week we want to share some free tips exclusively with you. This Friday at 10 am, we will be hosting an Introduction to IMR/AVR webinar. Topics covered during the webinar will include overview analysis, similarities, differences, and components thereof.