Every year, the IRS sends out millions of notices to taxpayers. This is done mostly through a massive computer system. Consider that when you respond to a notice there’s a good chance you will not even be interacting with a person! A big target for these nastygrams, of course, is home business owners. Often they… continue reading »
Often overlooked are the state filing requirements for 1099-MISC forms . So here’s a list: State 1099-MISC Requirement 1099-MISC Deadline Details Alabama X 28-Feb Form Link Alaska N/A N/A Arizona N/A N/A Arkansas X 28-Feb Form Link California X 31-Mar Form Link Colorado X 31-Mar Form Link Connecticut X 31-Mar Form Link Delaware X… continue reading »
If you have a C Corporation, then you will need to file a Form 1120 (the “C” in the name refers to the section of the IRS tax code). Even if you own all or a part of the company, the IRS does not consider you to be self-employed. As a result, you will not… continue reading »
When determining whether to incorporate or not, there are no clear-cut answers. It’s really a judgment call. Of course, you need to talk to an experienced attorney. But it is also a good idea to get advice from successful business owners. Despite all this, there are some general things to keep in mind. In fact,… continue reading »
The tax rates for your income depend on two factors: 1. Filing Status, which includes the following options: Married Filed Jointly Single Head of Household Married Filed Separately 2. Income OK, so with both of these factors, you will calculate your taxes based on tax brackets. For example, this is what it is for those who are… continue reading »
Whenever you bring someone on board as a contractor, make sure you have the person fill out and sign a W-9 Form. This will actually make the process of sending out a 1099-MISC much easier. The reason is that the W-9 will have critical information, like the mailing address, Tax ID number and whether the… continue reading »
It’s true that the odds of being audited are fairly low – under 1%. Yet this may not last long. The IRS has been changing some of its procedures – such as allowing agents to conduct audits via mail — and has also been increasing its hiring. Besides, the agency tends to focus more on… continue reading »
An offer in compromise (OIC) provides for settling an IRS debt for less than what is owed. For the most part, the agency will allow for this when the taxpayer has a financial hardship. However, before making an application, you must be current with all tax filings and payments. Next, you should check out Form 656-B. With it, you… continue reading »
If you owe $50,000 or less in IRS debt, then setting up an installment agreement should be fairly straightforward. But to qualify, you must be current on your prior tax returns and estimated payments. Also, a typical installment agreement can be for as long as six years (payments are made on a monthly basis). To make… continue reading »
As an employee, your employer will deduct the necessary Social Security and Medicare taxes from your paycheck. However, if you run your own business, then you must do this yourself. This is done by filling out Schedule SE, which will compute your self-employment taxes (the amount is reported on the “Other Taxes” section of your… continue reading »