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Posts Tagged ‘1099’

Online Taxes: Three Ways to Stay Out of Trouble

The Internet can simplify doing your taxes — but can’t replace good judgment. Here’s a look at your main online tax software choices and key issues to keep in mind, from import gotchas to professional consults.

Question: i have a credit card debt and the company said they were going to file a 1099 and i would have to pay the irs?

can they do this

Answer: I am not sure what you are asking. Is a credit collection agency saying this or is it a company that wants to hire you?

The short answer is yes, a company can hire you on a 1099 (versus a W-2) and they pay no taxes. I have been a contractor for 15 years and if a company (either directly or via a 3rd party like Kelly) hires you for a short term contract position (1099) which could go up to a year, they do not have to pay taxes. The burden then falls on you to pay the full social security, as well as any state and local taxes.

But, the government is watching for this type of abuse and to see if a company is simply trying to avoid paying taxes. If you are there for more than a year, that company could be liable for back taxes and penalties. It is called co-employment and the government frowns on that.

Norm

IRS issues loan write-down rules

With the Obama administration and private lenders now actively considering mortgage-principal-reduction programs…

Question: IRS form 1099-C what is the timeframe when creditors must have it filed by?

I just received paperwork from the IRS about my tax return that was filed in 2006. Apparently, a 1099-C was filed in 2006 from a creditor for an account that had been settled with the that creditor in 2003 and the settlement letter states “settlement in full”. How long does the creditor have to file a 1099-C for Debt Cancellation? The debt was cancelled in 2003 according to the settlement letter and my credit report. The IRS is now saying I owe them $1200 because I did not submit the information from the 1099-C on my 2006 tax return. Is it in writing somewhere that states the creditor has to file the 1099-C during the tax year the debt was written off or canceled? My question is how can the creditor, who settled with me in writing in 2003, file a 1099-C for the tax year of 2006? Doesn’t the 2003 letter which states “settlement in full” mean that is the year of the cancellation of the debt and therefore that’s the year the creditor should have filed the 1099-C?

Answer: This is a state law issue. The IRS merely requires the lender to issue the 1099-C in the year they write the money off of their books, not the year they stopped seeking money from you.

The 1099-C is notorious for showing up a few years later when your financial condition has improved and the tax bill will be bigger. (you can only exclude the money if you were in bankruptcy, insolvent or part of a 2007 foreclosure….)

Business owners can avoid tax pitfalls

Small business owners who compile their own income tax returns can find themselves falling into some common quicksand pits. The mistakes can be costly if they raise a company’s tax bill unnecessarily or subject it to penalties and interest in the future.

Question: nonemployee compensation on a 1099?

i worked as an independent contractor/driver last year. i got my 1099 from my company.
but today i got another 1099 from some transport company ive never heard of. written in ink of all things. it says under non-employee compensation almost 3k. ive never even heard of this company and i never recieved any money from them. i cant find anything about them online.
i think it may have been some sub contract work but i was never told about it. we delivered for someone else once. but i did that route a week and was never paid for it. i was screwed out of alot of my wages and i quit.
what the hell is goin on?

Answer: If I were you, I’d contact that transport company and see why they think they paid you $3,000. If you don’t get a good answer from them, don’t sweat it too much. You don’t have to report on your tax return any compensation you didn’t actually receive during the year. (But make certain you didn’t receive it, otherwise the IRS will not be pleased!)

Business Briefs

Aurora Marketing Merengue The Aurora Hispanic Chamber of Commerce will host “Marketing Merengue — A Latino Three Step Approach” at 11:30 a.m. Wednesday at Gaslite Manor Banquets, 2485 Church Road. It will be an interactive and actionable marketing workshop orchestrated with proven strategies to more effectively engage Latino audiences, presented by Jerry Campagna of MST Latino Inc.A cost of $15 …

Question: I received a Form 1099-MISC from one of clients. My consulting company is an S-Corporation. What shall I do?

My understanding is that the Form 1099-MISC is used for outside contractors/consultants who are registered as Sole Proprietorship companies (required to furnish a Schedule C).

Answer: Depends, if the 1099 is in your name or company name.

If it is in your Company name… no problems — do nothing. Give it to yoru accountant when you do your taxes.

If it is in your personal name and you billed on your S-corp name and were paid on your S-Corp name, you need to have them change the name of recepient on the 1099.

If you billed and were paid on your personal name, then you will have to pay taxes when you file your 1040.

What’s happening in and around New Orleans: Friday, March 5, 2010

Exhibitions Hornets Day at the Zoo Audubon Zoo, 6500 Magazine St. Performances by the Honeybees, Hornets Drumline and the Stingers, interactive games, music, the Hornets Bookmobile, and appearances by the players (2-3 and 3-4), 10 a.m.-4 Sun. Free ticket to…

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