LLC Filing as a Corporation or Partnership A domestic LLC with at least two members is classified by default as a partnership for federal income tax purposes unless it files Form 8832 and affirmatively elects to be treated as a corporation. And an LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes), unless it files Form 8832 and affirmatively elects to be treated as a corporation.Read more "LLC Filing as a Corporation or Partnership" How to Prepare & File Form 1096 to the IRSWhat is Form 1096? Form 1096, or Annual Summary and Transmittal of information Returns, is a summary return, which shows the totals from information returns and must be submitted to the IRS along with these returns, such as forms 1099, 1098, 3921, 3922, 5496 and W4-G. Form 1096 includes information specific to the employer as well as information specific to the forms being filed.You must submit a separate 1096 for every type of return you have given to a recipient. For example, if you prepared and submitted three 1099-MISC forms and two 1099-R forms, you have to submit a 1096 summarizing the 1099-MISC forms and another 1096 summarizing the 1099-R forms. When Must Form 1096 be Submitted? Form 1096 must be submitted to the IRS no later than the last business day of February each year, along with the applicable returns which it summarizes. Read more "How to Prepare & File Form 1096 to the IRS" Understanding Tax Form 1099-Misc In a nutshell, form 1099-Misc is issued by your business to a subcontractor or anyone who provides services to you for $600 or more during a calendar year. You will skip the 1099 if the provider of services is a corporation.
Report on Form 1099-MISC only when payments are made in the course of your trade or business. You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements. Other organizations subject to these reporting requirements include trusts of qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under section 501(c) or (d), farmers' cooperatives that are exempt from tax under section 521, and widely held fixed investment trusts. Read more "Understanding Tax Form 1099-Misc"
Understanding A New IRS Form 1099KThe form 1099-Ks are one of many new forms aimed at helping the IRS collect more money without raising taxes. The new IRS rule is effective beginning with 2011 tax year and requires all Payment Settlement Entities (Credit Card providers including banks, PayPal, and others) to report all qualifying payments made to individuals during the past calendar year. In other words, this 1099-K form is issued to folks who sell things (such as, eBay sellers) and get paid by credit cards, PayPal, etc. To get caught by this form, a seller must have had over $20,000 in sales or over 200 transactions. A casual eBay garage-sale-type seller wouldn’t get one of these 1099-Ks. Payments that are included in this rule are:
New Line on Schedule COn Schedule C, the IRS has added a new line where you report the income shown on the new 1099-Ks. Read more about the new forms on this IRS page. If you have other income that was not paid to you via credit cards or online payment systems, be sure to report the rest of the income on the next line. Remember, if you had refunds or charge-backs report those as returns and allowances. Read more "Understanding A New IRS Form 1099K" |