Coronavirus and Stimulus Package Update

The impact of the Coronavirus (COVID-19) is changing rapidly and all of us at A&CO are praying for the safety of your family and ours.  Even though our first priority is our safety, life goes on and recent events have affected the way we and our clients work.  Please see below for current information regarding the April 15th tax deadline, our office procedures, small business funding resources, and the stimulus package that is expected to pass this week. There is some free money on the table for businesses and individuals, and we don’t want you to miss it.

The deadline to file your 2019 Form 1040 (individual income tax return) has been extended from April 15 to July 15.If you owe, the tax payment deadline has also been extended to July 15, without accruing penalties and interest.The deadline to contribute to your 2019 IRA or HSA has also been extended to July 15.The first quarter 2020 estimated income tax payments deadline has also been extended to July 15; …

What's New For The 2020 Tax Filing Season

Filing taxes last year was a nightmare not just for you but for us and the IRS too.  This year might not be much better.  
Here’s why: first, the IRS is still working to issue guidance for the changes to the tax code they signed into law more than two years ago and second, Congress passed a series of tax breaks late in 2019 that will require the IRS and tax software providers to revise forms at the last minute.  
If you are interested in learning more about what’s happened since we last met, grab your coffee and read at your leisure. J
Further Consolidated Appropriations Act In the last few weeks of 2019 Congress produced its most significant tax package of the year as part of the Further Consolidated Appropriations Act, 2020 (FCAA).
The Act includes the revival of expired or expiring tax breaks mostly through 2020.  Many of these tax breaks expired after 2017 but Congress retroactively extended them back to January 2018.  This means you will have to amend prior year returns if you wan…

Another January, Another 1099-MISC Deadline

Another year has flown by and is almost in the books. With that means the Form 1099-MISC filing deadline is just around the corner (January 31 for most). 
Here are some key facts to remember about 1099's as we approach the new year.1)  Bank account activity needs to be entered and reconciled through December 31. So if you’re not caught up through November (or September if a quarterly A&Co client), you’ll want to get on that ASAP so that there’s only one month/quarter to do in January. NOTE: Checks dated in 2019 that don’t clear until 2020 still must be counted towards 2019! They’ll simply appear as an outstanding item on the bank reconciliation.2)  Anyone paid $600 or more for services OR rents OR potentially a combination of services and materials by cash, check, or bank wire/ACH/transfer (cumulative in the calendar year) require a 1099-MISC to be filed, unless the Form W-9 indicates otherwise…a little more on that later. Payments you made using your debit card, credit card, Pay…

Form W-9: Do I REALLY Need It?

Chances are as a small business owner you’ve heard of Form W-9...and if not, there’s good news – I’m about to tell you all about it 😉. Maybe you’ve been requested to provide it to a customer, or maybe I’ve asked you to get one for a contractor you’ve paid. But do you understand why you’re requesting this form (or why it’s being requested of you), and what its purpose is?
The Form W-9 essentially is an informational form that helps with Form 1099-MISC processing (that’s our primary focus here at least). The W-9 lists the person’s/company’s name, entity type, address, taxpayer identification number (either SSN or EIN), and signature certification. This gives all of the necessary information needed to file a Form 1099-MISC, other than the actual dollar amount paid to the person/company during the year (which should be available in your accounting records). It also certifies that the person/business is not subject to backup withholding, which essentially means that you as the payer woul…

Does Your Business Need to Charge Out of State Customers Sales Tax?

“Nexus” determines whether your business must collect and remit sales tax in another state.If you have nexus, you must collect.Nexus is a Latin word meaning connection.Sales tax nexus occurs when your business has some kind of connection to a state.Until this connection is established a state cannot require you to register and collect sales taxes.

So, what creates nexus?The answer to that question changed last year in a historic landmark case when the Supreme Court in South Dakota v. Wayfair overturned a 1992 court case Quill v. North Dakota. If you’re not familiar with this case then you need to keep reading, because it will have a huge impact on business owners.
What was the South Dakota v. Wayfair case all about? Before the Wayfair decision in June 2018, Quill served as the precedent for sales tax nexus. Under Quill, businesses had to have a physical presence (e.g., office, store, warehouse, employees, independent contractors, inventory storage, etc.) in the state before the state …

How to Deduct Home Office Expenses in an S Corporation

A large number of small S corporations use the home office of one of the shareholders (or the sole shareholder) as their principal business office, which is used exclusively and regularly for corporation business.

The costs related to this home office can be handled for tax purposes in a number of different ways, but generally the easiest method and the one that results in the most favorable tax treatment for the corporation/shareholder is for the corporation to reimburse the shareholder under an accountable expense reimbursement plan. Under this arrangement, the corporation will reimburse the shareholder for the home office costs on a monthly or other agreed upon basis. The amount the corporation pays is a deductible business expense, and, because the reimbursement is under an accountable plan, the reimbursement is not included in the taxable income of the shareholder.

As an accountable expense reimbursement, the shareholder must keep track of the actual expenses of maintaining the o…

1099-Misc Filing Requirements and Penalties for 2018

It’s a new year and that means 1099 season is here!  I hope you have been collecting those W-9 forms from people because the IRS is cracking down on 1099 reporting.   
If you don’t have W-9 forms signed and filled out, I suggest you start working on collecting those NOW...otherwise be prepared for possible penalties this year.

What’s New

Beginning last year, the IRS changed the deadline for filing government copies of 1099-Misc forms to January 31st.  In case you weren’t aware the OLD deadline for most was February 28th (March 31st if filing electronically).  That means 1099 preparers have one to two less months to get the information required to prepare these forms this year.
The IRS has always required the filing of 1099-Misc forms and there have always been penalties for not filing and filing late.  What’s new is that beginning last year the IRS started enforcing those penalties.  A few of our clients who self-prepare their 1099’s received large penalties for late filing last year; mos…