Theresa Arndt, CPA

Another year has flown by and is almost in the books. With that means the Form 1099-NEC and 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 2023 that don’t clear until 2024 still must be counted towards 2023! 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 us

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

“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

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 th