Category Archives: Start-Ups

Tax Tibits: Do I have to issue my landscaper and housekeeper a 1099?

1099 and the lawYou are required to issue a 1099 to anyone you pay $600 or more in the course of your trade or business who is not incorporated.

Typical payments requiring a 1099 include services performed by independent contractors, such as gardeners and housekeepers for your business, as well as rents your business pays.

Received a Payment and Other Reporting Situations

Per the IRS, if, as part of your trade or business, you received any of the following types of payments, you will have to file a specific form.

  • Payment of mortgage interest (including points) or reimbursements of overpaid interest from individuals (1098)
  • Sale or exchange of real estate (1099-S)
  • You are a broker and you sold a covered security belonging to your customer (1099-B)
  • You are an issuer of a security taking a specified corporate action that affects the cost basis of the securities held by others (Form 8937)
  • You released someone from paying a debt secured by property or someone abandoned property that was subject to the debt (1099-A) or otherwise forgave their debt to you (1099-C)
  • You made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment (1099-MISC)

Not Required to File Information Returns

You are not required to file information return(s) if any of the following situations apply:

  • You are not engaged in a trade or business.
  • You are engaged in a trade or business and
    • the payment was made to another business that is incorporated, or
    • the sum of all payments made to the person or unincorporated business is less than $600 in one tax year (unless the recipient is an attorney or law form, see specific instructions for 1099-MISC for further details).

If you need to issue a 1099, and haven’t, we can prepare the 1099 forms if you would like.  Just contact us. We can be reached at 619-589-8680.

We do more than just tax preparation at US-TaxLaws.com. We are your best source for professional tax preparation and/or financial consulting services. We give clients a total solution that can include:

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation
Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services
Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & Trusts, Estate Planning   Bookkeeping   Payroll

 

What Are The Top Six Home Office Deductions?

IRS Talks About Home Office Deductions

If you are one of our clients, you know how we handle your home office deductions.  But for those who aren’t our clients – yet – here are some tips from the IRS that you might find useful.

Issue Number:IRS Tax Tip 2015-42

If you use your home for business, you may be able to deduct expenses for the business use of your home. If you qualify you can claim the deduction whether you rent or own your home. If you qualify for the deduction you may use either the simplified method or the regular method to claim your deduction. Here are six tips that you should know about the home office deduction.

1.Regular and Exclusive Use. As a general rule, you must use a part of your home regularly and exclusively for business purposes. The part of your home used for business must also be:

  • Your principal place of business, or
  • A place where you meet clients or customers in the normal course of business, or
  • A separate structure not attached to your home. Examples could include a garage or a studio.

2.Simplified Option. If you use the simplified option, you multiply the allowable square footage of your office by a rate of $5. The maximum footage allowed is 300 square feet. This option will save you time because it simplifies how you figure and claim the deduction. It will also make it easier for you to keep records. This option does not change the criteria for who may claim a home office deduction.

3.Regular Method. If you use the regular method, the home office deduction includes certain costs that you paid for your home. For example, if you rent your home, part of the rent you paid may qualify. If you own your home, part of the mortgage interest, taxes and utilities you paid may qualify. The amount you can deduct usually depends on the percentage of your home used for business.

4.Deduction Limit. If your gross income from the business use of your home is less than your expenses, the deduction for some expenses may be limited.

5.Self-Employed. If you are self-employed and choose the regular method, use Form 8829, Expenses for Business Use of Your Home, to figure the amount you can deduct. You can claim your deduction using either method on Schedule C, Profit or Loss From Business. See the Schedule C instructions for how to report your deduction.

6.Employees. If you are an employee, you must meet additional rules to claim the deduction. For example, your business use must also be for the convenience of your employer. If you qualify, you claim the deduction on Schedule A, Itemized Deductions.

For more on this topic, see Publication 587, Business Use of Your Home. You can view, download and print IRS tax forms and publications on IRS.gov/forms anytime.

If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.

Additional IRS Resources:

US-TaxLaws is your best source for professional tax preparation and/or financial consulting services.  We make your tax dollars work for you. Find out how we can help you.  Give us a call at 619-589-8680. 

2015 Tax Dates

January 15, 2015

4th Quarter 2014 Estimated Tax Payment Due

April 15, 2015 

Individual Tax Returns Due for Tax Year 2014

Individual Tax Return Extension Form Due for Tax Year 2014

1st Quarter 2015 Estimated Tax Payment Due

Last Day to make a 2014 IRA Contribution

June 15, 2015

2nd Quarter 2015 Estimated Tax Payment Due

September 15, 2015

3rd Quarter 2015 Estimated Tax Payment Due

October 15, 2015

Extended Individual Tax Returns Due

Last Chance to Recharacterize 2014 Roth IRA Conversion

January 15, 2016

4th Quarter 2015 Estimated Tax Payment Due

 

2015 SCORE Workshops in San Diego

SCORE LogoContinuing Education for the entrepreneur, start-up and small business owner.  

Note: Fees apply for most workshops.
Click on linked titles below for additional information and to register.
Access their calendar here.

Starting a Restaurant – January 20, 2015 FREE 9:00 a.m. – 12:00 p.m. PST
(Poway, CA)
This workshop is a MUST if you are serious about owning and operating your own restaurant! These essential aspects of a restaurant project will be discussed: Concept Planning…

Tax Considerations for Small Businesses – January 21, 2015 FREE 9:00 a.m. – 11:00 a.m. PST (Downtown San Diego, CA) See Parking Notes Below.
There are several types of taxes that businesses must pay during the calendar year. Understanding each one of these tax liabilities, being certain to meet the time requirements (and save penalty…

Advanced LinkedIn Marketing Hands On Laptop Training – January 21, 2015
6:00 p.m. – 8:30 p.m. PST (San Diego, CA)
This is an intensive hands on workshop designed for business owners that want to take their LinkedIn presence to the next level. It’s a packed agenda including: Advanced Networking…

Bing Ads for Small Businesses – January 23, 2015 FREE 8:30 a.m. – 10:00 a.m. PST
(Fashion Valley San Diego, CA)
Bing Ads is a robust collection of tools and information you can use to place advertisements on the web. Bing Ads can help you: Connect with customers who are engaged and likely to spend more…

Business Plan B: Setting Goals and Telling the World – January 24, 2015
9:00 a.m. – 12:00 p.m. PST (Kearny Mesa, CA)
Having identified your target market and competitive advantage in the first session, this workshop helps you develop a mission statement, preliminary goals and a marketing plan.

Notes on Parking in Downtown San Diego

  • The SBA/SCORE office is located across India St. from the America Plaza Trolley stop and one block away from the Santa Fe Depot Train and Trolley Station.
  • Parking is available in our building (entrance is on Columbia Street)
    (Credit or Debit Only) $2.00 per/30 minutes – Maxium $24.00
    Early Bird Special $12 (In by 9AM – Out by 6PM) – All prices subject to change without notice.
  • Additional parking is available in the area at indoor and outdoor lots – prices vary.
  • All metered street parking is limited to the time designated on the meter (usually 2 hours.) You must move your car after the time is up. You cannot add money to the meter to extend your parking time.
  • Allow extra driving time as construction around building may cause traffic delays.

SCORE is a Resource Partner of the U.S. Small Business Administration

SCORE services are provided without regard to race, color, religion, gender, sexual orientation, national origin, age, disability, genetic information, marital status, amnesty, or status as a covered veteran in accordance with applicable federal, state and local laws. Persons with disabilities may request reasonable special accommodations with a two week advance notice. Contact: Jill Andrews, 550 West C Street, Suite 550, San Diego, CA 92101 or (619) 727-4885. The material in this email is based on work supported by the U.S. Small Business Administration under cooperative agreement #SBAHQ12 S-0001. Any opinions, findings and conclusions or recommendations expressed in this email are provided by SCORE and do not necessarily reflect the views of the SBA.

To find a SCORE Chapter near you visit: www.score.org or web search SCORE with your city or state.

Click here to find an SBA District Office near you.