2013 Tax Season
For our clients:
This tax packet includes information we need to begin working on your taxes:
If you are a new client with Sterling Tax Group, Inc. Please read and complete this new client packet prior to gathering your tax documents for us. It should be helpful and it includes some forms you and your spouse (if applicable) will need to read and sign in order for us to complete your tax return.
If you are a returning client with Sterling Tax Group, Inc. Please read and complete this client packet prior to gathering your tax documents for us. It should be helpful and it includes some forms you and your spouse (if applicable) will need to read and sign in order for us to complete your tax return.
1099 Information Reporting
If you are preparing 1099′s yourself here is a sample of what you need to send to IRS Sample 1099 completed Red forms, you can order your red forms from IRS free of charge and no delivery fee from their website IRS.gov here is the link to the order page http://www.irs.gov/Businesses/Online-Ordering-for-Information-Returns-and-Employer-Returns and you will need each of your vendors to complete an IRS form W-9 to gather their tax information.
Who gets a 1099-misc? You are required to send a 1099-misc form to anyone who provided $600 or more of services for your business during a calendar year, and was not your employee. Generally payments to corporations are not report-able; however you must report payments to corporations for the following: cancellation of debt, medical/health care payments, withheld federal income tax or foreign tax, payments in lieu of dividends and interest, acquisition or abandonment of property, payments of attorney’s fees and gross proceeds paid to attorneys, credits for clean renewable energy bonds, and fish purchases for cash.
You will need the service providers to fill out a form W-9, it will contain the information you need to file the form. The 1099’s are sent to the recipient (service provider), and the IRS. You will also need to keep a copy for your business records and tax deduction supporting documentation. If you do not file the 1099, you will be denied the deduction in event of an Audit of your tax return, and you may be fined a penalty for failure to file the required form.
What kinds of information reporting are there? Other forms you or your business may need to send out include: Payments of non-employee compensation (1099-Misc), Payments to a Foreign Person (1042-S), Dividends and Distributions (1099-D), Patronage Dividends (1099-PATR), Interest (1099-INT), Royalties (1099-Misc or 1099-S), Cancellation of Debt (1099-C), Acquisition or Abandonment of Secured Property (1099-A), Proceeds from Broker or Barter Exchange Transactions (1099-B), Mortgage Interest Statement (1098), Charitable Contributions of large items (1098-C), Student Loan Interest (1098-E), Tuition Statement (1098-T), Changes in Corporate Control and Structure (1099-CAP), Certain Government Payments (1099-G), Health Coverage Tax Credit (1099-H), Long Term Care and Accelerated Death Benefits (1099-LTC), and Original Issue Discount (1099-OID).
When to file: You must furnish recipients with these forms no later than January 31st, and they are due to IRS by February 28, of each year.
What if someone refuses to fill out form W-9 and will not give me their information? They are in violation of the law. DO NOT USE THEIR SERVICES UNTIL THEY GIVE YOU THEIR INFORMATION! Document your attempts to collect the information necessary for reporting. It is usually a good idea to collect a W-9 from everyone who provides you services when they begin a job with you. You may be required to withhold income taxes from them if they refuse to provide you with a form W-9.
Make sure you are not mis-classifying workers, if you are in control of what a worker does, you provide the tools, location and direction for completing tasks you may be an employer and they may be an employee rather than an independent contractor/subcontractor.
You may find more useful information from IRS at irs.gov, and Employment Development Department (EDD) if you are a California Employer. You may find that they are your employee rather than a vendor. Who is an employee?
Resources for Employers
- Employee Withholding Form W-4 should be updated annually
- An Form I-9 is required at the beginning of employment
Other internet resources for CA taxpayers:
- Pay your CA taxes, set up a payment plan or check on your balance due, as well as get forms at FTB.ca.gov
- Information on Sales Tax reporting and Use tax in CA can be found at The CA State Board of Equalization, BOE.ca.gov
Who is Sterling Tax Group, Inc.
Sterling Tax Group, Inc., a California corporation, provides a broad range of services.
- Representation for audit and collections
- Tax preparation for individuals, businesses, trusts and estates
- Business consultation
- Fiduciary accounting
- Payroll services
Our Mission: “To share and provide our knowledge, experience, and skills in the complex world of tax rules and regulations”