Archive for February, 2010

1099 Tax Reporting – How Responsible AM I?

Posted on Feb 28, 2010 in Uncategorized No Comments »

Question
January got the best of us and we’re now just in the process of finalizing and issuing our 1099s.
At least we’re not late in filing with the IRS (due February 28th).
In our efforts to collect names, addresses and social security numbers, one of our contractors said she wasn’t aware that she would be getting one [...]

Colorado Dept of Revenue: On Line or Off?

Posted on Feb 25, 2010 in Uncategorized No Comments »

It has come to my attention that unfortunately the Colorado Dept of Revenue is still experiencing a number of glitches since they updated their computer system last October.
Back in November a number of my clients received  a nonfiler notification letter regarding online wage withholding tax filing for Q3:  July–September 2009.
I had hoped that the State would [...]

Always Read the Instructions. Carefully!

Posted on Feb 21, 2010 in Uncategorized No Comments »

Question:
How do I Best Report a Large Increase in Income FAQ?
My income is going to increase dramatically this year.
I think I’m going to do a 529 with some of my windfall.  At least that gets me out of the state tax.  Do you have any other advice?
Answer:  The 529 College Savings Plan Contribution [...]

Waiting for a 1099 to come in

Posted on Feb 20, 2010 in Uncategorized No Comments »

Question: Any reason why I haven’t received my 1099 for my investment account?
Answer: More and more companies are not mailing out tax forms and instead, account holders must go online to retrieve the appropriate tax information necessary to prepare a complete and accurate tax return. This is ostensibly an effort to be ‘green’ .
While this [...]

Two Companies – One New Hire

Posted on Feb 15, 2010 in Uncategorized No Comments »

Question:
We want to hire one person to work full-time for our ancillary company that is set up as a separate limited liability company.  Do we run this payroll through our primary operating company or do we instead set up this person as an employee of our ancillary company?
Answer:
Of course “it depends”.
If the individual will work [...]

Statutory Employee? What’s That?

Posted on Feb 09, 2010 in Uncategorized No Comments »

Question – An employee of ours wonders if he can be treated as a statutory employee.  What on earth is that?
Answer: The term statutory employee includes the following:

Life insurance agent
Agent-driver or commission-driver
Salesperson who solicits orders from other business establishments on behalf of a principal
Home-based worker performing piece work on behalf of a production or manufacturing [...]

What paperwork needs to be done when closing a business?

Posted on Feb 05, 2010 in Uncategorized No Comments »

Question: I closed my business, what governmental agencies do I have to contact and inform them of my unfortunate business demise?
Answer: My sympathy, first and foremost.
Then the answer is it could be a few; it could be several.
The most important and often overlooked is formally dissolving your legal enterprise with the Colorado Secretary of State. This [...]

Always Be Prepared for an Audit. Here are the Key Steps:

Posted on Feb 02, 2010 in Uncategorized No Comments »

Although technology has created an increasingly paperless environment, an audit, whether initiated by the Internal Revenue Service, state, or local governmental agency, still requires a clear paper trail.
For a typical IRS examination, 14 monthly bank statements must be furnished (January through December of the audited year, December of the prior year and January of the [...]