Is Your Business Ready For The New 1099 Reporting Requirements?

Does Your Organization Pay Any Single Vendor $600 or More?

In March 2010, President Obama signed into law a new comprehensive health care reform law. The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (Health Care Act) focus on expanding health care coverage and controlling the related costs. In an effort to pay for the Health Care Act and curb unreported or under-reported revenues, the Health Care Act contains critical provisions that change information reporting requirements. These changes could drastically increase the paperwork burden for small businesses, including not-for-profit organizations.

Does your organization already have everyone’s taxpayer identification number on file? Is your organization’s accounting system and accounting staff capable of preparing dozens of Form 1099s? When and where do you start?

In general, all persona engaged in a trade or business must file with IRS An information return for payments made to another persona in the course of trade or business that constitute fixed or determinable income of $600 or more in the tax year. The payer is also required to provide the payment recipient with an annual statement showing the aggregate payments made and contact information for the payer.

Word is that this includes merchandise used in your business, for example a computer purchased from Costco would require the business owner to collect the necessary information from Costco and provide them with a Form 1099. Landlords will have to provide a 1099 to anyone performing work on their rental properties, and if you purchase an aggregate of $600 or more in paper, pens and toner cartridges from Office Depot or Staples, guess what?? A 1099 is required.

NOT CONCERNED WITH FILING?.... THINK AGAIN

To aid in the compliance of these new requirements, the IRS double the penalties for failure to correctly file information returns. The new penalties range from $30 to $100 per form 1099 for inadvertently failing to file and a minimum penalty of $250 per Form 1099 for intentional failure. If an organization fails to obtain a payee’s taxpayer identification number, they may have to begin backup federal income tax withholding at a 28% rate on payments.

REPEAL – UNCERTAIN

Explaining the administrative nightmare to lawmakers has fallen on deaf ears. Amendments to the Health Care Act that would have repealed the increased Form 1099 requirements failed to pass in the Senate in September and again in November 2010. Since the fate of the provisions are so uncertain, organizations should be prepared to comply with the new Form 1099 requirements thus avoiding a stressful nightmare at the end of 2011 scrambling to get everything in place.

If you have questions or need assistance with compliance please contact me for a free one hour consultation.


http://www.checkedandbalancedaccounting.com/

New Ideas to Make Money in This Struggling Economy

Many small business owners are struggling to keep their heads above water in today's economy. Even though large corporations are faring reasonably well, small businesses are suffering in the downturn from which America is just beginning to recover. Recent legislation provides hundreds of millions of dollars for Small Business Administration loan guarantees, but entrepreneurs can't plan to expand unless their revenues recover.

To that end, what can a small business owner do to avoid seeing red in the reports generated by his financial software? Three key tactics can help entrepreneurs make it through today's downturn and come out stronger on the other side.

Tactic 1: Be Mindful of Appearance

Small business owners offer either a product or service, and keeping appearances in mind can benefit both types of owner. Companies that provide products should be most concerned with the image that their product conveys. It's likely that a product provider is already cognizant of his goods' attributes and has optimized their appeal.

A small business owner can always focus on his own appearance, however. A financial planner (for example) who wears casual clothes may want to seem relaxed and laid-back, and in better times that may have been a workable branding strategy. But people are scared; they want an authoritative expert to help them with their finances. Suits or jackets are more appropriate, and sartorial trends have been moving this way in the corporate world, too.

Retailers are another group of small business owners who can benefit from increased attention to appearance. Stores should be clean and inviting; products should be logically displayed. Now is a good time to make long-delayed cosmetic upgrades, as long as they don't break the bank: contractors are widely available and ready to do business.

Tactic 2: Expand a Business' Presence

Low-margin small businesses have used fairs and markets as a revenue source for decades. It's unlikely that organic farming would be viable without farmers' markets. But a small business owner doesn't need to be a purveyor of candlesticks or vegetables to have a presence at farmers' markets and other community gatherings.

A restaurateur can showcase his cooking at a holiday event. An office supply store owner can sell products at a market. Private practice lawyers or other service providers can have a presence at community events; handing out business cards or promotional items can lead to increased revenue in the future.

Small businesses are a popular media topic at the moment. Business owners can contact local reporters to express interest in interviewing for a future story; if the reporter agrees, free publicity is a guaranteed result.

Yet another way to expand brand awareness and earn goodwill is to offer seminars to community groups. Many local colleges offer small business courses; contacting the schools to see if they need another speaker or panelist can lead to raised awareness of a business within the community.

Tactic 3: Look for Synergism on the Community Level


It's likely that an entrepreneur's community has many small businesses. Chambers of commerce hold networking events, as do some business owners themselves. An entrepreneur shouldn't miss an opportunity to network locally, especially with the economy in its current state.

Networking can lead to both more business and better business opportunities. By discussing a company's activities or prospects with other small business owners, the chances of creating new revenue streams are increased. A coffee shop proprietor may find that he can collaborate with an art dealer to hang artwork for sale in the coffee shop. Alternately, the art gallery could use the coffee shop for catering services at an opening.


Similarly, a calligrapher can work with the owner of a stationery shop to create personalized paper goods. A bait-and-tackle expert can pursue collaboration with the proprietor of a marina to offer fishing supplies to boaters.

Synergistic opportunities are endless, but, as they say, it takes two to tango. Unless a small business owner puts himself out there and appears willing to collaborate with fellow business owners, he cannot expect to see revenue growth via synergy.


In Conclusion:


America is recovering from the worst recession since the 1930s, and many small businesses are barely scraping by. Not every small business can survive today's economic situation, but creative and resourceful small business owners significantly improve their firms' chances.


If desperate times call for desperate measures, the state of the economy calls for unconventional measures. The economy is projected to improve in 2010 - Dean Maki, Barclays Capital's historically accurate forecaster, expects 3.5 percent growth - but until consumer spending rebounds, businesses large and small will have to think unconventionally.

When is it time to hire a Bookkeeper?

Most likely, you started your small business because you enjoy the challenges of being an entrepreneur. You are devoted to your company, your employees and your clients. You're on top of the world and the future is bright. There's nothing you haven't thought of and nothing that could get you down, except…

OH, WAIT! BOOKKEEPING!

1.You loathe the thought of entering receipts into a financial system or software program.



2.You spend too many hours working late in the office tackling bookkeeping issues.


3.Your frustration level grows higher each time you work on your books.


4.At tax time, you stumble to get your paperwork together for your accountant or CPA.


If you are spending more than a few hours a month managing your paperwork, payroll, and taxes-- chances are you could benefit from the services of a professional bookkeeper.


If your small business has grown to the point where it is getting difficult for you to keep up with the paperwork, you don't have time for bookkeeping, or the budget to hire an in-house bookkeeper, an outside professional bookkeeping service may be just what you need.


Spend more of your valuable time running your business


Allow for more free time with friends and family


Or, whatever else you would rather be doing besides bookkeeping


If you are like most small business owners, you're lucky to find a receipt when you need it—for something purchased a month ago. And for most of us, unless you do bookkeeping for a living, you probably live with an overflowing receipt box that gets higher and higher until tax time arrives and maybe beyond.


Here's a question:On a daily or weekly basis, how much time does it take you to organize your receipts and bookkeeping? If you're finding it's taking way too much time away from making your business successful, then it's probably time to look for someone who can assist you with these tasks.




Sometimes it's better to free up your time for those things that are more important to you and vital to the success of your business.

Listen to your inner wisdom, and if/when the time is right and your budget will allow, hire someone to take off the pressure. Your peace of mind will be well worth it.How much time do you spend keeping track of:


Receipts, budgeting, invoices, bank accounts, payables, receivables, and payroll?

What about tax documents and the yearly hassle of filing your taxes?

Managing all of these little details can easily consume a great deal of your valuable time, and as you are well aware, time is money!

Maybe it's time to call for help!

checkedandbalanced.vpweb.com