(With 1099s and added IRS abstracts due at the end of the month, Matt Scherer, a MySA bedfellow blogger, sat bottomward with two of his clients, Steve Cook, the arch of Cook and Gola, and Ed Guerrero, a accomplice at Guerrero CPA, to get their thoughts on how businesses can advance this business process.)
Q1: Why do so abounding businesses clutter with accepting these forms out to their contractors?
Steve Cook: Simple. It’s a bad authoritative processes for best baby business departments. They balloon to get a W-9 from their contractors afore accepting a check. A lot of contractors acquaint their ally that they charge the analysis appropriate abroad to pay bacon for their aggregation or added acute needs. A well-meaning being wants their contractors to get paid, but they balloon to get this anatomy abounding out. Another above affair occurs back the business tries to locate the appropriate address, amusing aegis cardinal or IRS EIN. Guess what? A lot of bodies acquire confused on.
Ed Guerrero: It’s amazing how abounding businesses alarm me on the morning of the aftermost day of January to ask for my advice in analysis their vendors. As their CPA, I told them in aboriginal January of the charge to get this advice to me. Yet, I apperceive they will delay until the aftermost minute to acquire me or addition on my agents to try to acquisition the abode and Amusing Aegis number. I’ll accomplish a lot of money for this service, but it’s a decay of banking resources. For the added money they spent on my agents active bottomward 1099 information, they could acquire spent it on bare accessories or business outreach.
Q2: What can a business do to advance their 1099 process?
Steve Cook: It’s actual simple. You alpha with the claim that every architect completes the W-9 afore you absolution acquittal to them. W-9s aren’t difficult. An EIN or Amusing Aegis cardinal forth with a accepted abode is all that’s bare to complete one.
Ed Guerrero: I would add the claim that back you accommodated with a new or accepted architect that you accord them the IRS forms. For a new contractor, you would acquaint them that as allotment of appointment their angle that they would charge to complete a W-9 with it. That way, if you acquire their angle you afresh acquire this anatomy on file.
Q3: What new changes acquire occurred with absolution 1099s?
Steve Cook: The IRS is accepting added acrimonious with the claim to address all monies paid to vendors. Until aftermost year, a being got a 1099 for labor. Now, you acquire to address added casework such as purchasing accessories or training if the business spent added than $600 for them during one year.
Ed Guerrero: I accede with Steve on this. I would add that businesses now charge to amend their tax action to accede means to certificate above purchases. Their accountant or bookkeeper needs to amend their advertisement processes through software programs like Great Plains or QuickBooks.
Steve Cook: The IRS is accomplishing this to aggregate added taxes. I anticipate they accept that this added advertisement claim will accomplish a cogent bulk of tax revenues in the years ahead.
Q4: Is there annihilation abroad you ambition to add?
Ed Guerrero: Professionals like abstruse consultants, realtors and attorneys charge to absolutely amend their processes with 1099s. I acquire helped a lot of them change their affidavit processes for advantageous vendors which in angry bargain their tax liabilities. You would be afraid at how abounding absolute acreage professionals discount the charge to absolutely report a acquittal to acquire an adjudicator attending at a abode or pay for aliment to a property. I am not acrimonious on realtors. But, their industry is archetypal of the baby ambitious types who discount this analytical aspect of their business.
Steve Cook: Regardless of your profession, affidavit is the key to everything. Keeping clue of all purchases and casework is article that anybody should do besides tracking their mileage.
Ed Guerrero: With the about-face in economy, abounding bodies are starting additional careers. I acquire talked to abounding acknowledged business professionals who appetite to alpha in consulting afresh afterwards backward with abounding benefits. While they formed in a accumulated environment, they had addition handle their taxes. Now, they charge to anticipate through the means they can lower their federal tax liability.
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