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The Importance and Role of 1099 IRS Forms

The IRS features innumerable forms which are found cumbersome by most taxpayers while filing the tax returns. This agony can well be lessened by having a very clear understanding of these forms and the correct procedure of filling these forms. 1099 IRS forms are one of the most significant IRS tax forms covering different types of income apart from salaries, guidelines and wages. Tax payers are not required to submit the copies of these forms with their Form 1040 while filing them on paper. Tax payers get the flexibility of filing form 1099 online and this is something that has come as a great benefit for the tax payers.

Different Types of Form 1099

There are different types of 1099 IRS forms among which the most common ones are forms 1099-INT, SA-1099 and 1099-R. Apart from these three common 1099 forms, there is the form 1099-MISC which is used by various businesses for making payments that do not fall under other categories of form 1099.

Form 1099-INT or Interest Income

This 1099-INT form is generally issued by the brokerage or the banks to the customers possessing mutual fund accounts. These are issued to tax payers who accumulate more than 10% interest in all the accounts combined during a financial year.

Form 1099-R or Distribution from Retirement Accounts

This form highlights any money which might have been moved by a particular tax payer. It is generally triggered by certain regular activities including moving money from traditional IRS to Roth IRA. This form can also be triggered with the simple withdrawing post retirement.

SSA-1099 or Social Security Benefits

This form is generally issued to retirees when they start receiving Social Security benefits. This form is issued annually and it details the amount send to an individual; the amount the retiree was required to repay from the previous year and the amount of the federal taxes withheld. This form is quite important because it shows certain benefits that might be taxable especially if the benefits have income from various sources. The other forms falling into the category of IRS 1099 forms include 1099-A, 1099-B, 1099-C, 1099-CAP, 1099-LTC, RRB-1099, RRB-1099R, W-2G, 1099-OID, 1099-PATR, 1099-S, 1042-S, 1099-Q, 1099-H, SSA-1042S, 1099-G, RRB-1042S and 1099-SA. It is to be noted that all these forms can easily Efile 1099 online without going through any hassle.

Online Filing of Form 1099

It is easy to file form 1099 online by taking the services of some of the best service providers in this field. There are some dependable sources that can always be of good help in filing 1099 forms online and their services should always be hired in order to save oneself from any kind of problem while filing them in person.

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Everything You Need to Know About Form 7004

IRS Form 7004 is called as Application for Automatic Extension of time to file certain Business Income Tax Information, and Other Returns. From the very name of this form, it can rightly be concluded that this form is best suited for all those business entities trying to file their five or six month’s federal tax extension legitimately. Some points that comprehensively explain everything important about Form 7004 have been detailed below:

Purpose

Extension is permitted and even held valid if the criteria mentioned below are met properly:

• Form 7004 solely needs to be filled properly without any scope of interpretation and even without ambiguity.
• Tax estimation, if applicable, needs to be perfect or correct.
• It is mandatory to fill the form within the due dates. Along with this, the tax that is owed should be paid in the correct manner.

Verifying the Extension Period

It is important for the tax payers to check the Line number and the Part number they fall under for judging their time eligibility.

• 6-month Extension: A type of return is eligible for a 6 month extension automatically if it matches with the ones highlighted in Part II Line 1b.
• 5-month Extension: A type of return is eligible for a 5 month extension if it matches with part I Line 1a of form 7004.
• It is also necessary for the tax payers to scrutinize or go through Lines 2 and 4 prior to choosing their specific extension period.

Exceptions

tax filingLines 2 and 4 of the IRS form 7004 generally highlight the exceptions which are applicable. These exceptions include:

• Line 2: This is for the foreign corporations not having a business place or an office in the entire United States.
• Line 4: Line 4 is applicable for selected domestic and foreign partnerships and corporations.

Extension Termination

Internal Revenue Service or the IRS possesses the right of cancelling the extension on valid grounds. A notice of termination will genuinely be mailed to an entity or an individual 10 days before the termination date.

Filling Up Form 7004

Form 7004 can either be filled offline or online. Online filling can easily be carried out at the official website of the IRS. Online form filling on IRS’s website is completely free. However, the form filling can also be carried out manually. This can be done by getting the form from one of IRS’s local outposts.

Tax payers also have the flexibility of getting the form printed from IRS website. Once the manual or online filling of the form is complete, it needs to be mailed to an IRS authority. Remember, that there is no signature needed in the form. The applicant is not notified by the IRS in case his or her application is approved. However, the IRS informs an applicant if his or her application has been rejected.

The Main Purpose of IRS Form 1099

There are different types of IRS Form 1099. To be very precise, there are a total of 16 and all these form 1099 varieties serve one general purpose- to provide information to the Internal Revenue Service about earnings from non-employment-related mediums. It is mandatory for the payers of these income types to send a copy of the form 1099 to IRS and a copy to the recipient who makes the payments. The recipient is actually the taxpayer. The payers must also send one copy of the form to the state tax authority of the taxpayer and even keep a copy for their own reference.

A Targeted Tax Device

Very similar to the other types of tax forms, the IRS Form 1099 encourages people towards reporting all their earnings enabling the IRS to collect full taxes that it owes to the taxpayers. According to the IRS, form 1099 enables the IRS to improve collections and increase intended compliance. This is the main reason why form 1099 is called information return technically. Form 1099 serves as an effective device that helps the IRS in collecting taxes. IRS compares the reported income of the taxpayers on form 1040 alongside the information reported on 1099s and various other forms like the W-2. The W-2 form is used by employers for reporting the salaries and the wages that they pay to their employees. The computer checks carried out by the IRS enable the organization to collect taxes on un-reported income.

Factors to Consider when Dealing with Form 1099

There are some important factors that you need to consider when dealing with IRS Form 1099 and they are as follows:

Errors should be Reported Immediately

Do not just keep receiving the 1099s. You must check the forms for errors and if you find any errors, report them immediately. The payer must instantly be informed of any error in the form because if there is time, the payer might be able to correct the error prior to sending the form to the IRS. In case, the incorrect form has already been dispatched by the payer, you must request the payer to send a corrected form.

Every 1099 Must be Reported

IRS’s matching is the key to all 1099s. The Social Security Number of the payee and the Employer Identification Number of the payer is included in each and every form 1099. The IRS compares and even matches the 1099s with the tax return of the payee. Thus, you need to keep in mind that you cannot ignore form 1099 if you receive it because the IRS will not do so.

IRS Notices

In case, reporting form 1099, goes completely out of your mind, the IRS will probably send a computer-generated letter to your address billing you for taxes. In circumstances where you find the letter to be absolutely correct, you need to pay your tax returns.

Request a Credit From IRS For Form 2290

Form 2290 for the IRS needs to be filed for all people who own trucks that weighs over 55000 pounds and use the US highways for at least 5000 miles per year. The IRS 2290 tax needs to be filed from 1st July every year. The United States of America has one of the most complex highways in the world. The roads are constantly under the pressure of heavy trucks as well as bad weather. These factors lead to a lot of damage and repairs become necessary. The form 2290 exists for this very reason; the tax money is transferred to service contractors who deal with repairs throughout the year. Failing to file the tax only leads to more complications and hefty fines.

Requesting credit from the IRS

You may request a credit from the IRS against your form 2290 that you have filed for the following reasons. For vehicles that were destroyed, sold or stolen before June 1. A credit can be claimed for the tax paid against the next Form 2290. To claim this you need to fill Form 8849 of the IRS. For vehicles that were used for less than 5,000 miles during the taxable period a credit of tax can be paid from the first Form 2290 in the next tax window. A complete refund of money cannot be claimed, all taxes can only be forwarded to the subsequent tax periods. Keep a receipt of the form 8849 with your driver at all times.

A credit cannot be claimed before the end of the Form 2290 tax period. If you are claiming credit in the month of August in 2015, you will have to wait until 1st July 2016 when the next tax window opens to initiate your claim. However, the form must be filled before June 30, 2016 if you have any claims.

Do note that you should file for credit only if you genuinely are eligible to receive credit due to valid reasons. Many people try to bend the laws to evade taxes, and if you are caught you may be held responsible leading to fines or imprisonment or both. File the paperwork properly and keep everything organized.

There are far easier ways to initiate claims against the IRS. One of them is to use the help of online service providers who take care of all IRS 2290 paperwork and ensure all claims for your credit are placed on time. You will not have to worry about forgetting dates or missing any paperwork as these agencies take complete responsibility and you can rest assured that you will get your credit forwarded to the next tax window. Requesting credit from the IRS is a long process and an online service provider saves you from all the hard work and paperwork. Every single procedure can be completed directly at home, saving the time and effort needed to go to the IRS office and standing in a queue for hours just to get your credit claim. E-file Your 2290 Form Now http://www.Etax2290.com

Independent Contractors Often Overlook Number Of Deductions As Applicable In Form 1099 And It’s For Their Look Of These Tips For Tax-Savings

One can save on medical expenses cost which is dollar to dollar deductions. This can add up quickly to save money for independent contractors when they make medical expenses out of pocket.

Independent contractors can deduct a standard mileage rate for every time when they used their car towards business. But it is always safe to keep a detailed log in their car to justify deductions in case of an audit.

E-file Your 1099 Form Through our website Etax1099.com – IRS Approved E-filer

If independent contractors or entrepreneurs have their home as office then they are allowed to deduct a portion of the rent or mortgage. The amount is based on the percentage of their home that is a dedicated home office size of space and other rules will apply. The deduction doesn’t end with what one pay for the space, however, they can also deduct a percentage of the utilities and homeowner’s or renter’s insurance.

Src: Flickr

With regard to business gifts, independent contractors are allowed to spend $25 towards presenting a bouquet of flowers towards client’s visits and are absolutely and totally deductible. In case of entertaining with a bottle of scotch at $100 for the clients or new business prospects including the fellow contractors and entrepreneurs, $25 is deductible. One should have bills to justify accounts and be preserved during an audit.

Concerning Business travels, Independent contractors have upper hand in claiming most of their deductions during their business travel. They can deduct most of the costs made towards business cause. However the personal expenditures of buying things for their homes during business visit will be disallowed and there are more such exceptions. Tax professional can guide Independent contractors to the right way of tax deductions especially for frequent business travels.

Independent contractors and entrepreneurs, Have all your bills intact for all your exact deductions before you e-file your IRS form 1099 through IRS certified service partner http://www.Etax1099.com

The Schedule Of 1099-K is the Rule of IRS as a Tool to Improve Voluntary Tax Compliance as Mandatory

The year 2012 saw a new schedule through the rule of IRS in the form of 1099-K where in to improve voluntary tax compliance by business taxpayers as mandatory. The business entity like a payment settlement entity (PSE), a domestic or foreign organization, that acts as a bank and operates under the contractual obligation to make payments to participating payees who do not conduct transactions directly with payers. A PSE must file Form 1099-K for payments to the payee made by payment card transactions or in settlement of third-party payment networks. In the case of third-party entities, gross payments to the payee must exceed $20,000 and there must be more than 200 such transactions during the tax year.

For purposes of the form, a reportable payment transaction is a transaction in which a payment card (such as a credit card or gift card, debit card, prepaid telephone cards etc.) is accepted as payment or any transaction that is settled through a third party payment network like PayPal. It does not include ATM withdrawals, cash advances against a credit card, a check issued in connection with a payment card, or , any transaction in which a payment card is accepted as payment by a merchant or other payee who is related to the issuer of the card. Form 1099-K allows the U.S. government to track the rapid growth of e-commerce as a means of conducting business and ensuring that those who receive income from online transactions are reporting it and meeting their tax obligations.

form 1099k tax

Img Src: Flickr

More simply, the 1099-K allows the government to monitor sales of goods and services through payment cards and websites like PayPal and Amazon. It also provides income verification to the businesses that use either payment cards or third parties to obtain money from sales. The issuing of this form is also an opportunity for businesses to reconcile any discrepancies noted between their total gross receipts reported and the 1099-K information they receive.

In simple terms, taxpayers who have a credit card merchant account, PayPal account or similar account and otherwise meet the criteria will receive form 1099-K from their service provider. That would include professionals like lawyers and architects who accept online or credit card payments for services, freelancers compensated via PayPal and Etsy sellers, affiliates, eBay merchants and other small businesses who accept credit cards, debit card or PayPal as payment.

This form 1099-K needs to be filed by merchants by January 31 but where-as the Payment Settlement Entity must file to the IRS by April 1 electronically or by February 28 via paper file.

Visit http://www.Etax1099.com and Register Here To File Your Form 1099.

2014-15 – New Form 1099-Misc From IRS With Few Important Changes For This Tax Season

For the tax year 2014, IRS has released a new form for 1099-MISC with few important changes. This will be the latest version with notable changes.

The first change is that with regard to the Foreign Account Tax Compliance Act (FATCA). The updated form includes a new checkbox for foreign financial institutions (FFIs) and U.S. payers to indicate they are fulfilling their chapter 4 filing requirements as whether they have reported to tax form 1099 in previous year or not and if required to be checked up for this current year and the check box need to be ticked up accordingly.

Src: Flickr

IRS instructions as stated as beginning in 2014, an FFI with a chapter 4 requirement to report a U.S. account maintained by the FFI that is held by a specified U.S. person may satisfy this requirement by reporting on Form(s) 1099 under the election described in Regulations section 1.1471-4(d)(5)(i)(A) and thus confirm the updated form instructions for tax-payers to take note of, which the IRS published in October with new instructions for Forms 1099-OID- Original Issue Discount and 1099-INT- Interest Income.

This is only for information about the form 1099 instruction changes for this current season and more details to explain the features of changes for tax payer understanding will come up in other blogs.

Additionally, the latest 1099-MISC form designates certain Medicaid waiver payments as excludable income as difficulty-of-care payments. Payments to foster care providers are excluded if the payments are for fewer than 11 children who are younger than 19 and for fewer than six adults with age 19 or older.

Please visit http://www.Etax1099.com for more information for the updated form and to e-file your tax form 1099-MISC, 1099-INT, and 1099-OID respectively as per requirements.

FAQs about Filing a 1099 Online

So it’s tax time and you’re going through all the returns you’ve received and come across a form titled 1099 form. If you’ve filed a 1099 previously then you probably know exactly what you should do again but many people come across a 1099 and wonder “What am I supposed to do with this?” Here are a few frequently asked questions that many people ask about filing their 1099 electronically.

What Is a 1099 Form For?

Form 1099 is a tax form that is used to report any income that you receive that you need to report on your tax return. There many different kinds of 1099 forms and you can file your form your file online as well as by mail.

What Should I Do with my 1099 Form?

When you prepare your taxes you have to report all of the taxable income that you received during the previous tax year. 1099 forms cover the income you receive not covered on your W-2. If you have any income reported on your 1099 you will need to use form 1040 in order to get your return.

How Do I efile my 1099?

As one of the easiest ways to prepare a tax return filing your 1099 form online means that you won’t have to worry about what forms you have to fill out and where the number goes on your 1099. The best software will do all the math and double check your information to make sure that you are entering the correct information.

What Should I do if I Should have Received a 1099 but Didn’t?

If you know you should have received a 1099 from your business but have yet to receive it then you may still be able to file your paperwork using the form 4852 as a substitute.

What Types of 1099 Forms are There?

There are various types of 1099 forms that are used to report the different kinds of income you receive. Here are the types of 1099 forms available:

  • 1099-R – Special Tax Treatment
  • 1099-G – Unemployment and Governement Benefits
  • 1099-MISC – Miscellaneous Income
  • 1099-SSA – Social Security
  • 1099-DIV – Dividend Income
  • 1099-INT – Interest Earned
  • 1099-B – Stock Transactions and Sale of Assets
  • Form 4852 – Substitute for W2 Form

What If I am Not Going to Get a 1099?
If you were paid such a small amount that your employer is not required to send you a 1099 you are still required to report any income you earned that was taxable. The minimum amount you are required to earn before being able to be sent a 1099 as an independent contractor is $600. If you made less than that your payer does not have to send you a 1099 but you still have to report that as your self-employment income.

What If I Don’t Receive a 1099 on Time?
If you did not receive your 1099 form by February 15 then you should contact the IRS where you will be given more information about what to do and possibly be able to still efile your return using a substitute form.

Visit Etax1099.com to efile your form 1099

FMCSA Regulations for Truckers And Drivers On What Not To Do Towards Safe Passage On National Highways Alongside IRS Regulations For Form 2290

FMCSA has brought out very useful and important basic regulations for truckers, fleet-owners especially for drivers to regulate the smooth running and moving of the loaded cargo and the freights that trucks carry for a safe passage through USA national highways. It is better to know what one should not do with regard to the regulations.

Truck drivers should not hit anything on the road in order to avoid any crash which will be shown on crash indicator installed. The number of crashes indicates the number of scores which will be unhealthy for the trucking industry as FMCSA would rate them as potential danger to human lives and property and accordingly there are structured legal action against drivers and the truckers.

English: Graph outlining the relationship between number of hours driving and incidents of crashes involving truck drivers in the United States. All hours over 12 are combined, due to the low number of sample data. (Photo credit:Wikipedia)

Then the cargo-related affairs would be judged on what not to do viz.,unsafe handling of hazardous materials, poorly managing secured loads, dropped or spilled cargo, failure to prevent shifting loads.

The vehicle maintenance is considered important as it is the responsibility of the trucker and the driver and so one should not leave checking the vehicle parts starting from bad tires to inoperative defroster and always should not fail to check the malfunctions, worn or other unsafe equipments before initiating any business schedule. Failing the regulation is violation and may be reported as poor performance that may halt the trucking business.

The straight-forward and simple CSA basic regulation is not to drive under the influence of drug substances and alcohol. The violation is considered very serious and may lead truckers to be fined by legal authorities of the intra-states as well as with federal laws and drivers to be jailed after proper blood testing to find the presence of drugs or alcohol.

Driver’s health is considered most important as they have to drive the truck for the effective functioning of the truck-owners’ delivering goods and products as required. Therefore the HOS-hours of service should not be ignored as CSA program recommended 70 hours in a weekly basis with two rest periods between 1am and 5am should be met and this will go a long way for the drivers to protect oneself against illnesses of both short term and long term including fatigued driving.

Follow the regulations of FMCSA for safe and successful business passage along with follow the IRS instructions for e-filing HVUT form 2290 for this tax year 2013-2014 by 1st July 2014 and every year on 1st July if filing annually unless if it is Saturday, Sunday or other public holidays but must file on the subsequent business working day through the IRS certified tax-partner and service providerhttp://www.Etaxform2290.com

Beach Sunset Panorama

Off Topic 🙂

Don Charisma

Some very nice sunsets over the past couple of weeks, everyday I different sight 😀

Six portrait shots coupled together in Photoshop.

Enjoy 🙂

DonCharisma.org-Beach-Sunset-Pano-PS-3x2L

Taken in Thailand (c) Don Charisma



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Get information on all IRS related tax forms like, form 2290, form 1099, 4868, 990n and more. Get expert advice on efiling your tax through IRS approved e-filing service provider,

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