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.
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.
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.
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.
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.
The annual tax statement that you’re a given by your bank and saving institution that shows how much you were paid in interest from your account during the past income tax year. This for is call Form 1099-INT. Interest reported can be from savings accounts, interest-bearing checking accounts, and US Savings bonds. This form will also document the other income tax related items such as early withdraw penalties and federal tax withheld. Your financial institution will report all of this information to the IRS when they send you the tax Form 1099-INT
How to Get Your Form 1099-INT?
On January 1st of each calendar year all financial institutions will complete and post your copy of your 1099-INT to their website on your banks online banking account portal. You will need to log on to your online banking to download, review, and print the form for your records. Otherwise you will have to use your banks online portal to let them know you want to receive a paper copy in the mail. Your bank should keep the past five years of 1099-INT forms on their website for you. You will not receive a 1099-INT if the interest you accrued during the income tax year was less than $10. Also, you will need to sign up for your banks electronic statements to receive the form. If you do not use online banking with your financial institution then you will receive a copy of your current 1099-INT to file with your taxes by January 31st.
Thing You Need to Know
If you are a joint account holder, the 1099-INT will be in the primary account holders name to file for income taxes. If after reviewing your forms you find that any of your information is not correct, you will need to call your bank to have this fix the form and resubmit it to the IRS. Also, if you feel you should receive the 1099-INT form but didn’t, you will have to contact a representative at your bank to find out why you did not receive your tax form. You must a United States citizen to be eligible to file the 1099-INT form. Dividends paid out are not included on the 1099-INT form. For that you will receive a separate form called a 1099-DIV that will need to be filed with your income taxes as well. If you are not a US citizen then you will have to contact the IRS to find out how to file taxes.
Income tax time can be very confusing but there are resources that can help ease the stress. Form 1099-INT is used when it is time to file income taxes and the total amount of interest you have been paid will be added to your gross income for the current tax year. Be sure that you have all of your tax documents before your start your income tax filing so that your taxes will be complete and there will be no problems after all of your forms have been submitted.