Category Archives: File 1099

The Difference Between An Employee And A Contractor

The Difference Between An Employee And A Contractor

If you are running a business and you are looking to prepare important tax documents, you will run across and important question — does the person in question qualify as an employee of your company or a contractor? The difference will be crucial when it comes to how you pay your end of the taxes and what documents you need to file with the IRS. When it comes to hiring a contractor, you will need to file 1099s for contractors. If, however, someone is your employee, the process is entirely different.

Here at the Online File Taxes, we make it simple for you to file 1099s for contractors, freelancers, and others. Through our online platform, you can quickly fill out the necessary information, check out, and automatically e-file your 1099s with the IRS. Not only that, but your documents will also be saved in a convenient location where you can access the documents at any time. We also handle sending the 1099s to the appropriate contractors to simplify the process even further for you. Before you decide whether or not you should file a 1099 for a contractor, be sure they do in fact fall under this classification. Read on to learn more about the major differences between contractors and employees.

Considering The Control Over The Worker

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The first thing to think about when trying to determine if someone is your employee or simply a contractor is how much you control about their work. A contractor is someone who operates independently of your company and is simply hired for a specific task or time period. As such, you do not control the way they do their job. This includes that you cannot control what the worker does and how they perform their tasks.

This is in contrast to an employee who works for you directly and answers to you. With an employee, you can clearly dictate instructions on when, where, and how to work. Other examples that include what is called behavioral control include the following:

  • Dictating what type of tools they use
  • Giving instructions on specific supplies and services to purchase
  • Detailed guidelines on what work must be performed

Depending on the degree of control over these behavioral aspects, a worker will be classified as either a contractor or employee. The more control you retain over someone, the less likely it is that you can classify them as a contractor. Simply put, a contractor has much more independence and operates as if they were their own company outside of your business.

Factoring In The Financials And Benefits

Another determining factor between an employee and a contractor is how the financials are handled. There are numerous facets to what falls under this broad umbrella, but the basic idea is whether or not your business handles most of the costs of equipment and other up front investments or the worker does. If the worker is responsible for using their own tools or puts forth a large investment in equipment without reimbursement from your business, they are most likely a contractor. However, when you have an employee, you will be the one responsible for these costs.

Along the same vein, a contractor is independent which means they can seek out other work as well. While an employee might be contracted to only work for you, a contractor is allowed — in most cases — to continue to advertise, seek out business opportunities, or maintain a visible business location.

Also falling under the umbrella of financials is the way you are paying someone. An employee has a guaranteed wage, whether salary or hourly. They are paid at set intervals and have a constant flow of paychecks. An independent contractor, however, might be paid a flat fee for one project.

Defining The Type Of Relationship

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Finally, a large factor in determining whether the worker in question is a contractor or an employee will be found in the type of relationship between them and the business. Do you have a contract that includes employee-type benefits? For example, vacation pay or insurance coverage would be an indicator of an employee status. Conversely, an independent contractor will not receive these types of benefits and there might not be a long-term guarantee of work.

All of the above factors play a role in determining whether or not someone is a contractor or an employee of your company. In some cases, the lines may be fuzzy between the two and it can be hard to determine which is true. In these situations, it is wise to fill out a form with the IRS that helps determine the worker status.

The Importance Of Filing A 1099 For Contractors

If you do determine that someone you worked with over the past year was a contractor, you will need to file a 1099 with the IRS. Because taxation is handled differently depending on whether or not someone is your employee or contractor, it is critical that you figure this out early on. A contractor will be responsible for all their own taxes, whereas with an employee, there will be taxes you are required to pay. By filing the proper forms, you can ensure your company is not amiss during tax season.

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The good news is that through Online File Taxes, you can quickly and simply submit any 1099s for contractors that you need. Whether you have one form to fill out or hundreds, our platform is equipped to make the process as simple as possible. You can easily submit all the information needed, without printing off cumbersome amounts of paperwork. Once you check out, your forms will be e-filed with the IRS. We are an IRS approved provider, so you can rest assured that your 1099s will be filed accurately and quickly. Not only will we file your 1099s with the IRS right away, but we will also mail out the 1099s to the respective contractors. This takes away all the hassle for you and ensures that you get everything completed by the January deadline. The best part of all is that our services are affordable. Try our service out today and streamline the process of filing 1099s for contractors.

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Tips For Small Business Owners For The Upcoming Tax Season

Tips For Small Business Owners For The Upcoming Tax Season

If you are a small business owner, then odds are good you wear a million hats. Operating a small business requires hard work and a lot of focus. From ensuring day-to-day operations are running smoothly to handling big picture items, such as the future goals of your business, it is no easy feat to effectively manage your small business. One big task that many small business owners loathe but is a necessary evil is correctly filing taxes. For small business owners, tax season can be a flurry of activity and can begin to feel downright chaotic.

Before tax season is fully upon us, take the time to consider the following tips that will help you prepare. Here at OnlineFileTaxes.com, we make it easy to file 1099s through our online platform. Read on to find out how this, as well as our other tips and tricks, can make your life easier in the 2019 tax season.

Get Organized Early

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When it comes to filing taxes, the more organized you are, the better. Make sure that from the start you are keeping everything you will need organized. Do you find yourself simply throwing receipts and paperwork into a pile on your desk? Do you have a filing cabinet that is overflowing with papers that are haphazardly organized? Take the time to straighten out all your paperwork and set in place a system to keep things in order.

Due to the amount of paperwork you will undoubtedly have as a small business, it is wise to turn as much of your paperwork into digital documents as possible. Storing your information in a digital format will make it easier to stay organized and prevents you from drowning in a sea of papers. Make sure that you keep everything in an order that is simple for you to weed through later. For example, all your receipts should be kept in one location, sorted by date. If you have employed contractors, freelancers, or other non-employee workers, store all their information in one easy-to-access location. Whether you keep hard copies of everything on hand or you store things online, make sure your system is simple and easily navigable. By keeping your paperwork organized throughout the year, you can save yourself from a massive headache when tax season is in full swing.

Be Sure You Understand Your Responsibilities

Taxes for small business owners can be a confusing thing. There are a myriad of complexities surrounding what you need to file and what you will owe. If you are not an expert in taxes, take the time to learn more so you are confident that you know your responsibilities come tax season. Reach out to a local CPA to get advice or spend a day researching on your own. Create a list of questions you have or areas of confusion. Dig until you find the answers you need.

In many cities, local libraries will offer free tax services where you can meet one-on-one with a tax expert. Bring in a list of questions and find out everything you need to know long before tax season arrives. This will help you better prepare ahead of time and will prevent you from feeling at a complete loss when your taxes are due. By ensuring you understand your responsibilities, you can save yourself time and money in the long run.

Tackle Projects In Steps

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Filing taxes as a small business owner can feel like an overwhelming task. If you are staring at mounds of paperwork in your office and you realize you have a ton of research to do before you are equipped to file your taxes properly, take a deep breath and bite off small pieces of the project at a time. Instead of spending a whole day drowning in receipts, tax forms, and paperwork, block out small chunks of time each day for a week to handle one component of the project.

For example, one day you can spend a few hours organizing all your receipts. Another day you might spend doing research on local laws for filing taxes as a small business owner. By tackling the project in steps, the task will be less overwhelming and you will be less frazzled leading to fewer mistakes.

Streamline The Filing Process

The good news is that with the advent of technology, a lot of tasks that were once manual and time-consuming can now be streamlined. If you can improve your efficiency by utilizing online tools, by all means, do so! For example, 1099s for small business owners can all be filed online through our service at OnlineFileTaxes.com. Instead of downloading and printing out dozens of 1099s and then manually filing them with the IRS, you can quickly do it all through our online portal. Once you fill out the information online, the 1099s will automatically be filed with the IRS electronically for you. You will receive a copy of the form for your own records, which will be easy to access online at any time. The 1099 will also be automatically mailed out to the appropriate recipient, saving you yet another step.

By utilizing efficient technologies, such as OnlineFileTaxes.com, you can save yourself an immense amount of time and hassle. Instead of being buried in paperwork, spending hours upon hours filling out lengthy forms, you can quickly accomplish the task, freeing your time for other important pressing matters. As a small business owner, your time is invaluable, so be sure to implement as many streamlined methods for tax filing as you possibly can.

Assess For Next Year

Finally, take the time after you are finished with tax season to assess what could be done better next year. Did you struggle with organization, making it difficult to find the paperwork you needed when it came time to file your taxes? Did you make the mistake of manually filing all your 1099s, creating a headache? Take note of any areas you could improve in and set up a better system for the following year.

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Interested in making the process of filing 1099s simple? Sign up to utilize OnlineFileTaxes.com today and save yourself time and money. With our easy-to-use platform, you can file all your 1099s in no time at all from the comfort of your computer.

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Everything You Need to Know About 1099 Preparation

Are you a freelancer or independent contractor? Depending on how much work you’ve done, you could be receiving a 1099 form down the road. But what exactly is a 1099 and why is it important?

Let’s take a closer look at these forms.

The Basics of a 1099 Form

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Just because you’re a freelancer or independent contractor doesn’t mean you’re exempt from tax implications. Basically, 1099 forms report to the Internal Revenue Service how much a company has paid you in the last tax year as a “non-employee.” Think of this documentation as an alternative to W-2 forms, which organizations use to declare income for employees.

We are often asked what specifically defines an independent contractor. Here’s the thing: you become eligible for a 1099 when you work and perform services for a company as opposed to being a direct employee. For the most part, an independent contractor can dictate their schedule, choosing when and how often they want to work.

Did you recently sign up to be a driver for a ride-sharing company? Are you doing freelance design work for a friend’s business? In both of these scenarios, you would qualify as an independent contractor and, consequently, would be eligible for a 1099.

Here’s where things get a bit dicey. If a company has paid a freelancer less than $600 over the course of a year, there’s no need to send the independent contractor a 1099. However, the freelancer must still account for the income when doing their taxes.

How to Prepare Your 1099s

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Now that you understand the basics of a 1099 form, let’s dive into 1099 preparation from an employer’s perspective. Here are some tips for making sure this documentation is on par with what the IRS wants:

Verify your information

image1QuickBooks explains the importance of having correct information on your contractors. Ideally, you should have already filled out a W-9 for each freelancer, which includes their name, address, and Social Security number. Don’t be afraid to ask your independent contractors if any of their information has changed.

So what happens if a contractor fails to provide a W-9 or left out pieces of information? According to the IRS, you are allowed to withhold 28 percent of their pay. This is what’s known as “backup withholding” in the tax world.

Get your 1099s

image2Now you’re ready to obtain those 1099s and get started. One mistake to avoid here is using a downloaded form or even a sample from the IRS. Instead, you must use forms that are readable by the IRS scanner that process 1099s.

Maybe you’re thinking, “This sounds like more of a hassle than anything else.” Here at OnlineFileTaxes.com, we agree that obtaining 1099 forms can be complicated. We’ll circle back to this idea later in the post.

Fill out the forms

image3This is likely to be the most time-consuming step of the process. Each 1099 form should include your Federal Tax ID number, as well as the contractor’s information. Be sure to also enter the amount of money paid to the contractor, which is entered in Box 7 under “Non-employee compensation.”

The last piece is filling in the contact information forms. As aforementioned, manually filling out 1099s can take up a good chunk of time. That’s why we recommend using an e-file provider such as OnlineFileTaxes.com.

Send out the forms

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After spending precious hours (or days) filling out 1099s, you’re ready to send them out and get back to running your business. The deadline for mailing or handing copies to independent contractors is February 1.

Should you fail to meet this deadline, you could face some hefty IRS penalty fees.

Keep copies for your records

Copy C is meant to be kept for your records. While you may not want additional paperwork in your office, it’s essential to have these records available in case there are questions. The last thing you want is to be contacted by the IRS regarding a contractor’s 1099 and not have your own copy of the form.

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How We Can Assist With 1099 Preparation

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Whether you’re a business owner, CPA, accounting professional, or an independent contractor, chances are you’ve thought about e-filing 1099 forms. Doing so saves time and allows you to focus more on your work. But with so many 1099 preparation services out there, how do you really know which is best for you?

More people are using OnlineFileTaxes.com than ever before and it’s no secret why. With our unique, easy-to-use system, you can e-file 1099 forms in just minutes. Your files are sent to the IRS for fast, efficient, safe, and, of course, simple filing.

Let’s take a closer look at some of the benefits of OnlineFileTaxes.com:

  1. Process any number of forms – Whether you need to process one 1099 or hundreds,onlineFileTaxes.com makes a great resource.icon1

  2. Remove the need to buy and fill out lengthy forms – Who really has the time to do this anymore? Maybe you’re a business owner and a parent. You shouldn’t have to put off valuable family time just to manually complete 1099s. Thanks to our automated filing system, you can focus less on tax documentation and more on enjoying your family.icon2
  3. Eliminate the need to invest in any software – It might seem convenient to grab the latest tax software and call it good. However, these products can certainly be pricey. Not to mention, you have to purchase the newest version every year. With OnlineFileTaxes.com, there is no expensive software to worry about.icon3
  4. Eliminate the administrative and IT costs associated with year-end 1099 processing – You’re a savvy business owner who watches over finances like a hawk. It’s no secret that 1099 processing can cost a pretty penny. There has to be a more affordable option, right? Well, signing up for OnlineFileTaxes.com is absolutely free. Users can print, mail, and e-file 1099s for as low as $1.25 per form. That’s quite the steal if you ask us.icon4

  5. Print, mail, and electronically file with the IRS once you fill out your forms – At OnlineFileTaxes.com, we want your experience to be a stress-free one. That’s why we make it easy to print, mail, and electronically file with the IRS. We even print and mail recipient copies for you to keep for your records. You won’t find a more straightforward e-filing service.icon5

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E-File Various Tax Forms With Us

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When it comes to filing Form 1099 online, there’s no better system than OnlineFileTaxes.com. Keep reading to learn about 1098, 1099, and W-2 forms.

Form 1099-MISC

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We touched on this documentation earlier, but it’s worth explaining a bit more. Form 1099-MISC reports commission paid during the year to an individual (usually labeled a freelancer or independent contractor) who is not an employee. We have found this specific form to be the most common 1099.

Form 1099-DIV

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Wondering if there’s a tax form used to report dividends and distributions paid to a person? Then it’s imperative to e-file Form 1099-DIV. You must file this form if you paid to a person:

  • To whom you have paid dividends and other distributions on stock of at least $10

  • For whom you have withheld and paid any foreign tax on dividends and other distributions on stock

  • For whom you have withheld any federal income tax on dividends under the backup withholding rules

  • To whom you have paid at least $600 as part of a liquidation

Form 1099-INT

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This form reports interest paid during the year to an individual whom you have paid at least $600 in interest. In addition, Form 1099-INT reports specified private activity bond interest and federal income tax withheld, if applicable.

From 1099-B

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This form is used to document proceeds from broker and barter exchange transactions. More specifically, Form 1099-B reports such proceeds for each person for whom the broker has sold any of the following:

  • Stocks

  • Bonds

  • Commodities

  • Regulated futures contracts

  • Foreign currency contracts

  • Forward contracts

  • Debt instruments

Form 1099-C

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Form 1099-C revolves around the cancellation of debt. It must be filed for each debtor for whom a debt owed is at least $600 if the debtor is an individual, corporation, partnership, trust, association, company, or estate. The IRS requires Form 1099-C be filed regardless of whether the debtor is required to report the debt as income.

Form 1099-R

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Form 1099-R reports distributions from pensions, annuities, retirement plans, and insurance contracts for each person to whom you have made a distribution or are treated as having made a distribution of $10 or more from such plans.

Form 1099-S

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Form 1099-S reports the sale or exchange transaction for money, indebtedness, property, or services of any ownership interest in land, permanent structures, buildings, etc. In simpler terms, this form accounts for any proceeds from real estate transactions.

Form 1098

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This form is used to report mortgage interest of at least $600 received during the year via trade or business from an individual, including a sole proprietor. Keep in mind that the $600 amount specified in Form 1098 applies separately to each mortgage.

Form 1098-T

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This form is used for each student enrolled and for whom a reportable transaction is made. If the insured received any sort of refund or reimbursement of qualified tuition, Form 1098-T must still be filed.

Form 1098-MA

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Form 1098-MA provides information to the IRS, as well as homeowners, regarding mortgage payments made with funds allocated from the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets.

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File Your 1099 Electronically

If you’ve never used a service for filing, now is a great time to start. OnlineFileTaxes.com offers the most cost-effective way to e-file 1099s and other essential forms.

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What You Should Know About 1099s

Tax Day has come and gone once again.

As a taxpayer, we’re willing to bet that you hate putting together documentation for Uncle Sam. Obviously, though, it’s something every taxpayer must do.

We thought it would be beneficial to focus on 1099 preparation in our latest blog post. More specifically, what should the average joe know when they go to file 1099 forms next year?

Let’s take a look:

  1. There are countless varieties of 1099 – The accompanying infographic explains this in greater detail, but it’s also worth touching on in this list. There’s a 1099-DIV for dividends, a 1099-INT for interest, a 1099-R for pensions and retirement payouts, a 1099-S for real estate transactions, and more. Interestingly, the one that’s most common (Form 1099-MISC) seems to be the most challenging for taxpayers. The takeaway here is that not all 1099 forms are the same.

  2. Timing is important – Taxpayers had until January 31, 2018 to file 1099s for the 2017 tax year. For future reference, some businesses send out their 1099s at the same time they mail pay stubs so they don’t have to send a form later. That’s why it’s a good idea to always look out for 1099s. Maybe you’re wondering, “What if I don’t receive a copy of my 1099 form by February or March.” Well, don’t just assume you’re in the clear. Believe it or not, some businesses don’t issue 1099s until well into April or May. This is certainly something to keep in mind if you’re accustomed to filing taxes early.

  3. The Internal Revenue Service receives them also – The majority of businesses send 1099s to the IRS at the same time they mail forms to taxpayers. It’s just easier that way, right? Other payers get the necessary documentation to employees, allow some time to collect copies, and then transmit this information electronically to the IRS. Why is this worth mentioning? Here’s the thing: while you may think you can hide earnings information from big brother, you really can’t.

  4. Report errors as soon as possible – It’s one thing to keep every 1099 in a neatly organized pile. That said, do yourself a favor and open these forms immediately after receiving them. Reporting errors happen every once in a while. The last thing you want is to see $10,000 on an issued 1099-MISC when you know you only made $1,000 from the company that sent the form. Tell the company immediately if this occurs.

  5. Report every 1099 – It goes without saying that you can’t ignore a 1099 form. Keep in mind that the IRS matches every single 1099 form with your tax return. Do you think a particular one should be canceled? Then make it a point to explain why on your return.

File 1099 Online

Handling 1099 documentation can be more of a hassle than anything else. That’s why more taxpayers are choosing OnlineFileTaxes.com.

We are proud to offer the most cost-effective way to efile 1099 forms.

With OnlineFileTaxes.com, you can process hundreds of forms in a way that’s seamless and economical. Our system is ideal for businesses, CPAs, accounting professionals, and individuals alike.

Sign up for free!

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Why You Should Use OnlineFileTaxes.com

We don’t know many people who actually enjoy doing their taxes. But if you’re the owner of a business, an accounting professional, or self-employed, 1099 preparation is a big deal. OnlineFileTaxes.com is proud to be an IRS-approved e-file provider. We take the hassle out of filing your 1099 forms. With our online tax reporting service, you can e-file 1099 forms and other documentation in minutes. Say goodbye to wasting valuable business days manually going through one 1099 after another. With OnlineFileTaxes.com, your files are electronically sent to the Internal Revenue Service quickly and efficiently. For your convenience, we also print and mail recipient copies for you to keep in your records. Keep reading to learn more about our service and how OnlineFileTaxes.com makes sense for your situation.

File 1099 Forms With Ease

Whether you have just one copy of a 1099 form to file or hundreds, we invite you to take advantage of our services. So what makes OnlineFileTaxes.com unique? Well, let’s start with the fact that our do-it-yourself software allows you to effectively manage all of those tax forms. Plus, since we e-file 1099 forms, a 1096 isn’t necessary. As long as you get your completed documentation in by the end of March, then it will be filed on time. Pretty cool, right?

Our Pricing to E-File 1099 Forms

It’s our belief that you shouldn’t have to pay a premium price to have someone handle your 1099 forms. Please note that our default service option includes e-filing, as well as printing mailing recipient copies. Here are a few other options available through OnlineFileTaxes.com:

  • E-file only – Maybe you have already provided us with recipient copies and simply want us to report to the IRS. If that’s the case, then this is the option for you.

  • Print and mail only – Some businesses and individuals prefer that we print and mail recipient copies. For example, let’s say you already submitted your information to the IRS but would like OnlineFileTaxes.com to provide hard copies to recipients. You can count on us to customize a solution to fit your needs.

  • TIN checking – Should you report a wrong TIN number for your recipients, you could face serious penalties. OnlineFileTaxes.com can help you be proactive in this area. It’s important to know that we are an IRS-approved TIN check provider. If you’re interested in this service, we will confirm the number before submitting to the IRS. Please don’t hesitate to reach out to us with questions regarding TIN checking.

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What Others Say About Our 1099 Preparation

OnlineFileTaxes.com will e-file your 1099 forms for as low as $1.25 per form. Frankly, if you’re looking to save time and money on your taxes, choosing OnlineFileTaxes.com is a no-brainer.

Take it from Jennifer Schubert-Akin of Manhattan Accounting Services, LLC in Colorado, who says, “I highly recommend OnlineFileTaxes for your 1099 e-filing needs. There’s no need to buy expensive forms and stuff envelopes. It’s secure, accurate, fast, and affordable…and better than Intuit’s e-file service.

It’s time to take control of your taxes. Start filing today.

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Mistakes to Avoid on 1099s

More Americans today are performing contract work either on a full-time or part-time basis. If you were an independent contractor in 2017, then it’s your responsibility to track that income individually. This is where 1099 forms come into play. Unfortunately, there are a number of mistakes contractors make with 1099 income. Keep reading as we dive into the five most common ones and how you can avoid being audited by the Internal Revenue Service.

  1. Misunderstanding the form altogether – There are several different 1099 forms, from 1099-MISC and 1099-INT to 1099-DIV and 1099-R. Each has specific tax reporting requirements. Take 1099-INT, for example. This is an IRS tax form that’s used to report interest income paid to individuals. Essentially, 1099-INT reports the total amount paid by the financial institution to an individual during the course of a year. Contractors often ask, “Well I never got a paper form, so I don’t have to do anything, right?” Not true. It’s imperative that you self-report the income on your taxes in this case. Those who fail to do so could be subject to an audit, which could result in paying back taxes plus costly interest and penalties. Our best piece of advice here is to make sure you educate yourself on 1099 forms and what they entail.

  2. Not writing off all business expenses – Are you looking to save money as a contractor? Then writing off all business expenses is a must. Let’s look at a hypothetical to provide some clarity for this. You work primarily from home and rarely venture outside of your residence for business matters. On occasion, though, you must commute to client offices. That mileage qualifies as a business expense. So be sure to account for that during tax season. The last thing you want is to overpay hundreds or thousands of dollars in taxes.

  3. Not keeping adequate records – The IRS requires you to keep proof of all business receipts, mileage, and other documentation to prove that the transactions actually happened. Should you be unable to provide this information for whatever reason, you may be on the hook for back taxes and penalties.

  4. Writing off personal expenses – Plenty of independent contractors and self-employed folks use the same phone for personal and business use. The same goes for contractors and vehicles. Obviously, the IRS won’t be happy if you choose to write off both personal and business expenses. So you must estimate what percentage of the cost is related to personal versus business use. It may seem like an inconvenience at first, but it’s certainly better than the alternative.

  5. Counting expenses more than once – In the QuickBooks Resource Center, it’s explained that most people use the Standard Mileage Rate when figuring out car expenses to write off. Be aware that the Standard Mileage Rate includes things such as gas, repairs, maintenance, lease payments, insurance, depreciation, and registration. As aforementioned, avoid counting the expense a second time with personal transactions.

The Go-To Spot to File 1099 Forms

Now that you know about which mistakes to avoid when filing, it’s time to get started with 1099 preparation. OnlineFileTaxes.com is the easiest way to file your 1099 forms in 2018. Thanks to our services, there’s no need to invest in pricey software that will only be used once a year. Say goodbye to administrative and IT costs associated with year-end processing. What makes OnlineFileTaxes.com so great is that your online files are electronically sent to the IRS for fast, efficient, and simple filing. Our team even prints and mails recipient copies for you to keep for your convenience.

Whether you’re an individual entity or business owner with multiple employees, we can help. OnlineFileTaxes.com can help you effectively manage those 1099 online forms. Maybe you need just one copy of 1099 forms. On the other hand, there’s a chance you might need hundreds. Whatever the case, we have a solution for you. You don’t have to stress about tax season any longer. OnlineFileTaxes.com allows you to get your filing done correctly and efficiently so you can get back to focusing on your business.

E-file 1099 forms today. Sign up for free and enjoy prices as low as $1.25 per form including printing, mailing, and online e-filing services.

 

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How to Handle Your First Business Tax Return

You will always remember 2017 as the year you started your own business. But now tax time has arrived. It’s your responsibility to get those returns filed accurately, timely, and in a way that achieves the maximum refund possible. Of course, you also have a business to run at the same time. Here are a handful of things to consider when filing a business tax return for the first time:

  1. Review the forms in totality – It’s important to do your due diligence in seeing which line items need to be filled out. You will be asked things such as the nature of your business, the year of the business, and of course, its location. Lastly, be sure that your accounts have the correct categories of expenses and income. This will allow you to get off on the right foot in terms of filing those returns properly.

  2. Determine the right depreciation method – As explained by The Balance, the Internal Revenue Service allows a first-year deduction of up to $100,000 for the majority of furniture and equipment, as opposed to writing off the cost over a number of years. It’s your choice, therefore, if you’d like to take the first year write-off. If your business is still relatively young, then it may be best to go with a slower depreciation. This ensures that most of the deductions will be available when your business has more income and is in a higher tax bracket.

  3. Understand home office deductions – Do you have a home-based business? Then it’s important to consider the ability to deduct a portion of your residence as a deduction. To do this right the first time, deduct the percentage of the real estate taxes and mortgage interest that would be otherwise taken as an itemized deduction. If there are any profits remaining, then other home expenses would be allocated to the business and personal portion.

  4. Calculate self-employment tax – Believe it or not, self-employment tax may be a significant part of this process. Make it a point to calculate these taxes as part of your total when paying quarterly estimates. Not to mention, the first quarter installment of your 2018 taxes are also due April 15. It’s crucial that you have these funds readily available.

  5. Get the necessary forms to employees – Remember that your employees receive a printable W-2 form to identify their income and withholding tax. Then there’s the 1099-MISC reporting for contractors who make at least $600 as of the 2017 tax year. If you haven’t done so already, have your contractors complete form W-9 to give you the required information. The more time you allow yourself and your team to do this, the better. The last thing you want is to wait until the last second to get everyone their tax forms.

An Easier Way to File 1099

It wasn’t too long ago that business owners were forced to buy and fill out lengthy tax forms. At OnlineFileTaxes.com, that’s no longer the case. We are proud to be an IRS-approved e-file provider. What does that mean exactly? Well, 1099 preparation has never been easier. Unlike other clunky online tax services, OnlineFileTaxes.com is designed with you in mind. We understand that you may not have a lot of time to mess around with tax forms. That’s okay! We have made the entry and filing of tax data both convenient and economical. Best of all, we guarantee that your information is filed on time with the IRS.

No longer do you have to dread tax season. At OnlineFileTaxes.com, we’ve perfected the e-filing tax process. The information you provide to us is strictly confidential and only to be used for the purpose of filing 1099 forms.

Here are just some of the benefits of using our services:

  • Allows you to e-file 1099 forms stress-free, whether you need one or hundreds

  • Eliminates the need to invest in any software

  • Takes away any administrative and IT costs associated with year-end processing

  • Prints, mails, and electronically files with the IRS once you fill out the forms

Whether you need just one copy of 1099 forms or other tax forms, we have you covered. Sign up for free today and get started with our services for as low as $1.25 per form.

 

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Debunking Tax Myths About IRS Audits

Few Americans actually enjoy doing their taxes. It’s why so many taxpayers tend to wait until the last possible second to file. Then there’s the fear of the Internal Revenue Service. Unfortunately, the IRS is often portrayed as “out to get us.” Nobody wants to be audited. With that in mind, here are myths about IRS audits that you shouldn’t believe, as referenced from Money.com.

  1. You’re more likely to be audited if you e-file – Thanks to innovative software, gone are the days when you had to spend days (or even weeks) filing your taxes. The fact is that nearly 90 percent of all returns today are submitted electronically. Plus, the IRS confirms that returns done by hand are 20 times more likely to have mistakes on them compared to ones completed online. This means you shouldn’t have to fret over taking the convenient route this tax season.

  2. IRS agents will come to your home – Mistakes occasionally happen when filing online. For whatever reason, things just don’t match up accordingly. As a result, an agent is required to conduct an audit if for no other reason than to get a few items clarified. So should you have to be concerned about an intimidating IRS agent knocking on your door at dinner time? The short answer is ‘no.’ Nearly 70 percent of audits take place by mail. Be aware that scammers are trying to take advantage of taxpayers via email or phone more so than ever before.

  3. Filing late raises the risk of being audited – Do you consider yourself a procrastinator with taxes? Some taxpayers mistakenly think that using an extension to file late increases their chance of getting audited. This just isn’t accurate, though. There are certainly a number of factors that warrant an extra look by the IRS. But the timeframe in which you filed isn’t necessarily one of them.

  4. Audits are a terrible experience – It used to be that the IRS was a frightening agency that took over your house and went through every record imaginable. You can feel comfortable knowing that isn’t the case anymore. Agents are required to focus more on taxpayer rights and customer service. Ultimately, you’re working with the IRS agent to resolve something on your return.

  5. Only the wealthy get audited – There’s no question that the rich have a higher chance of being audited by the IRS. Those who make less than $200,000 in a year get audited 1 percent of the time. Not surprisingly, the more income you report, the greater the chance of being audited. However, just because you may not make six figures doesn’t mean the IRS won’t take a closer look. For example, families earning less than $100,000 a year saw their audit risk go up by 17 percent in the last seven years. Meanwhile, Americans making more than $100,000 per year have seen their audit risk decrease by 8 percent.

  6. More deductions mean more audits – There are plenty of deductions for taxpayers to take advantage of over the course of a year. It’s not as though a long list of deductions will raise a red flag with the IRS. Now, if charitable deductions amount to more than your income, you’re going to be in some trouble.

  7. The audit risk is over after you get your refund – You waited months to get that refund check and it finally arrives. No longer do you have to worry about audited, right? Not exactly. It’s important to know that the IRS can go back up to three years to audit someone, or up to six years if they find a major discrepancy.

File 1099 Forms With Ease

Now that you have clarification on some of the common tax filing myths, it’s time to get to work. OnlineFileTaxes.com is the easiest, most cost-effective way to file 1099 online. Thanks to OnlineFileTaxes.com, 1099 preparation is a breeze. Whether you just need one copy of 1099 forms or hundreds, we are your one-stop shop.

Whether you’re a business owner, CPA, accounting professional, or individual and need to e-file 1099 forms, turn to OnlineFileTaxes.com. Our prices start at just $1.25 per form, including printing, mailing, and e-filing services.

Get started today.

 

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Tips for Filing 1099-R

Form 1099-R is a U.S. Internal Revenue Service form that’s used to report distributions from pensions, annuities, retirement/profit-sharing plans, IRAs, and insurance contractors for each person to whom you have made a designated distribution or are treated as having made a distribution of $10 or more from profit-sharing or retirement plans. This could also include any individual arrangements, annuities, pensions, insurance contractors, survivor income benefit plans, permanent and total disability payments under life insurance contractors, charitable gift annuities, etc. Keep reading for 1099-R filing tips from OnlineFileTaxes.com.

  1. Your taxable amount may not be fully ‘taxable-focus’ on Box 2a - Usually, your plan administrator must reflect the taxable amount of your distribution in Box 2a. Be aware that the following are non-taxable transactions, which would be reported in Box 1, but not Box 2a:

    1. Direct rollovers between qualified plans, 403(b) plans, 457(b) plans, traditional IRAs, and simple IRAs
    2. The principal on a return of excess contribution from an IRA that’s removed by the deadline (the excess amount and earnings are reported in Box 1, but only the earnings are reported in Box 2a)
    3. Any recharacterized IRA contributions or Roth conversions
    4. Distributions of after-tax amounts from qualified plan
  2. You will need to apply the non-taxable treatment on your return if an amount is reported in Box 2a – Let’s look at an example of this. You receive a rollover eligible distribution and you rolled over the amount within two months. The IRS requires that you report such amount on Lines 15a and 15b if the distribution was made from an IRA or Lines 16a and 16b if the distribution was made from a qualified savings plan. Maybe you receive a distribution of $15,000 from your traditional IRA last year, but you rolled over the amount within the allocated 60 days. The issuer of your 1099-R must report the amount as taxable. When you file your return, be sure to do the following:

    1. Enter $15,000 on Line 15a

    2. Enter ‘rollover’ next to Line 15b

    3. Enter ‘0’ on Line 15b

  3. Non-taxable amounts are attributed to after-tax contributions made to your qualified plan – Here’s the thing: If the distributions were made from a qualified plan or 403(b) plan, then there’s a good chance the 1099-R correctly shows the non-taxable amount. Just know that you may have to file Form 8606 with your return in this case. Form 8606 includes a formula that helps you determine the taxable portion of your distribution. Filing this additional form will help the IRS understand how you got to the current figure.

  4. Stay accurate with any recharacterization – Let’s say that you converted an amount that water recharacterized down the road. If a conversion for last year is recharacterized this year, the 1099-R for recharacterization will not be issued until January of next year. Not only that, but the tax reporting for the recharacterization will likely not correspond to the tax reporting for the conversion. Consider the hypothetical in which you converted $200,000 last year and, due to market losses, the account was valued at $150,000 when it was recharacterized. You should expect to receive a 1099-R form and a 5498 showing $150,000 for the recharacterization. Still, you would treat the entire $200,000 as non-taxable because the entire amount was recharacterized for tax purposes. In the event that you characterize less than 100 percent of the conversion, you will need to file IRS Form 8606.

Unless the form shows that you had taxes withheld, it’s not required that a 1099-R be filed with your return. It’s a good idea, however, to keep a copy of your account statement that includes the transaction for which the form was generated. This way, you have what you need should a transaction review come up down the road.

Stress-Free Way to File 1099 Forms

We are proud to make 1099 preparation much more efficient and cost-effective than it’s been in the past. OnlineFileTaxes.com is an IRS-approved e-file provider. Whether you need just one copy of 1099 forms or hundreds, we can help. Our 1099 online forms are available for as low as $1.25 perform.

 

Here’s how it works: First, use our online tax reporting service to e-file your 1099 forms in minutes. No longer are you forced to spend hours on end filling out forms manually. From there, your online files are electronically sent to the IRS for fast, efficient, and simple filing. We even print and mail recipient copies for you to keep for your records.

With OnlineFileTaxes.com, you don’t have to invest in expensive software that you only use during tax season. Plus, say goodbye to outrageous administrative and IT costs related to year-end 1099 processing.

Have you been searching for a less stressful way to e-file 1099 forms? Look no further than OnlineFileTaxes.com.

 

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Tips for Filing 1099-DIV

You have plenty of tasks on your to-do list as a business owner. From paying employees to keeping customers happy, you will do whatever is necessary to keep things running smoothly. When it comes to taxes, though, you may be anything but an expert. Let’s say you rely on independent contractors for certain projects. If that’s the case, you must send out 1099 forms for tax-filing purposes. Be aware that such forms are only sent to sole proprietorships and partnerships. Most importantly, it’s your responsibility to do your own bookkeeping. Tax season will be here before we know it, which is why it’s imperative to get those forms straightened out now. Keep reading for 1099-DIV filing tips.

About Form 1099-DIV

Form 1099 Dividends and Distributions is used to report dividends and other distributions payments to investors. What’s a dividend, you may ask? Well, dividends reported on 1099-DIV forms can include dividends paid, capital gains, dividends, and exempt-interest dividends. Form 1099-DIV reports the total amount paid by the bank or financial institution to an investor during the course of a year. The form is also used to report tax items such as Section 1250 Gain, Section 1202 Gain, investment expenses, foreign tax paid, as well as federal tax withheld.

Keep in mind that financial institutions must file this form with the IRS for each investor to whom they have paid dividends during the year, whether electronically or on paper. The bank is also required to provide a statement to the recipient to whom the dividend is paid. In terms of logistics, 1099-DIV forms will be reported on Schedule B of your personal return. Should the form be issued to a partnership or S corporation, it will be listed separately on the Schedule K-1 and end up on your personal Schedule B.

Who Should File Form 1099-DIV?

The IRS requires most payments of dividends and distributions to be reported on 1099-DIV forms by the person or entity that makes the payments. As aforementioned, most financial institutions or government agencies making dividend payments are the ones needing this form.

When is Form 1099-DIV Filed?

An organization must file this form if they:

  • Paid dividends (including capital gain dividends and exempt-interest dividends) and other distributions on stocks of $10 or more

  • Paid at least $600 as part of a liquidation

  • Paid or withheld any foreign tax on dividends and other distributions on stock

  • Withheld any federal income tax on dividends under the backup withholding rules

Are There Penalties For Not Filing Form 1099-DIV?

If you weren’t already aware, the deadline to file 1099-DIV forms is the end of February if filing on paper. Electronic files must be submitted by the end of March. That said, the deadline to provide recipient copies is the end of January. It’s important to know that the IRS imposes heavy penalties if a business fails to file in general or fails to file correct information with these forms. For example, expect to get penalized for not providing recipient copies. Not surprisingly, the penalty increases with time. That’s why it’s a good idea to file as soon as possible.

File 1099 Forms With Ease

There’s no question that filing your 1099 forms can become a nightmare. Do you really want to spend your time manually completing forms and/or purchasing expensive software to get the job done? Our team at OnlineFileTaxes.com doesn’t think you should. Thanks to our online tax reporting service, you can e-file your 1099 forms online in minutes. Whether you have one or hundreds or 1099 forms, we invite you to check out our services. Note that standard pricing includes printing, mailing, and filing services.

Why Use OnlineFileTaxes.Com?

Are you tired of managing those 1099 tax forms the old-fashioned way? Has it gotten to the point where tax forms get in the way of running your business? Then you’ve got to check out what our e-file provider has to offer. Rest assured that our service is simple, cost-effective, efficient, and secure. As long as you get your data in by the end of March, then it will be filed on time. OnlineFileTaxes.com is also an IRS-approved federal e-filing provider.

Here are just some of the benefits of working with OnlineFileTaxes.com:

  • Allows you to process any number of forms seamlessly and economically

  • Eliminates the need to invest in any software

  • Eliminates administrative and IT costs associated with year-end 1099 processing

  • Prints, mails, and electronically files with the IRS once you fill out the required forms

  • Supports uploading Excel files instead of manually filling out forms

With OnlineFileTaxes.com, forms cost as low as $1.25. We are proud to offer the most cost-efficient way to e-file 1099 forms. Don’t let 1099 preparation get in the way of running your business any longer. Sign up for free at OnlineFileTaxes.com.

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