Simply Junior

The IRS is at it again. The stealthy and highly aggressive agency has added two new 1099 tax forms for businesses, requiring extra caution and countless more hours in reporting and preparing your tax returns. This means all business, no matter how small, will be affected. Whether big or small, it is essential to be aware of these new tax extensions NOW- or you could find yourself in BIG trouble when filing your tax return next year.

Additionally, we can expect the number of IRS audits to continue to rise for small-business owners in 2010. About 25% to 30% of my tax relief clients are small businesses with tax problems – so I know how important it is to avoid IRS penalties, IRS audits or other tax problems that could be detrimental to your business.

Neil deMause revealed in his CNNMoney.com article “Stealth IRS changes mean millions of new tax forms” these two new tax extensions:

1) 1099-K – an extension to the 1099 form, which requires businesses to report non-wage income (dividends, earned interest, contract work). The 1099-K addresses “hard -to-track” payment streams used by businesses: credit cards. From 2011, businesses making over 200 payment transactions per year (and totaling over $20,000) through credit or debit cards have to fill out the 1099-K, documenting the year’s transactions and send this to their clients and the IRS.  This will have little effect on companies currently reporting all credit card transactions to the IRS, though if you are not currently in the practice of doing so, it’ll be worth it to anticipate this for the near future.

2) 1099-Misc – used by companies use to record payments to individual service providers and freelance workers, has been massively expanded to include, from 2012, all annual business payments and purchases over $600. While previously payments to corporations and purchases of goods have been excluded, now all businesses need to obtain the taxpayer ID number of firm or individual you are paying. This form will now be a tracking mechanism used for any and all business transactions.

What This Means For Your Business: Swimming in Paperwork and Receipts!

The simple truth is that these extensions to tax legislation are quite the burden. There is a high probability you may get lost in the paperwork and tracking of receipts.  A small business currently spends 3 – 5 hours a year on average filing 1099 forms. A survey conducted by Pennsylvania-based SMC Business Councils, shows that filing these two 1099 extensions for services purchased from corporations only would cause a standard small business at least 200 filings per year and an additional cost of $6,000 in preparing yearly tax returns. This estimate excludes the requirement for filing 1099s for purchases of goods – this would cause a staggering increase.

How did this tax provision blizzard come upon us? This new legislation has been in the works since 2007 when a tax-gap study was conducted. This ‘tax gap’ between businesses and individuals costs the government about $300 billion per year in lost revenue. The study showed that adding additional 1099 tax extension forms could produce $345 billion per year in federal tax revenue and this is where the health reform bill comes into play. These two extension requirements are part of the health reform bill – snuck in the 2,000 page bill, allowing the government to track down unreported income. The goal of this new tax legislation is to catch income that is not currently reported to the IRS.

For more information on these tax extensions,  view draft versions of the 1099-K form and watch a video on “How to avoid a tax audit by the IRS” read the full article on CNNMoney.com.

If your business is under audit or you owe back taxes or IRS penalties – it’s important to get immediate tax relief to protect the future of your business. And you don’t want to go up against the IRS alone without the expert help of a professional tax attorney or Certified Tax Resolution Specialist.

Efile your taxes for free online and get your tax refund from the IRS in as little as 8 days. By using free online tax filing software like TurboTax Federal Free Edition you can file your taxes for free online and maximize your refund.

Here is how it works. TurboTax partnered with the IRS to provide free and secure efiling services for anyone starting in 2002. The TurboTax system walks you through a step-by-step series of questions that makes sure you are using the right form and fills out the information with 100% accuracy. There is no more questionable tax returns or hunting down how you should fill out your 1040ez or other paperwork. The tax system is made so that the average person can efile their own taxes without any help.

3 Reasons You Should E-File With TurboTax Today

1. It’s Free – As long as you do not have a complex tax return your IRS tax efile is absolutely free. Just visit the special link below to TurboTax and select the Federal Free Edition from their menu.

2. It’s Easy – All you have to do is collect your tax documents, w-2′s, etc and follow the clear instructions on your computer screen. If you use TurboTax, they guarantee you’ll maximize your deductions when you efile.

3. It’s Fast – The IRS states that you can get your return in as little as 10 days if you E-File online and choose to direct deposit your return. TurboTax can get your refund in as little as 8 day

So, you’ve heard about (free tax filing) and you might have even heard it’s available at Turbo Tax. Well, you’re right, there is a program available at Turbo Tax which is called the Tax Freedom Edition free tax filing program. Because of an agreement with the (IRS), this free tax filing program is available to those taxpayers who have an adjusted gross income (AGI) of $28.000 or less.

Why is the Government and Turbo Tax doing this? Because, it helps them, and it helps you!

Since initially debuting in 2003, the IRS has received more than 15 million tax returns through the Free File program, representing a cost-savings to the government of more than $32 million in processing costs of an electronic return compared to that of paper. You the taxpayer, get to file your taxes in a more efficient and timely manner than ever before. By using online tax software for your tax filing you get a number of benefits not previously available. Mainly… Free Tax Filing!
The Freedom Edition Tax Software Program, through the Free Tax File Alliance, provides free tax preparation services to millions of Americans with low-to-medium incomes. A partnership between the Government and 19 private tax software companies has been reached which allows you to prepare and file your Federal income tax return for free. There are also 21 States which have a similar program.

If you think you might qualify for (free tax filing) then do yourself a favor and check it out and see. You might get to save yourself a buck in the process and also learn an easier way of doing taxes. One thing is for sure… Online tax filing is here to stay. This is your chance to get started for free.

Using the internet to file your taxes online is a convenient way to complete your tax return.

If you are thinking about preparing your taxes online this year, then don’t worry because it’s easier than ever. Here is a quick guide to help you get your tax preparation and tax filing online done fast and easy.

There are many websites where you can prepare and file your taxes electronically to the IRS. Some of these sites are free and others will charge you a fee for filing your tax return. In order to file for free you must meet certain requirements set forth by the IRS.

What you’ll need to get started Your personal information, including name, address, telephone number, date of birth, and social security number. You will also need information for your spouse and dependents you plan to include on your tax forms. And don’t forget W-2s, 1099s and any other paperwork showing income for the year 2006. You will also need the totals for items you plan to deduct like, mortgage interest, charitable contributions, and medical expenses.

If you want to have your refund deposited directly into your bank account then you’ll need your bank name, routing number, and account number.

Most of the online tax preparation programs have an easy to follow interview system. The program asks you simple questions and all you have to do is type in the answers.

As you work through your tax return, the online program will put your answers on IRS-approved tax forms then double check for errors and missed deductions you may qualify for.

Once you complete your tax return, you can then electronically submit your tax return online to the IRS. If you expect a refund check, filing online is a great option. The IRS can process your return and issue your refund directly into your bank account much quicker than if you mailed a paper return.

If you’re still using pencil and paper to for your tax returns, consider trying an online website for your tax preparation and filing this year.

Would you like to prepare your Federal taxes online this year? When it comes to Federal tax preparation, you now have the option of filing and preparing your taxes online. Doing your taxes online is faster, easier, and more convenient than ever before.

Get your taxes done in record time. You’ll be amazed at how quick and easy, tax preparation online can be. When you prepare your taxes online, you get the knowledge of tax professionals at your fingertips. Today’s tax software is specially designed for an accurate and easy return.

So how do you go about getting started on your Federal tax preparation? Simple. First navigate to an IRS approved Federal tax filing website, and once you’ve found a website that you like, you can start your tax preparation.

Preparing your taxes online is similar to the offline method of tax preparation. You’ll still need to gather up your tax information such as income, expenses, and deductions you plan to take. Only instead of filling out paper forms, you’ll be entering your tax information via your computer.

After you have entered your Federal tax information it’s time for the tax preparation software to do it’s magic. In about 3 seconds all of your tax calculations will be made for you. If you forgot something. No problem! You can go back and make a new entry and then calculate your tax again.

After you’ve completed your tax preparation you’ll be given the option to electronically file. Just follow the on-screen instructions and you’ll be done in no time.