Tax Information

When Would I Provide a W-2 and 1099 Form to the Same Person?

W2 + 1099 FormA worker’s role determines which information return you would provide. You provide a Form 1099-Misc to independent contractors and Form W-2 to employees. However, there may be instances where a worker may be serving as an independent contractor and an employee for the same entity.

A Federal Tax court case, Ramirez V. Commissioner, stated, “that the fact that a person is an employee in one capacity does not foreclose the possibility that he can be an independent contractor with the same employer in another context”. Employers need to review the details of their payment arrangements with their employees to correctly classify them for W-2 and 1099 tax purposes. Some quick examples of people who correctly should be given both a W-2 and a 1099 in the same year are:

• An employee of a property management company also provides contractor/maintenance [Read More]

August 27th, 2017|Articles|

Unused ITINS To Expire After Five Years

Individual Taxpayer Identification Numbers (ITINs) will expire if not used on a federal income tax return for five consecutive years, the Internal Revenue Service announced today. To give all interested parties time to adjust and allow the IRS to reprogram its systems, the IRS will not begin deactivating ITINs until 2016.

The new, more uniform policy applies to any ITIN, regardless of when it was issued. Only about a quarter of the 21 million ITINs issued since the program began in 1996 are being used on tax returns. The new policy will ensure that anyone who legitimately uses an ITIN for tax purposes can continue to do so, while at the same time resulting in the likely eventual expiration of millions of unused ITINs.

ITINs play a critical role in the tax administration system and assist with the collection of taxes from foreign nationals, resident and nonresident aliens [Read More]

June 18th, 2015|Articles|

Managing Your Tax Records After You Have Filed

Keeping good records after you file your taxes is a good idea, as they will help you with documentation and substantiation if the IRS selects your return for an audit. Here are four tips from the IRS about keeping good records.

  1. Normally, tax records should be kept for three years.
  2. Some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer. Good rule of thumb here is three years after the disposition of the asset.
  3. In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.
  4. Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support [Read More]
June 18th, 2015|Articles|