2011 changes to 1099 requirements on the1040 Schedule C

There is a new requirement on income tax forms this year that businesses need to be aware of. The new 1099 requirement says businesses, charities, even government entities must issue 1099 forms to all vendors from whom they purchased more than $600 worth of services and goods in the year.

Two new questions appear on Schedule C, Form 1120, Form 1120S, and Form 1065.

• “Did you [the corporation] make any payments in 2011 that would require you to file Form(s) 1099?”
• “If ‘Yes,’ did you [the corporation] or will you file all required Forms 1099?”

The deadline for filing paper 1099 forms to the IRS was February 28 but if you haven’t done it yet, it’s not too late. Filing them electronically will extend the deadline to April 2. We cover more details on 1099s in our article on W-9s but if you have more questions please feel free to contact us.

 Piggy Banks
Give your child more than one piggy bank or money jar so that their money can be broken out into savings, spending or specific item accounts. This can help visualize goals, make it clear where the money goes as well as prepare them for their own bank accounts.

Allowances
If you give your child an allowance or if they get money as gifts for birthdays, make it easier for them to save by breaking the amount into savable denomination. Five $1 dollar bills are much easier to divide among the piggy banks than one $5 bill.

Cost of Living
As your child gets older introduce them to the family’s monthly bills. Children often think money grows on trees and that things that are used daily are free. Sit down and share the monthly bills with them as you pay them. You can choose to start simple with electricity, tv & internet bills and then introduce more complex cost like credit cards & taxes when they are ready. Make a more dramatic point by stacking money on each bill as you pay them.

Spending Journal
As your child starts making their own decisions on spending their money help them to document what they are buying and how much they are spending. They will be able to visualize both their good spending and bad spending better with a list that can be reviewed together.

401k Style Matching
Need to give your child a little more incentive to save? Consider matching what they save like a company does with employee 401k plans. You can even set rules on how much or when they can make withdrawals. Start to establish their perspective on the benefits of long term savings as they become more accustomed to their own spending and savings habits.

These are just a few tips on how to give your child a foundation for being responsible with money. Remember to make it fun, involve the whole family and have regular conversations so that there are always opportunities to learn about managing money wisely. Once they’ve grasped the fundamentals you can introduce them to the world of electronic banking, mobile apps and debit cards.

Our Web Client Organizer is designed to help you conveniently gather tax information needed to prepare your 2011 personal income tax return. We will be sending each client an email with detailed instructions on how they can log in to their personal Web Client Organizer, but here is a step-by-step overview of what to expect.

Step 1.
To access your Web Client Organizer, click the link http://284340.netlinksolution.com or copy and paste this link into the browser address line.

Step 2.
To protect your privacy, your Web Client Organizer is password protected. Access your Organizer using the login ID provided in your personalized email. The password to open your Web Client Organizer is your SSN. Enter the password using only numbers. For example, if your Social Security number is 111-22-3333 you would enter 111223333.

Step 3.
Your engagement letter has also been posted on the website as an action item. Once you have accessed your web portal, click the My Tax Documents link and then click the WALLACE-2011Organizer-ActionRequired link. After you review the letter, please print, sign and date, and return it to our office.

Step 4.
We have provided certain information from your 2010 personal income tax return to help you complete the Web Client Organizer with minimal time and effort.

Enter 2011 information on the Web Client Organizer screens provided. If any information does not apply to you or is incorrect, delete it or make the necessary corrections.
Please answer all applicable questions and use the Client Notes screen to enter additional information not provided in the Web Client Organizer. The Client Notes screen is also available for any questions that you may have for our office.

FAQs

I haven’t received my Unique ID & Password?
If you have not received you ID and Password by January 31 please contact Natalie Forssenius.

Can I still provide you with a printed version?
If you prefer not to use the electronic features of the client portal, you can print the Organizer as a PDF file. To do so, under the Web Organizer Index, select Create PDF.

What other documents will I need to provide?
We will also need the following information provided to our office:

• Forms W-2 for wages, salaries and tips.
• All Forms 1099 for interest, dividends, retirement, miscellaneous income, Social Security, state or local refunds, gambling winnings, etc.
• Brokerage statements showing investment transactions for stocks, bonds, etc.
• Schedule K-1 showing income from partnerships, S corporations, estates and trusts.
• Statements supporting deductions for mortgage interest, taxes, and charitable contributions (including any Form 1098-C).
• Copies of closing statements regarding the sale or purchase of real property.
• Legal papers for adoption, divorce, or separation involving custody of your dependent children.
• Any tax notices sent to you by the IRS or other taxing authority.
• A copy of your income tax return from last year, if not prepared by this office.

Can I upload my documents to the Web Client Organizer?
You can attach and send additional files with your Web Client Organizer to our office for retrieval. This is a convenient and secure way to send information regarding the preparation of your tax return without having to mail or deliver these documents to our office. You can attach the following types of files to your Web Client Organizer: Microsoft Money or Quicken tax exchange format (.txf), Microsoft Excel (.xls), Microsoft Word (.doc, .rtf), Adobe Reader (.pdf), image files (.jpg, .bmp, .tif, .png), and web pages (.html).

Can I upload QuickBooks Files?
The Web Client Organizer cannot currently accept Quickbooks Files but you can securely upload your QuickBooks file on our website using the Client Login link.

In the past years a large amount of our paper consumption comes from our yearly Client Organizer. This printed document helps our clients get organized for their yearly tax returns by providing them with a printed checklist and questionnaire to fill in prior to meeting with us. Last year we used over 11,000 sheets of paper in the process, not including envelopes and mailing labels. This year we are bringing it all online with our new Web Client Organizer. With the online version in place we have completely eliminated the need for a printed version. We will be sending a personalized email with details to each client by January 31. Contact Natalie Forssenius if you don’t receive your detailed email by then.

Though our Web Client Organizer is our biggest Green program this year, our other initiatives around the office include a completed transition to paperless filing (including client files), emails ‘printed’ to electronic PDF files, paper shredding and recycling services as well as recycling non-paper items around the office. We look forward to finding more ways to make our workplace a Greener one.

New credit legislation has been enacted in Virginia to encourage telework arrangements.  Telework is a work arrangement where an employee is allowed to perform  normal work duties at a location other than their central work location.  To be eligible as a teleworker for the purposes of claiming the tax credit, an employee must telework at least one day per week.  The teleworking employee must enter into a signed telework agreement on or after July 1, 2012, but before January 1, 2014, and must be a new teleworker (not previously teleworking) to qualify for the tax credit.

The legislation provides for a tax credit up to $1,200 per employee, up to $50,000 per organization, for eligible telework expenses incurred during taxable years 2012 and 2013. Eligible telework expenses include:

-          Computer equipment (laptops/netbooks/tablets)

-          Networking equipment and software

-          Security and antivirus software

-          Internet access

-          Communications equipment and services  (VoIP, mobile phones, Smartphones,       

            phone service, routers, modems/web cams, VPN)

-          Telework Center fees

Eligible expenses may also include up to $20,000 for conducting a telework assessment on or after January 1, 2012.  These expenses include consultant or other expenses to asses existing teleworking (both formal and informal), equipment and training needs, barriers/issues, management and employee support, developing telework policies and procedures, and determining employee position eligibility and performance measurement.

The amount of the credit claimed cannot exceed the tax liability of the taxpayer and there is no carryforward of any unused credit.  Any credit attributable to a partnership, S-Corporation or limited liability company will be allocated to the individual partners, shareholders, or members in proportion to their ownership or interest in the business entity.

Businesses must apply for tentative approval of the credit through the Virginia Department of Taxation using Form TEL-1.  The deadline for submitting Form TEL-1 for a 2012 credit is October 31, 2011.

If you believe you qualify for this credit, or would like additional information, please contact Desiree Bryan at 804-888-8468.  Additional information can also be found at www.teleworkva.org.

“We are very proud that our continued success has been recognized,” says Partner, Kelli Meadows.  ”We are very fortunate to have a great team of staff and clients.”

Wood graduated from Strayer University Summa Cum Laude with a Masters of Science in Accounting.  She was previously employed by the Monticello Area Community Action Agency as their Chief Financial Officer.