Newsletter 2010

Newsletter 2010

Businesses Cont

Businesses Cont

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Last Reviewed: Jan 2011

Last Modified: Jan 2011

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Some Bad News for Businesses.

Changes in 1099 Reporting. 1099 reporting is changing beginning in 2011. The first change brings taxpayers reporting rental income within the 1099 filing requirements for service payments totaling $600 or more for the year. In 2012, 1099 reporting expands again to include the purchase of goods. The exemption for payments to corporations is also removed. In 2012 merchant account administrators (credit card companies and PayPal type accounts) will also be required to file 1099s for transactions of $600 or more. It appears that we are moving toward 1099 reporting for most economic activity of a trade or business including rental activity.

File Your Partnership and S-Corp Return on Time or Else. Partnership and S-Corp return late filing penalties will go through the roof beginning in 2010. These penalties are not measured as a percentage of tax owed like other late filing penalties. The clear message here from IRS is that they want these returns and the companion K-1s filed and issued on time even if there is no tax to pay with the returns.