Dear Business Client: (Year end information page 1, 1099 information page 2)
Once again it is that time of year when we have to start thinking about taxes and our approaching year-end. Congress has still not addressed the changes that are scheduled to take place in our tax code, the payroll tax changes, the alternate minimum taxes, the capital gains, etc.. Some items ended with 12-31-2011 that could affect your 2012 filing if Congress acts on them. As these changes are enacted I will be sure to incorporate any change that affects you or your company when completing your tax returns.
Be advised that the OHIO minimum wage increases January 1, 2013 to $7.85 per hour or $3.93 for tipped employees. This is for all pays on or after January 1.
I annually take this opportunity to remind all business clients of some of the information that will be necessary to accurately prepare your year-end tax returns. Please gather the following as is applicable to you and your business:
All Bank balances at 12/31/2012.
Amount of cash on hand at 12/31/2012.
Schedule of Accounts Receivable due you at 12/31/2012.
Schedule of Accounts Payable you owe at 12/31/2012.
Inventory value of goods on hand at 12/31/2012 (Both raw materials and finished products).
Copy of sales tax returns filed for the year or a schedule of the information (if prepared by you).
Copy of any 1099’s received by you from third parties for 2012. If you receive payments via credit card, Google or PayPal you shuld receive a 1099-K. These MUST be forwarded to me as line 1a of your tax return REQUIRES this information which will be matched by the IRS. Failure to match will result in an audit. Your return cannot be completed until these forms are received.
Statements from financial institutions showing the amount of any outstanding loan balances at 12/31/2012 and interest paid for the year.
If you prepare your own payroll tax returns provide copies of all tax returns filed for the year and W2 copies.
Copy of invoices for all asset purchases made during the year.
Any notices received from any taxing authority during the year.
Any other information you think will be important.
Also if you are required to issue 1099 forms please complete the attached 1099 request form and return to me. I will prepare such forms for you on the properly formatted forms, if you desire. Please allow sufficient time for processing.
The IRS continues to target taxpayers (business & individual) who do not comply with the 1099 filing requirements. Severe failure to file penalties are being assessed and the related expense deduction is being disallowed. Backup withholding rules may also be imposed upon you. As a reminder if you made Interest or Dividend payments in excess of $10 you must issue a 1099. If you made payments totaling at least $600 to any individual or company (Not a Corporation) you must issue a 1099. If you own rental properties you are considered a “business” by the IRS and must follow the 1099 rules also.
Many ask me every year if I am accepting new clients. The answer is yes! Your referrals would be greatly appreciated.
As stated at the beginning of this letter our Congress has yet to address the 2012 Alternate Minimum Tax which was a tax passed about 40 years ago to address 185 high income taxpayers. Today it is scheduled to affect millions. If not patched by congress for 2012 it will affect individuals with $33,750 taxable income and joint filers with $45,000 taxable income THIS YEAR. We can only wait and see what Congress will do. Congress also has not done anything with the expiring “Bush era” tax cuts which all expire on 12/31/2012. Hopefully, by the time you come in to have me prepare your return we will know what our 2012 & 2013 taxes will be.
All further tax information of any kind will be posted on my website at www.stanshermancpa.com under the heading of “TAX BULLETIN” for updated tax information that may affect you. I strongly suggest you periodically review this information as it may affect you and/or your company.
If you have any questions on this do not hesitate to contact me.
I look forward to continuing to serve your accounting and taxation needs in 2012 and beyond.
Premier Business & Consulting Services