Tax Return Extensions

2017 Tax Return Extension DeadlineIf for some reason you are unable to file your personal tax return by this year’s deadline of April 18, 2017, JBL Accounting and Tax Professionals wants to remind you that you have to option to file a tax return extension.  By filing an extension, you will gain an automatic six (6) months to gather, prepare and file your federal income tax return with the IRS.  Instead of an April 18, 2017 date to file your federal income tax return, if you file an extension, you will have until October 16, 2017 to file your tax return.

There are a few things you will need to file an extension.  You will need to estimate your tax liability and pay any about that you predict you may owe when you file your extension.  The simplest way to do this is to utilize a tax accountant who will make sure all of your information is filed properly and you are estimating your potential tax liability accurately.

Individuals who pay as much as they can by the April 18, 2017 extension due date significantly reduce the overall amount they may be subject to with penalties and interest charges.  The late filing penalty is generally five percent (5%) per month and the late payment penalty is normally 0.5% per month.  It is better to file a federal tax return extension and pay the estimated tax liability up front, then deal with the penalties and interest charges you would be fast with by filing late without an extension.

For additional information, contact JBL Accounting and Tax Professionals, Inc.  We will be happy to assist you with all of your tax questions and needs.

JBL Accounting & Tax Professionals is based in Spring Hill, Tennessee. We offer a full range of professional accounting, payroll and tax services to the entire Middle Tennessee area including, Franklin, Brentwood, Cool Springs, Columbia, and all of the Greater Nashville area.

Contact us today to see how we can help you!

(615) 392-0522

Who Should Receive a 1099-MISC

Should I have Received a 1099?

Tax Return Preparation in Spring Hill, TNTax season is upon us and we, at JBL Accounting & Tax Professionals, get the questions “Who Should Receive a 1099-MISC?”  This can be confusing subject because different rules apply to different situations.  So let’s dive in and see if we can make the muddy water somewhat clearer.

The Internal Revenue Service, or IRS, requires businesses to file informational returns reporting gross proceeds paid in the amount of $600.00 or more to unincorporated taxpayers and some businesses.  Form 1099-MISC is one of the most common informational returns used for this reporting feature.  The IRS uses these returns to track income received by unincorporated taxpayers and some businesses in an attempt to thwart underreporting of income.  To avoid unintentional underreporting of income, you should know who is subject to informational reporting.

Facts

Generally, you must postmark any form 1099-MISC you issue by January 31st of each year, except when it falls on a weekend, in which you will have until the following Monday.  Copy B is for the taxpayer records.  The IRS receives copy A of form 1099-MISC and Form 1096 which summarizes all the 1099-MISC.  These forms are required to be postmarked by February 28, except when it falls on a weekend, in which case you will have until the following Monday.  The IRS does not require taxpayers to submit a copy of form 1099-MISC with the annual income tax return.

 Business Services

Rent payments not associated with personal payments are reportable transactions.  Examples include your business renting space, equipment or other assets paid to any one vendor.  Gross rental proceeds are reported in box 1 of your form 1099-MISC.  Physicians and other healthcare providers paid more than $600 or more from your business, in a single tax period, receive form 1099-MISC with gross proceeds reported in box 6.  Legal services rendered by attorneys require informational reporting of gross proceeds in box 14 of form 1099-MISC.

Individuals

Individuals and unincorporated businesses receive form 1099-MISC for services performed.  Individuals receiving services are not required to furnish informational returns to service providers.  Taxpayers working on fishing boats receive form 1099-MISC reporting their share of catch income reported in box 5.  There are no minimum gross proceeds required to report fishing boat income.  Non-employee individuals and unincorporated businesses receiving proceeds for services rendered are subject to informational reporting.  Non-employee compensation is the most common income reported on form 1099-MISC, with gross proceeds reported in box 7.

Proceeds

Businesses paying proceeds to individuals and other businesses report income on form 1099-MISC, in box 3.  These proceeds include winners of prizes, awards and sweepstakes, punitive damages and other income not from services rendered.  Report cash values; however, if the payment is not cash, report fair market value at the time of the payment.  Farmers who receive monies from insurance companies receive a form 1099-MISC.  Gross crop insurance proceeds of $600 or more in a single tax period would be reported in box 10.

Other Income

Various other forms of payment require the issuance of form 1099-MISC to recipients.  Taxpayers receiving royalties in excess of $10, before reductions for taxes, commissions and more, report in box 2.  Aggregate payments of $10 or more, made to securities brokers on behalf of their clients, in lieu of tax-exempt interest or dividends, are reported in box 8 of form 1099-MISC.  Taxpayers receiving golden parachute payments in excess of the base amount should report it in box 13 of form 1099-MISC.

JBL Accounting & Tax Professionals is only a phone call away to help either walk you through the process or set up an appointment to complete the 1099-MISC process for you.

JBL Accounting & Tax Professionals is based in Spring Hill, Tennessee. We offer professional accounting and tax services to the entire Middle Tennessee area including, Franklin, Brentwood, Cool Springs, Columbia, and all of the Greater Nashville area.

Contact us today to see how we can help you!

(615) 392-0522