DOES YOUR BUSINESS USE INDEPENDENT CONTRACTORS OR DOES YOUR BOSS TELL YOU HE WILL 1099 YOU?
HERE ARE SOME NEWS!
The IRS has developed audit programs that Overview focus on employers who “misclassify” workers as independent contractors. These IRS programs can be expensive for employers and particularly painful for small businesses that may not be able to withstand the “economic strain” of additional employment taxes. And a worker who was misclassified as an independent contractor could also put the business’s retirement and benefit plans in jeopardy for failing to cover all employees.
If you are reading this article, I can’t help but wonder what is the reason for your pursuit of financial management. A natural assumption would be that you have already been introduced to the current financial legislation, and probably didn’t understand a word. Nevertheless, it can be the other way around and your search for counseling is owed to an overall understanding of the tax system, which may lead to a need of protection and security for your money. In simple words, if you don’t want to aimlessly waste money, you have come to the right place.
As CPAs and tax advisors, we would like to remind you of quite the contrary. Just because tax season is over and the LA weather is beautiful this time around doesn’t mean you should not think and strategize about how to properly prepare for the 2012 tax year.
Small businesses and accountants need to be aware that IRS will step up its efforts in auditing small corporations.
IRS is planning to increase the number of random line-by-line tax audits of small corporations in a near future. The examiners will randomly select the 2010 returns of approximately 2,500 corporations with total assets of less than $250,000 to look for the signs of noncompliance by firms and their owners. The IRS will use the findings to update its return selection formulas.
To keep things simple…..Any employer such as sole proprietor, corporation, partnership or even a nonprofit organization with one or more employees may establish a SEP Plan. If you are an owner of a S-Corporation or if you are a self-employed business owner regardless of whether you are the only employee of the business you still may establish a SEP plan. Individual employees may not establish a SEP plan; however if the employee is eligible to participate in the SEP plan, they must establish their individual Traditional IRA’s to which the employer will deposit SEP contributions. Usually a traditional IRA account that receives Sep-employer contributions is referred to as a SEP IRA.