We have recently attended business tax update classes and wanted to alert you to some important new compliance requirements:
The new 1099 Penalties and due dates
- Congress has gotten serious about not issuing 1099s. Penalties can be as much as $260 per each 1099 filed late, incomplete or incorrectly filed forms depending upon the number of days after the due date of January 31st and could be subject to penalty of $530 per 1099 for intentionally not filing them at all! Corrected copies will also be subject to the penalty, if filed after the due date, so be sure to confirm correct names, address and federal id or social security numbers!
- We recommend having 1099 recipients complete a w9 before issuing any checks to them.
- In prior years, January 31 of the following year was the due date to mail the recipients’ copy and February 28 for filing IRS copies, however, the date remains the same for recipients but IRS copies are now also due by 1/31/17!
- Social Security filing copies of w2s will also need to be filed by 1/31/17 instead of 2/28!
- Our office will need to receive have all information to prepare 2016 1099s and w2s no later than January 20th, in order for all copies to be filed timely by 1/31/17
Change in C Corporation tax return due date
- Calendar year C corporation 1120 returns are now due April 15th (March 15 was the prior due date).
- Most 1120 fiscal year filers will be due the 15th day of the 4th month after the year end but 6-30 fiscal year end C corporation will continue with their existing due dates
Change in LLC and Partnership tax return due date
- Calendar year LLC and Partnership 1065 returns are now due March 15th (April 15 was prior due date)
- S corporation 1120S returns due date remains the same as March 15
- Our office will need tax information by February 10th if you want your business returns filed timely
S corporation officer health insurance
- S corporation officers need to include their health insurance costs in their w2 wages boxes 1 and 16 in order to take the self-employed health insurance deduction on their individual tax return form 1040.
- The company needs to pay the insurance premium or reimburse the officer before 12/31.
- Remember to contact your payroll service in early December to add this as a year-end adjustment, otherwise, no self-employed deduction on your personal return!
Mileage rates for 2016
- Business 54 cents per mile
- Charitable 14 cents per mile
- Medical 19 cents per mile
IRS Notice 2015-82 Increase De Minimis Safe Harbor amount for Repairs and Capitalization Policies
- The De Minimis Safe Harbor election has increased from $500 to $2500 per item for businesses without audited financial statements. This is an annual election and allows taxpayers to consider deducting up to $2500 as an operating expense for materials, supplies, repairs, maintenance and equipment. This provides tax planning opportunity for businesses beginning with purchases made after January 1, 2016.
About 360 Financial Group
360 Financial Group, founded in 1990, provides a holistic approach to comprehensive wealth management as well as tax and accounting and investment management services. At 360 Financial Group, our MISSION is to be our clients’ primary advisor. We believe our knowledge, experience, and intuitive approach to tax and financial planning gives our clients the confidence they need to help them realize their dreams.
Registered Representative, Securities Offered Through Cambridge Investment Research. Inc., a Registered Broker-Dealer, Member FINRA, SIPC and Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Small Business Group, Inc. and Cambridge are not affiliated.
Cambridge Investment Group, Inc. is a privately-controlled firm with a national reach across the financial services industry consisting of multiple broker-dealers and RIAs, including Cambridge Investment Research Advisors, Inc. – a large corporate RIA; and Continuity Partners Group, LLC – a special purpose broker-dealer and registered investment advisor; and Cambridge Investment Research, Inc. – an independent broker-dealer, member FINRA/SIPC, that is among the largest privately-controlled independent broker-dealers in the country supporting approximately 3,000 independent financial professionals nationwide who serve their clients as registered representatives and investment advisor representatives, choosing to use either Cambridge’s firm Registered Investment Adviser or their own. For more information visit www.joincambridge.com.
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.