We want to remind you of some important information to help in this year-end’s tax filings. Please read thoroughly, for there are many important changes.
Please review your records to determine if any Form 1099’s are required to be prepared and mailed by 1/31/2017 to non-corporate companies (including LLC’s and/or individuals) who provided services such as subcontractors, professional and legal fees, rent, and etc. of $600 or more.
The exemption from reporting payments made to corporations does not apply to payments for legal services. New this year, the IRS’ copy must also be provided by 1/31/2017, whether e-filed or mailed, instead of 2/28.
We want to stress, Congress has gotten serious about not issuing 1099’s, and penalties have greatly increased for intentionally not filing, late filing, and incorrect reporting, such as names, addresses, Social Security and Federal ID numbers.
Please provide a list of names and amounts, including any new Form W-9’s (copy attached), by Friday, January 20, 2017, if you would like us to prepare Form 1099’s for you, and want timely filed forms to avoid IRS assessed penalties and interest. We recommend having 1099 recipients complete a W-9 before issuing any payments to them.
If you have an outside payroll service
Please notify them asap, for any adjustments (bonus, *officer health insurance, company paid HSA, etc.) to be included on your quarterly payroll returns and included on the employees W-2’s, along with any adjusted payroll tax deposit requirements. Please follow their year-end checklist and adjustment deadlines.
If you handle your own payroll taxes in house
Don’t forget to include any year-end adjustments such as *officer health insurance, company paid HSA and health care costs, etc. on the employees W-2’s.
If we prepare your payroll returns
Please provide us *officer health insurance so year-end adjustments can be added to your 4th quarter payroll returns and the employees’ W-2’s. If applicable, provide all Health Savings Account (HSA) contributions paid by the company in 2016 per employee, including December 2016.
*Important- S Corporation officers must include their health insurance costs and company paid HSA contributions in their W-2 wage boxes 1 and 16 in order to take the self-employed health insurance and HSA adjustments 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 adjustment on your personal return is allowed.
ACA compliance regulations have not changed; companies should not be reimbursing individual health care premiums unless you qualify under the rules for S Corporation officers.
Reminder to make any additional Simple, SEP or 401K contributions up to the maximum limits to help reduce your 2016 tax liability.
Please contact our office at 410.893.2100 if you have any questions or concerns.
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.