Category: Business Taxes | Blog

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Archive for the ‘Business Taxes | Blog’ Category

The 5 Ws of a 1099-K

Posted by Michelle O'Brien on March 1, 2016
Last modified: October 6, 2016

Don’t let your 1099-K stand in the way of business.

If you’re an Uber driver, run an Etsy shop, or rent out your home to AirBNB frequenters, then you might notice a new tax form that has found it’s way into your mailbox in recent years.

It’s nothing to stress over. This is generally a straightforward form to review, and easy to report on your tax return.

What is a 1099-K?

Form 1099-K, otherwise known as Payment Card and Third Party Network Transactions, is one of the more recently introduced tax forms. It was created by the IRS in order to report income received from online electronic payments (e.g. credit cards, PayPal, debit cards, etc.) through third party processors. Prior to this form, many independent contractors who used online payment methods were left confused on how to report those sales on their tax returns.

Who gets a 1099-K?

Wondering if you’re one of the lucky ones who will get a 1099-K this year? The qualifications are somewhat more specific compared to other forms such as the W-2. With a 1099-K, it is based on sales volume.

Retailers who accept online credit card payments will receive a 1099-K from any business that processed their payments. However, the 1099-K is only mandatory if online processing meets the following stipulations:

  1. Sales volume is over $600 per year via credit card companies.
  2. Sales volume is over $20,000 and more than 200 individual transactions were made via third party processors.

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Prepare a Business Tax Return with RapidTax

Posted by Michelle O'Brien on February 4, 2016
Last modified: February 4, 2016

Let RapidTax help you and your business this year!

Starting this year, RapidTax is offering online business tax return preparation and e-filing. We’ll now be able to further assist existing customers who already use our website to prepare their individual returns. We’ll also be able to welcome new customers with businesses who need to file a tax return. Below are a few questions that you’ll want answered before preparing your business tax return with RapidTax.

What type of businesses can use RapidTax Business preparation?

Your business entity is determined when you register your business with the state you are located in. Our team at RapidTax welcomes four main business entities when it comes to preparing and e-filing business returns. These include the following:

  • Single Member LLCs
  • Partnerships
  • S-corporations
  • C-corporations

If you do not fall under one of these business entities or you’re unsure of what type of business you have, feel free to give our tax team a call at 844-CORPTAX (267-7829) to help you out. (more…)

Holiday Tax Deductions: Business Gifts

Posted by Michelle O'Brien on December 21, 2015
Last modified: October 6, 2016

Tis the season of Secret Santas and Holiday Company Parties.

It’s a common tradition among businesses to get in the holiday spirit and give gifts to clients and employees. Even though giving gifts doesn’t typically put the idea of taxes in mind, it’s important to know how to report business gifts as tax deductions.

What are direct gifts versus indirect gifts?

The IRS will give the green light on a tax deduction for two types of gifts; direct and indirect. Don’t worry – this still gives you substantial leeway to choose that perfect gift this year. Direct gifts are given as part of a direct professional relationship. For example, the owner of 123, LLC gifts a Godiva gift basket to each employee for the holidays. Indirect gifts typically involve a middleman, such as sending a gift home for your employee’s child.

Is there a cost limit?

There is a $25 limit per gift, per year. What’s that mean? Well, let’s say that your company likes to give gifts to clients or employees multiple times per year. The deduction would only apply to ONE gift and only $25 of that gift could be deducted.

Keep in mind that the gift CAN cost more but only $25 of the total can be reported as a deduction (so hold onto that ‘#1 BOSS’ title and keep giving your employees those iPad minis).  

Does the cost include incidentals?

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When Can I File a Business Tax Return?

Posted by Emma Lawrence on January 13, 2014
Last modified: October 6, 2016

Do you have to file a business tax return?  The IRS recently announced they will accept 2013 business tax returns starting today, Monday, January 13, 2014.

The first day to file a business tax returns, January 13, falls 18 days before the first day to file 1040 returns (1040 tax filing start date is January 31st).  If you need to file a business tax return with income derived from forms 1065 or 1120S , you can today on RapidTax.

Business tax returns accepted by the IRS starting on January 13,  include any return on the IRS Business Master File (BMF). BMF returns include the following federal forms:

  • 1120 (corporations)
  • 1120S (S corporations)
  • 1065 (partnerships or entities taxed as partnerships)
  • 1041 (trusts and estates)
  • 720 (excise)
  • 940 (FUTA)
  • 941 (FICA)
  • 2290 (Heavy Highway Vehicle Use Tax)

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A Tax Savings Guide to the Holidays: Tax Deductible Business Party

Posted by Michelle O'Brien on November 26, 2012
Last modified: October 6, 2016

You can save tax money by throwing a holiday party – but make sure it’s business-related

In parts one and two of our guide to saving on taxes during the holidays, we talked about scheduling a business meeting on the way to visit relatives and deducting part of your travel expenses as well as putting a tax deductible gift to yourself under the tree.

Another great idea for saving tax money during the holidays is to throw a tax deductible holiday party for your employees or customers.

Not only is throwing a party a great way to get into the holiday spirit, it can boost employee morale and make your customers/clients happy.

But it’s not all fun and games. Your party must be directly related to your business in order for you to deduct it. Essentially what this means is you can’t go too crazy. The IRS will disallow anything it considers lavish or extravagant as well as anything that isn’t directly related to your business. (more…)

Business Travel Tax Deductions

Posted by Michelle O'Brien on September 4, 2012
Last modified: October 6, 2016

Many of the expenses involved in a business trip are tax deductible

Those who have to do a lot of traveling for work will be relieved to know that you can deduct many of those expenses and thus significantly lower your tax bill.

What travel expenses can I claim?

According to the IRS, you can claim the “ordinary and necessary expenses of traveling away from home for your business, profession, or job.”

Be warned: the expenses cannot be “lavish or extravagant” in the eyes of the IRS. Obviously no personal expenses are deductible either. It might make sense to exclude questionable expenses from your return as they can increase the chance of you getting audited.

The travel expenses you can deduct include (more…)

Freelancing, Federal Business Income Tax, and You

Posted by Michelle O'Brien on October 18, 2010
Last modified: October 6, 2016

If you’re a small business owner, a Fortune 500 company, or somewhere in between, chances are you’ve had to deal with freelance employees (aka 1099 employees aka contract employees). These are people who, rather than working for your company, work for themselves. Instead of coming in from 9-5 every day, they work on a single project or for a few hours a day. And they are also affected greatly by federal business income tax law.

And, of course, when someone you are using is affected, your business is affected too. Here’s the lowdown on how federal business income tax affects your freelancers and your company:
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