Articles and Tax Tips

By Steven D. Mercatante Esq.

 
We often receive questions regarding record retention and the Form W-9. Mostly these questions focus on the length of time needed to retain payee Forms W-9 on file. In particular confusion arises because the IRS has different record retention rules for different forms. For instance, you often hear about needing to hold onto Form 1099 documentation for “three years; or four years if backup withholding occurred, or if filing Form 1099-C.”
 
Nevertheless, if you take this too much on face value, you may be making a mistake... 

By Steven D. Mercatante Esq.
 
Filing deadlines often arrive well before you are ready. That said the speed of the filing season does not need to overtake you. In particular there are several tools provided by the IRS which can help slow filing season down and significantly cut down on potential mistakes made by your organization. For instance... 

By Steven D. Mercatante Esq.
 
Some tax information reporting forms are far more important than others are. For instance, most filers are very familiar with the Form W-2, the tax information reporting form which reports wages and other forms of compensation paid to employees. However, the IRS is probably least concerned with the W-2 and far more interested in other information reporting forms. Why? The following article will answer that question and introduce you to the information reporting forms the IRS focuses upon the most heavily. 

By Steven D. Mercatante Esq.
 
Although payments for rent may seem like a simple issue there are some pitfalls you need to be aware of when dealing with rent payments reportable on the Form 1099. The following article will briefly examine these common traps and show how you can avoid them. 

By Steven D. Mercatante Esq.
 
Publication 1220 should be the starting point for anyone looking to learn about the basics of Form 1099 filing. The following article will examine why and highlight what it is that makes Publication 1220 so effective in making your filing season easier and reducing corrections.

By Steven D. Mercatante Esq.
 
Among your other job duties as an information reporter there is one that typically ranks at the top; avoiding risk. Risk is inherent in doing business therefore, the need to minimize risk is essential to maximizing organizational goals. If you fail to meet regulatory standards you are setting up your organization for unnecessary exposure to risks.
 
When it comes to regulatory compliance and setting internal controls these are goals mandated by the federal government for almost all organizations. Such goals are not optional and if you make a mistake because you were lax in your compliance efforts you will eventually get zapped. Among the risk that can cause the greatest pain there is one that ranks higher than just about any other does. The following article will identify what this risk and offer you some practical advice on how to mitigate just such a risk.
 
Incorrectly classifying your workers - a move ranking among the riskiest you can take. Among other things, you can face substantial fines as a repercussion for misclassifying workers as contractors when they are in fact employees. But why?

By Steven D. Mercatante Esq.
 
Risk is inherent in doing business therefore, the need to minimize risk is essential to maximizing organizational goals. If you fail to meet regulatory standards then you are setting up your organization for unnecessary exposure to risks. What kind of basic risks are we talking about? The following article will examine some of the more common information reporting risks you can run across as well as how you can make the changes needed to protect your organization.
 
Information Reporting Risk Basics
 
Form 1099 compliance is part and parcel of IRS compliance efforts, including the audit process. Auditors/examiners look at more than the Forms 1099 filed; they look at every payment made. Their goal is simple, to find those payments that should have been reported but were not.
 
What you need to know is that... 

By Steven D. Mercatante Esq.
 
One of the most common questions we receive revolves around the issue of LLC reporting. The following article will begin our exploration into the basic LLC structures with a detailed look at the Single-Member LLC while also offering some practical tips on how to handle your reporting requirements.
 
Before we get started, know that LLC stands for “Limited Liability Company;” NOT “Limited Liability Corporation.” Be patient with your payees, just because you know what an LLC is does not mean they even know what their own entity designation stands for. Do not argue with your payees, just ask for the proper documentation and if they insist they are an LLC “and that means they are a corporation” then you will just tell them what documentation you need to see; more on that documentation in a moment.
 
An LLC is problematic for reporting purposes because it can register as a number of different entity types, making it difficult to identify when reporting is required. Especially problematic is the rare situation when an LLC indicates it is a corporation, and exempt from reporting. We say this situation is rare because the overwhelming majority of organizations classified as LLCs are truly not corporations.
 
There is one more thing you need to know about LLC formation before we move on to our discussion of single-member LLC’s... 

By Steven D. Mercatante Esq.
 
One of the most common questions we receive revolves around the issue of LLC reporting. The following article will continue our exploration into the basic LLC structures with a detailed look at the Multi-Member LLC while also offering some practical tips on how to handle your reporting requirements.
 
Before we get started, know that LLC stands for “Limited Liability Company;” NOT “Limited Liability Corporation.” In addition, be patient with your payees, just because you know what an LLC is does not mean they even know what their own entity designation stands for. Do not argue with your payees, just ask for the proper documentation and if they insist they are an LLC “and that means they are a corporation” then you will just tell them what documentation you need to see; more on that documentation in a moment... 

By Steven D. Mercatante Esq.

 
All too often, the entity we thought we were reporting to is sold to a new owner in the midst of the year. Do you know what to do when this happens and you continue to make payments to the new owner? Many 1099 professionals do not. The following article explore your basic approach to handling just such a situation while also offering some practical tips on how to handle your reporting requirements.
 
Assuming you are aware of the change in ownership your response is actually quite simple...