News Archives - MJW EA & Company LLC

February 16, 2019 Leave a Comment

A Reminder About the Business Entity Tax (BET)

What is the BET?

The BET is a $250 tax due every other taxable year and is imposed on most businesses.

Who is liable for the BET?

The BET applies to the following business types formed under Connecticut law and to non-Connecticut entities required to register with or obtain a certificate of authority from the Secretary of the State before transacting business in the state:

• S corporations;

• Limited liability companies (LLCs), including single member LLC’s, which includes:

• Limited liability partnerships (LLPs); and

• Limited partnerships (LPs).

Fee is $250 per filing and the next filing date (for calendar year businesses) is 4/15/19 which covers 1/1/17 – 12/31/18.

If you were in business at any point in 2017 or 2018, this still needs to be filed.

Click on the link for some FAQs about the change in the BET:

http://www.ct.gov/drs/cwp/view.asp?a=1454&q=506078

Did you know? In addition to the BET, all businesses registered with the Secretary of State must file an annual report and pay an annual fee to the Secretary of State. Some reminders about Annual Report with Secretary of State:

$20/yr for LLCs and Partnerships, $150/yr for Corporations and $50 for Non-Profits.
Bills ARE NOT sent unless you sign up for email reminders – you must be responsible for monitoring your status
The due date is based on business type and registration date.
Businesses can look up if they are current and file/pay for annual report through the C.O.N.C.O.R.D. link:

http://www.concord-sots.ct.gov/CONCORD/

As always, we are here to help – call or email with any questions you have!

February 9, 2019 Leave a Comment

Important Rule Every Business Must Follow!

All businesses, no matter the size, are subject to the 1099-MISC filing requirements. In order to be prepared at year-end to timely file any Forms 1099 that are required, you must obtain complete & accurate W-9 forms annually from any vendor you pay $600 or more for services (including mixed services/materials) or rent/lease.

For a simple task, this is very complicated and errors can cause a multitude of problems for you and your vendors!

Step One:

In order to have the information needed to prepare these forms you need to obtain a completed Form W-9 from your vendors before issuing any checks.

Step Two:

Review the W-9 to ensure it has been correctly completed. Items to review are:

The vendor must check one of the boxes in Section 3.
If they check the Limited liability company box, then they must enter a tax classification code to the right of the box.
If they select the Individual/sole proprietor or single-member LLC box, they are required to provide their name and social security number that they use on the page 1 of their Form 1040 not the business name and EIN. They may list business name on line 2.
They must sign and date the form.

Step Three:

Based on how your vendor completes this form, you can determine if they need to have a 1099 issued. Most vendors willneed to have a 1099 issued. The only exceptions are:

Payments to a C-Corp or an S-Corp (an LLC does not automatically fall under this exception) which is not being paid for legal or medical services
Payments made via credit card, debit card or PayPal.

If you use QuickBooks, we recommend the W-9 be attached to each vendor profile. If we prepare your
1099 Forms for your business, please provide us with copies of all completed W-9 forms as you receive them so we can review and to have on hand to expedite the preparation of your 1099s at year-end.

Important Notes:

If your vendor refuses to provide a complete W-9, you are required to withhold and submit 24% backup withholding from any payments to the vendor. You can be responsible for this backup withholding even if you do not collect it from your vendor. Additionally, the IRS may assess penalties ranging from $50-$530 per 1099 for failure to timely file.

Related to your 2018 filings, you may receive a notice from the Treasury Department (Notice CP-2100A) stating that a 1099 that was filed for 2018 by your business had an incorrect name or SSN/EIN. Read the notice carefully; you may not need to respond to this notice, but you do need to follow up with the recipient to verify that you have the correct information on file.

Bottom Line:

Before issuing any checks to vendors as a good business practice we recommend that you obtain a fully completed W-9 before issuing any checks.Blank W-9 forms along with other tax forms are available on our website on the Forms and Worksheet page under Common IRS Forms. If you have any questions, we are always happy to help!

January 4, 2019 Leave a Comment

You Can’t Deny the 1099

Don’t miss the deadline for filing 1099’s!

What is Form 1099-Misc?

1099-MISC is the version of Form 1099 that is used to tell the IRS that you’ve paid an independent contractor $600 or more in fees, compensation, rents, prizes, awards, or any other kind of income – that’s $600 or more over the course of the entire year.

Do you need to file a 1099-MISC this year?

This will depend on whether you hired any independent contractors this year, and how much you paid them. If you paid an independent contractor less than $600 over the course of the financial year, you don’t need to submit Form 1099-MISC for them.

Keep in mind that if you’re an independent contractor, you still need to report all of your income, even if you did less than $600 of work for a client and never received a 1099.

If you did pay a contractor more than $600 for services, rent, or for any other type of miscellaneous income payment (including a barter), you need to file a 1099. There are exceptions to this rule.

Don’t file 1099s for corporations

It’s rare, but sometimes an independent contractor will be registered as a C corporation or S corporation. You don’t need to file Form 1099 for a contractor registered as a corporation. You can see whether a contractor is incorporated based on the information on their Form W-9. Request one from any contractor as soon as you hire them. Also keep in mind that corporation names are typically appended with “, inc.”

What is an independent contractor?

An independent contractor is anyone you hire on a contract basis to complete a particular project or assignment.By definition, an independent contractor is not an employee. Common examples include graphic designers, landlords, attorneys, accountants, landscaping and general contractors.

Filing Deadlines for Form 1099

The deadline to file with the IRS and sending a copy of Form 1099 to your contractors is January 31, 2019.

If you need help filing these forms, we are, of course, here to help!

December 14, 2018 Leave a Comment

2018 4th Quarter Estimates Due

As the Fourth Quarter of 2018 winds to a close, we wanted to remind you that estimated taxes are due on or before January 15, 2019.

If you are required to pay estimates, we prepared and included pre-addressed envelopes and vouchers with the amounts due in the tax return packet we provided

If we keep your envelopes and vouchers here in our office, please make sure you come in with your checks prior to the due date so we can mail your estimates out before the deadline.

You also have the option to use IRS directPay for Federal estimated tax payments and TSC for the State. Click hereto be brought to the Federal site. Click hereto make CT online payments.

Federal estimates should be sent to:

Internal Revenue Service

P.O. Box 37007

Hartford, CT 06176-0007

CT Estimates should be sent to:

Department of Revenue Services

P.O. Box 5053

Hartford, CT 06102-5053

As always, we are here to answer any questions you may have.

December 11, 2018 Leave a Comment

Why You Need Year-End Business Strategies (Especially this year!)

Yikes! The Tax Cuts and Jobs Act!!! We have been working hard interpreting and applying the new (and old) tax law. All year we have been attending seminars, giving workshops, meeting with clients, dealing with the IRS and DRS and now it’s our last chance before we start the new year to get the word out and suggest strategies.

SHOULD YOU WAIT UNTIL JANUARY TO HAVE YOUR 2018 TAX STRATEGIES IN PLACE?

It’s not the best move…. A day late and a dollar short, as they say!

As a small business owner, you have options for retirement. The nuances of the plans and amounts to be contributed should be addressed with us. Some have to be made before year end, some by the filing deadline, some by the extension deadline.
Expenses are not a dollar for dollar savings. Don’t spend money you don’t have thinking you will be saving on taxes. Be strategic. Remember: if you use your credit card, the transaction date is the date it is considered purchased.
Review your 2018 transactions, reconcile, and update your books!
Pay yourself wages (if you are a C or S Corp) – DON’T pay yourself wages if you are treated as a partnership or a sole proprietor.
If you pay out holiday bonuses, make sure they go through payroll. It is a very big NO-NO to give bonuses outside of payroll and could be very costly to you!
If you do receive wages, you still have time to adjust your withholding. We have been advising our clients all year to do this. Take a look at your withholding to date. Let us know if you want us to work with you on this. Best to avoid surprises on April 15^th!
Get organized now for the issuance of 1099’s.The IRS is getting tougher on these compliance matters. You need to issue 1099’s to anyone you paid for services or rent to (including your landlord, attorney and accountant) for$600.00 or more. Use the W-9 form to obtain the pertinent information from the service provider – do it NOW – and not on Jan 31! Even better – going forward don’t pay anyone until you have them complete the W-9 form. Ask us if you need help!
Take a look at your income for 2018 and anticipate the tax liabilities. Make changes now wherever you can.
1. If you are operating as an S-Corporation or Partnership, be aware of CT’s new
  Pass-Through Entity Income Tax. You are required to make estimated taxes through the business and there are penalties if you do not. If you have not made estimated tax payments for the business yet you still have time. But…it’s complex. You will most likely want to work with us on this one. Call soon!
1. Be aware of the new 20% Qualified Business Income Deduction for Pass-Through Entities. This is a new deduction that is calculated separately. And, yes, very complex.
Not to be confused with the CT Pass-Through Entity tax is the CT Business Entity Tax (of $250.00 is due every other year and the next return due date is 04/15/2019. All LLC’s, with the exception of C-Corps, are subject to the Business Entity Tax.You may receive a bill in the mail or you may receive notification by email. If your copy does not arrive you still have to file a timely return. We highly recommend filing this form electronically using the TSC-Bus. We are not going to routinely complete paper forms this years (we have found this to be too confusing for the business taxpayers), but we will remind you that they are due. We will help upon request.

In summary,there are many changes this year. Not all of the changes will impact each business taxpayer – much depends on the entity and individual situations.

As always, upon request we are here to help!

A Reminder About the Business Entity Tax (BET)

Important Rule Every Business Must Follow!

You Can’t Deny the 1099

2018 4th Quarter Estimates Due

Why You Need Year-End Business Strategies (Especially this year!)

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