I am sitting here today completing 1099s, 1098s, W-2s, 940s, 941s, Alabama and Florida unemployment forms, Alabama withholding forms, and 1096s! Poor Jim had to look through the files in Alabama and fax me last quarter’s returns so I had them to reference. Do you have any idea how frustrating it is to try to tell someone over the phone exactly what he is looking for and where they are? (Not to mention being on the other end and not having a clue what you are looking for!)
Unfortunately it became apparent that I will not get to Alabama in January, and most of these things need to be done by the 31st. (Some can wait until the end of February, but why wait when all the information is already out?) So, New Year’s Eve for me is in Florida, and for Jim, it is in Alabama!
We are looking forward to a great start of 2007 in Troy. We have several homes ready to sell and almost ready to sell during the tax season. I noticed an ad on the television a few nights ago offering loans on people’s last paystub of the year in anticipation of their tax refunds! My staff (soon to be ex-staff - my successor starts her new job on Tuesday) has already processed and mailed the W-2s from our company, and several of the employees were already planning their trip to H&R Block, etc. We processed about 150 of them, but it always amazes me how many of the same people live paycheck to paycheck each year.
Jim has a handyman (licensed and insured) in Alabama who just started his business this past year. Unfortunately, I think he will be really surprised when he gets his 1099s from us. (He did work for 2 companies.) He had no idea what the W-9 was and why. He has told Jim more than once that he was told he didn’t need to worry about taxes for a few years after starting his business. I want to be sure he has his 1099s in his hands from us before they file for their fast refund. I know his business records are slim to none, probably more likely in the none category. (He is also a tenant who pays each month with a money order…if someone can’t keep his household finances straight with a checking account, how can he ever keep a business straight?)
If you have not gotten your non-employees to fill out a W-9, it is probably too late for 2006. The best practice is to have the person fill it out BEFORE you hand them their first check. This is something that could come back to bite you if you don’t do it. The IRS does look for this if you are audited. EVERYONE who does work for you (handymen, subcontractors, lawn services, cleaning people, etc.) is supposed to get a 1099 if they earned $600 or more from your business. Corporations are exempt.
Now, back to the taxes…Happy New Year, friends!
Ellen Brenn