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Equibiz -December 1999 Equibiz - bringing to you the latest income tax developments, tax tips and software news related to the horse industry. ***************************************************** Happy Holidays, and Best Wishes for a Safe and Happy New Year ***************************************************** TAX NOTES No Significant Changes for 1999 Congress shut down for the year and the century just before Thanksgiving, with no significant tax changes being passed for 1999. Cash Basis Taxpayers need to ensure that bills such as property taxes, membership dues etc. are paid in 1999 so that they may be claimed as deductions for the 1999 fiscal year. Expenses charged to credit cards in 1999, qualify as paid in 1999. *********************** Q & A This is your space to ask Carolyn questions on equine income taxes, equine software or general equine business questions. Carolyn may be contacted at the above address, or by email: equinecpa@aol.com. All readers questions will be answered directly, and those of most interest to readers in general will published in this column. Q. I run a horse-boarding stable, and was wondering to whom should I issue 1099s? I pay for services from a trainer, veterinarian, and farrier, do all these individuals need to be issued 1099s? When are 1099s issued? A. This is a timely question. First I will answer the to whom part of the question. You must file a Form 1099-MISC for each person to whom you have paid (1) at least $600 in rents, services (including parts and materials), prizes and awards, other income payments and medical and health care payments. According to the instructions to Form 1099-MISC, if the following four conditions are met, a payment generally is reportable as nonemployee compensation: (1) you made the payment to someone who is not your employee; (2) you made the payment for services in the course of your trade or business; (3) you made the payment to an individual,partnership, estate, or, in some cases, a corporation; and (4) you made payments to the payee of at least $600 during the year. Report only those payments made in the course of your trade or business. Personal payments are not reportable. Your trainer, veterinarian and farrier would all need to be issued a 1099 if they are not incorporated. Payments made to corporations are generally exempt from the reporting requirements unless they are payments for legal services. You must report attorney fees in box 7, or gross proceeds paid to attorneys in box 13 of the 1099-MISC form. Forms 1099-MISC must be completed and mailed or delivered to the recipient by January 31. The IRS copies and FORM 1098 are due February 29. Forms may be obtained by contacting 1-800-TAX-FORM (1-800-829-3676). Note that because the IRS processes paper forms by optical character recognition equipment, you cannot file with the IRS the FORMS 1098 or 1099 that you can print from their website. You must obtain preprinted forms. If you don't have the social security number or taxpayer ID # for someone you need to remit a 1099 to, be sure to send them form W-9 (Request for Taxpayer Identification Number and Certification) to complete. This form may be downloaded from the IRS website, and can be printed on your computer. http://www.irs.ustreas.gov/prod/forms_pubs/index.html If you're still unsure about what you need to do, or if you want your 1099s prepared by myself, please contact me at your convenience at carolyn@rocknberry.com ************************************************************* On the Web... With the new millennium breathing down our necks, Y2K concerns have become a major issue with PC users. Is your computer Y2K ready? Solving your Year 2000 problems on your Desktop PC's requires that five separate but related sets of activities be addressed. These five steps include: The hardware The operating system The commercial application software The developed software The external interfaces to other systems and contingency planning. Here's a link to a site that discusses fixing each of these components: http://www.mitre.org/research/cots/Y2K_SOLUTIONS.HTML This site also provides links to Microsoft's Year 2000 Product guide website. Business Sites of Interest: Newsletter subscriber, Julie Fershtman has written a series of informative articles on a variety of legal subjects of interest to horse owners. Read these articles at: http://www.quarterhorses.com/equinelegal.htm Each month I get questions from individuals wanting to know how to write a business plan. Last month, I loaded up Microsoft Office 2000, Small Business Edition, and was pleasantly surprised at the business plan writer included with that software. It is very thorough, and includes links to many useful internet sites as well as a load of information on writing a good business plan. Have a Web Site You'd Like to Share? Feel free to email me website addresses that you'd like to share with other readers, but please, only websites with content related to equine business, small business or taxation. *********************************************************** ************************************************************* Subscribe/Unsubscribe: Tell your friends about this email newsletter. Send them to http://www.equinecpa.net To be removed from this mailing list, please reply to this email with "unsubscribe" in the subject line. This newsletter is also available for web viewing at: http://www.equinecpa.net/newsletters/dec99 *************************************************************** Copyright 1999 Carolyn Miller, CPA |
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