Grooms & Harkins, Personal & Business CPAs

To Our Business Tax Return Clients:

We want to remind you that Form 1099-MISC must be issued to individuals and other unincorporated entities to which you paid $600 or more for services in calendar year 2011.  Included in the list of required recipients are attorneys and medical care providers (but not health insurance), whether incorporated or not.  Likewise, Forms 1099-INT and 1099-DIV must be issued to recipients of interest and dividend income, respectively.

Forms 1099 must be received by the payee no later than January 31, 2012, and transmitted to the IRS with Form 1096 no later than February 29, 2012.

PLEASE NOTE:  This is an area of greatly increased IRS scrutiny.  All business returns — meaning Schedules C and F of Form 1040, Form 1120S (S corporation return), Form 1120 (corporate return), Form 1065 (partnership return) — now contain the following questions on the tax form:

• Did (you/the corporation/the partnership) make any payments in 2011 that would require (you/it) to file Form(s) 1099?   This must be answered yes or no.
• If “Yes,” did (you/the corporation/the partnership) or will (you/the corporation/the partnership) file all required Forms 1099.

Remember that the signature block of all tax returns contains the following language: “Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct and complete.”

It is our understanding that these boxes cannot be left blank because e-filed returns will be rejected if the boxes are unanswered.  It is also our understanding that this raises the potential penalties for each 1099 not filed from $100 to $500.

We recognize that this increased IRS scrutiny is a headache and that this letter is, necessarily, strongly worded.  If you have any questions or concerns about this matter, please do not hesitate to call or email us so we can discuss it.

 Very truly yours,

 Grooms & Harkins, P.C.

Unimpressed with U.S. deficit reduction plans, S&P delivers on its warning.

Presented by Deanna R Pickering, CPA, PFS

Unprecedented and unsettling. Standard & Poor’s issued a historic downgrade of U.S. debt on August 5, sensibly waiting until the market week had concluded to send a shock wave toward global investors. It reduced America’s long-term debt rating – which had been AAA since 1941 – to AA+.¹

S&P felt Congress did too little too late. The credit rating agency had threatened to lower the boom if Congress passed any deficit reduction plan smaller than $4 trillion in scope. The Budget Control Act of 2011 “falls short of what, in our view, Continue reading →

We’ve put a video on our Facebook page showing the office and where we stand with contractors, etc.  Please take a look at your convenience.  Thank you again for all of your support.

This morning at about 9:00 am a man in a large pickup drove through our office wall.  The details can be found at www.trib.com.  Everyone in our office is safe and unharmed. 

We praise God for the safety of our employees.  We are saddened by the death of a pedestrian and we pray for his family.

We want to thank everyone for their prayers and concerns.

(IRS Summertime Tax Tip 2010-07)

In its summer series of tax tips, the IRS provided a few pointers that might help us with military clients.

Combat Pay. If the service person serves in a combat zone as an enlisted person or as a warrant officer for any part of a month, all of the Continue reading →