NOVEMBER

Newsletter

Corporate Transparency Act - Resource Transparency Act/Beneficial Ownership Reporting Update

(Every client who is an owner, officer or controlling person in an LLC, Partnership, or Corporation needs to read this)

Over the last several weeks, we have sent emails to clients that we have identified may be required to comply with the new Corporate Transparency Act. If you have created an LLC and registered your business with the state, you are required to register your business with FINCEN as well. This reporting is due at the end of the year, so time is of the essence.

You can file the report yourself, or we can do it for you. Please read through the consent letter we emailed you for more information. If you have a business or rental property with an LLC and you believe you should have received an email from us, please check your spam folder. The email would come from:

Jellison CPA

If after checking your spam, you still don't see the email, give the office a call and we will get the information to you.

You can get more information regarding the filing requirements on our website under the resources tab. Click here:

Corporate Transparency Act - Resource

1099 REQUIREMENTS

Every business (even personal returns with a SCH C Business or SCH E Rental) is required to answer the following questions on their return: Did you make any payments in 2024 that would require you to file Form(s) 1099? If “Yes,” did you or will you file required Form(s) 1099?

So, how do you know if your business is required to file 1099 forms? 

First, there are 2 main 1099 forms businesses file each year 1099-MISC and 1099-NEC. The most common payments requiring these forms are:

• File Form 1099-MISC for each person in the course of your business to whom you have paid the following during the year:
• At least $10 in royalties (box 2).
• At least $600 in:

Rents (box 1).

Other income payments (box 3).

• File Form 1099-NEC, Nonemployee Compensation, for each person in the course of your business to whom you have paid the following during the year.
• At least $600 in:

Services performed by someone who is not your employee or

Payments to an attorney (box 1). 

• You may either file Form 1099-MISC (box 7) or Form 1099-NEC (box 2) to report sales totaling $5,000 or more of consumer products to a person on a buy-sell, a deposit-commission, or other commission basis for resale.

Second, not all the vendors you paid for the above items require a 1099 to be sent. It could depend on the type of business entity the vendor is. To determine the vendor’s entity type you will need the vendor’s completed W-9. Most incorporated companies, C Corporations & S Corporations, do not require a 1099 to be issued. However, there are exceptions such as payments for rent or royalty and payments to attorneys. These payments require 1099 regardless of entity type.

Note: it is a good rule of thumb to request an updated W-9 each year. Vendors could have a name or address change. W9 Form Link

The due date for filing 1099-NEC is January 31st for the previous year’s payments. 1099-MISC is February 28th. 

See the IRS website for more information: 1099 information

How Businesses Can Prepare For Year-End

With the holidays approaching we all get busy, but as business owners, this is also an important time to prepare for the upcoming tax season. Here are steps you can take to begin getting organized.

1. Make sure all of your accounts are reconciled. Clean up any checks or deposits that haven't cleared the bank.
2. If you have loans, request a year-end report with the balance from the lending institution.
3. Make a list of any capital assets purchased or disposed of during the year.
4. Prepare and file 1099's if applicable- they need to be postmarked to the contractors by January 31st.
5. Take a look at how your year was financially. Did it meet or exceed your expectations? Make note of any concerns.
6. Start preparing for next year! Getting organized now will make next year even easier.

Please consider joining the fun

in Hartland!