2019 Business Reporting Reminders Guide

December 6, 2019

Now more than ever, it is imperative to make sure you meet the reporting obligations as detailed below for:

  • Form 1099-MISC
  • S-Corporation Health Insurance
  • Personal Use of Employer-Provided Vehicle
  • Personal Property Tax and Business License Returns
  • Employer Payroll Update

 

Form 1099-MISC

There are several items to keep in mind that will streamline the process, whether you prepare Forms 1099-MISC yourself or request WellsColeman to prepare them for you.

Review your vendor lists and mark which vendors should receive a Form 1099-MISC.

  • Generally, any payee (other than a corporation) who is engaged in a trade or business and receives $600 or more in rents, services, or other income from you during the year should receive a Form 1099-MISC.
  • One common exception is payment made to attorneys.  Attorneys should receive a Form 1099 for services in excess of $600 regardless of whether or not they are incorporated.

Make sure all vendor setups are complete with name, address, and identification number.

  • Many errors occur in this area and if the information does not match what the IRS has on record, a letter will be mailed requesting you to begin backup withholding from the payee.  All vendors should complete a Form W-9 before any payment is made to ensure you have the correct information.

Forms 1099-MISC are due to recipients and the IRS by January 31, 2020.

  • If WellsColeman prepares your Forms 1099-MISC and Form 1096, we need your information in our office no later than January 20, 2020.

Watch those penalties!

  • Failing to file information returns timely, failing to include all required information on the return, filing incorrect information such as an incorrect TIN or failing to report a TIN can result in huge penalties.  The amount of the penalties is based on how late the information return is filed.

 

S-Corporation Health Insurance Reporting on Form W-2

More than 2% shareholders of S-Corporations must include health insurance premiums for the shareholder and his/her family on the shareholder’s annual W-2. 

  • The premium amount is included in Box 1 Federal Wages and Box 14 Other but is not included in Social Security or Medicare wages.
  • Please contact your payroll service provider and provide them with this information no later than December 20, 2019.

 

Personal Use of Employer-Provided Vehicle Reporting on Form W-2 

Employers must report this taxable non-cash fringe benefit on the employee’s annual W-2. It is subject to federal income tax, social security and Medicare tax, and FUTA tax.

  • The value is based on the fair market value of the vehicle and is calculated using one of the following three methods:  Annual Lease Value Rule, Cents-per-Mile Rule, or Commuting Rule.
  • Please contact your payroll service provider and provide them with this information no later than December 20, 2019.

 

Personal Property Tax and Business License Returns

Be mindful of what counties and localities you operate in and where your business property is located.

  • Not filing required returns or filing them late can result in additional penalties and interest. Most localities require you to obtain a business license, renew it annually, and pay annual taxes on your business property located in that jurisdiction.
  • Depending on the locality and your type of business, fees to obtain and renew business licenses are typically based on the gross receipts you earned in that locality during the year. Property taxes are generally based on the value of your property housed in that jurisdiction at the end of the year.
  • The business license and personal property tax returns for most localities are due on March 1, 2020.

 

Employer Payroll Update

New overtime provisions will go into effect beginning January 1, 2020 under the Fair Labor Standards Act (FLSA), mostly impacting “white collar” workers, defined as:

  • Executive, administrative, and professional employees that “exercise independent judgment and discretion about matters of significance”.
  • Administrative employees are not meant to include administrative assistance, office clerks, etc.
  • Professional employees are not meant to include doctors, registered nurses, lawyers, and other such professionals that are automatically exempt from overtime.
  • “White collar” employees paid a salary less than $47,476 will receive mandated paid overtime for hours worked over 40 hours per week (not per pay period).
  • “Blue collar” employees, such as administrative assistants that are paid a salary over $47,476 are still required to receive paid overtime.

A new paystub requirement goes into effect in Virginia beginning January 1, 2020, requiring all employers (including household employers) to provide employees with a paystub upon each regular pay date.

  • Employees must receive a paper paystub or be provided access to their paystub electronically.
  • Farmers are exempt from this requirement.
  • All paystubs must include the following information:
    • Name and address of the employer
    • Number of hours worked in the pay period
    • Applicable rate of pay
    • Gross wages earned during the pay period
    • Amount and purpose of any payroll deductions

Please review your payroll platforms for compliance with this new law and feel free to contact us for further assistance.

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