On Demand Webinar
Webinar Details $219
- Webinar Length: 100 Minutes
- Guest Speaker: Steven Mercatante
- Topic: Taxation and Accounting
- Credit: ATATX 1.5, CPE 2.0, IRS 2.0
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With constant revisions to Forms 1099 and related rule changes, it is crucial to remain up-to-date with the current information reporting laws to avoid those dreaded penalties and interest, not to mention the time consumed to make corrections. Whether you are new or seeking an update, this course will provide CPAs, Accounts Payable, Payroll, and Tax professionals with plain English guidance to help minimize 1099 filing mistakes while breaking down the tough 1099 payee and payment reporting situations, such as those involving middlemen, agents, liens, and garnishments.
In this course, industry expert and corporate tax attorney Steven D. Mercatante Esq. explores some of the more common problems experienced by CPAs, accounts payable, and tax departments related to documenting, validating, and reporting payee information on IRS Forms 1099. He identifies key issues and best practices for addressing them.
Your Benefits For Attending:- Determine which 1099 to use and watch out for key trouble spots on the most commonly filed Forms 1099.
- Identify W-9 document validation best practices, with a focus on situations when multiple names are provided, handling undocumented payees, exempt payees, and best practices for handling reporting when multiple parties are involved in the transaction.
- Target categories of payees and payments that can lead to 1099 reporting when the reporting does not necessarily follow the check.
- Receive tips on recent 1099 changes.
- Learn about tricky situations involving the identification of the beneficial owner of the income for 1099 reporting purposes.
- Get help determining when a garnishment or lien payment made to a court or an attorney is reportable and to whom.
- You sometimes face difficult payment situations involving multiple parties and struggle to identify to whom you should report the payment.
- Your 1099 validation and reporting procedures are not set up properly to help in identifying the beneficial owner of the income and to whom you should report.
- You are a CPA or work in Accounts Payable and need to understand these complicated topics.
- Introduction
- The Law 00:01:14
- Form 1099-NEC 00:12:27
- Form 1099-NEC Cont’d 00:16:08
- 1099-MISC 00:16:58
- 1099-MISC Attorney/Settlement “Middleman” Issues 00:18:21
- 1099-MISC Attorney/Settlement “Middleman” Issues - Example 00:35:00
- 1099-MISC Attorney/Settlement “Middleman” Issues - Punitive Damages 00:36:30
- 1099-MISC Attorney/Settlement “Middleman” Issues - Special Rules On Delivery 00:43:24
- Other Legal “Middleman” Issues - Garnishments and Levies 00:54:48
- Middleman Basics - “The Middleman” 01:02:49
- Middleman Basics - Questions 01:16:23
- Middleman Basics - Key Issues: Management or Oversight 01:16:23
- Middleman Basics - Key Issues: Significant Economic Interest 01:16:33
- Middleman Basics - Knowing Who The Beneficial Owner Is 01:18:54
- Middleman Basics – Outsourced Payments 01:23:54
- Middleman Basics – Charitable Donations 01:24:15
- Middleman Basics – Agent Payments 01:28:55
- Protect Yourself 01:33:45
- Attendee Questions 01:38:36
- Presentation Closing 01:41:56
- Artificial Intelligence (AI) 00:08:56
- Audit 00:07:20, 00:36:45
- Backup Withholding 00:07:17, 00:14:39
- B-Notice 00:04:07, 00:07:19, 00:15:01
- Compensatory Damages 00:37:43
- CP-2100 00:04:13
- Due Diligence 00:03:36
- Exempt 00:29:06
- Expense 00:21:10
- Federal Insurance Contributions Act (FICA) 00:50:38
- Federal Unemployment Tax Act (FUTA) 00:50:39
- Form 1099-INT 00:40:43
- Form 1099-MISC 00:12:40, 00:13:50, 00:16:05, 00:16:59, 00:21:32, 00:33:57, 00:55:22
- Form 1099-NEC 00:12:39, 00:13:50, 00:16:11, 00:58:13
- Form W-2 00:50:36, 01:01:45
- Form W-9 00:13:28, 00:58:25, 01:22:17
- Garnishment 01:02:06, 01:19:31
- Gross Proceeds Payment 00:20:00, 01:02:17
- Independent Contractor 01:01:46
- IRC Sec. 3406(a) 00:03:50
- IRC Sec. 6041(a) 00:01:14, 00:55:48
- IRC Sec. 6109(a)(2) 00:03:45, 00:14:51, 00:55:46, 00:58:46
- IRC Section 6045 00:28:17, 00:55:49
- Levy 01:19:31
- Nonprofit Corporation 01:01:25
- Punitive Damages 00:37:43, 00:38:28
- Tax Gap 00:02:24
- TIN 00:04:00, 00:14:54, 00:58:26, 01:21:02
- Transaction 00:20:47, 01:02:56
- Vendor 00:03:59, 00:04:55, 00:05:47, 00:14:47, 01:20:42
- Wage 00:50:49
Artificial Intelligence (AI): Artificial intelligence is intelligence demonstrated by machines, as opposed to the natural intelligence displayed by humans or animals.
Audit: A formal examination of an organization's or individual's accounts or financial situation
B-Notice: A notice from the IRS stating that one or more tax ID numbers were missing from a 1099 or do not match the IRS records.
Backup Withholding: Backup withholding is the tax that is levied on investment income, at an established tax rate, as the investor withdraws it. Backup withholding helps to ensure that government tax-collecting agencies (such as the IRS or Canada Revenue Agency) will be able to receive income taxes owed to them from investors' earnings. (www.investopedia.com)
CP-2100: It is a notice that tells a payer that he or she may be responsible for backup withholding. It is accompanied by a listing of missing, incorrect, and/or not currently issued payee TINs. Largevolume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, andsmall filers receive a paper CP2100A.
Compensatory Damages: A sum of money awarded in a civil action by a court to indemnify a person for the particular loss, detriment, or injury suffered as a result of the unlawful conduct of another. Compensatory damages provide a plaintiff with the monetary amount necessary to replace what was lost, and nothing more.
Due Diligence: Due diligence is a process or effort to collect and analyze information before making a decision or conducting a transaction so a party is not held legally liable for any loss or damage. The term applies to many situations but most notably to business transactions.
Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage
Expense: Offset (an item of expenditure) as an expense against taxable income.
Federal Insurance Contributions Act (FICA): The Federal Insurance Contributions Act is a United States federal payroll contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.
Federal Unemployment Tax Act (FUTA): The Federal Unemployment Tax Act (FUTA) is a federal law that imposes an unemployment tax on employers. The FUTA tax funds the federal government's oversight of each state's unemployment program. Only employers pay FUTA tax. You must deposit the tax quarterly and file an annual form.
Form 1099-INT: Form 1099-INT is the IRS tax form used to report interest income. The form is issued by all payers of interest income to investors at year end and includes a breakdown of all types of interest income and related expenses. Payers must issue Form 1099-INTs for any party to whom they paid at least $10 of interest during the year.
Form 1099-MISC: The Form 1099-MISC is an Internal Revenue Service (IRS) tax return document used to report miscellaneous payments made to nonemployee individuals, such as independent contractors, during the calendar year. (www.shrm.org)
Form 1099-NEC: In the context of 1099 tax filing, NEC stands for “Nonemployee Compensation” (the first letters of the three words None, Employee and Compensation). Most tax payers recognize NEC as box 7 on Form 1099-MISC. NEC is used to report income paid to independent-contractors / the-self-employed (referred to as 1099 employees for simplification purposes). So, while employers report income that gets paid to employees on Box 1 (Wages, tips, other compensation) of the W2 form, payers report income that gets paid to none-employees on Box 7 (NEC) of the 1099-MISC form. As an individual, if you received form 1099-MISC instead of Form W-2 then the payer did not consider you an employee and did not withhold income tax or social security and Medicare tax.
Form W-9: Form W-9 (officially, the "Request for Taxpayer Identification Number and Certification") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number). - Wikipedia (https://en.m.wikipedia.org/)
Garnishment: A legal summons or warning concerning the attachment of property to satisfy a debt
Gross Proceeds Payment: When a business sells an asset, whether tangible or intangible, it receives a payment, which is the gross proceeds. The amount includes the costs of production and other costs and expenses related to the transaction.
IRC Section 3406(a): Requires that, under certain circumstances, including the payee's failure to provide a TIN, the payer must perform backup withholding.
IRC Section 6041(a): Provides that persons engaged in trade or business must report certain payments on an information return.
IRC Section 6045: Every person doing business as a broker shall, when required by the Secretary, make a return, in accordance with such regulations as the Secretary may prescribe, showing the name and address of each customer, with such details regarding gross proceeds and such other information as the Secretary may by forms or regulations require with respect to such business.
IRC Section 6109(a)(2): Requires that a payee provide a TIN to the payer when the payment will be reportable on an information return.
Independent Contractor: An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non-employee. As a result, independent contractors must pay their own Social Security and Medicare taxes. - Investopedia (https://www.investopedia.com/)
Levy: A tax levy, under United States Federal law, is an administrative action by the Internal Revenue Service under statutory authority, generally without going to court, to seize property to satisfy a tax liability. The levy "includes the power of distraint and seizure by any means".
Nonprofit Corporation: A nonprofit organization, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is an organization dedicated to furthering a particular social cause or advocating for a shared point of view.
Punitive Damages: Punitive damages, or exemplary damages, are damages assessed in order to punish the defendant for outrageous conduct and/or to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit.
TIN: A Taxpayer Identification Number is an identifying number used for tax purposes in the United States and in other countries under the Common Reporting Standard. In the United States, it is also known as a Tax Identification Number or Federal Taxpayer Identification Number.
Tax Gap: The gross tax gap is the difference between true tax liability for a given tax year and the amount that is paid on time. It is comprised of the nonfiling gap, the underreporting gap, and the underpayment (or remittance) gap.
Transaction: In QuickBooks, a transaction type identifies what kind of transaction occurred, such as a customer transaction, bill payment or a bank transfer. When you submit a transaction, you type in a transaction code to represent it.
Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.
Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.
