Filing of 1099 forms by Schedule C, E, F, Forms 1065 partnerships and 1120 corporations.
Two New Questions:
I. "Did you make payments in 2011 that would require you to file Form(s) 1099?
J. "If 'Yes' did you or will you file all required Forms 1099?"
Federal penalties have been increased for 2011, in many cases doubled, for failure to file 1099 forms. Penalty provisions are in IRC (Internal Revenue Code) 6721 for failure to file and 6722 for failure to furnish payee statements. If a taxpayer fails to file a 2011 form 1099-MISC before August 1, 2012 the failure to file penalty is $100 per 1099 form and the failure to furnish payee with a copy is $50.
Credit for Small Employer Health Insurance Premiums. New Form 8941
Beginning with the 2010 tax year, employers who provide health insurance to employees con potentially obtain a credit for doing so. The credit is authorized by IRC 45R and is claimed on new for 2011 form 8941. Section 45R was part of the Patient Protection and Affordable Care Act of 2010.
To be an eligible small employer for purposes of the 45R credit, the employer must meet these three requirements.
1. The employer paid a uniform percentage of not less than 50% of the premium cost of each enrolled employee's health insurance.
2. The employer had fewer than 25 full-time equivalent employees. The FTE is based on 2,080 hours of compensation per year. An employer could have more than 25 employees so long as the FTE is not more than 25.
3. Average annual wages was less than $50,000 per FTE.
2011 Standard Business Mileage Rates
Standard business mileage rates are 51 cents per mile for business driven from January 1, 2011 through June 30, 2011 and 55.5 cents for business miles driven between July 1, 2011 and December 31, 2011.
Please provide your written mileage log at your appointment.
Hobby Loss Rules
Do you have a hobby? Check with us after reviewing the Facts and Circumstances Test.
Factors below are not intended to be an exclusive list and should be considered together to determine if a profit motive exists. (Reg. 1.183-2(b))
1. The manner in which taxpayer carries on the activity.
2. The expertise of taxpayer and advisors.
3. Time and effort spent by taxpayer in carrying on the activity.
4. The expectation that assets used may appreciate in value.
5. Taxpayer's success in other similar or dissimilar activities.
6. Taxpayer's history of income/loss with respect to the activity.
