So many things have changed with the New Year; I think it is important that each of you read this update to make sure you comply with all the government changes going on.
Health Insurance has really changed drastically. In my own firm, we never received a cancellation notice, but our carrier sure enough no longer offers the policy we had. We had to convert, which in many small business cases, amounts to paying more.
1099s are due to be mailed to all recipients. Naturally, we need your list and amounts, or better still is having your entire bank statements in house reconciled. We can then print your 1099s for your recipients. This year the IRS is looking at landlords & contractors in particular with regard to 1099s being issued. Also don’t forget, all tax returns now have lines that say “was this business supposed to send 1099s” and “if so, did or will the business send 1099s.” Surely we want to answer yes to both questions if it applies. Every owner signs the tax return under penalties of perjury, so make sure this is complete and accurate.
Audits are on a sharp rise and are coming from many places, since federal, state and city agencies haven’t got enough money to pay their bills. Particularly shocking are NYS dept of labor, NYS sales tax, and IRS income tax audits. Not all audits can be avoided as the IRS is targeting restaurants and landlords this year. Your best defense is correct and complete compliance. This means, don’t pay anyone who doesn’t have proper rights to work and pay everyone on the books accompanied by the proper employee or outside contractor paperwork. Government agencies audit non-filers, late filers and delinquent payers first. So it is best to avoid attracting the agencies.
NYS has a new computer system called CISS [computer information selection system] designed by IBM and smarter than WATSON computer which beat the jeopardy champions on TV. This machine has data from across the state on sales, taxable sales, income taxes, corporate taxes, dmv, nys insurance fund info etc. and correlates it all and dumps out prospective businesses to audit. Maybe some of you have heard or experienced that NYS contacts delinquent taxpayers owning more than $10,000 to NYS and prevents driver license renewals! So this is yet another reason to keep your records current, and file and pay on time.
Send us your bank statements, 1099 information, loan information and any other prevalent data so that we can prepare and make sure you file timely. Our goal is to get everyone the largest legitimate refund, file all your forms timely and to be sitting with all records complete should an audit letter come your way.
Best regards and we look forward to serving you this tax season,
– Harlan S. Kahn, CPA