New 1099-misc income reporting requirement

IRS will require all businesses to file a 1099-misc form for vendors and contractors whom you have paid in excess of $600.00 per year.  This use to exempt payments to corporations and other similar entities.Collection and management of supplier data is more important now than ever.

This will take effect for year 2012 for the year ended 2011.

New 1099 tax legislation included in the funding provisions of the Patient Protection & Affordable Care Act (March 2010) requires companies to collect valid TINs on a much larger scale than pre-legislation levels. Today most companies are expected to perform 1099 reporting for less than 10% of their supplier population. When the new law takes effect, companies can expect reporting levels to rise above 90%. Companies will need to implement new policies and potentially even new systems to manage supplier information more accurately in pursuit of staying in compliance


Thank you.
Vijay

Personal Injury Proceeds-taxation

Personal Injury proceeds are NOT taxable

Personal injury proceeds are considered compensation of injuries and losses, it is not a "gain" or "windfall" under the tax codes.
Actually, whether personal injury damage awards are taxable depends on what the award is for. If it is to compensate for personal physical injuries or sickness, then it's not taxable (IRC Section 104(a)(2)). Emotional injury that is the result of of physical injury may not be taxable; however emotional injury that is the result of nonphysical injury (for instance, defamation or trespass) is generally taxable. Likewise, lost wages that are the result of physical injury may not be taxable. (See IRS Guidance: Lawsuit Awards and Settlements and Rev. Ruling 85-97.)

For further clarification, contact us.

charitable donation

IRS is tightening up the rules and monitoring of donation deductions. To be on the right side, be sure to donate to a qualified chariotable organization.  Proper documentation is premiere.  You should keep/get a receipt.  If you donate money get a receipt and/or give checks preferrably.  All donations should be done before end of calendar year-Dec 31st.

Thank you and

Happy Thanksgiving to you and loved ones.

Vijay Sammy

Estate planning for child with disability

What follows is very important concerning estate planning for the future protection of a son or dauther with a significant disability:

Things to consider:

1.Wills
2. Special needs trust
3. Durable power of attorney
4.  Medical directive or living will

look into as proper planning can handle reality better for all involved.
Sincerely Gratitutes.
Vijay

Tax update tips

Remember if you make any energy eifficient puchases/renovations please keep reciept. This is for year 2009 and 2010 tax year. Check with me for more details on this and many other updates.