Posts by Carol Price4

I’ve never sent over a list of Disney companies—not that anyone ever asked for one...

What I actually send is the balance sheet, gross profit statements, income statements, decisions on profit usage or loss distribution, a breakdown of tax losses by year (if applicable), and the statement regarding overpaid prepayments... nothing else—and honestly, no one has ever called me to say anything was missing, 😁

Exactly—you'll definitely need a Sales Tax ID if you're planning on selling to other businesses.

I think Richard Howard55 made a good point there—you’re kind of blurring the lines between tax compliance law and income tax regulation.

When it comes to KPIs, cash should only include what was actually paid in cash—basically just the banknotes and coins tracked under tax compliance law.

Cards, checks, and everything else? That all goes straight to the bank account. 👍

Finally got things moving properly.... four guys have been grinding since this morning just to get about one done an hour—it was such a struggle—but now I'm firing off a final one every single minute almost...

The ZP goes right along with the sales tax filing...

ruggedlynx63 said:They aren't coming, they just aren't... ugh...😵
Does anyone actually have a solid conclusion regarding passive interest for 2015? Like, does it even count as income back then or what? I’m honestly just completely lost at this point 😢
It’s like they wrote the laws just to make us suffer... 🙂

Look, I'm just gonna report it. It’s not like we're talking huge money here—let them deal with the headache and the legal jargon... damn, we shouldn't have to be lawyers too 😵 just to get through our actual jobs...

Jessica Gonzalez30 said:Well, Section 30 covers income from capital and how that gets taxed when it's paid out.

Section 20, paragraph 5—if you look closely—clarifies that interest collected on funds or placements used for business operations counts as business receipts, unless those amounts are already subject to withholding tax under Section 30. So, basically, any interest up to 0.50% isn't classified as capital income and isn't hit with withholding, but it *is* still a business receipt.

Anything over 0.5% is subject to withholding, but it wouldn't count as business income because we wouldn't want it getting taxed twice, right? 😉

I’d honestly go looking for an official ruling on this one. Look, Section 20 says business receipts come from the types of income listed in Section 30, but then Section 30 itself says that credit interest on a checking account isn't actually "interest"... and it's never been treated as a business receipt before.

I don't mean to be difficult here—it's not a huge deal—but the wording just feels super blurry to me. Plus, why even mention receipts in a section that focuses on expenses? It's not even explicitly stated in Section 20...

Jessica Gonzalez30 said:It’s Article 21, Section 5 of the Income Tax Act.

On top of that, the R&D department released a note that I'll quote here:
"Please note that interest earned on deposits (both demand and term deposits) in checking or foreign currency accounts, paid out by the bank where the business holds its account, is considered part of business receipts."

As of January 1, 2015, the provision in Article 9, Section 1, Item 1 of the Act was removed—it used to say:

(1) The following are not considered income:
1. Interest received from USD or foreign currency savings, or on deposits (demand or term) held in checking, current, or foreign currency accounts earned from banks, savings institutions, or credit unions.

So, there you have it.😉

Article 20 of the Income Tax Act

(6) Business income also includes interest received under Article 30 if it comes from financial transactions that fall under the taxpayer's core business operations.

Article 30

(15) Regarding the interest mentioned in paragraphs 1 and 3, the following are not considered:

3. Interest earned on positive balances in checking, current, or foreign currency accounts provided by banks, savings institutions, or other financial entities—but only up to the maximum amount paid for liquid savings. This exemption applies if the interest on liquid savings is lower than the minimum rate for fixed-term deposits—basically, if it doesn't exceed 0.5% annually.

Interest doesn't count toward your receipts anymore—it used to be listed separately under non-operating income, but now there’s just a specific spot on the new form for non-operating receipts...

Just a little tip from my own experience—if you’re running your own business but used to be an employee before that, you might still have an active tax ID on file... and you really need to watch out for that when reporting non-taxable income. I dealt with this one case where a guy worked in Chicago, then moved away and started his own thing—when I went to report some non-taxable stuff, everything flagged because his records with the FBI still showed his old city! 👍

I just don't get it—look, I totally realize IT folks aren't experts in our field and they don't need to know every single nuance, but why can't someone who actually understands the day-to-day workflow sit down with them? It would be so simple to explain the possible variations so those templates actually work right the first time...

It's enough to drive you crazy when you can't get your job done and we're all just spinning our wheels!

Brandon Jackson4 said:Carol Price4,
here’s an instruction I found on the IRS website:

It states there's an obligation to report all receivables that aren't older than 6 years.
Specifically, for the initial reporting regarding outstanding unpaid receivables as of December 31st...
for the year 2015, this includes all overdue, unpaid amounts that became due for collection after December 31st...
2009. In other words, those due from January 1st, 2010, and beyond.

Based on this from the IRS, my take is that all 2009 invoices fall in if they are due after 12/31/2009... like an invoice dated Dec 20, 2009, that isn't due until Jan 15, 2010.
What's your thoughts on this?

Yeah, it says "due" rather than "issued"—just like I mentioned earlier—but honestly, any debt older than six years should be written off regardless of how you slice it. Per accounting standards, if you haven't written them off by then, you're just presenting a totally unrealistic picture of the company... so...

Brandon Jackson4 said:Looking for some clarification here.

If an invoice doesn't explicitly state a due date—basically, when is it officially considered overdue?

Does that timeline change depending on whether the bill is sent to a business or just a regular individual?

Also, regarding this new IRS form... is it filed electronically through the standard portal, or does it go somewhere else?

One more thing: what happens if the recipient was an individual back in the day who only had a Social Security number on file (back before everyone had a specific taxpayer ID, around 2009 or 2010)?

Thanks,

If there's no due date listed, it's generally considered due 30 days after the issue date.

You'll send that specific tax form over via the IRS e-file system.

As for those old invoices from 2009—you don't even need to worry about reporting them. You only have to report stuff going back six years, so anything from January 2010 onwards is what matters.

cosmictinker24 said:So, I went to see my consultant, and they told me that regardless of the statute of limitations or whether those companies were wiped from the corporate registry during bankruptcy or liquidation, we still have to track these as unpaid receivables. Apparently, they have to show up on this new reporting form because we never took legal action (basically all unpaid invoices from the last six years)... It's total absurdity, honestly...
I even had a woman confirm this at a seminar yesterday...
The only real headache is if the business itself closes down; then we might be on the hook for the sales tax, even though we never actually collected a dime from the client. So, I guess the move is to not include them as receipts and just leave things as they are!

But who are you supposed to sue if you didn't even know the company had already folded? Honestly, if it's bothering you, I'd just move it to receipts and call it a day—because if you ever decide to clear out all the old unpaid stuff during closing, it's going into receipts anyway.🍿

Or just roll with it and put it in the OPZ-STAT, 🙂

Henry Edwards33 said:You might be overthinking this one 😘

When you wrap up your final year of business, you have to settle every single obligation and outstanding claim. That includes any owner contributions that get finalized on December 31st—just like in the example you gave.

For the very first year, you’re spot on; it really just comes down to cash flow. But that final year always trips me up because you have to square everything away on the very last day of operations. You can't leave anything hanging; it all has to be accounted for.

Just to add—she was asking about taxes, specifically regarding net income after expenses... in the second year, prepayments kick in once the IRS decision arrives. At least, that's how it's worked for me so far, though I haven't had a chance to dig into the latest tax code changes to see if we need to report those prepayments separately from standard income.🤔

Don't sweat it—there's always a little downtime around New Year's every year, so it'll be back up before you know it...

Chloe King4 said:Yeah, that's pretty much it.

The thing is, though, it's a bit different for me because I’d probably only rent this machine out for maybe a month or two at most. How would I even handle that?

Just sign a contract for a month or two, and then the IRS will just send over the tax bills for those specific months—simple as that.

David Green642 said:And what if it's equipment being rented instead of real estate? None of my people have dealt with machinery or inventory rentals—only property🤔

Right, but look at it this way—say I own some equipment personally, and a corporation wants to lease it from me and pay for it.

First off, for a company to claim that as a business expense, there has to be a formal lease agreement in place—and second, since I'm earning income as an individual, I'll owe taxes on it.

If I were selling it to the company, that would just be a sale of personal property with no tax hit, but since this is actual income, Uncle Sam is definitely going to want his slice of the pie...

If you’re renting out a property from an individual—just a regular citizen—you still have to report that lease to the IRS so they can calculate the tax... and just a heads-up, the payment goes straight to their checking account, not a business account...
if I'm reading the question right...

Richard Howard55 said:Haha! Talk about tension!!!🙂
It’s pretty disappointing, honestly. You can't even touch the tax base for paid contributions during that first and final year of running a small business. They really nailed the logic on that one, didn't they?

I totally missed that one—where did you read 🤔

Henry Edwards33 said:What’s the matter? Everyone panicking? 🤣

Honestly, devilica and apis are spot on—you guys just aren't reading closely enough.

Here is the kicker... 😁

Thanks for clearing that up, Henry... haha, they sure got worked up!