Emily Myers8 said:If you're running a sole proprietorship, any unpaid outgoing invoices aren't considered actual income yet, so you don't report them to the IRS for sales tax purposes.
Quincy:
How do I close out those accounts? It says services completed in Dec '22 need to be closed in dollars?
What you're seeing doesn't apply to sole proprietors; that's more for corporations paying corporate tax. An outgoing invoice counts as revenue regardless of whether you've been paid, so it goes into the current fiscal year in dollars, while the outstanding balance gets carried over to the next year in dollars.
So, we’re looking at this Synesis software again. Their instructions say to log every single unpaid bill from 2022 into the IRU and URU, regardless of when they were actually due. I guess if you enter them that way, the system just shuffles them over to 2023, but then everything shows up in dollars. Then there's the part about the 2023 bills—apparently, you can record those in Q1 using dollars because the sales tax for that period has to be in dollars too. But wait, what happens with the invoices issued in Q1 that were already paid in dollars right away? It’s all a bit messy. If I follow this, I’ll end up with a closed set of books where some accounts are settled in dollars and others in something else entirely. It’s confusing, honestly.
So, regarding those invoices issued back in December 2022 where the payment isn't actually due until January 2023... they were logged in the IRS for 2022, but then the software automatically pushed them into 2023 and converted everything into dollars. How on earth am I supposed to close out those specific accounts? It’s saying services performed in 12/22 have to be closed out in USD?
So, regarding those invoices issued back in December 2022 where the payment isn't actually due until January 2023... they were logged in the IRS for 2022, but then the software automatically pushed them into 2023 and converted everything into dollars. How on earth am I supposed to close out those specific accounts? It’s saying services performed in 12/22 have to be closed out in USD?
I’m looking for some insight regarding the sale of a parking space located in an underground garage owned by a long-term revenue-generating entity. The asset has been fully depreciated, and now the plan is to sell it to an individual. What does the actual procedure look like? Does VAT apply to the issued invoice, or is it exempt? And what else should I be watching out for here? I haven't really had the chance to deal with this specific scenario before...
So, here's the thing. There was no tax prepayment liability for 2020, yet I ended up paying two prepayments from 2019. After that, nothing else was paid, and those negative amounts were rolled over to account 1201... I guess I'm just stuck. I have no idea which figure I should actually enter under PAID TAXES on the 2020 Form 1040? Maybe someone could help me out with this?
I need some urgent help regarding the payroll reporting forms for sick leave—specifically for those self-isolation cases. Any advice? 6.1. acquirer identification code - 5201 Is there an issue with using the same insurance code here? I mean, the sick leave ran from November 3rd to the 13th, 2020... I guess it might be a problem. Maybe. 16.1. — Payment method code? Is it 0 or 1? I think I read somewhere that it should be 1, but then I see some examples using 0... I guess it’s just one of those things. Maybe it depends on the specific filing.
Brandon Walker6 said:So, he could just transfer it to his personal account as income, or maybe just leave it sitting in the business account... honestly, it doesn't even go on the books either way because it’s not an actual expense or a deductible cost. The IRS would basically just say the funds were used for what they were intended for—keeping jobs afloat.
Thanks so much for clearing that up. 😁 I'm wondering, though... is it actually okay that he received this support from the IRS while simultaneously forcing me onto mandatory vacation? It feels wrong. Like, the government is essentially paying my wages, but I’m burning through my PTO for something I didn't even cause. My boss hasn't paid me in two weeks, so I'm just left trying to make ends meet... I mean, there's money available, but why wouldn't we just take what the state is offering? They could just bridge the gap to my full salary and things would be fine. If I end up staying on, I'll have used up all my vacation time and then I'll be working like a dog until next summer. It's just a miserable situation, honestly.
casualorca5 said:Outside GDP, at least that's how I interpreted it.🙄
Alright, thanks. And what about the small business owners? I mean, he applied for relief for himself, too... but then he isn't even paying himself a salary. It’s all a bit messy, I guess. What can even be done with his share, really? And more importantly... how am I supposed to book that? I guess there might be a way, but honestly, it sounds like a headache. Maybe.
Quick question regarding those tax-exempt receipts from December 2019—the ones due by January 15th, 2020. Should I be using the December 31st, 2019 report designation for those?
stormybadger8 said:Well, I don't have one, and I never have... I've been running my own business for 25 years and haven't worked a W-2 job once... I asked the IRS back in the day, and they told me straight up that small business owners don't use withholding certificates and you can't even apply for one... And sure enough, I just tried to pull one up on the IRS website and the system won't let me.
Logically, a business owner could only have one if they used to be an employee somewhere else, had a certificate issued before starting their business, and it just stayed in the system...
Yeah, he probably had a W-2 job at some point, so that's likely why it shows up..
urbanwalker72 said:🤣 I believe what you are saying, but it seems obvious that you shouldn't place your trust in them.
Then could you please explain to me how it is possible for the IRS to operate this way?
It is quite simple: the individuals working there simply lack the necessary expertise. What else is surprising about that?
No one tests them for competency, their salaries are relatively modest, nobody is held accountable, and there are no consequences for errors.
How could the outcome be anything other than this?
Of course, we didn't argue, because it was easier to just make the change to speed things up and resolve the filing as quickly as possible.
Naturally, avoiding conflict is easier. However, six months down the line, you'll find yourself on the IRS website using their "contact us" form, explaining that you couldn't find any regulations stating that a business owner without a salary or pension needs a PAC, yet the local branch is demanding it.
The system works such that the Headquarters will demand explanations from the branch manager, the department head, and the staff regarding why these demands were made, which might actually lead to some learning.
There is no other way to educate the staff.
Since the IRS agents themselves don't seem to know anything when asked politely, it’s clear THEY are just winging it, so we might as well take a chance and insist that the changes are reflected on the PAC as well.
Yes. They are the ones who trigger the avalanche of incompetence.
In my view, it isn't the agents, but rather the Department of the Treasury.
Everything you said is true, though perhaps not for every agent at the IRS, as they seemingly just blindly follow whatever their software tells them; I have no idea what principles they operate on, nor do I have the time to study their methods.
Well, it isn't a matter of the software; it is a matter of fundamental ignorance.
Exactly, it serves absolutely no practical purpose anymore.
Back before 2005, the IRS used to require a copy of your employment contract and your personnel file just to set up a PAC.
Even though it was nothing more than bureaucratic red tape and sheer nonsense, at least back then they understood the actual function of the PAC.
Let me jump in on this dilemma regarding the small business owner's W-4. When I log into IRS Online and click on W-4, I enter the SSN and get a message saying "Taxpayer has no W-4 form or the W-4 is closed". But when I go to Requests and click on Issuing/modifying a W-4 under that SSN, it pulls up a W-4 right there... which is why I'm so confused. Either way, I'll list her as a dependent for 10 months on the annual tax return... and maybe I'll request a W-4 change and note under dependents that as of November 1st, she isn't one anymore. At least the Police Department can see everything since she's employed by her dad now and can't qualify for the deduction anymore.
Brenda Chase3 said:From what I’ve been able to gather through the IRS portal, an employer can’t just request a new W-2 for someone who doesn't have one on file, simply because the employer isn't considered an authorized signatory for that individual's tax records. I noticed that while you can tweak certain details on an existing W-2, I’m still not entirely convinced there's a way to actually trigger the creation of a brand-new one for an employee—at least, I haven't stumbled upon a method to do it myself. If it were that easy, anyone could just start generating tax documents for people who don't even realize their paperwork is a mess. That said, please double-check my logic; don't take my word as gospel. I’m just recounting my own experience where I tried to find a workaround and hit a dead end. Usually, we just advise our staff to handle their own filings through the official channels, which seems standard to me. As employers, we just wait for the documents to show up in our digital inbox via the IRS system.
The employee is actually the daughter of a small business owner, and he's been claiming her as a dependent until now... Will she just be removed from the deduction for these last two months when the annual tax return is filed? Or does he need to submit a request to amend his own business tax records?
Brenda Chase3 said:From what I’ve been able to gather through the IRS portal, an employer can’t just request a new W-2 for someone who doesn't have one on file, simply because the employer isn't considered an authorized signatory for that individual's tax records. I noticed that while you can tweak certain details on an existing W-2, I’m still not entirely convinced there's a way to actually trigger the creation of a brand-new one for an employee—at least, I haven't stumbled upon a method to do it myself. If it were that easy, anyone could just start generating tax documents for people who don't even realize their paperwork is a mess. That said, please double-check my logic; don't take my word as gospel. I’m just recounting my own experience where I tried to find a workaround and hit a dead end. Usually, we just advise our staff to handle their own filings through the official channels, which seems standard to me. As employers, we just wait for the documents to show up in our digital inbox via the IRS system.
I actually managed to get through... I finally saw the employee's Social Security number today, and when I entered it, the system said there was no tax record on file. So, I submitted the request and the consent form, and now I'm just sitting here waiting...
Does anyone happen to know how to pull a tax withholding card through the employer portal for a new hire? I can't seem to make heads or tails of this IRS site... it's a bit of a mess, I guess.
I was hoping someone could weigh in on a hiring situation?
Here’s the deal: my daughter is working for our family business. She’s been a full-time student until now, but she’s actually dropping out of college at the end of this month. Right now, she's technically covered under the business owner as a dependent to keep her health insurance active. To make sure she doesn't lose coverage, we want to officially hire her for part-time work—about 4 hours a day at half the minimum wage on a permanent contract. I know we need to file the standard payroll and tax forms with the relevant agencies. My question is, do we have to manually update the business registration to show she isn't a dependent anymore, or does the system just automatically clear that status once she's registered as an employee? Also, regarding taxes and withholdings—since she's 22 and this is her first real job, is she exempt from Medicare contributions? Is there anything else I might be overlooking here? Thanks.
Brenda Chase3 said:The textbook way to handle this would be to issue a deposit invoice—since, effectively, that's what it is—which gives you a credit to apply. This happens quite often, and if a deposit invoice isn't issued, most accountants simply treat the extra funds as a payment applied to the following month. In your specific case, you would just record that difference paid in February as being applied on March 1st. Strictly speaking, my first suggestion is the most accurate because you would technically owe sales tax on that advance payment as of February. That said, in everyday practice, most firms don't make a big deal out of using the second method when these things pop up.
Thanks, Brenda Chase3! I'll just close it out in March 2019 since we didn't refund the cash or issue a retainer invoice anyway. I mean, I don't really have any other choice! 🙂
I could use some help with this: What happens if a client overpaid their invoice back in February? We bill them monthly for our consulting services... But now, for the March billing, they’ve paid less by that exact amount. I'm wondering what I should have actually done with that extra credit in February? Since the next invoice hadn't even been generated yet to offset it...