Posts by Brenda Chase3

I personally prefer to record compensations as in-kind transactions since the IRS hasn't established a clear precedent for how to handle them otherwise. That said, I know a few accountants who go ahead and book them as income and expenses through their payroll software. At the end of the fiscal year, they just file detailed explanations with the IRS regarding the discrepancies, because the tax authorities end up seeing a lower total income than what was actually reported on the books.

Patrick Peterson49 said:Hey, can I send my termination notice to Social Security dated June 27th, 2014—even if my actual last day on the job was July 1st? 😕

I’m assuming what you mean is that the actual termination date is July 1st, but you want to mail the paperwork early on June 27th. You can certainly do that. They will simply process it once the effective date of the separation arrives—so, from July 1st onwards.

dustyscout8 said:I’m looking for some guidance here. On June 6th, our accounting firm submitted the physical registration paperwork to Medicare to officially link us with a client so we can begin managing their employee enrollments and terminations. We attempted to log into the system today to process our first termination for this specific client, but the business isn't appearing in the registry at all—their name is nowhere to be found in the employer database. Is there an additional step we need to take to properly "link" ourselves to this client's account so we can actually carry out these filings?
Many thanks

You should probably give NOAA a call; it’s possible there was a typo during data entry or they just overlooked the filing. Typically, once NOAA processes those papers, everything should be live in the system immediately without needing further action on your end. It feels more like a clerical error on their side or perhaps a small mistake in the information provided during the initial submission. Either way, a quick phone call to NOAA should clear this up.

ini5 said:I’m still waiting on my IRS and City Hall forms from 2013 to be processed. Have yours come through yet?

The IRS hasn't cleared anything for anyone (not for any of my clients, anyway), but City Hall finished everything ages ago. When you're checking your submitted forms, there's a "refresh status" button—just click that. It might tell you it's still being processed, but if you hit refresh, it should update to "processed" once it actually goes through.

Robin Cook4 said:Hey, can anyone tell me when you actually hit the threshold to register for sales tax at $76667? Like, am I supposed to notify the IRS right away, or do I just wait until the end of the year when I file my taxes?

It all comes down to the calendar year. Essentially, you don't need to file anything before the year wraps up, so you can continue operating outside the sales tax system until December 31st. However, don't lose sight of the timing here: once December 31st passes, you have to submit your application to join the sales tax system by January 15th. You cannot wait until February 28th to include it with your tax filing; you absolutely must get that request in no later than January 15th.

Robert Sanchez6 said:The instructions specify that a work history booklet is necessary. However, I have always submitted a formal verification letter instead—so I am genuinely uncertain if an application would be accepted using only three attachments: the employment contract, the Social Security statement, and a copy of my ID.

You don't need to bother with that verification letter. That requirement is basically a relic from back when physical work logs were actually used; they just haven't updated their wording in the system yet. All you really need to submit is the employment contract, your ID, and the processed Social Security documentation. That's all there is to it. I've been submitting my paperwork that way since those old paper records were phased out last year, and I've never run into a single issue.

frozenangler12 said:Oh, I know what you mean... I actually had a girl come in this week who was starting her very first job. She submitted her application without including her Social Security number, but once they finished processing everything, her SSN showed up right there on the completed form 😉
...

The ID isn't strictly required during the initial filing, but my guess is that for termination filings, it becomes mandatory since everyone already has an established SSN in the system.

Charles Stewart69 said:Ugh, I know, that's literally why I added the smiley face. But honestly, even if I tried to dodge the difference, an IRS agent would probably be blowing up my phone within minutes telling me I've got a 24-hour window to cover the debt before they start seizing everything I own. 🙂

Well, at least you've got an agent who stays on top of things. 😉 🤣

Charles Stewart69 said:So, my new notice finally showed up in my mailbox yesterday, which means I already paid the April contributions using the old rates, and I won't be hitting them with the new amount until the May payment. Anyway, does that mean I can just leave the April stuff as is since I already settled it, or am I going to have to cough up the difference later? I mean, seriously, whose fault is it if they can't get the official notices sent out on time? 🙂

You'll have to pay the difference, otherwise you're just inviting unnecessary interest charges. There's really no way around it.

dustyscout8 said:I appreciate the responses, everyone, though it feels like we’ve been completely blindsided by 🙂
. So, let me get this straight: there is absolutely no need to scan the employment contract? No supporting documents whatsoever? I'm just supposed to fill out the necessary forms and call it a day?
And once those are signed and submitted, what actually happens next? What is the subsequent step in the process after they are printed out and taken down to the Social Security Administration office?

No attachments are necessary unless you're registering someone for professional certification training.
I'm not quite following your logic... why would you head down to the Social Security office with printed forms? You might be thinking of the healthcare administration. Generally speaking, once the enrollments or terminations are submitted through Medicare.gov, they should process them within a few days. Once processed, you'll be able to download everything as a PDF from the portal.

You can print those out and take them to the health insurance office (if you don't use the online portal). However, if you use the digital system, you just scan the employment contract, the employee's ID, and the processed Social Security documents, then upload everything directly during the electronic filing via Medicare.gov.

Robert Sanchez6 said:Does anyone happen to know the answer to this? I am looking for some clarity. It appears to be a standard employment relationship with either a corporation or an individual, but I cannot say for certain—and frankly, trying to get a straight answer from the Social Security Administration over the phone is proving to be an impossible task.

It’s a standard employment relationship. A classic case. That’s exactly how they handled things when the foreign worker was manually processing one just last month.

You can actually bypass the need for an official transcript if you have the formal decision—basically, just a donation receipt. If you're donating through a local community center or a non-profit, they should be sending you a confirmation statement directly. It’s pretty straightforward. Sometimes small business owners will drop off their donations in cash rather than doing a bank transfer, so it won't show up on your digital statements. Personally, I have my donors send me a formal confirmation every single year without fail; I just attach those to my tax return and call it a day.

dustyscout8 said:I’m looking for some guidance here. This past Friday, we filed the initial registration paperwork for our bookkeeping firm with the Social Security Administration, along with a power of attorney for another small business we manage, which we intend to use for handling their employee enrollments. However, when I log into the online portal, the system only grants me access to filings for our own bookkeeping firm; there is absolutely no option to manage or report for the hospitality business we are trying to represent.
Is it possible we missed a specific form or a secondary authorization? Did we need to submit something electronically to establish our authority over that second business? I have tried calling the helpline for the online portal, but I can't get anyone to pick up the phone.

In my experience, those access forms used to be processed almost instantly once they were handed in at the service window (at least in New York City), and you could start using the system right away. It would probably be best to follow up and see if you can get them processed just to figure out where the bottleneck is.

rowdyhawk25 said:You really need to draft a formal debt forgiveness decision regarding those suppliers due to the statute of limitations, and you have to list every single invoice individually. Since these fall well under $1667, they are tax-deductible. There isn't a specific place to book this on the small business owner's side. Those invoices are likely still sitting there as unpaid in the IRS records. My advice would be to use that debt forgiveness decision to clear them out in the IRS books and attach the decision itself so there's a clear paper trail of why the action was taken.

Thanks, rowdyhawk25. I’m a little fuzzy on the closing part, though. If I close them out in the IRS books, wouldn't they automatically be recorded as expenses (in my view, as kind of an in-kind gain)? Is that the correct way to handle it? And what happens to the sales tax on those invoices?
If I'm understanding this correctly, if they aren't tax-deductible, they would be booked as in-kind income? And since they are expired and the invoices are less than $1667, then they get booked as an in-kind expense?
I've been trying to hunt down some articles online that explain this in more detail, but I haven't had much luck so far.

A small business client of mine currently has several outstanding invoices owed to a supplier totaling roughly $2.00 (we're looking at about ten different invoices here). These bills date all the way back to 2006 and 2009, and they've just sat there untouched—no one ever chased them down or initiated any legal action. Based on my understanding of the statute of limitations, these should have expired after three years. I'm trying to figure out the proper accounting procedure to write off this stale debt: specifically, how do we actually clear these from the books and which accounts should they be posted to? Also, do we need to obtain some kind of formal documentation from the supplier to justify closing these out due to the expiration of the claim?

Robin Kern76 said:So, my company just got the green light from the agency to send two of our workers off for some professional training. Does anyone here know if filing the paperwork with Medicare and the SSA works the same way it does for a standard full-time gig? Like, is there a different process for this kind of thing?
Also, when I’m logging onto the Digital USGS site, am I actually going to need to scan up the employment contract to prove the training setup?
Seriously, if anyone knows the drill, please help me out here.

When you're registering with the CDC, you should select "Professional Training without Employment" as your insurance basis (assuming that's the specific program you're in). However, the system usually forces you to pick an employment type to move forward. Since your training agreement isn't technically a standard labor contract, just select "Fixed-term Contract" (since these programs usually run for a year or two) and set it to full-time. That usually bypasses the error message.
You'll also need to submit a signed copy of your training agreement along with the official approval letter from the state employment office.

I ran into a snag with Medicare—they emailed me saying my application was rejected because I submitted Form 1 instead of Form 2. In my case, I ended up having to handle the whole thing manually in person.

rowdyhawk25 said:Look, in this specific scenario, it doesn't matter if the payment is being issued by the federal government. The key thing is that the outgoing invoice isn't addressed to them—it's addressed to the client. Even if someone like Pero Perić stepped in and made the payment on the client's behalf, the logic remains the same. You handle that outgoing invoice exactly how any other sole proprietor would handle their standard billing.

Exactly. I got my wires crossed between Ira and ur, and honestly, getting bogged down in Sales Tax Form obligations just threw my brain into a knot. I was thinking about it as some sort of direct dispute with the government rather than an assignment of funds—my apologies! Of course, since the invoice was issued to Perić, once it's settled via assignment (whether through a setoff or whatever method), the Sales Tax must still be paid to the IRS because the invoice was issued inclusive of tax.

Terry Miller17 said:Well, sure, an assignment—though they prefer to label it a set-off, but the semantics don't change much.

But does one still recognize the Sales Tax liability? I have encountered certain individuals who insist that payments from government agencies cannot include Sales Tax, arguing instead that these are merely base payments without tax included—even though they haven't provided me with any official documentation backed by law to support that. Their logic seems to be: the government pays you, and then you simply pay them back...

It reminds me somewhat of how insurance companies operate.

To recognize a Sales Tax liability, you generally need an invoice that explicitly breaks out that tax amount. From what I understand, these types of federal disbursements aren't subject to taxation themselves. This means a small business owner would still owe Sales Tax on the invoices they issue, but they wouldn't be able to claim a credit against those funds received from the government.

amberbadger17 said:I totally blanked and forgot to put the date on my stupid employment Contract before I sent it off. Does anyone have any bright ideas on how to fix this mess?

Honestly, probably nothing. If they catch the mistake, they'll just reject your filing and tell you to resubmit it. It actually happened to me once—I accidentally wrote 2013 on a contract instead of 2014, and Medicare didn't even blink. They processed the whole thing without a second thought. They mostly just go by the digital records from the Social Security administration anyway, and in my experience, they rarely take the time to scrutinize the actual paperwork that closely.

Anthony Cruz13 said:Let me try to explain it this way—I didn't actually deposit money into the business account every single week. Instead, at the end of the month, I just totaled up all my revenue and made one big deposit into the account. I did the same with my expenses to cover my material costs. Like I mentioned before, it turned out that my expenses actually exceeded my total revenue, and the accountant told me that those extra costs just carry over into the next period. What I'm really trying to figure out is whether I should use a portion of my revenue to cover the payroll taxes, or if I should just take out an owner's loan. I was told the fees for a loan might be pretty steep, which worries me. Also, could you maybe explain a little more about how those expenses "carry over" to the next period?

Why would you even consider an owner's loan if you have enough cash flow to just deposit the revenue? 🤷
There isn't anything stopping you from depositing your daily earnings whenever you want; you don't have to wait until the end of the month. Just deposit enough of that revenue right now to cover your current obligations—the same money you would have eventually deposited anyway—and then you can just settle the remaining balance at the end of the month.