Posts by Jessica Gonzalez30

shadowdrifter99 said:The point being made there is about the timing of the payment, not whether it's treated as cash or a bank deposit. It makes zero sense to claim a check counts as cash when the bank doesn't even drop the money into your account until the check actually clears.

So, just to clarify—are you saying that if a small business owner pays for something using a credit card, you’d treat that the exact same way as if they handed you physical cash?

Carol Price4 said: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...

NPR released an explanation regarding the KMT.
In the end, they won't go through with it, even though at first everyone was like, "Of course we're doing this," colleagues and all🎉:klap:

They’ve really started getting on my nerves with how they write their articles.
It’s always just a copy-paste job of the Law, followed by half a day of trying to explain what they just pasted.
I think I’ll just stick to my way of doing things—there’s no way I’m going to spend my time fixing every single tiny calculation over a few cents or dollars.☕

Arthur Bishop6 said:Just so I'm clear here—this new federal statistical report form is only being sent to businesses registered for sales tax?

That's correct.

placidlynx92 said:I'm about to go change it for the third time, 🙂🙂
but I'm holding off on hitting send just yet. 🤣

🤣🤣🤣
God forbid—why bother stressing over it if you already know you're probably going to tweak it at least one more time? Besides, anything could happen with federal regulations before February 28th. 🤣🤣

placidlynx92 said:Then again, if you consider that prepayments are being made throughout 2015, yet the obligation to settle them is dictated by the Customs Act (meaning 2015 transactions get filed in 2016), it stands to reason that the new rates should apply 🙂. I went ahead and ran the numbers both ways—using the old rates first, then the new ones—but I haven't sent anything off yet. I'm just sitting here waiting...

I have to disagree there.
If I was paying prepayments back in 2015 based on a specific rate—say, 0.02%—then logically, when I sit down to do the final reconciliation for the 2015 tax year, I should stick to that same rate I used for the prepayments, rather than suddenly jumping to a new one. But, honestly, the exact same headache is going to pop up again in 2016 anyway 🤣🤣🤣

The logic just flies right out the window 🤣🤣

Robert Rifovac and his group said use the old rates... so, old rates it is. I'm not going to lose any sleep over it 🤣

I could use a little bit of guidance if anyone here has dealt with a situation like 🙂
.
A small business owner I work with took some damage to their commercial auto policy—the one they use for their daily operations.
The VAT was paid directly from our account, but the insurance company settled the remaining balance by paying the vendor directly.

So, here’s how I handled the bookkeeping: I recorded the VAT paid via the checking account, and then I booked the rest of the invoice as an in-kind expense. To make sure everything balanced out, I also recorded the net settlement the insurance company sent to the vendor as in-kind income (based on an out-of-court settlement agreement). Does that sound like a sound way to book this?

Also, should I be reporting both that expense and that income as deductible or non-deductible in the KPI?

Brenda Chase3 said:To makes perfect sense to me as well. If we look at how things were handled back in 2015, it follows the same pattern, especially since the documentation states the changes are law entering into force on January 1st, 2016.
Essentially, once we hit January 1st, those new rates kick in immediately; they aren't going to apply them retroactively to the previous year.

Up until now, the standard approach has always been to look at the date the law enters into force—but since everything seems to be shifting lately, I’m honestly just a little worried that things might have started moving backward behind my back without me realizing it.🤣

Keith Martinez5 said:It clearly states they apply to the 2015 tax year...

It states the law entering into force is January 1st, 2016—which, logically, should affect the 2016 calculations. 😉
That’s how we've handled things up until now, anyway, but at the seminar, they actually mentioned that the old rates would still be used.🕺

Jack Carter88 said:Go ahead and submit the form; it will be processed and linked to your payments. I ran into a nearly identical situation myself involving an employee. Their Social Security enrollment was fully up to date, yet the system kept flagging this exact error during the form check. By the time I filed the following month, everything had cleared up perfectly.

It was the same story for me, and I have to admit, seeing that warning pop up gave me a massive stomach ache. My first thought was—oh boy, which poor soul did I accidentally de-register? 😱

casualorca5 said:I guess maybe a tradesman is only required to report income from self-employment and non-employment earnings if those were actually earned during the tax year.☕
So, you might as well just forget about the bank and those verification letters.👍

Exactly. 👏

cosmictinker24 said:My employer (they're a freelance consultant) just got hit with a Statement of Interest Paid from their bank... regarding some interest earned on a savings account they opened back in 2015.
Should this be reported on the annual tax return under 4.4. CAPITAL INCOME, specifically section 4.4.2. INTEREST DATA—meaning both the income itself and the withheld federal tax based on that statement???

Thanks

From what I understand, you only report interest if it's tied to funds being used specifically for business operations—and even then, only if the tax hasn't already been withheld at the source, like interest on a standard checking account for overnight deposits.

Since the bank would have already withheld the tax when they paid out the interest (effectively reducing the payout by that amount), I'm leaning toward thinking this interest shouldn't be included, especially if it isn't interest attributed to capital deployed for actual business activities.

If I've got that wrong, please feel free to set me straight.
I'm just getting a bit lost wading through all this law and regulation 😵

rowdybison3 said:The issue is I sent them an invoice for $24000, but they only sent me $70,000.00. The rest of the $667 won't pay up because their invoice was made out to $667 personally instead of the LLC, so they just paid the difference. Now I've got this $2,000.00 gap showing as a debt, and I'm not really sure how to clear it without triggering some kind of sales tax headache.

I'm afraid there's no way around it.

Keith Martinez5 said:Well, freelancers don't really have "set" working hours... at least, that's what I put down, and I assumed that would be the case for all the other months as well? Now I'm second-guessing myself entirely!🤔

It looks like we’re using the "3" label for the rest of the months.
So, just to clarify—the Type 1 designation actually refers to full-time employment.
With him, it isn't really about whether he's putting in full-time hours—it’s more that he’s covered with benefits and insurance for the entire month.

Paul Carter40 said:Thanks, 🙂
Does it matter if I'm buying from an individual or a corporation overseas?
Where can I even find the actual laws regarding these limits—is it even safe $1667, gosh..
Who am I even supposed to ask..

The limit of $1667 is actually set by the cash transaction taxation laws, and it really only applies to businesses required to track sales. I think I read somewhere that the $15,000 threshold stays the same regardless of whether you're dealing in dollars or another currency, but I might be overthinking it.

Jessica Gonzalez30 said:Look, any amount you book as a paid expense for those contributions absolutely has to be recorded as income first. That’s how I handle things when I'm working with companies—anything that hasn't been utilized yet, I just list under deferred revenue. You could probably do the same thing via a formal letter to the IRS; you just have to make sure that for the 2015 tax year, you only recognize enough income to match what you actually spent, and everything should stay perfectly fine.👍

Oh, please forgive me! I got so caught up in my own typing that I realized I was actually thinking about one of my more profitable small business clients instead of the situation at hand. 🤣

For those working with cash-basis accounting, you'd naturally record that under receipts, 😒
and then you'd just file a request to reduce the estimated tax payments 😉

graniterider10 said:I received that money from the agency back in October, but I only actually used the contributions as an expense for two months—November and December. I get what you're saying, and I know it’ll all balance out eventually... but that specific influx bumped up my 2015 tax liability and my prepayments for 2016. I realize the expense side will lower my 2016 taxes... but until then, who knows what'll happen.😵

People have already mentioned something about this here... I'll dig into it some more.

Look, any amount you book as a paid expense for those contributions absolutely has to be recorded as income first. That’s how I handle things when I'm working with companies—anything that hasn't been utilized yet, I just list under deferred revenue. You could probably do the same thing via a formal letter to the IRS; you just have to make sure that for the 2015 tax year, you only recognize enough income to match what you actually spent, and everything should stay perfectly fine.👍

rowdybison3 said:Hey,
I handle the books for a Small Family Farm and I’m a bit stuck on how to settle this one:

Our farm sent an invoice to a company, but they paid us a reduced amount. Basically, they just subtracted what we owed them from our total. How should I record this in some simple bookkeeping? I also have to account for the fact that they didn't actually send the payment until early 2015, even though the bill was from back in 2014—so that debt has been sitting on our books for a year now.

Any help would be great.

If you treat it as an in-kind receipt, you can perform a set-off payment between the company and the Family Farm by referencing a Compensation Statement. Then, you just close out the other side as already paid.
I think that makes sense, though I'm slightly fuzzy on exactly which part needs to be closed out manually...

rowdybison3 said:Hey,
I handle the books for a Small Family Farm and I’m a bit stuck on how to settle this one:

Our farm sent an invoice to a company, but they paid us a reduced amount. Basically, they just subtracted what we owed them from our total. How should I record this in some simple bookkeeping? I also have to account for the fact that they didn't actually send the payment until early 2015, even though the bill was from back in 2014—so that debt has been sitting on our books for a year now.

Any help would be great.

You can basically treat this as a barter or offset transaction between the company and the Family Farm. You'd record the settlement of the debt by offsetting the amounts, and then you just close out the remaining balance as paid.
I think that makes sense—though, if I'm being honest, I might be slightly underselling the technical side of how you actually close that second part out.

amberbadger17 said:At the end of the day, neither the jobs nor the interest rates are going to be the real issue... has anyone actually tried sending a direct inquiry yet?

I have this overwhelming urge to just smash things. I'm honestly over it.

Not quite—I'm holding out until they clear up all these discrepancies first.🤣

Nicole Lee6 said:If I may interject for a moment;
would this mean that I first take the invoice for my training (specifically code 95—periodic driver retraining) and, say, a subscription to a professional journal, and record them as business expenses in my tax filings based on the cash accounting method at the moment I pay them? And then, am I allowed to use 80% of those base amounts (since we fall under the micro-enterprise category) a second time as a deduction through an HHS filing?

The main thing is making sure the training is directly tied to the business you're actually running.
If that checkmark is hit, you can reduce the tax base by 60%, plus that extra 20% bump. 😉