59 posts shown.
amberbadger17 said:QUICK QUESTION HERE:
What’s the deal with the sales tax for 12/15?
Am I basically just doing the most basic math on the planet and then maybe tweaking things if I catch a mistake... and that's it?
Basically, I need to know if this works like a standard sales tax calculation (just totaling everything up), or if it's strictly about the specific revenue categories for the 12/15 period.
Honestly, nothing could surprise me at this point, but I figured I'd ask before I panic and send off the form before you guys have a chance to teach me how to actually do this properly. 😁
Yeah. First, you go through everything from January 1st all the way through November 30th to make sure it's solid, and if everything looks good, you just run the standard calculation for December. If you end up finding mistakes from that January to November stretch, you just bake those corrections right into the December filing...
Brenda Chase3 said:The answers were provided three posts up.
For December 2015, you stick to the old rules, and the electronic filings for January 2016 won't be submitted until February 2016. We should have more specifics regarding the filing details and the payment reference numbers within a few days, so we can discuss them here once they're clear.
Contributions will be slightly higher than they were in 2015 because the base rate increased to $1741, so the total will go up by roughly $23. You'll handle the electronic filing for those contributions just like you did for the income tax; the main difference is that we are now taking over their role, meaning we'll submit the electronic filing for taxes and withholdings on the day of the payment.
Just to add some more context here... The new account numbers for small business owners to make their contribution payments are as follows:
8230 - Social Security 1st tier
2330 - Social Security 2nd tier
8605 - Unemployment Insurance
8796 - Employment Tax Credit
8133 - Workers' Comp Contributions
Like account12345 mentioned, we're still waiting on the official word regarding reporting methods, specific examples, and the rest of the fine print, so we'll pick this back up once that hits our desks... 🙂
crimsonstag76 said:Hey everyone, I’m running into a major headache with my QuickBooks. For some reason, I can't get any digital signatures to work. I updated my security certificates yesterday, and now suddenly everything is blocked.
Does anyone have any ideas or a quick fix for this?
I've already tried troubleshooting on both my home laptop and my office desktop. I've restarted everything multiple times, too. Honestly, I'm in a huge rush to get this finished.
https://irs-gov-portal-help.usa.gov/signing-documentsTake a look at this link—honestly, there's a good chance that recent Java update is what's messing with your settings...
graniterider10 said:Thanks, graniterider10. I’m going to try and get that down payment sorted out right now. As long as there isn't a massive panic today, it should be fine since I still have some breathing room before the sales tax filing deadline.
Man, I just realized I posted this in the Sole Proprietors thread... my bad. Given that, just ignore what I said earlier about "booking to the down payment account and then clearing it against account 220"😁
At any rate, they absolutely have to issue you an invoice for that deposit
graniterider10 said:I just paid a deposit for a seminar happening in February. When I asked them for a receipt for that down payment, they told me they wouldn't issue anything until I pay the remaining balance on the day of the event. I’m totally lost—how am I supposed to book this expense? They really should be giving me something right now so I can justify the cost, especially since my bank statement clearly shows the money left my account. I don't get it. How are they even going to justify receiving that money on their end?
Look, they really ought to issue you an invoice for that prepayment if they aren't going to provide the full final invoice before the deadline for filing your sales tax returns for the period you made the payment. Assuming you dropped that money in December, if they don't get the full invoice to you by mid-January, they absolutely should be handing over an invoice for the deposit right now...
If they stay stubborn and refuse, just book it directly from your bank statement under prepaid expenses, and then once you finally get that actual invoice in hand, you can perform the reclassification entry...
Richard Howard55 said:So, does that mean my tax base and local surcharges are just the net difference between what comes in and what goes out?
Pretty much, yeah... unless you've got some carried-over losses from previous years or specific tax credits to write off, then it gets a bit more complicated than that...
Carol Price4 said:The W-2 for payroll tax and health insurance contributions uses the actual payment date if you pay by the 15th—but if the filing happens after the 15th, the date defaults to the 15th since that's when the contributions actually become due... I think I read that somewhere, let me try to dig it up...
I was honestly pretty surprised by what Milivoj wrote regarding those advance payments... it seems like total nonsense! Based on the logic above, it should be the payment date if settled by month-end, or the last day of the month if filed later 🤔🤔 ...that’s just my take on it, though, so don't hold me to it...
I'll do some digging, and if I find anything useful, I'll post it here, 🙂
Small business owners are going to be in such a mess now. They're used to having a bit of wiggle room, and now they're being squeezed tight—again, and once again, it's us taking the hit. Honestly, we should be asking for early retirement benefits after all this crap they've piled on our shoulders!
Man, if the proposed amendments actually strip out non-taxable income under section 39—meaning the W-2 will only cover per diems and travel reimbursements moving forward—then woohoo! At least there's one decent thing happening!
Give me a break! 🕺 On top of everything else, now we have to sit around playing waiting games, wondering when some small contractor will finally decide to actually pay their payroll tax and health insurance contributions or their deposits—and you know there are plenty who pay their own stuff separately from what they owe for their employees—all while we’re expected to turn in the W-2 forms immediately.
Thank God I don't handle a ton of small businesses, or I'd be losing my mind... 🙄
Carol Price4 said:Starting January 1, 2016, anyone running their own business—whether they're reporting based on gross income or net profit—is responsible for calculating their own payroll tax and health insurance contributions.
- These folks handle their own math, put together monthly reports—basically their W-2 filings—and send them straight to the IRS
- The payment deadlines haven't shifted, so you'll still need to have those contributions paid up by the 15th of each month for the previous month's work
Here’s how the monthly bases for self-employment insurance contributions look for 2016:
Small business owners (gross income) = $1741 (using a 0.65 multiplier)
Small business owners (net profit) = $2947 (using a 1.1 multiplier)
Freelancers (gross income) = $2947 (using a 1.1 multiplier)
Due to some updates in the regulations regarding how government revenue and mandatory contributions are handled, new specific tax codes for self-employed individuals were added, effective January 1, 2016.
8230 Social Security contribution (Part I)
2330 Social Security contribution (Part II)
8796 Employment tax
8605 payroll tax and health insurance contributions
8133 payroll tax and health insurance contributions
Annual Tax Return
- In Attachment UPO under section 971, we're looking at determining the income tax prepayments for self-employment for the upcoming tax year.
- They also updated the "Long-term Asset List."
- There's a new required form—Form P-PPI—which is basically a summary of all business income and expenses for the year; freelancers have to attach this to their annual return (Form DOH).
- Self-employed taxpayers pay their determined income tax when they file their annual return (which is due by February 29, 2016).
- For those specifically covered under Article 18, once the deadline for filing the 2015 annual return passes, any previous notices regarding income tax prepayments become void.
- Starting in March 2016, monthly prepayments will be calculated based on the numbers from the filed 2015 annual return.
- You'll start paying this monthly prepayment starting March 2016, which is also when you submit your W-2 (funds move from account 1430 to 1619).
- Income tax prepayments are due monthly by the last day of the following month, based on what was reported in the previous year's annual return—essentially, the 2015 tax liability is just split across the months you actually worked.
- If a taxpayer lists other types of income alongside their self-employment earnings on the annual return, the prepayment for the next period is only calculated based on the self-employment portion.
- These monthly prepayments cover the months immediately following the annual return deadline (so for 2016, that means March 2016 through February 2017).
Source: RIPUP, Milivoj Friganović, M.Sc.
Thanks, Mr. Milivoj... I'm still a bit lost on when exactly we're supposed to submit the W-2 for contractor contributions... Is it on the actual day we pay them, or is there some kind of deadline by the 15th of the month? Does anyone know if that's actually spelled out somewhere?...
Larry Edwards3 said:The employee brought in her medical certificates, so we went ahead and emailed them over to the state unemployment office just to be safe.
We currently pay her social security contributions based on the minimum wage, and I was wondering if I should reduce those payments to account for those few days she was out on sick leave? I suppose that for any sick leave lasting up to thirty days, I should probably just continue calculating the contributions as if she had been working normally, right?
You calculate and pay the contributions based on the full gross amount, no reductions whatsoever.
Donna Jones26 said:@ruggedlynx63, does the landlord actually have to provide a certificate even if the original 10-year lease from 2008 doesn't mention anything about one?
Do we need to go through the hassle of drafting new lease agreements or an addendum?...
Look, I’m an accountant, not a lawyer, so this isn't strictly my lane, but I’m speaking from direct experience since I personally lease out two commercial properties myself... and that’s exactly what my tax advisors and an energy certification specialist told me. I wouldn't say you need a whole new contract—the energy certificate is its own thing and shouldn't have anything to do with the actual lease terms. But here's the deal: since January 1, 2016, having an energy certificate is a mandatory requirement for landlords, plain and simple, and you'd better get it done unless you're looking to get slapped with a massive fine. It doesn't matter at all that you signed that contract way back in 2008; if you're renting out that space or building after the 2016 mandate kicked in, that property absolutely must have an EC...
Donna Jones26 said:What about businesses or contractors who *do* have a lease agreement (they aren't the property owners)? Do they need an energy certificate too?
Also, if an individual owns three commercial properties that have been rented out for years, do they need energy certificates (per the regulations since early 2016)? These leases were signed for long terms with two small businesses and one corporation, and they run until 2018...
I'm honestly not following what you're asking here... If you're just the tenant renting the space and don't actually own the building, the responsibility for getting that energy certificate doesn't fall on you at all...
Donna Jones26 said:What about businesses or contractors who *do* have a lease agreement (they aren't the property owners)? Do they need an energy certificate too?
Also, if an individual owns three commercial properties that have been rented out for years, do they need energy certificates (per the regulations since early 2016)? These leases were signed for long terms with two small businesses and one corporation, and they run until 2018...
Yes, they do.
jadenomad24 said:I’ve got an invoice from a company based in Canada, but they’re billing us for a service actually performed here in the US.
They have a valid tax ID.
The note on the invoice says: VAT is exempt under Article 138, paragraph 1 of EU Directive 2006/112/EC.
How am I supposed to report this amount on my sales tax return?
Should I treat it as an acquisition of services and calculate 25% tax on the total?
And then just list it as both a liability and a credit at the same time?
Spot on! That's exactly right...👍
Clarification regarding the requirement for energy certificates from Yelp:
Because the Department of Housing and Urban Development keeps getting flooded with questions about whether you actually need an energy certificate when renting out a building or a specific unit within one, they’ve put out this official explanation:
The Building Code (as published in the Federal Register) brings the European Parliament and Council's Energy Performance of Buildings Directive (Directive 2010/31/EU) into the American legal framework, and it's been in full effect since January 1, 2014.
According to Section 23, Subsection 1 of the Code, an energy certificate must be issued for any building—or a specific part of a building—that requires energy to maintain its internal design temperature for its intended use. There are some exceptions, though... specifically for buildings with a lifespan of two years or less, buildings used for religious services, industrial buildings, workshops, non-residential agricultural buildings with low energy needs, or anything with a total usable area under 50 square meters.
Moving on, per Section 24, Subsection 2 of the Code, if you’re a property owner looking to sell, rent, lease, or enter into a rental agreement for a building or a specific unit, you are legally required to obtain an energy certificate first. As far as the sale of property goes, this obligation has been part of the American legal landscape since we fully joined the European Union back on July 1, 2013.
Now, the rule requiring these certificates for rentals, leases, or sublets falls under Section 203 and officially kicked in on January 1, 2016. And just to be clear, "renting" in this context includes short-term vacation rentals too... so, owners of vacation apartments have been required to grab an energy certificate since January 1, 2016, provided the building itself is over 50 square meters. If the apartment is part of a larger building that exceeds 50 square meters, you need the certificate regardless of how small the individual apartment unit actually is...
Just a heads-up, Section 171 lays out some pretty heavy fines for anyone cutting corners. We're talking between $5,000.00 and $3333 for individuals, and anywhere from $15,000.00 to $10000 for corporations acting as building owners, if they fail to secure an energy certificate before selling, renting, or leasing the property.
Compliance and enforcement of these specific rules are handled by the relevant consumer protection and trade inspection agencies.
amberbadger17 said:Does anyone actually know this? Help me out here, please...🙂
It's about installments! I need to know how you actually pay an installment, how you record it in the books, and then how you go about deducting the withholding tax from the total installment amount...
vividotter912 said:Since my USD statement shows a higher amount paid than what was booked on the account (based on that Federal Reserve rate)—meaning a negative FX difference—should I be booking it as:
2210 P
4.... D
Yeah, you definitely should... 🙂
vividotter912 said:I need some help regarding how to record an invoice.
I received an invoice in dollars for a vehicle purchase, which was paid via the Federal Reserve—meaning at their rate (I assume) on October 20th.
When I'm recording this invoice, which exchange rate should I be using?
I read somewhere that I have to use the Federal Reserve middle rate from that specific day, October 20th, 2015.
So, what do I do about the discrepancy... do I report an exchange rate difference or the bank fees? The amount on my Federal Reserve statement is higher than the amount in dollars when I calculate it using the Federal Reserve rate.
thanks
Look, you just calculate everything based on the Federal Reserve's average rate for that specific day. As for the leftover difference, you just book that under foreign exchange gains or losses...
nimblepuma10 said:I mean, I want to believe you... but when everyone is giving me their own version of the truth 🙂
So, here’s the next chapter of my saga: I headed down to the IRS office to check on the requirements for small business tax filing, specifically asking about using a standard checking account just to be safe. The woman there told me, quite pointedly, that I absolutely need a dedicated business account—as if they’d ever let me get away with using a personal one at a bank like JPMorgan Chase. I guess the IRS is always right, isn't it? 😁
nimblepuma10, don't you think your life would be a whole lot easier if you just hired an accountant first? That’s literally why we exist... You just find a decent local accounting firm, and they walk you through every single step and the entire sequence of things you need to do to get a small business started... 😉
If you ask me, you’ve been out of compliance this entire time because you were only issuing invoices for services that had already been paid for.
The rule is simple: you HAVE to issue an invoice the moment a service is completed; when the actual cash hits your account is a completely different matter, especially since you aren't hitting those sales tax obligations until the payment is actually collected.
Regarding the OPZ-STAT-1 filing, my take is that you really ought to be reporting all Unpaid prepayments on there, provided you listed them as Unpaid receivables on your DOH forms... and we're talking about those Unpaid amounts going back six years. Anything older than six years doesn't need to be reported...
Robert Johnson11 said:So I’m finally pulling the trigger on starting my own small business, but I’ve already hit a massive wall with all this paperwork... If I'm running a service-based gig where I don't actually need a physical office or storefront, am I still stuck having to get a lease agreement notarized with my landlord (who happens to be my parent), or can I just file a zero-dollar lease since they're letting me use the space for free? I heard through the grapevine that the IRS doesn't even recognize these "free" lease agreements, so I'm sitting here wondering why I'd bother getting anything notarized for an apartment lease if there isn't even any money changing hands, especially since my folks are just being cool and letting me use the place for nothing...
Look, if your business doesn't require a physical commercial space to operate, you don't even need to bother drafting a lease agreement in the first place. And honestly, regarding those "zero-dollar" leases? Speaking from experience, the IRS is definitely not going to buy that story...