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Small business owners - HOW do you do it???


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Anyone want to offer me advice?

 

My dh and I just started an LLC this past summer (early summer, to be exact).

 

I'm sitting here about to scream. Between quarterly estimated taxes, paying independent contractors, business privelege taxes, what receipts do I save for expenses, state taxes, did I record our income correctly, figuring out what a "member draw" is and do we have enough $$ to even PAY ourselves after all of these #&%^#&% taxes. . . . . .

 

I'm all this: :confused:

 

And this: :svengo:

 

And more of this: :banghead:

 

(Mariann - add an "I Hate Taxes" smilie, wouldja?)

 

So. . . we can't afford an accountant. Really. HOW do you do it? Is this going to get easier? Will we ever make money?

 

AAAARRRGH!!!

 

I'm a bassoonist, not a bookkeeper. :glare:

 

Pass the Mike's.

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Okay, let's start a support club because DH and I are in the same boat. We had a great plan ... we're both engineers and want to start an engineering consulting business. I would own it and it'll be a WBE so we have a great leg up on all kinds of government contracts. I was going to quit my job in September to get the business up and running - DH would continue working until I started producing an income with the business and then he'd join me.

 

Then...

 

Wait for it ...

 

DH got laid off in May.

 

All of a sudden we were starting a business much sooner than we expected and now I get to continue working until December trying to save as much money as possible. You see I now own a company in field that is in direct competition with my current employer. To try to make any money with our company I can't be working. I'm scared to death and totally excited. Oh, did I mention that we are right in the middle of doing IVF also.

 

Enough about me though. :001_smile:

 

What are you using for your booking software? I'm using Quickbooks Pro and it's a love/hate relationship. Mostly hate though.

 

I feel like that old Star Trek quote ... Dammit man, I'm an engineer, not an accountant!

 

If you ever want to talk or commiserate on the fun PM me. Even if we aren't in the same field it sounds like we are going through the same things.

 

If I catch one more person throwing away a reciept in this house ... :glare:.

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I really recommend the book Lower Your Taxes Big Time:

 

http://www.amazon.com/Lower-Your-Taxes-Time-2009-2010/dp/0071623787/ref=sr_1_1?ie=UTF8&s=books&qid=1284783806&sr=8-1

 

I know that the title sounds cheesy or like some attempt to scam the government but it's not. DH and I both read it and were impressed with the knowledge. Not all of the information is helpful at the point we are at but it still gives good information about what information to keep (mileage, reciepts) and what you can actually deduct. It's a very easy read.

 

A fun and motivating book to read (in your free time - LOL) is The Millionaire Next Door. It's very motivating on living frugally and starting a business.

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My parents had their own business for over 30 years. When at first they couldn't afford an accountant, they would still consult one occassionally at the hourly rate just to make sure they were doing what they should and doing it correctly. Later, when the business grew and they could afford it, they finally hired one full time. But it was still lots of work on their end making certain everything was in order before they gave it to the accountant. They retired last year but i hear dad recommending this to someone just last week. He said that those 4 or 5 hours of accountant consultation each year were worth gold and in the end saved him money.

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Anyone want to offer me advice?

 

My dh and I just started an LLC this past summer (early summer, to be exact).

 

I'm sitting here about to scream. Between quarterly estimated taxes, paying independent contractors, business privelege taxes, what receipts do I save for expenses, state taxes, did I record our income correctly, figuring out what a "member draw" is and do we have enough $$ to even PAY ourselves after all of these #&%^#&% taxes. . . . . .

 

I'm all this: :confused:

 

And this: :svengo:

 

And more of this: :banghead:

 

(Mariann - add an "I Hate Taxes" smilie, wouldja?)

 

So. . . we can't afford an accountant. Really. HOW do you do it? Is this going to get easier? Will we ever make money?

 

AAAARRRGH!!!

 

I'm a bassoonist, not a bookkeeper. :glare:

 

Pass the Mike's.

 

:iagree: Yes, exactly what you said. Ok, no, pass the wine, not the Mike's, but other than that, YES!

 

Suggestions: can you barter for services with an accountant? Or find a start up accountanting business who'd be willing to do some work for you more cheaply so they can add to their customer list?

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Us too!! :grouphug:

 

This whole thing is quite frustrating and we've been at it for 4 years. We do all of our own bookkeeping but have an accountant do our taxes and make sure we did everything correctly. It's well worth the $800 or so we spend each year.

 

As for Quickbooks put us in the mostly hate side of the love/hate relationship as well. That stupid program couldn't be more confusing.

 

Our taxes are insane and we don't even make that much $$. Don't even get me started on the cost of our health insurance or the hoops we had to jump through to verify income to refi our house.

 

Owning our own business has been the biggest stress in our lives but it has also been the biggest reward. DH is actually around for the kids, (as opposed to the 3+ hour commute he had prior to this) we have a ton of flexibility for day to day things, and it's extremely rewarding. :D

 

Good luck! If you form a support group I'm in!!

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Know what? As for income taxes, as a small business owner, generally you only pay 7.65% more than you did as an employee.

 

What's the difference?

 

You have to write a check to pay them now! As an employee, your taxes came out of your check and you never really "saw" it. If everyone had to write a check quarterly to pay their taxes (instead of having them withheld) they would be screaming, too!

 

As for the craziness - hire a bookkeeping business. They are cheaper than an accountant and more geared to what you need - someone to keep up with the paperwork. Or have someone come in one day a week.

 

It may seem like you "can't afford it" but it might save you money in the long run. That and you can spend your time focusing on your business instead of being buried under paperwork.

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No advice here, just :grouphug:. We've been at this for quite a while now, and it doesn't get much easier. We hit a slump this summer, and went 6 weeks without paying ourselves.:blink: Every time we start getting ahead, disaster of some sort strikes. Of course, every one thinks we are loaded with money...:confused: We are still recovering and will be for a while. We are on vacation now, but if it hadn't been paid for months ago we would have cancelled it. An accountant or good bookkeeping company can help you get set up an into a routine of what to do when. It gets pretty confusing! Good luck!

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Anyone want to offer me advice?

 

My dh and I just started an LLC this past summer (early summer, to be exact).

 

I'm sitting here about to scream. Between quarterly estimated taxes, paying independent contractors, business privelege taxes, what receipts do I save for expenses, state taxes, did I record our income correctly, figuring out what a "member draw" is and do we have enough $$ to even PAY ourselves after all of these #&%^#&% taxes. . . . . .

 

I'm all this: :confused:

 

And this: :svengo:

 

And more of this: :banghead:

 

(Mariann - add an "I Hate Taxes" smilie, wouldja?)

 

So. . . we can't afford an accountant. Really. HOW do you do it? Is this going to get easier? Will we ever make money?

 

AAAARRRGH!!!

 

I'm a bassoonist, not a bookkeeper. :glare:

 

Pass the Mike's.

 

well...get Quickbooks...or another book keeping system. THEN get a GOOD and honest accountant. THEN...find some trade allies...and find out what the REAL going labor rates are. NOT the beer money plumber rate or the really high priced rate...and be somewhere in there. We pay TAXES....TAXES and more TAXES. We fire someone for being totally inept and end up with higher unemployment rates. We go to a service call and someone has a 100 year old leaky oil tank and they try to pin it on you! It is so crazy out there.

You need a THICK skin, a glass of wine and a desire to succeed.

 

As far as draw money, what we did wa figure out our bills and a little extra for extras....then divided by 52....

 

Don't forget to pay your OWN payroll tax or you too can be hit with a 12,000 tax bill at the end of the year!

 

Most of this is a learning experience...and NO it doesn't get easier, it gets different. Less panicky and more :confused: .....;)

 

Good luck to you and your dh in this edeavor. Unfortunately, our country is no longer set up to assist the small entrepenuer or to aid small businesses. It is really tough out there....

 

 

~~Faithe

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well...get Quickbooks...or another book keeping system. THEN get a GOOD and honest accountant. THEN...find some trade allies...and find out what the REAL going labor rates are. NOT the beer money plumber rate or the really high priced rate...and be somewhere in there. We pay TAXES....TAXES and more TAXES. We fire someone for being totally inept and end up with higher unemployment rates. We go to a service call and someone has a 100 year old leaky oil tank and they try to pin it on you! It is so crazy out there.

You need a THICK skin, a glass of wine and a desire to succeed.

 

As far as draw money, what we did wa figure out our bills and a little extra for extras....then divided by 52....

 

Don't forget to pay your OWN payroll tax or you too can be hit with a 12,000 tax bill at the end of the year!

 

Most of this is a learning experience...and NO it doesn't get easier, it gets different. Less panicky and more :confused: .....;)

 

Good luck to you and your dh in this edeavor. Unfortunately, our country is no longer set up to assist the small entrepenuer or to aid small businesses. It is really tough out there....

 

 

~~Faithe

:iagree:

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What helped me tremendously was doing Employee Leasing. They do all that employee withholdings (which I was told is the #1 place people make tax mistakes) plus we have a group worker's comp through them & they offer health insurance, if you want. They even have direct deposit.

 

As to getting our taxes done, I go to H&R Block. I figure it's worth it for the advice through the years plus if we do get audited, they go with you for no extra charge.

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I am a CPA so maybe I am biased, but you need to get some help from a CPA. Try using Quickbooks to track your expenses, income, billing and payroll taxes. Pay form some up front advice even if you do most of the stuff yourself. This sort of advice often pays for itself.

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Thanks, Ladies! The commiseration helps a TON.

 

I have found a great accounting/bookkeeping online resource - anyone use Outright.com? It really has been helpful. We have a FABULOUS lawyer, who has a neat business model, and to top it off he's giving us his services pro bono.

 

I think, though, that we will need to do the accountant consulting idea - I just honestly feel buried, you know?

 

Homeschool, keep the house semi-clean, work in our business, do the bookkeeping/accounting for the business, take the kids to various activities. . . . . . . it's a little overwhelming, right now.

 

Glad to know I'm not alone!

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I have a question...

 

The only employees our business has are me & DH. If we take a draw from the business is that the same as paying ourselves a salary? Do we pay our taxes, unemployment, etc. on that amount? We do pay quarterly taxes personally and for the business but I'm not sure about unemployment taxes (DH takes care of all of this) and this is where I get a little fuzzy about what we're supposed to do.

 

We do have an accountant but we're in the process of searching for a new one because we don't think he's giving us proper advice.

Nevermind I found the answer!! :)

Edited by mmasmommy
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I hear ya! It's not for the faint hearted. We own two small businesses. A small , but growing tire shop and a construction business with two other partners, but DH the main owner.

You have to file seperate for your business and personal taxes. It pays many times over to have a good accountant and someone who knows the tricks do your tax. We save hundredss if not thousands because of who does our tax. There are many ways to deduct and they have to know about them all.

To keep it seperate, you have to pay yourself out of the business. Write a check and deposit it into your personal account. This is what you pay your tax on, which is your profit. Depending on how fussy you are you don't have to track the personal spending.

Save every business receipt. My dh keeps containers in every vehicle. lIke plastic files that snap closed. Everyone puts every reciept in and every months they get deposited into a filing cabinet. We use the credit card bills to record into Quick Books. Then we send our Quick books backup to the accountant at tax time.

It can get crazy at times. But we're making out OK.

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I can't tell you how excited I am to see this thread. Faithe and I have PM'd somewhat about it, but I'd really like to start a support group.

 

We've been self-employed since 2002 and, frankly, we are still not profitable. It's only been about 3.5 years, though, since we adopted and have stuck to our current business model, so I think (hope, pray) this one might work.

 

Taxes and insane. More than that, though, are the hoops you have to go through to PAY all the taxes. We've incurred, from the beginning, several thousand $$ in fees and penalties because we didn't understand what needed to be filed when.

 

Yes, get the advice of a good accountant - it's well worth the $$ (but it burns me up that we have to pay anybody to help us pay the government. What a racket! We're intelligent adults who should be able to read the code and figure it out.)

 

Yesterday we had $1,666.67 deducted from our bank account by the "IRS." No warning, we had no taxes due and no letters saying we owed anything. Our accountant is stumped. We think it's fraud and the bank is investigating, but it wouldn't surprise me one bit to find out we did something wrong and owed this $$ somehow. I'm incensed. That was our health insurance payment, basically.

 

We started out with an almost $.5M nest egg in 2002. We are down to under $100K in savings. I'm about ready to run away, frankly. (Not really, but some days I do find it hard to find the joy.)

 

We're doing something wrong, but can't figure out exactly what it is.

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Don't forget to pay your OWN payroll tax or you too can be hit with a 12,000 tax bill at the end of the year!

 

 

Yeah .... don't ask me how I know this. :scared: That lesson taught us that an accountant is must-have!

 

We love Quickbooks. I enter everything in and we have the accountant who does our taxes look over it twice a year.

 

s/o ?: Is anyone else panicking over the new health care-1099 law?

 

http://www.google.com/hostednews/ap/article/ALeqM5hAvWflrKAzC5ihkMKerPivEQbTDAD9I7PKG81

 

We are in an absolute panic here about this! The only thing that calms me down is knowing that it doesn't take effect until 2012 and hoping that it is repealed before then.

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Yeah .... don't ask me how I know this. :scared: That lesson taught us that an accountant is must-have!

 

We love Quickbooks. I enter everything in and we have the accountant who does our taxes look over it twice a year.

 

s/o ?: Is anyone else panicking over the new health care-1099 law?

 

http://www.google.com/hostednews/ap/article/ALeqM5hAvWflrKAzC5ihkMKerPivEQbTDAD9I7PKG81

 

We are in an absolute panic here about this! The only thing that calms me down is knowing that it doesn't take effect until 2012 and hoping that it is repealed before then.

 

We use QB and I like it, for the most part. We have QB Payroll Services do our payroll and filing (after being dinged more than once for not filing properly) and that takes some of the pressure off.

 

We are concerned over this health care reform. Our employees are self-insured right now with high-deductible plans and HSAs. We do payroll deduct their premiums/HSA contributions and send the check to the insurance company, but if our employees leave, they take their own policy with them and there's no COBRA to worry about.

 

We like it this way. If we have to pay high insurance premiums, we will be forced to lay off people, no question about it.

 

I tried to start a Small Business Support Group here on the forums, but...I don't see it. I don't know how to set up a group, I guess. :tongue_smilie:

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That's not what I meant.

 

There was a provision tucked into the new health care law that mandates all "businesses file tax forms called 1099s for every vendor that sells them more than $600 in goods"!!!

 

Ugh. I was just talking to my accountant about that. What a silly silly rule. Don't get me started on silly government rules though!

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My dh has his own business that has been family run for 45 years. After his father passed away, both him and his mother decided to continue on as long as they could. My dh is a goldsmith and jeweller, he says that he can see the business slowly slipping away each day. In this day where people are worried about money, they don't spend it on their jewellery. It is also really hard to compete with large box stores that sell jewellery (not always the best quality) for cheap. I have no advice, I just wanted you to know that you aren't the only one struggling. We are lucky if we can just pay our bills monthly.

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So, I posted on the other thread about the good things with having a business. This thread is about accounting and taxes, and that is a different story. I find it agonizing at times.

 

We use Quickbooks Pro and do our payroll with it. We have an accountant we can call with questions and who does are year end taxes, but I've seriously lost sleep at night wondering if we're doing everything right or not.

 

It does seem to get better, but there are times when I wonder how we're going to pay ourselves and the taxes too. And, forget health insurance. That's considered a luxury here. We haven't had any for a few years. Thankfully, we're all in good health and praying to remain accident free.

 

I recommend a good CPA and a good attorney. Both of which are available for an occasional question without billing you for every minute you're on the phone. You really need to have someone that can make sure you're doing everything right.

 

Gooblink: We just got dinged because we filed our taxes late. It was partly our fault, and I feel, partly our accountants. We have some other things that we've had to pay penalties for and it just makes my stomach turn. But, honestly, what are you supposed to do? I know in the beginning we didn't have the money to run everything past an accountant. We (I mean ME) had to sit and figure everything out. It's definitely been Small Business 101 for me. I never had accounting. I'm good with numbers and very organized. That's really all that's saved us. Dh doesn't even do our own checkbook.

 

If you start a group for small business owners, I'm definitely in.

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That's not what I meant.

 

There was a provision tucked into the new health care law that mandates all "businesses file tax forms called 1099s for every vendor that sells them more than $600 in goods"!!!

 

Sorry, I hadn't read the link.

 

Yeah, makes my blood boil. Enough to just give up and get a government job.

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Thanks, Ladies! The commiseration helps a TON.

 

I have found a great accounting/bookkeeping online resource - anyone use Outright.com? It really has been helpful. We have a FABULOUS lawyer, who has a neat business model, and to top it off he's giving us his services pro bono.

 

I think, though, that we will need to do the accountant consulting idea - I just honestly feel buried, you know?

 

Homeschool, keep the house semi-clean, work in our business, do the bookkeeping/accounting for the business, take the kids to various activities. . . . . . . it's a little overwhelming, right now.

 

Glad to know I'm not alone!

 

It is VERY overwhelming. I know exactly what you mean. :grouphug: I am now beginning to whittle down extra activities, school the most important subjects and trying to find time to just have some fun with my kids. I keep reminding dh that he started his business with the intent to have MORE time with his family...not less....

 

Just wanted to klet you know you are not alone out there...

 

~~Faithe

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Yeah .... don't ask me how I know this. :scared: That lesson taught us that an accountant is must-have!

 

We love Quickbooks. I enter everything in and we have the accountant who does our taxes look over it twice a year.

 

s/o ?: Is anyone else panicking over the new health care-1099 law?

 

http://www.google.com/hostednews/ap/article/ALeqM5hAvWflrKAzC5ihkMKerPivEQbTDAD9I7PKG81

 

We are in an absolute panic here about this! The only thing that calms me down is knowing that it doesn't take effect until 2012 and hoping that it is repealed before then.

 

YES!!! I am freaking OUT over that one!! Talk about adding hours and hours of paperwork! OMG! The extra healthcare expenses are also very scary to us little folk....

 

If we could get a social group going on here it would be great!

 

I am also losing it right now because I just can not keep my mind focused on homeschooling and get muy kids work in order. OY! I just spent the most absolutely beautiful fall day sitting at my desk doing the books, paying the TAXES, credit cards and utility bills....OH MY GOD! It is exhausting.

 

Now to go clean and cook and take the kids to swim practice...:driving::willy_nilly::drool5:

 

~~Faithe

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We do not have employees, so we do not have to deal with payroll taxes, but we do have independent contractors. If the independent contractor is a sole proprietor, you must obtain their social security number. At end of year by January 31st, you issue them a 1099Misc for nonemployee compensation. The 1096 is the "transmittal" form all your 1099Misc, which you send to IRS.

 

As for the estimated taxes, we set aside a certain percentage (somewhere around our tax bracket %) of our profit and pay it in quarterly with a 1040ES voucher to IRS (and state if applicable) for the estimated income and self employment taxes. I am assuming you are a single member or husband/wife LLC.

 

We recently were surprised to learn that our little suburb had its own business personalty tax in addition to that imposed by our county.

 

I second the idea of a consultation with the accountant and having one prepare the tax returns using your bookkeeping.

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YES!!! I am freaking OUT over that one!! Talk about adding hours and hours of paperwork! OMG! The extra healthcare expenses are also very scary to us little folk....

 

If we could get a social group going on here it would be great!

 

I am also losing it right now because I just can not keep my mind focused on homeschooling and get muy kids work in order. OY! I just spent the most absolutely beautiful fall day sitting at my desk doing the books, paying the TAXES, credit cards and utility bills....OH MY GOD! It is exhausting.

 

Now to go clean and cook and take the kids to swim practice...:driving::willy_nilly::drool5:

 

~~Faithe

 

The new provision for 1099's is easy if you use Quickbooks - it's as simple as printing them. I *would* like to know who lobbied for that provision, though.;)

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I used up every spare moment and then some when I had a small business. You have to be very organized and do your homework on accounting/taxes/banking/etc. If you keep it small and do not have employees it is infinitely simpler - I've done it both ways and I prefer being the only employee. You also have to force yourself to do things that may not come naturally - sales, for instance.

 

That being said, I loved it and plan to go back to having some type of small business when the kids are grown. Hopefully by then it will be a better business climate.

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The new provision for 1099's is easy if you use Quickbooks - it's as simple as printing them.

 

We go through hundreds of thousands of dollars in materials a year. (We own a remodeling-construction company.) These are materials/supplies that we buy retail/wholesale from incorporated companies and pay sales tax on. Currently, I just input the receipt as "Lowes" or "Amoco gas". I don't specify which branch. Now, I'm going to have to track down each and every company's tin, address, and owner for each branch that we buy materials from; fill in their info to Quickbooks, and then will spend even more time each week making sure which exact store we've purchased from than I already spend. And, then send out hundreds of 1099s. :tongue_smilie:

 

I have a feeling a lot of small businesses will get burned with this change. It will be easier for companies like mine to consolidate purchases to one big company in order to simplify tax reporting, rather than having to track down tins, owners, and mailing addresses of all the smaller specialty lumber yards, cabinet makers, moulding makers, gas stations, etc.

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We go through hundreds of thousands of dollars in materials a year. (We own a remodeling-construction company.) These are materials/supplies that we buy retail/wholesale from incorporated companies and pay sales tax on. Currently, I just input the receipt as "Lowes" or "Amoco gas". I don't specify which branch. Now, I'm going to have to track down each and every company's tin, address, and owner for each branch that we buy materials from; fill in their info to Quickbooks, and then will spend even more time each week making sure which exact store we've purchased from than I already spend. And, then send out hundreds of 1099s. :tongue_smilie:

 

I have a feeling a lot of small businesses will get burned with this change. It will be easier for companies like mine to consolidate purchases to one big company in order to simplify tax reporting, rather than having to track down tins, owners, and mailing addresses of all the smaller specialty lumber yards, cabinet makers, moulding makers, gas stations, etc.

 

You will only have to report/send 1099s for those things you pay cash for or pay with a check. The credit card companies will be reporting the info on all debit/credit card purchases.

 

This makes me think that the credit card companies pushed for this new policy because they stand to make a LOT more money in fees as everyone pays for things with a card to avoid the 1099 requirements.:tongue_smilie:

 

Also, click here:

 

http://www.irs.gov/newsroom/article/0,,id=225029,00.html

 

The IRS is looking for public input as to how they can meet the new law while reducing the requirements on small businesses. I wouldn't fret yet - the IRS doesn't want to be buried under any more paper than they already are!:lol:

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You will only have to report/send 1099s for those things you pay cash for or pay with a check. The credit card companies will be reporting the info on all debit/credit card purchases.

 

This makes me think that the credit card companies pushed for this new policy because they stand to make a LOT more money in fees as everyone pays for things with a card to avoid the 1099 requirements.:tongue_smilie:

 

Also, click here:

 

http://www.irs.gov/newsroom/article/0,,id=225029,00.html

 

The IRS is looking for public input as to how they can meet the new law while reducing the requirements on small businesses. I wouldn't fret yet - the IRS doesn't want to be buried under any more paper than they already are!:lol:

 

Thank you for this! I didn't know about the credit/debit part. This is about half of our purchases.

 

You've got a definite point on who benefits here! :glare:

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