Tax changes for the 2011 tax year
As we’re heading into another tax-preparation season, I wanted to share some relevant changes in the tax code.
A 1099 vendor is someone you pay for business-related goods/services who is not incorporated — like an independent contractor — and to whom you have paid more than $600.
Starting with the 2011 tax year, you do not have to report certain types of payments to vendors who fall into the 1099 category. Instead, the payment-services entities that you use will report these payments instead. These entities include:
- Credit cards
- Debit cards
- Electronic payment services like Paypal
If you paid your 1099 vendor with cash, checks, direct deposit or electric fund transfers, then you have the responsibility of reporting those monies.
Here is the IRS’s guide to 1099s (PDF).
Finding the right CPA
I’m also going to resurrect an old thread in which I encouraged members to share recommendations for good CPAs in their areas. If you have worked with a CPA, please take a moment to share their contact information.
Advice from a pro
If you’re looking for a CPA for the first time, please take a moment to read this Private Forum post from a member who is a CPA. He offers answers to:
- What should we look for in terms of getting a good one for a webcomics-based business?
- How much should we expect to pay?
- Is it a requirement that they be local to us?