The IRS requires individuals and companies making certain payments to file 1099s. Click here for a guide to assist you in identifying these payments. The most common types of 1099s are for interest, dividends, rents, royalties, commissions, and non-employee compensation. There are penalties assessed for failure to file. Please note that these penalties are now at $500 per occurrence.
If you want us to prepare and file your 1099s, complete and submit this 1099 worksheet to our office by January 3, 2020.
Personal Use of Company Automobiles
An employee or owner who personally uses the company automobile must either pay the company for that use or include that use as compensation on their W-2. If you are self-employed, or not incorporated, the personal use can be handled on your 2019 individual tax return.
Complete this Personal Use of Company Automobile Worksheet and submit it to our office by January 3, 2020. Upon completion of both pages of the worksheet, the employer must sign side one and the driver of the company automobile must sign side two. Please note on the worksheet if any automobiles purchased in 2019 had a gross vehicle weight of 6,000 pounds or more.
Any employee just starting to use a company automobile for the first time in 2020 must complete side two of the worksheet and return it to you within 30 days.
Fringe Benefit for Partnerships & S Corporations
Fringe benefits for partners and more than 2% S corporation shareholders/employees are not deductible by the partnership or corporation. The fringe benefit rule applies to these key fringe benefits:
- The exclusion from income of amounts received from an accident and health plan (medical expense reimbursement plan).
- The exclusion from income of amounts paid by an employer to an accident and health plan (health and long-term care insurance premiums).
- The exclusion of the cost of up to $50,000 of group-term life insurance on an employee’s life.
- The exclusion from income of meals and lodging furnished for the convenience of the employer.
The premiums for health and accident insurance, life insurance, and disability insurance may be required to be reported on your W-2. Even though these amounts may be added to your W-2, they may not be subject to FICA tax. The items that affect most partnerships and S corporations are health and group-term life insurance premiums paid for by the employer. Company contributions to an employee’s Health Savings account must be reported as an informational item on the W-2.
Complete this Fringe Benefit Worksheet for Partnerships and S Corporations and submit it to our office by January 3, 2020.
Employer Owned Life Insurance
If your company has purchased life insurance on an owner or a key employee, there are certain reporting requirements. Please contact us if you have purchased any individual life insurance policies.