Last year, the Internal Revenue Service introduced a draft version of a form that we haven’t seen since 1982: Form 1099-NEC, Nonemployee Compensation. Form 1099-NEC is intended to replace the nonemployee compensation part of a form many of us have come to know and love: Form 1099-MISC, Miscellaneous Income.
Form 1099-MISC is sticking around for other things, like reporting gross proceeds to an attorney, Section 409A deferrals, and nonqualified deferred compensation income. But nonemployee compensation - money paid to freelancers, independent contractors, gig workers and others that aren’t employees - will now be reported on Form 1099-NEC.
The Not Completely New Form 1099-NEC
The form, which will make its comeback in 2021 for the 2020 tax year, looks like this:
2020 Form 1099-NEC
2020 Form 1099-NEC IRS
Who Gets A Form 1099-NEC?
The IRS says that trades or businesses need to issue Form 1099-NEC if the following four conditions are met:
You made the payment to someone who is not your employee.
You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
You made the payment to an individual, partnership, estate, or, in some cases, a corporation.
You made payments to the payee of at least $600 during the year.
Employers are allowed to defer withholding, deposit, and payment of the employee's portion of Social Security tax on wages that are less than $4,000 during a bi-weekly pay period. Each pay period is to be considered separately, and no deferral is allowed for any payment to an employee of taxable wages of $4,000 or more for a bi-weekly pay period. Technically the requirement to deposit employee Social Security tax does not occur until the tax is withheld; thus, by postponing the withholding of the employee Social Security tax, the deposit obligation is delayed.
The choice to defer withholding, deposit, and payment of the Social Security taxes is optional.
Note that this is a deferral of the payroll tax and not an exemption from payroll tax. The due date for deferred employee Social Security taxes is postponed until the tax period beginning on January 1, 2021, and ending on April 30, 2021. Deferred payroll taxes not paid during this period will be subject to interest and penalties.
NOTE: EMPLOYEES WILL HAVE TO PAY THOSE TAXES BEGINING JANUARY 1ST 2021- IN OTHER WORDS: YOU WILL GET A BIGGER CHECK FROM SEPTEMBER 1ST THRU DECEMBER 31ST BUT YOU WILL GET SMALLER CHECK STARTING JANUARY 1, 2021 BECAUSE YOUR TAXES WILL BE DOUBLE.
YCK Accounting Services INC updated their business hours.
https://www.standard.net/news/local/irs-warns-local-residents-about-stimulus-check-fraud/article_666b4412-4f22-5269-8ee3-904820453b39.html
STANDARD.NET
IRS warns local residents about stimulus check fraud
See #7- NC will charge interest if you do no pay on time any taxes you owe to NC State.
YCK Accounting Services INC
24 March at 15:56 ·
Frequently Asked Questions for Relief Offered in Response to COVID-19 Outbreak
1. Am I required to file my income tax return by April 15, 2020?
No. The Secretary has automatically extended the time for filing income and franchise tax returns due on April 15, 2020, to July 15, 2020, for individuals, corporations, and estates and trusts to mirror the announced deadline change from the Internal Revenue Service. The automatic extension also applies to partnerships.
2. What tax schedules qualify for the extension of time to file?
The extension of time to file through July 15, 2020, applies to individual income tax returns, corporate income and franchise tax returns, partnership tax returns, and estate and trust tax returns due April 15, 2020. It does not apply to trust taxes such as sales and use taxes or withholding taxes.
3. What do I need to do to request the extension of time to file my income tax return?
Nothing. The extension of time to file your income tax return will be granted automatically. No action is required in order to receive an extension through July 15, 2020.
4. Can I receive an additional extension of time to file an income tax return if I cannot file by July 15, 2020?
Yes. Taxpayers that need additional time to file beyond the July 15th deadline can submit a request for an additional extension with the IRS or with the Department on or before July 15, 2020.
Tax Administration Page 2 of 2 March 24, 2020
5. Will I receive a failure to pay penalty if I pay my income tax liability after April 15, 2020?
No. The Department’s Important Notice issued March 19, 2020, provided that the Secretary will not assess the failure to pay penalty as long as the amount of income tax due is paid on or before July 15, 2020.
6. Will I receive a failure to file penalty if I file my income tax return after April 15, 2020?
No. The Department’s Important Notice issued March 23, 2020, provided that the Secretary will not assess the failure to file penalty as long as the income tax return is filed, or an extension is granted, on or before July 15, 2020.
7. Will I be responsible for paying interest if I pay my income tax liability after April 15, 2020?
Yes. You will be responsible for paying interest at the statutory rate from April 15, 2020, until you pay your income tax liability. The rate of interest is currently 5% per year, the minimum rate allowed by statute. Currently, State law prevents the Department from waiving accrued interest, including interest assessed for the underpayment of estimated tax, except in limited cases.
8. Will I be required to pay all tax and interest due by April 15, 2020, to receive an extension to file through July 15, 2020?
No. The extension to file an income tax return through July 15, 2020, will be granted even if additional tax and interest are due on April 15, 2020.
9. What can I do if I cannot pay my income tax liability by July 15, 2020?
If you have filed your tax return and cannot pay the tax due in full, you can use our website to make payments until you receive a Notice of Collection from the Department. Upon receipt of a Notice of Collection, you may request an Installment Payment Agreement.
10. How do I request a penalty wavier for penalties not covered in this notice?
You should complete Form NC-5500, Request to Waive Penalties, and mail the form to the N.C. Department of Revenue, Customer Service, P.O. Box 1168, Raleigh, NC 27602-1168
Frequently Asked Questions for Relief Offered in Response to COVID-19 Outbreak
1. Am I required to file my income tax return by April 15, 2020?
No. The Secretary has automatically extended the time for filing income and franchise tax returns due on April 15, 2020, to July 15, 2020, for individuals, corporations, and estates and trusts to mirror the announced deadline change from the Internal Revenue Service. The automatic extension also applies to partnerships.
2. What tax schedules qualify for the extension of time to file?
The extension of time to file through July 15, 2020, applies to individual income tax returns, corporate income and franchise tax returns, partnership tax returns, and estate and trust tax returns due April 15, 2020. It does not apply to trust taxes such as sales and use taxes or withholding taxes.
3. What do I need to do to request the extension of time to file my income tax return?
Nothing. The extension of time to file your income tax return will be granted automatically. No action is required in order to receive an extension through July 15, 2020.
4. Can I receive an additional extension of time to file an income tax return if I cannot file by July 15, 2020?
Yes. Taxpayers that need additional time to file beyond the July 15th deadline can submit a request for an additional extension with the IRS or with the Department on or before July 15, 2020.
Tax Administration Page 2 of 2 March 24, 2020
5. Will I receive a failure to pay penalty if I pay my income tax liability after April 15, 2020?
No. The Department’s Important Notice issued March 19, 2020, provided that the Secretary will not assess the failure to pay penalty as long as the amount of income tax due is paid on or before July 15, 2020.
6. Will I receive a failure to file penalty if I file my income tax return after April 15, 2020?
No. The Department’s Important Notice issued March 23, 2020, provided that the Secretary will not assess the failure to file penalty as long as the income tax return is filed, or an extension is granted, on or before July 15, 2020.
7. Will I be responsible for paying interest if I pay my income tax liability after April 15, 2020?
Yes. You will be responsible for paying interest at the statutory rate from April 15, 2020, until you pay your income tax liability. The rate of interest is currently 5% per year, the minimum rate allowed by statute. Currently, State law prevents the Department from waiving accrued interest, including interest assessed for the underpayment of estimated tax, except in limited cases.
8. Will I be required to pay all tax and interest due by April 15, 2020, to receive an extension to file through July 15, 2020?
No. The extension to file an income tax return through July 15, 2020, will be granted even if additional tax and interest are due on April 15, 2020.
9. What can I do if I cannot pay my income tax liability by July 15, 2020?
If you have filed your tax return and cannot pay the tax due in full, you can use our website to make payments until you receive a Notice of Collection from the Department. Upon receipt of a Notice of Collection, you may request an Installment Payment Agreement.
10. How do I request a penalty wavier for penalties not covered in this notice?
You should complete Form NC-5500, Request to Waive Penalties, and mail the form to the N.C. Department of Revenue, Customer Service, P.O. Box 1168, Raleigh, NC 27602-1168
Notice you will have to pay interest if you do not pay you taxes due by April 15, 2020
YCK Accounting Services INC
24 March at 15:56 ·
Frequently Asked Questions for Relief Offered in Response to COVID-19 Outbreak
1. Am I required to file my income tax return by April 15, 2020?
No. The Secretary has automatically extended the time for filing income and franchise tax returns due on April 15, 2020, to July 15, 2020, for individuals, corporations, and estates and trusts to mirror the announced deadline change from the Internal Revenue Service. The automatic extension also applies to partnerships.
2. What tax schedules qualify for the extension of time to file?
The extension of time to file through July 15, 2020, applies to individual income tax returns, corporate income and franchise tax returns, partnership tax returns, and estate and trust tax returns due April 15, 2020. It does not apply to trust taxes such as sales and use taxes or withholding taxes.
3. What do I need to do to request the extension of time to file my income tax return?
Nothing. The extension of time to file your income tax return will be granted automatically. No action is required in order to receive an extension through July 15, 2020.
4. Can I receive an additional extension of time to file an income tax return if I cannot file by July 15, 2020?
Yes. Taxpayers that need additional time to file beyond the July 15th deadline can submit a request for an additional extension with the IRS or with the Department on or before July 15, 2020.
Tax Administration Page 2 of 2 March 24, 2020
5. Will I receive a failure to pay penalty if I pay my income tax liability after April 15, 2020?
No. The Department’s Important Notice issued March 19, 2020, provided that the Secretary will not assess the failure to pay penalty as long as the amount of income tax due is paid on or before July 15, 2020.
6. Will I receive a failure to file penalty if I file my income tax return after April 15, 2020?
No. The Department’s Important Notice issued March 23, 2020, provided that the Secretary will not assess the failure to file penalty as long as the income tax return is filed, or an extension is granted, on or before July 15, 2020.
7. Will I be responsible for paying interest if I pay my income tax liability after April 15, 2020?
Yes. You will be responsible for paying interest at the statutory rate from April 15, 2020, until you pay your income tax liability. The rate of interest is currently 5% per year, the minimum rate allowed by statute. Currently, State law prevents the Department from waiving accrued interest, including interest assessed for the underpayment of estimated tax, except in limited cases.
8. Will I be required to pay all tax and interest due by April 15, 2020, to receive an extension to file through July 15, 2020?
No. The extension to file an income tax return through July 15, 2020, will be granted even if additional tax and interest are due on April 15, 2020.
9. What can I do if I cannot pay my income tax liability by July 15, 2020?
If you have filed your tax return and cannot pay the tax due in full, you can use our website to make payments until you receive a Notice of Collection from the Department. Upon receipt of a Notice of Collection, you may request an Installment Payment Agreement.
10. How do I request a penalty wavier for penalties not covered in this notice?
You should complete Form NC-5500, Request to Waive Penalties, and mail the form to the N.C. Department of Revenue, Customer Service, P.O. Box 1168, Raleigh, NC 27602-1168
Frequently Asked Questions for Relief Offered in Response to COVID-19 Outbreak
1. Am I required to file my income tax return by April 15, 2020?
No. The Secretary has automatically extended the time for filing income and franchise tax returns due on April 15, 2020, to July 15, 2020, for individuals, corporations, and estates and trusts to mirror the announced deadline change from the Internal Revenue Service. The automatic extension also applies to partnerships.
2. What tax schedules qualify for the extension of time to file?
The extension of time to file through July 15, 2020, applies to individual income tax returns, corporate income and franchise tax returns, partnership tax returns, and estate and trust tax returns due April 15, 2020. It does not apply to trust taxes such as sales and use taxes or withholding taxes.
3. What do I need to do to request the extension of time to file my income tax return?
Nothing. The extension of time to file your income tax return will be granted automatically. No action is required in order to receive an extension through July 15, 2020.
4. Can I receive an additional extension of time to file an income tax return if I cannot file by July 15, 2020?
Yes. Taxpayers that need additional time to file beyond the July 15th deadline can submit a request for an additional extension with the IRS or with the Department on or before July 15, 2020.
Tax Administration Page 2 of 2 March 24, 2020
5. Will I receive a failure to pay penalty if I pay my income tax liability after April 15, 2020?
No. The Department’s Important Notice issued March 19, 2020, provided that the Secretary will not assess the failure to pay penalty as long as the amount of income tax due is paid on or before July 15, 2020.
6. Will I receive a failure to file penalty if I file my income tax return after April 15, 2020?
No. The Department’s Important Notice issued March 23, 2020, provided that the Secretary will not assess the failure to file penalty as long as the income tax return is filed, or an extension is granted, on or before July 15, 2020.
7. Will I be responsible for paying interest if I pay my income tax liability after April 15, 2020?
Yes. You will be responsible for paying interest at the statutory rate from April 15, 2020, until you pay your income tax liability. The rate of interest is currently 5% per year, the minimum rate allowed by statute. Currently, State law prevents the Department from waiving accrued interest, including interest assessed for the underpayment of estimated tax, except in limited cases.
8. Will I be required to pay all tax and interest due by April 15, 2020, to receive an extension to file through July 15, 2020?
No. The extension to file an income tax return through July 15, 2020, will be granted even if additional tax and interest are due on April 15, 2020.
9. What can I do if I cannot pay my income tax liability by July 15, 2020?
If you have filed your tax return and cannot pay the tax due in full, you can use our website to make payments until you receive a Notice of Collection from the Department. Upon receipt of a Notice of Collection, you may request an Installment Payment Agreement.
10. How do I request a penalty wavier for penalties not covered in this notice?
You should complete Form NC-5500, Request to Waive Penalties, and mail the form to the N.C. Department of Revenue, Customer Service, P.O. Box 1168, Raleigh, NC 27602-1168
Special Tax Deduction for Cash Donations to Charities in 2020
In the latest post on A Closer Look, Tax Exempt and Government Entities Commissioner Edward Killen reminds taxpayers there’s a special deduction for cash donations of up to $300 to a qualified charity in 2020. This $300 deduction is designed for taxpayers who take the standard deduction and aren’t normally able to deduct their donations.
Before making a donation, use the Tax Exempt Organization Search (TEOS) tool on IRS.gov/TEOS to make sure the charitable organization is eligible for tax-deductible donations.
The post also includes several other important reminders for taxpayers and charities, along with information and links to other temporary provisions of the relief provided in the CARES Act.
IRS.GOV
Tax Exempt Organization Search | Internal Revenue Service
YCK Accounting Services INC updated their business hours.
