Are you a spiritual entrepreneur?
Setting up your business can be a fun and exciting time. You've taken your own Leap Of Faith and you are ready for success. However understanding your legal responsibilities is imperative to building a thriving business.
Do you know the federally imposed filing requirements?
As an entrepreneur and business owner it may seem be confusing and difficult to decipher.
Here's what you need to know. As a professional lightworker in the holistic, metaphyscial or spiritual field, it's a requirement by the IRS to issue 1099's if you intend to expense the costs associated with an independant contractor who provided services to your business.
If you have utilized the services of a contractor for your trade or business and paid them $600 or more within the 2017 calendar year, you may be required to issue them a form called a 1099-MISC.
These payments only pertain to those derived for the purpose of your trade or business, thus personal expenses are not applicable. These payments are connected to services, not products.
Here are some examples of services:
- Web Designer
- Graphic Artist
- Legal Services
- Rent (for business space)
Services paid to a Corporation do NOT need to be reported on a form 1099, however services paid to an individual or an LLC are required. The form W-9 captures the necessary information including the vendor's name, Tax ID, and address. One of the best practices is to have your vendor complete a form W-9 initially, prior to engaging in services. If you request the completed form to be returned to you prior to remitting payment, you will have their information on file for the year end and won't be in a situation of tracking them down.
You can download the form W-9 HERE.
The IRS has a right to impose penalties for those who fail to report and file 1099's. If it's found that the negligance was intentional, the penalty is significantly increased without a maximum.
Reviewing your records at the end of the year with your tax accountant can help reduce the risk of oversight. Also note that the 1099's are due to the recipient and the government by JANUARY 31, 2018.
To learn more helpful business tips order the #1 Internationally best-selling book Leap of Faith: How To Build Your Spiritual Business. From practical tips, immediate tools and instant answers, Leap of Faith helps the spiritual entrepreneur build a business that is successful and abundant.
*The information in this article is not intended to substitute for professional legal advice. Please consult with your tax accountant or preparer for personalized consultation.