InfoSphere™ Business Alerts And Intelligence: compliance

Sunday, January 20, 2013

E-Commerce Sales Tax Alert - 2013 Has Landed.

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If you conduct any type of internet e-commerce business, the state and local governments are becoming very diligent (i.e., they need money, and they’d like you to help them to collect it or suffer the consequences), and you must heighten your level of compliance by employing one or more automated sales tax calculation and administration devices for your protection, and for the protection of your clients. Avalara offers some powerful yet scalable solutions for those of us who are engaged in e-commerce, whether selling a specialty item or a shopping cart catalog of products. You may download this fabulous informational and educational white paper for free by clicking on the link below:

E-Commerce Internet-Based Business And The 2013 Sales Tax Compliance Solution

In the event that you feel that the above link sounds intimidating (anything about regulations, taxes, penalties and inconvenience to my business -- our yours -- usually does), you can simply
click, alternately on the link which follows to receive your free view and download of this fabulous report:

Douglas E. Castle’s Informational And Educational Resource For E-Commerce In 2013

Some additional points of interest follow -- just for you! --

1) Be certain that the fields in your subscription and purchase forms have a section to include the address of your customer or subscriber -- even if this is part of a two-step process by autoresponder... services such as MailChimp do this job rather well;

2) You may very well be likely liable for collecting, reporting and remitting sales tax to a number of different states and municipalities. Be certain that you have an automated service that permits you to compute, collect, categorize and remit, and make sure (it’s your responsibility) to inform your accountants in advance of your compliance steps;

3) If your ISP, host or server is located out of the USA, but you are selling to clients within the United States Of America, you are still obligated to comply with all applicable federal and state tax laws regarding income and sales tax;

4) If you are involved in e-commerce where you represent that a certain amount of your proceeds from your sales of a product or the rendering of a service are going to be donated to a charity, you are likely subject to special reporting requirements for fundraising organizations (at the state level), despite your good intentions. Seek legal, tax and accounting advice if you are planning on doing this;

5) If you are an IRC Section 501(c)3 (tax-exempt organization), a PAC (political Action Committee) or a dues collecting Membership Organization, you can be almost certain that you’ll be scrutinized more than in years before. Be certain to get good advice from your tax, accounting and legal professionals regarding what is expected of you regarding compliance. If you have been either non-compliant or careless in the past, find out what you can do to avoid the threat of losing your special tax status and providing the documentation to the government which you might have failed to provide in the past.

As surely as a starved man will grab your tuna sandwich (even if it’s got chopped up lettuce and stuff in it), the U.S. Government will be turning up the heat and turning out in numbers to collect every cent from every business and person from which or whom it can.

Thank you for reading me, retweeting me and spreading the word across your social media platforms, groups and posting forums.

Douglas E. Castle for The InfoSphere Business Alerts And Intelligence Blog

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Tuesday, March 6, 2012

Your Online Business And Form 1099-K

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Economies of scale, in terms of time spent (which really should be spent minding the business when you are short-staffed and your every minute is critical) as well as payroll service and accounting dollars expended are especially acute when it comes to the operation of a small business. There are federal, state and local forms, special employer reports, withholding, disability, FICA, and a multitude of time-- and resource-consuming records to be kept and reports to be filed to maintain compliance with the law.

Using independent contractors seemed like a part of the solution to this black hole in productivity and record keeping, but the Internal Revenue Service began to impose some strict tests to determine exactly what manner of person (natural or encapsulated in an entity) qualified as an independent contractor, and what additional forms had to be filed even if he/she/it was, in fact an independent contractor.

Non-compliance (failure to remit taxes withheld, failure to timely file reports) was, and still is not an option. The cost of an audit can be prohibitive in terms of professional representation and time; adding interest and penalties to this unwieldy mountain of pain has sunk many a small business or entrepreneurial enterprise. If you cannot afford compliance, you cannot afford to even be in business.

If you are engaged in online selling or e-commerce, in general, the IRS is now requiring a new an exciting form, the 1099-K to ensure that online sellers report their sales and income properly. And to be certain that you are in compliance with requirements relating to this form, the IRS has enlisted (i.e., mandated under penalty of law) merchant payment processors -- the clearing houses between sellers and customers - to keep certain records of your business' online sales, and send these forms to you, as well as to the government authorities involved.

A brief article follows which helps to clarify what this is all about, what to expect, and what you must do. When you've finished reading this article by clicking on the source hyperlinks, please hit the "BACK" button on your browser and come back to this page for some additional words to the wise. Don't worry -- take your time to read the article thoroughly before you return - the bus won't leave without you. Promise.

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How the 1099-K will change small-business record keeping
A new tax form, called the 1099-K, is being introduced to make sure online sellers report their income correctly. The new form, which payment processors will send to merchants that exceed a certain sales threshold, might be incentive for small-business owners to step up their record-keeping efforts, said Steven Aldrich of Outright.com. "The problem is that most small business owners are still using paper and pencil and spreadsheets to track their business data. This reporting is really a clarion call to move those people into the digital age," he explained. [CLICK ON EITHER OF THE FOLLOWING HYPERLINKS TO READ THE ENTIRE ARTICLE] Bloomberg Businessweek , Entrepreneur.com/The Daily Dose blog

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Some more tips for small business owners and entrepreneurs in general:

1) Use a professional third-party payroll service if possible. It saves some time and adds an additional layer of liability between your company and the taxman;

2) Have your bookkeeper use reliable software (many small companies use QuickBooks, but there are other programs, even some specific to certain types of industries and businesses) to constantly keep track of all business inflows and outflows, and to have them all neatly categorized and backed up daily. You should be able to get a complete printout of all of the transactional information relating to your business within an hour's notice. Insist upon getting frequent regular reports - you might be amazed at just how useful these reports can be in terms of telling you where your problems might be (and attention required), and how well you're doing on other fronts.

3) Have a reputable independent CPA (or, preferably a firm of CPAs where there is 'peer review') prepare all of your important tax returns. Research your accountant before you choose -- if your return is prepared by an accountant who has had many of his clients audited, you might be unknowingly getting your tax return internally red-flagged.

4) If the IRS or any other tax agency wants to review or audit your books and records, refer them to your accountant or tax attorney, and be certain that the audit is conducted at your accountant's or attorney's office. This tends to reduce intimidation and time consumption.

5) Always be current with every aspect of your withholding and reporting compliance. Any delays can be incredibly expensive, and can damage your business in terms of its reputation, credit standing or its very existence. Be conservative. Play it extra safe. Take your business risks in other areas where they can possibly generate substantial returns.

Douglas E. Castle for The InfoSphere Business Alerts And Intelligence Blog and The Business And Project Planning And Management Blog

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