Click HERE to print our Prepaid Letter.

1099 & CONSTRUCTION WORKERS:

REMINDER! IF you paid anyone over $600.00 total during the year, you must give them a 1099 by January 31, 2012. You should have them fill out and sign a W-9 prior to them contracting to doing any work for you.

NEW! - NOW: Corporations and LLC's also need 1099's (starting 2012).

A Supreme Court case involving construction sub-contractors has determined that sub-contractors are employees if the contractor supplied the materials.

Starting January 2009, all Minnesota construction sub-contract workers must have state withholding tax withheld from their pay. Call (612) 721-2026 to set this up with LeAnn.
 

2008, 2009 & 2010 MILEAGE:
See our F.A.Q. Page.
 

FIRST-TIME HOME BUYERS:
(anyone who hasn't owned a home for the previous two years)
If you purchased a home in 2008, you can get up to $7,500.00 up-front credit, but the credit will be repaid over the next 15 years of taxes. Bring in your HUD Settlement Statement from the purchase of your home. If your purchase agreement was before April 30, 2010 and your closing took place prior to September 30, 2010, you may qualify for an extra amount on your refund. Please bring in your HUD closing papers, no matter when you purchased, sold or refinanced in 2010.
REMEMBER - Let us know if your purchase was 2008.
 

ENERGY CREDITS:
The energy credits for 2010 & 2011 are for energy efficient things done to your main personal residence, such as high efficiency furnace, windows, doors, and insulation. You need to have the manufacturer certificate to show the high efficiency rating. Bring your receipts and information to your preparer.
 

REGARDING AUDITS:
Lots of new auditors have been trained in 2008, 2009, 2010 & 2011. There have been a lot of audits from both federal and state, and these will continue into 2012 (the government is broke and looking for money).
     Things to watch for:
     1. Pay use-tax on out-of-state purchases.
     2. KEEP RECEIPTS.
     3. Keep bank statements.
     4. S-Corp Officers must have wages of at least $26,000 for the year 2011, or you will have a very high chance of being audited.
     5. Keep good track of business miles (We also need total miles for the year. It's a good idea to have an oil change with an odometer reading toward the beginning and end of the year in order to calculate total miles.)
     6. Keep your appointment calendars.
     7. Make sure you've paid sales tax on all your equipment purchases and out of state purchases.

IF YOU RECEIVE AN AUDIT LETTER, CALL US AND SIGN A POWER OF ATTORNEY, AND WE CAN DO THE AUDIT FOR YOU.
"Don't talk to IRS yourself, and never give them more than what they ask for."
(Now where did I hear that before?)

SALES TAX:
In January 2006, MN started to require all payments for returns to be paid electronically online. Call us at (612) 721-2026 if you need help or don't have on-line access. Don't forget USE TAX.

As of July 1, 2008, an additional .25% is added to MN metro counties' sales tax. Annual filers, make sure you keep your sales tax numbers separate for January through June and July through December, since the rates are different. In July 2009 the rate changed again; call LeAnn at our office to get a chart of the counties or zip codes.

Did you know?
1. You should charge sales tax on shipping charges that are added to the bill.
2. It's not good enough to just get a person's resale tax # - you need them to completely fill out and sign a ST-3 form if they don't pay sales tax.
3. You should turn in use tax on items you buy out of state and the supplier never charged you sales tax.

A common problem that sales tax audits are finding is that a lot of people are not paying use tax.  If you buy a product that you did not pay sales tax on and you use it, then you owe sales tax.  This commonly happens when you order something from another state, order online or pay with a credit card and it's shipped to you.  Check your invoices and receipts, if you didn't pay sales tax and it's an item you use, you owe use tax.  Use tax are filed and paid at the same time as sales tax.  If you have any questions, feel free to call our office.
 

IF YOU HAVE EMPLOYEES, READ THIS:

The Federal Government has switched everyone over to a new system with the 941 deposits. Banks can no longer except the 941 or 940 tax. These must be electronically filed. Please call LeAnn for help to set up this new system. 

The MN UC Fund is now charging a $250.00 per month penalty for late filed UI returns, even if the returns are zero.  The new commissioner said they would not abate these penalties, so it's very important to file on time.  Also, some people have received a notice from the Federal government saying that they can file and pay 941 yearly (Form 944); please note this does NOT mean you can pay and file UI returns yearly, as doing so would result in expensive penalties.
 

© 2004 Lynda Mohs Tax Service