You may not need a full-time bookkeeper, but you’ve got some pressing bookkeeping questions. Well, we’re here to help.
Email The Bookkeeper your questions – from the mundane to the intricate – and she’ll get back to you within 24 hours and post a response here!
Your Question: Do non-profit organizations need to pay sales tax? The Bookkeeper’s Answer: Thanks for this question! Many nonprofits assume they do not need to pay sales tax, and it is a common misconception that carries substantial consequences. Yes, nonprofit organizations do need to pay sales tax. Although nonprofit organizations are tax-free entities, there are instances where nonprofits incur a tax liability. When the nonprofit has a charity auction or sales event, a sales tax must be paid on the sold items. Nonprofit organizations...read more
Your Question: Do S-Corp losses flow through to the personal income tax return (just as income does)? The Bookkeeper’s Answer: Yes, both the income and the losses of an S-Corp flow through to the shareholders’ individual income tax return. The main benefit of qualifying for S-Corp status is that the S-Corp is taxed at the individual level, and the individual tax rates are lower than the corporate tax rates. However, the losses are limited to the taxpayer’s basis. We hope this answered your question. If you have any questions...read more
Your Question: How long should I keep accounting records? The Bookkeeper’s Answer: Great question! Some accounting records need to be kept permanently. Others only need to be retained for a certain number of years. We have compiled the attached list of suggested retention rates for accounting records, including legal, insurance, and personnel records. Feel free to contact us if you require any additional information! Record Retention Best regards, The Bookkeeper firstname.lastname@example.org Important Note: While we have attempted to...read more
Your Question: When should I request a Form W-9? The Bookkeeper’s Answer: Business owners should request a Form W-9 from any independent contractors or nonemployees performing services for their business. In order to compensate these independent contractors and file a 1099, a W-9 will need to be collected. The independent contractors should already have a W-9 and should provide the business with a copy of their W-9 prior to services being performed. Best regards, The Bookkeeper email@example.com Important Note: While we have...read more
Your Question: When should I issue a 1099? And what is the difference between a 1099 and a W-2? The Bookkeeper’s Answer: The 1099-MISC is the Miscellaneous Income tax form. The 1099-MISC should be filed by non-profit organizations and anyone operating a trade or business. Below is a list of the most common expenses that businesses would file on their 1099 forms. File a 1099 if your business paid any of the following expenses during the tax year: Compensation of services of a nonemployee Rental payments for the office building, machines,...read more