I’ve been wanting to throw a candle party at my house. You know the kind, a bunch of ladies get together, eat food and get talked into purchasing over priced products so their friend can have free gifts and special prizes.
These parties come in many forms – the one that probably started them all is the Tupperware Parties of the 60′s. Now, there are many different types of products sold through the “party plan” concept, where one person is the consultant and the party is hosted at an individual’s house.
Well, a little none tax fact is, the hostess gifts that you receive when hosting one of these parties is taxable income and the fair market value of the products you receive must be reported.
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The other day I was listening to a radio program on NPR. The gentlemen on the radio was talking about how he lives on a farm and he barters many of his food, clothing, and other household items with others in his community. The main thing I thought of during his five minute interview was, I hope he realizes that bartering is considered “Other Taxable Income” according to the IRS.
Publication 17 has the IRS definition of bartering,
Bartering is an exchange of property or services. You must include in your income, at the time received, the fair market value of property or services you receive in bartering. If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as fair market value unless the value can be shown to be otherwise.
There is a 1099 form that relates directly with Bartering. It’s called 1099-B. If you have been involved with an exchange of property or services through a barter exchange you will need to either send to your recipient or receive Form 1099-B by February 15, 2012.
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Form 5498 is an informational form that reports regular and rollover contributions on individual retirement accounts such as; Traditional IRA, Simplified Employee Pension (SEP), Roth IRA, and Savings Incentive Match Plan for Employees (SIMPLE). Because this is an informational form for you, you do not need to include it on your tax return. Instead, your retirement plan provider will send the information to the IRS via e-filing. The deadline to for your retirement provider to mail out Form 5498 is May 31st of the following year.
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As the story goes; a CPA and a Software Engineer sat down for lunch at one of their favorite Mexican restaurants. The CPA is complaining to the Software Engineer that he is having a hard time finding a simple and easy way to print and e-file the 1099 forms he needs to produce for the company he is working for. After many hours of brain storming E-File Magic was born! E-File Magic software has helped thousands of people and companies get the forms to their recipients and e-filed to the IRS since 2006.
You no longer need to make an extra trip to the office supply store to purchase pre-made 1099, 1098, 5498, and W2-G Forms. Instead, all you need to do is simply download the E-File Magic Software, enter in your recipient data, and pay a small fee. You can use your office printer and blank paper to print the completed forms. Or if you like, you can choose to have E-File Magic print and mail the forms for you.
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Even though summer is not officially over until Friday, September 23rd, the temperature in Portland seems to be taking a down turn. During this transition period of seasons, it might be a good idea to start thinking ahead and start organizing for tax season.
Some good ideas to get yourself prepared would be:
- Start looking through your mileage log, and make sure everything is up to date.
- Double check to make sure you have made all of the charitable contributions you wanted to make for the year.
- Did you purchase a home this year? If so, make sure all of your paperwork is together.
- Keep important receipts, such as education and non-compensated business expenses.
There are many taxable items you will need to wait for before you can file your tax return, but starting to organize will help speed up the tax process at the beginning of next year.
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