Filing & Paying Business Taxes (Part 6)

Filing & Paying Business Taxes

Continued from last week

Penalties. The law provides for the following penalties if you do not file Form 1099-MISC or Form W-2 or do not correctly report the information.

Failure to file information returns. This penalty applies if you do not file information returns by the due date, do not include all required information, or report incorrect information.

Failure to furnish correct payee statements. This penalty applies if you do not furnish a required statement to a payee by the required date, do not include all required information, or report incorrect information.

Waiver of penalties. These penalties will not apply if you can show that the failure was due to reasonable cause and not willful neglect. In addition, there is no penalty for failure to include all required information, or for including incorrect information, on a deminimis (small) number of information returns if you correct the errors by August 1 of the year the returns are due. (A deminimis number of returns is the greater of 10 or 1/2 of 1% of the total number of returns you are required to file for the year.)

Form 8300. You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction, or two or more related business transactions. Cash includes U.S. and foreign coin and currency. It also includes certain monetary instruments such as cashier’s and traveler’s checks and money orders. Cash does not include a check drawn on an individual’s personal account (personal check).

Penalties. There are civil and criminal penalties, including up to 5 years in prison, for not filing Form 8300, filing (or causing the filing of) a false or fraudulent Form 8300, or structuring a transaction to evade reporting requirements.

This column is offered as a public service with the understanding that each person's tax situation is different; and that you should consult your CPA before taking any action based upon comments made in this article. Call me and I will be happy to explain my “CPA Quality Tax Preparation at H&R Block Rates”.  I can be reached at 825-2771.

Continued next week