1099's

[ILLMAS]

TP in prior year has run a daycare out of her house (Sch-C), last year she told me she had incorporated because another person who runs a day care recommended to her and even helped her fill-out everything needed to incorporate. I told her then, she had to open an account and start writing and depositing the money into the corporate account, today she brings all her paper work and she never notified the state agency to use her FEIN from the corp, so she has a 1099 under her SS# for subsidies the state paid her. Also, since she is a day care provider, another state agency pays her self-employment health insurance, however she was on the payroll for most of 2010 (on the corporation), she recieved a 1099 Misc for the value of the health coverage, last year I would report the premium under Self-Employment insurance and the 1099 amount as other income, basically it was a wash. I don't know if I should just include the health insurance premium as income only, and forget about the self employment insurance? Also, the day care 1099 is for a large amount, I already adviced the client to correct it with the state, however I know that the 1099 can be reported on the corprate return, then just straighten it out with the IRS when I notice comes, but I really don't want to that because I don't want to spend more time later on. I quit, no I have 3 more hours to go :(

[grandmabee]

just report the 1099 daycare on sch C and then expense it out as reported on 1120s with ID#

How are you going to handle the 8829 expenses when the corp doesn't own the home? did she rent it ?

you are right what a mess. why don't they ask you (us) for help instead of the hair dresser, etc etc

[Julie]

It sounds like her corporation didn't actually do any business, though, since the 1099 was issued to her personally, and the corp doesn't even have a bank account of its own.

[Cathy]

TP in prior year has run a daycare out of her house (Sch-C), last year she told me she had incorporated because another person who runs a day care recommended to her and even helped her fill-out everything needed to incorporate. I told her then, she had to open an account and start writing and depositing the money into the corporate account, today she brings all her paper work and she never notified the state agency to use her FEIN from the corp, so she has a 1099 under her SS# for subsidies the state paid her. Also, since she is a day care provider, another state agency pays her self-employment health insurance, however she was on the payroll for most of 2010 (on the corporation), she recieved a 1099 Misc for the value of the health coverage, last year I would report the premium under Self-Employment insurance and the 1099 amount as other income, basically it was a wash. I don't know if I should just include the health insurance premium as income only, and forget about the self employment insurance? Also, the day care 1099 is for a large amount, I already adviced the client to correct it with the state, however I know that the 1099 can be reported on the corprate return, then just straighten it out with the IRS when I notice comes, but I really don't want to that because I don't want to spend more time later on. I quit, no I have 3 more hours to go

Deadline for filing an extension for a corporate return is March 15, 2011. That's what I'd do for starters...and then after April 18th....or probably 1st part of June is when I'd complete the returns. Too much hoo rah for this time of year.

Cathy

[ILLMAS]

Will verify with TP but I believe she was making deposits and checks from the corporate account, it seems she notified the state agency of the new corporate account but never changed from SS# to FEIN.