Tax form software developer Greatland Corp. has released its annual list of the year’s most newsworthy events in terms of their implications on W-2 and 1099 forms.
• “Real” and Royal Weddings: Millions of Americans turned on their televisions to witness two high-profile weddings: the marriage of Prince William and Kate Middleton and the marriage of Kim Kardashian and Kris Humphries. Alas, only one turned out to be the stuff of fairytales. The other is the stuff of IRS nightmares. Assuming the wedding was part of Ms. Kardashian’s or her family’s business, they better brush up on year-end reporting forms knowledge and requirements for the 2011 tax year. Income earned from her wedding? Depending on the situation, wages or income earned would be reported on a W-2 or 1099-MISC form. Payments of $600 or more to wedding contractors? More 1099-MISC forms. And if it turns out the tabloids are true and that Kim actually paid Kris to take part in the wedding as an alleged publicity stunt? No word on if his employment status will require her to issue him a W-2 or 1099-MISC form. Kim, we happen to know a good W-2 and 1099 provider if you need one.
• All Aboard the Cain Train: From Anthony Wiener’s misguided use of Twitter to Arnold’s love child, 2011 was not short on political scandals. Among them was the swift rise and fall of businessman Herman Cain. Cain seemingly came from nowhere with his bold 9-9-9 tax plan – a plan which would have eliminated all payroll taxes and most deductions, as well as drastic changes to the very forms we hold so dear. But the Cain Train had barely left the station before his bid for president ended in November of this year.
• It is Really All About Winning: Charlie Sheen’s #winning streak in 2011 might just earn him a few 1099 and W-2 forms. Following his mid-season departure from Two and a Half Men, Sheen’s W-2 might show a little less income this year. Sheen will surely hope to make up for those losses with new royalty income from his famous trademarked “Tiger Blood” and “Winning” catchphrases, as reported on a 1099-MISC form.
• But Then There’s Losing: The major casinos reported huge losses due to the Packers upset of the Steelers in this year’s Superbowl. Those lucky gamblers who bet big on the Packers will receive a Form W-2G for reporting their winnings.
• Income Reporting Doesn’t Discriminate Between the 99% and the 1%: Perhaps the only common ground the Occupy Wall Street’s 99 percent can find with the 1% is wage and income reporting. No matter how much money one earns, it must be reported to the government on a W-2 or 1099 form. Now the amount reported is likely much greater among the 1%, but we won’t get into that . . .
• What’s a 1099-MISC Alex? For the first time ever, a computer named Watson played the top champions of all-time on Jeopardy and won – $1,000,000, to be exact. All game show winnings are reported on a 1099-MISC. However, we are not sure how the IRS treats non-human recipients.
• Monumental (and One Minor) Change: Finally, 2011 was a year of sweeping change. From the blossoming Arab Spring to the deaths of Osama bin Laden, Moammar Gadhafi and Kim Jong Il, 2011 was chock full of major global news events. Although these events have very little—if anything—to do with income reporting, we’d be remiss if we didn’t mention them. So, in an attempt to tie W-2 and 1099 reporting back to the theme of “change,” we will note one final item: In 2010, there was an overlooked provision in the health care reform legislation aimed at improving reporting and generating more tax income. It would have required all businesses to not only issue a 1099 to document income paid to contract workers, but also issue a 1099 form to any business from which they purchase at least $600 in goods or services – a huge burden and major increase in forms and reporting. Thankfully, Congress came to its senses in 2011 and repealed the provision, bringing sighs of relief from business owners all over.
Grand Rapids, Mich.-based Greatland Corporation operates two Web-based wage-reporting and filing sites for independent contractors and small business: speedEfiler.com and FileTaxes.com, which enable small and mid-size businesses to file their W-2 and 1099 forms online to federal and state agencies, and have copies printed and mailed directly to employees or recipients.
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