Tag Archives: deadlines

A Happy Banker Makes for a Happy Business

With the onset of COVID-19, small business banks are more nervous about potential loan losses than ever. Here are several tips for your business to maintain a great working relationship with your lender. These same tips can also be used if you want to plant seeds with your banker for potential future loans.

  • Produce timely financial statements. Your lender may require you to produce financial statements over the duration of your loans to ensure that you have enough cash to make consistent, on-time payments. Strive to produce up-to-date financial statements and send them to your bank before they ask for them. Not only will timely financial statements make your lenders happy, the pro-active nature of your financials will show a level of transparency to them. Be prepared to include a note explaining major changes and schedule regular phone calls to go over the business.
  • Implement solid internal controls. How does a lender have faith that the dollar amounts on your financial statements are accurate? By properly implementing internal controls. You’ll have a happy banker if your company can provide evidence that your internal controls are operating properly.
  • Communicate. If your business encounters turbulent financial waters, the best thing to do is immediately let your lender know about it. Better yet, by keeping in constant communication, your lender will most likely be able to spot if your business starts experiencing a downturn and will try devising a plan before you begin missing payment deadlines.

Remember, your banker probably has their hands full right now. These tips allow them to spend more time on their problem loans, and one of them will not be yours.

1099 Filing Requirements

Another year has come to an end and we would like to take the time to remind you of Form 1099 reporting requirements and changes to filing deadlines.

Certain payments made in the course of business are required to be reported on the appropriate Form 1099.  The type of 1099 filed depends on the type and amount of the business expenditure.  Some of the most common expenditures requiring a 1099 are listed below:

Payments for: Equal to or Exceeding: Form:
Dividends $  10 1099-DIV
Interest (generally) $  10 1099-INT
Royalties $  10 1099-MISC
Liquidating distributions $600 1099-DIV
Interest (paid in the course of business) $600 1099-INT
Fees paid for services $600 1099-MISC
Commissions $600 1099-MISC
Prizes and awards $600 1099-MISC
Rents $600 1099-MISC

Note: Generally, payments made to a corporation are not required to be reported on a form 1099.  However, there are some exceptions such as attorney fees.

A copy of the 1099 is required to be postmarked to the recipient and the IRS by January 31, 2017. Failure to correctly file the required 1099’s within the due dates can result in penalties of up to $260 per return (based on when filed) with a maximum of $1,059,500 for each year.

In addition to the above mentioned requirements, business taxpayers will be required to answer two questions on their 2016 income tax returns: (1) Did you make any payments in 2016 that would require you to file Form 1099(s)? (2) If yes, did you file the required Form 1099(s)?

In order to properly fill out the required forms, you will need to obtain information from each person to whom you make qualifying payments. Form W-9 is used for this purpose and can be obtained by going to http://www.irs.gov/pub/irs-pdf/fw9.pdf.

The information above relates to the most common types of transactions and circumstances.