What’s going to happen next year with taxes and tax rate? When it comes to taxes, there is one thing you can be certain of – change.
Here are three things you might not have expected to look out for in 2012:
- What states do you need to pay tax in?
The hot new tax topic is “nexus.” Nexus means connection. If you have a connection with a state, the state may decide that you have to collect and pay sales tax on items you sell and/or it may decide you have to file a tax return in multiple states. Want to know more about this hot topic? Please visit us at http://www.NexusNegotiator.com
- Do you have a past foreclosure, deed-in-lieu of, loan modification or short sale?
Banks are taking their own sweet time at reporting these past taxable events. We’ve seen cases of people losing their houses to foreclosure in 2008 and then two years later getting the documentation to report on their tax returns. If you don’t report, you’ll get a note from the IRS. But if you do report, it’ll likely be in the wrong year. Unfortunately, no one seems to be holding the lenders responsible for providing timely and accurate Form 1099-A and Form 1099-C forms.
- New merchant service provider and PayPal account reporting goes into effect.
Actually, the new reporting done on a Form 1099-K goes into effect for 2011, with the first of these rolling out in 2012 with the 2011 numbers. Merchant service providers and others like Pay Pal will have to report the total gross sales amounts for anyone who sells over $20,000 and over 200 transactions in a year. There are likely to be some real hiccups in reporting just due to the program being new, plus the amount being reported will be the gross amount, not taking into account fees or returns. Plus shipping & handling charges will be included in the total gross.
Interestingly, the newly issued Schedule C form (used for Sole Proprietorship) has the Congress-mandated line item for reporting third party pay received (as reported on Form 1099-K) but the instructions tell us to report that line as -0- for 2011. In other words, Sole Props don’t need to reconcile with the forms, at least for 2011.
The news will be full of what happens with tax rates, but there are plenty of other things that will soon be impacting how, when and where you file your taxes.