Outright.com Helps Online Sellers Conquer the 1099-K Tax Form in 2013

2012 was the year of the 1099-K.  With the introduction of the form, the IRS sought to better track the earnings of online sellers.  Despite their intentions last year, the form was sent out to business owners but that was the end of it.  In 2013, things are getting serious.  The IRS has announced they will be matching the 1099-K form numbers against what is submitted by the sellers on their tax returns.  Anyone who has a discrepancy will be getting a much-dreaded letter from the IRS.

Given the newness of this process and its impact on small and micro businesses, Outright.com, a leading online bookkeeping software, offers features to make the 1099-K a breeze.   Outright helps its current user base of 250,000 business owners track their income and expenses from a variety of sources including numerous ecommerce sales sites and payment processors.

As a first step to tackling the 1099-K, business owners should check if the form they received is indeed accurate.  It's always wise to double check numbers in case of a discrepancy.  Users can compare the figures on their 1099-K form against the numbers listed in Outright for a specific payment channel, e.g. PayPal.  Once satisfied that all is indeed in order, an Outright user can then fill out their Schedule C form on the website itself, reconfirm the numbers match what is listed on the 1099-K, and mail the form to the IRS.  Since in 2013 the Schedule C does not include a box for the 1099-K numbers, it is crucial to make sure the gross receipts amount the user lists in the form is not less than the 1099-K amount.

For people who have not yet used Outright, it is not too late.  Customers can use Outright to pull together all of their expenses in one place, making it easier to complete their taxes.   It is possible to import data from online sellers such as Amazon, eBay or processors like PayPal at any time and the imported transaction history dates back up to one year automatically.  More data can also be uploaded manually. 

Outright is committed to helping small businesses with their finances through changes in the business environment.  "Change is the only constant," says CEO, Steven Aldrich.  "The 1099-K is a new form and how doggedly the IRS pursues audits because of it is yet to be seen.  But in this new year of increased scrutiny, it behooves us at Outright to help our users avoid skirmishes with the tax man and stay focused on what they do best – running their business."

IRS Highlights Refund Tracker for Electronic Tax Return Filers

Frank Byrt for Accounting Web writes: With the federal tax-filing season ready to begin January 30, the IRS wants electronic tax filers (e-filers) to know of its improved Where's My Refund? tracking program.  

 

The IRS has been pushing e-filing for several years, and the latest wrinkle, being able to track one's return through the process, including the timing of the refund, is sure to be another catalyst for taxpayers to take the e-file route. 

 

The IRS says that e-filers can access information about the status of their 2012 return, and eventually the timing of their refund, beginning within twenty-four hours of the IRS's receipt of their return.

 

In sharp contrast to the speedy e-filing process, filers whose returns have been prepared on paper and sent in by mail won't be able to check the status of their return for four weeks.

 

Taxpayers can check the status of their tax return on the IRS website or via the IRS2Go mobile app (see sidebar).

 

In order to find the returns status, filers will need to provide their Social Security number; filing status (e.g., married, single, head of household); and the exact dollar amount of the expected refund. All that information is on the original tax return.

IRS Where's My Refund? Tracking Guidelines

• Access a tax return's status via the mobile app IRS2Go or on the IRS website. (IRS2Go is available for Appleand Android devices.)
• The earliest to check the status of a refund is twenty-four hours after the IRS has received the return.
• To log in, one must provide his or her Social Security Number, filing status, and exact refund amount.
• The tracker will display the refund's progress through three stages: (1) return received, (2) refund approved, and (3) refund sent.
• The IRS system updates overnight, so one only needs to check once a day.
• Expect the IRS to issue a refund within twenty-one calendar days if e-filed, unless there's a discrepancy or more information is necessary.

 

The Where's My Refund? link includes a tracker that displays the refund's progress through three stages: (1) return received, (2) refund approved, and (3) refund sent. 

 

An actual refund date will be available as soon as the IRS processes the return and approves the refund.

 

The IRS system updates every twenty-four hours, usually overnight, so checking once a day is all that's necessary to track the refund's status.

 

The IRS states on its website: "Once we start processing returns, we expect to issue refunds within normal time frames. You can generally expect the IRS to issue your refund in less than 21 calendar days after we receive your [e-filed] tax return." 

 

The IRS has previously required most professional tax return preparers to take the e-filing route. Since last year, any authorized e-file tax return preparer who anticipates preparing and filing eleven or more forms 1040, 1040A, 1040EZ, and 1041 during a calendar year must use IRS e-file,  unless the preparer or a particular return is administratively exempt from the e-file requirement, or the return is filed by a preparer with an approved hardship waiver.

 

And if the number of applicable income tax returns in any tax preparatory firm with multiple preparers is eleven or more, then all members of the firm generally must e-file, even if a member expects to prepare and file fewer than eleven returns on an individual basis.

 

The IRS has projected that approximately 70 percent of all individual tax returns will be filed electronically for the 2012 tax year.