As tax season is upon us, the Finance staff at HCS offer the following reminders:
HCS management clients have had 1099 MISC forms sent out to recipients. These forms are used to report to the IRS payments of $600 or more for services performed for a trade or business by people not treated as employees. Examples of these payments are attorney fees and gross proceeds, fees to nonemployees and rental expense. Companies that are classified as Partnerships or LLC’s are considered 1099 vendors. The HCS accounting department obtains a W-9 form from companies or individuals our clients do business with. All monies paid to 1099 vendors are recorded over the course of a calendar year, then verified for accuracy before the 1099 MISC form is issued in January. Recipients have until February to verify the information on the form. The HCS accounting department then reports the total of all 1099 MISC payments made by our clients to the IRS using form 1096, the Annual Summary and Transmittal of US Information Returns, by February 29th.
NYS Sales & Use Tax
Most businesses operating in New York State are required to register as a sales tax vendor. Although medical practice services are not considered to be taxable, the practice may purchase products or supplies to be used in their office from out-of-state vendors who are not required to charge NYS sales tax on these items. As the items are “used” in NYS, the sales tax due must be paid by the practice. For any newly formed business, sales tax returns are required to be filed and paid quarterly. After a full calendar year (which for NYS sales tax is from March 1st through February 28th or 29th), if the practice has paid less than $3,000 total in sales tax, the NYS tax department will notify the practice that their filing status is changed to be an annual filer. The HCS accounting department prepares and files the quarterly or annual sales tax returns and also renews the NYS Certificate of Authority for our management clients when required to do so by New York State.
If you are not currently a management services client of HCS be sure to check with your accountant that these two items have been addressed for your practice or call Sharada Varanasi at HCS for help with your accounting/consulting needs.