• You pay wages to one or more employees including household employees.
• You file Schedule C or F and have a Keogh plan or are required to file excise, employment or alcohol, tobacco or firearms returns.
• If you are a partnership, estate, corporation, nonprofit organization, farmers’ cooperative, and plan administrator – even if you do not have any employees.

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2. How do I apply for an EIN?

Complete Form SS-4. You can get an EIN immediately by calling the Tele-TIN for the service center for your state or you can send the completed Form SS-4 directly to the service center to receive your EIN by mail. If you apply by mail, you will receive your EIN in approximately 4 weeks.  You may also apply on-line (24/7) by going to www.irs.gov, then search the IRS site for SS-4 EIN.  You should find the on-line application link and instructions.

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3. Why should I check the third party designee on  any tax form or individual tax return?
   
   Third-party designees will now be able to exchange information with the IRS concerning a tax return.  They may also request and receive writing tax information relating to a tax return including copies of specific notices, correspondence, and account transcripts.  The named third party designee may now be any individual, corporation, firm, organization, or partnership.  As a result, the enhanced third party designee authorization will be substantially equivalent to Form 8821, "Tax Information Authorization."
   
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4. To whom am I required to send a Form 1099–MISC?

Any person who, in the course of his or her business (including activities deemed non-profit), makes payments totaling $600 or more for services rendered (other than a corporation). However, payments to a corporation for legal fees in excess of $600 are reportable on Form 1099-MISC. Do not report payments to employees, such as Christmas bonuses or car allowances on Form 1099.

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5. To whom am I required to send a Form 1099-INT?

Any person who receives $600 or more of interest from you during a calendar year.

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6. What is the maximum earnings subject to Social Security Tax for 2004?

2005 = $90,000

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7. What is the 2004 maximum amount of earnings one can have and still receive full benefits?

Under Age 65 - $12,000

Ages 65 AND 6 months and over - no limit

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8. What is the 2005 standard mileage rate?

Effective January 1, 2005, the standard mileage rate for the use of a car for business purposes is 40.5 cents a mile for all business miles.  The standard mileage rate for medical and moving purposes is 14 cents a mile.  The charitable rate, which is set by law, remains at 14 cents a mile.

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9. What are the advantages of incorporating my business?

• Limited liability.
• Ability to raise capital through issuance of stock.
• Ease of transfer of ownership.
• Profits passed through are not subject to self-employment tax (S-corporation only).
• By not distributing profits to shareholders, income tax can be deferred (C-corporation only).
• Owner/Employees are entitled to the same tax-free fringe benefits as other employees (C-corporation only).

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 10.    When is the filing date for our tax return?  When is the due date for our tax deposit or
          estimate?

          See our Tax Calendar .

          A new feature has been added to the Iowa Department of Revenue and Finance (IDRF) Web site:
          "Where's My Refund?"  You can now check the status of your refund via this new service.  All you need is
           to have your social security number and the amount of the refund requested.  Visit www.state.ia.us/tax
           and click on the "Status of Your Iowa Income Tax Refund" link.

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• Corporations - No penalty for underpaying estimates if the tax is less than $500.
• Corporations - No penalty if four equal estimated payments total at least 100% of the current year tax liability.
• Corporations – No penalty if four equal estimated payments total at least 100% of the prior year tax liability. Does not apply if prior tax year was less than 12 months, corporation did not file a tax return in prior year, or prior year did not show a tax liability.
• Individuals – No penalty for underpaying estimates if the tax liability, less withholding is less than $1,000.
• Individuals – No penalty for underpaying estimates if taxpayer pays at least 90%of the current year’s tax.
• Individuals with AGI of less than $150,000 – No penalty for underpaying estimates if payments total at least 100% of the prior year tax liability.
• Individuals with AGI of more than $150,000 – No penalty for underpaying estimates if payments total at least 110% of the prior year tax liability.

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• Travel, transportation, meals and entertainment expenses not reimbursed by employer – need actual receipts or log book for documentation.
• Job hunting expenses – incurred while searching for a new job in the taxpayer’s same trade or business.
• Safety equipment, small tools, supplies needed for your job.
• Protective clothing or uniforms required for your job.
• Dues to professional organizations.
• Subscriptions to professional journals.
• Education expenses to maintain or improve skills needed in your work (tuition, books, supplies, lab fees, etc.).

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C. J. Richtsmeier, CPA
Last Updated August 23, 2005
Contact Us

The Gramm-Leach-Bliley Act and the related Federal Trade Commission (FTC) requires us to provide the following disclosure notice of our privacy policy to our clients.

DISCLOSURE NOTICE

C.J. RICHTSMEIER, CPA - PRIVACY POLICY

CPAs, like all providers of personal financial services, are now required by law to inform their clients of their policies regarding privacy of client information.  CPAs have been and continue to be bound by professional standards of confidentiality that are even more stringent than those required by law.  Therefore, we have always protected your right to privacy.

Types of Nonpublic Personal Information We Collect

We collect nonpublic personal information about you that is provided to us by you or obtained by us with your authorization.

 Parties to Whom We Disclose Information

For current and former clients, we do not disclose any nonpublic personal information obtained in the course of our practice except as required or permitted by law.  Permitted disclosures include, for instance, providing information to our employees, and in limited situations, to unrelated third parties who need to know that information to assist us in providing services to you.  In all such situations, we stress the confidential nature of information being shared.

 Protecting the Confidentiality and Security of Current and Former Clients’ Information

We retain records relating to professional services that we provide so that we are better able to assist you with your professional needs and, in some cases, to comply with professional guidelines.  In order to guard your nonpublic personal information, we maintain physical, electronic, and procedural safeguards that comply with our professional standards.

 Please call if you have any questions, because your privacy, our professional ethics, and the ability to provide you with quality financial services are very important to us