Building a business
IRS Form 1099: Note the new Jan. 31 deadline
If you hire an independent contractor to perform services costing $600 or more in a year, you must file Form 1099 with the IRS. In the past, the deadline for filing the form—and the summary form 1096— was the end of February. But now the deadline is Jan. 31.
A clarification of terms
Independent contractor. This is a self-employed person, such as Joe the plumber or Beverly the bookkeeper. By contrast, an incorporated entity such as Sears plumbing is not an independent contractor. If Joe is doing business as Joe’s Plumbing Company, he is still an independent contractor as long as his company is not incorporated. An exception is an attorney. Whether the attorney is self-employed or employed by an incorporated law firm; you must file Form 1099 for an attorney’s services of $600 or more in a year.
A critical difference
IRS defines an independent contractor as a person who determines what and how a service is performed. As the payer, you control only the result of the work. In other words, you and Beverly the bookkeeper agree that she will deliver a printed report of your program’s expenses and income every two weeks. But Beverly decides that she will perform the work at night on the computer in her home office, for example.
By contrast, a person is an employee if you control what and how the work is done. Thus, the teachers in your program are employees because you spell out their duties, work hours, guidance techniques, and so forth. In addition, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to your employees.
Form 1099-MISC. As the payer, you file the form, called the “ten-ninety-nine,” electronically with the IRS and send a copy to Joe the plumber. Joe should receive copies of the 1099 from all customers that have paid him $600 or more in a given year. He then must report the income on his tax return.
You can download the 1099 and other forms at www.irs.gov/Forms-&-Pubs. On Form 1099 Copy B (for the recipient), fill in the amount you paid in Box 7, Non-employee Compensation.
Form 1096 Annual Summary. You also file Form 1096 with the IRS, reporting the amount you paid Joe as well as Beverly and any other independent contractors to whom you paid $600 or more in a year.
IRS requires this reporting of “miscellaneous income” of independent contractors as a way of discovering their income and making sure they pay their income taxes on that income.
Forms W-2 and W-3. As an employer, you file a W-2 Tax and Wage Statement for each employee to whom you paid $600 or more in a given year, and give a copy to each individual. You file the W-3 summary listing the amounts you paid all employees.
Why the deadline change?
The previous February deadline was changed to Jan. 31 to allow IRS to compare early filings of taxpayers and possibly identify persons who may be posing as Joe the plumber or Beverly the bookkeeper with the intention of fraud.
Power out? What to do
You’re in your office reconciling the bank account when suddenly the computer blinks and the lights go out. Startled, you sit in near darkness and listen. No AC humming, nothing but silence. You glance out the windows but see nothing unusual in the broad daylight.
You look down the hallway. Ms. Jones in the next room comes out and asks, “Your lights out too?”
As a director, you’re bound to experience a power outage at some point, especially on a sweltering summer day when the air conditioning is going full blast. How you respond can have significant consequences for children and staff. What do you do?
Ideally, your program will have a written emergency plan, and everyone on staff will be familiar with it. In the plan, one person (usually the director) and perhaps an alternate will be responsible for managing the response to the outage. The plan will identify the location of circuit breakers and other equipment, explain procedures to follow, and list critical contact information.
Assume, for example, that GFCI (ground fault circuit interrupter) switches have been installed on wall outlets in the kitchen, restrooms, and utility room. These switches, often required by city codes in rooms where water and electricity are used, monitor the electrical current and trip the circuit if they sense an imbalance from an overload or broken wire. Ideally, your plan will have a diagram showing locations of GFCI’s.
Similarly, your plan will contain information about the circuit breaker box, a metal box in a stairwell or closet or on an outside wall. These circuit breakers are organized in a row, allowing you to see immediately if one or more breakers has tripped. Ideally, the breakers will be marked to indicate which circuits they’re on (AC, laundry, and kitchen, for example).
The plan will give instructions for pressing a GFCI switch or pushing a breaker back in line as well as suggestions for correcting the problem, perhaps by turning off an electrical appliance.
Your plan will also describe your electric meter and how to read it. If the dials are not spinning or the screen is blank, your building is not getting electricity (or the meter is broken). Contact your energy provider.
Check with neighboring homes and businesses to see whether they’re not getting electricity either. If the circuits are fine and power does not return after 5 to 10 minutes, contact the energy provider. Ideally your emergency plan will have a phone number or website address where you can report the outage. Be prepared to give your name, program address, and cell phone number. At this time, you may learn which areas are affected, the cause, and perhaps how long the outage will last.
During a brief outage, experts recommend the following:
Restrict activities to those that can be done safely in natural light. Use flashlights (not candles) if necessary.
Have drinking water available for all children and staff.
Tune in to a local station on a battery-operated radio.
Turn off computers, copiers, and similar equipment.
Set up a buddy system for preschoolers when going to the restroom.
Keep refrigerators and freezers closed. With doors kept closed, a refrigerator will keep food cold for four to six hours, and a half-filled freezer will keep food frozen about half a day (if full, two days). Decide whether to move food to other locations.
In hot weather, monitor children and staff for signs of heat-related illness.
Some situations will require that you call parents to pick up their children. Infants using heated bottles may need immediate pick-up to continue feedings, for example. Likewise, a mid-morning outage may interfere with cooking lunch, and hot weather may cause physical heat stress. Consider posting information about outages on your website or give to local radio and TV stations.
After power is restored, you may want to have electro-mechanical systems checked to ensure they are working properly. You’ll also determine whether to cook or discard refrigerated and frozen food.
Creating a disaster plan, Building a Business, Texas Child Care, Summer 2013. www.childcarequarterly.com/backissu_summer13.php.
Family Child Care Emergency Preparedness Guide. No date. New Hampshire Child Care Resource and Referral network, Inc., www.dhhs.nh.gov/dcyf/cdb/documents/famcareprepguide.pdf.
Say NO MORE to domestic violence
No one likes to think about it, or even hear about it. But we know it happens, as evidenced by frequent news reports.
But domestic violence affects people in all walks of life, all income and education levels, and all communities. The NO MORE campaign was launched in 2013 to bring domestic violence and sexual assault out of the shadows.
The campaign is a public/private collaboration of service providers, advocacy groups, corporations, and the U.S. Department of Justice and is supported by hundreds of local organizations and individuals. Its purpose is to bring visibility to the problem, not to provide direct services nor to lobby for policy reforms.
To that end, NO MORE has produced media tools, including print ads and public service announcements (PSAs), to amplify the message that domestic violence will no longer be tolerated. You can download postcards, posters, and other materials at http://nomore.org.
The website also lists related events, including the 28th Annual Crimes Against Children Conference Aug. 8-11, 2016, at the Sheraton Dallas Hotel.
Remind staff and families that anyone needing help can call the National Domestic Violence Hotline at 1-800-799-7233 (TTY 1-800-787-3224).
If you observe signs of domestic violence, such as those in the list below (taken from webmd.com, www.webmd.com/mental-health/tc/domestic-violence-signs-of-domestic-violence) in staff, families, or friends, encourage the person to talk with a mental health professional.
Having bruises or injuries that look like they came from choking, punching, or being thrown down
Attempting to hide bruises with makeup or clothing
Making excuses like tripping or being accident-prone or clumsy
Having few close friends and being isolated from relatives and coworkers and kept from making friends
Having to ask permission to meet, talk with, or do things with other people
Having little money available; may not have credit cards or even a car
Having low self-esteem, being extremely apologetic and meek
Referring to the partner’s temper but not disclosing the extent of the abuse
Having a drug or alcohol abuse problem
Having symptoms of depression, such as sadness or hopelessness, or loss of interest in daily activities
Talking about suicide.