Mom's Gone Virtual's Telecommuting Taxes

Income taxes can be a very difficult topic, especially if you telecommute or work from home! Mom's Gone Virtual helps take the confusion out of telecommuting taxes by giving you free tax tips.


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Telecommuting Tax Twist

Hello Everyone!

Just a quick note to alert everyone to the new title of my blog: Mom's Gone Virtual's Telecommuting Taxes. I am in the process of re-working a few things and this is the first dedicate this site to telecommuting tax tips and resources.

The web address hasn't changed, it's still The content will now be specifically geared toward the telecommuter and work at home individuals.

Until next time....leave me a comment and let me know what you think!

Later Days!


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A Reader Article Link

One of my readers posted a link in a comment regarding the Home Office Deduction that may be of interest to some of you! Since I know that not all my readers look at the comments I will post the link here for you.
Home Office Deduction Link

Thank you Sarah for helping to make things a bit easier on everyone and for being a devoted reader!

Have a great weekend everyone!


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Form 1099-MISC Information

Tax season is in full swing so I thought I would take the time to answer some common questions concerning independent contractors, telecommuters and 1099 forms. Here are a few that I have received in the past concerning what these forms are and what to do with them.

I am an independent contractor who works from home (telecommuter). The company I contract with sent me Form 1099-MISC. What is this and what do I do with it?

Similar to the W-2 form employees receive, the 1099-MISC is an informational form that a company sends to the IRS to report the payments they have made to their independent contractors in the last year. As an IC, you do not have taxes taken out of your payments like an employee would, therefore requiring a different form than a normal employee.

You use this form to report income on your tax returns. You should receive a 1099-MISC from each company you contracted with and received more than $600 in payments.

I was an IC for a company and made $400 this year. Will I receive a 1099?

You may or may not receive a 1099 from a company if you made less than $600. Some companies will send all of their independent contractors a 1099, no matter what amount of money they are paid. However, they are not required to send one unless the person made $600 or more.

I made $1,000 with a company that I was an independent contractor for but have not received a 1099 from them? What should I do?

Companies have until January 31st to have their tax forms postmarked. If it nears the 31st, be patient. Chances are they are on their way to your mailbox. Keep in mind that this is the date which they need to be postmarked by, not received by. If the middle of February arrives and you still have not received the form give the company a call and inquire about if and when they mailed the form. If you have no luck with the company you can always contact the IRS for further help.

You can go ahead and file your return without the forms, but you must report the income you received from the company.

Where do I report the income on my 1099-MISC forms on my tax return?

You should figure your total earnings, before expenses, as an independent contractor and report it on Schedule C: Profit or Loss from Business, line 1 (gross receipts or sales).

I am a Virtual Assistant and have contracted a few projects out to someone. Do I need to report these payments to the IRS? Is there anything that I need to send to the IC regarding these payments?

If you have paid $600 or more to one IC, then you must send them a form 1099-MISC stating the amount you paid them for the year. You also need to send a copy to the IRS.

If you paid the IC less than $600, you can write the amount off as an expense and do not have to send a 1099.

All telecommuters should keep in mind that even if a company does not send you a 1099, you are still responsible for reporting all income you received throughout the year. Detailed records of income received will make this process much easier if you do not receive a 1099 and it is always good to have a double check of your records too! I cannot stress enough just how important it is to keep accurate records as a telecommuter.


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Document Security? Why?

By D. David Dugan

Why should document security be so important to me? What exactly is it anyway? These are just a couple of questions you might have when someone mentions document security to you. With today’s technology, thieves are getting smarter and attacking both large and small businesses.

Where it used to only be financial institutions, security firms, and those working on government contracts that had to worry about document security, now it involves everyone. Even if you don’t own a company, document security is important to you as an individual.
Ever hear the phrase, “One man’s trash is another man’s treasure”? Well in today’s world, your trash is treasure to identity thieves, con men, corporate spies, forgers, blackmailers, and others. What you throw in the trash can get you ripped off.

Identity thieves today can find information on documents, bills, canceled checks, and other items that you throw away. Sometimes they use that information to apply for credit cards in your name and other times they can simply use technology to make a duplicate of the credit card you already have. Most stores don’t even check ID when taking a credit card, so once a duplicate is made, they are in business.

Con men need only to learn a little bit about you in order to cook up some scheme involving you. The personal information in your letters, bills, and other documents can give them all they need to con you into believing they are someone other than who they really are. The personal information they obtained from your documents enhances their story to make it believable.
Forgers enjoy the documents you throw away even more, since you probably signed some of them and they now have a copy of your signature. However, copying your signature is not the only definition of forgery. They can take canceled checks and make a new checkbook with all the proper numbers. They can forge other documents and do a lot more damage than you might think.

Corporations make big money. Not everyone who works for or runs a corporation can be trusted to be ethical, as we have seen with all the recent scandals involving big corporations. Some corporations use spies to learn what their competitors are up to. This is so common today, that some don’t even think it is unethical. They see it as a business necessity.

That means document security for your corporation is now a business necessity you have to take very seriously, if you haven’t already done so. Your competitors may not hesitate to obtain documents from your company in any way possible. They may use bribes, go through the trash, have the trash hauled to them directly, or simply sneak in and take them.

This is not just some stuff from a spy novel. Corporate spies get paid big money for the information they can get from the documents they can steal or “find”. You have to take document security seriously, especially where your plans will only be successful if kept secret until you can legally protect them. If it involves intellectual property, document security is even more important.

Don’t think this leaves you out if you only own a small business. If your ideas are patentable, copyrightable, or trademarkable, then your document security is important as well.
Even if you don’t plan to patent, copyright, or trademark anything, your financial document security is still very important. A thief knows as a small business owner, you probably don’t have very good security for your documents. Some thieves especially target small businesses because they are much easier targets.

Well, now that you know document security is important for various reasons, what do you do about it. How can you be sure you have a good plan for document security and document disposal?

There are several options for you, each depends on your specific circumstances. There are companies that are specifically in the business of document security for large and small businesses. They actually come to your business and do all the shredding and document disposal. This is one of the most convenient ways of being sure your documents are destroyed properly.

Is document disposal all I need to know about document security? The answer is no that is only the beginning. It all depends on what type of company you run.

Do you allow your employees to take sensitive documents home with them? Do you allow them to photocopy anything they want with no record of what they copied? If you are a financial institution, do you use new Pantograph methods for your documents? Many of the old Pantograph methods no longer stop today’s thieves from copying your sensitive financial documents.

There is a lot more to document security than just shredding documents and disposing of the material securely. I plan to address more of those methods in future articles about document security. In this article I just wanted you to see that everyone needs to take document security seriously.

D. David Dugan helps maintain a Spyware Security site at and recommends using All Star Shredding for your paper shredding, document destruction and on site document security needs.

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The Next Revolution in the Accounting Industry

By Amir Morani

Every industry goes through its natural phases of transformation. As time goes, new technology becomes available, and new processes are developed. Internal and external factors contribute to the transformation process of all industries. Accounting industry is not an exception.

Only a few years ago very few accountants used software to prepare tax returns for their clients. Some even considered it a pride that they were smart enough to prepare tax returns without using software. Within a few short years, almost every accountant in the country uses some kind of tax preparation software to prepare tax returns. Now it is not a question of whether an accountant uses software to prepare tax returns, but of which software the accountant is using. Times have changed significantly in the accounting industry. Observant accountants may notice how fast things changed in their industry.

Unlike only a few years ago, it is almost unimaginable how any accounting practice could function and survive without computers and accounting software. There is probably not a single accounting practice in the country that operates without computers and software for tax and accounting. Only a few years ago, a large number of accountants did not consider computers or software as something that would be able to enter their industry. They thought nothing would replace their ability to prepare a tax return. They thought nothing could replace their ability to balance a trial balance and prepare financial statements out of it. Their denial has turned into widespread acceptance within a short time.

Accountants are now in a new phase of denial. This time they deny that it is ever possible for an accounting practice to operate without papers. They deny that it is ever going to be possible for accountants to operate without papers, period. There has been a lot of talk about paperless offices coming for years. Numerous articles have described how the world will change with paperless business operations. However, the predictions have not come true at the speed people were expecting. The topic lost its attraction over time. Thus, the denial of accountants that there could ever be a paperless office for them is justified.

The fact is that the paperless office is sneaking up on us. The technology that is required to convert business operations into paperless operations has become remarkably affordable. Small CPA practices can now go paperless with an investment of as little as $2,000, on their own. Times have changed significantly in this area but unfortunately, accountants are not noticing this trend.

The technology is available, affordable and quick. Yet there are thousands of accountants in the country, who are not even aware of this change coming in their industry. Just like it is unimaginable that an accounting practice could operate without computers and software today, within a few short years, it will be unimaginable that an accounting practice operates WITH PAPER.

The nature of this change is such that it could be devastating for many accounting practices. When accounting and tax software came about the process of adopting the change was not that difficult. You could go forward with a new way to operate very easily. You would purchase the software, train yourself and start using it, going forward.

Going paperless, however, is a culture change of a great magnitude. It brings about major changes in the way the offices work. It requires a major change in work flow processes. The conversion process also requires good planning and implementation. Conversion is not difficult but it does require special planning and attention. There is a significant revolution brewing in the accounting industry, unnoticed by many, which could damage and kill many small accounting practices, while make fortunes for others. It is the paperless revolution that could bury a few accountants under their own papers.

Amir Morani CPA CMA CFM MBA is the author of 10 Steps to A Paperless CPA Office – The Simplest Guide to Make Your Practice Paperless. Visit the blog at
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The information found at is not intended to be, nor should it be taken as, legal advice of any kind. Please contact your personal tax advisor, accountant, or attorney for questions pertaining to your specific situation.