Does it Make Sense to Pay Vendors Early?

According to Gene Marks, CPA and president and CEO of the Marks Group, it does make sense to pay your vendors early. Your vendors are critical partners, and if you treat them this way you will see the payoff in the long run.

One advantage of early payment is discounts many vendors offer for early payment. If you don’t see an early payment discount option on an invoice, don’t hesitate to ask your vendor what they can do for you.

Paying vendors early also helps solidify relationships. You will be someone your vendors want to continue to work with. They will be willing to take your calls, and are more likely to do favors should need something like last minute inventory fast.

Marks also suggests paying vendors twice a month – say on the 10th and the 25th. He says this allows you to avoid seepage of money from an uncontrolled … Read More

Beware – Unemployment Benefits are Taxable

With the advent of the Covid-19 pandemic, many workers are applying for jobless benefits for the first time. One survey indicated many recipients are unaware that unemployment benefits are subject to federal income taxes as well as state income taxes in most states. There is also concern that individuals do not know that tax withholding is not automatic.

Unemployment recipients in Minnesota can request withholding when they sign up for the benefit. To start or change tax withholding, individuals can log on to their personal account at www.uimn.org or phone 651-296-3644 in the Twin Cities or 1-877-898-9090 in greater Minnesota. Federal income tax is withheld at a rate of 10 percent.

In Massachusetts, recipients have the option of requesting that federal and/or state income taxes be withheld from weekly benefit payments when they sign up. Federal income taxes are withheld at a rate of 10%, and state income taxes are withheld … Read More

Income Taxes for Estates and Trusts

Estates and trusts are taxed on income they earn, just like individuals. Assets (stocks, bonds, rental property and other interest- and dividend-producing assets) owned by an individual become part of the estate upon their death. Income generated by these assets must be reported to the IRS by the trust or estate. Estates and trusts pay taxes based on rates set by the IRS each year.

Which Estates and Trusts Must File a Form 1041?

The following estates are required to file Form 1041:

  • Estates with gross income of $600 or more for the tax year
  • Estates with a beneficiary who is a nonresident alien

The following trusts are required to file Form 1041:

  • Trusts that have any taxable income at all
  • Trusts that have a gross income of $600 or more regardless of taxable income
  • Trusts with a beneficiary who is a nonresident alien

An estate must obtain a tax ID … Read More