Tax Reporting on a Hire Unreported to Regulating Agency

[arthur]

My business is fully licensed by the New York City Department of Health and has paid taxes since our inception year 2013.

Is there any exposure for submitting a 2014 1099 form for a daycare assistant hired in 2014 that I neglected to report to the Department. Do I risk significant penalties with the Deparment? How do I work with the Department on submitting the 2014 hire info and avoid possible penalties? This same daycare hire was approved by the Department for 2015.

My objective is to add her salary to my 2014 business tax return deductions. Really appreciate any help !

[Michael]

Welcome to the forum. Tom Copeland will hopefully have an answer for you. In the mean time here are a few threads regarding deduction for substitutes and 1009s.

https://www.daycare.com/forum/tags.php?tag=deduction+-+substitute

https://www.daycare.com/forum/tags.php?tag=1099

[TomCopeland]

Hiring

My business is fully licensed by the New York City Department of Health and has paid taxes since our inception year 2013.

Is there any exposure for submitting a 2014 1099 form for a daycare assistant hired in 2014 that I neglected to report to the Department. Do I risk significant penalties with the Deparment? How do I work with the Department on submitting the 2014 hire info and avoid possible penalties? This same daycare hire was approved by the Department for 2015.

My objective is to add her salary to my 2014 business tax return deductions. Really appreciate any help !

You should contact the City Department of Health and explain that you didn't file the proper form for 2014. You will probably have to pay a fine. You are entitled to deduct her salary as a business deduction on your 2014 taxes. Because you didn't withhold and pay federal and state payroll taxes, there will be penalties for not doing this. However, the tax benefit of deducting her salary will be more than any penalties.