Category Archives: IRS

IRS

IRS Extends Deadlines for Victims of Hurricane Michael

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From the IRS Newsroom today:

IRS Extends Deadlines for Victims of Hurricane Michael 

Hurricane Michael victims in parts of Florida and elsewhere have until Feb. 28, 2019, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

The IRS is offering this relief to any Major Disaster Declaration area designated by the Federal Emergency Management Agency (FEMA) as qualifying for either individual or public assistance. Currently, this only includes parts of Florida, but taxpayers in localities added later to the disaster area, including those in other states, will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

“The IRS has moved swiftly to announce this relief for taxpayers affected by Hurricane Michael in advance of the Oct. 15 extension filing deadline,” said IRS Commissioner Chuck Rettig.” We recognize the devastation this historic storm caused for many taxpayers, and IRS employees stand ready to support the disaster recovery effort as they have done many times in the past.”

Source: Help for Victims of Hurricane Michael | Internal Revenue Service

IRS, QuickBooks Software, Software, Tips

Short-Term Rental Clients Need To Navigate Tax Concerns

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Rob Stephens of The Progressive Accountant recently shared his top four recommendations when advising clients to make sure they avoid costly mistakes when working with short-term vacation rentals:

1. Listing quality and rental rates.
2. Hotel occupancy taxes.
3. Get organized and find the right tools.
4. Administrative risk around taxes and regulations.

And I’d like to add that there’s an additional concern folded into the above, which is whether this is truly a Schedule C hotel operation business or a Schedule E rental property — a entire topic on its own.

He points out that:

More and more people are renting their homes, which triggers new and unique tax requirements. Being on the alert for these pitfalls can protect your client (or you) from hidden tax liability and operational problems.

He is recommending Avalara’s MyLodgeTax as a hotel occupancy tax solution. (Though, full disclosure, he sold his compliance software to them and it is currently being rebranded. Still, as Avalara is a trusted name in sales taxes, I feel confident sharing the recommendation.)

Source: Helping Your Short-Term Rental Market Clients Navigate Tax Concerns and Avoid Costly Mistakes | Sales Tax & Compliance

IRS, QuickBooks Software, Tips

Why Small Businesses Should Have an Accountant on Their Team

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QuickBooks Certified ProAdvisorYou may not know that Intuit, the owner of popular small business accounting software QuickBooks, has a resource center for small businesses on its website. And tucked away in there is a great article on the reasons to bring an accountant onto your team.

Now, I’ve often complained about Intuit’s sales pitch — whether it’s hawking QuickBooks Desktop, Online, Mobile or even one of its tax preparation solutions such as TurboTax — they make it sound like anyone can do their own books or taxes as long as they have the right tools. And it’s simply not true. To clarify: this is not a problem with the tools themselves — it’s an issue with the marketing and advertising. (The tools tend to be pretty great, in fact.)

The issue is that you need to know not only how to use the tools, but how the internal systems for using those tools should be customized to suit your specific situation. Accounting and bookkeeping rules — the basics, anyway — are pretty solid; but the workflow is extremely specific to each company. This is one reason it’s essential to work with a professional bookkeeper or accountant to interview you, get your books set up right, train you, and then review things on a periodic basis.

I’m not saying any of this because I’m trying to get more work — I have a waiting list that’s too long already. I share this because over and over, I’ve watched small businesses spend more time and money on clean-up or mistakes (some of which involved the IRS or state agencies) than they ever would have spent on proper set-up and training in the first place.

Intuit lists some specific reasons to engage the services of a professional bookkeeper or accountant:

  1. Getting Your Business Properly Set Up
  2. Spending Your Time Wisely
  3. Providing Expert Advice and Help
  4. Focusing on Growth
  5. Staying Up-to-Date on Tax Laws
  6. Reducing Your Tax Bill
  7. Audit Prep and Representation
  8. Accounting Mistakes Are Expensive

So if you haven’t made the commitment to seeking at least an initial professional consultation yet, maybe this is the time. Ask around within your neighborhood or industry and see if other business owners are happy with their bookkeeper or accountant and schedule an initial session where you bring a list of questions and get some answers. If you feel a connection, then maybe this is the right person for your team. If you don’t — at least you got some questions answered, and you’re better off for the experience.

Source: Why Small Businesses Should Have an Accountant on Their Team – QuickBooks

IRS

2019 IRS Form W-4

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From today’s “e-News for Tax Professionals Issue 2018-38” —

Following feedback from the payroll and tax professional communities, the IRS announced the 2019 version of the Form W-4, Employee’s Withholding Allowance Certificate, will be similar to the current 2018 version, while important changes will be incorporated into the 2020 version of Form W-4.

A draft version of the 2019 Form W-4 will be available in coming weeks. The IRS will continue to work closely with the payroll and tax professionals as it makes changes to the 2020 version of the form.

Source: IRS Statement on Form W-4 | Internal Revenue Service

IRS, Tips

IRS Extends Deadlines for Victims of Hurricane Florence

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This past Monday, September 17th, was a big tax deadline for business returns on extension, as well as third-quarter estimated tax payments. Unfortunately, hurricanes don’t care that we’re in a tax deadline season. As was the case with last year’s natural disasters, the IRS is offering relief for taxpayers affected by Hurricane Florence. Most notably:

The tax relief postpones various tax filing and payment deadlines that occurred starting on Sept. 7, 2018 in North Carolina. As a result, affected individuals and businesses will have until Jan. 31, 2019, to file returns and pay any taxes that were originally due during this period.

This includes quarterly estimated income tax payments due on Sept. 17, 2018, and the quarterly payroll and excise tax returns normally due on Oct. 31, 2018. Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2017 extensions run out on Sept. 17, 2018. Taxpayers who had a valid extension to file their 2017 return due to run out on Oct. 15, 2018 will also have more time to file.

Source: IRS extends upcoming deadlines, provides tax relief for victims of Hurricane Florence | Internal Revenue Service

IRS, Software, Tips

New Rules for Submission of 1099-MISC Forms

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Good article recently from one of my favorite publications, CPA Practice Advisor. They note two big changes for filing of 1099-MISC forms.

New IRS rules for submitting late 1099-MISC with Box 7

After January 31, 2019, 1099-MISC with Box 7 filled in should be filed separately from 1099-MISC with any other box filled in. As an example, on February 5, if you have a 1099-MISC with Box 7 and a 1099-MISC with only Box 1 filled in and your e-file provider has put them in the same record, as per last year’s format, the MISC with Box 7 will be flagged as late, which indeed it is. The challenge is, however, that the 1099-MISC with Box 1 may also be flagged as late, even though it is not, since it is not due until Mar. 31.

If companies do accidentally submit non-Box 7 1099-MISC along with late Box 7 forms and get a Notice 972CG (A Penalty is Proposed for Your Information Returns), according to the IRS they may respond and clarify the content of the submission, indicating the number of Forms 1099-MISC that did not report Box 7.

More on this from the IRS here:
https://www.irs.gov/forms-pubs/changes-to-current-forms-publications/filing-forms-1099-misc-with-nec-in-box-7-with-the-irs-dec-2017

New 1099-K State Filing requirements with Gross Amount more than $600

The IRS does not currently require companies to submit 1099-Ks unless the Box 1a Gross Amount for the year is at least $20,000. However, individual states have become attuned to the income reporting possibilities with this form and are mandating submission of the 1099-K for gross payments more than $600. This $600 is the same threshold for 1099-MISC Box 7 reporting.

At the moment, Massachusetts and Vermont have implemented the reporting requirement for 1099-K with more than $600. Be sure to stay up to date with your particular state’s rules as they may pick up this requirement in the future.

Source: New Rules for Submission of 1099 Forms | CPA Practice Advisor

IRS, Tips

IRS Withholding Calculator: Give Yourself A ‘Paycheck Checkup’

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Funny story: Last week I attended the IRS Tax Forum and our keynote speaker was Kirsten Wielobob, Deputy Commissioner for Services and Enforcement. In sharing her enthusiasm for various IRS tools and features, she encouraged us to suggest to our clients that they use the “Paycheck Checkup” (then proceeded to joke about how that phrase makes her think of “how much wood could a woodchuck chuck”).

But that’s not the funny part of the story. That part came when she said that she decided to go ahead and try it out herself, in her own tax situation, and the results came back that she was under-withholding by $500 per paycheck!

My main take-away was that the new “tax reform” has made calculating taxable income so complex that even the revised IRS W-4 form isn’t properly estimating taxpayer withholding. And clocking in at 11 pages of instructions… it’s unlikely most taxpayers will bother with it.

So if you have any concerns whatsoever that you might not be having enough taken out of your check to cover federal taxes, especially if you’re participating in the “sharing economy” — which complicates things exponentially — please do yourself and your tax preparer (so they don’t get shot as the tax-time messenger) a favor and give the new IRS Withholding Calculator a try.

And for the record:

New York state wildlife expert Richard Thomas found that a woodchuck could (and does) chuck around 35 cubic feet of dirt in the course of digging a burrow. Thomas reasoned that if a woodchuck could chuck wood, he would chuck an amount equivalent to the weight of the dirt, or 700 pounds. –American Forest Foundation

 

Source: IRS Withholding Calculator | Internal Revenue Service

Education, Illinois, IRS, Tips

City of Chicago Small Business Center on the Road Expo, Sept 8th

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The Small Business Center on the Road Expo series is back for 2018! The next expo will be at Truman College Saturday, September 8th from 10:00 a.m. – 2:00 p.m. The expos are free and open to the public.

Keynote Speaker will be Josh Deth, Chairman of the Party at Revolution Brewing in Chicago’s Logan Square neighborhood. Revolution Brewing operates two facilities, an award-winning brewpub and a production brewery growing by leaps and bounds. After landing his first brewery job cleaning kegs at age 20, Josh spent three years at Goose Island Beer Company before launching Revolution Brewing in 2010.

You can also expect:
– FREE assistance from business consultants to begin the licensing process
Resources on Procurement, Financial, Insurance, Consumer information
Financial Advisers on hand to answer questions
– Learn how to perfect your Elevator Pitch
– FREE Tax Clinic: One-on-One counseling sessions provided by Center for Economic Progress (CEP)
– FREE Law Clinic: Legal advice and support provided by The Community Law Project
– FREE Networking Hour: Connect and exchange ideas with like-minded entrepreneurs provided by Chicago’s Office of the City Treasurer from 1:00 – 2:00 p.m.

Source: City of Chicago :: City of Chicago’s Small Business Center on the Road

IRS

New Law gives More Time to Challenge Wrongful IRS Levy

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The IRS sent out an important bulletin today, explaining that:

Businesses and individuals have additional time to file an administrative claim or bring a civil action for wrongful levy or seizure, according to the Internal Revenue Service. The Tax Cuts and Jobs Act of 2017, the tax reform law enacted in December, extended the time limit for filing an administrative claim and for bringing a suit for wrongful levy from nine months to two years.

The change in law applies to levies made after Dec. 22, 2017, and on or before that date, if the previous nine-month period hadn’t yet expired.

The timeframes apply when the IRS has already sold the property it levied. As under prior law, there is no time limit for the administrative claim if the IRS still has the property it levied.

Source: New law gives individuals and businesses more time to challenge a wrongful IRS levy; newly-revised publication can help | Internal Revenue Service

IRS, Software

2018 Tax Software Survey Results

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The Tax Adviser (an AICPA publication) does a great job every year collecting information on which tax preparation packages are being used by professionals and what they like and dislike about each. This year was no exception — the article is chock-full of useful metrics and covers 13 products. It also lists favorite software by firm size, which I think is a great perspective, and “best for a new practice” ratings.

Check it out — definitely worth a read.

Source: 2018 tax software survey