As of January 1, 2024, a new rule requires millions of small-to-medium-sized businesses to report detailed personal information about their owners to the U.S. Treasury Department. The rule is expected to affect more than 30 million companies in the U.S., and failure to comply could lead to sizable fines or even jail time. Yet a recent survey shows a majority of the affected businesses were unaware of this new requirement. (more…)
ERC Update: Congress May Enact Early Termination of the Program and IRS Allows Cancellation of Erroneous Claims
On January 31, 2024, in a strong bipartisan vote, the U.S. House of Representatives approved the Tax Relief for American Families and Workers Act of 2024 (H.R. 7024). The Act contains provisions benefitting individuals and businesses. To “pay for” these tax benefits, the Act authorizes the termination of the Employee Retention Credit (ERC) program effective January 31, 2024. If passed by the Senate in its current form, no ERC claims can be filed after the termination date. It is unknown at this time if and when the Senate will discuss this legislation and potentially modify it. If passed by the Senate a retro-active termination date may still apply. (more…)
Congress Proposes an Abrupt Halt to Employee Retention Credit Claims
ACTION MAY BE NEEDED BEFORE JANUARY 31, 2024
Last week, the House Ways and Means Committee approved a bill that could imminently close the window for Employee Retention Tax Credit (ERTC) claims. If passed, the deadline to file amended payroll returns to claim the Employee Retention Tax Credit moves to January 31, 2024. There are other changes to the program including extending the period for IRS audits of ERTC claims to six years and significant penalties for promoters. The termination of ERC was included as a vehicle to pay for $78 billion in tax relief for individuals and businesses in the Tax Relief for American Families and Workers Act of 2024.
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Year-End Tax Preparation - Ten Timely Topics for Closely Held Businesses
The end of the calendar year means it’s time to get ready for another tax season. Here are 10 issues that owners, financial officers, and tax executives in closely held businesses should consider as part of their year-end activities. (more…)
Work Opportunity Tax Credit - Don’t Overlook a Valuable Hiring Incentive
As the tight labor market continues to put upward pressure on wages, many businesses are struggling to attract and retain qualified workers at salaries the company can afford to pay. One often-overlooked tax credit could provide some relief for companies in this situation while also pointing them to a potential source of new employees they might not have considered otherwise. (more…)
Subchapter S Shareholder-Employees: “Reasonable” Compensation Is a Must
Subchapter S corporations offer a number of tax advantages, but they can also lead to complications. One longstanding concern is the question of “reasonable compensation” for S corporation shareholders who are also officers or employees of the company. Several provisions in the 2017 Tax Cuts and Jobs Act (TCJA) have drawn added attention to this issue—and to the sizable penalties that companies can incur if they do not manage officer compensation properly. (more…)
The SECURE 2.0 Act and Employers: Changes Affecting Your Business
The SECURE 2.0 Act, which was signed into law in late December 2022, contains many provisions that can impact employers, employees, and retirees. We covered the key provisions in a previous article, SECURE Act 2.0 – Helping Employees and Employers With Retirement Savings. Now, we are going to concentrate on how the Act affects employers including new requirements and the potential for increased administration and compliance costs. (more…)
Does Your Business Have Unclaimed Property… and Possibly Large Penalties?
By Misty Shore, CPA, MST, Tax Senior
UPDATE March 22, 2023 – The California Voluntary Compliance Program (VCP) is open as of today, which allows unclaimed property holders to determine if they qualify for a waived interest assessment. Holders must complete a VCP Interest Form to receive an application. After submitting a completed application form, approved holders that meet all program requirements, which includes completing a training program and meeting reporting deadlines will be eligible for waived interest (12 percent) on past-due unclaimed property reported under the program. For additional information and to complete an interest form, visit: California Voluntary Compliance Program. (more…)
Partnerships and S Corporations: IRS Clarifies Schedule K-2 and K-3 Rules
Since the IRS first introduced them for the 2021 tax year, Schedules K-2 and K-3 have caused concerns—and confusion—for many partnerships and S corporations. The purpose of the two schedules is to report information related to foreign financial activities, but some pass-through entities found themselves subject to the forms’ requirements—even though they had no foreign interests or concerns. (more…)