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by Larson Accounting
27 de April de 2023
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News

The real climate job of the future: carbon accountant

My children, 11-year-old twins, vaguely college-bound, will be entering the workforce right as the compost hits the turbine. I know I’m supposed to look at them and apologize for the sins of our fossil-fueled world and chain myself to the doors of a coal plant to hasten mitigation. But that would be an awful embarrassment to my daughters, and I’m shy. And I’m not that worried about history judging me. History is gonna be kinda busy.

But still. What’s a climate dad to do? I can’t just buy them tall boots (we live in New York City) and call it a day. So, in the interest of fatherhood, I’ve been looking at all the climate-tech startups coming online. Which climate jobs should they pursue? Should I steer them into hydrogen? Nuclear? Biotech? Something something something solar? Should I wake them up each morning and whisper, “Batteries“?

I do feel squirrelly about the term “climate unicorn.” To me it has confused priorities. Why should I care if some company is worth a billion dollars at this stage in the Anthropocene? The goal should be practical, and the animal should be common and reproduce frequently. I would rather see a million Carbon Cats. Greenhouse Gas Geese. Radiative-Forcing Rabbits.

Take, for example, green hydrogen. We are to be excited about green hydrogen. Perhaps my children should go into that. The idea being: (1) Use renewable energy to make hydrogen. (2) Swap it for coal in high-heat industrial processes. (3) Byproduct? Water! Take that, coal. Invest away! Send in résumés! Hydrogen could supply 10% of all our energy in a decarbonized world. Boot up some turbines! But, oh no. Here come the climate quants (BloombergNEF researchers) to ruin everything. To produce that much hydrogen, they tell us, you need more than the amount of the renewable energy that exists today. That’s more than every solar panel and wind turbine that took us more than a decade to build, just for making green hydrogen. Then we’d need at least 19 more things at that scale to lick this. Doesn’t mean stop trying — but also it takes us a half-century to dig one subway tunnel. So.

I keep working through the list, imagining job titles and companies of the future. Electric vehicle charging station repair specialist for Voltago. Satellite methane spotter for Methnone. Tree counter for Leafery. Heat-resistant grape engineer for Nose Winegeneering. Battery firmware engineer for Edisonian. Fake meat photographer for a chain of restaurants called State of Bean. Mold mitigator. Immigration aide. Dehydration response trainer. Relocator. (I stop around then.)

For the past 30 years, I mostly worked in software — coding and consulting; people called me when they had a technology problem and needed a solution. “Solutions” are magical things. Just apply one, and the problem is gone. Somehow it didn’t quite work that way. Despite what software promised, tech solutions always required other solutions to manage the first solutions. Today the new “solution” is a bunch of machine-learning tools, such as ChatGPT. There’s already a new industry emerging to try to mitigate how much damage that solution will do.

But that concept — the idea of the one grand fix — doesn’t work in a world dominated by One Giant Problem from whence spring many complex subproblems — each one yielding many tiny grandproblems and great-grandproblems. My kids’ world will be one unbelievably large Sankey diagram, one where even the biggest, most giant solution, using every possible resource, is a few percentage points toward where we need to be. Assuming one magical technology will fix (motions to the room) is like assuming you can fix a headache by taking two whole bottles of Tylenol.

Which leads me to a terrible conclusion, an almost unbearable one. No, I don’t think we’re all going to die. It’s worse than that. I think the one, true job — the job that will matter more than any — will be, essentially, carbon accountant. The greatest job security will be for people who know the tax rebates and every aspect of green law, then study PDFs — God, there will still be PDFs in 2050, won’t there? — then study every aspect of the large, open climate standards from places like Gold Standard, Verra, IFRS and others, and get really, really good at using mitigation disclosure software to fill out report after report so their employers don’t get fined or shut down by the government.

We’re going to need hundreds of thousands of people like that. They’re going to take pictures, install sensors, write things down, look inside of vats of chemicals, create PowerPoints. And they’ll be able to bill a ton, because once we realize that no magical unicorn is going to show up in the garden dragging a cart full of large denominations — that’s the moment of profound and painful realization when people will understand they need to give up and call a consultant. And that’s when the real money starts to flow. Trust me on that. I was a consultant.

But “certified carbon accountant” has a ring to it, right? I’m kind of excited. Because you’ll need lots of carbon-accounting software. Coding — that is a job. You’ll need lawyers to defend the CEOs who go to jail and lawyers to fight the lawyers who defend the CEOs. You’ll need ever more standards, standards galore. Maybe my children can be the people who prepare climate accounting frameworks. Maybe they’ll go off and make PDFs of their own. How proud I’ll be! And look, we’re in trouble. I don’t deny it. But sometimes I think we focus way too much on the death, and that does a huge disservice to the taxes.

Source: by Paul Ford
Photo by querbeet, via Getty Images

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by Larson Accounting
25 de April de 2023
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NewsTax 2023

IRS reminds tax-exempt organizations of annual May filing deadline

WASHINGTON — The Internal Revenue Service today reminded thousands of tax-exempt organizations of their May 15, 2023, filing deadline.

The annual filing due date for certain returns filed by tax-exempt organizations is normally by the 15th day of the 5th month after the end of an organization’s accounting period. Those operating on a calendar-year (CY) basis must file a return by May 15, 2023. Returns due include:

  • Form 990-series annual information returns (Forms 990, 990-EZ, 990-PF)
  • Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ
  • Form 990-T, Exempt Organization Business Income Tax Return (other than certain trusts)
  • Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code

Mandatory electronic filing

Electronic filing provides fast acknowledgement that the IRS has received the return and reduces processing time, making compliance with reporting requirements easier. Note:

  • Organizations filing a Form 990, 990-EZ, 990-PF or 990-T for CY2022 must file their returns electronically.
  • Private foundations filing a Form 4720 for CY 2022 must file the form electronically.
  • Charities and other tax-exempt organizations can file these forms electronically through an IRS Authorized e-File Provider.
  • Organizations eligible to submit Form 990-N must do so electronically and can submit it through Form 990-N (e-Postcard)on IRS.gov.

Common errors

The IRS also reminds organizations to submit complete and accurate returns. If an organization’s return is incomplete or the wrong return for the organization, the return will be rejected. Common errors include missing or incomplete schedules.

Extension of time to file

Tax-exempt organizations that need additional time to file beyond the May 15 deadline can request a six-month automatic extension by filing Form 8868, Application for Extension of Time to File an Exempt Organization ReturnPDF. In situations where tax is due, extending the time for filing a return does not extend the time for paying tax. The IRS encourages organizations requesting an extension to electronically file Form 8868.

Pre-recorded workshops

To help exempt organizations comply with their filing requirements, IRS provides a series of pre-recorded online workshops. These workshops are designed to assist officers, board members and volunteers with the steps they need to take to maintain their tax-exempt status, including filing annual information returns.

Source: IRS-2023-90, April 20, 2023

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by Larson Accounting
30 de March de 2023
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ALERTTax 2023

Dirty Dozen: IRS urges tax pros and other businesses to beware of spearphishing; offers tips to avoid dangerous common scams

WASHINGTON —The Internal Revenue Service today warned tax professionals and businesses that they remain a top target for identity thieves and face threats from common scams on this year’s Dirty Dozen list.

As part of the annual Dirty Dozen tax scams effort, the IRS and the Security Summit partners urged tax professionals and businesses to be on the lookout for a variety of suspicious email requests. Through these spearphishing emails, scammers try to steal client data, tax software preparation credentials and tax preparer identities with the goal of getting fraudulent tax refunds. These requests can range from an email that looks like it’s from a potential new client to a request targeting payroll and human resource departments asking for sensitive Form W-2 information.

“It’s vitally important for tax professionals and businesses to maintain a strong defense against cyberattacks like spearphishing,” said IRS Commissioner Danny Werfel. “The information these businesses have on their systems is extremely valuable to an identity thief looking to steal identities and file fraudulent tax returns. There are simple steps that tax pros and businesses can take to avoid being fooled by these common schemes, including extra caution when opening emails, clicking on links or sharing sensitive client data. Extra care can go a long way to protect tax professionals and businesses as well as their clients.”

Working together as the Security Summit, the IRS, state tax agencies and the nation’s tax industry have taken numerous steps since 2015 to strengthen internal systems and controls to protects against tax-related identity theft. As part of this effort, the IRS and Summit partners continue to warn people about common scams and schemes during tax season and beyond that can threaten a taxpayer’s personal and financial information. The Security Summit initiative is committed to protecting taxpayers, businesses and the tax system from scammers and identity thieves, and the Dirty Dozen is part of the larger effort.

The IRS’ annual Dirty Dozen campaign is a list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal information, data and more. Some items on the Dirty Dozen are new and some make a return visit. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers and the tax professional community about various scams and schemes.

Side-step spearphishing: Cyber security tips for tax pros and businesses

Phishing is a term given to emails or text messages designed to get users to provide personal information, either directly or by clicking on a link or attachment. Spearphishing is a tailored phishing attempt to a specific organization or business.

The IRS is warning tax professionals about spearphishing because there is greater potential for harm if the tax preparer has a data breach. A successful spearphishing attack can ultimately steal client data and the tax preparer’s identity, allowing the thief to file fraudulent returns.

A taxpayer becoming a victim of tax-related identity theft is certainly an issue with spearphishing, but criminals seeking tax preparer credentials or access to their client’s tax-related information increases the potential number of victims.

Spearphishing begins with a suspicious email – one that may appear as a tax preparation application or another e-service or platform. Some scammers will even use the IRS logo and claim something like “Action Required: Your account has now been put on hold.” Often these emails stress urgency and will ask tax pros or businesses to click on links to input or verify information.

How to side-step spearphishing:

  • Never click suspicious links.
  • Double check the requests with the original sender.
  • Be vigilant year-round, not just during filing season.

Client impersonation: Spearphishing aimed at tax pros

The IRS and its Security Summit partners continue to see spearphishing attempts that impersonate a new potential client, known as the “New Client” scam. If the tax preparer responds, the scammer sends a malicious attachment or URL that ultimately enables them to gain access to sensitive client information on the tax preparer’s computer systems.

Bogus requests for W-2s: Spearphishing aimed at businesses

The IRS wants to warn businesses about another specific spearphishing scam that targets employees in payroll or accounting departments. These employees might get an email that looks like it comes from an official source requesting W-2s for all employees. The payroll department might accidentally reply with these important documents, which would provide scammers with W-2 data on employees that can be used to commit fraud.

The IRS recommends using a two-person review process when receiving these types of requests for W-2s. The IRS also recommends any requests for payroll be submitted through an official process, like the employer’s Human Resources portal.

Make a difference: Report fraud, scams and schemes

Individuals should never respond to tax-related phishing or spearfishing or click on the URL link. Instead, the scams should be reported by sending the email or a copy of the text/SMS as an attachment to phishing@irs.gov. The report should include the caller ID (email or phone number), date, time and time zone, and the number that received the message.

Taxpayers can also report scams to the Treasury Inspector General for Tax Administration or the Internet Crime Complaint Center. The Report Phishing and Online Scams page at IRS.gov provides complete details. The Federal Communications Commission’s Smartphone Security Checker is a useful tool against mobile security threats.

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, CA 92677-3405
Fax: 877-477-9135

Alternatively, taxpayers and tax practitioners may send the information to the IRS Whistleblower Office for possible monetary reward.

Source: IRS-2023-62, March 29, 2023

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by Larson Accounting
27 de March de 2023
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ALERTTax 2023

Dirty Dozen: IRS warns individuals to stay clear of shady tax preparers; offers tips on carefully choosing tax professionals

WASHINGTON — The Internal Revenue Service today continued the Dirty Dozen series by cautioning taxpayers to avoid unscrupulous tax return preparers and provided important tips to find the right tax professional.

People should be careful of shady tax professionals and watch for common warning signs, including charging a fee based on the size of the refund. Some “ghost” tax preparers refuse to sign the tax return or ask people to sign a blank return. These are all common warning signs, and people should always rely on a trusted tax professional, and the IRS offers a variety of resources to help.

“Most tax professionals offer excellent advice and can really help people navigate complex tax issues. But we continue to see instances where taxpayers are “ghosted” by unscrupulous tax preparers with bad advice who quickly disappear,” said IRS Commissioner Danny Werfel. “We encourage taxpayers to check out the tools and resources available to them to ensure they find the right tax professional for their needs.”

Unscrupulous tax return preparers mark day six of the IRS’ annual Dirty Dozen campaign – a list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal information, data and more. Some items on the Dirty Dozen are new, while others are re-emerging. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers and the tax professional community about various scams and schemes.

Working together as the Security Summit, the IRS, state tax agencies and the nation’s tax industry, including tax professionals, have taken numerous steps since 2015 to warn people about common scams and schemes during tax season and beyond that can increase the risk of identity theft. The Security Summit initiative is committed to protecting taxpayers, businesses and the tax system from scammers and identity thieves.

Choose carefully: Check credentials of tax return preparers

Taxpayers should choose a tax preparer as carefully as they choose a doctor or lawyer. After all, the tax preparer is entrusted with sensitive personal and financial information. While there are different types of tax preparers with varying levels of credentials and qualifications, there are constants when it comes to finding a preparer:

  • A taxpayer’s individual needs will determine which kind of preparer is best for them.
  • Taxpayers are ultimately responsible for all the information on their income tax return, regardless of who prepares the return.
  • Tax professionals are required to have an IRS Preparer Tax Identification Number (PTIN) to prepare federal tax returns.

The IRS offers resources for taxpayers to educate themselves on types of preparers, representation rights, as well as a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This directory can help taxpayers find a return preparer with specific qualifications to fit their needs. The directory is searchable and sortable.

Don’t get ghosted: Avoid shady or self-serving tax professionals

Most tax return preparers provide outstanding and professional service. Unfortunately, there are also some unethical tax preparers that should be avoided at all costs.

A major red flag or bad sign is when the tax preparer is unwilling to sign the dotted line. Avoid these “ghost” preparers, who will prepare a tax return but refuse to sign or include their IRS Preparer Tax Identification Number (PTIN) as required by law.

Not signing the return could mean the preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. This leaves the taxpayer vulnerable and on the hook for any misinformation on the return. Taxpayers should never sign a blank or incomplete return.

Shady tax preparers may:

  • Ask for a cash only payment without providing a receipt.
  • Invent false income to try to get their clients more tax credits.
  • Claim fake deductions to boost the size of the refund.
  • Direct refunds into their bank account, not the taxpayer’s account.

Taxpayers can report preparer misconduct to the IRS using Form 14157, Complaint: Tax Return Preparer.PDF If a taxpayer suspects a tax return preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct AffidavitPDF.

Make a difference: Report fraud, scams and schemes

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, CA 92677-3405
Fax: 877-477-9135

Alternatively, taxpayers and tax practitioners may send the information to the IRS Whistleblower Office for possible monetary reward.

For more information, see Abusive Tax Schemes and Abusive Tax Return Preparers.

Source: IRS-2023-59, March 27, 2023

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by Larson Accounting
21 de February de 2023
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NewsTax 2023

IRS and Treasury provide guidance for insurance providers on alternative minimum tax under the Inflation Reduction Act

WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2023-20PDF, which provides interim guidance for insurance companies and certain other taxpayers for the new corporate alternative minimum tax (CAMT) until the issuance of proposed regulations.

The Inflation Reduction Act of 2022 created the CAMT, which imposes a 15% minimum tax on the adjusted financial statement income of large corporations for taxable years beginning in 2023. Large corporations, including insurance companies, with average annual adjusted financial statement income exceeding $1 billion are the taxpayers generally affected by the CAMT. The Treasury Department and the IRS have issued Notice 2023-20 to provide certainty to insurance companies and certain other taxpayers.

In particular, Notice 2023-20 provides interim guidance for the determination of adjusted financial statement income as it relates to (1) variable contracts and similar contracts, (2) funds withheld reinsurance and modified coinsurance agreements, and (3) the basis of certain assets held by certain previously tax-exempt entities that received a “fresh start” basis adjustment.

Notice 2023-20 also solicits comments on the rules contained in the notice and certain other issues under consideration. The Treasury Department and the IRS recommend that such comments be submitted by April 3, 2023.

More information may be found on the Inflation Reduction Act of 2022 page.

Source: IRS-2023-30, Feb. 17, 2023

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by Larson Accounting
6 de February de 2023
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NewsTax 2023

WASHINGTON — The Treasury Department and Internal Revenue Service today issued Notice 2023-13, which contains a proposed revenue procedure that would establish the Service Industry Tip Compliance Agreement (SITCA) program, a voluntary tip reporting program between the IRS and employers in various service industries. The IRS is issuing this guidance in proposed form to provide an opportunity for public comment.

The proposed SITCA program is designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance. The proposed program would also decrease taxpayer and IRS administrative burdens and provide more transparency and certainty to taxpayers. The proposed program includes several features:

  • The monitoring of employer compliance based on actual annual tip revenue and charge tip data from an employer’s point-of-sale system, and allowance for adjustments in tipping practices from year to year.
  • Participating employers demonstrate compliance with the program requirements by submitting an annual report after the close of the calendar year, which reduces the need for compliance reviews by the IRS.
  • Participating employers receive protection from liability under the rules that define tips as part of an employee’s pay for calendar years in which they remain compliant with program requirements.
  • Participating employers have flexibility to implement employee tip reporting policies that are best suited for their employees and their business model in accordance with the section of the tax law that requires employees to report tips to their employers.

The intent of the SITCA program is to serve as the sole tip reporting compliance program for employers in various service industries and would replace the following programs:

  • Tip Rate Determination Agreement (TRDA)
  • Tip Reporting Alternative Commitment (TRAC)
  • Employer designed TRAC (EmTRAC)

The IRS is continuing to explore opportunities within the gaming industry and, as such, this program does not impact the existing Gaming Industry Tip Compliance Agreement (GITCA) program.

The proposed revenue procedure provides that for employers with any of these existing agreements, such agreements would remain in effect until the earlier of:

  1. The employer’s acceptance into the SITCA program;
  2. An IRS determination that the employer is noncompliant with the terms of their TRDA, TRAC or EmTRAC agreement; or
  3. The end of the first full calendar year after the final revenue procedure is published in the Internal Revenue Bulletin.

Anyone interested in providing feedback to the proposed SITCA program should follow the instructions in the notice and reply by May 7, 2023.

Source: IRS-2023-19, Feb. 6, 2023

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by Larson Accounting
2 de February de 2023
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Tax 2023

Key points to keep in mind when filing 2022 tax returns

WASHINGTON — To help taxpayers navigate the beginning of the tax filing season, the Internal Revenue Service today offered a checklist of reminders for people as they prepare to file their 2022 tax returns.

From gathering paperwork to filing a tax return, these easy steps will make tax preparation smoother in 2023:

1. Gather tax paperwork and records for accuracy to avoid missing a deduction or credit.

Taxpayers should have all their important and necessary documents before preparing their return. This helps people file a complete and accurate tax return. Errors and omissions slow down tax processing, including refund times.

Some information taxpayers need before they begin includes:

  • Social Security numbers for everyone listed on the tax return,
  • Bank account and routing numbers,
  • Various tax forms such as W-2s, 1099s, 1098s and other income documents or records of digital asset transactions,
  • Form 1095-A, Health Insurance Marketplace statement,
  • Any IRS letters citing an amount received for a certain tax deduction or credit.

​​​​​​​2. Remember to report all types of income on the tax return.

This is important to avoid receiving a notice or a bill from the IRS. Don’t forget to include income from:

  • Goods created and sold on online platforms,
  • Investment income,
  • Part-time or seasonal work,
  • Self-employment or other business activities,
  • Services provided through mobile apps.

3. File electronically with direct deposit to avoid delays in receiving a refund.

Avoid paper returns. Tax software helps individuals avoid mistakes by doing the math. It guides people through each section of their tax return using a question-and-answer format.

For those waiting on their 2021 tax return to be processed, here’s a special tip to ensure their 2022 tax return is accepted by the IRS for processing. Make sure to enter $0 (zero dollars) for last year’s adjusted gross income (AGI) on the 2022 tax return. Everyone else should enter their prior year’s AGI from last year’s return.

4. Free resources are available to help eligible taxpayers file online. Free help may also be available to qualified taxpayers.

IRS Free File provides a free online alternative to filing a paper tax return. IRS Free File is available to any individual or family who earned $73,000 or less in 2022.

With IRS Free File, leading tax software providers make their online products available for free as part of a 21-year partnership with the IRS. This year, there are seven products in English and one in Spanish. Taxpayers must access these products through the IRS website.

People who make over $73,000 can use the IRS’ Free File Fillable Forms. These are the electronic version of IRS paper forms. This product is best for people who are comfortable preparing their own taxes.

Qualified taxpayers can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.

5. Choose a tax professional carefully.

Most tax return preparers are professional, honest and provide excellent service to their clients. However, dishonest tax return preparers who file false income tax returns do exist. The IRS has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications and more on choosing a tax pro on IRS.gov.

6. Avoid phone delays; use online resources before calling the IRS.

To avoid waiting on hold, the IRS urges people to use IRS.gov to get answers to tax questions, check a refund status or pay taxes. There’s no wait time or appointment needed — online tools and resources are available 24 hours a day. The IRS’ Interactive Tax Assistant tool and Let Us Help You resources are especially helpful.

Additionally, the IRS suggests taxpayers stay up to date on important tax information online by:

Source: IRS-2023-17, January 31, 2023

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by Larson Accounting
30 de January de 2023
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NewsTax 2023

Filing Season 2023 has begun: Employer January 31 wage statement deadline almost here

WASHINGTON — The Internal Revenue Service today urged employers to be aware of the January deadline to file Forms W-2 and other wage statements. Filing these documents timely prevents late-filing penalties for employers, helps employees file their income tax returns and prevents tax fraud.

Employers must file copies of their 2022 Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by January 31, 2023. This deadline applies for all Forms W-2 and W-3, whether filing by paper forms or electronically.

Employers must also provide copies B, C and 2 of Form W-2 to their employees by January 31, 2023. For more information on filing Form W-2, see General Instructions for Forms W-2 and W-3.

Use same employer identification number on all forms

Employers need to make sure the employer identification number (EIN) on their wage and tax statements (Forms W-2, W-3, etc.) and their payroll tax returns (Forms 941, 943, 944, etc.) match the EIN the IRS assigned to their business.

Do not use a Social Security number (SSN) or Individual Taxpayer Identification number (ITIN) on forms that ask for an EIN. Do not truncate the employer’s EIN or the employee’s SSN on any of the forms.

If an employer used an EIN (including a prior owner’s EIN) on their payroll tax returns that’s different from the EIN reported on their W-3, they should review General Instructions for Forms W-2 and W-3, Specific Instructions for Form W-3, Box h—Other EIN used this year.

Filing wage and tax statements and payroll tax returns with inconsistent EINs or using another business’s EIN may result in penalties and delays in processing an employer’s returns. Even if an employer uses a third-party payer (such as a Certified Professional Employer Organization, Professional Employer Organization, or other third party) or a different entity within their business to file these documents, the name and EIN on all statements and forms filed must be consistent and exactly match the EIN the IRS assigned to their business.

For more information on third-party arrangements, see Publication 15, (Circular E), Employer’s Tax Guide.

Extensions

Employers may request a 30-day extension to file Forms W-2 with SSA by submitting a Form 8809, Application for Extension of Time to File Information Returns, by January 31. However, they must meet one of the criteria on Line 7 of Form 8809 to be granted an extension. For detailed information, see Form 8809 and General Instructions for Forms W-2 and W-3.

Filing Form 8809 does not extend the due date for furnishing wage statements to employees. Filing a separate extension of time to furnish Forms W-2 to employees must occur by January 31. Detailed information and instructions on how to file an extension of time to furnish Forms W-2 to employees is in the General Instructions for Forms W-2 and W-3.

Electronic filing

The IRS and SSA encourage all employers to e-file. It is the quickest, most accurate and convenient way to file these forms. E-filing is mandatory if an employer is filing 250 or more information returns.

For more information about e-filing Forms W-2 visit the SSA’s Business Services Online, and Employer W-2 Filing Instructions & Information.

Source: IRS

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by Larson Accounting
23 de January de 2023
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NewsTax 2023

IRS kicks off 2023 tax filing season with returns due April 18

WASHINGTON — The Internal Revenue Service kicked off the 2023 tax filing season with a focus on improving service and a reminder to taxpayers to file electronically with direct deposit to speed refunds and avoid delays.

Following a successful opening of its systems today, the IRS is now accepting and processing 2022 tax returns. Most of the individual tax returns for the 2022 tax year are expected to be filed before the April 18 tax deadline.

Taxpayers have until April 18 to file their taxes this year, but some taxpayers living overseas and disaster victims may have later filing deadlines. Alabama, California and Georgia storm victims now have until May 15 to file various federal individual and business tax returns and make tax payments.

“Following months of hard work, we successfully opened our processing systems today to start this year’s tax season,” said IRS Acting Commissioner Doug O’Donnell. “Getting to this point is a monumental effort not only for the IRS but also for the nation’s tax community. The hard-working employees of the IRS look forward to serving taxpayers this filing season, and I personally want to thank them, and all of the tax and payroll community for their dedication to making tax time smoother for the nation.”

O’Donnell also noted that taxpayers can count on IRS delivering improved service this filing season. As part of the August passage of the Inflation Reduction Act, the IRS has more than 5,000 new telephone assistors and added more in-person staff to help taxpayers.

“We continue to increase IRS staffing to help provide taxpayers with the information and assistance they need,” said O’Donnell. “The IRS reminds taxpayers to take some important steps when filing their tax returns for a smoother process. They should gather their necessary tax records, file an accurate return electronically and choose direct deposit to get their refunds faster.”

Taxpayers who electronically file a tax return with no issues and choose direct deposit should still receive their refund within 21 days of the date they file – similar to previous years. Due to tax law changes such as the elimination of the Advance Child Tax Credit and no Recovery Rebate Credit this year to claim pandemic-related stimulus payments, many taxpayers may find their refunds somewhat lower this year.

Source: IRS-2023-11, January 23, 2023

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by Larson Accounting
23 de January de 2023
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Tax 2023

Check tax withholding now to avoid paying future quarterly estimated payments

WASHINGTON — The Internal Revenue Service reminds taxpayers who earn wages to use the Tax Withholding Estimator now to adjust their 2023 withholding. People’s tax situations occasionally change through marriage or divorce, adding a child or having one move out on their own. Checking now and making necessary adjustments early in the year may help them avoid the need for quarterly estimated tax payments.

The Tax Withholding Estimator online tool helps taxpayers see if they may get a refund or need to make a payment directly to the IRS to avoid a tax bill and penalties next year.

Income taxes are pay-as-you-go and are normally paid during the year as income is received through withholding from paychecks, pension payments, Social Security benefits or certain other government payments.

Having a second job or non-wage income from unemployment, self-employment, annuity income, the gig economy or digital assets may require taxpayers make quarterly estimated tax payments to avoid a balance due when they file.

In addition, various financial transactions, especially late in the year, can have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, virtual currency, real estate or other property sold at a profit.

Tax Withholding Estimator

The Tax Withholding Estimator, also available in Spanish, can help wage earners determine if they have too much or too little tax withheld. Taxpayers may use the estimate to change their withholding amount and submit a new Form W-4, Employee’s Withholding Certificate, to their employer. The tool offers those who earn wages step-by-step help for tailoring the amount of income tax they should have withheld from their paycheck.

Make a tax payment

The fastest and easiest way to make an estimated tax payment is to do so electronically using IRS Direct Pay or the Treasury Department’s Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit Pay Online. If paying by check, be sure to make the check payable to the “United States Treasury.”

Other items may affect 2023 taxes

Some unforeseen life events can trigger a need to make withholding adjustments. Here are some tools to help taxpayers know how to make adjustments due to different scenarios:

More Information:

Source: IRS-2023-10, January 19, 2023

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