Tax Minute for Sept 12

TODAY’S DEADLINES

IRS: Employers: Employees are required to report to you tips of $20 or more earned during August.

TODAY’S NEWS & TIPS

COVID: Broad-based penalty relief for millions of taxpayers. To help struggling taxpayers affected by the COVID-19 pandemic, the IRS issued Notice 2022-36, which provides penalty relief to most people and businesses who file certain 2019 or 2020 tax returns late certain 2019 or 2020 tax returns late. The IRS is also taking an additional step to help those who’ve already paid these penalties by providing a refund or credit. The IRS expects to complete these payments by the end of September 2022. This relief will be automatic – there’s no need to call the IRS. The COVID-related penalty relief news release provides more information on what penalties are included and what criteria must be met to receive relief.

September 15 deadline for third quarter estimated tax payments. The IRS reminds taxpayers who pay estimated taxes that the deadline to submit their third quarter payment is September 15, 2022. Taxpayers with income that isn’t subject to withholding can learn more about making timely quarterly payments, including those who:

• Are self-employed, investors or retirees

• Have income such as interest, dividends, capital gains, alimony, cryptocurrency, or rental income

  2021 tax extension filers don’t overlook important tax benefits. The IRS reminds taxpayers who’ve yet to file their 2021 federal income tax return to make sure they take advantage of the deductions and credits for which they’re entitled and to file electronically as soon as possible. "Each year, eligible taxpayers overlook money saving deductions and credits that can help them with the cost of raising a family, daycare, paying for college, saving for retirement or making a donation to charity," said IRS Commissioner Chuck Rettig. "We want to ensure they're aware of all the tax benefits for which they may qualify." Tax tip: Taxpayers: File when ready, don’t wait until October 17 to file a 2021 tax return

  September is National Preparedness Month. With the height of hurricane season fast approaching and the ongoing threat of wildfires in many places, the IRS urges everyone to develop an emergency preparedness plan, or if they already have one, update it for 2022. Taxpayers should consider six areas when updating and securing tax records before natural disasters strike.

  Every taxpayer has the right to privacy. The privacy of America's taxpayers is paramount at the IRS. The right to privacy is 1 of the 10 rights the Taxpayer Bill of Rights gives all taxpayers. The right to privacy ensures taxpayers can expect that any IRS inquiry, examination, or enforcement action will comply with the law and not be unnecessarily intrusive. Learn how this affects financial documentation, personal property and more.

  Aspiring entrepreneurs: Learn the basics of setting up a business. New entrepreneurs can start out on the right foot by making sure they understand the tax responsibilities of running a business. The process can seem daunting, but IRS.gov has resources to help new business owners. The basics include:
  • Applying for an employer identification number

  • Choosing a business structure • Choosing a tax year

  Interest rates increase for fourth quarter. The IRS announced that interest rates will increase for the calendar quarter beginning October 1, 2022. The rate will be 6% for most taxpayers.

Tax relief for Mississippi water crisis victims. Mississippi victims of the water crisis beginning Aug. 30, now have until Feb. 15, 2023, to file various individual and business tax returns and make tax payments. Following the recent disaster declaration issued by the Federal Emergency Management Agency (FEMA), the declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area.

A Closer Look: Streamlining the 1023. In the most recent issue of A Closer Look, Sunita Lough, Commissioner, Tax Exempt/Government Entities Division, discusses the past, present, and future of the Form 1023-EZ, which was launched in 2014 to help small charitable organizations seeking federal tax-exempt status. This executive column is also available in Spanish. “Form 1023-EZ has reduced the burden on the smallest organizations applying for tax-exempt status and increased the efficiency of the Exempt Organization division’s operations,” said Lough. “In TE/GE, we are committed to succeeding in our mission to provide our customers with top quality service by helping them understand and comply with tax laws and to protect the public interest by applying the tax law with integrity and fairness to all.” “A Closer Look” is a column from IRS executives that covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

New charitable remainder trusts webpage. Visit the new charitable remainder trusts webpage, now available on IRS.gov. Charitable remainder trusts are irrevocable trusts that let you donate assets to charity and draw annual income for life or for a specific time. Resources include how charitable remainder trusts work, reasons to create a charitable remainder trust, the various types and more.

News from the Justice Department’s Tax Division. The United States filed a complaint in the U.S. District Court for the Southern District of Texas to bar Houston area return preparer Jonathan Perry from preparing federal income tax returns for others. The complaint alleges that during 2017-2022, Perry – individually and doing business as X-Pert Tax Services and as JONATHAN PERRY – significantly overstated the customers’ tax refunds, costing the United States more than an estimated $4.4 million in tax revenue.