Have Your Clients Evaluated Their 2022 Roth Conversion Strategy?
According to the IRS, these third parties typically charge a large fee or may require a percentage of the tax refund generated by the amended return. While it’s possible that some business owners do legitimately qualify for a refund, many do not.
Similarly, the business owner must remember that if the business files an amended return, they must also reduce the wage deductions they took on their tax return based on the amount of the ERC that is claimed on the amended return. In most cases, the third party offers to prepare an amended return that either improperly determines that the business is eligible for the ERC or overstates the amount of the credit available.
Business owners should closely examine the qualification requirements and their individual circumstances before filing an amended return to claim the ERC. Employers must either satisfy the governmental order test or the gross receipts test to claim the credit. For more information on the ERC, visit Tax Facts Online. (Read More)
Reminder for Service Providers: Watch for 1099-Ks
The IRS has released a reminder for service providers and others with over $600 in sales during the 2022 tax year. Those taxpayers may receive a Form 1099-K early in 2023 for the first time if their 2022 sales exceed the $600 mark.
The IRS also reminds taxpayers that there is actually no change to the tax treatment of this income. The only change is to the reporting rules for Form 1099-K. As always, all income remains taxable, including from part-time work, side jobs or the sale of goods. Taxpayers must report all income on their tax return unless it is excluded by law even if they don’t receive a Form 1099-K or any other tax documents.
The new reporting is designed to help taxpayers keep track of their income. The IRS suggests that taxpayers with side jobs may wish to consider making estimated tax payments throughout the year to cover their tax liability.
For more information on the types of income that are taxable, visit Tax Facts Online.
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