There are a few things business owners need to do before they close their business. Of course, they need to fulfill their federal tax responsibilities. It's also important to notify the IRS of their plans.
Aug. 16 - West Virginia Senator Joe Manchin recently claimed the 15 percent corporate minimum tax contained in the Inflation Reduction Act, which should be called the Inflation Creation Act, is not a tax increase. Instead, he claimed, the bill simply closes a loophole that allows corporations to avoid paying all the taxes they owe. Despite what Senator Manchin says, the fact is the new minimum tax increases the amount of money some corporations must hand over to the government; in other words, it increases their taxes.
Tucked into the tax and spending bill that passed the Senate this weekend was a $15 million provision to study allowing the IRS to prepare taxes. What could possibly go wrong with that?
A small part of the $80 billion IRS funding in the Inflation Reduction Act includes the $15 million dedicated to fund a task force to study the cost and feasibility of creating a free direct e-file program. This means having the IRS do your taxes for free. Talk about a conflict of interest!
I have been saying that the IRS has been itching to go after small business. Well, the Congressional Budget Office (CBO) informed lawmakers that audits of taxpayers making under $400,000 accounts for about $20 billion in revenue for the Inflation 'Increasing' Act - in spite of their lies that nobody making under $400,000 would see any harm from this bill.
A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors.
According to a Government Accountability Office report, in 2018, there were 2,148 law enforcement officers working for the IRS’s Criminal Investigation Division. They were armed with 4,461 weapons, including 15 fully automatic weapons and more than 5 million rounds of ammunition.
The division investigates “potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.”
Congress has passed the CHIPS Act of 2022 (HR 4346) and President Biden is expected to sign the measure into law soon. The Act provides $52 billion in funding to companies that build or expand semiconductor production facilities in the U.S. as well as funding for development of related emerging technologies.
Part of the new Democratic spending package will expand the U.S. Internal Revenue Service (IRS) in an attempt to raise government revenues and fight inflation.
From collecting stamps and woodworking to crafting and quilting, people have all kinds of hobbies – and most of these hobbies will never turn a profit. For hobbies that do earn income, people should know that they must report it on their tax return. They should also be mindful that their hobby might be a business.
As the old saying goes: When something sounds too good to be true, it probably is. Taxpayers with outstanding tax bills might be tempted by businesses who advertise and offer to help them reduce their tax debt. These businesses, often called Offer in Compromise mills, make huge claims about reducing unpaid taxes for pennies on the dollar. Unfortunately, these companies sometimes don't deliver and charge large fees.
The Internal Revenue Service has announced an increase in the optional standard mileage rate for the final 6 months of 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.
For those of you that keep a mileage log, you need two totals to figure your taxes. One total business miles for the first six months of the year and one total business miles for the last six months of the year.