Increased small employer plan start-up credit

Eligible small employers may claim a general business credit of up to $5,000 for the cost of establishing a pension plan, such as a SEP or SIMPLE plan, for eligible employees. An eligible employer is one with 100 or fewer employees who received at least $5,000 in compensation the previous year. The credit is allowed for the year the plan is established and each of the two subsequent years.

For plan years starting after Dec. 31, 2022:

The Internal Revenue Service announced the launch of a new page on IRS.gov explaining theEmployer-Provided Childcare Tax Credit, an incentive for businesses to provide child care services to their employees.

“This business tax credit helps employers provide their employees with child-care services and facilities,” said IRS Commissioner Danny Werfel. “We’ve heard that some employers may be overlooking this important credit, so the IRS has created a new one-stop shop for information on IRS.gov that provides an easy place to learn more.”

Taxpayers for whom using the technology required to comply with electronic filing requirements conflicts with their religious beliefs may claim a religious exemption and file paper forms instead. IRS Notice 2024-18 provides updated guidance on claiming the religious exemption for taxpayers filing business returns such as Form 1120, Form 1120-S, or Form 1065.

These filers are not subject to the e-filing waiver procedures applicable to other taxpayers, such as those requesting a hardship waiver. Instead, taxpayers who qualify for the religious exemption should print “Religious Exemption” in bold letters on top of the paper-filed return. They should notfile Form 8508, Application for Waiver from Electronic Filing of Information Returns. Notice 2024-18 obsoletes Notice 2010-13.

The Internal Revenue Service has announced work is underway on the Simple Notice Initiative, an effort to simplify and clarify about 170 million letters sent annually to taxpayers.  It's about time and those who have received one can certainly testify to that.

The Simple Notice Initiative will review and redesign hundreds of notices with an immediate focus on the most common notices that individual taxpayers receive. The redesign work will accelerate during the 2025 and 2026 filing seasons, improving common IRS letters going out to individual taxpayers and then expanding into notices going to businesses.

One of the biggest nightmares to straighten out is someone stealing your name and social security number and filing a fake tax return with that information.  It can take up to a year to straighten out the mess and your refund is held until it is done.  But, a very simple added precaution can stop those thieves dead in their tracks.  It is called an IP Pin.  If that pin number is not on your return, (you get a new one each January) then the IRS will not accept your return electronically.  Period.  So they can steal my name/SS# and try to file a return to get that free government money, but it will do them no good. 

Prior to 2020, a "Stretch IRA" was used to extend the tax-deferred status of an inherited IRA  when it passed to a non-spouse beneficiary (i.e. children and/or grandchildren).   This way you could pass an IRA down to the next generation and beneficiaries would enjoy the tax benefits of an IRA over their respective lifetimes.

Most of the revenue collected by the IRS doesn't come from payments submitted with tax returns. It comes from amounts withheld from employees' wages (income tax and payroll tax). Since they represent around 70% of the IRS's revenue, unpaid payroll taxes are taken very seriously.

If you have unpaid payroll taxes, you should address them as quickly as possible before the IRS assesses penalties. You should also be aware that the liability for these taxes is different than almost any other tax — the IRS has broad powers to collect some unpaid payroll taxes from multiple people affiliated with a business.

Payroll taxes are a common name that refers to amounts withheld from employees' paychecks to fund Medicare and Social Security. They are also called FICA taxes (FICA stands for the Federal Insurance Contributions Act, the law that created these taxes).

Although scams can happen any time of the year, they tend to be more prevalent during tax season. Scammers use tax refund time to target victims through various email phishing attempts, fraud schemes, phony phone calls and other deceptive activities. Here are four common tax season scams:

1. “I am from the IRS, and you will be arrested if…”

Beware of phone calls from anyone claiming to be an IRS employee or law enforcement officer. Fraudsters impersonate government officials to intimidate you, which is a form of social engineering commonly used by scammers. Some tricks scammers use are: