IRS News, May 13

IRS Recommends Emergency Preparedness

Disaster can strike at anytime, and the IRS recommends updating your emergency plans annually. Documenting valuables and keeping copies (digitally if necessary) of key documents can make disaster recovery far easier. Additionally, scams and frauds proliferate after an emergency or disaster situation so be sure the charity seeking your donation is a legitimate one.

Small Business Week Wraps Up

Taking advantage of Small Business Week, the IRS focused on many key areas for small businesses:

The IRS reminds small business owners that the TCJA (Tax Cuts and Jobs Act) lowered
the backup withholding rates to 24% (from 28%) and 22% for bonuses. Backup
withholding applies when there is a problem with an employee’s name or TIN (taxpayer
identification number), or a problem with the EIN (employer identification number).

Small businesses are urged to make estimated tax payments to avoid fees and
penalties. This often includes those participating in the sharing economy, such as
rideshare providers, Airbnb operators, etc.

The IRS encourages small businesses to be aware of potential security threats, and reminds business owners that as of May 13, only individuals with either a Social Security number (SSN) or an individual taxpayer identification number (ITIN) can request an employer identification number (EIN). This requirement aims to provide greater security to the EIN process.

Watch videos for small businesses on the Small Business playlist!

Tax-Exempt Organizations’ Returns Due

While tax-exempt organizations don’t have to file standard tax returns, they must file Form 990-series information returns. For those operating on a calendar year, the filing deadline is May 15 (those operating on a different accounting period have until the 15th of the fifth month after their accounting period ends). Failing to file annual reports for three consecutive years will result in the revocation of federal tax exemptions as of the due date of the third year for which they are required to file. Tax exemption status can be checked online.