Tax Updates Mid September

 

September 15 Deadline Approaches

The IRS reminds taxpayers who pay estimated taxes that the deadline for their third quarter payment is September 15, 2023. This affects those taxpayers not subject to withholding, such as gig workers, sole proprietors, retirees, partners and S corporation shareholders. Those who expect to owe at least $1000 in taxes for 2023 after subtracting their withholding and tax credits must also pay. Taxpayers who are uncertain whether they are required to pay estimated taxes can use IRS tools to find out: Tax Withholding Estimator and the IRS Interactive Tax Assistant offer clear instructions. 

“Sweeping” Effort to Restore Fairness

The IRS announces “key changes” coming to reduce burden on average taxpayers and “restore fairness” to the tax system with Inflation Reduction Act funding. The agency will shift its focus from working-class taxpayers to the wealthy, using Artificial Intelligence to identify sophisticated tax-avoidance schemes. The IRS plans to ensure audit rates do not increase for those earning less than $400,000 a year and will expand compliance efforts in high-income/high wealth and partnership categories. Additionally, protecting all taxpayers from a variety of scams and schemes by raising consumer awareness on these issues will be a priority.

September – National Preparedness Month

The IRS reminds taxpayers that September is National Preparedness Month. With peak hurricane season just ahead, an updated emergency preparedness plan is key. 

Recommendations include the following:

  • Secure critical original documents inside water- and fireproof containers. This includes tax returns, birth certificates, social security cards, deeds, titles, and insurance policies. A duplicate copy of each can be stored with a trusted friend or converted into a digital file format and kept securely.
  • Keep a detailed inventory of property and business contents. Photos, videos, and written descriptions (including make and model numbers where applicable) are critical when documenting insurance claims or tax benefits. The IRS offers disaster loss workbooks for businesses and individuals to help compile such lists.
  • Reconstructing Records after a disaster may be required for getting federal assistance, insurance, or tax purposes. The IRS has tips for Reconstructing Records.
  • Employers using payroll service providers should check if their provider has a fiduciary bond in place to protect the employer against a possible provider default. The Electronic Federal Tax Payment System (EFTPS) used by many employers to make federal tax payments can be especially convenient when disaster displaces businesses or employees. An EFTPS account can be created here.