New IRS 1099-K Rules on Payment Processor Payments

Summary of President Biden’s Tax and Spending Proposals with tax changes for individuals and corporations.

Spending Proposals IRS budget increase will result in more audits and more information reporting requirements for banks.

The Second Round of Paycheck Protection Program loans is available to help individuals and businesses affected by COVID.

Tax Changes for Businesses under President Biden

Taxation of non-qualified stock options of private companies

COVID-19 SBA Paycheck Protection Loans for the Self-Employed

Summary and computation of Trust Fund Recovery Penalty

The recently enacted tax reform bill has made significant changes to the taxation of business.  This post summarizes some of the more substantial changes.

Employer-owned life insurance policies issued after August 17, 2016 are subject to taxation by the IRS unless they qualify for an exception.

The IRS was prepared to require tax filers to indicate on line 61 whether they and their family had health coverage during 2016. If not, taxpayers are subject to a penalty. Now it appears, due to President Trump, that filing out line 61 is optional.

The IRS along with the DOJ has been aggressively pursuing offshore account holders to disclose their overseas bank accounts before it's too late.  There are significant penalties for holding accounts in certain foreign banks.  However, in an effort to encourage account holders to disclose their accounts, the IRS started the Offshore Voluntary Disclosure Program (OVDP)  and the streamlined procedures enable taxpayer to meet their tax obligations while limiting the potential penalties for continued non-compliance.

More and more consumers are buying all kinds of stuff online--over the internet from companies such as Amazon.  Many of these sales transactions occur without the payment of sales taxes, as the selling company likely has no physical presence in the state of the purchaser.   Many brick-and-mortar companies argued that they were at a disadvantage as they were forced to compel customers to pay more (often times 8% or more) to cover the state sales tax.  

The House of Representatives has passed its plan for changing the tax code that lowers marginal rates with incentives for domestic investment and simpler tax filings.  It is all about economic growth and simplicity.

What to do when the IRS comes to collect.

Proposed changes to Retirement Plans.  The coming federal budget will include a few changes to retirement accounts, including a new retirement plan called the myRA.

The "Cadillac Tax" is a 40% penalty (excise tax) on health insurance plans and a provision of Obamacare that takes effect on January 1, 2018. On that date, employers who provide insurance plans will get hit with a 40% excise tax on insurance premiums above $10,200 for an individual or $27,500 for a family plan.  It is estimated that in 8-10  years most health insurance plans offered by employers will be subject to the tax.

The idea that there’s no such thing as a free lunch could eventually ring true for employees who get complimentary meals at work, as the Internal Revenue Service and Department of the Treasury have taken a step closer to potentially taxing such meals. Last year, the IRS suggested in its Priority Guidance Plan that it was exploring modifying sections of the Tax Code concerning employer-provided meals that it believed were problematic.

The trust fund recovery penalty allows the IRS to collect the unpaid withholding taxes from the assets of the owners and operators of businesses. It penalizes those who had control over the decision to divert the payroll money from the IRS to other creditors of the business. The trust fund recovery penalty is equal to the income taxes, social security taxes, and Medicare taxes withheld from employee paychecks. 

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