IRS NEWS FOR BUSINESS
June 2017
►UPCOMING WEBINARS
*Closed captioning offered for afternoon web conferences ONLY.
Understanding Form 8300 – 75 minutes
(Report of Cash Payments Over $10,000 Received in a Trade or Business)
· June 15, 2017 – 10am Central; 9am Mountain
· Register & Attend: https://www.webcaster4.com/Webcast/Page/1148/20341
· June 15, 2017 – 1pm Central; 12pm Mountain; *
· Register & Attend: https://www.webcaster4.com/Webcast/Page/1148/20342
Continuing Education:
· All participants who qualify will receive a Certificate of Completion.
· See Webinars for Small Businesses for upcoming National and Local Webinars
· Click HERE for videos recently posted to the IRS Video Portal.
►NEWS
IRS Small Business Self-Employed Tax Center
· The IRS Small Business and Self-Employed Tax Center is your one-stop online resource for all small business and self-employed tax forms and helpful information. Learn more about it by watching this YouTube video.
· Watch this and other videos on the IRS’s YouTube Channel.
Hobby or Business? IRS Offers Tips to Decide
· Millions of people enjoy hobbies that are also a source of income. From catering to cupcake baking, crafting homemade jewelry to glass blowing -- no matter what a person’s passion, the Internal Revenue Service offers some tips on hobbies.
· Taxpayers must report on their tax return the income earned from hobbies. The rules for how to report the income and expenses depend on whether the activity is a hobby or a business. There are special rules and limits for deductions taxpayers can claim for hobbies.
Five Tax Tips on Making Estimated Tax Payments
· Taxpayers usually will have taxes withheld from their pay if they are an employee. However, if a person doesn’t have taxes withheld, or they don’t have enough tax withheld, they may need to make estimated tax payments. Taxpayers that are self-employed normally have to pay their taxes this way.
Employee or Independent Contractor? Know the Rules
· The IRS encourages all businesses and business owners to know the rules when it comes to classifying a worker as an employee or an independent contractor.
Tax Tips to Consider for Cash Intensive Small Businesses in the Sharing Economy
· Small business owners that offer goods and services through an online platform may be part of the sharing economy. Some participate part time while others operate full time. Activities such as ride sharing, freelancing, renting a spare bedroom and crowd funding are usually taxable. The IRS has a Sharing Economy Tax Center to help these taxpayers find the information and help they need to meet their tax obligations.
Home Office Deduction Often Overlooked by Small Business Owners
· The IRS reminds small business owners who work from a home office that there are two options for claiming the Home Office Deduction. The Home Office Deduction is often overlooked by small business owners
· The first option for calculating the Home Office Deduction is the Regular Method. This method requires computing the business use of the home by dividing the expenses of operating the home between personal and business use.
· The second option, the Simplified Method, reduces the paperwork and recordkeeping burden for small businesses. The simplified method has a prescribed rate of $5 a square foot for business use of the home. There is a maximum allowable deduction available based on up to 300 square feet.
IRS Audits
· An IRS audit is a review/examination of an organization's or individual's accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.
· When a taxpayer’s account is selected for audit, the IRS will notify them by mail. We won’t initiate an audit by telephone. This is a change over prior practice which included notifying taxpayers by telephone.
IRS Explains How Offer in Compromise Works
· Taxpayers who have a tax debt they cannot pay may have heard that they can settle their tax debt for less than the full amount owed. It’s called an Offer in Compromise. Before applying for an Offer in Compromise, here are some things to know.
►TAXES. SECURITY. TOGETHER. (Identity Theft)
How to know it’s really the IRS calling or knocking on your door
· Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee.
· The IRS initiates most contacts through regular mail delivered by the United States Postal Service.
· However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.
· Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail.
Know Who to Contact
· Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
· Report phone scams to the Federal Trade Commission. Use the FTC Complaint Assistant https://www.ftccomplaintassistant.gov/#%26panel1-1 on FTC.gov. Please add "IRS Telephone Scam" in the notes.
· Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at .
►Employers
See the spring issue of the SSA/IRS Reporter.
Employer Reminder: Reporting Tips versus Service Charges; Key Differences between Categories Affect Employees, Tax Reporting
· The IRS reminds employers that so-called “automatic gratuities” and any amount imposed on the customer by the employer are service charges, not tips.
· Service charges are generally wages, and they are reported to the employee and the IRS in a manner similar to other wages. On the other hand, special rules apply to both employers and employees for reporting tips. Employers should make sure they know the difference and how they report each to the IRS.
►NEWS FROM OTHER AGENCIES
Data Security Assistance from the Federal Trade Commission
· Small Business Computer Security Basics
o If you’re running a small business with only a few employees, you’ve learned about a lot of things – accounting, marketing, HR, you name it. And you probably depend on technology, even if it’s only a computer and a phone. You can’t afford to get thrown off-track by a hacker or scammer.
· Careful Connections: Building Security in the Internet of Things
o Advice for businesses about building security into products connected to the Internet of Things, including proper authentication, reasonable security measures, and carefully considered default settings.
►IN EVERY ISSUE
Small Business and Self-Employed Tax Center
Understanding Your IRS Notice or Letter
Recent Tax Scams and Consumer Alerts
Identity Protection: Prevention, Detection and Victim Assistance
Federal Trade Commission:
· Individuals: https://www.identitytheft.gov/
· Business:https://www.ftc.gov/tips-advice/business-center/privacy-and-security/data-security
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Business – June 2017