Fall 2022 Newsletter
Dear Clients and Friends,
We hope you have enjoyed your summer and are looking forward to the cooler months ahead. School will soon be in session and it seems the dog days of summer are ending; a sure sign that fall is on its way.
Enclosed, please find the fall edition of our quarterly newsletter. In it, you will find information on what is needed for reporting digital payment activity to the IRS if your business decides to accept digital currency.
The digital payment tax law now requires taxpayers to report transactions that exceed $600 per year to the IRS. These payments include but are not limited to PayPal, Venmo, CashApp, etc. You can expect to receive a 1099-K from every platform you use where the $600 threshold was exceeded. For taxpayers that occasionally sell items on platforms such as eBay or Etsy and your transactions exceed $600, you may now be considered a “business” in the eyes of the IRS. Be prepared to create a business tax return on Schedule C of your Form 1040.
Identity scams continue to be a real pain for taxpayers. Be on the lookout for suspicious emails, phone calls and/or texts. The IRS initial form of contact will always be by mail. If you receive an email or phone call from someone claiming to be an IRS agent do not provide any personal information. Report all IRS or Treasury-related fraudulent calls or emails to phishing@irs.gov.
Are you being audited by the IRS? If you receive an audit notice, don’t panic and do not take it personally. A vast majority of audits are selected by IRS computers and are routine; it doesn’t necessarily mean anything is wrong. Contact our office right away to help and/or provide all necessary information to the auditor.
Unfortunately, this edition’s newsletter was printed before two new pieces of tax laws were passed by Congress. The first, “The Chips Act,” focuses on incentives to U.S. manufacturers of microchips and the second, “The Inflation Reduction Act of 2022,” contains many tax provisions for individuals and corporations. It also provides incentives for investments in clean energy technology. The law also has provisions designed to lower the cost of prescription drugs and enhance the affordability of health insurance. Both of these bills will be more fully discussed in future issues.
The 2021 tax return filing deadline is approaching quickly and we are working diligently to complete the returns that are on extension. If you have not dropped off all of your 2021 information, please do so as soon as possible. We look forward to meeting with you in the coming months to discuss tax planning ideas for 2022.
Please call our office today to schedule an appointment or if you have any questions regarding the information contained in this letter. As always, we appreciate your continued patronage and welcome your referrals to your friends and associates.
Sincerely,
Starkey & Company, CPA’s