The United States Internal Revenue Service (IRS) has issued its latest newsletter on tax issues for small businesses and the self-employed, including information on closing a business and on classification of workers. You can read the IRS small business newsletter below.
Inside This Issue
- Truckers need to file by August 31 deadline, e-file encouraged
- A Closer Look: Don’t wait to file
- Storm tax relief for Missouri and Kentucky
- Learn ways to better protect personal data and identity information
- Education-related tax benefits for 2022
- Some things to know about crowdfunding and taxes
- Worker Classification 101: Employee or independent contractor
- What business owners need to do when closing their doors for good
1. Truckers need to file by August 31 deadline, e-file encouraged
The IRS reminds those who have registered, or are required to register, large trucks and buses that it’s time to file Form 2290, Heavy Highway Vehicle Use Tax Return. The IRS strongly encourages using e-file and filing before the payment deadline of August 31, 2022, for vehicles first used in July 2022. Find out about details and how to gather required information in the truckers news release.
2. A Closer Look: Don’t wait to file
The latest column in A Closer Look features Doug O’Donnell, IRS Deputy Commissioner, Services & Enforcement, encouraging taxpayers not to wait to file their tax returns and sharing why it’s more important this year. “Every year, millions of people need more time to file their taxes and many focus their attention on the mid-October filing extension deadline,” said O’Donnell. “This year, there are special factors at play that make it even more important for people to make sure they don’t wait to file until the last minute before the October 17 deadline and that, to the extent possible, they file electronically.” Read the column in Spanish (Español).
3. Storm tax relief for Missouri and Kentucky
Flooding victims in some parts of Missouri and Kentucky are eligible for tax relief. The IRS extended the October 17, 2022, deadline for those affected to November 15, 2022, to file various individual and business tax returns and make tax payments.
4. Learn ways to better protect personal data and identity information
With identity thieves continuing to target the tax community, IRS Security Summit partners urge tax professionals to learn the signs of data theft and what to do so they can react quickly to protect clients.
Steps to take
The Security Summit partners concluded a special summer education campaign by outlining steps tax professionals can take to help clients from becoming statistics in identity-theft related tax-fraud scams.
Sample data security plan
The Security Summit partners shared the Written Information Security Plan, a special plan designed to help tax professionals, especially those with smaller practices, protect their data and information. Federal law requires all professional tax preparers to create and implement a data security plan.
5. Education-related tax benefits for 2022
Expense deduction rises to $300
As the new school year begins, the IRS reminds teachers and other educators that they’ll be able to deduct up to $300 of out-of-pocket classroom expenses for 2022 when they file their federal income tax return next year. Find out who qualifies and what’s deductible.
College students should study up on two tax credits
Higher education, including specialized job training and grad school, can be pricey. Eligible taxpayers who paid higher education costs for themselves, their spouse, or dependents in 2021 may be able to take advantage of two education tax credits. The American opportunity tax credit and the lifetime learning credit can help offset education costs by reducing the amount of tax they owe. Find out more about these credits and which one could lead to a refund of up to $1,000.
6. Some things to know about crowdfunding and taxes
Crowdfunding is a popular way to raise money online. People often use crowdfunding to fundraise for a business, for charity, or for gifts. It’s important to know that money raised through crowdfunding may be taxable. Learn about what may be considered a gift, the form it’s reported on and careful record keeping.
7. Worker Classification 101: Employee or independent contractor
It’s critical for business owners to correctly determine whether the people providing services are employees or independent contractors. IRS Tax Tip 2022-117 provides information to help businesses avoid problems that can result from misclassifying their workers.
Gig Economy Tax Center
For people that are classified as independent contractors or gig workers, the IRS Gig Economy Tax Center has a wealth of information. They can find forms and information on record keeping, deducting expenses, and filing and paying their taxes.
8. What business owners need to do when closing their doors for good
There are a few things business owners need to do before they close their business. Of course, they need to fulfill their federal tax responsibilities. It’s also important to notify the IRS of their plans. Follow these six steps when closing a business.