IRS Updates

Recently, we wrote about new draft guidance from the IRS that makes it easier for partnerships and S corporations to qualify for an exception to filing Schedules K-2 and K-3. Since then, the IRS released its final instructions, confirming those guidelines. Background To summarize, pass-through entities, such as partnerships and S corporations, are required to…

If you own a car—or a fleet of cars—that you use for business, you should be aware that the IRS released new depreciation limitations for passenger automobiles. Automobile depreciation is the decrease in value of a vehicle over time. Under certain circumstances, businesses and self-employed individuals may be able to deduct a portion of this…

On December 29, 2022, the IRS increased the standard mileage deduction rate for vehicles used for business in 2023 to 65.5 cents. This is a 4.5% increase over the rate it announced in June, which was itself a 6.4% increase over the previous rate. While it’s typical for the IRS to announce an annual rate…

On December 30, 2022, the Treasury Department issued Notice 2023-11, guidance aimed at helping foreign banks and US citizens living abroad who have experienced problems staying in compliance with the US Foreign Account Tax Compliance Act (FATCA). Who is Affected by FATCA? FATCA primarily affects US citizens who have $10,000 or more in foreign financial…

In November, we wrote about the IRS’s new $600 reporting threshold for third-party settlement organizations (TPSOs) and why it meant that more people would be getting 1099-K forms this January. TSPOs include payment platforms such as PayPal and Venmo, online marketplaces such as eBay and Etsy, and gig-worker platforms such as Uber and TaskRabbit. Since…

The Treasury Inspector General for Tax Administration (TIGTA), released a report on December 20, 2022, assessing the IRS’s plan to return to pre-pandemic inventory levels by the end of calendar year 2022. The report found that while the IRS has made progress in reducing its backlog, the backlog will continue into 2023. TIGTA is a watchdog…

Interest rates have been rising across the board, so it should come as no surprise that the IRS is getting in on the action. Starting January 1, 2023, late, partial, or missing tax payments will cost more. On November 29, the IRS announced that rates used to calculate interest on underpayments (taxes owed but not…

If you’re an employer or a self-employed individual who opted to defer part of your Social Security taxes for 2020, the IRS would like to remind you that the deadline for your second installment is due soon. Back in 2020, the Coronavirus, Aid, Relief and Economic Security (CARES) Act was passed to help individuals and…

The IRS recently published its Applicable Federal Rates (AFRs) for December 2022. What is the Applicable Federal Rate (AFR)? The applicable federal rate (AFR) is the minimum interest rate permitted by the Internal Revenue Service (IRS) on private loans, including loans between family members. Generally, they are significantly lower than commercial lending rates. If lenders…