Estimated tax payments: Who owes them and when is the next one due?

If you don’t have enough federal tax withheld from your paychecks and other payments, you may have to make estimated tax payments. This is the case if you receive interest, dividends, self-employment income, capital gains or other income. Here are the applicable rules for paying estimated tax without triggering the penalty for underpayment. When are […]

Will the Inflation Reduction Act deliver?

Can the proposed Inflation Reduction Act deliver much-needed economic relief? In spite of some estimates from Congress, another research group is doubtful. The Penn Wharton Budget Model research tool quantifies the economic impact of government policies. It estimates that the bill would cut federal deficits by $248 billion over 10 years but have little impact […]

Deadline Extended

The IRS has extended the deadlines for amending a retirement plan or individual retirement arrangement to reflect recent legislation, including the SECURE Act and the CARES Act. The extended amendment deadline is Dec. 31, 2025, for 1) an IRA or 2) a qualified retirement plan or 403(b) plan (including a collectively bargained plan) that isn’t […]

How external confirmations are used during an audit

Auditors commonly use confirmations to verify such items as cash, accounts receivable, accounts payable, employee benefit plans and pending litigation. Under U.S. Generally Accepted Auditing Standards, an external confirmation is “a direct response to the auditor from a third party either in paper form or by electronic other means, such as through the auditor’s direct […]

Storm filing relief

Storm victims in federally declared disaster areas of Kentucky are now eligible for tax filing relief. The IRS has announced that for filing deadlines after July 26, 2022, affected individuals and businesses have until Nov. 15, 2022, to file and pay any tax due. The Nov. 15 deadline also applies to quarterly estimated tax payments […]

What’s in the Inflation Reduction Act part 2

A provision in the proposed Inflation Reduction Act would boost the payroll tax credit for increasing research activities. Currently, a qualified small business (QSB) may elect to take part of the research credit as a payroll tax credit against its employer FICA tax liability. A QSB must have gross receipts of less than $5 million […]

Top 10 D&O risks

What’s in the Inflation Reduction Act

One provision of the proposed Inflation Reduction Act would close the “carried interest loophole.” Currently, partners aren’t taxed when a profit’s interest is issued, but when the income is realized by the partnership. At that point, the income usually is taxed at the maximum long-term capital gains rate of 23.8% (compared with a top income-tax […]

ACA’s penalty is decreasing in 2023

The Affordable Care Act’s (ACA’s) affordability percentage for employers to avoid a shared responsibility payment (penalty) is decreasing in 2023. The ACA’s employer-shared responsibility provision requires applicable large employers to offer minimum essential coverage that’s “affordable” and that provides “minimum value” to full-time employees or potentially make an employer-shared responsibility payment to the IRS. Health […]

IRS Funding proposed

A proposal to appropriate $80 billion over 10 years to the IRS is back on the table as part of the Inflation Reduction Act. (It was originally included in the Build Back Better bill.) The funds would be available to the IRS through Sept. 30, 2031, across four areas of the agency. First, nearly $3.2 […]