View Padgett President Roger Harris' congressional testimony on the impact of the Corporate Transparency Act and the BOI reporting requirements here.
IRS audit efforts on the rise: What small businesses should know
October 29th, 2024 | Business Tips, Financial Tips
The IRS has been ramping up its audit efforts, targeting large corporations and high-income individuals. By 2026, audit rates for corporations with over $250 million in assets are set to nearly triple. Additionally, partnerships with assets above $10 million will face a tenfold increase in audits. This initiative, funded by the Inflation Reduction Act, is part of a broader IRS strategy to focus on wealthier entities and noncompliant high-dollar returns. Are Small Businesses Affected? For most small businesses and individuals earning less than $400,000, audit rates are unlikely to increase. The IRS’s priority remains on more complex returns involving wealthier taxpayers. For instance, taxpayers who use business aircraft for personal travel are under added scrutiny, as only business-related flights can […]
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Running a partnership or LLC comes with its own set of tax rules, and making sure your business complies with federal tax law is essential. Here are five important areas to cover when drafting your partnership or LLC operating agreements: 1. Guaranteed Payments to Partners Guaranteed payments are made to partners for services or capital, regardless of the partnership’s income. They should be clearly outlined in your agreement since they are treated as ordinary income and have specific tax implications. Be sure to define these payments to avoid surprises at tax time. 2. Accounting for Tax Basis from Partnership Liabilities Partners can benefit from additional tax deductions by including their share of the partnership’s liabilities in their tax basis. Different […]
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“The IRS wants your input.” If that statement surprises you, it’s time for a paradigm shift. As revealed in a recent episode of the Federal Tax Updates podcast featuring IRS officials and tax professional leaders, a new era of collaboration is emerging in tax administration. Gone are the days of an insular IRS. As Terry Lemons, the IRS’s Chief Communications and Liaison Officer, states today, “We can’t run the tax system by ourselves at the IRS. We need help. Tax professionals play a vital role.” This focus on partnering with tax pros offers practitioners new opportunities for input, education, and problem-solving. In a live podcast from the bustling halls of the IRS Nationwide Tax Forum, hosts Roger Harris, EA, and […]
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Understanding IRAs: your retirement savings guide
With the recent passing of the SECURE 2.0 Act of 2022, you may have questions about the different types of Individual Retirement Accounts (IRAs) available. How do you choose what retirement plan is right for you? IRAs are a powerful tool for retirement savings. They are savings plans that come with tax advantages to help taxpayers build a retirement fund. Each type of IRA has its own set of regulations and deadlines. Here’s a quick overview of the most common kinds: Traditional IRA: Contributions to a traditional IRA may be tax deductible and earnings grow tax-deferred until distribution, which means you won’t pay taxes on your traditional IRA funds until you make a withdrawal. The contribution limit for 2022 is […]
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Latest Tax, Accounting & Financial Tips
IRS audit efforts on the rise: What small businesses should know
The IRS has been ramping up its audit efforts, targeting large corporations and high-income individuals. By 2026, audit rates for corporations with over $250 million in assets are set to nearly triple. Additionally, partnerships with assets above $10 million will face a tenfold increase in audits. This initiative, funded by the Inflation Reduction Act, is part of a broader IRS strategy to focus on wealthier entities and noncompliant high-dollar returns. Are Small Businesses Affected? For most small businesses and individuals earning less than $400,000, audit rates are unlikely to increase. The IRS’s priority remains on more complex returns involving wealthier taxpayers. For instance, taxpayers who use business aircraft for personal travel are under added scrutiny, as only business-related flights can […]
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