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  • 01/26/2023 8:24 AM | Anonymous member (Administrator)

  • 01/26/2023 8:21 AM | Anonymous member (Administrator)

    IRS reminder: Important backup withholding deadlines

    FS-2023-03, January 2023

    Some businesses and other payers withhold money from payments they made to certain people to satisfy backup withholding. These entities should remember their upcoming filing deadlines.

    What is backup withholding?

    Business and other payers generally don’t withhold taxes from payments reported on Forms 1099 and W-2G. There are, however, situations when a payer must withhold 24% of the payment to ensure the IRS receives the tax due on this income. This is known as backup withholding. Payers that withheld money for backup withholding must deposit the withholding with the IRS. More information about backup withholding is on these pages, Backup Withholding and Topic No. 307 Backup Withholding. Also review Publication 1281, Backup Withholding for Missing and Incorrect Name/TINs and Publication 15, Employer’s Tax Guide.

    Backup withholding annual return filing due date for Tax Year 2022

    Payers must report their liability for backup withholding and any other federal income tax withheld from nonpayroll payments on Form 945, Annual Return of Withheld Federal Income Tax. The last day for filing Form 945 for tax year 2022 is Jan. 31, 2023. However, if the payer made deposits on time and in full, the last day for filing is Feb. 10, 2023. Taxpayers can review the instructions for Form 945 for filing details and section 11 of Publication 15 for information on making federal tax deposits.

    Information returns used to report backup withholding

    The information returns listed below are used to report backup withholding to IRS and payees for tax year 2022:

    • ·         Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
    • ·         Form 1099-DIV, Dividends and Distributions
    • ·         Form 1099-G, Certain Government Payments
    • ·         Form 1099-INT, Interest Income
    • ·         Form 1099-K, Payment Card and Third-Party Network Transactions
    • ·         Form 1099-MISC, Miscellaneous Information
    • ·         Form 1099-NEC, Nonemployee Compensation
    • ·         Form 1099-OID, Original Issue Discount
    • ·         Form 1099-PATR, Taxable Distributions Received from Cooperatives
    • ·         Form W-2G, Certain Gambling Winnings

    Filing due dates for Information Returns

    Except for Form 1099-NEC, the information returns listed above are generally due to the IRS on February 28, 2023, for paper filers,  and March 31, 2023, for electronic filers. The filing due date for Form 1099-NEC is Jan. 31, 2023, for both paper and electronically filed returns.

    Furnishing due date for Information Returns

    Payers must furnish most information returns to payees by Jan. 31, 2023. Exceptions are in the Guide to Information Returns, beginning on page 26 of the General Instructions for Certain Information Returns (2022).

    Information Return filing extensions

    Payers can request a 30-day extension to file any of the information returns listed above by filing Form 8809, Application for Extension of Time to File Information Returns. Extensions are usually automatic except for Form 1099-NEC. Payers who need a 30-day extension to file Form 1099-NEC must meet one of the criteria listed on line seven of Form 8809. An additional 30-day extension may be available as described in instructions to the Form 8809.

    Same employer identification number on all forms

    Information returns and Form 945 must have the same employer identification number for filing. This is also a requirement for third parties such as accountants or agents filing on behalf of another payer. Filing returns with inconsistent EINs can result in processing delays and compliance notices, and possibly the assessment of penalties.

    Filing electronically

    The IRS strongly encourages e-filing even though paper filing is available. E-filing is required if a taxpayer files 250 or more of any one type of information return. E-filing is the most secure, and accurate method to file returns, and it saves taxpayers' time and prevents delays in processing returns.

    On Jan. 23, 2023, the IRS launched a free e-file service for any Form 1099. The Information Returns Intake System is a web-based platform that is accurate, convenient, easy to use, secure and it doesn’t require any additional software. Learn more about e-filing information returns with IRIS and its features.

    For help with electronically filing information returns, review Publication 1220 and the Filing Information Returns Electronically page on

    For more information on electronic filing of Form 945, see the E-file Employment Tax Forms page.

  • 01/26/2023 8:01 AM | Anonymous member (Administrator)

    IRS opens free portal to file information returns; new electronic option can reduce millions of paper Forms 1099 estimated to be filed by businesses in 2023

    IR-2023-14, Jan. 25, 2023

    WASHINGTON — The Internal Revenue Service announced today that businesses can now file Form 1099 series information returns using a new online portal, available free from the IRS.

    Known as the Information Returns Intake System (IRIS), this free electronic filing service is secure, accurate and requires no special software. Though available to any business of any size, IRIS may be especially helpful to any small business that currently sends their 1099 forms on paper to the IRS.

    “The IRS is excited to offer any business, especially small companies, a great new way to electronically file their 1099s for free,” said IRS Acting Commissioner Doug O’Donnell. “This simplifies filing for those issuing 1099s and helps recipients receive information timely. The launch of IRIS can help reduce the millions of paper Forms 1099 we project will be filed in 2023 and demonstrates our commitment to finding useful and innovative ways of reducing paperwork on the business community and others issuing 1099s. This is part of the larger effort underway to make improvements and transform operations at the IRS.”

    Filers can use the platform to create, upload, edit and view information and download completed copies of 1099-series forms for distribution and verification.

    With IRIS, businesses can e-file both small and large volumes of 1099-series forms by either keying in the information or uploading a file with the use of a downloadable template.

    Currently, IRIS accepts Forms 1099 only for tax year 2022 and later.

    The IRS encourages any business, especially those that now file on paper, to switch to e-filing through the platform and share in its benefits.

    These benefits include:

    • E-file security standards keep information safe and protected.
    • The portal is an accurate filing method that automatically detects filing errors and provides alerts for missing information.
    • Filers can submit automatic extensions and make corrections to information returns filed through the platform.
    • The IRS acknowledges receipt of the return in as early as 48 hours.
    • The platform keeps issuer information from year to year, and prior years filed through this platform, providing convenience to 1099 filers.
    • E-filing eliminates trips to the post office and can reduce office expenses for paper, postage and storage space.

    Enrollment for the IRIS filing platform is now open. Filers should begin the enrollment process immediately.

    The Filing Information Returns Electronically (FIRE) system will remain available for bulk filing Form 1099 series and the other information returns through at least the 2023 filing season.

    For more information about IRIS visit

    Additional resources

    ·         Publication 5717, IRIS Taxpayer Portal User Guide.

    ·         General Instructions for Certain Information Returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498 and W-2G), provides general information, instructions and requirements for 1099-series forms and other select information returns.

  • 01/13/2023 9:11 AM | Anonymous member (Administrator)

    January 12, 2023

    By  Dave McGuire

    As we celebrate the New Year and move into filing season, it is a good time to review where the industry stands with specialty tax areas that are an increasingly large portion of business tax returns. These areas include cost segregation, research tax credits, energy credits and deductions, and international tax compliance. With the recent passage of the Inflation Reduction Act of 2022, and the lack of tax extenders, it is important to be aware of how these complicated areas are ever changing.

    When considering these specialty areas, one of the first aspects taxpayers need to consider is the increased enforcement efforts by the IRS. Whether it be R&D tax credits, cost segregation, 179D or penalties related to international tax compliance, you do not have to look hard to find examples of where and when the IRS is enforcing the law more effectively. With heightened funding levels for the IRS under the Inflation Reduction Act, the increase in IRS enforcement looks to continue into the coming years. Taxpayers and preparers need to be diligent in ensuring their studies are completed in a quality manner or clients may be at risk.

    The Tax Cuts and Jobs Act of 2017 included provisions that will affect the handling of specialty tax moving forward. As a budgetary tool, the TCJA had sunset provisions that start to come into play in 2022 and 2023. These include a change to the calculation of adjusted taxable income for the 163(j) limitation, a leveraging down of bonus depreciation starting in 2023, and the new amortization requirement for 174 expenses. While many of these were expected to be fixed through an extenders bill, as of the writing of this article Congress has not been able to bring the extenders to fruition. This will impact businesses as they decide how to handle cost segregation studies, due to the reduction of bonus and the interaction of depreciation with 163(j).  

    One area that people assume is affected relates to the research and development tax credit. While the new requirement to amortize Section 174 expenses does begin in 2022, this does not reduce research tax credits. The R&D tax credit is based on the amount of Section 41 expenses. While all Section 41 expenses are Section 174 expenses, not all Section 174 expenses are Section 41. In other words, claiming an R&D tax credit does not create Section 174 expenses; it simply allows you to take a credit on top of the expense you were already taking. This means taxpayers that forgo the R&D tax credit will still have the same amount of Section 174 expenses to amortize, they will now just not have the R&D tax credit to offset this deduction.

    As if the changes we dealt with in 2022 were not enough, more changes are coming in 2023. Under the Inflation Reduction Act, the Energy Efficient Building Deduction (179D) and the New Energy Efficient Home Credit (45L) drastically change starting in 2023. In addition to requiring the prevailing wages for some of the increased credits, 179D can now be transferred from tax-exempt entities, and the 45L tax credit changes to be linked to Energy Star, versus the previous requirements under the International Energy Conservation Code. For some taxpayers, this may increase their credits and deductions, but for others this will make the credits and deductions much less valuable. It will be critical to review and discuss early in 2023 to ensure properties being completed through the year qualify.

    The ever-changing landscape of specialty tax will make the 2022 filing season more complicated. Combining this landscape with the increased compliance risk from the IRS, it is more important than ever for taxpayers and their CPAs to ensure they receive sound technical expertise. While the opportunities are still significant, it is critical for CPAs to understand and advise clients appropriately to maximize opportunities in these specialty areas.

  • 01/03/2023 8:07 AM | Anonymous member (Administrator)

    Sun 25 Dec 2022 

    Gene Marks

    Most small businesses in the US will continue to grapple with a slower economy, inflation, supply chain challenges and labor shortages next year. But our biggest problem will be interest rates. Rates rose sharply in 2022 – in 2023 those rates are going to hurt.

    As recently as March, the federal funds rate, which is the rate the Federal Reserve charges banks for its money, was 0.25%. Now it’s 4.33%. During the same period of time, and because of this increase in the cost of doing business, the average prime rate at most banks has risen from 3.25% in March to 7% today.

    That’s the prime rate, the very best rate the banks offer to their very best, largest, blue-chip customers. You and I aren’t getting the prime rate when we get a loan from a bank. A typical small business pays anywhere from two to four points above prime. Which means that as I write this, my clients are paying interest of 9 to 11% on their loans, which is more than double than earlier this year. And none of this includes the Fed’s plans to increase rates another 50 basis points soon, with additional increases threatened in order to control inflation.

    This is a big deal.

    If a small business has a $1,000,000 loan, its interest expense will increase next year from $70,000 to $110,000. That extra $40,000 could pay for an hourly worker, or more employee benefits, or repairs or more materials or a number of other things. But instead it will go to the bank, so the bank can satisfy its obligations to the Fed (and make its profit), which doesn’t really buy anything at all.

    And these are the costs for a traditional bank loan, which is something many small businesses simply can’t get, thanks to lack of collateral, history and other risk factors. The costs of alternative financing – online lenders, merchant advances, credit card borrowings – is significantly higher.

    The impact of this is going to be significant. When the cost of something more than doubles, it becomes too costly for some to buy. And that’s what will happen in 2023.

    Startups will be unable to afford the financing needed to launch, and early-stage companies will be unable to come up with the money for the financing needed to grow. We’re already seeing this in the tech industry, where venture capitalists and other investors have pulled back their funding of unprofitable, early-stage companies resulting in tens of thousands of layoffs and hundreds of closures.

    My clients are mostly business-to-business, employer-owned businesses that manufacture, distribute and perform services. Some of these clients have fixed-rate mortgages and equipment loans, received when interest rates were much lower. But few will be interested in new loans to finance new acquisitions because the interest costs severely eat into their return on investment from these investments.

    More concerning is the cost of working-capital loans that are extended to small companies and which are almost always variable and exposed to interest-rate fluctuations. Working-capital loans are used to fund inventory purchases, shipments ahead of customer payments, labor costs and other operational expenses. As these costs continue to rise, fewer businesses will be able to afford doing these activities, which will have a significant impact on their profitability, let alone their sustainability.

    Mergers and acquisitions will drop in 2023 as companies find it harder to raise funds to buy other businesses, which means those business owners who wish to sell and retire will simply have to wait, or accept lower payouts. And overall financing will tighten as banks – who famously avoid risk – will further avoid taking risks on smaller companies.

    The impact of increased interest costs will dramatically increase our expenses. But what about revenues?

    Rising mortgage rates have already shrunk most of the residential and commercial real-estate industry, taking away sales and profits from countless businesses that depend on this industry for their livelihood. Bigger projects that require financing will be scaled back, delayed or cancelled. Buying cars is now more expensive thanks to the increased cost of loans and leases, which means those businesses supporting the auto industry suffer.

    And besides all of those in the financial services industry who make their money from interest income and capital gains, there are the countless small businesses in manufacturing industries who supply parts, labor and services to their customers, and who build equipment and machines, but who will build less of them thanks to a falling demand for equipment because their customers will defer on paying higher loan rates.

    The good news? This won’t last forever. Nothing ever does. The Fed is raising interest rates for the right reasons, which is to rein in the inflationary environment we’re now in. Some businesses will shrug off higher interest rates as long as acceptable profits can be achieved through higher prices or overhead reductions. Anyone running a business for more than 20 years – like me – knows it’s all been done and seen before. And I believe things are now headed in the right direction.

    But before we get back to reasonable rates of inflation and interest, there will be pain, because this will take time – at least another year and probably longer. Which means if you’re running a business in 2023 it’s going to be all about interest rates.

  • 12/27/2022 8:36 AM | Anonymous member (Administrator)

    December 23, 2022

    By  Michael Cohn

    The Internal Revenue Service on Friday postponed the introduction of a $600 threshold for filing a Form 1099-K to report on transactions involving services such as eBay, PayPal, Venmo, Etsy and third-party settlement organizations, which was scheduled to take effect in the New Year and generate millions of new forms going out to unsuspecting taxpayers and their accountants.

    Organizations such as the American Institute of CPAs, the National Association of Tax Professionals, the National Taxpayers Union and others had been sounding warnings about the lower threshold, which was down from $20,000 previously. It was included as part of the American Rescue Plan Act of 2021 as a way to raise extra tax revenue, and lawmakers in Congress were lobbied heavily to forestall the change or at least raise the threshold.

    As a result of the delay, the IRS said third-party settlement organizations won't be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount. In tandem with the announcement, the IRS released guidance Friday stating that calendar year 2022 will now be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations including Venmo, PayPal and CashApp that would have generated Form 1099-Ks for taxpayers.

    "The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan," said acting IRS commissioner Doug O'Donnell in a statement. "To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements."

    The American Rescue Plan Act lowered the reporting threshold for third-party settlement organizations to $600 per year from the earlier threshold of more than 200 transactions per year, exceeding an aggregate amount of $20,000. The law doesn't aim to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill.

    Under the law, beginning Jan. 1, 2023, organizations were required to report third-party network transactions paid in 2022 with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the number of transactions. Third-party settlement organizations report these transactions by providing individual payees a Form 1099-K, "Payment Card and Third-Party Network Transactions."

    The transition period described in Notice 2023-10 defers the reporting of transactions in excess of $600 to transactions that occur after calendar year 2022. The transition period aims to facilitate an orderly changeover for the organizations' tax compliance, as well as individual payee compliance with income tax reporting. A participating payee, in the case of a third-party network transaction, is any person who accepts payment from a third-party settlement organization for a business transaction.

    The change under the law is especially significant because tax compliance is higher when amounts are subject to information reporting, like the Form 1099-K. However, the IRS said it must be managed carefully to help ensure 1099-Ks are only issued to taxpayers who should receive them. On top of that, it's important for taxpayers to understand what to do in response to this reporting, and tax preparers and software providers will have the information they need to help taxpayers.

    The IRS promised more details on the delay will be available in the near future along with information to help taxpayers and the industry. For taxpayers who may have already received a 1099-K as a result of the statutory changes, the service said it's working rapidly to provide instructions and clarity so taxpayers know what to do.

    The IRS added that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will stay in effect.

  • 11/28/2022 8:39 AM | Anonymous member (Administrator)

    By  Michael Cohn

    November 23, 2023

    The Internal Revenue Service issued a notice containing a list of required amendments needed for Section 403(b) plans. 

    A 403(b) plan, also called a tax-sheltered annuity plan, is a retirement plan for certain employees of public schools, employees of certain Section 501(c)(3) tax-exempt organizations and certain ministers. A 403(b) plan allows employees to contribute some of their salary toward the plan.

    Notice 2022-62, released Monday by the IRS, contains the 2022 required amendments list, establishing the end of the remedial amendment period and the plan amendment deadline for changes in qualification requirements and Section 403(b) requirements for both qualified individually designed plans and individually designed plans, respectively.

    The list is divided into two parts. Part A covers changes in requirements that generally would require an amendment to most plans or to most plans of the type affected by the change. Part B includes changes in requirements that the Treasury Department and the IRS don't expect to require amendments to most plans but might require an amendment because of an unusual plan provision in a specific plan.

    For instance, the IRS noted, if a change affects a particular requirement that most plans incorporate by reference, Part B would include that change because a particular plan might not incorporate the requirement by reference, so it might include language that's inconsistent with the change. 

  • 10/19/2022 6:50 AM | Anonymous member (Administrator)

    October 18, 2022 

    Jeff Stimpson

    Inflation will drive up more than 60 tax provisions for 2023, including the tax rates, according to the Internal Revenue Service.

    Revenue Procedure 2022-38 details the annual adjustments for tax year 2023, with filing in 2024, including:

    • Standard deduction. For married couples filing jointly — $27,700, up $1,800 from the prior year; for single and married filing single — $13,850, up $900; for head of houseold — $20,800, up $1,400.
    • Marginal rates. The top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for MFJ). The other rates are:
    • 35% for incomes exceeding $231,250 ($462,500 for MFJ); 32% for incomes exceeding $182,100 ($364,200 for MFJ); 24% for incomes exceeding $95,375 ($190,750 for MFJ); 22% for incomes exceeding $44,725 ($89,450 for MFJ); and 12% for incomes exceeding $11,000 ($22,000 for MFJ). The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for MFJ).
    • AMT. The Alternative Minimum Tax exemption amount rises to $81,300 and begins to phase out at $578,150 ($126,500 for MFJ, with phaseout beginning at $1,156,300). 
    • The Earned Income Tax Credit. The tax year 2023 maximum amount is $7,430 for qualifying taxpayers who have three or more qualifying children, up from $6,935 for TY22. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phaseouts.

    Among other changes for TY23, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $300, up $20.

    For the taxable years beginning in 2023, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,050. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $610, an increase of $40 from taxable years beginning in 2022.

    For participants who have self-only coverage in a medical savings account, the plan must have an annual deductible not less than $2,650, up $200, but not more than $3,950, an increase of $250 from TY22. For self-only coverage, the maximum out-of-pocket expense amount is $5,300, up $350.

    For family coverage, the new annual deductible is not less than $5,300, up from $4,950 for TY22. The deductible cannot be more than $7,900, up $500. For family coverage, the out-of-pocket expense limit is $9,650, an increase of $600.

    For tax year 2023, the foreign earned income exclusion is $120,000, up from $112,000 for tax year 2022.

    Estates of decedents who die during 2023 have a basic exclusion of $12.92 million, up from a total of $12.06 million for estates of decedents who died in 2022. The annual exclusion for gifts increases to $17,000 for calendar 2023, up from $16,000 for calendar year 2021.

    The maximum credit allowed for adoptions for tax year 2023 is the amount of qualified adoption expenses up to $15,950, an increase from the maximum $14,890 for 2022.

    By statute, certain items that were indexed for inflation in the past are currently not adjusted. The personal exemption for tax year 2023 remains at 0, as it was for 2022. For 2023, as in tax years going back to 2018, there is no limitation on itemized deductions.

    Sign in front of IRS building in Washington, D.C.

    Pamela Au/wingedwolf - Fotolia

    The MAGI amount used by joint filers to determine the reduction in the Lifetime Learning Credit is not adjusted for inflation for taxable years beginning after 2020. The Lifetime Learning Credit is phased out for taxpayers with MAGI exceeding $80,000 ($160,000 for joint returns).

    The Inflation Reduction Act extended certain energy-related tax breaks and indexed for inflation the energy-efficient commercial buildings deduction beginning with tax year 2023. The applicable dollar value used to determine the maximum allowance of the deduction is $0.54 increased (but not above $1.07) two cents for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25%.

    The applicable dollar value used to determine the increased deduction amount for certain property is $2.68 increased (but not above $5.36) 11 cents for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25%.

  • 09/26/2022 7:28 AM | Anonymous member (Administrator)

    September 23, 2022

    By  Mary Anne Ehlert

    A study by the U.S. Census reveals that over 3 million children have a disability, about 4.3% of the under-18 population, and it's estimated that one in five households is caring for a child with special needs. The number is growing because of changes in diagn, the prevalence of autism is now one in every 68 children, an increase driven by greater awareness of the autism spectrum.

    More than ever, it's important for CPAs and financial planners to ask their clients about the presence of a child with special needs in the family, because many of their parents are worried about securing their child's future during their retirement and after their death. 

    At my firm, Protected Tomorrows in Lincolnshire, Illinois, we specialize in assisting such families. To me, it's a personal mission. My sister, Marcia, who was born with cerebral palsy, changed my life forever. I saw first-hand the difficulties our parents had in making sure Marcia would be cared for when they could no longer do so. Our mission is to provide each family hope and a coach who can guide them through the uncertainty they will face.

    Over the years, I've developed eight steps to future care planning, addressing all aspects of life, including legal considerations, potential government benefits, transition planning, residential options, employment opportunities, recreational choices, investment solutions and family communication. At every step, we focus on a client's abilities, not their disabilities. 

    Step 1: I've found that many families are, at first, hesitant to share their stories, so it's important to ask the right questions: Do you have a child with special needs, or a child who will need more financial support than their siblings in the future? What is the child's disability? What are their unique gifts and talents? What are your dreams for their future, and what are your fears? What is the best thing that could happen for their future?

    The answers you receive will serve as the foundation for forward-planning.

    Step 2: Identify the potential life needs of the individual with special needs, including quality of life, medical needs, education and recreation, based on their ability to support themselves. This step helps quantify medical expense deductions, identify tax returns to be filed, and clarify other expenses not yet accounted for. 

    Step 3: Guide the family toward discussions about legal considerations, including wills, powers-of-attorney, trusts and guardianships. It's common for families to delay this step because no one likes thinking about death, but the decisions made today — as daunting as they seem — can ensure greater protection for the individual with special needs. They should retain an attorney who is knowledgeable about such details as special needs trusts and guardianships. It is critical to understand how the taxation of these trusts are handled into the future.

    Step 4: Capture all the benefits the individual will be eligible for. The professional's role in helping the individual maintain their eligibility for programs such as Supplemental Security Income and Medicaid can be important to the maintenance of those valuable benefits. Questions to be asked here include whether the individual with special needs has health insurance through an employer or parent employer, whether the individual holds assets in their name, and whether there's a possibility of an inheritance.

    Step 5: Document, document, document. A family with an individual with special needs spends much of its time finding resources, building self-esteem, joining support groups and keeping life stable and safe for that person. Although parents and caregivers have much of this information in their heads, it is critical to the future quality of life of the loved one that they record important information in writing (referred to as a "letter of intent"). Parents often struggle with giving that responsibility to other family members, so building the support team is critical to confidence.

    Step 6: Help the family plan for what happens when the individual with special needs ages out of state-supported education and has to find a place to live, work and play. When the "bus stops coming," the family often realizes for the first time that the planning is now up to them. The amount of research necessary to find the right programs can be overwhelming. The key for CPAs is to have access to information through a network of professionals to share important information with families.

    Step 7: Fund the future. A CPA can help a client make wise decisions today that will be beneficial in the future. For example, if the plan dictates that a certain amount of money is needed for the lifetime of the individual, how are these funds to be obtained? Will the government provide all the necessary funding? Can the family fund the special needs trust with a large enough inheritance? Should life insurance be purchased, and who should be the policy owner? Having a defined plan to fund the future provides the family peace of mind.

    Step 8: Like all estate plans, planning for an individual with special needs is not a one-and-done. Families require regular reviews to understand the changes that may occur. New legislation may be enacted that impacts their plans, or a program may be discontinued.

    Families of individuals with special needs spend a great deal of time delivering care and finding resources to help them care for their loved one. It's often hard for them to step back and consider the future. Their CPA can and should offer the knowledge and guidance they need.

  • 09/15/2022 7:19 AM | Anonymous member (Administrator)

    September 13, 2022

    By  Michael Cohn

    Taxpayers trust professional advice and tax authorities, according to a new global survey, but are less sure about politicians and the press. 

    report released Tuesday by the Association of Chartered Certified Accountants and the International Federation of Accountants found that in relation to the tax system, people have the highest level of trust in professional tax accountants, with 67.1% saying they trust or highly trust them, and professional tax lawyers at 64.6%. Across the sample in the survey, 41.2% of respondents reported using the services of a professional accountant to manage their tax affairs.

    Respondents demonstrated a clear belief that accountants play a positive role, contributing to a more efficient (71.9%), more effective (70.2%) and fairer (67.4%) tax system.

    ACCA and IFAC surveyed 5,600 people across 14 countries and found that overall, people trust the tax authorities, but opinions are polarized and a significant minority (27.9%) either distrust or highly distrust their tax authority. Politicians were the least trusted people with respect to the tax system, with a net "trust deficit" of –25.7%. Social media reports were the only other category showing a net trust deficit  at –8.6%. Unfortunately the press isn't trusted much more than politicians and social media. While media reports show a small net positive balance (8.1%), 9.4% of the respondents indicated they highly distrust media reports, and a 22.2% distrust them. 

    "This new survey comes at a time of uncertainty as governments around the globe come to grips with the consequences of the COVID-19 pandemic and the implications of the Russian invasion of Ukraine," said ACCA chief executive Helen Brand during an online panel discussion Tuesday hosted by ACCA, IFAC and the Pan-African Federation of Accountants. "Preexisting global megatrends and challenges such as climate change and changes in population patterns have highlighted the importance of creating a more sustainable and importantly fairer world. The importance of tax systems in building resilient economies cannot be overstated."

    ACCA chief executive Helen Brand


    She cited research from the IMF that economic growth goes hand in hand with a consistent stream of tax revenues. "The challenge for governments over the next 30 years will be to fund health and social care, infrastructure development and the needs of an aging population against the backdrop of resource and environment challenges," said Brand. "This is particularly true for developing economies, which are at the heart of our new survey, where existing resources and capacity to collect are already stretched. This puts additional pressure on governments to find responsible ways  to spend more while at the same time facing an unprecedented trust crisis. It's a vicious circle: The lack of trust threatens a key resource enabling any government across the world to meet today's challenges, in other words tax revenues, but without tax systems, governments cannot fund the initiatives to build that trust, and without that revenue governments cannot deliver on the UN's Sustainable Development Goals."

    "As professional accountants, we do our part in the development of sustainable economies and sustainable societies," said IFAC president Alan Johnson. "As we look to the future of our profession, both in the private and the public sector, and in the broader movement to sustainability, it is also important that we look more deeply and understand what is holding us back. Corruption and crime-related issues, such as money laundering, bribery, illicit financial flows and fraud are significant obstacles to economic development and economic growth as well as human development, and ultimately to the achievement of the 17 United Nations' sustainability goals. The UN estimates that you need between $5 and $7 trillion of investment annually to achieve the SDGs, but at the same time today you lose something like $3.6 trillion, or half of what we need to invest to deliver the SDGs to corruption, whether it is lost to governments or indeed to society. We could never afford to lose this amount of money before the pandemic and we certainly cannot afford to lose it today. The global profession has an important role to play here because we're uniquely placed as trusted advisors to businesses and governments, to support an ecosystem which includes all actors, both privately and in the public sector and nongovernment organizations, to ensure that public policy addresses the needs of society because that is important if we really do want to work in the public interest."

    He noted the IFAC has recently released an action plan for fighting corruption and economic crime (see story or listen to podcast). "In every country we studied, we heard that the problems in tax systems have less to do with collecting taxes and much more to do with how taxes are used," said Johnson. "We have found that attitudes toward tax are largely driven by the population's views on corruption. Trust in the tax system is lower when taxpayers perceive higher levels of corruption and the diversion of funds. There are many connections here between the tax system, sustainable development and public financial management."

    People want to see tax systems used to target specific positive outcomes, according to the survey. Nearly three-quarters of the respondents strongly support the use of tax incentives to target 'global megatrends' such as climate change (73.8%) and the aging population (72.8%). The survey found that 73.9% of respondents support the use of tax incentives to attract multinational business while 69.3% support cooperation between countries to create a more coherent international tax system. 

    The respondents generally believe that taxpayers are paying a reasonable amount of tax. Across the entire sample, respondents were more likely to agree than disagree that specific taxpayer groups were paying a reasonable amount of tax. This applied to various groups, including average- or low-income individuals, high-income individuals, local companies, and multinational companies. Nearly half the global respondents (46%) said multinational companies were most likely to be paying a reasonable amount of tax. However, in seven of the G20 countries, more respondents disagreed than agreed that multinationals are paying a reasonable amount of tax. Across the wealthier countries as a whole there was a net positive balance across the survey respondents of only 22.4%. Attitudes toward tax minimization were more relaxed than in the G20 surveys, with only minimization by low- or average-income individuals attracting a net negative score in more than one country. The attitude toward tax minimization by low-income individuals was the most deeply split category, with strongly negative scores in six countries almost equal to the aggregate positive scores in the other eight.

    Across the entire sample, online services ranked as the most commonly used service in managing tax affairs, being selected by 42.2% of respondents, compared to 36.9% of respondents among the G20 countries surveyed last year. 

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