While you are working late preparing tax returns, the AICPA is also keeping busy, evaluating proposed regulations and interpretations of current law that could affect your practice. What are some of the hot topics on our advocacy to-do list?
Let’s start with information reporting. Businesses that accept credit or debit cards are starting to receive the new Form 1099-K from their merchant card processing company that reports the gross amount they received during the prior year. The form was created to ensure that businesses report their credit and debit card income, especially from online sales. (The IRS just posted more information on its website about the requirements.)
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A few years ago, President Obama decided to boost the economy by proposing the “Making Work Pay Credit” – a tax incentive intended to put money into people’s pockets. The credit was “delivered” by changing withholding rates so taxpayers would get a little more cash in each paycheck. However, it ended up frustrating some people because the withholding tables employers were provided did not always match the amount of the credit.
For example, a two-income family may have taken home an additional $1,200 but only qualified for the maximum credit of $800, resulting in a family possibly owing $400 more at tax time. Similar problems existed for single people with multiple jobs because withholding was reduced by each employer, even though they could only get one $400 credit. Dependents with jobs also had issues because their withholding was reduced even though they were not even eligible for the credit.
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