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Recently, the Tax and Compliance Product Manager at Greenshades attended the IRS Nationwide Tax Forum in Atlanta, where insightful information about upcoming tax compliance and filing changes was shared.
This blog aims to highlight the key takeaways from the event and how they may impact businesses and their clients. From updates on information returns and reporting thresholds to new opportunities arising in the tax landscape, we'll cover essential points to keep your business compliant and thriving.
Important IRS Changes and Updates
Information Returns and the IRIS
The Information Returns Intake System (IRIS) has been launched, offering a new way to file the 1099 series. However, it is still evolving, and more forms, including 1098 series and W-2G, are expected to be added before year-end. Forms 8027 and 1042-S, though, won't migrate to IRIS this year and will continue to be filed through FIRE (Filing Information Returns Electronically).
Mandatory IRS eFile Threshold
The mandatory eFile threshold for information returns has decreased significantly, from 250 to just 10. This means that if a business is filing more than 10 total information returns across all forms, they must file electronically for the 2023 tax season. This change affects smaller businesses, who will now need to eFile their information returns.
Lower Reporting Threshold for 1099-K
The reporting threshold for the 1099-K form, used for "Payment Card and Third-Party Network Transactions," has been reduced from $20,000 to $600. This change is aimed at capturing income from gig work and marketplace selling. Given the reduced reporting threshold for 1099-K forms, many businesses, including niche marketplaces, consignment and re-sale, and freelance platforms, will have to produce significantly more 1099-Ks this year.
IRS Enforcement for Form 1042-S
The IRS is increasing its enforcement efforts for Form 1042-S, also known as "Foreign Person’s U.S. Source Income Subject to Withholding," to do a better job of tracking non-resident, non-citizen income that is earned in the US.
Form 1042-S serves as the reporting tool for payments made to foreign individuals by U.S. based institutions or businesses and is known for its complexity and potential for informational errors. To help filers ensure accuracy, the IRS is offering a digital tool for 1042-S data integrity.
Employee Retention Credit Window
For tax years 2020 and 2021, the window for claiming the Employee Retention Credit (ERC) is closing. Employers who wish to claim this credit must do so quickly, using an amended 941 or 941-X form. However, it's essential to be cautious of ERC scams that may target small businesses.
Conquer Tax Season with Greenshades
Whether you're a business owner or a tax professional, Greenshades is your go-to partner for compliance and seamless year-end filing with a solution for all your W-2s, 1099s, and other forms. Our software collects and validates your data, creates forms, and allows for easy reviews, bulk updates, and SSN verification.
As the eFile ecosystem for information returns becomes more complex Greenshades offers seamless support for filing information returns correctly through the right portals. Schedule a demo today to learn more about our tax and compliance solutions and how we can make your year end process smooth and efficient. Get ready to conquer tax season with confidence!
