IRS NEWS
If you represent a government entity that makes payments to contractors for products or services—or you are a contractor yourself—you may be interested in learning more about the new Federal income tax withholding provisions under Internal Revenue Code section 3402(t). These new provisions will require payers to withhold three percent from certain payments for products and services, beginning on January 1, 2013. These requirements apply to all Federal and state agencies, and certain units of local government. Learn more about which entities are required to withhold, which payees may be exempt from withholding, and which payments are subject to this withholding. These issues and others will be explained and discussed via two free phone forums offered by the IRS office of Federal State and Local Governments on August 4th and August 18th.
Each phone forum will be limited to 1,000 participants, so please sign up through the links above as soon as possible. If you have a specific issue that you would like the speakers to address, please let us know via email at tege.ask.fslg@irs.gov. You can find more information abut the section 3402(t) withholding on the FSLG website. |
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Five Tips for Avoiding Refund Delays Relating to Your Economic Recovery Payment
The $250 Economic Recovery Payments that were issued in 2009 by the Social Security Administration, Department of Veterans Affairs and Railroad Retirement Board must be included when claiming the Making Work Pay Tax Credit on 2009 tax returns. Many people who worked during 2009 and also received a $250 Economic Recovery Payment in 2009 are slowing down their tax refunds by not properly including the payments when claiming the Making Work Pay Tax Credit.
Here are five tips from the IRS that will help you avoid these refund delays:
- If you worked during 2009, you may be eligible to claim the Making Work Pay Tax Credit that was established by the American Recovery and Reinvestment Act of 2009 and is worth up to $400 for individuals and $800 for married couples.
- The Economic Recovery Payments are not taxable income; however, anyone who receives social security, veteran or railroad retirement benefits, as well as certain other government retirement benefits, must reduce the Making Work Pay Tax Credit they claim by the amount of any payment they received in 2009.
- Taxpayers with earned income should claim the credit by attaching Schedule M to their 2009 income tax return.
- To help avoid delays when you claim the credit, make sure you properly report your Economic Recovery Payment on IRS Schedule M, Making Work Pay and Government Retiree Credits.
- If you are not certain whether you received the $250 payment, you should verify that information by contacting the appropriate agency before preparing and filing your tax return and claiming the Making Work Pay Tax Credit.
More information about the Economic Recovery Payment and the Making Work Pay Tax Credit can be found at IRS.gov/recovery. Schedule M and the related instructions can be obtained at IRS.gov or can be ordered by calling 800-TAX-FORM (800-829-3676).
Links:
Error Codes
Sudoku puzzles courtesy of Sudoku Shack
- For
Standard and
Enhanced payroll
subscribers this
Payroll Update
contains an updated
federal form:
Form 943.
- For
Enhanced payroll
subscribers,
this update includes
new state forms
for the following
states: Indiana
and Utah.
- For
Enhanced
payroll subscribers,
this update
includes
updated state
forms for
the following
states: Alabama,
Arizona,
Arkansas,
California,
Colorado,
Connecticut,
Delaware,
District
of Columbia,
Georgia,
Hawaii, Idaho,
Illinois,
Indiana,
Iowa, Kansas,
Kentucky,
Louisiana,
Maine, Maryland,
Massachusetts,
Michigan,
Mississippi,
Missouri,
Montana,
Nebraska,
New Jersey,
New Mexico,
New York,
North Carolina,
North Dakota,
Ohio, Oklahoma,
Oregon, Pennsylvania,
Rhode Island,
South Carolina,
Virginia,
West Virginia,
and Wisconsin.
IRS
address changes you need to know
now
IRS is changing
several of its “lockbox” addresses.
And companies in 23 states are
affected.
The new address applies to you
if your company is in: Connecticut,
Delaware, Georgia, Illinois, Indiana,
Kentucky, Maine, Maryland, Massachusetts,
Michigan, New Hampshire, New Jersey,
New York, North Carolina, Ohio,
Pennsylvania, Rhode Island, South
Carolina, Tennessee, Vermont, Virginia,
West Virginia, or Wisconsin
and you file one of these forms: 940,
941, 943, 944, 945, 2290, 1041ES.
Instead of
sending payments to the old Charlotte,
NC address, your new lockbox site
is in Cincinnati, OH. For all the
details, see IRS’ Notice or
check out Publication
3891, Lockbox Address Directory.
IRS Speeds
Lien Relief for Homeowners
Trying
to Refinance, Sell
WASHINGTON — The
Internal Revenue Service today announced
an expedited process that will make
it easier for financially distressed
homeowners to avoid having a federal
tax lien block refinancing of mortgages
or the sale of a home.
If
taxpayers are looking to refinance
or sell a home and there is a federal
tax lien filed, there are options.
Taxpayers or their representatives,
such as their lenders, may request
that the IRS make a tax lien secondary
to the lien by the lending institution
that is refinancing or restructuring
a loan. Taxpayers or their representatives
may request that the IRS discharge
its claim if the home is being sold
for less than the amount of the mortgage
lien under certain circumstances.
The
process to request a discharge or
a subordination of a tax lien takes
approximately 30 days after the submission
of the completed application, but
the IRS will work to speed those
requests in wake of the economic
downturn.
“We don’t want the IRS to be a barrier
to people saving or selling their homes. We want
to raise awareness of these lien options and to speed
our decision-making process so people can refinance
their mortgages or sell their homes,” said
Doug Shulman, IRS commissioner.
“We realize these are difficult times
for many Americans,” Shulman said. “We
will ensure we have the resources in place to resolve
these issues quickly and homeowners can complete
their transactions.”
Interest
Rates Drop for
the First Quarter
of 2009
WASHINGTON – The
Internal Revenue
Service today announced
in Revenue Ruling
2008-54 that interest
rates for the calendar
quarter beginning
Jan. 1, 2009 will
drop by one percentage
point. The new
rates will be:
-
Five
(5) percent
for overpayments
[four (4) percent
in the case
of a corporation];
-
Five
(5) percent
for underpayments;
-
Seven
(7) percent
for large corporate
underpayments;
and
-
Two
and one-half
(2.5) percent
for the portion
of a corporate
overpayment
exceeding $10,000.
Under
the Internal
Revenue Code,
the rate of interest
is determined
on a quarterly
basis. For
taxpayers other
than corporations,
the overpayment
and underpayment
rate is the federal
short-term rate
plus 3 percentage
points. Generally,
in the case of
a corporation,
the underpayment
rate is the federal
short-term rate
plus 3 percentage
points and the
overpayment rate
is the federal
short-term rate
plus 2 percentage
points. The
rate for large
corporate underpayments
is the federal
short-term rate
plus 5 percentage
points. The
rate on the portion
of a corporate
overpayment of
tax exceeding
$10,000 for a taxable
period is the federal
short-term rate
plus one-half
(0.5) of a percentage
point.
The
interest rates
announced today
are computed from
the federal short-term
rate during October
2008 to take effect
Nov. 1, 2008, based
on daily compounding.
Revenue
Ruling 2008-54,
announcing the
new rates of
interest, is
attached and
will appear in
Internal Revenue
Bulletin No.
2008-52, dated
Dec. 29, 2008.
Intuit
QuickBooks Payroll
Year End Common
Mistakes
Tips
for QuickBooks
Standard Payroll
or QuickBooks
Enhanced Payroll
Common
mistakes on payroll
tasks at year-end
can quickly multiply
your headaches
during an already
busy time. We've
compiled the
following tips
to help QuickBooks
Standard Payroll
or QuickBooks
Enhanced Payroll
subscribers avoid
the most common
mistakes made
at year-end.
Follow these
tips, so you
can focus on
your business
and celebrating
the new year.
Select
a different Intuit
Payroll Service
for more Year
End Support:
Basic,
Standard & Enhanced
Payroll | Assisted
Payroll | Complete
Payroll
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