The IRS launched its Information Returns Intake System (IRIS) for tax year 2022. Then, starting tax year 2023, if you have 10 or more information returns, you must file them electronically. (Learn more about this in our Changes to the Electronic Filing Requirement in 2024 article.) So how do you know if you should use IRIS or eFile360 to e-file your information returns? Let’s compare the two. As a business owner, CPA, accounting clerk, or HR professional, we know you’re busy, so we’ll cut right to the chase: Pros of IRIS Free service E-file any 1099 form Cons of IRIS Only works with 1099 forms You need an Employer Identification Number (EIN), which you probably have. Requires an IRIS Transmitter Control Code (TCC), which you need to apply for. It can take up to 45 days for your TCC application to be processed. eFile360 vs. IRIS IRISeFile360CostFreeStarting at $4.25 per recipientForms1099s1099s, 1098s, W-2, and ACAIdeal ForBusiness owners, government agencies, software developers, and third-party filersBusiness owners, accounting clerks, CPAs, and HR professionalsGetting StartedMust apply for and receive a TCC, which can take up to 45 days, before e-filingE-file right away, no strings attached The primary difference between choosing eFile360 and IRIS is whether you want the responsibility of e-filing tax forms or if you want to delegate that responsibility to a team of experts who have e-filed various tax forms since 2009. The IRS calls the e-filer a “responsible official,” regardless of whether they are an issuer (meaning you only e-file for your business) or a transmitter (meaning you e-file for your business and other businesses). When to Choose eFile360 for Your E-filing Needs If you need to e-file 1098, ACA, or W-2 forms, or you need to e-file quickly, eFile360 is your best e-filing partner. Whether you need to e-file for your business or for your clients, we provide bulk pricing and all data is …
Illegal Business Tax Practices You May Not Know About
When it comes to running a successful business, understanding and adhering to the rules of taxation is essential. Unfortunately, there are some illegal business tax practices that you may not be aware of. Knowing what these are can help you avoid costly mistakes or even legal prosecution. This article will provide an overview of some of the illegal business tax practices that companies must be on guard against. So read on to learn more about how to protect yourself and your company from falling victim to these violations. Illegal Business Tax Practices: Deductions There are hundreds of tax deductions available for individuals and businesses to take every year. Some require that the taxpayer itemize their tax return, while others can just be subtracted from the amount a taxpayer owes the IRS or the state and local governing bodies. But there are also lots of instances where someone thinks something should be deductible but it isn’t. Nearly all personal bills and living expenses are not deductible save a few choice areas that pertain to things like children, home businesses, and the like. Business News Daily even shared some off-the-wall deductions their readers shared, like the guy who hoped to deduct the price of the motorcycle he recently bought because it’s his stress reliever and it helps him perform better in his professional role. Or the client who wanted to claim a dog as the company mascot and provide it with the same medical coverage employees are entitled to. While these are extreme (and funny) examples, there are many things that seem like they should be deductible but aren’t. Let’s go through a few of them. The first one we want to talk about is business-related entertainment. We’ve seen the movie scenes where everything from dinner and drinks to all-inclusive resorts are just put on the “company card.” And while certain businesses may be willing to incur such expenses to win over clients and grow their business, you can’t deduct 100% of those …
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1098 Tax Breaks You Probably Didn’t Know About
Tax season can be tricky, especially when it comes to understanding all the different tax breaks available. Fortunately, there are plenty of tax breaks you may not know about that can help boost your refund. This article will explore how a 1098 tax break can help lower your taxable income and maximize your tax return. From student loan interest deductions to energy credits, these 1098 tax breaks offer great potential to save money and make filing taxes easier. 1098 Tax Breaks and Basic Info There are several different types of 1098 forms and they all serve to help individuals and businesses keep track of financial information that isn’t available on main income tax forms. Here’s a glance at all the 1098 forms: 1098 (Mortgage Interest Statement) 1098-C (Contributions of Motor Vehicles, Boats, and Airplanes) 1098-E (Student Loan Interest Statement) 1098-F (Fines, Penalties, and Other Amounts) 1098-MA (Mortgage Assistance Payments) 1098-Q (Qualifying Longevity Annuity Contract Information) 1098-T (Tuition Statement) If you are looking for more information about how you could get a 1098 tax break and what each form is made for, read on! 1098 (Mortgage Interest Statement) The true Form 1098 is one of the most common 1098s Americans receive each year. Mortgage companies are required to provide this form if an individual paid at least $600 in mortgage interest in the tax year in question. To be able to deduct this mortgage interest from your federal taxes, you must be the primary borrower on the loan, and also be active in making payments. If you want to deduct this interest, you will need to itemize your taxes (instead of taking the standard deduction) and use Form 1098 and a Schedule A form to deduct the personal part of mortgage interest. This form can also be used for reporting mortgage insurance premium payments and mortgage points payments. 1098-C (Contributions of Motor Vehicles, Boats, and Airplanes) This form is provided to those …
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Lower Your Business Tax Liability: Did You Miss These 6 Deductions?
Planning ahead and understanding the various deductions available are key components that help lower your business tax liability. For business owners, it is important to understand their tax liabilities and maintain compliance with regulations. This article will provide long-term tips to help business owners lower their business tax liability with deductions. Knowing which deductions are available, how they are applied, and the impact they have on taxes can be a daunting task. However, understanding these deductions and taking advantage of them can save businesses a significant amount of money on taxes each year and even result in multiple years with a lower overall tax bill. Home Office Repairs, Alterations Your deductions for your home office don’t stop at the new laptop or computer desk. Repainting, re-flooring, and adding new or different lighting fixtures – all of these things are deductible if you are using the repaired or renovated part of your home for your work activities. When it comes to business expenses, many people overlook the things that seem “outside” the norm when it comes to tackling what is deductible and what isn’t. But remember – if you redid the flooring in your entire house and you only use 10% of its square footage for work, you can only deduct that amount, not the full renovation cost. It may even be beneficial to space out renovations in your business spaces over a few years if you’re able. This can help with tax planning and will lower your business tax liability for a longer amount of time. Research and Development R&D is a core component of your business. Whether you are testing new inks for a t-shirt printing business or creating new inventory software for your corporation, you have to do quality research and development to keep your business thriving and growing. These R&D tax credits (which were recently doubled via the Inflation Reduction Act) can reduce your tax liability dollar for dollar, up to …
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Tips for Reducing Your 2023 Business Tax Bill
The upcoming tax season can be a daunting prospect for any business. With the 2023 business tax bill quickly approaching, it is essential to begin preparing now in order to maximize savings for your 2024 tax season. Planning ahead and understanding the implications of the Inflation Reduction Act will help. Fortunately, we’ve compiled some great tips for reducing your 2023 business tax bill (which will be paid during the 2024 tax season). Capitalize on the IRA The Inflation Reduction Act (IRA) was signed by President Joe Biden in August of 2022, and there are some big ways your business could use it to help reduce your federal income tax liability. According to a White House briefing, “the Inflation Reduction Act will reduce costs for small businesses by maintaining lower health care costs, supporting energy-saving investments, and bolstering supply chain resilience.” The IRA extended the American Rescue Plan’s premium tax credit for the Affordable Care Act (ACA) plans by extending them through 2025. Because of these lower healthcare costs, entrepreneurs will be able to use those available funds to help grow or start their small businesses. Small businesses will also receive a tax credit that covers 30% of the cost of switching to solar power solutions. This switch also helps lower long-term energy costs for SMB owners. And this energy efficiency can also mean a tax credit of up to $5 per square foot when these efforts deliver lower utility bills. SMBs can also see a 30% tax credit pertaining to the expenses of purchasing electric and fuel cell model vehicles – another short-term money saver that lowers expenses in the long term. On the personal side, you can upgrade your car by switching to an electric vehicle. Thanks to the IRA, you can receive up to $7,500 in tax credits for the purchase of a new electric vehicle. There are a few stipulations though: your new car must not have a price tag of more than $55,000 – if you’re buying an SUV, van, or …
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Common 1098 Filing Mistakes and How to Avoid Them
We’ve previously talked about Form 1098, the different types, and FAQs to help you with your filing every year. But this time, we wanted to focus on some common 1098 filing mistakes and how to avoid (or fix) them before they become a bigger or recurring problem. Need help with your 1098 filing? Contact the experts at eFile360 today! Common 1098 Filing Mistakes: Uncertainty about Reportable Points There are several confusing concepts within the 1098 filing process, as with many information returns. And one of those concepts is the who, how, and exceptions that surround reportable points for mortgage interest. A qualified person or lender of record must file Form 1098 to report all points paid in connection with the purchase of a principal residence, according to the IRS. This applies to anyone in business to collect these interest payments if the total reaches or exceeds $600 in points or other mortgage interest. Individuals and private owners who are paid for a mortgage will not need to worry about Form 1098. Several conditions must be met to create a scenario for reportable points, as well as several exceptions, all of which are outlined at this IRS link. Failing to File for an Extension If there are errors on the 1098s you send out or receive, they may result in a taxpayer’s need to file an extension. If information forms have incorrect information or errors in the calculations or other reportable amounts, it’s important to get those extension requests in sooner rather than later. It’s always better to have it and not need it than to need it and not have it, as they say. If you can’t make the April 18th deadline for 2023, or if you’re worried you won't have your corrected current tax year information returns in enough time to meet that deadline, you should start the extension process as soon as possible. The penalty for failing to file your tax return on time is 5% of your unpaid taxes for each month you are late, with a possible cumulative …
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