Inspired by National Small Business Week, the IRS announced how they plan to improve processes and services for small business owners.
Communicating with Small Business Owners
Improving how the IRS communicates with taxpayers has been a priority since the pandemic. For small business owners, the IRS will add new improvements to phone service, in-person service, and online services so small business taxpayers can get help when they need it.
Online Service Improvements
A goal the IRS set for the 2023 Tax Filing Season in 2024 is to launch Business Online Accounts. The Business Online Accounts tool is designed for small business taxpayers and will allow the following:
- Use the account to see their tax information, schedule and track payments
- Access business tax transcripts online in an easy-to-read format
According to IRS Fact Sheet 2023-13, sometime before 2024, small business owners will be able to respond online, and make corrections of:
- self-employment income,
- employment-related identity theft notifications, and
- dozens of other online notices.
To help with communications, the IRS plans to simplify the language in the notices sent to taxpayers. These notices will have clear instructions on what taxpayers need to do.
Simplification of Frequently Used Forms
The IRS plans to modernize tax forms that small businesses use most frequently. The updated forms will be streamlined, mobile-friendly and available in multiple languages. Small business owners who file their own taxes will save time with the new, simplified tax forms.
The tax forms include:
- Form 940 Employer’s Annual Federal Unemployment (FUTA) Tax Return
- Form 941 Employer’s QUARTERLY Federal Tax Return
- Form 944 Employer’s ANNUAL Federal Tax Return
E-file Forms 1099
In February 2023, any small business entity or person could e-file Forms 1099 for tax year 2022 and later via the Information Returns Intake System (IRIS). Having the ability to e-file Form 1099 eliminates the need to copy and mail. Anyone with 250 or more information returns must file them electronically via IRIS, which is a free system that allows you to file any Form 1099 including:
- Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
- Form 1099-C, Cancellation of Debt
- Form 1099-DIV, Dividends and Distributions
- Form 1099-INT, Interest Income
- Form 1099-K, Payment Card and Third-Party Network Transactions
- Form 1099-LTC, Long-Term Care and Accelerated Death Benefits
- Form 1099-MISC, Miscellaneous Income
- Form 1099-NEC, Nonemployee Compensation
- Form 1099-Q, Payments from Qualified Education Programs (Under Section 529 and 530)
- Form 1099-QA, Distributions from ABLE Accounts
- Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
- Form 1099-S, Proceeds from Real Estate Transactions
- Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
Eliminating Paper-based Processes
Scanning of paper forms has been expanded by the IRS. Automating paper-based processes and making more forms available online is part of the strategy the IRS is using to improve processing times and getting refunds faster to taxpayers. As more digitized services are rolled out, we will be certain to apprise you of the implementation dates.
Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.
DISCLAIMER: The WM Update, WM Wednesday Wisdom, WM Daily Update, and other related communications are intended to provide general information, as of the date of this communication, and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.