Reporting Issues

President Signs Repeal of Expanded 1099 Requirements

Posted Wed, 04/20/2011 - 12:34 by Daniel Skerbitz

As expected after a great public outcry and recent action in Congress, on April 14, 2011 President Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (HR 4; 1099 Act), which repeals both the expanded Form 1099 information reporting requirements and also the 1099 reporting requirements imposed on taxpayers who receive rental income. This removes the requirement to provide 1099s to corporations (other than law firms) and for the purchase of products and tangible property and reverts to the 1099 reporting requirements to the existing rules.

2012 Budget Proposal Limits Charitable Contribution Deduction

Posted Fri, 02/25/2011 - 11:29 by Daniel Skerbitz

The President proposes to limit, starting in 2012, itemized deductions (including charitable contributions) for married taxpayers with income over $250,000 and single taxpayer with income over $200,000. President Obama explained that his 30% reduction in itemized deductions for high-income taxpayers is necessary in order to pay for a 3-year fix to the AMT (alternative minimum tax). The proposal limits the tax rate at which high-income taxpayers can take itemized deductions to a maximum of 28%. The language is found on page 212 of the Federal Receipts portion of the proposed budget (see at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/r...)

Can Ministers Exclude Housing Allowances for More than One Home?

Posted Thu, 02/10/2011 - 10:55 by Sandy Siegfried

The Tax Court, in a divided decision, said yes to a minister that received an allowance for a second home that he had on a lake. The court rejected the IRS argument that the tax free allowance is limited to a single residence. More on this as it unfolds.

A Step in the Right Direction: Senate Votes to Repeal of the Expansion of Form 1099 Filing Requirements

Posted Mon, 02/07/2011 - 13:20 by Sandy Siegfried

The Senate, by a 81-17 vote, approved an amendment to repeal a health care reform provision that would have had a major paperwork burden on churches and ministries. The provision would have required churches, ministries, and businesses to report to the IRS any purchase of more than $600 of goods or services from any vendor. This requirement, scheduled to go into effect in 2012, greatly expanded the current 1099 requirement that applies only to payments to unincorporated providers, and only for services.

Let’s hope the House will follow the Senate’s lead, and do it quickly.

Year End Tax Reporting Reminders

Posted Thu, 02/03/2011 - 13:35 by Daniel Skerbitz

By now, you should have provided your employees with their copy of Form W-2 (wage and tax statement), and your independent contractors with their copy of Form 1099-MISC (nonemployee income). These forms were due to the recipients by January 31, 2011. The filing deadlines for submitting the 1099’s to the IRS is March 1, 2011 (if submitting the forms by paper). If you are filing over 250 forms, you must submit them electronically by March 31, 2011. The W-2 forms must be filed with the Social Security Administration by February 28, 2011. If filing electronically, the due date is March 31, 2011. Late penalties apply if forms are not filed by the due date.

Relief for Some on Foreign Bank Account Reporting

Posted Fri, 03/05/2010 - 10:34 by Daniel Skerbitz

As you may know, the IRS now requires more persons who own or have signature authority over foreign bank accounts are required to file a Form TD F 90-22.1, foreign bank account report (FBAR) by June 30 of each year. This requirement impacts organizations and their officers who have overseas activities and accounts. Due to the complexity of the new reporting rules, the IRS has announced limited relief for some filers effective for the 2009 calendar year:

1. Signature authority only. Persons with signature authority only, but no financial interest in a foreign account, will now have an extra year to file the report. The report originally due on June 30, 2010, will now be due on June 30, 2011.
2. FBAR-related questions on tax forms. A taxpayer who qualifies for the additional one-year filing deadline, provided they have no other reportable foreign accounts, should check “NO” in response to the FBAR-related questions on their 2009 federal tax forms (those questions that ask about the existence of foreign financial accounts).

For more information see IRS Notice 2010-23 at http://www.irs.gov/newsroom/content/0,,id=104345,00.html

Bill Allows 2010 Haitian relief contributions to be deducted on 2009 returns

Posted Wed, 01/27/2010 - 12:35 by Sandy Siegfried

President Obama has signed into law a bill that allows donors who contribute to the Haitian relief effort to elect to deduct their 2010 contributions on their 2009 returns. The election would apply to those contributions made in cash after January 11, 2010 and before March 1, 2010.

The bill also relieves recordkeeping requirements for these contributions, in that a telephone bill would satisfy the Code Sec 170(f)(17) recordkeeping requirements if it shows the name of the done organization, the date of the contribution, and the amount of the contribution.

Form 5500 Reporting Relief for 403(b) Plans

Posted Thu, 07/23/2009 - 13:25 by Daniel Skerbitz

As you may already know, new regulations require that all organizations and churches establish a written plan document for 403(b) plans (tax-sheltered annuity plans) by no later than 12/31/09. In addition, the Department of Labor has revised the Form 5500 annual filing for benefit plans to require expanded reporting for 403(b) plans. Plans filing the Form 5500, even small plans, must report aggregate financial information regarding the assets of the plan. This can be difficult, or even impossible, for some plans because some accounts are controlled by the employee, and the organization may not have any knowledge that the account exists, especially if they are no longer making contributions to that specific account.

Health Care Reform Proposals

Posted Wed, 07/15/2009 - 13:50 by Daniel Skerbitz

For a comparison of the current health care reform proposals from the three Congressional committees, go to www.kff.org/healthreform/sidebyside.cfm. The current proposals generally focus on forced coverage for employees, with penalties for employers who do not comply. For example, House Democrats propose a penalty of 8% of payroll for employers who fail to fund 65% of employee insurance premiums. Small employers would be exempt – depending on the proposal, a ‘small employer’ could mean fewer than 25 employees, or total payroll less than $250,000. The plans would also require all individuals to have insurance, or face penalties.

IRS Announces 2009 "insubstantial benefit" amounts for token goods or services given by charities

Posted Mon, 01/19/2009 - 17:35 by Sandy Siegfried

The IRS announced their official computation of inflation-based tax figures for tax years beginning in 2009 in Rev-Proc 2008-66. For 2009, a token gift value may be $9.50 (up from $9.10 in 2008) for contributions of $47.00 or more (up from $45.50), or not more than the lesser of 2% of the contribution or $95 (up from $91.00).