WEST PALM BEACH, Fla. (PRWEB)
March 24, 2022
Innovative Tax Relief LLC provides tax resolution and IRS tax relief services. In addition, the A+ BBB-accredited firm has expanded its offerings to tax planning. One of the essential parts of running a successful small business is good tax planning. With a good tax plan, you’ll keep what you earn instead of giving it away in taxes.
“Studying tax regulations and dealing with taxes by yourself can take up considerable time – the time you could spend growing your business. That is why you should take advantage of a professional tax planning service.” Says Ozzie Gomez, founder of Innovative Tax Relief LLC. “With this new service, we’re able to consult with clients – applying our years of experience in tax planning and resolution – to address their challenges knowing there are various tax changes that are impacting businesses.”
Effective January 1st, third-party payment apps such as Venmo, PayPal, and Cash App must begin furnishing a 1099-k to the IRS for any commercial transaction of $600 or more. This change in reporting law attempts to close the staggering tax gap that exists from unreported income—many users of these apps for personal and business use might have all kinds of questions about this change.
The $1.9 trillion pandemic-related America Rescue Plan package was signed into law in March by President Joe Biden and included this new change regarding the payment using these apps. It is a staggering change from the previous reporting requirements where the IRS required reporting if the transaction exceeded $20,000 or more and more than 200 transactions completed within a year. All commercial transactions now over $600 without any limit on the number of transactions will receive the 1099-k form.
The IRS explanatory release specified that the tax reporting only applies to charges for commercial goods or services, not personal payments between friends and family. You have to pay any tax on commercial transactions as a small business as a general rule.
What is a 1099-k form?
A 1099-k is an informational tax return that reports payment card and third-party network transactions to the IRS. These third-party networks or payment companies must send out the 1099-k for income received by January 31st of the following year. This form will report total gross income in box 1a received during the year without considering adjustments, discounts, or refunds. It will include payments from credit cards and online payments that you must report to the IRS.
Most likely, these platforms may begin to request additional information from their users to report transactions properly. For example, users may be asked to provide Employer Identification Number (EIN), Individual Tax Identification (ITIN), or their Social Security Number (SSN) if this information is not on file. If a taxpayer mistakenly receives a 1099-k for personal transactions, it would be their responsibility to explain why the money wasn’t taxable to the IRS. Since the 1099-K may include taxable and nontaxable income, it is imperative to keep good records of your transactions.
How can Innovative Tax Relief help?
If you are not a tax expert, the US tax code may seem too complicated to handle. Unfortunately, taxes are the most significant expense for most small and medium-sized business owners. Without deep knowledge and understanding of tax laws, you can pay much more for taxes than you have to or experience tax problems that would otherwise be avoidable.
Why is tax planning important?
All of us have to pay taxes. However, it is more important than ever to structure your business to optimize your profit. It’s legal and even desirable to take advantage of the current tax law and minimize the amount you have to pay. Tax planning is important for every small business owner who wants to maximize their profit.
What Are The Benefits Of Tax Planning?
- Tax planning has many benefits, including:
- Reduced tax liability
- Minimized litigation
- Contributes to economic stability
- Increases productivity
- It helps you in forecasting the financial position of your small business
- Provide you with investment opportunities that’ll produce income and improve your business structure
With an efficient tax plan, you can do more than reduce your tax liabilities – you can make your business more successful and grow faster in a shorter time frame. You’ll also be able to defer income to keep what you make and pay the lowest amount of taxes later.
Innovative Tax Relief LLC is a full-service tax resolution and tax planning firm that has helped numerous businesses find relief from tax issues. Our tax experts are licensed by the IRS to practice in all 50 states. For more information or press inquiries about tax topics, please contact us at firstname.lastname@example.org.
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