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Tax Resources for Small BusinessSmall Business and Self-Employed One-Stop Resource Small Business Forms & Instructions e-File for Businesses and Self-Employed Other ResourcesTax Information for Charities
| Issue Number: 2021-17Inside This Issue
1. IRS issues guidance regarding the retroactive termination of the Employee Retention Credit The IRS news release about the retroactive termination of the Employee Retention Credit covers what wages this applies to and what business should do to avoid failure to pay and failure to deposit penalties. 2. Businesses must report nonemployee compensation and backup withholding The IRS reminds businesses, payroll professionals and other payers to use Form 1099-NEC, Nonemployee Compensation, to report nonemployee compensation of $600 or more paid to a payee. Generally, payers must file Form 1099-NEC by Monday, January 31, 2022, for tax year 2021. Payers must also furnish Form 1099-NEC to payees by this date. Businesses should also be aware of:
3. IRS joins leading nonprofit groups to highlight special charitable tax benefit available through December 31 The Independent Sector and National Council of Nonprofits joined with the IRS to highlight a pandemic-related provision where married couples filing jointly can deduct up to $600 in cash donations and individual taxpayers can deduct up to $300 in donations. Under the temporary law, taxpayers don't need to itemize deductions on their tax returns to take advantage of this, which creates tax-favorable donation options not normally available to about 90 percent of tax filers. At a time when many charitable groups are struggling during the pandemic, the IRS highlights the new provision and urges people to make sure they donate to a qualifying charity. The special Tax Exempt Organization Search tool on IRS.gov can help people make sure they donate to a qualified charity. This article is also available in Spanish and Simplified Chinese. 4. Small businesses should make sure to use the right form when filing employment tax returns The IRS advises small business owners to review the rules for which form to use when filing quarterly versus annually:
The two forms are not interchangeable. 5. IRS issues information letters to Advance Child Tax Credit recipients and recipients of the third round of Economic Impact Payments; taxpayers should hold onto letters to help the 2022 Filing Season experience The IRS announced it will issue information letters to Advance Child Tax Credit recipients starting in December and to recipients of the third round of the Economic Impact Payments at the end of January. Using this information when preparing a tax return can reduce errors and delays in processing. Families who received advance payments will need to file a 2021 tax return and compare the advance Child Tax Credit payments they received in 2021 with the amount of the Child Tax Credit they can properly claim on their 2021 tax return. The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to EIP recipients in late January. This letter will help Economic Impact Payment recipients determine if they are entitled to and should claim the Recovery Rebate Credit on their tax year 2021 tax returns that they file in 2022. 6. Revised questions and answers for 2020 Recovery Rebate Credit The IRS updated its frequently asked questions (FAQs) regarding the 2020 Recovery Rebate Credit. Individuals who didn't get the full first and second Economic Impact Payments may be eligible to claim the 2020 Recovery Rebate Credit. 7. National Tax Security Awareness Week: Security Summit partners remind businesses to tighten security; be aware of steps to help prevent, protect data loss The IRS, state tax agencies and the nation's tax industry urged businesses to be alert to cyberattacks aimed at gaining access to business data and customer information and be aware of steps to help them on tax-related issues related to identity theft. More than 70% of cyberattacks are aimed at businesses with 100 or fewer employees. Con artists can target credit card or payment information, the business identity information or employee identity information. The information covers:
8. IRS issues standard mileage rates for 2022 The IRS issued the 2022 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on January 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
9. Interest rates remain the same for the first quarter of 2022 The IRS announced that interest rates will remain the same for the calendar quarter beginning January 1, 2022. 10. Other tax news Disaster relief
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