Stay informed on the latest tax news and developments, including legislation and rule changes, for effective tax planning and compliance.
For many taxpayers, the estimated tax payment deadline is in mid-June
IRS reminds taxpayers of the Q2 2023 estimated tax deadline on June 15, relevant for self-employed individuals, retirees, investors, businesses, corporations, and others without withheld taxes. Taxpayers pay-as-you-go, through withholding or quarterly estimated tax payments. Estimated taxes may be needed if withholding is insufficient. Form W-4 can be submitted to employers to withhold more tax. Estimated tax applies to individuals and corporations anticipating tax liabilities of $1,000 and $500 respectively upon filing their returns. IRS Interactive Tax Assistant and Forms 1040-ES and 1120-W provide more information. Publication 505 details tax withholding and estimated tax. More taxpayers will receive 1099-Ks for earnings over $600. IRS suggests considering estimated tax payments for non-withheld income. Electronic payments can be made via IRS Online Account, IRS Direct Pay, or EFTPS. Avoid underpayment penalty by owing less than $1,000 at tax time or paying 90%-100% of expected tax. The Tax Withholding Estimator helps ensure correct tax withholding.
Corporations that failed to pay estimated tax under the new corporate alternative minimum tax are exempt from penalties by the IRS
Today, the Department of Treasury and IRS issued Notice 2023-42, providing penalty relief for corporations that failed to pay the estimated tax linked with the new Corporate Alternative Minimum Tax (CAMT). The Inflation Reduction Act introduced the CAMT, a 15% minimum tax on the adjusted income of large corporations with average annual income exceeding $1 billion, starting from Dec. 31, 2022. Given the complexities in determining a corporation's CAMT liability, the IRS will waive penalties for unpaid estimated income tax regarding CAMT for taxable years starting after Dec. 31, 2022, and before Jan. 1, 2024.
Additional guidance for advanced energy projects is provided by the IRS
Treasury Department and IRS issued Notice 2023-44, providing detailed guidance for applicants seeking section 48C credit allocations in the advanced energy project credit program under the Inflation Reduction Act. It updates definitions, application process, and adds review criteria. The notice is relevant to clean energy, emission reduction, and critical material projects. It also outlines processes for submitting concept papers and applications, defines "facility" term, and stipulates rules for property eligibility. Further info on IRS.gov.
IRS warns companies and tax-exempt organizations about employee retention fraud warning flags and how to avoid submitting claims incorrectly
The IRS today renewed warnings to businesses to avoid misleading claims around the Employee Retention Credit (ERC). Amid aggressive marketing campaigns, many companies are misled about ERC eligibility, facing audits or criminal investigation for incorrect claims. “Aggressive promoters can endanger businesses with exaggerated credit claims," said IRS Commissioner Danny Werfel. The IRS reminds entities to carefully verify their eligibility before applying. Improper claims could lead to repayments, penalties, and interest. More details about ERC on IRS.gov.
