IRS Business Accounts & Your Business

Are you ready for some FOOTBALL?  Even if you do not watch pro football everyone wants to catch the Super Bowl (Sunday, February 11). It’s probably one of the most watched events in America. Oh and trivia, but I bet you know this one, Dominos sells more pizza than any other time during the year. Wonder who has the drink concession??? But I digress….

Exciting this year not only that Taylor Swift will be there cheering on her man. It’ll be a 2020 rematch, and the Chiefs will be on the hunt to win back-to-back Super Bowls (something only 8 teams in NFL history have accomplished).

Whether you watch to cheer on your favorite team, chuckle at the commercials, or see Usher perform at half-time — or if you decide not to watch it all — you know it’s happening. Everyone’s talking about it.

It’s the same way you know when tax filing season is happening. It’s being talked about everywhere you turn (even Turbo Tax is airing commercials during football games to remind you).

And now that tax season has officially begun, as of Monday the 29th, let me also deliver this little reminder that your 1099 forms for non-employee compensation — like the 1099-MISC and 1099-NEC — are due to the IRS and form recipients by Wednesday, January 31. Oops, this email is after the filing deadline. But you can still send them it.

It’s probably too late to avoid penalties if you’re just now getting them out. For the future, make a plan that prevents that from happening for other important deadlines (like getting out the other 1099 forms by February 15th, or waiting too long to get your tax information to start the filing process).

I am trying to make sure that deadlines are listed on the website for such deadlines as filing of W2 and 1099s and corporate, Trust/Estate/and Partnership filing in March. Even though the filing date by law is the 15th of April, that is also a DC holiday and the whole city shuts down. If it falls on a Saturday or Sunday it is the next business day. April 15th is a Monday so “technically” you have until the 16th to get a timely filed return or extension in.

Why not set up an appointment to get that process started? I offer in-person and video. Let us know which one you prefer, or if you are a new client we will get you onto our secure portal.

In other tax news, you’re also now getting access to more online features at IRS.gov. As part of last year’s Inflation Reduction Act (IRA), the IRS has rolled out new online business accounts for business owners. Similar to the existing individual accounts, these accounts are intended to provide businesses with more visibility and ease of communication with the IRS.

What specifically are these IRS business accounts good for? And should you get one? Well, that’s what I’m writing about today…

Karen S. Durda, EA’s
“Real World” Business Strategy Note
Should You Utilize an IRS Business Account?
“Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along.” – George Herbert

I’ll start with the first question you’re probably asking:
Should I get one of the new business accounts the IRS is now touting?

Short answer: Yes, if you qualify (of course). Only certain entities are eligible. But it’s a useful, new tool for your business.

The new IRS business accounts are now available to sole proprietors (as of Oct 2023), and S corps and partnerships (as of Dec 2023). These accounts allow owners, partners, and shareholders to view account information, transcripts, and notices, and also make payments, among other things.

One big benefit for businesses is the ability to view business tax transcripts directly within the account. This means you can verify tax data for loans and applications, and stop making multiple transcript requests.

For ease of information sharing, you can give your accountant access to the account as well.

To create an IRS business account, you’ll need your employer identification number (EIN). If you don’t have one of those, you can apply for one online. The business account application process also involves answering some security questions and verifying your identity with a photo ID. Set aside 15-20 minutes to complete the application.

Some of the beneficial uses for your business (not comprehensive):

  • Verify that the IRS has your proper business name and address
  • Make tax payments
  • Check to see if an entity issued you a 1099
  • Review the status of your quarterly estimated tax payments
  • Authorize powers of attorney
  • Read your IRS notices
  • View tax transcripts
  • Set up authorized users, like your accountant

And the word is that more features are still to come, along with access to more types of business entities, assuming IRS funding for these improvements remains available. With Congress you never know, so we’ll keep you posted.

 

This is just one more tool for your toolbelt as you manage your business taxes and financials in partnership with your accountant. Kudos to the IRS for making this happen. And I’d love to hear your feedback about your experience setting up, and using this new account. If you set up your ID.ME to access your tax account ( remember the first name on the tax return is the Social Security number/name to use. Spouses can also obtain an account but you will only see wage and income information for that Social Security Number.

PS – Have you filed your Beneficial Ownership Information report (BOI) yet? While you have until the end of 2024 to get it finished, why not go ahead and knock this one off your list now while you’re thinking about it?

I cannot assist in the preparation of anyone’s filing as it is not covered by my Error and Omissions Insurance. The IRS just raised the penalties and am not willing to proceed and not be covered. BUT THE GOOD NEWS is that several of my clients have done it and said it wasn’t that hard as long as you have a jpeg of your ID to upload. Oh, and a camera for a face shot.

Feel free to forward this article to a business associate, client, or a family member or friend you know who could benefit from our assistance. Who knows they may want to branch out to start a business! While these particular articles usually relate to business strategy, as you know, we specialize in financial management for business owners and families. And we always make room for referrals from trusted sources like you.

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