Tax Updates for Pass Through Business Entities
As we come into year-end tax preparations, please see the important updates from the IRS below.
The U.S. Treasury Department and Internal Revenue Service (IRS) released a notice regarding proposed regulations that will clarify that State and local income taxes imposed on and paid by a pass-through entity are allowed as a deduction by the pass-through entity in computing its non-separately stated taxable income or loss for the taxable year of payment. View the press release.
The IRS is demanding payment for backup withholding for failure to supply correct tax IDs.
The IRS is now reviewing cases (back to 2017) where incorrect or missing payee name or tax ID were filed on Forms 1099. To fight an assessment imposed by the IRS, the business must supply, at the minimum, Forms W-9 signed by the vendor for every incorrectly filed 1099 in the year in question. Please ensure you have an accurate, completed and signed Form W-9 for every vendor to avoid any penalty.