Don't Mess With Taxes

For more than 50 years, the U.S. Small Business Administration (SBA) has celebrated National Small Business Week, which recognizes the contributions of America’s entrepreneurs and small business owners.

The theme for this year's week, which wraps up today, May 7, is Building a Better America Through Entrepreneurship.

As part of the May 1 through 7 recognition of small businesses, SBA Administrator Guzman visited nine cities across the United States to participate in, along with SBA local office personnel and local elected officials, celebrations of the country's 32.5 million small businesses.

Since taxes are a critical component of small businesses, the Internal Revenue Service also continued its annual support of National Small Business Week.

Each weekday of 2022's official governmental recognition of small businesses, the IRS issued announcements on tax matters important to smaller companies. Those releases earn this weekend's multiple Saturday Shout Outs.

Small business tax tips: Below are the IRS small business tax tip highlights and links to the full announcements.

• IRS recognizes Small Business Week: Information and free resources for starting a business (Monday, May 2) — This announcement focuses on the IRS' free online resources for individuals starting a business. The IRS.gov includes ways to help employers meet their tax responsibilities, as well as help their employees. It includes information on selecting a business structure, understanding business taxes, knowing when to get an Employer Identification Number (EIN), and record keeping
• Take advantage of tax benefits for 2022; enhanced deduction for business meals, home office deduction and more (Tuesday, May 3) — Next year's filing deadline is nearly a year away, meaning entrepreneurs still have time to identify possible tax benefits, and take action to qualify for them so they can claim them when they file in 2023. Key benefits include enhanced business meal deduction of 100% of the full cost of business-related food and beverages purchased from a restaurant; the home office deduction available to the growing number of business owners now headquartered at their residences; and a variety of other tax benefits, from start-up expenses to the qualified business income deduction to the health-insurance deduction for self-employed individuals.
• Making estimated tax payments electronically is fast and easy (Wednesday, May 4) — Individuals, including sole proprietors, partners, and S corporation shareholders, generally must make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed. Corporations generally must make estimated tax payments if they expect to owe tax of $500 or more when their return is filed. Most companies meet at least part of their annual tax liability by making quarterly estimated tax payments. The IRS encourages those payments be e-filed.
• E-file, the best way to report payroll taxes (Thursday, May 5) — Staying electronic, the IRS also urges companies to make payroll tax payments, which include not only employer and employee portions of Social Security and Medicare taxes (also known as Federal Insurance Contributions Act or FICA amounts), but also the employer-only payment of Federal Unemployment Tax, usually referred to as FUTA.
• Special tax credit can help employers hire workers; key certification requirement applies (Friday, May 6) — Here the IRS focuses on a tax break for any business facing hiring challenges, the Work Opportunity Tax Credit (WOTC). This long-standing business credit encourages employers to hire workers certified as members of any of 10 targeted groups facing barriers to employment. Among these categories are former military personnel and individuals who've faced long-term unemployment, a common occurrence during these COVID-19 pandemic years.

In addition to the Small Business Week announcements, also check out the IRS' online Small Business and Self-Employed Tax Center. It has material for taxpayers who file Form 1040 or 1040-SR, Schedules C, E, F or Form 2106, as well as small businesses with assets under $10 million.

IRS business tax staff changes: Finally, it's worth noting that this year's Small Business Week comes on the heels of the IRS' selection of new leadership for its Small Business and Self-Employed Division (SB/SE).

On April 27, the tax agency announced Lia Colbert as new SB/SE commissioner. This division oversees the agency's collection activities and the examinations of most businesses in the United States. Colbert replaces Eric Hylton, who was SB/SE commissioner, when he left the agency about a year ago.

The IRS also announced Maha Williams as acting deputy commissioner, SB/SE Examination, taking over from De Lon Harris, who retired at the end of April. Before leaving the agency, Harris served as interim exam co-commissioner with Darren Guillot, who will continue in his role as deputy commissioner, SB/SE Collection and Operations Support.

Congratulations to all small business owners. Being the boss is challenging, from general operational and tax perspectives, but also very rewarding. We appreciate your contributions to all our communities.

Finally, as a shameless self shout out, here are few of my earlier small business tax posts you also might find of interest:

• Business closure tax tasks
• Tax implications of business entity choices
• A Labor Day salute to COVID-created new entrepreneurs
• Ways to keep your business from becoming a tax cybercrime target
• Simplified home office tax deduction pays off for some small businesses
• Work Opportunity Tax Credit can help businesses meet staffing needs, save on taxes

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