New Set of Rules
Recent changes may affect you--for better or worse.
The IRS is helping and hindering small businesses with two new initiatives. One initiative features four significant fee hikes that went into effect February 1.
- Requesting a change in accounting method went from $1,500 to $2,500.
- An opinion letter on employee IRAs, SEPs, SIMPLE IRA and Roth IRA plans went from costing between $125 and $2,570 to costing between $200 and $4,500.
- The cost of a pre-filing agreement went from a three-tiered price structure with a $10,000 cap to a flat fee of $50,000.
- The cost of a private letter ruling increased from $7,000 to $10,000, although taxpayers earning less than $250,000 can apply for a reduced fee.
On a more positive note, the agency simplified filing requirements for small employers. Businesses with one or more employees paying wages totaling less than approximately $4,000 a year will no longer have to file quarterly employer tax returns. Instead, they will file a new annual form-Form 944-and make one payment, explains Kevin Brown, the IRS' Small Business/Self Employee Commissioner.
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