Subscribe to Entrepreneur for $5
Subscribe

New Set of Rules

Recent changes may affect you--for better or worse.

By
This story appears in the May 2006 issue of Entrepreneur. Subscribe »

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.

Continue reading this article -- and everything on Entrepreneur!

Become a member to get unlimited access and support the voices you want to hear more from. Get full access to Entrepreneur for just $5!

3 months free with code ZENDESK

Presented by zendesk

3 months free with code ZENDESK