New Set of Rules
Recent changes may affect you--for better or worse.
The IRS is helping and hindering small businesses with two newinitiatives. One initiative features four significant fee hikesthat 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 RothIRA plans went from costing between $125 and $2,570 to costingbetween $200 and $4,500.
- The cost of a pre-filing agreement went from a three-tieredprice 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 applyfor a reduced fee.
On a more positive note, the agency simplified filingrequirements for small employers. Businesses with one or moreemployees paying wages totaling less than approximately $4,000 ayear will no longer have to file quarterly employer tax returns.Instead, they will file a new annual form-Form 944-and make onepayment, explains Kevin Brown, the IRS' Small Business/SelfEmployee Commissioner.
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