News For Your Week Ahead: August 19, 2022

In case you missed our email yesterday, check out this week’s MSATP TV: Jonathan Pocius of Payroll Services LLC discussed the new MarylandSaves program. Click the image or link below to watch the lunch and learn!

Watch here: MSATP TV: Maryland Saves – YouTube

Saving For College: The 529 | By Bob Jennings, TaxSpeaker

How do you save for college for your kids or grandkids? One of the most useful tools used by parents and more often by grandparents is something called a 529 plan.

Congress created 529 plans in 1996. A qualified tuition program (QTP) (also known as a 529 plan or program) is a program set up to allow you to either prepay or contribute to an account established for paying, a student’s qualified education expenses at an eligible educational institution. Whoever purchases the Section 529 plan is the custodian and controls the funds until they are withdrawn. One of our favorite sources for information on 529 plans is www.savingforcollege.com.

QTPs may be established and maintained by states (or agencies or instrumentalities of a state) and eligible educational institutions. Because multiple accounts may be established the taxpayer is not restricted to one specific state operated 529, even if already funded.

There is no deduction at the federal level for contributions to 529 plans, although many states offer a state credit or deduction. Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board. You can set one up and name anyone as a beneficiary — a relative, a friend, even yourself. There are no income restrictions on either you, as the contributor, or the beneficiary. There is also no limit to the number of plans you set up. And, 529 plans are exempt from estate tax.

Read about qualified educational expenses, and check out more details in TaxSpeaker’s newsletter here.

IRS Webinar: Foreign Tax Credit – Individuals | Tuesday, August 23, 2022 @ 2 PM EST

Webinar Objectives:

Overview of foreign tax credit (FTC) concepts
Treaty vs. statutory withholding rates
Foreign tax redeterminations (FTRs)
Foreign fiscal year considerations
Plus, a live Q & A

1 CE credit will be offered for this webinar. Category: Federal TaxQuestions? Email cl.sl.web.conference.team@irs.gov.

What Business Owners Need to Do When Closing Their Doors For Good | IRS Tax Tip 2022-122

There are a few things business owners need to do before they close their business. Of course, they need to fulfill their federal tax responsibilities. It’s also important to notify the IRS of their plans.

Business owners must take these steps when closing a business:

File a final tax return and related forms. The type of return to file and related forms depends on the type of business.
Take care of employees. Business owners with one or more employees must pay any final wages or compensation, make final federal tax deposits and report employment taxes.
Pay taxes owed. Even if the business closes now, tax payments may be due next filing season.
Report payments to contract workers. Businesses that pay contractors at least $600 for services including parts and materials during the calendar year in which they go out of business, must report those payments.
Cancel EIN and close IRS business account. Business owners should notify the IRS so they can close the IRS business account.
Keep business records. How long a business needs to keep records depends on what’s recorded in each document

IRS.gov has information to help guide business owners through the process of shutting down. Small businesses and self-employed taxpayers can find information including:

What forms to file
How to report revenue received in the final year of business
How to report expenses incurred before closure

Business owners can also get helpful information on declaring bankruptcy, selling their business and terminating retirement plans.

Tax Pros: Create a Written Data Security Plan | IR-2022-147

The Security Summit partners unveiled a special new sample security plan designed to help tax professionals, especially those with smaller practices, protect their data and information. The special plan, called a Written Information Security Plan (WISP), is outlined in a 29-page document that’s been worked on by members of the Security Summit, including tax professionals, software and industry partners, representatives from state tax groups, and the IRS.

Truckers Need to File by Aug. 31 Deadline, E-file Encouraged | IR-2022-146

If you have clients who have registered, or are required to register, large trucks and buses, it’s time for them to file Form 2290, Heavy Highway Vehicle Use Tax Return. The IRS strongly encourages using e-file and filing before the payment deadline of Aug. 31, 2022, for vehicles first used in July 2022.

Maximum Educator Expense Deduction Rises to $300 in 2022 | IR-2022-148

As the new school year begins, teachers and other educators will be able to deduct up to $300 of out-of-pocket classroom expenses for 2022 when they file their federal income tax returns next year. Visit IRS.gov for more information about who qualifies, what’s deductible, and more.

Are you hiring? MSATP members can post job opportunities on our website for free. Email info@msatp.org and we’ll help you get started. Looking for a job? We have some exciting new opportunities on our website, including several job opportunities at American University! You can view the classifieds section of our website clicking the button below.

View Here: Job Opportunities – Maryland Society of Accounting & Tax Professionals (msatp.org)

3 all-inclusive days down by the shore, 13 hours of CPE, and access to Maryland’s top talent in the accounting and tax field.

Looking for more CPE opportunities? The following Wolters Kluwer webinars are available to you at a special rate:

How to Avoid Common Peer Review Pitfalls | August 22, 2022 | 3 – 5 p.m. | 2 CPE (Recommended) | $106
Accounting Standards for CPAs: Summer Update | August 24, 2022 | 3 – 5 p.m. | 2 CPE (Recommended) | $106
Compilation and Review in the Red Zone | August 30, 2022 | 3 – 5 p.m. | 2 CPE (Recommended) | $106
2022 LLCs: Reducing Self-employment Tax and Maximizing the 20% Passthrough Deduction | September 1, 2022 | 3 – 5 p.m. | 2 CPE (Recommended) | $106
Transactional Tax Basis Capital Reporting | September 6, 2022 | 12 – 2 p.m. | 2 CPE (Recommended) | $106

RSVP Here: You’re invited to “Summer Wine Tasting.” Tap here to RSVP – Paperless Post Flyer

News For Your Week Ahead: August 19, 2022

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