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  • The Internal Revenue Service (IRS) has recently released the 2024 Form 941, Employer’s Quarterly Federal Tax Return, along with Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors, and Schedule R, Allocation Schedule for Aggregate Form 941 Filers. These updated forms, along with instructions, are now available here.

    As a business owner, learn how these changes will affect your tax reporting by reading on.

    What Employers Should Know

    Employers are advised to start using the March 2024 revision of Form 941 beginning with the first quarter of 2024. The IRS expects this revision to be utilized for all four quarters of the year. In addition, a notable change is the removal of COVID-19-related lines from the Form 941. This means the lines previously used to report COVID-19-related credits have been eliminated from the form. Employers will need to be mindful of this adjustment when completing their tax returns for 2024.

    Form instructions update

    The Form 941 instructions have been updated to align with the changes to the form. In addition, the updated instructions no longer include any worksheets. Employers should familiarize themselves with the revised instructions to ensure accurate completion of the form.

    Implications

    Employers are encouraged to familiarize themselves with the updated Form 941 and related schedules to ensure compliance with the latest reporting requirements. They may also need to review and adjust their internal processes and systems to accommodate the changes introduced in the updated forms. This could involve updating payroll and tax reporting software and training staff on the revised requirements to facilitate smooth and accurate reporting.

    Where GMS Steps In

    Given the dynamic nature of tax regulations, employers should stay informed about further updates or clarifications related to the revised forms. Regularly monitoring official IRS communications and updates can help employers stay ahead of any additional changes that may impact their tax reporting obligations.

    However, partnering with a professional employer organization (PEO) like GMS is here to take on this administrative task that, let’s face it, you don’t want to worry about. Our HR experts offer comprehensive HR, payroll, and compliance solutions that provide small business owners with expertise in managing tax-related matters. Small business owners can leverage the resources of a PEO to ensure seamless adaptation to the revised forms and instructions. This allows business owners to focus on their core business operations, knowing their tax reporting requirements are being effectively managed. Stay on top of regulatory changes and partner with GMS – contact us today.

  • The Internal Revenue Service (IRS) has recently unveiled a voluntary disclosure program for employers who mistakenly claimed the Employee Retention Credit (ERC). The ERC, a refundable tax credit, was designed to aid businesses that faced hardships due to closures and event cancellations mandated by state and local governments during the pandemic.

    Understanding The Issue

    Despite the noble intent behind the ERC, numerous employers who were ineligible for the credit applied for and received funds. This was partly due to misinformation provided by scammers. As a result, the IRS initiated a disclosure program to rectify these erroneous claims, which is open for participation until March 22nd, 2024.

    Consequences Of Erroneous Claims

    Employers who erroneously claimed the ERC face multiple repercussions, ranging from financial penalties to potential criminal investigations. If the funds have not been received, employers can withdraw their ERC claim, essentially nullifying the claim. Completing the voluntary disclosure paperwork and returning 80% of the total credit is necessary for those who have already received the funds.

    However, failure to rectify these claims may lead to audits by the IRS and subsequent demands for the full refund of the credit, along with interest and potential penalties. In cases of fraud, employers could even face criminal investigations and prosecution for submitting false tax claims to the IRS.

    Eligibility Criteria For The ERC

    To qualify for the ERC, a business must meet one of the following criteria:

    • Sustained a full or partial suspension of operations due to a government order limiting commerce, travel, or group meetings because of COVID-19 during 2020 or the first three quarters of 2021
    • Experienced a significant decline in gross revenue during 2020 or a decrease in gross revenue during the first three quarters of 2021
    • Qualified as a recovery startup business for the third or fourth quarters of 2021

    In addition, certain agencies, such as government agencies and employers that faced supply chain disruptions but did not experience a government-ordered suspension of operations, are not eligible for the credit.

    Challenges And Confusion

    Determining eligibility for the ERC can be challenging for employers, particularly in assessing the significance of revenue downturns or operational slowdowns. The complexity of this criteria has led to confusion among employers, with many unsure if they were rightfully entitled to the credit.

    The situation has been worsened by aggressive marketing tactics employed by some firms, which encouraged businesses to apply for credit even if they were not eligible. Employers were enticed with promises of substantial funds, often at the request of marketers who stood to gain a percentage of the claimed tax credit.

    Recommendations And Guidance

    Given the complexities and potential pitfalls associated with the ERC, it’s crucial for employers to seek guidance from trusted tax advisors. Advisors who do not stand to benefit from the credit can offer unbiased counsel, helping employers navigate eligibility requirements and make informed decisions.

    In light of the IRS’ voluntary disclosure program, employers are urged to take a close look at their ERC submissions and reassess their eligibility with the assistance of legal, accounting, and HR professionals. This presents a limited window of opportunity for employers to rectify any erroneous claims and avoid potential repercussions.

    In addition, it’s essential for employers to be aware that wages reported as payroll costs for the Paycheck Protection Program (PPP) loan forgiveness cannot be used to claim the ERC. The PPP, established by the CARES Act, provides small businesses with funds to pay up to eight weeks of payroll costs, including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

    Looking For Assistance?

    The IRS’ new voluntary disclosure program offers employers an opportunity to rectify erroneous ERC claims and avoid potential legal and financial consequences. By seeking expert guidance and carefully reassessing their eligibility, employers can navigate this complex landscape with confidence and integrity. Not sure where to start? GMS, a certified professional employer organization (CPEO), provides business owners with valuable assistance and guidance. The following are several ways GMS can support businesses through this process:

    • Expert guidance on eligibility: GMS can provide expert advice on the eligibility criteria for the ERC, helping businesses assess their qualifications for the credit based on the specific requirements outlined by the IRS.
    • Compliance support: GMS is equipped to ensure that businesses comply with the ERC’s stringent guidelines. They can help employers navigate the complex compliance landscape, minimizing the risk of errors and ensuring adherence to the program’s terms.
    • Strategic advisory services: GMS can offer strategic advisory services, guiding employers on the best course of action regarding their ERC claims and voluntary disclosure.

    Contact our HR experts today to learn more.

  • The Internal Revenue Service (IRS) has recently announced an increase in the mileage rate for 2024. This news relieves many individuals and businesses who rely on this deduction to offset their travel expenses. The new rate, set at 67 cents per mile, is up from the previous rate of 65.5 cents per mile for 2023. This goes into effect beginning January 1st, 2024.

    Diving Deeper Into This Increase

    This increase reflects the rising fuel and vehicle maintenance costs and is intended to help taxpayers who use their personal vehicles for business purposes. It allows them to deduct a certain amount for each mile driven based on the IRS’s approved rate. This deduction can be particularly beneficial for small business owners and employees who often travel extensively as part of their job duties.

    In addition to the 67 cents per mile driven for business use, the IRS also announced the standard mileage rate will be:

    These rates apply to electric and hybrid-electric vehicles and gasoline and diesel-powered vehicles. While this increase comes despite a recent decrease in fuel prices, vehicle acquisition costs have risen slightly, while vehicle depreciation has also accelerated. This means that the overall cost of vehicle ownership has also increased.

    What This Means For Small Business Owners

    For small business owners and employees who use their personal vehicles for work purposes, it’s essential to understand the increase in the mileage rate for 2024. The higher mileage rate means that employees can be reimbursed more per mile for their business-related travel. This can benefit both the employees and the business owners, as it helps offset the costs incurred by employees using their personal vehicles for work. Small business owners need to update their reimbursement policies and communicate the new mileage rate to employees to ensure they are appropriately compensated for their business-related travel expenses.

    PEO Support For Small Business Owners

    As the IRS announces the increased mileage rate for 2024, the road ahead for small business owners navigating tax implications appears more straightforward. Leveraging a professional employer organization (PEO) can be the key to unlocking a smoother journey. PEOs like GMS assist business owners in managing their HR tasks and, in this case, provide expert guidance on tax compliance, including maximizing deductions related to mileage expenses. By partnering with GMS, small business owners can confidently steer through these changes, focusing on growth while leaving the complexities of tax regulations in trusted hands. Contact GMS’ HR experts today!

  • To safeguard businesses from potential scams, the Internal Revenue Service (IRS) has just announced a groundbreaking decision. Effective immediately, the IRS has pressed pause on processing new claims for the coveted employee retention credit (ERC) until at least December 31st, 2023. While previously filed ERC claims will be honored, brace yourselves for slightly extended processing times to protect your hard-earned dollars from the clutches of scammers.

    IRS’s Commitment To Combat Fraud

    The IRS is not just hitting the pause button; it’s gearing up to unveil a series of initiatives to rescue businesses that were victims of aggressive ERC promoter schemes. Among these initiatives, a groundbreaking settlement program will provide you with a lifeline to repay any improperly received ERC payments. In addition, for those who may have filed ERC claims incorrectly, a special withdrawal option is in the works. Stay tuned as the IRS is promising more details on these programs.

    What Business Owners Should Know

    So, what should business owners do during this critical period? If you’ve already filed and have an ERC claim in limbo, it’s time for a thorough eligibility check. The IRS has noticed an alarming trend of businesses incorrectly citing supply chain issues as grounds for an ERC claim – a tactic that rarely aligns with the eligibility criteria. If you’re on the fence about filing a claim, it’s wise to consult the updated ERC guidelines and consider postponing your submission. The IRS recommends that businesses take advantage of the processing delay to review the ERC guidelines meticulously.

    Assistance At Your Fingertips

    To aid you in understanding your eligibility, the IRS has taken the initiative to update its ERC FAQs and crafted an eligibility checklist. These resources are available to ensure you make the most informed decisions regarding your ERC claim.

    However, during these times of change and uncertainty, it’s time to take it a step further. Have you considered partnering with a professional employer organization (PEO) like GMS? Our HR experts offer advice on ERC eligibility, ensuring compliance with IRS guidelines, and helping you make the most of available tax credits. We not only streamline your HR processes but also act as a strategic partner to ensure that your business thrives amidst these changing dynamics. Together with the IRS, GMS can be your trusted partner in pursuing financial stability and success. Contact us today to learn more.