June 2024 Tax Update & Compliance Strategies

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Inside This Article

Welcome to MY-CPE's June 2024 Monthly Tax Update, led by renowned tax experts Jason Dinesen and Nicholas Preusch. This comprehensive blog aims to arm U.S.-based tax professionals with the latest insights and changes in tax regulations, enabling you to navigate the complexities of tax compliance with confidence.

From updates on ERC payments to revisions in tax penalties and W-9 forms, this post provides actionable content designed to enhance your professional knowledge and readiness.

ERC Payments & Enforcement Efforts

In the wake of the pandemic, the IRS's Employee Retention Credit (ERC) has been a critical aid for businesses striving to keep employees on payroll. As of June 2024, the IRS will resume processing claims made before the September 14, 2023, moratorium.

Understanding the categorization of these claims into high, low, and medium risk—and the prioritization for payment—can significantly affect how you advise your clients.

Moreover, the IRS maintains a robust withdrawal program for businesses that inadvertently made erroneous claims, with a substantial amount already halted in improper claims. For tax advisors, staying abreast of these developments is crucial for providing accurate guidance.

New Exceptions to the 10% Penalty on Retirement Withdrawals

Significant regulatory changes include new exceptions to the 10% early withdrawal penalty from retirement accounts. These exceptions now encompass emergency personal expenses and scenarios involving victims of domestic abuse. This legislative adjustment provides a crucial financial safety net for individuals facing severe personal crises. Tax professionals should be well-versed in these changes to offer strategic advice that could prevent financial distress for their clients.

Updated Form W-9 Familiarization

2024 brought updates to the IRS Form W-9, which simplifies reporting for single-owner LLCs and introduces new boxes for entities with foreign owners or beneficiaries. This form is a cornerstone for compliance, crucial in avoiding penalties related to incorrect tax reporting. Understanding these updates is essential for tax professionals who are responsible for ensuring their clients' compliance with IRS regulations.

Importance of Obtaining a W-9

The W-9 form is often overlooked yet vital for establishing the tax status of business relationships and ensuring compliance with tax regulations. Whether it's contract labor, rent, or royalty payments, having a completed W-9 form can save businesses from potential penalties and legal complications. As tax professionals, emphasizing the importance of this form to your clients is a proactive step toward comprehensive tax compliance.

Legislative Updates Impacting Q2 2024 Tax Compliance

The second quarter of 2024 has seen several legislative updates that significantly impact tax compliance. Understanding these changes, including potential tax-free mergers and proposed renters' tax credits, is essential for tax advisors. These insights not only help in advising clients but also in strategic planning and compliance across various tax scenarios.

Common Tax Season Trends & Efficiency Improvements

Each tax season brings its set of challenges and trends. In 2024, common trends include an increased focus on digital solutions and automation to improve efficiency in tax processing. For tax professionals, staying informed about these trends is crucial for adapting to the evolving landscape and enhancing the service provided to clients.

Conclusion

This June 2024 Monthly Tax Update encapsulates vital information that every tax professional needs to stay ahead. By keeping informed of the latest tax developments and understanding their implications, you can provide more effective and strategic advice to your clients. Remember, your knowledge and skills are crucial in navigating the complex tax environment effectively.

FAQs

What is the significance of the latest ERC enforcement efforts?

The latest efforts highlight the IRS's commitment to rectifying erroneous claims while ensuring legitimate benefits are disbursed promptly.

How can tax professionals assist clients with the new 10% penalty exceptions?

By providing detailed consultations that outline the new exceptions, ensuring that clients who qualify can benefit from these changes.

What should tax professionals know about the updated Form W-9 for 2024?

It's crucial to understand the modifications to ensure compliance and to instruct clients on proper completion to avoid penalties.

What should tax professionals know about the updated Form W-9 for 2024?

It's crucial to understand the modifications to ensure compliance and to instruct clients on proper completion to avoid penalties.

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Jason Dinesen

President, Dinesen Tax & Accounting, P.C.

Jason Dinesen (LPA, EA) is an entrepreneur, tax expert, and CPE Presenter. Dinesen brings over 15 years of experience helping individuals and businesses with accounting, bookkeeping, tax preparation, and business advisory in various industries. Dinesen is a regular CPE Presenter at MYCPE ONE. He has coached more than 200k+ accounting, taxes, and HR professionals on various topics of accounting, individual taxation, corporate taxation, and professional ethics. Jason has developed a strong following within the professional community for tax-related subjects. Dinesen is known for sharp tax interpretations, and he quickly brings his analysis of the latest tax updates and IRS guidance to the professional community.