Be on the lookout for 1099-Ks being issued this coming January

What are 1099-Ks?

1099-Ks are issued annually by Payment Settlement Entities (PSE) and third-party settlement networks to report payment transactions taxpayers received during the year via credit cards and other contractual payments.  eBay, Venmo, Stub Hub and PayPal are some of the most recognizable of these entities that issue 1099-Ks annually to taxpayers using their services.

How have the rules changed?

Prior to the 2023 reporting year, a 1099-K was not required to be issued unless total transactions exceeded 200 and the total dollar amount exceeded $20,000 in a calendar year for the payee.  Under the new rules which begin for the 2023 reporting year, a 1099-K is required to be issued for total settlement payments from a third-party vendor that is at least $600 and no minimum number of transactions (Massachusetts had already required the $600 and no minimum number of transactions threshold prior to 2023 for payees with a Massachusetts address).

When should a 1099-K be issued?

1099-Ks should only be issued to report sales of goods or services.  Transactions between friends and family for reimbursements, personal affairs, etc. should not be reported on a 1099-K.

What to do if you receive a 1099-K?

Taxpayers that are in a business would generally report the 1099-K income on their Schedule C and deduct related costs.

Individuals who receive a 1099-K (such as for the sale of old unused furniture via eBay or the re-sale of sporting tickets via StubHub) generally should report the income and deduct the cost of the resale items on Schedule D/Form 8949.

  • For individuals, taxable income would be reported for the resale dollar amount reported on the 1099-K exceeding the cost of the underlying item.
  • For individuals, a loss from the sale of personal items is not allowed as a “taxable loss” if the resale income received and reported on the 1099-K is less than the cost of the item previously purchased.  (But the transaction reported on the 1099K would still need to be reported by individuals on their personal tax return, although a tax loss is not allowed to be claimed.)
    • When 1099-K income items are sold at a loss by individuals, taxpayers can opt to report the income and cost on Schedule 1 of the tax return – reporting the 1099-K income on Schedule 1, Part I, Line 8z with the description “Form 1099-K Personal item sold at a loss, $XXX” and report the cost, limited to income reported on the 1099-K, on Schedule 1, Part II, Line 24z with the description “Form 1099-K Personal item sold at a loss, $XXX”.


Are You A Beneficiary Of An Inherited IRA?

For taxpayers who are the beneficiary of an IRA or other retirement account, The SECURE Act changed the Required Minimum Distribution (RMD) rules for inherited IRAs. While final regulations are expected in 2023 but have not yet been issued, the IRS did issue guidance in IRS Notice 2022-53.

Included as part of the SECURE Act are new rules for individuals who died after December 31, 2019 and passed on retirement accounts to beneficiaries. The new rules required the designated beneficiary’s inherited IRA to be fully distributed within 10 years of the death of the deceased retirement account owner. However, the distribution rules differ depending on whether or not the deceased individual had reached the age of 70.5 (72 if they passed away after 2019) and had already started taking their Required Minimum Distributions (RMD):

For taxpayers that inherit an IRA and the RMDs have already started for the original retirement account holder, then:

  1. The designated beneficiary must continue to take annual RMDs over the life expectancy of the designated beneficiary, and
  2. The inherited IRA must be fully distributed by December 31 of the 10th year following the year of the original retirement account owner’s death.

For taxpayers that inherit an IRA and the RMDs have not begun because the original account owner died before their RBD commenced, then:

  1. The designated beneficiary is not required to take any annual RMDs in years 1 – 9, but has the option of doing so if they choose, and
  2. The inherited IRA must be fully distributed by December 31 of the 10th year following the year of the original retirement account owner’s death.

The notice does include some good news for taxpayers that may have missed RMDs for the years 2021 and 2022 resulting from SECURE Act’s lack of clarity relating to RMDs.  The IRS has provided an automatic waiver of penalty for those RMDs not taken for those two years only, which is great since the penalty for Failure to Take the RMD is equal to 50% of that year’s missed RMD.

If you are the beneficiary of an inherited IRA or other retirement account, please reach out to the financial institution holding the retirement account, your tax accountant, and/or the estate lawyer to make sure you are complying with these recently revised RMD rules.

Avoid Huge Penalties by Filing Your Form 5500 For Your 401k/Profit Sharing Plan By 7/31/23

Just a reminder that if your practice had a 401k/Profit Sharing Plan in place during 2022, you are required to file a Form 5500 by 7/31/23 (Form 5500 Corner | Internal Revenue Service ( If you aren’t able to submit this paperwork prior to 7/31, please file for an extension using the Form 5558,, giving yourself until 10/15 to file.

There are no taxes due with this form.  Instead, the 5500 is an informational filing only. Practices with SEPs and SIMPLEs are exempt from this annual filing requirement. While no taxes are due, the PENALTIES FOR FILING THE FORM 5500 LATE ARE DISGUSTING – A WHOPPING $250 PER DAY!!!

As a practice owner with a retirement plan, it’s up to you to follow up with your TPA to be completely sure that all the filing deadlines are met. No one is certain how flexible the IRS will be to reduce or waive this onerous late filing penalty. Please do what you can to not need to find out.

Remember, no one cares more about your practice avoiding this $250 per day late-filing penalty than you do.

IRS Warns That July 17th is Deadline For Taxpayers To File For 2019 Personal Tax Refunds

From IRS News – IR-2023-112, June 8, 2023

WASHINGTON ― The Internal Revenue Service today encouraged nearly 1.5 million people across the nation to submit a tax return to claim their refunds for tax year 2019 by the July 17, 2023, deadline.

The IRS estimates almost $1.5 billion in refunds remain unclaimed because people haven’t filed their 2019 tax returns yet. Available data includes a special state-by-state estimate of how many people are potentially eligible for these refunds in each state and each state’s median potential refund. The average median refund for tax year 2019 was $893.

“Time is running out for more than a million people to get their tax refunds for 2019,” said IRS Commissioner Danny Werfel. “Many people may have overlooked filing a 2019 tax return due to the pandemic. We don’t want people to miss their window to receive their refund. We encourage people to check their records and act quickly before the deadline. The IRS has several important ways that people can get help.”

Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury.

For 2019 tax returns, however, people have more time than usual to file to claim their refunds. Usually, the normal filing deadline to claim old refunds falls around the April tax deadline, which was April 18 this year for 2022 tax returns. But the three-year window for 2019 unfiled returns was postponed to July 17, 2023, due to the COVID-19 pandemic emergency. IRS Notice 2023-21, issued on Feb. 27, 2023, provided legal guidance on claims made by the postponed deadline. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by July 17, 2023.

 Learn more at: Time is running out: Taxpayers missing $1.5 billion in refunds for 2019 must file by July 17 | Internal Revenue Service (

July 1st Kicks Off the Next Round of Provider Relief Fund (PRF) Self-Reporting

Practice owners who received Provider Relief Fund (PRF) payments exceeding $10,000 in the aggregate between January 1, 2022 and June 30, 2022 are required to self-report during Reporting Period 5 (RP5) which runs through September 30th.

Providers who fail to comply with this requirement by September 30, 2023 will be deemed out of compliance with the program’s Terms and Conditions and could be subject to forfeiture of all PRF subsidies received during the first half of 2022.  Check out the Provider Relief Fund Reporting Non-Compliance Fact Sheet at:

For our clients who are required to report on PRF payments, you have likely received multiple emails from both HRSA as well as from our staff offering to help satisfy your self-reporting requirements. If you would like our assistance to self-report, please email us ( soon so we can help make sure that you meet the September 30th deadline.

For any S&S clients who have already completed the reporting requirement on their own or plan to do so by September 30th, please reach out to us at ( to let us know and we will update our records accordingly.

More info about the self-reporting requirement and the September 30th deadline is available at:  We do charge a fee to assist our clients with the self-reporting application.

Scam Alert Targeting Physicians

Physicians are warned to be alert to possible telephone scams targeting physicians, in which callers pose as agents or as investigators for the US Drug Enforcement Administration (DEA) or for the state Board of Registration in Medicine (BORIM).

If you receive a suspicious call, do not provide any personal information or accede to requests for payment or bank account information. The resources below explain how to report a call to appropriate authorities and how to protect against identity theft.

Planning for Your Child’s Summer Job

It’s a rite of passage for teens to get their first summer job.  Whether working in retail, hospitality, landscaping or another industry, make sure your child starts their employment off on the right foot using our tips below.

Completing your child’s Form W-4

When your child begins their summer job and will be paid as a W-2 employee, their new employer will require them to complete a Form W-4, Employee’s Withholding Certificate.  The purpose of the form is to instruct the employer how to withhold income taxes from your child’s weekly paycheck. However, if your child’s expected wages will be small (less than $13,850 in 2023), then he or she will be allowed to claim an exemption from federal tax withholdings from their wages.  To claim this exemption, they must meet the following qualifications:

  1. Last year your child had no federal income tax liability, and
  2. This year your child expects to have no federal tax liability again.

To claim this special exemption on the Form W-4:

  1. Complete Step 1 (name and address).
  2. Leave blank Steps 2, 3 and 4.
  3. In the space below Step 4(c), your child will write “Exempt”.  By claiming “Exempt” no federal income taxes will be withheld from your child’s pay.

To learn more about how our child should claim Exempt on their W2, please watch our 3-minute video: Andrew Schwartz CPA on Kids Claiming Exempt on Their W4 Form – YouTube.

Assuming your child has no significant investment income and their wages earned will be less than $13,850 (the standard deduction for 2023), then there will be no federal tax liability for your child for 2023.  (Although there will be no federal income taxes withheld from the paycheck, your child will still be subject to social security and Medicare taxes being withheld from his or her paycheck.)   Additionally, if no federal income taxes are withheld, your child’s wages are below $13,850 for 2023, and there is no other income received by your child; then no federal tax return will be required to be filed by your child.

E-filing your child’s federal income tax return is quick, easy and free

If your child’s employer does withhold income taxes from your child’s pay and he or she is due a refund of all or a portion of the withheld taxes, your child can easily file a tax return the following year in order to get the withheld taxes refunded back.  The IRS offers a free e-file link on their website that taxpayers can use to easily e-file their tax return when income is below $73,000.  The IRS link to this free e-filing option is

Learning financial responsibility 

Earning a weekly paycheck is a great tool for children to learn about financial responsibility.   Receiving a weekly paycheck presents parents with the opportunity to teach their children about money management and savings goals.  Set up financial objectives with your child based upon their weekly wages.  Consider opening a savings account at your bank for your child that will be funded each week with a set percentage or set dollar amount of each paycheck received.  Teaching the importance of building a small “nest egg” to be used for college or other personal expenses at a later date (books for school, a first car, entertainment, school related trips, etc.) will teach your child the value and responsibility of earning a regular paycheck and saving a portion for future financial needs.   Also consider adding a “parent matching component” to your child’s savings objective to entice your child to save more – for every dollar they add to their savings account, you add 50 cents to their savings account as well.

Getting an early to start on retirement planning 

If your child has earned income from a summer job, he or she will be eligible to contribute to an IRA under their name, even if no tax return is required to be filed by your child.  The maximum IRA contribution amount for 2023 is limited to the lesser of the child’s earned income or $6,500.  In most cases, the income earned by your child will be free from income taxes, assuming total income for your child will be less than the standard deduction of $13,850; thus, in this situation there would be no tax benefit in contributing to a traditional deductible IRA.  The long-term benefit would be to make the IRA contribution into a Roth IRA.  The earnings in the Roth IRA grow tax free over your child’s lifetime.  Additionally, the Roth IRA contribution can be funded by the parents (or grandparents) as a gift to your child, but must be funded into an IRA under the child’s name.

“Life-Changing Events” Present Tax Implications and Planning Opportunities

Most taxpayers will encounter a life-changing event at some point in their lifetime.  Being proactive can result in significant long-term benefits, while avoiding the situation can result in missed opportunities.

Included below are common life-changing events and related taxpayer questions:

  1. Marriage or divorce: How should I adjust my W-4 or estimated tax payments, given my change in marital status?
  2. Buying a primary residence: How will my mortgage payments affect my taxes? We plan to make our prior residence a rental property – how will having a rental property impact our taxes, and what expenses can we claim as tax deductions for this new rental property?
  3. Buying a second residence: Are we allowed tax deductions on a second house?  How do we treat this property on our tax return if we plan to use it part-time as our personal vacation home and part-time as a rental property to others?
  4. Selling your primary residence or a second residence: Will we be subject to income taxes from the capital gain from this house sale?
  5. Having a child: What are the tax benefits of having a child?  Will we be able to claim a portion of our expenses for childcare costs as tax deductions?  What are the tax benefits of opening a 529 College Savings Plan for our newborn child?
  6. Becoming self-employed: What expenses can be claimed as tax deductions?  What are my retirement plan options now that I am no longer included in the retirement plan at my old job?  What do I do with the retirement funds still held at my prior employer’s plan?  How do I determine what to pay for quarterly estimated taxes?
  7. Loss of job and collecting unemployment: Are my unemployment benefits taxable?
  8. Receiving an inheritance or a significant financial gift: Will this income be taxable to me?
  9. Planning to retire in the coming year: How much of my retirement plan distributions (RMDs) and social security benefits received will be included as taxable income on my tax return?  Can I request income taxes to be withheld on this income?  At what age should I begin taking social security benefits?

These are just a sample of life-changing events taxpayers face and related questions that arise.  Whether the impact of the life-changing event is large or small, planning accordingly should improve your chances for a beneficial outcome.  As early as possible, communicate with your advisors for guidance in making prudent decisions.   And with proper planning, you can strive to avoid large tax surprises and to benefit by maximizing your cash flow going forward.


SECURE 2.0 Revises Retirement Planning Opportunities

SECURE 2.0 Act, enacted at the end of 2022, revises retirement planning opportunities for taxpayers.

Based on the 2019 Setting Every Community Up for Retirement Enhancement Act (SECURE Act), the law helps individuals better prepare for retirement and saving.

The following is a summary of some key provisions impacting retirement planning in the coming years.

  • The catch-up contribution limit for 401(k) and 403(b) plans is increased to $10,000 annually for employees ages 60 – 63 (age as of December 31) beginning in 2025.
  • The catch-up contribution to a 401(k) or 403(b) plan for an employee with wages in excess of $145,000 the previous year is required to be made as a Roth contribution beginning in 2024.
  • For 401(k) and 403(b) plans that allow Roth contributions, employees that are 100% vested can opt to have their employer matching and other non-elective contributions to their retirement plan be funded as a Roth contribution beginning in 2023.  The employer contributions to an employee’s Roth retirement account will be taxable income to the employee at the time funded.
  • SIMPLE plans will allow a Roth funding component beginning in 2023.
  • SEP-IRAs will allow a Roth funding component beginning in 2023.
  • With regard to “qualified student loan payments” made by employees, employers can make matching contributions to the employees’ 401(k) or 403(b) account with regard to those employee student loan payments (thus treating the loan payments as if they were salary deferrals), subject to limitations, beginning in 2024.

To learn more about the Secure 2.0 Act, the following articles give a great overview:


Estimated Taxes For the 2nd Quarter 2023 Are Due Thursday, June 15

If we set up for you to pay quarterly estimated taxes, please make your Q2 payment by June 15th. Generally, taxpayers who are self-employed, are shareholders in S-Corporations that typically pay out distributions in addition to the wages paid to the owners, partners in profitable partnerships, and/or report a good amount of investment income should consider paying in estimated taxes during the year.

The IRS now recommends that individuals make their estimated tax payments electronically.  Read more at: National Small Business Week: Making estimated tax payments electronically is fast and easy | Internal Revenue Service (

To pay your estimated taxes electronically, go to, click on Make a Payment and then click on Pay Now with Direct Debit.  Follow the prompts and make the payment by direct debit from your bank account.  Other options are available to pay your estimated taxes including how pay them by credit card and the associated fees to do so.