Today we have brought together important information for the upcoming tax season. With this, we also put together upcoming due dates. Please check these out and feel free to contact the DPW office if you have any questions, comments, or concerns about the information or due dates!
Forms 1099
Businesses (including Schedule C’s; farms, rentals, etc.) are required to prepare these annual informational returns for certain amounts paid during the conduct of their trade or business.
Recipient copies are required to be issued by January 31, 2023.
THIS HAS BECOME AN AREA OF INCREASED FOCUS FOR THE IRS, MAKING IT EVEN MORE IMPORTANT TO MEET FILING REQUIREMENTS.
We will be issuing more detailed information on this subject before the end of the year, including any upcoming changes.
Please click HERE for more information on the 1099 Forms.
Health insurance for S Corp officers must be reported on their W-2s.
Suppose your company uses an outside payroll service. In that case, the payroll service must be provided with this information prior to the end of the year so that it can be included in the shareholder employee’s W-2 form. If the information is not provided to the payroll service in a timely manner, they may charge an additional fee to rerun affected W-2s.
If you process your payroll, work with your accountant to ensure proper reporting.
Metro/Local Taxes
Oregon cities and localities have introduced several new taxes over the last year or so. Depending on where you live, where you work or where your business performs services, there could be city or local taxes that will need to be paid come tax time. Here are a couple of the new taxes that are being assessed for the Portland city and metro areas:
Metro Supportive Housing Tax
For taxpayers that live in the metro area, work in the metro area, or have income derived from the metro area there will be a 1% tax assessed on that income for married filing joint tax filers with more than $200,000 taxable income ($125,000 for single filers). The tax is assessed on the taxable income above that threshold, for example, a single filer earning $150,000 in the metro area would incur $250 for this tax.
Remember, this is for the Portland metro area, not any specific city. You can use the tool linked below to determine whether you may be in the area affected by this tax. Addresses in Wilsonville, Hillsboro, Happy Valley, and Gresham could be included in this metro area. HERE
Multnomah County Preschool For All Tax
For taxpayers that live in Multnomah County, work in Multnomah County, or have income derived from Multnomah County there will be a 1.5% tax assessed on that income for married filing joint tax filers with more than $200,000 taxable income ($125,000 for single filers). The tax is assessed on the taxable income above that threshold, for example, a single filer earning $150,000 in Multnomah County would incur $375 for this tax.
There is an additional 0.8% assessed on higher income earners. For a couple filing a joint return, the additional tax would be on income over $400,000 ($250,000 for single filers).
To determine whether you, an employer, or a customer are in Multnomah County and potentially subject to this tax, please use the following tool. HERE
These two taxes were both effective January 1st, 2021. Wage withholdings for these taxes began in January 2022. We want to ensure that we have worked with our clients to make them aware of these taxes as well as work with them to be compliant moving forward. Please contact us if you have any questions regarding these local taxes.
Corporate Activity Tax (CAT)
The 2022 Corporate Activity Tax return is due April 18, 2023. If your gross receipts for 2022 exceed $750,000 and have not already registered, click here to get registered with the Oregon Department of Revenue via Revenue Online.
Because the cost of sales is a potential deduction for this tax, now would be a good time to review your Chart of Accounts to make sure expense categories are properly reporting in the Cost of Goods Sold section of your books. Also, if you are not currently allocating your payroll between the Cost of Goods Sold and Operating Expenses, we would strongly recommend getting that set up properly.
If you have several separate business entities, for the purposes of this tax, they may be considered a single unitary group and be required to file a single combined return.
The law establishing the CAT does not prohibit any business from recovering a business expense when setting the total price for the sale, lease, or license of an item or the sale of a service. The CAT is imposed on the entity doing business in Oregon and is considered part of the business’s expenses. A business may include a CAT surcharge when setting the total price charged to customers. However, the total price charged (including any amount estimated to be attributable to the CAT) is included in the business’s commercial activity. Please contact us to help you to determine the appropriate recovery rate.
To better understand how CAT tax affects your business, please contact us
Oregon Pass-Through Entity Tax Election (PTE-E)
If you own an S Corporation or Partnership and want your PTE-E tax payments deductible for 2022, the payments MUST be made before December 31st, 2022. Please contact us if you have any questions or want assistance estimating the amount.
Personal Property Return
All businesses (Schedule C’s and farms included) and non-profits are required to file an annual Personal Property Tax Return with their county assessor’s office for all personal property owned as of January 1, 2023.
You may or may not receive the necessary form for this purpose from the County Assessor at the beginning of 2023. Extensions are not available, and penalties will be assessed on late-filed returns.
If you need our assistance in preparing any of these forms or have any questions regarding filing requirements, please contact us by January 31, 2023. Click here for more information regarding Personal Property Tax Returns.
If you would like our support, click here for Personal Property Tax Engagement Letter.
Dates for W-2s
W-2 and W-3 government forms must be filed by January 31, 2023. The employee copies of W-2s must be mailed or distributed no later than January 31, 2023, as well.
Personal Use of a Corporate Auto
W-2s MUST include any owners/employees’ personal use of a company-owned or leased vehicle. This amount is included in calculating Social Security tax. We have the information to help you calculate the amounts to report to your payroll service. You should notify your payroll service before they process your last payroll for the calendar year, otherwise, you could incur additional charges.
SUI Rate Change for Payroll Tax
If you receive a letter from the Employment Department for a State Unemployment Tax rate change, please update your SUI rate as of January 1, 2023. If you are using a payroll service, please send the letter to them so they have accurate information to begin processing payroll that month.
Mileage Logs
The IRS has been auditing business mileage reimbursements and expenses, travel logs, and personal use of corporate vehicles. If you have not already done so, please keep track of business and personal mileage, especially if you are deducting actual expenses from your corporation. Keep a travel log in your vehicle; keep receipts for repairs, gas, and other related items.
DPW TAX DEPARTMENT
