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Issue Number:  2022-11

Inside This Issue

1. Security Summit week focuses on identity theft
2. More taxpayers to receive a Form 1099-K
3. Renew PTINs for tax year 2023
4. Treasury and IRS expand program for approving certain retirement plans
5. Taxpayers should review the 401(k) and IRA limit increases for 2023
6. Taxpayer Bill of Rights
7. Technical guidance
8. New/draft forms and instructions on IRS.gov

  1.  Security Summit week focuses on identity theft

It’s not too late to join the 7th annual National Tax Security Awareness Week that’s currently taking place and ends Friday December 2, 2022. The event features a series of educational materials to help protect individuals, businesses and payroll professionals from identity theft.

As part of the week, there are several new IRS educational posters for sharing that are now available to raise awareness on key points being addressed such as:

• Publication 5461, Protect personal and financial information online
• Publication 5461-B, Get an Identity Protection PIN
• Publication 5461-C, Businesses should watch out for tax-related scams and implement safeguards
• Publication 5461-D, Tax professionals should review their security protocols
• Publication 5709, How to Create a Written Information Security Plan for Data Safety

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  2.  More taxpayers to receive a Form 1099-K

The IRS reminds taxpayers earning income from selling goods and/or providing services that they may receive Form 1099-K, Payment Card and Third-Party Network Transactions, for payment card transactions and third-party payment network transactions of more than $600 for the year.

There is no change to the taxability of income – the only change is to the reporting rules for Form 1099-K. As before, income, including from part-time work, side jobs or the sale of goods, is still taxable. Taxpayers must report all income on their tax return unless it is excluded by law, whether they receive a Form 1099-NEC, Nonemployee Compensation, Form 1099-K or any other information return.

The IRS also emphasizes that money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable. If a Form 1099-K is incorrect and reflects income they didn’t earn, they should call the issuer. The IRS cannot correct it.

Additional income from Forms 1099-K may require taxpayers to begin making estimated tax payments. By law, taxpayers must pay tax on income as they earn it throughout the year. It is important for taxpayers to know they should pay at least 90% of their taxes during the year. Taxpayers should monitor their income throughout the year. For small business owners and self-employed people who don’t have withholding to adjust, this usually means making quarterly estimated tax payments.

Find more information on the Understanding your Form 1099-K and the new 1099-K Frequently Asked Questions IRS.gov webpages.

A note to payment settlement entities – Payment card transactions and third-party payment network transactions of more than $600 for the year, must be filed on a Form 1099-K by January 31, 2023. Again, there is no change to the taxability of income – the only change is to the reporting rules for Form 1099-K.

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  3.  Renew PTINs for tax year 2023

The IRS reminds tax return preparers that current Preparer Tax Identification Numbers (PTINs) expire December 31, 2022 and they will need to renew their PTIN before the 2023 filing season.

The online PTIN renewal process takes about 15 minutes to complete. Anyone who receives compensation for preparing a federal tax return must have a valid IRS-issued PTIN and needs to include it as the identifying number on any prepared return filed with the IRS.

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  4.  IRS expand program for approving certain retirement plans

The IRS is expanding of one of its programs for approving retirement plans. The IRS now allows certain public schools, churches and charities with 403(b) retirement plans to use the same individually designed retirement plan determination letter program as qualified retirement plans.

Find details about this program expansion and other changes affecting individually designed retirement plans in Revenue Procedure 2022-40.

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  5.  Taxpayers should review the 401(k) and IRA limit increases for 2023

The amount individuals can contribute to their 401(k) plans in 2023 will increase to $22,500 -- up from $20,500 for 2022.

In addition, the income ranges for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth IRAs and claim the Saver's Credit will also increase for 2023.

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  6.  Taxpayer Bill of Rights

By law, all taxpayers have fundamental rights when interacting with the IRS. It's important that all taxpayers know and understand their rights.

The Taxpayer Bill of Rights presents these rights in 10 categories.

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  7.  Technical guidance

Revenue Procedure 2022-38 – The IRS announces the 2023 tax year annual inflation adjustments for more than 60 other tax provisions, including tax rate schedules.

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  8.  New/draft forms and instructions on IRS.gov

Draft forms

• Form W-2, Wage and Tax Statement (Info Copy Only)
• Form W-2AS, American Samoa Wage and Tax Statement (Info Copy Only)
• Form W-2GU, Guam Wage and Tax Statement (Info Copy Only)

New forms

• Form 1094-B, Transmittal of Health Coverage Information Returns
• Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
• Form 1095-B, Health Coverage
• Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
• Form 8889, Health Savings Accounts (HSAs)
• Form 8922, Third-Party Sick Pay Recap

Draft instructions

• Instruction 1094-C and 1095-C, Instructions for Forms 1094-C and 1095-C

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