Unveiling Michigan’s Top 10 Overlooked Tax Deductions: A Guide to Maximize Returns

On April 21, 2024   /   ATS Advisors, Michigan Taxes  
Unveiling Michigan’s Top 10 Overlooked Tax Deductions: A Guide to Maximize Returns
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Michigan’s Top 10 Overlooked Tax Deductions: Tax season always brings a mix of anticipation and trepidation. For Michigan residents, navigating the intricate web of tax deductions can be particularly daunting. Yet, buried within the tax code are hidden gems that often go unnoticed. Here’s a retrospective glance at the top 10 most overlooked tax deductions for Michigan residents, unveiling opportunities to maximize returns and ease the tax burden.

  1. Home Office Deduction: Many Michiganders who operate a business from home fail to claim the home office deduction. Whether you’re a freelancer, consultant, or small business owner, you may be eligible to deduct a portion of your home-related expenses, such as utilities, mortgage interest, and property taxes.
  2. Charitable Contributions: Donations to charitable organizations often qualify for deductions, but Michiganders sometimes overlook this benefit. Whether it’s cash donations, goods, or mileage driven for volunteering purposes, these contributions can significantly reduce taxable income.
  3. Educator Expenses: Teachers and educators in Michigan often dip into their own pockets to purchase classroom supplies. Fortunately, they can claim a deduction of up to $250 for these expenses, including books, supplies, and other materials.
  4. State Sales Tax Deduction: While Michigan doesn’t impose a state sales tax, residents can still benefit from deducting sales taxes paid on large purchases, such as vehicles or boats. This deduction is particularly valuable for those who itemize deductions rather than opting for the standard deduction.
  5. Job Search Expenses: Job hunting can be costly, but the expenses incurred, such as transportation, resume printing, and agency fees, are often overlooked as deductible. Michiganders actively seeking new employment opportunities should keep track of these expenses for potential tax savings.
  6. Medical and Dental Expenses: Health-related expenses, including medical and dental treatments, can add up quickly. Michiganders who itemize deductions can include these costs if they exceed a certain percentage of their adjusted gross income, potentially providing substantial tax relief.
  7. Moving Expenses: While moving expenses are no longer deductible at the federal level for most taxpayers, Michigan still allows deductions for certain moving expenses related to starting a new job. Keep track of these expenses, including transportation, storage, and lodging costs.
  8. Unreimbursed Business Expenses: Employees who incur expenses related to their jobs, such as travel, meals, and uniforms, and are not reimbursed by their employers, may be eligible for deductions. This often overlooked deduction can provide significant tax savings for Michigan residents.
  9. Energy-Efficient Home Improvements: Making energy-efficient upgrades to your Michigan home not only saves on utility bills but also qualifies for tax credits. From installing solar panels to upgrading insulation, these improvements can yield both environmental and financial benefits.
  10. Gambling Losses: While gambling winnings are taxable, losses can be deducted up to the amount of winnings. Michigan residents who enjoy a night at the casino or participate in other forms of gambling should keep meticulous records of losses to offset taxable income.

As tax season approaches, Michigan residents should take advantage of these often overlooked deductions to optimize their tax returns. However, navigating the complexities of the tax code can be challenging. For personalized tax assistance and guidance tailored to your specific needs, consider reaching out to ATS Advisors. Their team of experts is dedicated to helping Michigan residents navigate the intricacies of taxation and maximize their financial well-being. Don’t let valuable deductions slip through the cracks—seize the opportunity to unlock potential tax savings and utilize Michigan’s Top 10 Overlooked Tax Deductions.

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5 Michigan Small Business Tax Benefits You Might Not Know

On April 11, 2024   /   IRS, Michigan Taxes  
5 Michigan Small Business Tax Benefits You Might Not Know
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5 Michigan Small Business Tax Benefits You Might Not Know – Need help? Contact ATS Advisors

As a small business owner in Michigan, navigating the tax landscape can be overwhelming. But fear not! There are several tax benefits and write-offs available to you that you might not be aware of. Let’s dive into five of these gems:

  1. Federal Section 179 Deduction: This deduction allowed small businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. It was a boon for businesses looking to invest in growth while reducing their tax burden.
  2. Michigan Small Business Tax Credit: Michigan offers a Small Business Alternative Credit for certain small businesses. This credit provides relief by reducing the Michigan Business Tax (MBT) liability for qualifying small businesses.
  3. Federal Research and Development Tax Credit: Small businesses engaging in qualified research activities may be eligible for this federal tax credit. It’s designed to encourage innovation and growth by providing a credit for a percentage of qualified research expenses.
  4. Michigan Net Operating Loss (NOL) Carryforward: If your business experienced a net operating loss in Michigan, you can carry that loss forward to offset future taxable income. This provision helps businesses weather tough times and stay afloat during periods of financial difficulty.
  5. Federal Qualified Business Income Deduction (QBI): The QBI deduction allows eligible small businesses to deduct up to 20% of their qualified business income from partnerships, S corporations, sole proprietorships, and certain trusts and estates. This deduction can result in significant tax savings for qualifying businesses.

These tax benefits and deductions can make a meaningful difference for small businesses in Michigan, providing much-needed relief and incentivizing growth and innovation. However, it’s important to consult with a tax professional to ensure that you’re taking full advantage of all available opportunities and complying with relevant tax laws and regulations.

In conclusion, while taxes may never be a small business owner’s favorite topic, knowing about and leveraging these tax benefits can lighten the burden and help your business thrive in the Great Lakes State.

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Michigan Gift Tax: A Few Things To Know

On April 1, 2024   /   Michigan Taxes  
Michigan Gift Tax: A Few Things To Know
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In the annals of Michigan’s tax history, the Michigan Gift Tax stands as a notable chapter, albeit one now consigned to the past. Enacted in 1971, the tax was designed to levy charges on gratuitous transfers of property or assets. Essentially, it was the state’s way of ensuring that gifts, large or small, didn’t evade the taxman’s gaze.

The concept of a gift tax isn’t unique to Michigan; it’s a feature of many state and federal tax codes. In essence, it’s a tax on the transfer of property by one individual to another without any consideration or payment in return. The idea is to prevent people from avoiding inheritance or estate taxes by giving away their assets before they die.

For Michigan residents, the Gift Tax was a reality they needed to navigate, particularly when considering generous gestures or estate planning. It applied to both tangible and intangible gifts, ranging from cash and real estate to stocks and bonds. The tax rate varied depending on the value of the gift and the relationship between the donor and the recipient.

However, Michigan’s Gift Tax era came to an end in 2013 when it was repealed, much to the relief of many residents and estate planners. This repeal brought Michigan in line with federal gift tax laws, which meant that most individuals were no longer subject to state-level gift taxes.

For those who may have questions about past dealings with the Michigan Gift Tax or require assistance with current tax matters, there are avenues to explore. Michigan residents, in particular, may find valuable guidance by reaching out to ATS Advisors. With their expertise in tax planning and compliance, they can provide tailored advice and support to ensure individuals navigate Michigan’s tax landscape smoothly.

As with any tax-related issue, it’s essential to stay informed and seek professional assistance when needed. While the Michigan Gift Tax may be a thing of the past, staying abreast of current tax laws and regulations remains crucial for all residents. And for those who may find themselves in need of guidance, ATS Advisors stands ready to lend a helping hand.

Still have questions? Here is some more info!

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Michigan Tax Credits For Renewable Energy

On March 27, 2024   /   Michigan Taxes  
Michigan Tax Credits For Renewable Energy
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Exploring Michigan Tax Credits for Renewable Energy

Live in Michigan? Need tax assistance? Contact ATS Advisors!

In an era marked by growing environmental awareness and the urgent need to transition towards sustainable energy sources, Michigan offers various tax credits aimed at incentivizing investments in renewable energy. Understanding these tax credits can not only help individuals and businesses contribute to a cleaner environment but also benefit financially. Let’s delve into the key tax credits available for renewable energy in Michigan:

1. Solar Energy Tax Credits:

  • Residential Solar Energy Credit: Michigan residents investing in solar energy systems for their homes can avail themselves of a generous tax credit. This credit covers a percentage of the cost of installing solar panels, helping homeowners offset initial expenses.
  • Commercial Solar Energy Credit: Businesses that choose to integrate solar energy systems into their operations can also benefit from tax credits. These credits encourage commercial entities to embrace sustainable energy solutions, reducing their carbon footprint while enjoying financial incentives.

2. Wind Energy Tax Credits:

  • Small Wind Energy Credit: Michigan provides tax credits to individuals or businesses installing small wind energy systems on their properties. These credits aim to promote the adoption of wind power as a viable renewable energy source, particularly for rural communities and agricultural operations.

3. Geothermal Energy Tax Credits:

  • Residential Geothermal Energy Credit: Homeowners opting for geothermal heating and cooling systems can take advantage of tax credits offered by Michigan. These credits help offset the upfront costs associated with installing geothermal systems, making them a more accessible option for residential properties.

4. Biomass and Other Renewable Energy Sources:

  • Biomass Energy Credit: Michigan supports the use of biomass energy through tax credits, encouraging the utilization of organic materials for power generation.
  • Other Renewable Energy Credits: Various other renewable energy sources, such as hydroelectric power and fuel cells, may also qualify for tax credits in Michigan, promoting a diverse and sustainable energy portfolio.

By leveraging these credits, individuals and businesses in Michigan can not only contribute to the state’s renewable energy goals but also enjoy significant financial benefits. Investing in renewable energy not only reduces reliance on fossil fuels but also fosters a cleaner and more sustainable future for generations to come.

 

 

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Understanding the Michigan Homestead Tax Credit: A Guide to Maximizing Savings

On March 12, 2024   /   Michigan Taxes  
Understanding the Michigan Homestead Tax Credit: A Guide to Maximizing Savings
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Understanding the Michigan Homestead Tax Credit is a valuable resource for homeowners in the state, designed to alleviate the financial burden of property taxes. Established to assist low- and moderate-income homeowners, this credit can significantly reduce the amount of taxes owed, providing much-needed relief for families across Michigan.

Live in Michigan? Need tax help? Contact ATS Advisors!

So, what exactly is the Michigan Homestead Property Tax Credit? Essentially, it’s a credit available to eligible homeowners who pay property taxes or rent on their primary residence in Michigan. The credit is calculated based on a variety of factors, including household income, property taxes paid, and the size of the household. The aim is to ensure that those with lower incomes receive more substantial benefits, thereby promoting housing affordability and stability.

One of the key features of the Homestead Property Tax Credit is its ability to provide direct financial assistance to homeowners struggling to meet their tax obligations. By reducing the amount of taxes owed, this credit can free up much-needed funds for other essential expenses, such as groceries, utilities, and healthcare costs. For many families, especially those on fixed incomes or facing financial hardships, the Homestead Credit can make a significant difference in their quality of life.

But how can homeowners in Michigan take advantage of this valuable credit? The process begins with determining eligibility. Generally, to qualify for the Homestead Property Tax Credit, homeowners must meet certain criteria, including residency requirements, income limits, and property tax payments. Eligibility is typically based on factors such as household income, marital status, and age, so it’s essential to review the specific requirements outlined by the Michigan Department of Treasury.

Once eligibility is established, homeowners can apply for the Homestead Property Tax Credit by completing the appropriate forms and submitting them to the Department of Treasury. These forms typically require detailed information about household income, property taxes paid, and other relevant financial data. It’s crucial to ensure accuracy when completing these forms to avoid delays or complications in processing.

After submitting the application, homeowners can expect to receive notification of their eligibility and the amount of the credit they qualify for. This credit can then be applied directly to their property tax bill, reducing the amount owed or providing a refund if the credit exceeds the tax liability. Additionally, eligible renters may also receive a portion of the credit based on their rental payments and income level.

In conclusion, the Michigan Homestead Property Tax Credit is a valuable resource for homeowners, offering financial assistance to those in need. By understanding the eligibility criteria and application process, homeowners can take full advantage of this credit, maximizing savings and easing the burden of property taxes. For more information on the Homestead Property Tax Credit and how to apply, homeowners are encouraged to contact the Michigan Department of Treasury or consult with a tax professional.

Visit Michigan.govs website for additional information on Understanding the Michigan Homestead Tax Credit.

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Three New Tax Changes Impacting Michigan Residents in 2023

On March 5, 2024   /   Michigan Taxes  
Three New Tax Changes Impacting Michigan Residents in 2023
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Three New Tax Changes Impacting Michigan Residents in 2023

Live in Michigan? Need to have your taxes handled? Contact ATS Advisors today!

As the calendar flipped to 2023, Michigan residents found themselves greeted with several notable changes to their state tax laws. From adjustments in deductions to alterations in tax brackets, these modifications bring both challenges and opportunities for taxpayers across the Great Lakes State.

1. Increased Standard Deduction:

One of the most significant changes affecting Michigan residents in 2023 is the increase in the standard deduction. This adjustment aims to provide tax relief for individuals and families by allowing them to deduct a larger portion of their income before calculating taxes owed. For single filers, the standard deduction rose to $6,600, up from $6,350 in the previous tax year. Married couples filing jointly now enjoy a standard deduction of $13,200, an increase from $12,700. This change translates into potential savings for taxpayers across various income levels, providing welcome relief for many Michigan households.

2. Revised Tax Brackets:

Another key modification impacting Michigan taxpayers is the adjustment to tax brackets. Tax brackets determine the rate at which different levels of income are taxed, and changes to these brackets can significantly influence individuals’ tax liabilities. In 2023, Michigan implemented a slight restructuring of its tax brackets, resulting in adjustments to the rates applied to different income thresholds. While the changes were relatively minor, they can still have a meaningful impact on taxpayers, particularly those with incomes near the thresholds of different brackets. Taxpayers should review the new brackets carefully to ensure accurate tax planning and compliance.

3. Expanded Credits for Education Expenses:

Michigan residents investing in education received some welcome news in 2023, as the state expanded credits for education expenses. This change allows eligible taxpayers to claim a credit against their state taxes for qualified education expenses, such as tuition and fees paid for higher education. The expansion of these credits provides additional support to individuals and families striving to pursue educational opportunities and further their skills and knowledge. By reducing the tax burden associated with education expenses, Michigan aims to promote access to education and workforce development, fostering economic growth and prosperity across the state.

In conclusion, the tax changes introduced in Michigan for the year 2023 bring a mix of benefits and adjustments for residents. With an increased standard deduction offering potential savings, revised tax brackets influencing rates, and expanded credits for education expenses providing support for learners, taxpayers must familiarize themselves with these changes to navigate the tax landscape effectively. By staying informed and leveraging available deductions and credits, Michigan residents can optimize their tax strategies and minimize their tax liabilities in the year ahead.

Click here to read other Michigan tax changes!

Three New Tax Changes Impacting Michigan Residents in 2023 – Ryan Garchar

 

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How To File Taxes for a Small Business and W2

On February 21, 2024   /   IRS, starting a business  
How To File Taxes for a Small Business and W2
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What to do if you receive a W-2 and a 1099?

The majority of American taxpayers fall into one of two categories. Self-employed individuals are paid by a company for work or services performed and receive a 1099 tax form.  People who are employees on a company’s payroll and receive a regular paycheck receive a W-2 tax form. Some people receive both. In any of these cases, questions like “What are W2s” and “What’s a W2 vs W9,” as well as information on how to file w2 and 1099 taxes together, become really important, especially as tax deadlines near. Understanding the 1099 vs W2 vs W9 (and many more) is crucial when filing an accurate tax return. Knowing the differences between the 1099 and W2, especially, is important so you can know your tax obligations throughout the year.
Live in Michigan? Need Tax assistance? Contact ATS Advisors!

Key takeaways

  • A W-2 form reports employee income, a 1099 reports freelance income
  • Both W-2s and 1099s are needed for a taxpayer to file an accurate 1040 form
  • W-2 taxpayers have taxes withheld from their paychecks, 1099 taxpayers do not

Taxes in 1099 vs W2

The main differences between a 1099 vs W2 situation are how payment is made for work and how income tax gets paid to the IRS. Employees who work for a corporation receive a regular paycheck, and the income and Social Security tax they owe are automatically taken out, or “withheld,” as the IRS says.

1099 and W2 in same year

Some people have a W-2 job and a side gig or small business where they’re the sole proprietor. If you’re on the schedule each week at Home Depot, and you get a paycheck from the company every two weeks, but you also do carpentry work for clients on the side, you will receive a W2 and 1099 from these different employer entities. The 1099 will come from clients, and the W-2 will come from Home Depot at the end of the tax year. It might happen that one of your clients is a construction company that really likes the work you did as a freelancer and offers you a full-time W-2 job. So, How To File Taxes for a Small Business and W2? In that case, you’ll receive both a 1099 and a W-2 from that company, and you’ll be reporting both types of income when you file your 1040 form at the end of the year.

When do W2 have to be sent out?

There is no difference in the sending deadlines for 1099 vs W2 forms. The IRS requires companies with W-2 employees to send W-2 forms no later than January 31 each year so those employees can file their tax returns accurately and on time. Companies who pay self-employed people have the same deadline to send 1099s to the IRS and to people they have paid. But anyone self-employed needs to pay self-employment taxes on the income. The difference between 1099 and W2 forms is that W-2 employees have already paid tax in the form of withholdings from their earnings, and 1099 workers have yet to pay income tax to the IRS.
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Small Business Tax Credits 2023

On February 8, 2024   /   IRS  
Small Business Tax Credits 2023
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Live in Michigan? Need tax assistance? Contact ATS Advisors

The Internal Revenue Service today urged business taxpayers to begin planning now to take advantage of tax-saving opportunities and get ready for reporting changes that take effect in 2023.

There are a variety of small business tax credits that can be taken advantage of so continue reading!

During National Small Business Week, April 30 to May 6, the IRS is joining the Small Business Administration and others in both the public and private sector to celebrate the hard work, ingenuity and dedication of America’s small businesses and their contributions to the economy.

With next year’s filing deadline nearly a year away, entrepreneurs still have time to identify possible tax benefits, take action to qualify for them and then claim them when they file in 2024. They also have time to plan for reporting changes and even claim overlooked tax benefits from the recent past.

Cutting energy costs for small businesses

The Inflation Reduction Act (IRA), enacted last summer, includes provisions that can save small business owners money on energy costs. For example:

  • Small businesses can receive a tax credit covering 30% of the cost of switching over to low-cost solar power, lowering operating costs and protecting against volatile energy prices.
  • Small business building owners can receive a tax credit up to $5 per square foot to support energy efficiency improvements that deliver lower utility bills.
  • Through the Clean Commercial Vehicle Credit, small businesses that use vehicles such as trucks and vans can benefit from tax credits up to 30% of purchase costs for clean commercial vehicles, like electric and fuel cell models that meet applicable requirements. There is no limit on the number of Clean Commercial Vehicle credits a business can claim.

These credits are nonrefundable, so businesses can’t get back more on the credit than they owe in taxes.

Employee Retention Credit: Claim it if eligible but avoid ERC scams

Eligible employers who overlooked the Employee Retention Credit (ERC) when they filed payroll tax returns for 2020 and 2021 can still claim it by filing an amended federal payroll tax return.

At the same time, the IRS has warned businesses not to fall victim to one of the many ERC-related scams being promoted online, in social media, on the radio and even phone calls and emails. Anyone who improperly claims the ERC has to pay it back, possibly with penalties and interest, so it’s important to avoid getting scammed.

Among other things, scammers misrepresent many features of the ERC and in some cases are merely using the credit as a ploy to steal the taxpayer’s identity or take a cut of the taxpayer’s improperly claimed credit. Eligible employers who need help claiming the credit should work with a trusted tax professional, not one of these scammers. ERC scams are so widespread this year that the IRS added them to its annual Dirty Dozen list of tax scams.

The ERC is designed to help employers who kept paying their employees while shut down during the pandemic or who suffered a significant decline in gross receipts during the eligibility period. The ERC is a payroll tax credit, not an income tax credit, and it was available only during 2020 and 2021.

Most eligible employers who overlooked the credit can still claim it by filing Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, available on IRS.gov. Form 941-X filers and businesses that file other types of returns can visit IRS.gov/ERC for details, forms and instructions.

Educational assistance programs can be used to pay student loans

Employers who have educational assistance programs can use them to help pay student loan obligations for their employees.

Though educational assistance programs have been available for many years, the option to use them to pay student loans has been available only for payments made after March 27, 2020, and, under current law, will continue to be available until Dec. 31, 2025.

Traditionally, educational assistance programs have been used to pay for books, equipment, supplies, fees, tuition and other education expenses for the employee. These programs can now also be used to pay principal and interest on an employee’s qualified education loans. Payments made directly to the lender, as well as those made to the employee, qualify.

By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.

Employers who don’t have an educational assistance program may want to consider setting one up. In a tight labor market, worthwhile fringe benefits such as educational assistance programs can help employers attract and retain good workers.

These programs must be in writing and cannot discriminate in favor of highly compensated employees. For information on other requirements, see Publication 15-B, Employer’s Tax Guide to Fringe Benefits. For details on what qualifies as a student loan, see Chapter 10 in Publication 970, Tax Benefits for Education.

More people will receive 1099-Ks

Starting in 2023, businesses and other taxpayers who receive more than $600 in income from third-party settlement organizations, including popular payment apps, may receive Forms 1099-K, Payment Card and Third Party Network Transactions. Typically, they’ll receive these reporting forms during January 2024.

The $600 reporting threshold is lower than it’s been in the past. For that reason, some people and businesses may receive a Form 1099-K that didn’t receive one in previous years.

There are no changes to what counts as income or how tax is calculated. For business taxpayers, most income is taxable, even if it’s not reported to them on a 1099 or another form issued by a third party.
The 1099-K reports various business transactions, including income from:

  • A business the taxpayer owns.
  • Self-employment.
  • Activities in the gig economy.
  • The sale of personal items and assets.

Good recordkeeping is key. For more information, visit the Understanding Your Form 1099-K page on IRS.gov.

Other tax benefits

From business start-up expenses and the home office deduction to the qualified business income deduction and the health-insurance deduction for self-employed individuals, there are a variety of tax benefits that may be available to entrepreneurs and other business owners.

For details on these and other tax benefits see Publication 535, Business Expenses. Details on another major expense for most businesses, depreciation of buildings, equipment and other assets can be found in Publication 946, How to Depreciate Property.

Yet another worthwhile resource for any small business is the agency’s Publication 334, Tax Guide for Small Business. All these publications are available on IRS.gov.

For more information featuring useful tax-related tools and resources to help small business owners, employers and self-employed individuals succeed visit the IRS.gov Small Business Week webpage.

Small Business Tax Credits 2023

Your general business credit for the year consists of your carryforward of business credits from prior years plus the total of your current year business credits. In addition, your general business credit for the current year may be increased later by the carryback of business credits from later years. You subtract this credit directly from your tax.

Most of the following credits are part of the general business credit. The form you use to figure each credit is shown below.

How to Claim the Credit

To claim a general business credit, you will first have to get the forms you need to claim your current year business credits.

In addition to the credit form, in most cases you may also need to file Form 3800.

If you file a Form 1040 or 1040-SR Schedule C, you may be eligible to claim the Earned Income Tax Credit (EITC). To learn more about EITC, refer to It’s easier than ever to find out if you qualify for EITC, or use the EITC Assistant to find out if you are eligible.

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Filing season has begun (3 Tips)

On January 30, 2024   /   IRS  
Filing season has begun (3 Tips)
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IR-2024-26, Jan. 29, 2024

Have a small business in MI? Contact ATS Advisors today!

WASHINGTON — Filing season has begun (3 Tips) to get you off to a great start. The Internal Revenue Service today reminded employers of the Jan. 31 deadline to file Forms W-2 and other wage statements with the Social Security Administration (SSA).

Filing these documents timely prevents late-filing penalties for employers, helps employees file their income tax returns and prevents tax fraud.

Employers must file copies of their 2023 Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the SSA by Jan. 31, whether filing electronically or by paper forms.

Employers must also provide copies B, C and 2 of Form W-2 to their employees by Jan. 31. For more information on filing Form W-2, see General Instructions for Forms W-2 and W-3.

The Jan. 31 deadline also applies to Forms 1099-NEC filed with the IRS to report non-employee compensation to independent contractors. Employers and payers can review the Instructions for Forms 1099-MISC and 1099-NECPDF for details and other due dates.

Employer Identification Numbers

Employers need to make sure the employer identification number (EIN) on their wage and tax statements (Forms W-2, W-3, etc.) and their payroll tax returns (Forms 941, 943, 944, etc.) match the EIN the IRS assigned to their business.

Do not use a Social Security number (SSN) or Individual Taxpayer Identification number (ITIN) on forms that ask for an EIN, and never truncate EINs or SSNs on any forms.

Extensions

Employers may request a 30-day extension to file Forms W-2 with SSA by submitting Form 8809, Application for Extension of Time to File Information Returns, by Jan. 31. Additionally, extensions of time to furnish Forms W-2 to employees must also occur by Jan. 31.

For detailed information and instructions on how to file an extension of time to furnish Forms W-2 to employees or to request a 30-day extension with the SSA, see Form 8809 and General Instructions for Forms W-2 and W-3.

Electronic filing

Beginning Jan. 1, 2024, the electronic filing threshold for information returns reduced from 250 to 10 for filing season 2024. Filers need to combine all information return types they file to determine if they meet the 10-return threshold and if the requirement to file electronically applies to them.

The IRS offers a free e-file service for the Form 1099 series, the Information Returns Intake System (IRIS) Taxpayer Portal. IRIS is a web-based platform that is accurate, convenient, easy to use, secure and doesn’t require any additional software. Learn more about e-filing information returns with IRIS and its features.

For help with filing information returns electronically, review Publication 1220, Specification for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2GPDF and the Filing Information Returns Electronically (FIRE) webpage.

E-filing is the most secure and accurate method to file returns, and saves taxpayers time and prevents delays in processing returns.

For more information about e-filing Forms W-2 visit the SSA’s Business Services Online, and Employer W-2 Filing Instructions & Information and Publication 15, Employer’s Tax Guide.

 

Filing season has begun (3 Tips)

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Michigan Sales Tax On Rental Equipment

On January 16, 2024   /   Michigan Taxes  
Michigan Sales Tax On Rental Equipment
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Have a Small Business in Michigan? Contact ATS Advisors to handle all of your tax needs and financial questions!

What is the Heavy Equipment Owners Excise Tax?

Issued under authority of Public Act 35 of 2022

  • Beginning January 1, 2023, this tax is levied on each transaction of a qualified renter for renting eligible personal property.
  • Qualified renter is imposed a 2% tax of the rental price directly on the customer that rents qualified heavy equipment.
  • Qualified renter collects the tax as part of the rental payment made by the customer and remits return and payment to the Michigan Department of Treasury.
  • Returns are due quarterly as follows: April 30th, July 31st, October 31st, and January 31st.
  • Amounts reported must be reported separately for each qualified renter business location.
  • Form 5815 can be remitted via email to: Treas-HeavyEquip-Customer-Support@michigan.gov
  • If sending a payment separately, Payment Voucher Form 5851, must be filled out completely and returned to:

Michigan Department of Treasury
P.O. Box 30830
Lansing, MI 48909

How To Claim An Exemption

To claim the exemption, eligible taxpayers would need to first file Form 5819 with the assessor of the local unit in which the qualified renter business location is set up.

  • This is the location where the rental equipment is stored when it is not rented out.
  • The form must have been postmarked before February 21, 2023, to be considered timely.
  • If a taxpayer missed that date, they could file directly with the March Board of Review of the township/city. They should contact the assessor to determine the best way of doing that.
  • Part of Form 5819 is “page 3,” which is the spreadsheet. This should be filed electronically as a spreadsheet.

Form 5819 and Instructions are available at Business Taxpayer Forms

Michigan Sales Tax On Rental Equipment – 2023

How to Compute Penalty

If a qualified renter does not submit a completed statement and full payment of the tax levied under section 5 by the applicable deadline in subsection (3), the department shall issue a notice to the qualified renter within 30 days after that deadline. The notice must include a statement explaining the consequences of nonpayment as described in subsection (5) and instructing the qualified renter of its potential responsibility under subsection (5)(b). A qualified renter shall submit payment in full within 90 days after the issuance of the notice with a penalty of 3% per month calculated from the applicable deadline in subsection (3) on the unpaid balance for each month payment is not made in full. The calculation of penalty is not prorated based on the date payment is received (e.g. for the April 30 quarterly deadline – any payment received any day in May would have 3% penalty, June has 6% penalty, etc.).

For the qualified renter’s first assessment year, the penalty must be waived if the qualified renter submits a completed statement along with full payment of the tax levied under section 5 within 30 days after the issuance of the department’s notice.

Michigan Sales Tax On Rental Equipment – 2023

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