New Tax Information

IRS Raises Filing Threshold for Form 990–N

Effective for tax years beginning on or after January 1, 2010, the IRS has raised the filing threshold for the Form 990–N (e–postcard return) from $25,000 to $50,000. In Revenue Procedure 2011–15, the IRS stated that small non-profit organizations with gross receipts that are normally less than $50,000 must file the Form 990–N. However, this does not change a non-profit organization’s requirement to file Form 990–T for unrelated business income reporting.

Reduced Social Security Payroll Tax Withholding Rates

For 2011, the payroll withholding rate for social security taxes has been reduced from 6.2% to 4.2%. Employees will see their take home pay increase by the 2% reduction in social security taxes for 2011. Employees with wages in excess of $106,800 will see an additional $2,136 in take home pay for the 2011 year. Self-employed individuals will see the 2% reduction of social security tax when filing their 2011 tax returns.

EFT Required for Businesses

Effective January 1, 2011, employers must use electronic funds transfer (EFT) to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax).

For more information on any of these issues or other specific tax questions, please contact the Frank & Company, p.c. Tax Services Department at (703) 821-0702 or click here to send e-mail