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Ready For New IRS Form 1099-DA?

September 12, 2023 by admin

Crypto-Tuesday, September 12, 2023 – The U.S. Department of the Treasury and the IRS are making new rules for people who deal with digital money, like Bitcoin and other cryptocurrencies. Starting January 1, 2025, if you’re a broker—which means you help people buy and sell this digital money—you’ll have to fill out a new tax form. It’s called Form 1099-DA. The idea is to make sure everyone’s paying the taxes they should. They’re also going to ask for more details on profits or losses for sales starting in 2026.

And get this, even folks in the real estate game must follow these rules. If you’re a title company or a real estate agent and you accept digital money in a property deal, you’ll have to report that too, starting the same year.

The new IRS Commissioner, Danny Werfel (yes that’s his name), says these new rules are to clear up any confusion. They especially want to keep an eye on rich folks to make sure they’re not hiding any money they should be paying taxes on. According to the IRS, when there’s a third-party like a broker reporting things, people are more likely to pay their taxes correctly.

So, if you have something to say about these rules, write it down, and submit your thoughts by October 30, 2023. They’re even holding a public meeting on November 7, and maybe on the 8th if they get a lot of people wanting to speak. At least the IRS will make it look like they are listening.

https://www.irs.gov/newsroom/treasury-and-irs-issue-proposed-regulations-on-reporting-by-brokers-for-sales-or-exchanges-of-digital-assets-new-steps-designed-to-end-confusion-help-taxpayers-aid-high-income-compliance-work


Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

Filed Under: Cryptocurrency, Today's Tax Talk Tagged With: 1099-DA, IRS

Have You Forgotten? The IRS Has!

September 11, 2023 by admin

Monday, September 11, 2023 – I am a subscriber to Dan Kennedy’s email list, and he recently shared his perspective on the significance of September 11th. In his email, he noted that we, as a society, have become more apathetic since the tragic events of 9/11.

Kennedy argues that we’re gradually becoming more accepting of troubling shifts in our society. This includes rising crime rates in major cities, porous borders, soaring national debt, and a failing educational system. He also mentions what he views as the military becoming more concerned with political correctness than readiness. Kennedy sees these developments as symptomatic of a general sense of complacency among Americans, and I agree.

From my viewpoint, there’s a specific concern that should be alarming to American business owners: the expanding powers of the IRS. The agency is implementing new policies that, I believe, are intrusive and limit our financial freedoms—measures that would have been unthinkable before the events of 9/11.

Take, for instance, the American Rescue Plan of 2021. The legislation proposed a sweeping financial reporting system that would monitor deposits and withdrawals in almost all types of financial accounts—whether it’s a bank account, an investment account, or even mobile payment platforms like Venmo, Paypal, and CashApp—once the account crosses a $600 transaction threshold. Though bank accounts were initially excluded, there’s a general sense that this exemption won’t last.

Furthermore, new regulations surrounding Form 1099-K are scheduled to go into effect in the 2023 tax year. This updated form will monitor payments made through third-party networks like PayPal and Venmo. Under the old rules, transactions were only reported if there were over 200 of them, amounting to more than $20,000 in a year. The new regulation lowers the reporting threshold to just $600 a year, regardless of the number of transactions. This shifts the burden of proof to taxpayers, requiring them to justify why these amounts shouldn’t be considered taxable income.

As someone who works closely with business owners, I consistently urge them to stand up against what I view as IRS overreach. The IRS has recently doubled its workforce, and it’s essential that we remain vigilant. Let’s not be complacent; the consequences could be as unforeseen and significant as those that unfolded on that fateful day in September 2001.


Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

Filed Under: Today's Tax Talk Tagged With: 911, Do You Remember, IRS

The Game Has Changed

September 2, 2023 by admin

Saturday, September 2, 2023 – Listen up, my independent contractor friends. I’m here to give you a wake-up call. Gone are the days of blending into the crowd with your 1099-MISC forms. The IRS, ever the keen observer, switched up the game in 2020. They’ve introduced a new form called the 1099-NEC—NEC standing for “Non-Employee Compensation.” Why? To make it a cinch for Uncle Sam to find out if you’re paying your self-employment tax.

If you’re not hip to the jargon, a 1099-NEC is basically a neon sign flashing “SELF-EMPLOYMENT TAX” over your head. Unlike the good ol’ days of 1099-MISC where you might’ve flown under the radar, the 1099-NEC is going to match you up neatly with IRS databases. Get it wrong, and you’ll receive a charming little note called a CP2000, giving you a rundown of what you owe—typically, it’s “pay more tax.”

What’s the tax, you ask? A hefty 15.3%. And let’s break it down for the mathematically challenged—12.4% is for social security, and 2.9% is for Medicare. This isn’t pocket change, folks.

Now, why am I hammering this home? Because if you’re an independent contractor, you ARE a business. Period. Start thinking about tax planning and the structure of your business like your livelihood depends on it. Why? Because it does.


Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

Filed Under: Today's Tax Talk Tagged With: 1099, 1099_NEC, Independent Contractor

Undercharging: A Problem to Avoid

August 31, 2023 by admin

Thursday, August 31, 2023 – I recently met with a client who is a self-employed contractor, receiving income reported on Form 1099. Like many in his situation, he views himself as more of an employee than a business owner. This mindset leads him, and others like him, to commit a critical error: undercharging for their services.

Many 1099 workers forget to account for taxes when setting their prices, setting themselves up for financial pitfalls down the road. They are not just responsible for regular income tax but also a 15.3% self-employment tax. Plus, they bear business expenses that W-2 employees usually don’t have to worry about.

This issue isn’t exclusive to 1099 workers; traditional business owners are also guilty of the same mistake. The misconception that low pricing will attract more customers is a dangerous gamble. As the saying goes, “We lose money on every sale, but make it up in volume”—a flawed business strategy, to say the least.

Marketing strategist Dan Kennedy wisely pointed out, “There’s no strategic advantage to being the second-lowest priced leader in your market.” Competing on price alone is a surefire way to race your business into the ground, hitting that dreaded $0 mark before you know it.

Raising your prices doesn’t just improve your bottom line; it enables you to offer superior service, leading to higher customer satisfaction. Satisfied customers tend to stick around, become repeat buyers, and provide invaluable referrals. These are the cornerstones of a sustainable and profitable business model.


Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

Filed Under: Today's Tax Talk Tagged With: IRS, Tax, tax planning, Undercharging

Radio As Community

August 28, 2023 by admin

Friday, August 25, 2023 – The vast majority of my clients come from listeners of my favorite radio stations – WGN 720AM, WLS A M 890 & AM 560 The Answer.  I have advertised on these stations for many years.  

Each station has its own devoted listeners.  Radio stations often hold events where they invite their listeners to gather together, spark friendships among like-minded individuals, and meet the personalities who have become part of their daily lives.

The radio hosts graciously take time to engage with the listeners, share inside stories about their show, and even joke around – like regular folk.  

To me, these events highlight the essence of what radio is all about – community.  It’s not just about passive listening; it’s a dynamic relationship between the broadcaster and the audience.  And the audience amongst themselves. Next time your favorite station holds an event -GO! You will not regret it.


Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

Filed Under: Uncategorized Tagged With: am560, Radio, wgn, wls

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