Tax Gap Grows; What this Means for Business Owners

The spread between what the federal government collects in taxes and what it thinks it should collect—the tax gap—has been growing. According to a recent Treasury Report, the gap is now estimated to be $584 billion. The Treasury says one fix is more information reporting to shine “light on opaque income streams, including proprietorship and partnership business income.” Note: Effective for 2022 transactions reported in 2023, Form 1099-K is required if they total $600 or more, which is a dramatically different standard from the current reporting threshold.  #IdeaoftheDay