Business Frame Weekly - 2023 GAAP Fin’l Reporting Taxonomy Available / Inflation to Fuel More Small Business Formation / 1099-K Reporting Threshold Reduced

The FASB announced on December 16 that the 2023 GAAP Financial Reporting Taxonomy (GRT) is now available, containing updates for accounting standards and other recommended improvements.

In Intuit’s recent QuickBooks New Business Insights report, small business formation continued to hover at a historically high level in 2022. Two thirds (66%) of survey respondents reported inflation and the need for additional income will influence them to start a small business.

The American Institute of CPAs (AICPA) wrote a letter to Congress, stating their deep concerns regarding the reduction of the Form 1099-K reporting threshold to $600 for 2022. According to the organization, this move will lead to significant confusion in the tax system within the coming months.

In this newsletter:

• 2023 GAAP Financial Reporting Taxonomy is Now Available, FASB Says
• Treasury Plans Tax Guidance on IRA by Year’s End
• Inflation Will Fuel More Small Business Formation in 2023
• Intuit Accountants Releases First-Annual 2022 Taxpayer Insights & Intelligence Brief
• AICPA Expresses “Deep Concerns” Regarding Form 1099-K Reporting Threshold
• Operation Cash Flow

December 20, 2022

2023 GAAP Financial Reporting Taxonomy is Now Available, FASB Says

The Financial Accounting Standards Board (FASB) on Dec. 16 announced the availability of the 2023 GAAP Financial Reporting Taxonomy (GRT) and the 2023 SEC Reporting Taxonomy (SRT)—collectively referred to as the GAAP Taxonomy. The FASB also is making available the 2023 DQC Rules Taxonomy (DQCRT), which together with the GAAP Taxonomy are collectively referred to as the FASB Taxonomies. The 2023 GRT contains updates for accounting standards and other recommended improvements, including those previously finalized in the proposed 2022 Q3 Supplemental GAAP Taxonomy for the Securities and Exchange Commission (SEC) Release Nos. 33-10771; 34-88606; IC-33836 related to business development companies that submit financial statement information using Inline eXtensible Business Reporting Language (XBRL).

Treasury Plans Tax Guidance on IRA by Year’s End

The Treasury Department announced a timeline Monday for offering more information on some of the main tax provisions of the Inflation Reduction Act. The department said it would provide the following information on tax provisions of the IRA by the end of the month: FAQs for consumers on the tax credit for energy efficient home improvement projects and residential energy property, initial guidance on the Corporate Alternative Minimum Tax, and initial guidance on the excise tax on stock buybacks.

Inflation Will Fuel More Small Business Formation in 2023

New research from Intuit QuickBooks shows that in 2023, two thirds (66%) of survey respondents indicate inflation and the need for additional income affect their plans to start a small business. These findings and more are highlighted in the QuickBooks New Business Insights report, based on a recent survey of 15,200 U.S. adults commissioned by Intuit (NASDAQ: INTU). The report also uncovered that business formation continued to hover at a historically high level in 2022 with several states leading the pack: Delaware (23%), Hawaii (22%), New Jersey (21%), Virginia (21%), and Maryland (20%).

Intuit Accountants Releases First-Annual 2022 Taxpayer Insights & Intelligence Brief

Intuit released its first-annual 2022 Taxpayer Insights & Intelligence Brief. This comprehensive study surveyed over 3,000 U.S. taxpayers using a tax professional to prepare their taxes. The study provided a holistic view of a taxpayer’s experience when working with a tax professional to gain insights into their expectations and service needs. The results showed as the tax and accounting industry shifts from leading with compliance based work to offering tax advisory services, there is a strong appetite from taxpayers for tax advisory and audit protection/resolution services. Additionally, the remote work revolution has increased the value of data storage, security, and electronic signatures in the minds of taxpayers.

AICPA Expresses “Deep Concerns” Regarding Form 1099-K Reporting Threshold

In a letter to Congressional leadership of the Senate Finance Committee and the House Ways and Means Committee, the American Institute of CPAs (AICPA) expressed deep concerns regarding the Form 1099-K, Payment Card and Third Party Network Transactions, reporting threshold that was lowered to $600 for 2022 and will lead to significant confusion in the tax system in the coming months. Under section 9674(a) of the American Rescue Plan Act of 2021 (ARPA), the de minimis threshold decreased from $20,000/200 transactions to $600 for any number of transactions, effective for 2022 Forms 1099-K, due to be filed in 2023. The move will substantially increase the number of Forms 1099-K required to be filed with the Internal Revenue Service (IRS) and furnished to recipients by third-party settlement organizations and their electronic payment facilitators.

Operation Cash Flow

Kabbage from American Express issued its inaugural "Small Business Holiday Report," which highlights the major trends among U.S. small businesses heading into the holidays. Polling 550 small business leaders, the report shows that the businesses surveyed are gearing up for the fast-approaching holiday season by prioritizing their holiday cash flow, strategizing ways to promote employee and customer retention, anticipating economic hurdles and prioritizing sales through social media.

Random Ramblings

• The top tax developments of 2022.
• The 9 biggest bookkeeping mistakes small businesses make (and how to avoid them).
• 5 must-have financial wellness benefits for 2023, according to Goldman Sachs.
• A guide to payroll forms.
• Building a stronger pipeline.