The Rx Advisors’ tax team continuously monitors changes in the tax laws and offers tax advice to our pharmacy clients. Here is a new twist from the federal government you’ll want to be aware of. If you use Cash App, Venmo, PayPal, and other digital payment apps in your pharmacy you should be aware of new changes. For 2022, as part of the American Rescue Plan Act of 2021, payment app companies now must submit documentation to the IRS for anyone that has received $600 or more in payments for goods and services.
The Internal Revenue Service says it will use the information for “new examination and collection approaches”. In other words, you could be subject to closer examination of some sort. So be aware if you are accepting payments through these payment app companies this year. You will likely receive a 1099-K from them, and that company will report the income to the IRS. So, it is important that what you submit matches what’s on the 1099-K. For overall tax reduction, an income tax plan for your business is key. You should ask your accountant about a mid-year tax planning session. If they do not offer a tax plan, you may want to consider a more proactive accountant.
For a successful 2022 tax season, here are a few tips: https://www.rx-advisors.com/post/3-tips-for-a-successful-2022-tax-season.
If you happen to be looking for ways to help minimize the costs of running your pharmacy and get a little money back at tax time, there is a very good chance you can with small business tax credits. Ask your accountant for any credits you qualify for or here is a great article on several credits your pharmacy should consider: https://www.rx-advisors.com/post/small-business-tax-deductions-credits