01/10/2024
7 Major Tax Changes to Know for this Tax Season
Tax rules and regulations continue to change rapidly, and we continue to monitor ongoing tax changes so that our clients get the best tax advantages available, while also being protected from tax changes that can create risks and problems.
Here then are 7 major tax changes to keep in mind as this tax season begins:
▪️The IRS postponed a new rule that was supposed to take effect this year, which would have caused many millions of people to receive 1099's for money received via digital payment services such as Venmo, CashApp, and PayPal.
▪️A government agency called the Financial Crimes Enforcement Network, or "FinCEN" for short, has put in place a new requirement for "smaller" business entities (20 or fewer full-time employees). These business entities, such as LLC's and corporations, must now file a "Beneficial Ownership Information Report" that gives FinCEN information about who owns and who controls those business entities. Penalties for non-compliance with this new rule are extremely severe.
▪️"Green energy" tax credits for homeowners, landlords, and vehicle owners have changed and, in some cases, improved. If you invested money into solar panels, energy efficient windows or doors, electric vehicle(s), or anything else related to green energy, please provide the details of what you purchased, the date of purchase, and the amount invested to your Tax Consultant so that we can maximize any applicable tax breaks.
▪️The IRS is trying to allow taxpayers to "self-service" more of your needs on their website, rather than needing to call IRS by phone. You can now view much of your own tax information such as past due tax amounts, income amounts for each year you filed taxes, etc. by starting an IRS Online Account and logging into it: https://www.irs.gov/payments/your-online-account
▪️Student loan repayments have started up again (for most people) after the COVID-induced "pause" in repayment requirements. To lighten the burden, IRS has a new rule that allows certain employees to count their student loan repayment as a 401K contribution for the purposes of "employer matching." If you're paying back a student loan and your employer has a 401K matching policy, this option should be explored, as it could result in some "free money" being put into your 401K by your employer.
▪️The IRS is targeting people who have been making money with cryptocurrency but not reporting or paying taxes on it. IRS has successfully sued several of the biggest cryptocurrency exchanges to force the exchanges to give the IRS data about certain of its users for the purposes of collecting tax. And the Treasury Department has announced that 1099's for cryptocurrency will start to be issued sometime soon, likely in 2025.
▪️As you probably saw on the news, the IRS received from Congress, through the "Inflation Reduction Act," a massive amount of new funding over the next 10 years. 47% of the new funding is allocated for enforcement, meaning additional tax collection efforts such as IRS audits and IRS letters. Please make sure to only use tax professionals who back up their work year-round, rain or shine (we do).
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