Bacon & Gendreau Tax Preparation

10/17/2023

Medicare B Premiums for 2024



The base Medicare Part B monthly premium for 2024 increases to $174.70/month ($164.90.10/month for 2023) (an increase of $9.80).



The higher premiums some taxpayers have to pay for 2024 vary based on the taxpayers’ modified AGI (MAGI) as shown on their 2022 income tax returns. Most of the various MAGI levels increased by a small amount with the exception of the maximum MAGI levels which stayed the same (except for MFS where the maximum MAGI level went down). The exact costs and modified AGI levels can be found at cms.gov by going to the Newsroom and clicking on the October 13, 2023 article.



The highest Medicare Part B premium for 2024 is $594.00/month ($560.50/month for 2023) and applies to:

- Individuals with modified AGI of $500,000 or more (same as for 2023).

- Married Filing Jointly taxpayers with modified AGI of $750,000 or more (same as for 2023).

- Married Filing Separately taxpayers with modified AGI of $397,000 or more ($403,000 for 2023).

12/27/2022

Good news!

IR-2022-226, December 23, 2022 — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.

12/27/2022

IR-2022-226, December 23, 2022 — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.

12/22/2022

https://www.irs.gov/pub/taxpros/fs-2022-40.pdf

12/15/2022

https://foolwealth.com/insights/what-are-the-most-tax-friendly-states-for-retirement?utm_campaign=Freemail&utm_medium=email&_hsmi=237945274&_hsenc=p2ANqtz--NbN5vxO-9klz0tCVSmHzSzxk4I8BKesH9A4gRJzquGRqW8So6yO3-yxDJa-gp_n_7jNwDsSxLOTSfUumTahp3dnY_Qw&utm_content=237944761&utm_source=hs_email

Sun and sand top the list of retirees' dream destinations, but what about lower taxes? Here are some tax-friendly states you may consider for retirement.

12/08/2022

https://www.irs.gov/newsroom/dont-let-a-tax-mistake-ruin-newlywed-bliss

Tax Tip 2022-188, December 8, 2022 — When people get married their tax situation often changes. A taxpayer’s marital status as of December 31 determines their tax filing options for the entire year, but that’s not all newlyweds need to know.

12/07/2022

"When God lays something on your heart
to do, your only responsibility is to just start. God doesn’t give you the strength to overcome, He gives you the strength while you overcome." – Fred Smith

12/07/2022

https://www.irs.gov/newsroom/highlights-from-2022-national-tax-security-awareness-week

Tax Tip 2022-187, December 7, 2022 — The IRS and its Security Summit partners recently held the annual National Tax Security Awareness Week. The Security Summit is a longstanding partnership between the IRS, state tax administrators and the tax software and tax professional community.

12/06/2022

Some tax credits return to 2019 levels. This means that affected taxpayers will likely receive a significantly smaller refund compared with the previous tax year. Changes include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and Dependent Care Credit.

Those who got $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 for the 2022 tax year.
For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022.
The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.
Visit Credits and Deductions for more details.

No above-the-line charitable deductions. During COVID, taxpayers could take up to a $600 charitable donation tax deduction on their tax returns. However, in 2022, those who take a standard deduction may not take an above-the-line deduction for charitable donations.

More people may be eligible for the Premium Tax Credit. For tax year 2022, taxpayers may still qualify for temporarily expanded eligibility for the premium tax credit.

Eligibility rules changed to claim a tax credit for clean vehicles. Review the changes under the Inflation Reduction Act of 2022 to qualify for a Clean Vehicle Credit.

Avoid refund delays and understand refund timing
Many different factors can affect the timing of a refund after the IRS receives a return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a 2022 federal tax refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer to process if IRS systems detect a possible error, the return is missing information or there is suspected identity theft or fraud.

Also, the IRS cannot issue refunds for people claiming the EITC or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund – not just the portion associated with EITC or ACTC.

Last quarterly payment for 2022 is due on Jan. 17, 2023
Taxpayers may need to consider estimated or additional tax payments due to non-wage income from unemployment, self-employment, annuity income or even digital assets. The Tax Withholding Estimator on IRS.gov can help wage earners determine if there is a need to consider an additional tax payment to avoid an unexpected tax bill when they file.

12/06/2022

Reporting rules changed for Form 1099-K. Taxpayers should receive Form 1099-K, Payment Card and Third Party Network Transactions, by Jan. 31, 2023, if they received third party payments in tax year 2022 for goods and services that exceeded $600.

There’s no change to the taxability of income. All income, including from part-time work, side jobs or the sale of goods is still taxable. Taxpayers must report all income on their tax return unless it’s excluded by law, whether they receive a Form 1099-K, a Form 1099-NEC, Nonemployee Compensation, or any other information return.

Prior to 2022, Form 1099-K was issued for third party networks transactions only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. The American Rescue Plan Act of 2021 lowered the reporting threshold for third party networks that process payments for those doing business.

Now a single transaction exceeding $600 can require the third party platform to issue a 1099-K. Money received through third party payment networks from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable.

The IRS cautions people in this category who may be receiving a Form 1099 for the first time – especially “early filers” who typically file a tax return during the month of January or early February – to be careful and make sure they have all of their key income documents before submitting a tax return. A little extra caution could save people additional time and effort related to filing an amended tax return. And if they have untaxed income on a Form 1099 that isn’t reflected on the tax return they initially file, that could mean they need to submit a tax payment with an amended tax return.

If the information is incorrect on the 1099-K, taxpayers should contact the payer immediately, whose name appears in the upper left corner on the form. The IRS cannot correct it.

11/30/2022

Good recordkeeping year-round helps taxpayers avoid tax time frustration

Wading through a pile of statements, receipts and other financial documents when it’s time to prepare a tax return can be frustrating for people who haven’t managed their records. By knowing what they need to keep and how long to keep it, people can develop a good recordkeeping system year-round and make filing their return easier.

Good recordkeeping can also help taxpayers understand their situation when they receive letters or notices from the IRS.

Good records help:

Identify sources of income. Taxpayers may receive money or property from a variety of sources. The records can identify the sources of income and help separate business from non-business income and taxable from nontaxable income.
Keep track of expenses. Taxpayers can use records to identify expenses for which they can claim a deduction. This will help determine whether to itemize deductions at filing. It may also help them discover potentially overlooked deductions or credits.
Prepare tax returns. Good records help taxpayers file their tax return quickly and accurately. Throughout the year, they should add tax records to their files as they receive them to make preparing a tax return easier.
Support items reported on tax returns. Well-organized records make it easier to prepare a tax return and help provide answers if the return is selected for examination or if the taxpayer receives an IRS notice.
In general, taxpayers should keep records for three years from the date they filed the tax return. Taxpayers should develop a system that keeps all their important information together. They can use a software program for electronic recordkeeping. They could also store paper documents in labeled folders.

Records to keep include:

Tax-related records. This includes wage and earning statements from all employers or payers including payment apps or cards, such as Form W-2, 1099-K, 1099-Misc, 1099-NEC. Other records include interest and dividend statements from banks, certain government payments like unemployment compensation, other income documents and records of virtual currency transactions. Taxpayers should also keep receipts, canceled checks, and other documents that support income, a deduction, or a credit reported on their tax return.
IRS letters, notices and prior year tax returns. Taxpayers should keep copies of prior year tax returns and notices or letters they receive from the IRS. These include adjustment notices when an action takes place occurs on the taxpayer's account.
Property records. Taxpayers should also keep records relating to property they dispose of or sell. They must keep these records to figure their basis for computing gain or loss.
Business income and expenses. Business taxpayers should find a bookkeeping method that clearly and accurately reflects their gross income and expenses. Taxpayers who have employees must keep all employment tax records for at least four years after the tax is due or paid, whichever is later.
Health insurance. Taxpayers should keep records of their own and their family members' health care insurance coverage. If they're claiming the premium tax credit, they'll need information about any advance credit payments received through the Health Insurance Marketplace and the premiums they paid.