IRS and Regulatory bodies update tax laws and regulations yearly. It is crucial to stay updated about the modifications that could affect your tax return and eligibility for tax credits as you gear up for the upcoming tax season 2024. Below are a few significant updates all taxpayers need to know.

Change in Standard Deductions

The standard deduction has been increased for the tax season 2024, which benefits all taxpayers. The revised deduction levels are as follows:

• $13,850 for single filers or married individuals filing separately,
• $20,800 for heads of households, and
• $27,700 for married couples filing jointly or qualified surviving spouses.

These changes are intended to give taxpayers improved tax savings and lower taxable income, thereby alleviating their financial burden.

Increased Additional Childcare Credit

The amount of the Additional Child Tax Credit (ACTC) has been raised. Now, the maximum additional child tax credit amount has been increased to $1,600 for every qualifying child.

The modifications made to the Child Tax Credit (CTC) under the American Rescue Plan Act of 2021 have now lapsed, signaling the end of those changes. Despite this, the IRS is actively keeping an eye on any new legislation related to the CTC that may be passed by Congress. The IRS is advising taxpayers who qualify for the Child Tax Credit not to delay filing their 2023 tax returns during this tax season 2024. If Congress alters the guidelines for the CTC, the IRS will automatically adjust the credits for individuals who have already submitted their tax returns, eliminating the need for any further action on the part of eligible taxpayers. Under the current law, the following conditions are applicable for the tax year 2023:

• The expanded tax credit for qualifying children under the age of 6 and the age of 18 is no longer in effect. For tax season 2024, the base amount of the CTC is set at $2,000 per qualifying child.
• The CTC begins to phase out for taxpayers with an Adjusted Gross Income (AGI) above $200,000 ($400,000 for joint filers).
• The refundable portion of the CTC remains limited, similar to the rules in 2020, with the ACTC maximum amount per qualifying child now increased to $1,500.

Changes to the Earned Income Tax Credit (EITC)

The provisions for taxpayers who do not have a qualifying child, as established by the American Rescue Plan Act of 2021, will not be in effect for the tax year 2023. To be eligible for the EITC without a qualifying child in 2023, taxpayers need to meet the age requirement of being at least 25 years old but under 65 years old by the end of 2023. For married taxpayers who are filing a joint return, at least one spouse must meet the age criteria of being at least 25 years old but under 65 years old by the end of 2023 to claim the EITC without a qualifying child. These age restrictions are put in place to ensure that taxpayers who are seeking this credit without a qualifying child meet certain age qualifications as outlined in the legislation. Taxpayers can find out if they are eligible to claim EITC through this official IRS link.

New Clean Vehicle Credit

The Clean Vehicle Credit, formerly known as the credit for new qualified plug-in electric drive motor vehicles, has changed in the tax season 2024. These changes include modifications to the maximum credit amount and the requirements for claiming the credit. Taxpayers may qualify for a credit of up to $7,500 for vehicles bought in the tax year 2023. For vehicles purchased before 2023, tax credits are calculated differently. Taxpayers can check for eligibility and corresponding tax credits here. To report the credit, taxpayers should use Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit, and Form 1040, Schedule 3.

Health Savings Account (HSA) Limits

The contribution limits for HSAs have been raised for tax season 2024, benefiting those with high-deductible health plans. Individuals can contribute up to $4,150 in 2024, up $300 from 2023. The family contribution amount for 2024 rose to $8,300, a $550 increase compared with 2023. This increase allows individuals to save for medical expenses with tax advantages.

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

Every year, based on the Federal Emergency Management Agency’s (FEMA) federally declared disaster areas, the IRS will implement administrative disaster tax relief measures. For the Tax Season 2024, the IRS made special tax law provisions to provide affected individuals and businesses with additional time to file returns, pay taxes, and complete other time-sensitive tasks. This assistance is specifically tailored for taxpayers who are affected by a disaster declared at the federal level, guaranteeing that they receive essential assistance during difficult circumstances. It is important to note that certain conditions may need to be met in order to qualify for the tax relief and provisions offered by the IRS. By following the established procedures and guidelines, disaster victims can benefit from the assistance provided by the government to alleviate the financial burden caused by the disaster.

The relief for the tax season 2024 extends the deadlines for filing and paying taxes that fell between Sept. 10, 2023, and June 17, 2024. This means that individuals and businesses affected in the disaster regions will now have until June 17, 2024, to submit their returns and settle any outstanding taxes from this period.

Who Qualifies for the Extension in Tax Season 2024?

In order to be eligible for an extension on filing your taxes, it is required that you are a resident or business situated in a region identified by the Federal Emergency Management Agency (FEMA) as a federally declared disaster area. This encompasses not only the main area impacted by the disaster but also the surrounding areas that have been affected.

Furthermore, the IRS is prepared to collaborate with any taxpayer residing outside the disaster zone but whose essential records are required to comply with a deadline falling within the extension period are situated in the impacted region. Taxpayers eligible for assistance and residing beyond the disaster zone must reach out to the IRS at 866-562-5227 for further guidance and support. This provision also encompasses individuals who participated in relief efforts and are associated with a reputable governmental or charitable institution.

What is included in the Extension?

Extension generally encompasses a range of tax deadlines, which can include filing income tax returns, making quarterly estimated income tax payments, and submitting different business tax returns. Additionally, extension can be utilized for other tax-related tasks, like requesting an extension for an individual tax return or making contributions to an IRA. The June 17, 2024, deadline will now apply to the following activities.

• Individual income tax returns and payments normally due on April 15, 2024.
• 2023 contributions to IRAs and health savings accounts for eligible taxpayers.
• 2023 quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
• Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31 and April 30, 2024.
• Calendar-year partnership and S corporation returns normally due on March 15, 2024.
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
• Calendar-year tax-exempt organization returns normally due on May 15, 2024.

How to Claim the Extension?

Taxpayers residing in a federally declared disaster area who qualify for the extension do not have to take any action to receive it. The IRS will recognize individuals located in the designated disaster zone and grant them an extension on their tax deadlines without requiring any additional steps. In the event that you receive a penalty notification from the IRS due to late filing or payment of taxes, you have the option to contact the phone number provided on the notice to request a waiver of the penalty.

The tax relief measures have been implemented as a component of a well-coordinated federal initiative aimed at addressing the extensive harm inflicted by these calamities. These measures have been devised after careful evaluation of the local damage assessments conducted by FEMA, ensuring that the relief efforts are targeted toward the areas most affected by the disasters.

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

What is the Credit?

Alternative Fuel Vehicle (AFV) Refueling Property credit is the credit given to taxpayers under section 30C credit. The taxpayers must have installed and utilized a certified vehicle refueling and recharging station at their residential or commercial properties in the tax year 2023 per the detailed eligibility criteria.

Eligibility Criteria

The criteria to qualify for the AFV Refueling Property credit is to have a property that must either store or dispense clean-burning fuel or recharge electric motor vehicles. Along with that:

• The property must be placed in service during the tax year 2023.
• The property should have an original use that began with the taxpayer.
• The property must be used primarily in the U.S. and U.S. territories.
• The installation must be either on business property or a main home.

To be eligible, all qualified fueling equipment also must be installed in a population census tract that is a low-income community or not an urban area.

How Much is the Credit for the Tax Season 2024?

The credit for qualified refueling property as of January 1, 2023, is as follows:

• 6% credit with a maximum credit of $100,000 for each single item of property, for properties that are subject to depreciation.
• 30% credit with $100,000 limit, for businesses that meet the prevailing wage and apprenticeship requirements.
• 30% of the cost with a maximum credit of $1,000 per item, for the qualifying properties that are not subject to depreciation.
• 30% of the cost of qualified property with a maximum total credit allowed of $30,000 per location for depreciable property and $1,000 per location for all the qualifying properties (including personal property) that is being placed in service before January 1, 2023.

What are the Key Changes in Tax Season 2024?

According to Notice 2024-20, the property placed in service as of Jan 1, 2022, to Dec 31, 2032, must follow the below qualifications, credits, and transfer options:

1. Modification of Section 30C Credit Limitation:
   • The IRS adjusted the limitation on the 30C credit, changing it from being based on the location of the property to being based on every single item of qualified AFV refueling property.
   • For depreciable property, the credit is limited to $100,000 per item. For non-depreciable property, the limit is $1,000 per item.
2. Requirement for Eligible Census Tract:
   • The IRS introduced a requirement that qualified alternative fuel vehicle refueling property must be placed in service in an “eligible census tract”.
   • Eligible census tracts are defined as low-income communities or areas that are not urban.
   • To know if the property is eligible the taxpayers must determine the GEOID (an 11-digit ID) of the property and crosscheck with the GEOID in appendix A and B of the notice. If the property’s GEOID is listed in the notice, then the property is eligible for credit.
   • To help determine if an installation location is in a qualified census tract, please see Argonne National Laboratory’s 30C Tax Credit Eligibility Locator tool and list of frequently asked questions.
3. Clarification on Property Eligibility:
   • The IRS clarified that the property will still be considered qualified AFV refueling property even if it can charge and discharge electricity from a vehicle battery to an external load.
4. Modification of Qualified Property Definition:
   • The definition of qualified AFV refueling property was amended to include depreciable property designed specifically to charge two- and three-wheeled electric vehicles primarily used on public streets, roads, or highways.
5. Adjustment of Credit Amount:
   • The IRS reduced the credit amount for depreciable qualified alternative fuel vehicle refueling property from 30% to 6%.
   • An enhanced credit amount is provided for such property that is part of a qualified alternative fuel vehicle refueling project meeting certain criteria.
6. Option for Applicable Entity Election:
   • Applicable entities, defined in section 6417(d)(1)(A), can choose to make an election under section 6417 to treat the credit amount as a payment against the tax imposed by the Code.
   • The amount of the section 30C credit, if treated as a general business credit under section 38, is considered an applicable credit.
7. Transfer Option for Eligible Taxpayers:
   • Eligible taxpayers can opt to transfer all or a portion of their section 30C credit determined for any taxable year to an unrelated taxpayer by making an election under section 6418.

How to Claim the Credit?

Partners and S corporations having AFV Refueling Property placed in service during the tax year 2023, can be reported and claimed by filling the Form 8911 (PDF), for more instructions visit https://www.irs.gov/pub/irs-pdf/i8911.pdf. Other taxpayers can report the credit directly online 1s of part III of Form 3800(PDF) which is general business credit, for more instructions visit https://www.irs.gov/instructions/i3800.

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices nationwide.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

The Employer-Provided Childcare Credit is a tax credit that is specifically designed for employers who offer childcare assistance to their employees.  This assistance can be provided in different ways, including the provision of onsite childcare facilities, financial support for childcare expenses, or the distribution of vouchers for childcare services.  The main purpose of this tax credit is to assist employers in covering the expenses associated with providing these valuable benefits while promoting their commitment to supporting working parents in their workforce.  By providing childcare services to employees, businesses can take advantage of this credit and potentially reduce their tax liability.  This credit aims to support employers in their efforts to offer a family-friendly work environment and promote work-life balance for their employees.

What is the Credit?

Taxpayers are encouraged to offer childcare services to their employees through the employer-provided childcare credit.  For the tax season 2024, the maximum limit of $150,000 per year is allowed.  This credit is calculated as 25% of the qualified childcare facility expenditures, along with an additional 10% of the qualified childcare resource and referral expenditures that are paid or incurred during the tax year.  By providing this credit, the government aims to incentivize employers to support their employees with childcare options.

Eligible Expenditures

In order to qualify for the credit, an employer must have made payments or accrued expenses for childcare that meet the criteria during the tax year 2023 which is basically filed on Tax Season 2024.  These expenses should be specifically intended to provide childcare services to the employees.  Eligible expenditure includes the below.

• The expenses related to obtaining, building, renovating, or extending a property that is utilized as a qualified childcare facility by the taxpayer.
• The taxpayer’s qualified childcare facility costs encompass operational expenses, such as payments made to support childcare workers through training, scholarship programs, and offering higher compensation to employees with advanced childcare training.
• Qualified resource and referral expenses consist of payments made or expenses incurred under a contract with a qualified childcare facility to provide childcare services to the taxpayer’s employees.

How To Claim the Employer-Provided Childcare Credit

1. Calculate the Credit: Calculate the overall amount of eligible childcare expenses that were accrued throughout the tax year 2023.  These expenses might include running childcare facilities on-site, supporting childcare costs, or issuing vouchers for childcare services.
2. Complete Form 8882: While filing for the tax season 2024, fill in the required fields on Form 8882, specifically designed for claiming the “Credit for Employer-Provided Childcare Facilities and Services.” This involves providing accurate information on the total childcare expenses that qualify and the number of employees who have benefited from the childcare assistance.
3. Attach Form 8882 to Tax Return: Ensure that you include Form 8882 along with your business tax return, such as Form 1120 for corporations, Form 1065 for partnerships, or Form 1040 for sole proprietors.
4. Include the Credit Amount on Tax Return: On your tax return, make sure to input the credit amount from Form 8882 on the designated line.  This credit will effectively lower the liability for the tax season 2024.
5. Maintain Records: It is important to maintain precise records of eligible childcare expenses, along with any relevant documents like invoices, receipts, and payroll records.  These records might be necessary in the event of an audit.

Consult with a Tax Professional:  To ensure that you are correctly claiming and maximizing the benefits of the Employer-Provided Childcare Credit, it is recommended to seek guidance from a tax professional due to the intricate nature of tax laws related to this credit.

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please get in touch with us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

Effective tax planning plays a crucial role in the smooth operations of any business.  With the ever-changing tax environment, it is imperative for small business owners to stay updated and adopt the right strategies to enhance their tax management and ultimately boost profitability.  As the tax season 2024 begins, small businesses need to have in place strategies to minimize their tax liability.

Stay Up to date with Tax Law Changes

It is crucial for small business owners to stay updated on the frequent changes in tax laws for effective tax planning.  In tax season 2024, it is particularly important for them to closely monitor any updates or amendments to tax laws that could have an impact on their businesses.  This encompasses changes in tax rates, deductions, credits, and compliance requirements.  To ensure awareness of any changes that may affect their business, consulting with a tax professional or regularly referring to reliable sources like the IRS official website is highly recommended.

Small Business Tax Law Changes for Tax Season 2024

The 2024 tax season has introduced many significant tax changes, whether you are filing a personal or business tax return.  For business, there are many tax deductions and credit changes that can significantly affect the tax liability.  For instance, business owners were deducting 100% of the cost of work-related meals and beverages at restaurants during the pandemic for the years 2021 and 2022.  For tax season 2024, it is reduced to 50% of the cost back to the 2020 level.

Entrepreneurs operating small businesses can avail increased standard mileage rates for business-related travel.  For those utilizing their cars for business purposes, a deduction of 65.5 cents per mile driven is allowable for the entirety of the 2023 tax year.  Notably, this reflects an increase of 3 cents from the midyear rate recorded in 2022.

Bonus depreciation, established under the Tax Cuts and Jobs Act (TCJA) of 2017, provides business owners with the opportunity to depreciate a significant portion of the expenses associated with a qualified asset.  Under TCJA provisions, business proprietors were permitted to depreciate 100% of the expenses related to qualified assets placed in service between September 27, 2017, and January 1, 2023.  However, for assets put into service in the year 2023, the bonus depreciation rate will gradually decrease by 20% each subsequent year.

Optimize Deductions and Credits

Utilizing deductions and credits can be advantageous in reducing taxable income and decreasing tax obligations.  Small business owners are encouraged to make use of all the deductions and credits available to them in order to minimize their tax burden.  Some common deductions for small businesses include expenses such as:

• Deductible business expenses may cover rent, utilities, supplies, and employee salaries.
• Small businesses can deduct equipment purchases, either fully or through depreciation.
• Home-based businesses can deduct a portion of home-related expenses like mortgage interest, property taxes, and utilities.
• Small businesses offering health insurance coverage may be eligible for a deduction on premium costs.

Small business owners should not only focus on deductions but also consider the various tax credits that are available to them.  These credits can provide significant financial benefits.  Some of the common tax credits that small businesses can explore include the Research and Development (R&D) Tax Credit, which encourages businesses to invest in innovation and development, the Work Opportunity Tax Credit (WOTC), which provides incentives for hiring individuals from certain target groups, and the Small Business Health Care Tax Credit, which helps small businesses provide health insurance to their employees.  By taking advantage of these tax credits, small business owners can reduce their tax liability and potentially save a substantial amount of money.

Take Advantage of Retirement Plans

Contributing to retirement plans like SEP-IRAs, SIMPLE IRAs, or solo 401(k) plans can offer tax benefits and financial security for small business owners.  These contributions are typically tax-deductible and can lower taxable income, while also allowing owners to save for retirement.

Maintain Meticulous Records

Keeping organized and detailed records of income, expenses, receipts, invoices, and other financial documents is essential for effective tax planning and compliance.  These records not only ensure adherence to tax laws but also provide valuable information for maximizing deductions and credits.

Small business owners should create a plan to pay estimated taxes every quarter to avoid penalties and meet tax obligations.  Seeking assistance from a tax professional can help accurately calculate these payments based on the business’s income and expenses.

IRS Audit Group

IRS Audit Group comprises tax professionals, CPAs, enrolled agents, and attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

What is the Corporate Transparency Act?

The Corporate Transparency Act (CTA) was enacted by Congress as part of the National Defense Authorization Act (NDAA) for Fiscal Year 2021 to combat financial crimes, including money laundering, terrorist financing, and other illicit activities facilitated by anonymous shell companies. The CTA’s reporting requirements will come into effect on tax season 2024 starting from January 1, 2024.

One of the key provisions of the CTA is the requirement for certain types of businesses to disclose their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). Beneficial owners refer to individuals who have a significant portion of a company’s equity or voting rights. In the past, it was relatively easy for individuals to establish shell companies without revealing their true ownership, enabling illicit actors to engage in financial activities anonymously. The CTA addresses this issue by mandating businesses to provide comprehensive information about their beneficial owners, including their full legal names, dates of birth, current addresses, and unique identification numbers. This information is stored in a confidential FinCEN database accessible to authorized government agencies, law enforcement, and financial institutions conducting due diligence. BOI reporting is not an annual requirement unless a company needs to update or correct information, a report only needs to be submitted once.

Who has to file for BOI?

Entities obligated to disclose information are referred to as reporting companies, and they come in two distinct categories:

Domestic Reporting Companies: Domestic reporting companies encompass corporations, limited liability companies, and other entities established through the submission of documents to a secretary of state or a similar office within the United States. These entities are formed and operate within the legal framework of the United States.

Foreign Reporting Companies: Foreign reporting companies are entities, such as corporations and limited liability companies, constituted under the laws of a foreign country. However, they have elected to conduct business in the United States by formally registering through the submission of relevant documentation to a secretary of state or a comparable office. This registration signifies their commitment to complying with reporting requirements in the U.S., ensuring transparency and regulatory adherence in their operations.

There are exemptions to the reporting requirements of the BOI for certain entities which are categorized into 23 types. These exemptions include publicly traded companies, certain financial institutions regulated by federal or state agencies, and entities that demonstrate low risk for money laundering or terrorist financing based on specific criteria. It is important to find out whether your company is eligible for exemption through the small entity compliance guide provided by FinCEN.

Key Reporting Requirements for Tax Season 2024

A reporting company will have to report the following as stated by FinCEN:

• Its legal name;
• Any trade names, “doing business as” (d/b/a), or “trading as” (t/a) names;
• The current street address of its principal place of business if that address is in the United States (for example, a U.S. reporting company’s headquarters), or, for reporting companies whose principal place of business is outside the United States, the current address from which the company conducts business in the United States (for example, a foreign reporting company’s U.S. headquarters);
• Its jurisdiction of formation or registration; and
• Its Taxpayer Identification Number (or, if a foreign reporting company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction).

A reporting company will also have to indicate whether it is filing an initial report, a correction, or an update of a prior report.

For each individual who is a beneficial owner, a reporting company will have to provide:

• The individual’s name;
• Date of birth;
• Residential address; and
• An identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of the identification document (for examples of acceptable identification, see Question F.5).

The reporting company will also have to report an image of the identification document used to obtain the identifying number in item 4.

Reporting Process

The reporting companies can file electronically through a secure filing system available via FinCEN’s BOI E-Filing website. The E-Filing portal permits a reporting company to choose one of the following filing methods to submit a BOI:

• Upload the finalized PDF version of the BOI report and submit it online.
• Fill out a Web-based version of the BOI report and submit it online.

A reporting company may submit its BOI report through either of these methods, both of which require the filing to be done online as BOIRs cannot be mailed or faxed to FinCEN. Step-by-Step process is defined in the below image.

FinCEN expects that reporting companies can file by themselves through guidance given on the official website. However, reporting companies that need help meeting their reporting obligations can consult with tax professional service providers such as tax lawyers or accountants.

Deadlines for BOI Filing

1. A reporting company established or registered for business activities before January 1, 2024, is granted until January 1, 2025, to submit its initial BOI report.
2. In the case of a reporting company created or registered in 2024, the timeline for filing extends to 90 calendar days from the point of receiving actual or public notice confirming the effectiveness of its creation or registration.
3. For reporting companies formed or registered on or after January 1, 2025, the window for filing the initial BOI report is condensed to 30 calendar days from the receipt of actual or public notice affirming the effectiveness of the company’s creation or registration.

Penalties for Non-compliance to CTA

Within 90 days of the original report deadline, the reporting companies must correct a mistake or inaccuracy or submit reports to avoid penalties. However, failure to comply with BOI reporting obligations may result in civil and criminal repercussions. Under the CTA, intentional violations of BOI reporting requirements can lead to civil penalties of up to $500 for each day of non-compliance. Additionally, individuals may face criminal penalties, including imprisonment for up to two years and a fine of up to $10,000.

Potential violations may include intentionally neglecting to submit a BOI report, knowingly submitting a false BOI, or purposefully neglecting to correct or update previously reported BOI. It is crucial to adhere to reporting obligations and promptly rectify any errors to avoid potential legal consequences outlined by the CTA.

IRS Audit Group

IRS Audit Group comprises tax professionals, CPAs, enrolled agents, and attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

Tax season 2024 is here, and it brings a blend of excitement and unease for numerous taxpayers. While taxes may not be exciting for all, there is one element of tax season that nearly everyone looks forward to the possibility of getting a tax refund. In 2024, navigating the complex realm of tax laws and regulations can be overwhelming, but by implementing effective strategies, you can maximize your refund and boost the amount of money you receive.

To optimize your tax refund, it is crucial to maintain a high level of documentation throughout the year. It is always advisable to meticulously document all sources of income, expenses, and financial activities associated with your taxes. This entails retaining receipts for deductible expenditures like charitable contributions, medical bills, and business-related costs. By consistently keeping accurate records, you will have all the essential paperwork readily accessible for tax season 2024. This will simplify the process of claiming deductions and credits that have the potential to enhance your refund amount.

Tax Deductions and Credits

Maximizing deductions and credits can significantly lower your taxable income and boost your tax refund. It is crucial to make the most of these valuable tools in tax season 2024 by exploring all the deductions and credits that you are eligible for. Some commonly claimed deductions include expenses related to education, medical costs, and mortgage interest, among others. Follow the below key strategies to reduce taxable income.

1. Homeowners who choose to itemize their deductions have the opportunity to benefit from the mortgage interest deduction. This tax provision allows individuals who own a home to deduct the interest they pay on their mortgage from their taxable income. By taking advantage of this deduction, homeowners can potentially reduce their overall tax liability and enjoy the financial advantages of owning a property. It serves as an incentive for individuals to invest in homeownership and provides a valuable tax benefit for those who qualify. Find whether you are eligible for mortgage interest deduction here.
2. Taxpayers who choose to itemize their deductions have the opportunity to deduct the amount they paid in state and local income taxes, foreign income taxes along with any property taxes they have paid. This deduction, known as the State and Local Taxes (SALT) deduction, allows individuals to reduce their taxable income by the total amount they have paid in these taxes throughout the year. By taking advantage of this deduction, taxpayers can potentially lower their overall tax liability and keep more of their hard-earned money. As an individual, your deduction of state and local income, general sales, and property taxes is limited to a combined total deduction of $10,000 for the tax season 2024. You can check your eligibility for foreign income tax deductions here.
3. Certain educational expenses, including tuition fees and interest on student loans, are eligible for deductions and credits. These deductions and credits provide individuals with the opportunity to reduce their taxable income and potentially lower their overall tax liability. By taking advantage of these benefits, individuals can alleviate some of the financial burden associated with pursuing higher education and make it more affordable for themselves or their dependents. It is important to consult with a tax professional or refer to the relevant tax laws and regulations to ensure eligibility and maximize the available deductions and credits for educational expenses.
4. By making contributions to a retirement account, such as a 401(k) or IRA, you have the opportunity to reduce your taxable income and potentially receive a larger refund. This means that the money you contribute towards your retirement savings can positively impact your overall financial situation. By taking advantage of these retirement contribution options, you not only secure your future but also enjoy the immediate benefit of reducing your tax liability for the 2024 tax season and potentially receiving a higher refund.
5. Tax-efficient investment strategies can play a crucial role in optimizing your tax refund. One effective approach is to consider contributing to a Health Savings Account (HSA) or Flexible Spending Account (FSA), which enables you to allocate pre-tax funds specifically for medical expenses. By doing so, you not only lower your taxable income but also have the potential to boost your refund. Another avenue to explore is investing in tax-exempt municipal bonds, which offer income that is exempt from federal taxes. This can significantly enhance your overall tax efficiency and contribute to a more favorable refund outcome.

Seek Out for Tax Professionals

Navigating the complexities of the tax code can be challenging, and failing to take advantage of deductions or credits could result in a smaller refund. It is advisable to consider the help of a qualified tax professional who can ensure compliance with tax laws while maximizing your refund. Although there may be associated costs, the potential for increased savings and peace of mind may outweigh the expense. In summary, to maximize your tax refund, it is important to plan, stay organized, utilize available deductions and credits, contribute to retirement accounts, and seek professional assistance when necessary. By employing these strategies, taxpayers can make the most of tax season 2024 and keep more money in their pockets, bringing them closer to achieving their financial goals.

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices nationwide.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

There are several advantages to filing your tax return without any delay for the 2024 Tax Season.  Firstly, it allows you to receive your refund sooner and reduces risks associated with your tax identity.  Additionally, starting your tax preparation early gives you ample time to gather all required documents and information for claiming deductions, avoiding a last-minute rush.  If you use a paid preparer, they may have more flexibility and potentially offer lower fees or hourly rates during non-peak periods.  While the official deadline is April 18, 2023, the IRS typically begins accepting tax returns as early as mid-January.

Here are a few key benefits for tax preparers when they file their returns early for the 2024 Tax Season.

Avoid Late Filing Troubles

Tax return filing requires careful attention to detail, as each field on the form must be accurately completed.  It is important to take the time to provide the correct information, as rushing to file at the last minute can result in mistakes and inaccuracies.  If errors are made, it will be necessary to correct them and submit revised returns at a later date.

Early e-verification and Faster Refund Process

Filing your income tax return early ensures that it is verified and ready for refund processing sooner.  The refunds are processed on a first-come, first-serve basis, so those who file their returns before the due date will receive their applicable tax refund sooner.  However, if you file your returns late, the refunds will be delayed.

Avoid Penalties!

If you fail to file your tax return on time, you will be subject to a penalty of 5% of the unpaid taxes for each month or part of a month that the return is late.  However, this penalty will not exceed 25% of the unpaid taxes.  However, missing tax payments can have severe repercussions that indirectly affect your credit score.

Easy Loan approval and Visa Processing

Banks and financial institutions require customers to submit their income tax returns from the past three years in order to process various loan applications, including home loans and vehicle loans.  Credit card companies also prioritize submitting tax returns before issuing a card.  Filing income tax returns before the deadline demonstrates your reliability as a borrower and facilitates a smooth loan approval process.  Additionally, income tax returns are mandatory for Visa processing, serving as evidence of your financial stability and credibility.

Carry forward Losses!

Business Owners can benefit from early filings in tax season 2024 as they can carry forward any losses incurred to subsequent years and utilize them to offset the income earned in those years.

Keep away from Last-Minute Traffic!

The income tax filing website often encounters a significant surge in traffic as the deadline approaches, resulting in a temporary malfunction of the site.  This can potentially cause delays in filing your returns.  To avoid any last-minute technical glitches and non-compliance problems, it is advisable to submit your tax returns well in advance of the deadline.  Doing so can ensure a smoother and timely filing process without any unnecessary stress or complications.

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

The Internal Revenue Service (IRS) has recently announced that the tax filing season for the year 2024 is set to kick off on January 29, 2024.  This date signifies the official commencement of the IRS’s acceptance and processing of individual tax returns.  The tax season holds immense importance for both individuals and businesses, as it necessitates taxpayers to meticulously review and reconcile their income, deductions, and credits from the previous year.  Through this meticulous process, taxpayers ultimately ascertain their tax liability or determine their eligibility for a tax refund and more.

Understanding tax deadlines and refund timelines is crucial for effective personal financial planning since tax refunds can cover some of their expenses or pay off debts.  The IRS consistently promotes the use of electronic filing, as it offers a quicker and more streamlined process for both the taxpayer and the IRS in terms of processing tax returns.  By staying informed about tax deadlines and utilizing electronic filing methods, individuals can optimize their financial planning and ensure a smoother tax refund experience.

The IRS is anticipating that more than 128.7 million individual tax returns will be filed by the April 15, 2024 tax deadline.  While the official acceptance and processing of tax returns will begin on January 29, individuals using software or tax professionals can start working on their taxes before that date.  Software typically accepts electronic submissions and holds them until the IRS is ready to process them.  Additionally, the IRS Free File will be available on IRS.gov starting January 12, and the IRS Direct File pilot will be rolled out in phases, with wide availability expected in mid-March for eligible taxpayers in participating states.  The IRS is improving services to taxpayers, building on the success of the previous tax season and ongoing transformation efforts.  IRS officials emphasized that the agency is dedicated to using new funding to make the process of preparing and filing taxes easier for taxpayers.

Improvements to Tax Filing Services

The IRS has announced the launch of its latest version of the IRS Free File Guided Tax Software service, which is now available online for taxpayers to prepare for the upcoming 2024 tax filing season.  This online tool, now in its 22nd tax season, allows taxpayers across the U.S. to access free software products on the IRS website.  In addition, taxpayers are encouraged to use mobile devices as an alternative to traditional computers.  The IRS emphasized that taxpayers have multiple options for filing their taxes, including tax software, tax professionals, Free File, or free tax preparation services through IRS partners.  The tool includes eight private-sector partners who will provide free options for filing tax returns online or in person for individuals with an average gross income of $79,000 or less in 2023.  The IRS promotes this tool as a simple alternative for taxpayers to claim the full amount of tax benefits they qualify for, such as the Earned Income Tax Credit and the Child Tax Credit.

In order to evaluate customer support and technology requirements, the IRS has planned a limited-scope pilot for the upcoming 2024 tax season.  This pilot program will not only help the IRS assess its operational challenges but also serve as a platform to test and identify successful solutions.  The aim is to address the issues highlighted in the report submitted to Congress by the IRS earlier this year, ensuring improved efficiency and effectiveness in their operations.

2024 Tax Season Important Dates

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please get in touch with us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

The deadline for Tax Season 2023 for individuals is over, and those who filed for refunds will be receiving the same within 21 days from the filing date.  But, If the taxpayers have received a notice from the IRS that their taxes are incorrect or that they owe money, they can either pay or dispute if IRS is wrong. There are options available to resolve such disputes. The IRS dispute process is an essential part of the tax system, but it can be complicated and intimidating. Managing a dispute with IRS can be a complex and compelling process for taxpayers. Following are the steps to manage a dispute with the IRS. The first step in managing an IRS dispute is understanding how the process works, and what options are available for appealing or litigating the issue at hand.

Understanding the IRS Dispute Process

The IRS dispute procedure consists of numerous steps. Taxpayers can file a dispute if they disagree with the amount of tax they are required to pay or believe the IRS made a mistake in their tax return. If there are any changes that would affect their refund or balance payable, the first step is to file Form 1040X. Taxpayers can submit Form 9465, Form 8857, or Form 843 with the required supporting paperwork if there are no changes. These forms include Instalments Agreement Request, Request for Innocent Spouse Relief, and Claim for Refund and Request for Abatement, respectively. Ensure that taxpayers submit all required forms and documents to initiate the dispute process.

If there is no communication from the IRS regarding the dispute after 90 days from the filing, it is time to move forward with appealing their decision. To do so, follow these steps:

Appealing IRS decision

Taxpayers have the right to appeal an IRS decision, and taxpayers have the right to use the two-step appeals process which involves an administrative appeal. Taxpayers need to submit a written request for reconsideration to the office that made the initial decision within 60 days of receiving a letter of disallowance. This can be done by letter, fax, or online at www.irs.gov/appeals. Taxpayers can request Form 12356-A, which offers guidance on how to complete and submit the appeals with necessary supporting evidence. This phase of the investigation aims to identify why the IRS took certain actions, such as reducing refunds.

Litigating IRS Dispute

Taxpayers need to take legal action if they are unable to resolve their dispute with the IRS. The IRS offers several options for litigating disputes that include.

• Filing a lawsuit against the IRS in court. If a taxpayer has a valid reason for disputing an assessment or collection activity, they can file suit against the IRS in federal court or state court if applicable. Throughout this process, they need a tax attorney who specializes in tax law to represent them.
• Requesting a management hearing with the Appeals Office Reviewer (AOR) is another option when appealing an IRS decision. AOR evaluation from the relevant evidence before determining whether to grant relief or not. This step does not guarantee relief, but it’s usually the first taken in appeals.

The IRS dispute process can be confusing, but it’s important to know taxpayers’ options. It is important to understand the steps included and the options available to taxpayers for resolving the issue. This may include communications with IRS and providing additional information to support their position, requesting an appeals conference with an independent appeals officer, or considering mediation. In some cases, litigation may be necessary. Therefore, seeking tax professional advice and guidance throughout the process can help ensure that taxpayer’s rights are protected and they’re able to achieve the best possible outcome. IRS Audit Group is a tax audit representation company that helps taxpayers navigate such time-consuming dispute processes. Contact us for a free consultation. https://irsauditgroup.com/contact/

Toll-Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]