
What to know before completing your tax return
Posted on March 3, 2024
The IRS is getting better and better at communicating important info – and getting more customer-friendly. (How ‘bout that?) With tax prep and return season in full swing, we at Teipen CPA Group think the timing is perfect!
Here’s a few info sites to help you with tax return prep this season:
Keep tabs on IRS.gov for updated resources and tools along with a special free help available 24-hours a day.
Teipen Group CPAs sometimes refer questions to Publication 17, Your Federal Income Tax (For Individuals) for additional guidance. It’s clear, concise, and full of updated info.
A word about accuracy and deadlines (the IRS has not softened on these concepts):
- The deadline this tax season for filing Form 1040 and 1040-SR (for seniors)is Monday, April 15, 2024..
- Don’t file without all your tax documents.That could lead to mistakes and potential delays.
- Organize your tax records to make the process of preparing and completing your tax return easier much easier (for you and for us!)
- Review, review, review. Look for inaccuracies or missing information. Find an error? Contact the issuer immediately to request a correction.
Create an IRS Online Account. (Teipen can help if you’re not sure how.) Online accounts provide secure access to information about your federal tax account, including payment history, tax records and other important information.
What’s changed for tax year 2023?
- The standard deduction amount increased. The amounts are:
- — Single or married filing separately — $13,850.
- — Head of household — $20,800.
- — Married filing jointly or qualifying surviving spouse — $27,700.
- Additional child tax credit has also increased.The maximum additional child tax credit amount has increased to $1,600 for each qualifying child.
- Child tax credit enhancements.Many prior changes to the Child tax credit (CTC) implemented by the American Rescue Plan Act of 2021 have expired. (That said, if Congress changes the CTC guidelines, the IRS will automatically make adjustments for those who have already filed so no additional action will be needed by those eligible taxpayers.)
- Earned Income Tax Credit (EITC). To claim the EITC without a qualifying child in 2023, taxpayers must be at least age 25 but under age 65 at the end of 2023. If a taxpayer is married filing a joint return, one spouse must be at least age 25 but under age 65 at the end of 2023. (Need more clarify? Go to Instructions for Schedule 8812 (Form 1040) or ask your Teipen CPA for help.
What about the Clean Vehicle Credit?
The credit and requirements for new qualified plug-in electric drive motor vehicles have changed. The credit can be reported on Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit, and on Form 1040, Schedule 3. Go to IRS Publication 17, Your Federal Income Tax (For Individuals), taxpayer guide for more precise info.
1099-K reporting requirements have not changed
However, after reviewing feedback from taxpayers, tax professionals and payment processors, the IRS recently released Notice 2023-74 announcing a delay of the new $600 reporting threshold for tax year 2023 on Form 1099-K, Payment Card and Third-Party Network Transactions. The previous reporting thresholds will remain in place, including the following:
- If you received direct payment by credit, debit or gift cards for selling goods or providing services by customers or clients, request Form 1099-K from your payment processor — no matter how many payments you received or how much they were for.
- If you used a payment app or online marketplace and received over $20,000 from over 200 transactions, the payment app or online marketplace is required to send a Form 1099-K. (Whether or not you received a Form 1099-K, you must still report any income on your tax return.)
- What’s taxable?It’s the profit from these activities that’s taxable income. The Form 1099-K shows the gross or total amount of payments received.
- What’s not taxable?You don’t need a Form 1099-K for personal payments, including money received as a gift and for repayment of shared expenses. Note those payments as “personal,” if possible.
If you have concerns about any of the above-mentioned changes and how they may affect your tax situation, our CPAs are here to help. Give us a call.