Tax season is always a crucial time for individuals and businesses alike. Staying updated with the latest information and news from the IRS can help you navigate the complex world of tax filing. In this article, Instant Global News brings you all the critical updates, new programs, and important changes from the IRS that may affect your tax filing.
Latest Updates
The IRS has recently announced several updates that are worth noting. Here are some of the key highlights:
New Voluntary Disclosure Program for Erroneous ERC Claims
The IRS has launched a Voluntary Disclosure Program for businesses that want to return the money they received after filing Employee Retention Credit (ERC) claims in error. This program aims to stop aggressive marketing tactics that misled employers into filing inaccurate claims. Interested employers must apply to the ERC Voluntary Disclosure Program by March 22, 2024. If accepted into the program, they will only need to repay 80% of the credit they received.
Disallowing Improper ERC Claims
To combat dubious ERC claims, the IRS has sent out more than 20,000 letters to taxpayers notifying them of disallowed claims. These disallowed claims include entities that did not exist or did not have paid employees during the eligibility period. The IRS is also offering a separate withdrawal program for employers with pending ERC claims, allowing them to remove the claims without any interest or penalty.
Penalty Relief on Unpaid Tax Returns
In a significant step to help individuals and businesses with unpaid tax bills, the IRS has announced new penalty relief for approximately 4.7 million taxpayers who were not sent automated collection reminder notices during the pandemic. This relief will total about $1 billion and will primarily benefit those making under $400,000 a year. Eligible taxpayers do not need to take any action to receive this penalty relief.
Form 1099-K Reporting Threshold Delayed
The IRS has announced a delay in the reporting threshold for Form 1099-K for third-party platform payments. The reporting threshold will not be required for taxpayers unless they receive over $20,000 and have more than 200 transactions in 2023.
End of Unannounced Revenue Officer Visits
The IRS has made a major policy change by ending unannounced visits to taxpayers by revenue officers. This change aims to reduce confusion and increase overall safety. Unannounced visits will only occur in unique circumstances.
These updates highlight the IRS’s efforts to improve transparency, compliance, and support for taxpayers. Now, let’s dive into some specific tax credits and filing information.
Clean Vehicle and Energy Credits
The Inflation Reduction Act of 2022 has brought changes to clean vehicle and energy credits. Here are a few important points to note:
New, Previously Owned, and Qualified Commercial Clean Vehicles Credit
The IRA has expanded the clean vehicle credit for qualified plug-in electric drive motor vehicles. It now includes fuel cell vehicles. Additionally, a new credit has been introduced for previously owned and commercial clean vehicles. If you have questions about these credits, refer to our frequently asked questions section on our website.
Home Energy Credits
The IRA has also made amendments to credits for energy-efficient home improvements and residential energy property. You can find details about eligible expenditures and credit limitations in our frequently asked questions section.
Alternative Fuel Credits
If you sold or used alternative fuels during 2022, you may be eligible to claim a credit and reduce your excise tax liability. Refer to Notice 2022-39 for instructions on making a one-time claim and reducing your excise tax liability.
These credits are part of the Inflation Reduction Act and aim to encourage clean energy usage and support environmentally-friendly practices.
2022 and 2023 Tax Filing
Filing your taxes correctly and on time is crucial to avoiding penalties and ensuring compliance. Here are some important points to keep in mind:
Missed the Filing Deadline?
If you missed the April 18 filing deadline, it’s essential to file your 2022 tax return as soon as possible. Taxpayers who owe and missed the deadline should file quickly to limit penalties and interest. If you’re unable to pay your tax bill, the IRS offers various options to help.
Disaster Tax Relief
Individuals and businesses affected by specific disasters have been granted extensions for filing their federal returns and making tax payments. Check the IRS website for the list of eligible localities and further details on tax relief in disaster situations.
State Payments
The IRS has clarified the federal tax status involving special payments made by 21 states in 2022. After a review, most taxpayers in these states will not need to report these payments on their 2022 tax returns.
Tax Credits Reverting to 2019 Levels
Several tax credits, including the Child Tax Credit, the Earned Income Tax Credit, and the Child and Dependent Care Credit, have reverted to pre-COVID levels for the 2022 tax year. This means that the amounts you receive may be lower than in previous years. Make sure to take note of these changes to avoid any surprises.
These updates and reminders ensure that you’re well-informed and prepared when it comes to tax filing. Now, let’s address some common questions in our FAQ section.
FAQs
Q: Can I still claim tax credits if I don’t owe taxes?
A: Yes, families and individuals who qualify can still file their 2021 tax return and claim tax credits, such as the Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit, without penalty.
Q: Can Puerto Rico families claim the Child Tax Credit?
A: Families residing in Puerto Rico who don’t owe taxes to the IRS can file their 2021 tax return until April 15, 2025, and claim the Child Tax Credit of $3,600 per child without penalty.
Q: Are there any changes to tax credits due to the COVID-19 pandemic?
A: Yes, tax credits such as the Child Tax Credit, the Earned Income Tax Credit, and the Child and Dependent Care Credit have reverted to pre-COVID levels for the 2022 tax year. It’s important to be aware of these changes to manage your expectations.
Q: Are there any new stimulus payments for 2022?
A: No, there were no new stimulus payments issued for 2022.
These frequently asked questions address key concerns that taxpayers may have. Now, let’s wrap up with a quick summary.
Conclusion
Staying informed about tax updates and news from the IRS is vital for a smooth tax filing process. In this article, we’ve highlighted some of the latest updates, changes, and important information that could affect your tax filing. From new programs and penalty relief to clean vehicle credits and tax filing reminders, the IRS is continuously working to improve services and support taxpayers.
Remember to regularly check the IRS website for the most up-to-date information, as tax laws and regulations may change. The team at Instant Global News is dedicated to providing you with insightful and practical information to help you navigate the world of taxes. Stay tuned for more useful updates and news.
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