News you can use
AICPA Supports Changing Requirements to Form 1099-K Reporting Threshold
American Institute of Certified Public Accountants (AICPA) has expressed its concern regarding lowered Form 1099-K reporting threshold, noting that the reduction in the de-minimis reporting threshold from third party network transactions from $20,000 and 200 transactions threshold to $600 for any number of transactions has create a significant burden. Earlier this month, the AICPA endorsed bipartisan Senate legislation S. 1761, the Red Tape Reduction Act, introduced by Senators Sherrod Brown (D-OH) and Bill Cassidy (R-LA), which would establish a $10,000 reporting threshold. The AICPA believes this legislation balances the taxpayer’s need to effectively manage reporting requirements with the goal of improving tax enforcement efforts. For a full article click on the link below.
Home Energy Credit
There are two types of Home Energy Credits that taxpayers may qualify for in 2023.
Energy Efficient Home Improvement Credit: If a taxpayer makes qualified energy-efficient improvements to their home, they can qualify for a tax credit of up to $3,200 for the tax year the improvements are made. As part of the Inflation Reduction Act (IRA), beginning in 2023 the credit equals 30% of certain qualified expenses.
Residential Clean Energy Credit: Taxpayers who invest in energy improvements for their main home, including solar, wind, geothermal, fuel cells or battery storage, may qualify for an annual residential clean energy tax credit. Taxpayers may be able to claim a credit for certain improvements other than fuel cell property expenditures made to a second home they live in part-time and don’t rent to others. The Residential Clean Energy Credit equals 30% of the costs of new, qualified clean energy property for a home in the United States installed anytime from 2022 through 2033.
For more details and a full article click on the link below.
IRS Gave Out More Than $10 Billion in Excess Child Tax Credit
The IRS miscalculated 2021 child tax credit payments for thousands of eligible taxpayers according to a new report from the Treasury Inspector General for Tax Administration. The American Rescue Plan Act of 2021, which was approved by Congress and enacted on March 11, 2021, expanded the child tax credit and authorized monthly payments, with differing amounts, to eligible individuals and families based on their adjusted gross incomes and, if they have kids, their children’s ages. The IRS created an automated process to recalculate the child tax credit and this process uncovered 3.8 million tax returns that contained a discrepancy. The result of an audit released on June 14th found that:
1. 6,833 taxpayers potentially received $10.5 million in excess child tax credit because tax examiners incorrectly resolved errors.
2. 105 taxpayers did not receive all their eligible child tax credit, estimated at $139,000.
For a full article click on the link below. There is an error in the title of the article, it should be $10 Million instead of $10 Billion.
Analysis of IRS Tax Audits
The most recent analysis shows that for every $1 the IRS spends auditing high-income taxpayers, it yields more than $12 in revenue, and audits of lower-income taxpayers yields $5 in revenue. Another interesting finding in analysis shows that getting audited tends to scare taxpayers and increase the amount they pay in taxes, for roughly a decade and a half. For a full article click on the link below.
States Sending Tax Rebate – is your state one of them?
Last year, over twenty states distributed one-time payments to qualifying residents, and some states are continuing to offer rebates in 2023. For a full article and list of states that have issues and are still in process or sending rebates click on the link below.
Is it worth to be in Middle-Class?
The federal poverty level for a family of four is $30,000 in 2023. According to U.S. Census Bureau data the median (middle-class) household income was $70,784 in 2021 (most recent statistics). With a difference in income of nearly $41,000, you might expect middle-class families to have a much easier time affording necessities. Unfortunately, due to high living costs, many families who are considered to be middle-class feel like they are essentially living in poverty. Overall, it costs more than $36,000 per year to be middle-class, landing some families with household incomes of $70,784 just $4,446 over the federal poverty line in 2023. For a full article and to find out why is Middle-Class Struggling click on the link below.
Let's Talk!
If you know of someone who needs tax and accounting help, please feel free to share with them my contact information. If they are still not sure about making a move please ask them to check out my newsletter.
For free consultation click on the link to schedule a one-on-one meeting with me over zoom or face to face. Schedule by clicking on a link below.
E-mail: dragana@dcmtax.com
Phone:318-751-5455
Dragana's World
Pickleball Update!!!
Since the last Newsletter I have participated in Selkirk Texas Open PPA tournament which was held at Rockwall, TX June 1-4, 2023. I played singles, women’s doubles, and mixed doubles. There were over 1,500 participants in different categories. This tournament was a great experience. I enjoyed every minute on and off the court playing, meeting new people, and socializing with my Shreveport/Bossier crew. Very thankful to all those that stayed in the sun for hours and supported me/us specially mixed double since we were on the court for most of the Sunday (June 4). I was able to meet some of the professional pickleball players as well to watch some of the championship matches.
Selkirk Texas Open PPA Results
Singles 4.0 19+ – won two matches and lost two matches.
Women’s Doubles 4.0 19+ played with Lindsey Blount - won two and lost two matches.
Mixed Doubles 4.0 19+ played with Eric Zheng - won five and lost two matches.