Issue 61  January 17th 2024

Tax Season Starts Soon; When can you file?

The Internal Revenue Service has announced that they will start accepting and processing 2023 federal tax returns on January 29th. However, depending on how complicated your tax return is, you may be able to submit your federal tax return now, even though the IRS is not yet accepting tax returns, but you will still need to wait till January 29th for the IRS to receive your return and process it. The IRS Free File program opened January 12 where eligible taxpayers can file their federal returns for free. To qualify to use a free file program your Adjusted Gross Income (AGI) must be $73,000 or less. For more information click on the link below.

Internal Revenue Service is waiving back penalties

Just in time for the holiday season, the Internal Revenue Service announced that they will help individuals, business and tax-exempt organizations that owe back taxes. The IRS will waive nearly $1 billion in penalties for taxes owed by almost 5 million taxpayers who did not receive automated collection reminder notices during the COVID-19 pandemic. Under the penalty relief, the IRS will waive failure to pay penalties (FTP) for eligible taxpayers for tax years 2020 and 2021. The Penalty relief will automatically apply to taxpayers with assessed tax under $100,000 that received an initial notice of taxes owed but were not sent automated collection reminder notices during the pandemic. For more details click on the link below.

Employee or independent contractor?

U.S. Department of Labor (DOL) came out with the new rule which offers guidance for employers related to determining whether to classify a worker as an employee or independent contractor under Fair Labor Standards Act (FLSA). The new rule calls for employers to consider six factors when determining whether a worker should be treated as an employee or independent contractor. The six factors are:

• Any opportunity for profit or loss a worker might have;
• The financial stake and nature of any resources a worker has invested in the work;
• The degree of permanence of the work relationship;
• The degree of control an employer has over the person's work;
• Whether the work the person does is essential to the employer's business; and
• A factor regarding the worker's skill and initiative.

The new rule becomes effective March 11, 2024. For more details click on the link below.

EV Tax Credit

Are you thinking about buying an electric vehicle in 2024? Here are some of the things to consider when thinking about possible tax savings. Starting with 2024 fewer vehicles are eligible for the full $7,500 EV tax credit. Some vehicles that qualified for partial or full credit in 2023 may not qualify as of January 1, 2024. For more details on which vehicles qualify and why there is a reduction in credits 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 a 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