Tax News Update | December 2023

• IRS Postpones 1099-K Reporting
• IRS Releases Official 2024 Inflation Adjustments
• 2024 IRA and 401(k) Limits Increase
• The IRS May Call You – Really
• Online Tool for Sellers of Clean Vehicles Now Available
• Interest Rates Remain the Same for Q1 2024
• December Applicable Federal Rates
• Area Stakeholder Liaison Teams
• Business Issues webinar added – Dec 19
• 2023 Seminar Dates and Locations
• Tutorial for joining our webinars without the Zoom app.
• 2023 BTB Brochure
• The Tax Book – Promo Code 544
• CFS Tax Tools – Coupon Code BTB57143
• $50 Referral Bonus 

“The government you elect is the government you deserve.”

~ Thomas Jefferson

Instructors 

James Hockenberry, EA – Jim is the President of Back to Basics Income Tax Seminars and has over 31 years of experience in income tax and financial planning. He is an Enrolled Agent and holds a Bachelor of Business Administration (BBA) degree from the University of Wisconsin-Eau Claire. He has worked as a tax researcher / technical writer and has served as an instructor for several tax and financial organizations. Jim has also written several texts regarding income tax, estate tax, and financial planning matters. 

Steve O’Rourke, EA – Steve is an Enrolled Agent with a successful tax practice in Oshkosh, Wisconsin. His firm, which was established in 1989, prepares over 2,500 individual and business tax returns. Steve has a Bachelor of Business Administration (BBA) degree from the University of Wisconsin – Oshkosh. He has over 40 years of experience as a tax professional and is a nationally known speaker, having taught tax seminars for the National Association of Enrolled Agents, the National Association of Tax Professionals, and several other professional organizations nationwide.

IRS Postpones 1099-K Reporting 

IRS announced that it is again delaying implementation and enforcement of new $600 Form 1099-K reporting threshold, which as enacted under American Rescue Plan Act 2021 (ARPA) was to take effect for post-2021 years, but which IRS delayed for 2022 calendar year and is now again delaying for 2023 calendar year. Thus, for 2023, pre-ARPA reporting threshold of $20,000 and 200 or more transactions will remain in place. This relief is in wake of feedback from taxpayers, tax professionals, and payment processors, and is meant to alleviate potential confusion. Details are set out in Notice 2023-74.

Also, IRS states that it is planning for another (partial) delay of implementation in 2024, “planning for a threshold of $5,000 for tax year 2024 as part of a phase-in implementation,” and invites feedback as to the same.

IRS Releases Official 2024 Inflation Adjustments

The IRS has issued Rev. Proc. 2023-34 that contains various 2024 inflation adjusted amounts, including the individual tax rates, capital gains rates, standard deductions, §179 expensing limits, and inflation-adjusted figures for health, charitable, compliance, and other specialty items. Some of the more notable adjustments are below.

Standard Deduction

$29,200 – Joint return or surviving spouse

$21,900 – Head of household

$14,600  – Single

$14,600 – Married filing separate returns

$1,300 – Dependents (or $450 plus the individual’s earned income, whichever is greater. 

$1,550 – Married taxpayers 65 or over or blind

$1,950 – Single taxpayer or head of household who is 65 or over or blind

Exemption Amount

$5,000 – While the dependency exemption deduction under §151 is reduced to zero from 2018 through 2025, this reduction isn’t taken into account for other purposes of the Code, such as who is a qualifying relative for family credit purposes, and eligibility for head-of-household status. 

Kiddie Tax Exemption

$2,600  –  A parent will be able to elect to include a child’s income on the parent’s return for 2024 if the child’s income is more than $1,300 and less than $13,000

Business Expensing

$1,220,000 – The amount that may be expensed under §179

These and all the other inflation adjusted figures are found in Rev. Proc. 2023-34.

2024 IRA and 401(k) Limits Increase

The IRS issued technical guidance in Notice 2023-75 regarding all of the cost‑of‑living adjustments affecting dollar limitations for IRAs, pension plans and other retirement-related items for tax year 2024.

$23,000 – Contribution limit for 401(k), 403(b), most 457 plans, Thrift Savings Plans 

$7,500 – Catch-up contribution limit for individuals aged 50 and over 

$7,000 – The limit on annual contributions to an IRA 

$1,000 – Catch-up contribution limit for individuals aged 50 and over 

$16,000 – Contributions to SIMPLE plans

$3,500 – Catch-up contribution to a SIMPLE plan for employees 50 and over

The income ranges for determining eligibility to make deductible contributions to traditional IRA, to contribute to Roth IRAs, and to claim the Saver’s Credit all increased for 2024.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) 

The phase‑out ranges for 2024 are between:

$77,000 and $87,000 – For single taxpayers covered by a workplace retirement plan. 

$123,000 and $143,000 – For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan.

$230,000 and $240,000 – For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered.

$0 and $10,000 – For a married individual filing a separate return who is covered by a workplace retirement plan.

$146,000 and $161,000 – For taxpayers making contributions to a Roth IRA for singles and heads of household.

$230,000 and $240,000 – For married couples filing jointly. 

$0 and $10,000 – For married individuals filing a separate return who makes contributions to a Roth IRA.

These and other inflation adjusted amounts are found in Notice 2023-75 

The IRS May Call You – Really

The IRS has announced that between November 27, 2023, and January 19, 2024, it will be randomly contacting tax professionals to participate in a voluntary phone survey. The IRS will use the survey responses to help it improve services to the tax professionals community and the taxpayers they serve.

According to the IRS, the survey will:

• Be conducted by ICF, an independent research firm hired by the IRS, 
• Take about 20 minutes to complete, 
• Cover topics including e-filing, due diligence requirements, data security, and electronic document submission, and 
• All responses are anonymous and confidential.

Individuals taking the survey will not be asked to provide any personal information about themselves or their clients. 

Tax professionals selected to take the survey will be contacted by ICF Monday through Friday, between 8:30 am and 6:30 pm local time, from an 816 (Kansas City) area code. 

For more information or questions about the survey tax professionals can email TaxProfessional@icfsurvey.com or call (888) 504-6387.

Online Tool for Sellers of Clean Vehicles Now Available 

Clean vehicle dealers can now register using the new IRS Energy Credits Online tool, known as IRS Energy Credits Online. The new tool enables dealers and sellers of clean vehicles to complete the entire process online and receive advance payments within 72 hours. The tool will generate a time-of-sale report that the taxpayer will use when filing their federal tax return to claim or report the credit. Beginning in 2024, clean vehicle sellers and licensed dealers must use the tool for their customers to successfully claim or transfer the new or previously owned clean vehicle credit for vehicles placed in service on Jan.1, 2024, or later.

Interest Rates Remain the Same for Q1 2024

The IRS has announced that over/under payment interest rates will remain the same for the calendar quarter beginning January 1, 2024. The interest rates for the first quarter of 2024 are: 

• 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
• 5.5% for the portion of a corporate overpayment exceeding $10,000.
• 8% for underpayments (taxes owed but not fully paid).
• 10% for large corporate underpayments.

Rev Rul 2023-22

December Applicable Federal Rates

Rev Rul 2023-20

Area Stakeholder Liaison Teams

Business Issues webinar added on December 19.

We will be offering a Business Issues Update & Review webinar on Tuesday, December 19 for 8 CE/CPE credits. I will be rebroadcasting an earlier seminar with Jim hosting and answering your questions during the broadcast. See this link for a credit breakdown. Also, see this link for the Agenda. All listed times are Central Time.

2023 Seminar Dates and Locations

Please note that we have moved two locations (Brookfield and Mesa) for the 2023 seminars. Note that each location has a link to Google maps. 

— Click to Register —

WISCONSIN

LIVE-STREAM WEBINARS

Part I Update & Review                       Dec. 14

Part II Update & Review                      Dec. 6, Dec. 7, Dec. 15

— Click to Register —

Tutorial for Joining our Webinars Without the Zoom App 

Some people have had some issues joining our live stream webinars using the Zoom app. We have recorded a short 3 minute tutorial on how to join our webinars using only a browser. Click here to watch the tutorial. 

Speaking Engagements 

If your professional group is looking for outside speakers for an upcoming event – we can help. For additional information, please email jhockenberry@dbcllc.com.

The Tax Book – Promo Code: 544

Use Promo Code 544 for additional discounts and take advantage of The Tax Book’s award-winning tax research solutions. 

Order at: www.thetaxbook.com/order
Promo Code: 544

CFS Tax Tools – Coupon Code: BTB57143

CFS Tax Software, Inc.

Tax Tools is a collection of over 300 worksheets, calculators, flowcharts, and forms that tackle a variety of tough tax topics (many of which aren’t included in your 1040 software), including:

• Individual Tax Planner 
• ACA modules 
• Penalty and Interest Calculator 
• Social Security Optimization 
• Updated for latest tax law changes

You can order online at www.taxtools.com, or call 1-800-343-1157. Either way, be sure to use Coupon Code BTB57143 for additional savings.

$50 Referral Bonus

Refer a new attendee to a Back to Basics Income Tax Full Day Seminar and receive a $50 referral fee. Upon receipt of the new attendee registration(s), BTB Income Tax Seminars will mail you a check of $50 for each new attendee. Click Here to get a copy of the referral coupon.

(NOTE: Not valid with any other special offers or discounts)