Tax News Updates | November 2024

• 2024 BTB Tax Toolkit – Now Available
• Seminars are Underway
• Guidance Issued for the Energy Efficient Home Improvement Credit
• 2025 Social Security COLA Announced
• Inflation Adjustments for 2025 Released
• IRS Encourages All Taxpayers to Get IP PIN
• PTIN Renewal Season is Here
• Tax Troubles
• November  Applicable Federal Rates
• 2024 Back to Basics Update
• 2024 Seminar / Webinar Dates and Locations 
• 2024 Desk Reference Guide
• Viroqua Tax Practice For Sale
• Accounting Practice for Sale
• Kenosha & Racine Area – Client Referrals
• Area Stakeholder Liaison Teams
• Speaking Engagements
• The Tax Book – Promo Code 544
• CFS Tax Tools – Coupon Code BTB57143
• $50 Referral Bonus 

“Today, it takes more brains and effort to make out the income-tax form than it does to make the income.”

~  Alfred E. Neuman

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. 

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.

2024 BTB Tax Toolkit – Now Available

The year-end planning letter is now available. The cost is only $60 delivered to your email email. In addition to your own professionally written 4-page ready to mail newsletter, we have included client interview worksheets, a data taker, sample election statements, and a client engagement letter. The newsletter includes articles on new tax laws, year-end planning, and much more. Click here for online ordering and delivery of the 2024 BTB Tax Tool Kit.

Seminars are Underway

The 2024 BTB seminars started in September, webinars began October 25. If you have not registered – now is the time to do it. For those with more than one person attending an event from the same office, don’t forget to take advantage of the group discounts.

We have launched a new website where you can now create and manage your own account.

1. On-line registration. Once your account is created you can then login and register for each event. Click here or the button below to get started.

2. Group registrations. To take advantage of the group discounts, we can help you with the process. Just use the link and fill out the group registration form, hit submit and we will complete the group registration for you.

If you have already registered, we will see you at the event. Just remember to bring your seminar confirmation letter with you to the seminar. For our full-day seminars and webinars, check-in begins at 8:00 am. Seminars start at 8:25 am and end at 4:35 pm.

Guidance Issued for the Energy Efficient Home Improvement Credit

Recently issued Revenue Procedure 2024-31 and proposed regulations provide guidance for the Energy Efficient Home Improvement Credit. The revenue procedure provides procedures and requirements that a manufacturer of specified property must follow to be treated as a qualified manufacturer (QM). To become a QM, a manufacturer must:

• Register and enter into an agreement with the IRS.
• Assign a qualified product identification number (PIN) unique to each item of specified property.
• Label such items with PINs.
• Make periodic reports to the IRS of PINs assigned.

For property placed in service beginning in 2023, a taxpayer may take a credit equal to 30% of the total amount paid for certain energy efficient products or for a home energy audit. 

The credit is limited to certain amounts, per taxpayer and per tax year. A taxpayer may claim a total credit of up to $3,200, with a general total limit of $1,200, and a separate total limit of $2,000 for electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves or boilers that meet certain requirements.

The $1,200 general limit also includes additional limitations specific to certain types of property that meet the requirements:

• $600 for any item of qualified energy property.
• $600 in total for exterior windows and skylights.
• $250 for an exterior door.
• $600 in total for exterior doors.
• Home energy audits are limited to $150.

Beginning in 2025, for each item of specified property placed in service, no credit will be allowed unless the item was produced by a QM and the taxpayer includes the PIN for the item on the taxpayer’s tax return.

2025 Social Security COLA Announced

The Social Security Administration (SSA) has released its 2025 COLAs. Individual wages subject to the 6.2% Old Age, Survivors, and Disability Insurance (OASDI) tax increases from $168,600 to $176,100. 

There remains no limit on wages for the Medicare hospital insurance tax of 1.45%. Social security and Supplemental Security Income (SSI) beneficiaries will receive a 2.5% increase resulting in the average social security retirement benefit increasing by approximately $50 per month. 

The SSA will begin issuing simplified one-page COLA notices to social security beneficiaries in early December 2024. Individuals who set up a social security account at www.ssa.gov/myaccount by November 2024 will be able to log into their accounts to view their COLA notices online. 

Additional SSA COLAs can be viewed at www.ssa.gov/news/press/factsheets/colafacts2025.pdf .

Inflation Adjustments for 2025 Released 

The IRS announced the annual inflation adjustments for tax year 2025. Revenue Procedure 2024-40 provides detailed information on adjustments and changes to more than 60 tax provisions that will impact taxpayers when they file their returns in 2026.

Changes include those for the standard deduction, marginal tax rates, AMT, earned income tax credits, pulse more. Unchanged for the 2025 tax year include amounts for the personal exemption, lifetime learning credits and the limitation on itemized deductions 

IRS Encourages All Taxpayers to Get IP PIN

The IRS encourages all taxpayers to safeguard their identity by signing up for an identity protection personal identification number (IP PIN). This simple yet crucial step can provide an added layer of security, helping protect against tax-related identity theft.

Taxpayers should sign up for an IP PIN before Nov. 23, 2024. After this date, the IP PIN system will undergo maintenance and will not be available again until early January 2025. Signing up for an IP PIN now will ensure that a taxpayer’s identity is protected when the filing season begins. New IP PINs are generated for the 2025 filing season during this period, so online enrollees must retrieve their new IP PIN starting early January 2025.

How to request an IP PIN

The best way to sign up for an IP PIN is through an IRS Online Account. The process requires identity verification, and spouses and dependents can also obtain an IP PIN if they complete the required verification steps. Once an IPPIN is issued, it must be on both electronic and paper returns.

To get an IP PIN, taxpayers should create or log into their online account at IRS.gov and follow the steps for identity verification. Once verified, taxpayers need to click on the profile tab to request their IP PIN. IP PIN users must use this number when filing their federal tax returns for the current calendar year and any previous years filed during that same period.

For those unable to create an Online Account, alternative methods are available, such as in-person authentication at a Taxpayer Assistance Center. More information is available on how to sign up at Get an identity protection PIN (IP PIN).

Additional information about IP PINs

• An IP PIN is valid for one calendar year. For security reasons, new IP PINs are generated at the beginning of each calendar year. Some participants will receive their IP PIN in the mail, while others will have to log into their Online Account to view their current IP PIN.

• Enrolled taxpayers can log back in to their Online Account to view their current IP PIN.
• Taxpayers with an IP PIN must use it when filing any federal tax returns during the year, including prior year tax returns, or amended returns.
• IP PIN users should share their number only with the IRS and their tax preparation provider. The IRS will never call, email, or text a request for the IP PIN.

• Taxpayers can get an IP PIN now for 2024. The IRS will issue new IP PINs starting in January 2025.
• Taxpayers who enrolled in the IP PIN program and have not been a victim of tax-related identity theft can opt out of the IP PIN program via their Online Account.

PTIN Renewal Season is Here

PTIN (Preparer Tax Identification Number) renewal season is now underway for all tax professionals. The fee to obtain or renew a PTIN for 2025 is $19.75. All current PTIN holders will receive formal notification from the IRS Return Preparer Office in the coming weeks.

All PTINs expire on Dec. 31, and must be renewed annually. Tax professionals and enrolled agents must have a valid PTIN to prepare any federal tax returns for compensation.

Tax Troubles

This is a case of taxpayers attempting to deduct business expenses from activities that were not conducted as a business. 

Debra Lea Jones-Mazotti and Robert Dean Mazotti, married taxpayers who file joint returns, weren’t entitled to business deductions for Debra’s alleged writing-researching activities that weren’t engaged in for profit within the meaning of §183. Notably, Debra admittedly lacked a business plan, had no profit-loss statement, didn’t otherwise keep adequate records, and overall failed to conduct activities in a businesslike manner. Further, although claiming to have consulted famous authors and other experts, she didn’t offer any credible evidence that any author or other expert provided advice about her activities. She also didn’t provide credible evidence of how much time she spent on activity or that she had business success in similar activities; had prolonged period of losses from activities; used said losses to offset other income; and derived personal pleasure from activities or used same for recreational purposes, including by treating extensive family vacations as research trips.

Debra Jones-Mazotti did not keep formal books and records related to her purported writer-researcher expenses. And she has never run a profit-and-loss statement. Moreover, the Mazottis claimed deductions for personal expenses such as family vacations, clothing, food, home improvements, and vehicle maintenance and repair costs. When pressed about the nature of the deductions, Ms. Jones-Mazotti was evasive and often unable to explain how these personal deductions related to her purported writer-researcher business activities. A reasonable and prudent person would know that personal expenses may not be deducted under the guise of business expenses.

Under the circumstances, the Court ruled that the Mazottis were negligent in that they failed to make reasonable attempts to comply with the tax law and to determine the correctness of deductions that should have seemed too good to be true [Robert D. Mazotti, et ux. v. Commissioner, T.C. Memo. 2024-75].

November Applicable Federal Rates

Rev Rul 2024-24

2024 Back to Basics Update

Website – New and improved website for better access to the newsletter and an improved registration system. 

Registration – In an effort to improve registration and CPE / CE reporting we need to have each participant register with his/ her own separate email address. The system is now designed to allow only one distinct email address per person. Your registration is your ticket to the seminar or webinar.

Note: Because of the strict continuing education requirements – each person will have to register separately even if you are part of an office group.

E-book Option – As always, all participants will receive a printed textbook for each session. However, if you prefer to go paperless, you can save $10 per session by selecting e-book only.

Webinars – Over 45% of our registrations are from Webinars – which tells us that more people prefer the convenience of on-line education. We have added additional dates and times for our on-line webinars this year – including an option that is more convenient for those in the Mountain time zone.

Seminar Locations – Due to the success of the webinars, the average classroom size for the in-person seminars has decreased. Unfortunately, this makes it necessary to consolidate a few of our seminar locations. For those who attended our prior seminars in Superior, Janesville, and Racine you will have to select one of our other remaining locations – or join us on-line.

Referral Program – We understand that referrals have always been the best way to grow a business. As a thank you, we will mail you a $50 referral fee for each new attendee who registers for a Back-to-Basics seminar.

2024 Seminar / Webinar Dates and Locations 

Registration is now available.

Note: All webinars begin at 8:25 am and end at 4:35 pm in the time zone indicated above.  

2024 Desk Reference Guide

Now that the final numbers for 2024 have been released by the IRS, we have updated the Desk Reference Guide for the new year. Click here for your copy of the 2024 Desk Reference Guide.  

Viroqua Tax Practice For Sale

Tax and accounting practice for sale in Viroqua, Wisconsin. Loyal clients, good reputation, high-growth community in the heart of the scenic Driftless area of Southwest Wisconsin. Owner retiring after 30 years. Gross revenue $330K. 68% tax, 32% accounting. Average 1040 fee is $621. Exceptionally clean files and well-organized office. Two employees are eager to stay under new leadership. Owner willing to provide transition services. Excellent office location is available to be leased from the owner, if desired. 

For additional information, please contact celeste@gibsoncpalaw.com.

Accounting Practice for Sale

Northeast/central Wisconsin. $380,000 gross (sale price negotiable). Drake tax software, Quickbooks accounting software. Networked computers, all office equipment, 3,300 square foot office on main highway, available for lease or purchase.   Seller willing to provide multiple years of transition support.  

Reply to bkcpa@frontier.com for more details. 

Kenosha & Racine Area – Client Referrals

I have been attending the BTB seminars for many years.  I plan to retire from tax work after next tax season – April 16, 2025.  I have a small tax practice in Kenosha with about 75 clients.  I work alone, out of my home, so I have been able to keep my fees reasonable.  When I visit with my clients after the first of the year, I would like to help them find a new tax preparer for their 2025 taxes by giving them a list of available tax preparers.  If you are in the Kenosha or Racine area, and you are taking new clients, please contact me via email: peggyjgallo@gmail.com.

Area Stakeholder Liaison Teams

Speaking Engagements 

If your professional group is looking for outside speakers for an upcoming event – we can help. For additional information, please email jim.s.hockenberry@gmail.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)

Back to Basics Income Tax Seminars^® is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org. Sponsor ID # 108520