Tax Updates Late November
Additional Delay in Form 1099-K Reporting
The IRS will treat 2023 as an additional transition year when it comes to the American Rescue Plan (ARP) provision regarding the $600 reporting threshold for third-party payment processors. Under previous rules, third-party processors and platforms did not have to report the payments on Form 1099-K unless the taxpayer received over $20,000 and had more than 200 transactions in the year. The ARP lowered that threshold to $600. After many months of feedback from taxpayers, tax professionals, payment processors and others, the IRS temporarily delayed the new requirement last year, and is repeating the delay for 2023. A phase-in threshold of $5,000 is planned for the 2024 tax year.
Saver’s Credit Reminder
The IRS reminds low- and moderate-income taxpayers that the Retirement Savings Contributions Credit (Saver’s Credit) can help them earn a special tax credit in 2024 and beyond. The deadline for contributing to a workplace plan such as a 401(k) is December 31, and savers have until April 15, 2024 to contribute to an IRA or Roth IRA. The credit is available to individuals with adjusted gross incomes (AGIs) up to $36,500; heads of household can earn up to $54,750 AGI, and married couples filing jointly can claim the credit it with AGIs up to $73,000. Use the Interactive Tax Assistant tool for the Saver’s Credit to determine eligibility or visit the Saver’s Credit page for more information.
National Tax Security Awareness Week Commences
Security Summit partners have kicked off the 8th National Tax Security Awareness Week. The focus is on protecting sensitive financial information against identity thieves and other security threats, especially around the holidays and the start of the 2024 tax season.
- Cyber Monday kicks off the week with information regarding safe internet use, tips for tax professionals and businesses, and common identify theft schemes currently circulating.
- Tuesday’s article outlines measures taken by tax professionals: Written Information Security Plans (WISPs) and the use of multi-factor authentication to protect taxpayer accounts and client information, and other lines of defense.
Fraud Awareness on Giving Tuesday
The IRS highlights its continued support of efforts to fight charity scams and fraud. Fake charities and scammers taking advantage of natural disasters or other situations are a drain on the resources of generous donors and deprive legitimate organizations of needed funds. Givers can use the Tax Exempt Organization Search tool to verify a charity’s status and review the Dirty Dozen tax scams for 2023.