Tag Archives: tax security

IRS Updates Mid-December 2023

2024 FSA Limit Increase

Flexible Spending Arrangements (FSAs) can be used to pay medical expenses throughout the year, and the contribution limit for 2024 is increased by $150 to $3200. Employees who participate in an FSA can contribute through payroll deductions, and the amount is not subject to federal income tax, Social Security tax, or Medicare tax. Depending on the FSA plan, qualified medical expenses can include those not covered by a health plan, such as copays and deductibles, as well as services such as dental or vision care, and over-the-counter medicines. More information is available in Publication 969.

2024 Filing: Get Ready

The IRS urges taxpayers to ready themselves for filing their 2023 federal income tax return by being prepared. Important things to be aware of include:

  • Enhancements to online taxpayer accounts, including access to data and information
  • 1099-K reporting threshold delay
  • Energy related credits, for electric vehicles (purchased in 2022 or before, or in 2023), or home improvements
  • Timing of refunds, avoiding delays, and using direct deposit
  • Important documents needed for filing

Find more information at the Get Ready page.

National Tax Security Awareness Week Concludes

Security Summit partners have wrapped up 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. 

ERC Disallowance Work Expanded

The IRS continues its efforts to combat dubious Employee Retention Credit (ERC) claims. More than 20,000 letters have been sent to taxpayers notifying them of disallowed ERC claims, including to entities that did not exist or did not have employees during the eligible ERC period. The special withdrawal program is still available to those with pending claims who realize their claims were inaccurate, and there will be a voluntary disclosure program unveiled soon to allow those who already received improper payments to avoid future IRS action. 

Tax Updates December 17

National Tax Security Awareness Week

The IRS and Security Summit partners spent a week sharing information with taxpayers and tax professionals about security risks and how to minimize them. 

  • Day 1: Tax scams and identity theft – identifying phishing and tax scams, protecting devices with security software and protecting your sensitive information.
  • Day 2: Fake charity scams – verifying a charity before you give, and tips on keeping your financial and personal information safe.
  • Day 3: Identity Protection PINs – participating in the IP PIN program helps individual taxpayers protect against identity theft. The IP PIN tool is scheduled to launch January 10, 2022.
  • Day 4: Tax Pros – pandemic circumstances have added to the security risks from cybercriminals. Using the “Security Six” measures helps protect client data.
  • Day 5: Businesses – cyberattacks and theft of customer and business information remain serious problems. Follow the Federal Trade Commission’s best practices to maintain cybersecurity.

New in 2022

The IRS is encouraging taxpayers to ready themselves for filing their 2021 federal tax return. Key changes affect millions of taxpayers, and special steps regarding Economic Impact Payments (EIPs) and advance Child Tax Credit payments must be taken. For instance, those who received less than the Child Tax Credit amount for which they were eligible may claim the remainder on their return, while those who received more will have to repay the excess payment when they file. Letters regarding these amounts, as well as EIP amounts paid, will begin arriving in January. There is also a charitable deduction which may be claimed by taxpayers who take the standard deduction.

Required Minimum Distributions for Retirees

The IRS reminds retirement plan participants and individual retirement account owners that required minimum distributions (RMDs) must usually be taken by December 31. These are generally minimum amounts that must be withdrawn annually, depending on age or date of retirement. Owners of traditional IRAs, traditional SEP IRAs, SIMPLE IRAs, and workplace retirement plans are subject to RMDs. Roth IRAs do not require distributions while the original owner is still alive.