UPDATES TO ALERT – Regarding Tax Changes for 2023 Directed to Venmo and PayPal Users Originally Posted December 17, 2022

e-commerce tax changes

E-Commerce Platforms Impacted by Recent IRS Announcement

PUBLISHER’S NOTE: After publishing an article on this blog on December 17, 2022, the I.R.S. made a change as to the effective date for the “gig-tax” rule discussed. Please read the update below.

UPDATE: I.R.S. Makes Tax Changes for E-commerce Platforms, Pauses Requirement for 1099s

e-commerce tax changesOn December 23, 2022 the I.R.S. paused the requirement that e-commerce platforms such as PayPal, Venmo, Etsy and Airbnb send 1099s to any users who had gross income through the app of at least $600 in 2022.

Previously, e-commerce users received 1099s if they had gross income for the year of at least $20,000 or at least 200 transactions. As part of the American Rescue Act, in March of 2021 Congress changed the threshold to $600, to take effect in 2022. Now the I.R.S. had instituted a one year delay for the law to go into effect. According to the I.R.S., this delay is to help reduce confusion during the 2023 tax-filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.

Keep in mind that this delay does not affect what income is taxable, only how much information is reported by … Read More... “UPDATES TO ALERT – Regarding Tax Changes for 2023 Directed to Venmo and PayPal Users Originally Posted December 17, 2022”

ALERT: IRS Tax Changes for 2023 That Could Affect You Especially if You Use Venmo or PayPal

Alert Key Legal Update

PUBLISHER’S NOTE: After publishing this blog on December 17, 2022, the I.R.S. made a change as to the effective date for the “gig-tax” rule discussed. Please read the update here.

Highlights of the New Tax Law Changes for 2023

paypal estate taxWith 2023 fast approaching, it is time to look at changes to income tax rules and regulations for 2023 and how they may affect you.

As is usually the case, 2023 will bring annual inflation adjustments to many tax provisions. Some of the more notable ones are as follows: the standard deduction for married couples filing jointly rises to $27,700 from $25,900 and for single individuals, up to $13,850 from $12,950; the estate tax exclusion for decedent’s estates rises to $12,920,000 from $12,060,000; and the annual exclusion for gifts increases to $17,000 from $16,000 for 2022.

One of the more significant changes applies to those who earn income through payment apps such as Venmo and PayPal. Previously, payment apps were required to send 1099s to users if their gross income through the app exceeded $20,000 or they had at least 200 transactions within the calendar year.

Now the threshold for receiving 1099s from the app will be a user … Read More... “ALERT: IRS Tax Changes for 2023 That Could Affect You Especially if You Use Venmo or PayPal”

Did You Receive Child Tax Credit Money? Check For This Important IRS Letter Before Filing!

advance child tax credit letter 6419

Internal Revenue Service Issues Letter 6419 for Those Who Received Child Tax Credit Money Last Year

advance child tax credit letter 6419The tax season began January 24, 2022, and you may be thinking you’re ready to go ahead and file your 2021 taxes. Well, there might be one more document coming from the Internal Revenue Service if you and your family received advance child tax credit money last year – Letter 6419.

The IRS began issuing these important letters in December, but according to USA Today, many people still hadn’t received their letters as of January 19, 2022. Still, it is important that, if you believe you’re going to receive that letter, you keep an eye out for it.

So, who is going to receive a Letter 6419 from the IRS?

Letter 6419 will be sent to any qualifying family that received payments from the child tax credit from July 2021 to December 2021.

The advance child tax credit payments were a temporary expanded program where families would receive half of their child tax credit over the course of six months in 2021 – July to December. The payments included up to $300 a month for each child through age 5 and up … Read More... “Did You Receive Child Tax Credit Money? Check For This Important IRS Letter Before Filing!”

How Much Child Tax Credit Should You Receive Starting July 15th?

child tax credit american rescue plan

IRS Announces American Rescue Plan Raises Child Tax Credit For 2021, Largest Ever

DID YOU GET A LETTER FROM THE IRS?

child tax credit american rescue planOh my – a letter from the IRS! That has to be bad news, right? Perhaps an audit notice? Well, not in this situation! 36 million families will be receiving a letter from the IRS explaining the new child tax credit provisions for 2021 under the American Rescue Plan. It is predicted that 92% of households with kids will qualify for direct financial aid. For those with children, the American Rescue Plan  increased the Child Tax Credit  from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six, and raised the age limit from 16 to 17. All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household).

INFO DIRECT FROM THE IRS WEBSITE:

“Important changes to the Child Tax Credit will help many families get advance payments of the credit starting this summer. The IRS will pay half the … Read More... “How Much Child Tax Credit Should You Receive Starting July 15th?”

LEGAL ALERT: New Tax Proposal Will Eliminate Spousal Support Deduction in 2018!

Alert! Key Legal Update

SPOUSAL SUPPORT LEGAL ALERT

The Implications Of The New Tax Proposal On Your Divorce. Provision In New Tax Would Eliminate Spousal Support Deduction.

spousal support divorce taxThis could be a BIG deal in your divorce case! Are you planning on continuing your divorce case into next year?  Are you perhaps in a position to complete it in 2017? The new tax proposal recently unveiled may make you think twice.

The Tax Cuts and Jobs Act contains a provision that would effectively eliminate the deduction that tax payers receive for making spousal support payments. Click here to read the full text of the proposed Act.

As the law currently reads (and has for around 75 years) , the person paying the support is allowed to deduct the amount, while the person being paid is required to claim it as income and thus, pay taxes.

When determining spousal support, courts take into account the fact that the paying spouse is able to deduct the amount of spousal support paid on his or her taxes.  Should the new legislation pass as presently written, the payor spouse will lose their deduction, thereby raising their tax burden which may reduce the amount of income available for spousal … Read More... “LEGAL ALERT: New Tax Proposal Will Eliminate Spousal Support Deduction in 2018!”

FRAUD ALERT: Avoid Tax Return Scams!

Fraudulent tax return preparers are back!

tax credit fraudulent

Tips On How To Avoid Fraudulent Tax Preparers

With this being tax season, the Federal Justice Department urges the public to look out for and avoid fraudulent tax preparers who illegally swindle both their clients and the federal treasury.  Below are some tips that may seem obvious and others that may not seem so obvious.

  1. Look for a PTIN.  The IRS requires that all paid tax preparers register with the IRS and obtain a preparer tax identification number (PTIN).
  2. Never allow your refund to be deposited directly into a tax preparer’s bank account.  Courts have barred such a practice.
  3. Never sign a blank return or a return without fully reading it from beginning to end first.
  4. Never allow your tax preparer to mischaracterize expenses.  By this, I mean that you should never allow personal purchases to be wrongly characterized as deductible expenses.
  5. Never allow your tax preparer to fabricate expenses or deductions.  Some common ones are the educational credit, the child care credit or the earned income tax credit.
  6. eFile.  The eFiling method is considered the safest and most reliable.
  7. Look for professional credentials or listings with the Better Business Bureau in choosing
… Read More... “FRAUD ALERT: Avoid Tax Return Scams!”

Gay Marriage Alert: The IRS Finalizes Rules Recognizing Same-Sex Marriages

Tax Returns To Be Amended By IRS To Reflect Same-Sex Marital Status Changes

same-sex marriage irs taxIn 2013, in United States v, Windsor, the U.S. Supreme Court found Section 3 of the Defense of Marriage Act to be unconstitutional.   Section 3 defined “marriage” as a legal union between one man and one woman and “spouse” as only a person of the opposite sex who is a husband or a wife.  The Court’s decision meant that married same-sex couples must be treated under federal law as married opposite-sex couples.

The IRS followed up with Revenue Ruling 2013-17.  The IRS concluded that, for federal tax purposes, the terms ” husband and wife”, “Husband” and “wife” should be interpreted to include same-sex spouses.  The IRS further concluded that, for federal tax purposes, recognition should be given to a same-sex marriage that was valid in the state where it was entered into, regardless of the married couple’s place of domicile.

IRS Issues Final Rules For Same-Sex Marriage Couples

On September 2, 2016, the IRS has issued final rules consistent with United States v. Windsor and Revenue Ruling 2013-17.  Under these rules, the terms “spouse”, “husband” and “wife” shall apply to same-sex marriages for federal tax purposes.  These … Read More... “Gay Marriage Alert: The IRS Finalizes Rules Recognizing Same-Sex Marriages”

Page 1 of 3
1 2 3