In the aftermath of Thanksgiving, the latest issue of the Forbes Tax Breaks newsletter emphasizes the importance of year-end tax planning and updates. Highlighted in this mini-edition is the IRS’s delay of the implementation of the new $600 Form 1099-K reporting threshold for third-party settlement organizations. For the 2024 fiscal year, this threshold will require reporting only if a taxpayer’s income exceeds $5,000. The threshold will decrease to $2,500 for 2025 and reach the $600 mark in 2026. Taxpayers should be mindful that while they may not receive the form under the new rules, companies might still issue it based on previous thresholds, which does not affect tax treatment.
Importantly, the IRS will be suspending online applications for Employer Identification Numbers (EINs) starting around December 20 for annual maintenance, lasting through the first business day of January. Those in need of an EIN during this period should adopt traditional methods instead of digital applications. Additionally, companies established or registered before January 1, 2024, will need to file Beneficial Ownership Information (BOI) reports by January 1, 2025, to avoid penalties. This filing requirement is crucial for businesses to remain compliant with new regulations.
As the year closes, taxpayers are encouraged to consider their approaches to tax planning, charitable contributions, and retirement fund contributions. Evaluating the plan for social security benefits and preparing for updates regarding student loan forgiveness and repayment options are also highlighted. Careful thought before making any financial moves is suggested, especially concerning decisions like prepaying income taxes with Roth accounts, as each choice can have significant long-term implications.
Tuesday marks Giving Tuesday, a day where charities strive to inspire philanthropic giving. Recent statistics reflect that in 2023, Americans contributed a staggering $557.16 billion to charities, which translates to over $1.52 billion daily. The largest share of donations went to religious organizations, with significant contributions also directed toward human services and educational charities. Individual donors remained the backbone of this charitable giving, underlining the importance of personal contributions during the holiday season.
In other legal news, the Supreme Court is set to hear consolidated cases related to a critical question on whether Congress unlawfully delegated taxation powers to the FCC, which in turn delegated its authority to a private company, the Universal Service Administrative Company (USAC). This legal challenge stems from concerns regarding the FCC’s Universal Service Fund, which was established to promote telephone and internet access in disadvantaged and high-cost areas. A ruling on this matter could have substantial implications for the regulatory framework surrounding telecommunications funding.
As the year draws to a close, taxpayers and practitioners must remain aware of important deadlines and upcoming tax conferences, including the ABA Section of Tax’s Criminal Tax Fraud and Tax Controversy Conference in December. The IRS has issued its Management Quarterly Update, detailing operational challenges, including those influenced by the Inflation Reduction Act of 2022. Additionally, notable appointments in the tax advisory sector highlight ongoing developments within firms, showcasing the industry’s growth and adaptation amid changing tax landscapes.
