Important Tax Updates

Listed below are some important Tax Updates from the Internal Revenue Service and the Illinois Department of Revenue. We strive to keep you informed with relevant and vital content. Please contact us if you have any questions.

IRS Smartphone App

The IRS has created an app for your smartphone! - IRS2GO
This will allow you to check your refund status, receive tax updates and show payment options.

2024 Mileage Rates

2023 Mileage Rates

There is an app called MileIQ that is great to help keep track of miles.

Alimony Rules

• If divorce is final before December 31, 2018 old rules apply.
• If your divorce is final after January 1, 2019 payments made are not deductible from income of the payer.
• Payments received are not included in the income of the receiver.

IRS Tax Credits

Saver Credit
Qualifying taxpayers can get the credit by putting money into an IRA or 401(k) plan.

Energy Credit
Energy credit restored. Check energystar.gov for qualifying items.

Permanent Tax Credits:

• American Opportunity Credit for College
• Educator Credit for Teachers
• Work Opportunity Credit

Affordable Care Act - "Obama Care"

With this comes new forms/reporting rules. Feel free to call us if you have any questions.

Please answer these following questions to determine your reporting requirements:

1. Did you have full coverage through employer, Medicare, medicaid for the entire year?
   YES - Full coverage need 1095 - B or C.
   NO - Continue to step 2.
2. Was coverage through the exchange?
   YES - Go to step 3
   NO - No action required.
3. Coverage through the exchange
   - If you signed up on the exchange you will receive form 1095-A before January 31, 2017. This form will be required in order for us to complete the income tax return.
   - If you received an exemption we will need the certificate number to report on the tax return as well.
   

IRS Updates

Standard Deduction Limits:

• Single – $14,600
• HOH – $21,900
• Married Filing Joint – $29,200

Tax Updates:

• Energy Credit – reinstated 1/1/23.
• Mortgage Insurance Premiums (PMI) no longer deductible.
• American Opportunity Credit and Educator Credit remain the same.
• No longer deductible – employee business expenses, union dues, job search expenses, safety deposit fee, IRA fees, etc.
• No longer deduct moving expenses unless active military.
• Child Tax Credit is $2,000 per child under age 17.
• No more personal exemptions.
• Limits on home mortgage interest and home equity interest.
• IRS is targeting S-corps that pay little or no salaries to owners and take profits as dividends without paying payroll taxes on the dividends.
• New SUV /Pick- Up Truck bonus depreciation tax break for with GVW over 6000 pounds. 100% of business use can be taxed but vehicle can be new or used and heavy use pick up truck's must have a bed length of at least 6 feet.
• Remember all W-2's and 1099's must be sent out to employees by January 31.
• Medicare Surtax - 3.8% certain taxpayers.
• Higher tax brackets for people who earn over $400,000 (single) $450,000 (MFJ).
• New Home Office Deduction using Safe Harbor Rules.
• Annual exclusion for gifting is 18,000 (for 2024), and 17,000 (for 2023).

Tax Scams

The IRS has put out a bulletin warning taxpayers about tax scams that you need to be
aware of:

Most Recent Scams
Important note: we have had approximately 20 clients that have received this phone call (see below). If your not sure please contact us immediately before giving any information.

• IRS-Impersonation Telephone Scam
  An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.
• Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Or, victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.
• Note that the IRS will never:
  1) call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill;
  2) demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe;
  3) require you to use a specific payment method for your taxes, such as a prepaid debit card;
  4) ask for credit or debit card numbers over the phone; or
  5) threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

Ongoing Scams

• Beware of if you receive and email from the IRS it is a scam. The IRS does not send out emails for payment or refund. The best practice is not to open attachments, click on any links, or divulge any personal account information.
• Beware of any verbiage that sounds like "We will prepare your income tax return without any documentation" or "No DOC Tax Preparation". The IRS does not allow this type of tax preparation.

The IRS’s annual ‘Dirty Dozen’ list includes common tax scams that often peak during the tax filing season. The IRS recommends that taxpayers be aware so they can protect themselves against claims that sound too good to be true. Taxpayers who buy into illegal tax scams can end up facing significant penalties and interest and even criminal prosecution.

To read more, visit our Tax Tips Page

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