IRS encourages and help Volunteers who provide free tax filing services to seniors.
WASHINGTON The Internal Revenue Service (IRS) announced on December 02, 2024 $53 million grants in 2025 for the Tax Counseling for the Seniors and Volunteer Income Tax Assistance Program, for organizations that provide free federal tax return preparation. This program was established in 1978 to provide free tax counseling and federal return preparation to individuals who are age 60 or older. Volunteers receive training and technical assistance to help community locations across the nation.
Issue Number: IR-2024-301
IRS - November 09, 2023 | |||
Income tax rates for the personal income tax remain the same for several years. However, the income level at various tax rates changes almost every year. These changes are applied every year to adjust the tax liability as per the expected inflation in the coming year. Today IRS announced the changes in the income level for the tax year 2024 which will be filed in early 2025. We have appended below the comparison of income level changes with last two years for your ready reference. | |||
Tax Year 2024 filing in 2025 | Tax Year 2023 filing in 2024 | Tax Year 2022 filed in 2023 | |
Tax rate | (Filing Status - Single) | (Filing Status - Single) | (Filing Status - Single) |
10% | $0.00 to 11,600 | $0.00 to 11,000 | $0.00 to 10,275 |
12% | $11,601 to 47,150 | $11,001 to 44,725 | $10,276 to 41,775 |
22% | $47,151 to 100,525 | $44,726 to 95,375 | $41,776 to 89,075 |
24% | $100,526 to 191,950 | $95,376 to 182,100 | $89,076 to 170,050 |
32% | $191,951 to 243,725 | $182,101 to 231,250 | $170,051 to 215,950 |
35% | $243,726 to 609,350 | $231,251 to 578,125 | $215,951 to 539,900 |
37% | $609,351 or more | $578,126 or more | $539,901 or more |
(Married Filing Jointly) | (Married Filing Jointly) | (Married Filing Jointly) | |
10% | $0.00 to 23,200 | $0.00 to 22,000 | $0.00 to 20,550 |
12% | $23,201 to 94,300 | $22,001 to 89,450 | $20,551 to 83,550 |
22% | $94,301 to 201,050 | $89,451 to 190,750 | $83,551 to 178,150 |
24% | $201,051 to 383,900 | $190,751 to 364,200 | $178,151 to 340,100 |
32% | $383,901 to 487,450 | $364,201 to 462,500 | $340,101 to 431,900 |
35% | $487,451 to 731,200 | $462,501 to 693,750 | $431,901 to 647,850 |
37% | $731,201 or more | $693,751 or more | $647,851 or more |
(Married Filing Separately) | (Married Filing Separately) | (Married Filing Separately) | |
10% | $0.00 to 11,600 | $0.00 to 11,000 | $0.00 to 10,275 |
12% | $11,601 to 47,150 | $11,001 to 44,725 | $10,276 to 41,775 |
22% | $47,151 to 100,525 | $44,726 to 95,375 | $41,776 to 89,075 |
24% | $100,526 to 191,950 | $95,376 to 182,100 | $89,076 to 170,050 |
32% | $191,951 to 243,725 | $182,101 to 231,250 | $170,051 to 215,950 |
35% | $243,726 to 365,600 | $231,251 to 346,875 | $215,951 to 323,925 |
37% | $365,601 or more | $346,876 or more | $323,926 or more |
(Head of Household) | (Head of Household) | (Head of Household) | |
10% | $0.00 to 16,550 | $0.00 to 15,700 | $0.00 to 14,650 |
12% | $16,551 to 63,100 | $15,701 to 59,850 | $14,651 to 55,900 |
22% | $63,101 to 100,500 | $59,851 to 95,350 | $55,901 to 89,050 |
24% | $100,501 to 191,950 | $95,351 to 182,100 | $89,051 to 170,050 |
32% | $191,951 to 243,700 | $182,101 to 231,250 | $170,051 to 215,950 |
35% | $243,701 to 609,350 | $231,251 to 578,100 | $215,951 to 539,900 |
37% | $609,351 or more | $578,101 or more | $539,901 or more |
WASHINGTON ― The Internal Revenue Service announced today that nearly 1.5 million people across the nation have unclaimed refunds for tax year 2019 but face a July 17 deadline to submit their tax return.
The IRS estimates almost $1.5 billion in refunds remain unclaimed because people haven’t filed their 2019 tax returns yet. The average median refund is $893 for this year, and the IRS has done a special state-by-state calculation to show how many people are potentially eligible for these refunds.
“The 2019 tax returns came due during the pandemic, and many people may have overlooked or forgotten about these refunds,” said IRS Commissioner Danny Werfel. “We want taxpayers to claim these refunds, but time is running out. People face a July 17 deadline to file their returns. We recommend taxpayers start soon to make sure they don’t miss out.”
Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don't file within three years, the money becomes the property of the U.S. Treasury.
Issue Number: IR-2023-79
Employers must file their copies of Form W-2, Wage and Tax Statement and Form W-3, Transmittal of Wage and Tax Statements with the Social Security Administration by Jan. 31.
The Jan. 31 deadline also applies to Forms 1099-NEC, Nonemployee Compensation filed with the IRS to report non-employee compensation to independent contractors.
File now to avoid penalties
Automatic extensions of time to file Forms W-2 are not available. The IRS will only grant extensions for very specific reasons.
If you need any help, please call RKB Accounting
Effective January 01, 2023
The 2022 tax-year individual tax filing season starts on January 23, 2023. The deadline is April 18, 2023, failing which a penalty may apply.
If you cannot meet the deadline, you can request IRS for an extension before the deadline.
Beginning on Jan. 1, 2023, the standard mileage rates:
Tax-Year 2022 standard mileage rates:
Friday December 23, 2022
A 2022 holiday gift from IRS to remote sellers!
IRS announced a delay for a new $600 tax-reporting threshold for remote sellers and gig workers who were getting paid online through PayPal, and Venmo, etc.
That means your payment service provider, PayPal, Venmo, etc. will not issue a 1099K form in 2022 even if you have received more than $600.00.
However, you will still receive a 1099K form if you fall under the old rule. The old rule is that if you have more than 200 transactions and have received more than $20,000.
The employee who participate in 401(k), 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan can now contribute more money to their plan.
The contribution limit for 2023 has been increased to $22,500.00. The contribution limit was $20,500.00 in the year 2022.
December 18, 2022
The American Institute of CPAs has raised concern on the changes in rule for issuing form 1099K.
Since the beginning of 2022, if you are a remote seller or service provider and getting paid through PayPal or Venmo or a similar app, these payment processing service providers are now obligated to issue you form 1099K reporting total money that you have received in a year if the it exceeds $600.00.
AICPA has raised deep concern in its letter to Congressional leadership of the Senate Finance Committee and the House Ways and Means Committee, that the threshold of $600.00 is too low. This threshold was set up originally in 1954 almost 70 years ago and implementing the same amount limit does not account for the inflation for the last 70 years.
Stay tuned for more updates.
U.S. citizens or residents for tax purposes working outside the United States have a greater amount of income exclusion in 2022. It has been increased from $108,700 for 2021 to $112,000 for 2021 to $120,000 for 2023. You can claim the foreign earned income exclusion on Form 2555.
In order to claim the foreign earned income exclusion you must pass through the "bona fide residence test" or the "physical presence test."
Employer's filing and reporting deadline for 2022 tax-year is approaching fast, get ready now!
The following filing and reporting obligations that may apply to you:
Form W2 - Annual Wage Statement for each employee
Form 940 - Annual Federal Unemployment tax reporting
Form 944 - Withholding tax reporting from small businesses
Form 945 - Withholding tax reporting for non-employee
If you are selling goods and services and getting paid through third-party service providers like CashApp, Venmo, and PayPal. These service providers will now issue form 1099-K to report your income if the gross payments for goods and services exceed $600 for any number of transactions.
Before 2022 these third parties were only obligated to report on 1099-K if the gross payments exceeded $20,000 AND the number of such transactions exceeded 200.
DEDUCTIONS
TAX CREDITS
Learn more : Itemized Vs. Standard deduction
U.S. federal income tax bracket changes every year. The total amount of U.S. federal income tax that you pay on your same amount of income may differ from year to year. IRS adjusts the tax brackets based on inflation every year. Generally, the individual federal income tax rates, which are 10%, 12%, 22%, 24%, 32%, 35%, and 37%, total seven rates remain unchanged. What changes is the tax brackets?
Below are taxable income brackets for 2023 as compared to 2022 for individual federal income taxes based on your filing status.
When filing your US income tax return (1040) for the year 2022, you can claim either the “Standard Deductions” or “Itemized Deductions” on your tax return.
Every year IRS adjusts the amounts of Standard Deductions for inflation. Below are the 2022 tax year limits as compared to 2021.
Based on your filing status, the Married couples get $25,900, increased by $800 from $25,100 in 2021, plus $1,400 for each spouse age 65 or older ($1,350 for 2021). Singles can claim $12,950 standard deduction, which increased by $400 from $12,550 in 2021. — $14,350 if they're at least 65 years old ($14,250 for 2021). For the Head-of-household filers get $19,400 for their standard deduction, increased by $550 from $18,850 in 2021), plus an additional $1,400 once they reach age 65. Blind people can take on an extra $1,400 to their standard deduction ($1,750 if they're unmarried and not a surviving spouse)
Learn more : Itemized Vs. Standard deduction
7 most important tax changes in the tax year 2021, filing season 2022:
1. Increase in Child Tax Credit and Advance Monthly Payments
2. Expansion of the $300 charitable contribution deduction for joint filers
3. Your unemployment benefit received in 2021 is taxable as opposed to it was made tax free by Congress in 2020
4. Forgiven Loan received under the Paycheck Protection Program are tax-exempt
5. Threshold for medical deduction under the itemized deduction has been permanently lowered to 7.5% of AGI Vs. 10% in the prior year
6. Increase in Standard Deduction amount (Details posted before in the below news). This is basically an inflation adjustment
7. Expansion of the Earned Income Credit for 2021 and future years
What is backup withholding?
The person or business paying the taxpayer doesn't generally withhold taxes from certain payments. They don't do this because it's assumed the taxpayer will report and pay taxes on this income when they file their federal tax return. There are, however, situations when the payer is required to withhold a certain percentage of tax to make sure the IRS receives the tax due on this income.
IRS will start accepting tax returns from Monday, January 24, 2022.
The January 24 start date for individual tax return filers allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly. Updated programming helps ensure that eligible people can claim the proper amount of the Child Tax Credit after comparing their 2021 advance credits and claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.
Please circle April 18 in your calendar as your personal tax return filing deadline in the United States. Usually, it is April 15, but in the year 2022 this date falls on Emancipation Day, a legal holiday observed in Washington D.C.
Beginning on Jan. 1, 2022, the standard mileage rates:
The standard rate for business use is based on an annual study of the fixed and variable costs of operating an automobile.
The following are the personal income tax rates and brackets that you pay to Federal, Ontario, and Quebec for 2022 in comparison with 2021. Every year Canada revenue agency and the Quebec revenue agency adjust the tax bracket for inflation. Your income tax rates remain the same; only the taxable income brackets are adjusted for inflation.
Tax Rate | Taxable Income Bracket for 2021 | Taxable Income Bracket for 2022 |
15.00% | $0 to 49,020 | $0 to 50,197 |
20.50% | $49,021 to 98,040 | $50,198 to 100,392 |
26.00% | $98,041 to 151,978 | $100,393 to 155,625 |
29.00% | $151,979 to 216,511 | $155,626 to 221,708 |
33.00% | Above $216,511 | Above $221,708 |
5.05% | $0 to 45,142 | $0 to 46,226 |
9.15% | $45,143 to 90,287 | $46,227 to 92,454 |
11.16% | $90,288 to 150,000 | $92,455 to 150,000 |
12.16% | $150,001 to 220,000 | $150,001 to 220,000 |
13.16% | Above $220,000 | Above $220,000 |
15.00% | $0 to 45,105 | $0 to 46,295 |
20.00% | $45,106 to 90,200 | $46,296 to 92,580 |
24.00% | $90,201 to 109,755 | $92,581 to 112,655 |
25.75% | Above $109,755 | Above $112,655 |
WASHINGTON Nov 04, 2021 — Today, the IRS announces that individuals who participate in retirement savings plans such as 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan can contribute to their 401(k) plans in 2022 up to $20,500, up from $19,500 for 2021.
U.S. citizens or residents for tax purposes claim the standard deduction on their income tax return every year.
Due to inflation adjustment, the standard deduction amounts have been increased for 2021. Based on your filing status, the Married couples get $25,100 ($24,800 for 2020), plus $1,350 for each spouse age 65 or older ($1,300 for 2020). Singles can claim a $12,550 standard deduction ($12,400 for 2020) — $14,250 if they're at least 65 years old ($14,050 for 2020). For the Head-of-household filers get $18,800 for their standard deduction ($18,650 for 2020), plus an additional $1,700 once they reach age 65. Blind people can take on an extra $1,350 to their standard deduction ($1,700 if they're unmarried and not a surviving spouse).
U.S. citizens or residents for tax purposes working outside the United States have a greater amount of income exclusion in 2021. It has been increased from $107,600 for 2020 to $108,700 for 2021. The taxpayer claims the foreign earned income exclusion on Form 2555.
The standard ceiling on the foreign housing exclusion is also increased from $15,064 to $15,218 for 2021 (although overseas workers in many high-cost locations around the world qualify for a significantly higher exclusion).
As enacted in March 2021, under the American Rescue Plan, it offers a dramatic, one-year increase in the child tax credit for the tax year 2021.
The amount of the credit is one of the most significant changes. For 2021, it increases from $2,000 to $3,000 for most children – but to $3,600 for children five years old and younger. The extra amount ($1,000 or $1,600) is reduced – potentially to zero – for families with higher incomes, though.
The American Rescue Plan has also made major improvements to the child and dependent care credit. However, the changes only apply to the 2021 tax year (although President Biden wants to make the enhancements permanent).
April 08, 2021
Beginning Jan. 1, 2021, through Dec. 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.
Where can businesses get food and beverages and claim 100%?
Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption. However, restaurants do not include businesses that primarily sell pre-packaged goods, not for immediate consumption, such as grocery stores and convenience stores.
Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if these facilities are operated by a third party under contract with the employer.
March 17, 2021, IRS announced that the 2020 US personal income tax return 1040 filing due date has been extended to May 17, 2021, as the tough time continues. Taxpayers can also extend income tax payments irrespective of the amount due to May 17, 2021, without incurring any interest or penalty.
US Resident Employees
Under the tax treaty between the United States and Canada, Canada will not tax a US Resident even if the employment is exercised in Canada in the following situations:
- Your employer is not a resident of Canada
- Your employer does not have a permanent establishment in Canada
Due to COVID-19, travel restrictions were placed during 2020, and many US residents who regularly exercise their employment duties in Canada must extend their stay in Canada for more than 183. As per the above test, their income is taxable in Canada.
However, CRA states that the above 183-test will not apply to the above individuals exercising their employment-related duties in Canada if their stays are mainly because of the travel restrictions.
Rate for filing status - Married Filing Separately: 10% $0 – $9,875; 12% $9,876 – $40,125; 22% $40,126 – $85,525; 24% $85,526 – $163,300; 32% $163,301 – $207,350; 35% $207,351 – $518,400; 37% $518,401+
Filing status - Head of Household: 10% $0 – $14,100; 12% $14,101 – $53,700; 22% $53,701 – $85,500; 24% $85,501 – $163,300; 32% $163,301 – $207,350; 35% $207,351 – $518,400; 37% $518,401+
Rate for filing as Single: 10% $0 – $9,875; 12% $9,876 – $40,125; 22% $40,126 – $85,525; 24% $85,526 – $163,300; 32% $163,301 – $207,350; 35% $207,351 – $518,400; 37% $518,401+
Filing status - Married Filing Jointly: 10% $0 – $19,750; 12% $19,751 – $80,250; 22% $80,251 – $171,050; 24% $171,051 – $326,600; 32% $326,601 – $414,700; 35% $414,701 – $622,050; 37% $622,051+
Beginning on Jan. 1, 2021, the standard mileage rates:
• Per mile 56 cents driven for business use
• Per mile 14 cents driven for charitable organizations
The standard rate for business use is based on an annual study of the fixed and variable costs of operating an automobile.
Congress approved major tax reform in the Tax Cuts and Jobs Act, signed into law on December 22, 2017. This legislation, which affects both individuals and businesses, is commonly referred to as TCJA or the 2017 tax reform legislation.
The TCJA lowers the corporate tax rate to a flat 21 percent of taxable income for tax years beginning after December 31, 2017.
You will need Notice 1444, Economic Impact Payment, which shows how much of a payment you received in 2020. This amount is needed to calculate any Recovery Rebate Credit that you may be eligible for when you file your federal income tax return in 2021. People who didn’t receive an Economic Impact Payment in 2020 may qualify for the Recovery Rebate Credit when they file their 2020 taxes in 2021. Contact your tax professional to review your rebate eligibility.
Taxpayers with an Individual Tax Identification Number (ITIN) should ensure it hasn’t expired before filing a tax return in 2021.
Then:
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