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The Internal Revenue Service today urged business taxpayers to begin planning now to take advantage of tax-saving opportunities and get ready for reporting changes that take effect in 2023.

There are a variety of small business tax credits that can be taken advantage of so continue reading!

During National Small Business Week, April 30 to May 6, the IRS is joining the Small Business Administration and others in both the public and private sector to celebrate the hard work, ingenuity and dedication of America’s small businesses and their contributions to the economy.

With next year’s filing deadline nearly a year away, entrepreneurs still have time to identify possible tax benefits, take action to qualify for them and then claim them when they file in 2024. They also have time to plan for reporting changes and even claim overlooked tax benefits from the recent past.

Cutting energy costs for small businesses

The Inflation Reduction Act (IRA), enacted last summer, includes provisions that can save small business owners money on energy costs. For example:

• Small businesses can receive a tax credit covering 30% of the cost of switching over to low-cost solar power, lowering operating costs and protecting against volatile energy prices.
• Small business building owners can receive a tax credit up to $5 per square foot to support energy efficiency improvements that deliver lower utility bills.
• Through the Clean Commercial Vehicle Credit, small businesses that use vehicles such as trucks and vans can benefit from tax credits up to 30% of purchase costs for clean commercial vehicles, like electric and fuel cell models that meet applicable requirements. There is no limit on the number of Clean Commercial Vehicle credits a business can claim.

These credits are nonrefundable, so businesses can’t get back more on the credit than they owe in taxes.

Employee Retention Credit: Claim it if eligible but avoid ERC scams

Eligible employers who overlooked the Employee Retention Credit (ERC) when they filed payroll tax returns for 2020 and 2021 can still claim it by filing an amended federal payroll tax return.

At the same time, the IRS has warned businesses not to fall victim to one of the many ERC-related scams being promoted online, in social media, on the radio and even phone calls and emails. Anyone who improperly claims the ERC has to pay it back, possibly with penalties and interest, so it’s important to avoid getting scammed.

Among other things, scammers misrepresent many features of the ERC and in some cases are merely using the credit as a ploy to steal the taxpayer’s identity or take a cut of the taxpayer’s improperly claimed credit. Eligible employers who need help claiming the credit should work with a trusted tax professional, not one of these scammers. ERC scams are so widespread this year that the IRS added them to its annual Dirty Dozen list of tax scams.

The ERC is designed to help employers who kept paying their employees while shut down during the pandemic or who suffered a significant decline in gross receipts during the eligibility period. The ERC is a payroll tax credit, not an income tax credit, and it was available only during 2020 and 2021.

Most eligible employers who overlooked the credit can still claim it by filing Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, available on IRS.gov. Form 941-X filers and businesses that file other types of returns can visit IRS.gov/ERC for details, forms and instructions.

Educational assistance programs can be used to pay student loans

Employers who have educational assistance programs can use them to help pay student loan obligations for their employees.

Though educational assistance programs have been available for many years, the option to use them to pay student loans has been available only for payments made after March 27, 2020, and, under current law, will continue to be available until Dec. 31, 2025.

Traditionally, educational assistance programs have been used to pay for books, equipment, supplies, fees, tuition and other education expenses for the employee. These programs can now also be used to pay principal and interest on an employee’s qualified education loans. Payments made directly to the lender, as well as those made to the employee, qualify.

By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.

Employers who don’t have an educational assistance program may want to consider setting one up. In a tight labor market, worthwhile fringe benefits such as educational assistance programs can help employers attract and retain good workers.

These programs must be in writing and cannot discriminate in favor of highly compensated employees. For information on other requirements, see Publication 15-B, Employer’s Tax Guide to Fringe Benefits. For details on what qualifies as a student loan, see Chapter 10 in Publication 970, Tax Benefits for Education.

More people will receive 1099-Ks

Starting in 2023, businesses and other taxpayers who receive more than $600 in income from third-party settlement organizations, including popular payment apps, may receive Forms 1099-K, Payment Card and Third Party Network Transactions. Typically, they’ll receive these reporting forms during January 2024.

The $600 reporting threshold is lower than it’s been in the past. For that reason, some people and businesses may receive a Form 1099-K that didn’t receive one in previous years.

There are no changes to what counts as income or how tax is calculated. For business taxpayers, most income is taxable, even if it’s not reported to them on a 1099 or another form issued by a third party.
The 1099-K reports various business transactions, including income from:

• A business the taxpayer owns.
• Self-employment.
• Activities in the gig economy.
• The sale of personal items and assets.

Good recordkeeping is key. For more information, visit the Understanding Your Form 1099-K page on IRS.gov.

Other tax benefits

From business start-up expenses and the home office deduction to the qualified business income deduction and the health-insurance deduction for self-employed individuals, there are a variety of tax benefits that may be available to entrepreneurs and other business owners.

For details on these and other tax benefits see Publication 535, Business Expenses. Details on another major expense for most businesses, depreciation of buildings, equipment and other assets can be found in Publication 946, How to Depreciate Property.

Yet another worthwhile resource for any small business is the agency’s Publication 334, Tax Guide for Small Business. All these publications are available on IRS.gov.

For more information featuring useful tax-related tools and resources to help small business owners, employers and self-employed individuals succeed visit the IRS.gov Small Business Week webpage.

Small Business Tax Credits 2023

Your general business credit for the year consists of your carryforward of business credits from prior years plus the total of your current year business credits. In addition, your general business credit for the current year may be increased later by the carryback of business credits from later years. You subtract this credit directly from your tax.

Most of the following credits are part of the general business credit. The form you use to figure each credit is shown below.

• Form 3800, General Business Credit
• Form 3468, Investment Credit
  This consists of the sum of the rehabilitation, energy, and reforestation credits.
• Form 5735, American Samoa Economic Development Credit
• Form 5884, Work Opportunity Credit
• Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit
• Form 6765, Credit for Increasing Research Activities
• Form 8586, Low-Income Housing Credit
• Form 8820, Orphan Drug Credit
• Form 8826, Disabled Access Credit
• Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit
• Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit
• Form 8844, Empowerment Zone Employment CreditNote: The Renewal Community Employment Credit (Carry forward only) credit was previously on Form 8844, Empowerment Zone Employment Credit; however, the credit has expired for calendar years after 2009. The Form 8844 with instructions for 2009 contains the details on the credit. The carryforward is claimed on Form 3800, General Business Credit.
• Form 8845, Indian Employment Credit
• Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips
• Form 8864, Biodiesel and Renewable Diesel Fuels Credit
• Form 8874, New Markets Credit
• Form 8881, Credit for Small Employer Pension Plan Startup Costs
• Form 8882, Credit for Employer-Provided Childcare Facilities and Services
• Form 8896, Low Sulfur Diesel Fuel Production Credit
• Form 8900, Qualified Railroad Track Maintenance Credit
• Form 8906, Distilled Spirits Credit
• Form 8908, Energy Efficient Home Credit
• Form 8910, Alternative Motor Vehicle Credit
• Form 8911, Alternative Fuel Vehicle Refueling Property Credit
• Form 8923, Mine Rescue Team Training Credit
• Form 8932, Credit for Employer Differential Wage Payments
• Form 8933, Carbon Dioxide Sequestration Credit
• Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit
• Form 8941, Credit for Small Employer Health Insurance Premiums
• Form 8994, Employer Credit for Paid Family and Medical Leave

How to Claim the Credit

To claim a general business credit, you will first have to get the forms you need to claim your current year business credits.

In addition to the credit form, in most cases you may also need to file Form 3800.

If you file a Form 1040 or 1040-SR Schedule C, you may be eligible to claim the Earned Income Tax Credit (EITC). To learn more about EITC, refer to It’s easier than ever to find out if you qualify for EITC, or use the EITC Assistant to find out if you are eligible.

IR-2024-26, Jan. 29, 2024

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WASHINGTON — Filing season has begun (3 Tips) to get you off to a great start. The Internal Revenue Service today reminded employers of the Jan. 31 deadline to file Forms W-2 and other wage statements with the Social Security Administration (SSA).

Filing these documents timely prevents late-filing penalties for employers, helps employees file their income tax returns and prevents tax fraud.

Employers must file copies of their 2023 Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the SSA by Jan. 31, whether filing electronically or by paper forms.

Employers must also provide copies B, C and 2 of Form W-2 to their employees by Jan. 31. For more information on filing Form W-2, see General Instructions for Forms W-2 and W-3.

The Jan. 31 deadline also applies to Forms 1099-NEC filed with the IRS to report non-employee compensation to independent contractors. Employers and payers can review the Instructions for Forms 1099-MISC and 1099-NECPDF for details and other due dates.

Employer Identification Numbers

Employers need to make sure the employer identification number (EIN) on their wage and tax statements (Forms W-2, W-3, etc.) and their payroll tax returns (Forms 941, 943, 944, etc.) match the EIN the IRS assigned to their business.

Do not use a Social Security number (SSN) or Individual Taxpayer Identification number (ITIN) on forms that ask for an EIN, and never truncate EINs or SSNs on any forms.

Extensions

Employers may request a 30-day extension to file Forms W-2 with SSA by submitting Form 8809, Application for Extension of Time to File Information Returns, by Jan. 31. Additionally, extensions of time to furnish Forms W-2 to employees must also occur by Jan. 31.

For detailed information and instructions on how to file an extension of time to furnish Forms W-2 to employees or to request a 30-day extension with the SSA, see Form 8809 and General Instructions for Forms W-2 and W-3.

Electronic filing

Beginning Jan. 1, 2024, the electronic filing threshold for information returns reduced from 250 to 10 for filing season 2024. Filers need to combine all information return types they file to determine if they meet the 10-return threshold and if the requirement to file electronically applies to them.

The IRS offers a free e-file service for the Form 1099 series, the Information Returns Intake System (IRIS) Taxpayer Portal. IRIS is a web-based platform that is accurate, convenient, easy to use, secure and doesn’t require any additional software. Learn more about e-filing information returns with IRIS and its features.

For help with filing information returns electronically, review Publication 1220, Specification for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2GPDF and the Filing Information Returns Electronically (FIRE) webpage.

E-filing is the most secure and accurate method to file returns, and saves taxpayers time and prevents delays in processing returns.

For more information about e-filing Forms W-2 visit the SSA’s Business Services Online, and Employer W-2 Filing Instructions & Information and Publication 15, Employer’s Tax Guide.

Filing season has begun (3 Tips)

IR-2024-06, Jan. 9, 2024

Live in Michigan? Need Tax Assistance? Contact ATS Advisors!

WASHINGTON – With tax season rapidly approaching, the IRS reminds employers that Jan. 31 is the deadline for submitting wage statements and forms for independent contractors with the government.

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-MISC, Miscellaneous Income, and Forms 1099-NEC, Nonemployee Compensation, that are filed with the IRS to report non-employee compensation to independent contractors. Various other due dates related to Form 1099-MISC, Form 1099-K and Form 1099-NEC, including dates due to the IRS, can be found on the forms’ instructions.

The IRS offers a free electronic filing service for the Form 1099 series using the Information Returns Intake System (IRIS). Filers can also use this online portal to prepare payee copies for distribution, file corrections and request automatic extensions.

New filing requirements

New electronic filing requirements affect Forms W-2 that are required to be filed in 2024. Businesses that file 10 forms or more must file W-2s and certain information returns electronically. See New electronic filing requirements for Forms W-2 for more information.

E-filing is the quickest, most accurate and convenient way to file forms. For more information on e-filing Forms W-2, employers can refer to Employer W-2 Filing Instructions & Information on the Social Security Administration’s website.

Key points to remember

• Extensions to file are not automatically granted. Employers may request a 30-day extension to file Forms W-2 by submitting Form 8809, Application for Extension of Time to File Information Returns, by Jan. 31.
• Filing Form 8809 does not extend the due date for furnishing wage statements to employees. A separate extension must be filed by Jan. 31. See Extension of time to furnish Forms W-2 to employees for more information.
• Filing by the deadline helps the IRS to fight fraud by making it easier to verify income. Employers can help support that process and avoid penalties by filing the forms on time and without errors.
• Penalties may be assessed for failure to file correctly and on time. For more information visit the IRS’ Information Return Penalties page.
• Form 1099-K $600 reporting threshold delayed. This means that for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements.

The IRS encourages employers and taxpayers to visit About Form W-2, Wage and Tax Statement and Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2GPDF, for more information.

Live in Michigan? Need Tax Assistance? Contact ATS today!

R-2023-64, March 31, 2023

WASHINGTON — The Internal Revenue Service today issued a proposed regulation related to certain requirements that must be met for Mineral and Battery Component Requirements Tesla for the new clean vehicle credit.

The Inflation Reduction Act (IRA) allows a maximum credit of $7,500 per vehicle, consisting of $3,750 in the case of a vehicle that meets certain requirements relating to critical minerals and $3,750 in the case of a vehicle that meets certain requirements relating to battery components.

The critical mineral and battery component requirements will apply to vehicles placed in service on or after April 18, 2023, the day after the Notice of Proposed Rulemaking is issued in the Federal Register.

New clean vehicles placed in service on or after April 18, 2023, are subject to the critical mineral and battery component requirements even if the vehicle was ordered or purchased before April 18, 2023. A vehicle’s eligibility for the new clean vehicle credit is generally based on the rules that apply as of the date a vehicle is placed in service, meaning the date the taxpayer takes delivery of the vehicle.

This means that the vehicle may or may not be eligible depending on whether it meets the critical mineral and battery component requirements.

As a result of this guidance, the IRS updated the frequently-asked-questions (FAQs) for the clean vehicle credits.

Fact Sheet 2023-08PDF updates FAQs related to new, previously owned and qualified commercial clean vehicles.

The FAQs revisions are as follows:

• Topic A: Eligibility Rules for the New Clean Vehicle Credit: Questions 2, 3, 4, 5, 6, and 7, added question 11
• Topic B: Income and Price Limitations for the New Clean Vehicle Credit: added question 2, renumbering questions 2 through 10 to 3 through 11, respectively, updated questions 1, 3, 7, 8, and 9
• Topic C: When the New Requirements Apply to the New Clean Vehicle Credit: Questions 2, 4, 5, and 6, added question 8, renumbered prior question 8 to question 9
• Topic F: Claiming the Previously Owned Clean Vehicles Credit: Question 2
• Topic G: Qualified Commercial Clean Vehicles Credit: Added question 10

These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible.

More information about reliance is available.

2023 – Critical Mineral and Battery Component Requirements Tesla

Form 1099-K is a report of payments you got for goods or services during the year from:

• Credit, debit or stored value cards such as gift cards (payment cards)
• Payment apps or online marketplaces, also called third party settlement organizations or TPSOs

These organizations are required to fill out Form 1099K and send copies to the IRS and to you.

Payments you got from family and friends should not be reported on Form 1099-K.

Use Form 1099-K with other records to help you figure and report your taxable income when you file your tax return.

Did you get a Form 1099-K? Find what to do with it.

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1.) Who sends Form 1099-K

Payment card companies, payment apps and online marketplaces are required to fill out Form 1099-K and send it to the IRS each year. They must also send a copy to you by January 31.

2.) Who gets Form 1099-K

You should get Form 1099-K for these situations:

If you take direct payment by credit or bank card for selling goods or providing services

If your customers or clients pay you directly by credit, debit or gift card, you’ll get a Form 1099-K from your payment processor or payment settlement entity, no matter how many payments you got or how much they were for.

Find what to do with Form 1099-K.

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If you used a payment app or online marketplace and received over $20,000 from over 200 transactions

A payment app or online marketplace is required to send you a Form 1099-K if the payments you received for goods or services total over $20,000 from over 200 transactions. However, they can send you a Form 1099-K with lower amounts. Whether or not you receive a Form 1099-K, you must still report any income on your tax return.

This includes payments for any:

• Goods you sell, including personal items such as clothing or furniture
• Services you provide
• Property you rent

The payments can be made through any:

• Payment app
• Online community marketplace
• Craft or maker marketplace
• Auction site
• Car sharing or ride-hailing platform
• Ticket exchange or resale site
• Crowdfunding platform
• Freelance marketplace

If you accept payments on different platforms, you could get more than one Form 1099-K.

Personal payments from family and friends should not be reported on Form 1099-K because they are not payments for goods or services.

Find what to do with Form 1099-K.

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3.) Reporting threshold

For tax year 2023, payment apps and online marketplaces are required to file a 1099-K for personal or business accounts that receive over $20,000 in payments from over 200 transactions for goods or services.

There are no changes to what counts as income or how tax is calculated.

The reporting threshold for third party settlement organizations, which include payment apps and online marketplaces, was changed to $600 by the American Rescue Plan Act of 2021. The IRS announced a delay in implementing this change for tax year 2023, which covers tax returns generally filed in early 2024.

Although the Form 1099-K reporting threshold for 2023 is $20,000, companies could still send the form for totals over $600.

No matter the amount, if you receive payments for selling goods or services or renting property you must report your income.

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4.) Personal payments from family and friends

Money you receive from friends and family as a gift or repayment for a personal expense should not be reported on a Form 1099-K. These payments aren’t taxable income.

For example: Sharing the cost of a car ride or meal, receiving money for birthday or holiday gifts or getting repaid by a roommate for rent or a household bill.

Be sure to note these types of payments as non-business in the payment apps when possible.

If you receive a Form 1099-K when you shouldn’t have, take these steps.

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WASHINGTON — IRS Interest Rates 2024 will remain the same for the calendar quarter beginning Jan. 1, 2024.

For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily. Here is a complete list of the new rates:

• 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
• 5.5% for the portion of a corporate overpayment exceeding $10,000.
• 8% for underpayments (taxes owed but not fully paid).
• 10% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during Oct. 2023. See the revenue ruling for details.

Revenue Ruling 2023-22PDF announcing the rates of interest will appear in Internal Revenue Bulletin 2023-49, dated Dec. 4, 2023.

IRS Interest Rates 2024

As the end of the year approaches, one thing on all of our minds is taxes. The IRS released the new updated income tax brackets for 2024. Heres a Quick Guide:

• 10%: For incomes up to $11,600 ($23,200 for married couples filing jointly)
• 12%: Incomes over $11,600 ($23,200 for joint filers)
• 22%: Incomes over $47,150 ($94,300 for joint filers)
• 24%: Incomes over $100,525 ($201,050 for joint filers)
• 32%: Incomes over $191,950 ($383,900 for joint filers)
• 35%: Incomes over $243,725 ($487,450 for joint filers)

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IRS Tax Brackets 2024: New for 2024

Starting in calendar year 2023, the Inflation Reduction Act reinstates the Hazardous Substance Superfund financing rate for crude oil received at U.S. refineries, and petroleum products that entered into the United States for consumption, use, or warehousing. The tax rate is the sum of the Hazardous Substance Superfund rate and the Oil Spill Liability Trust Fund financing rate. For calendar years beginning in 2024, the Hazardous Substance Superfund financing rate is adjusted for inflation. For calendar year 2024 crude oil or petroleum products entered after

Dec. 31, 2016, will have a tax rate of $0.26 cents a barrel.

Highlights of changes in Revenue Procedure 2023-34:

The tax year 2024 adjustments described below generally apply to income tax returns filed in 2025. The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:

• The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.
• Marginal rates: For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).The other rates are:

  35% for incomes over $243,725 ($487,450 for married couples filing jointly)
  32% for incomes over $191,950 ($383,900 for married couples filing jointly)
  24% for incomes over $100,525 ($201,050 for married couples filing jointly)
  22% for incomes over $47,150 ($94,300 for married couples filing jointly)
  12% for incomes over $11,600 ($23,200 for married couples filing jointly)

  The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).

• The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700). For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).
• The tax year 2024 maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, an increase of from $7,430 for tax year 2023. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
• For tax year 2024, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $315, an increase of $15 from the limit for 2023.
• For the taxable years beginning in 2024, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,200. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $640, an increase of $30 from taxable years beginning in 2023.
• For tax year 2024, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,800, an increase of $150 from tax year 2023, but not more than $4,150, an increase of $200 from tax year 2023. For self-only coverage, the maximum out-of-pocket expense amount is $5,550, an increase of $250 from 2023. For tax year 2024, for family coverage, the annual deductible is not less than $5,550, an increase of $200 from tax year 2023; however, the deductible cannot be more than $8,350, an increase of $450 versus the limit for tax year 2023. For family coverage, the out-of-pocket expense limit is $10,200 for tax year 2024, an increase of $550 from tax year 2023.
• For tax year 2024, the foreign earned income exclusion is $126,500, increased from $120,000 for tax year 2023.
• Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.
• The annual exclusion for gifts increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.
• The maximum credit allowed for adoptions for tax year 2024 is the amount of qualified adoption expenses up to $16,810, increased from $15,950 for 2023.

Items unaffected by indexing:

By statute, certain items that were indexed for inflation in the past are currently not adjusted.

• The personal exemption for tax year 2024 remains at 0, as it was for 2023. This elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
• For 2024, as in 2023, 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
• The modified adjusted gross income amount used by taxpayers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after Dec. 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).

The tax brackets were adjusted upwards by 5.4% due to inflation, according to the IRS. You may get a break if your income now falls in a lower bracket, but you won’t feel these effects until you file taxes for 2024.

IRS Tax Brackets 2024

Here is How To Spot Fake Charities (Step by Step) Using guidance from the IRS.

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WASHINGTON — With the tragic crises and natural disasters happening around the globe, many are responding to the call to give what they can to help. The Internal Revenue Service today warned taxpayers to be wary of criminals soliciting donations and falsely posing as legitimate charities. When fake charities scam unsuspecting donors, the proceeds don’t go to those who need the help and those contributing to these fake charities can’t deduct their donations on their tax return.

“We all want to help innocent victims and their families,” said IRS Commissioner Danny Werfel. “Knowing we’re trying to aid those who are suffering, criminals crawl out of the woodwork to prey on those most vulnerable – people who simply want to help. Especially during these challenging times, don’t feel pressured to immediately give to a charity you’ve never heard of. Check out the charity first and confirm it is authentic.”

Those who wish to make donations should use the Tax-Exempt Organization Search (TEOS) tool on IRS.gov to help find or verify qualified, legitimate charities.

With the TEOS, people can:

• Verify the legitimacy of a charity
• Check its eligibility to receive tax-deductible charitable contributions
• Search for information about an organization’s tax-exempt status and filings

In addition, the IRS urges anyone encountering a fake or suspicious charity to see the FBI’s resources on Charity and Disaster Fraud.

Fake charities

Criminals commonly set up bogus charities to take advantage of the public’s generosity during international crises or natural disasters. Typically, they seek money and personal information, which can be used to further exploit victims through identity theft.

Fake charity promoters may use emails, fake websites, or alter or “spoof” their caller ID to make it look like a real charity is calling to solicit donations. Criminals often target seniors and groups with limited English proficiency.

Here are some tips to protect against fake charity scams:

• Verify first. Scammers frequently use names that sound like well-known charities to confuse people. Potential donors should ask the fundraiser for the charity’s exact name, website and mailing address so they can independently confirm the information. Use TEOS to verify if an organization is a legitimate tax-exempt charity.
• Don’t give in to pressure. Scammers often pressure people into making an immediate payment. In contrast, legitimate charities are happy to get a donation at any time. Donors should not feel rushed.
• Don’t give more than needed. Scammers are on the hunt for both money and personal information. Taxpayers should treat personal information like cash and not hand it out to just anyone.
• Be wary about how a donation is requested. Never work with charities that ask for donations by giving numbers from a gift card or by wiring money. That’s a scam. It’s safest to pay by credit card or check — and only after verifying the charity is real.

Taxpayers who give money or goods to a charity can claim a deduction if they itemize deductions, but these donations only count if they go to a qualified tax-exempt organization recognized by the IRS.