Are you searching for 2023 tax return preparation and filing tips? The window officially opened to submit 2023 tax returns to the IRS on January 29, 2024. The following day the IRS released IR-2024-38, “Things to remember when filing 2023 tax returns” including return preparation and filing tips to help “make tax preparation smoother.” Most of us have enough experience to organize the basics such as W2 information, 1099s, 1098s, K-1s or other income related forms.
However, in these 2023 tax return preparation and filing tips the IRS provided a reminder to include income from many other sources including, but not limited to income from selling goods and services online, investment income, self-employment or other business activities, part-time or seasonal work as well as services provided through mobile apps such as PayPal, Venmo, Airbnb, eBay and Etsy.
Many would consider this type of communication to be “fair warning.” The IRS is targeting those who avoid reporting gig economy income from these online payment portals. The IRS was recently forced to postpone the “$600 Rule” which was scheduled to go into effect January 1, 2024. The $600 rule now goes into effect January 1, 2025 requiring these online payment platforms to provide the IRS with information regarding US taxpayers (and others) whose transactions exceeded $600 in a calendar year.
The IRS modified the 2023 reporting requirement for these platforms, requiring them to provide a Form 1099-K for any users whose gross income exceeded $20,000 for the calendar year of 2023 as well as for those who conducted more than 200 separate transactions within 2023. If you use any of these portals you should be aware that the IRS is now watching. If you conducted more than 200 transactions or grossed more than $20,000 in 2023 you should be prepared to receive your 1099-K from the payment portal.
The online payment platforms will be required to provide information to users and the IRS (via 1099-K) for online payments to individuals or businesses in 2024 that exceed a gross income of $5,000 or 200 transactions.
In the 2023 tax return preparation and filing tips the IRS further noted that filing electronically is still the fastest way to receive any refund you are owed.
“Things to remember when filing 2023 tax returns” also includes suggestions if hiring a tax professional. The IRS reminds US taxpayers to “choose a tax professional carefully. Most tax return preparers are professional, hones and provide excellent service to their clients.
Most US taxpayers are preparing for the individual tax return deadline of Monday April 15, 2024. On February 5, the IRS announced, “Maine taxpayers impacted by severe storms and flooding” will have until June 17, 2024 to “file federal individual and business tax returns and make tax payments.” Currently, this relief applies to individuals and households who reside or have business in Androscoggin, Franklin, Hancock, Kennebec, Oxford, Penobscot, Piscataquis, Somerset, Waldo and Washington Counties in Maine. Other Maine localities may be added to this list in the future.
Allen Barron, Inc. and Janathan L. Allen, APC provide tax return preparation services for our clients. We remind business and individual filers to provide relevant information to our team as soon as possible to make sure we are able to meet reporting deadlines for you and your businesses.
We invite you to learn more about the integrated tax, legal, accounting and business consulting services of Allen Barron and contact us or call today to schedule a free consultation at 866-631-3470.
