The 2024 filing season is now open. The Internal Revenue Service (IRS) began accepting tax returns in late January. It is time to connect with your tax professional to collect, review, and create the appropriate returns.
Here are some timely tips to consider as you prepare your taxes this year:
- Protect your identity: Consider signing up for an Identity Protection personal identification number (IP PIN). This is a unique six-digit number that is valid for one year. Application for an IP PIN requires a valid photo ID such as a passport, driver’s license, or state ID. You authenticate through ID.me which can be done with a selfie—or via live video chat with an ID.me representative. The PIN reduces the odds of identity and refund theft.
- Foreign Bank Account Report (FBAR): Your FBAR report identifies qualified holdings that you have in foreign bank accounts, investments, and offshore tax jurisdictions. This report is submitted on an annual basis and is due on 4/15/24. That said, you are allowed an automatic extension (meaning you do not need to request the extension) until 10/15/24. Your FBAR is not filed with your taxes but submitted through the BSA E-filing platform.
- Beneficial Ownership Information (BOI): Unlike the FBAR, the new BOI report is not an annually submitted report. Unless exempted, the report, which provides detailed information about the owners of a company, is due by 1/1/25 for companies in existence prior to 1/1/24. FinCen recently amended a rule to require entities formed after 1/1/24 and before 1/1/25 to file within 90 days of their registration.
- 1099-K reporting form delay: Do not forget--the IRS has continued its hold on filing the new 1099-K forms. For tax year 2023, the reporting requirement is $20,000 and more than 200 transactions. The IRS will eventually lower that annual threshold to $5,000 for 2024 with an eventual goal of 1099-K forms required for transactions exceeding $600.
- Tax rates: Adjustments are made each year by the IRS to reflect for annual inflation. These impact your standard deduction, tax brackets, and the like. Check out the new adjustments before you file.
- Reduce filing errors: Provide end-of-year statements and figures for 2023 when filing. Make sure you include those year-end statements before filing. Even if your return is prepared by a tax professional, recheck your deductions and tax credits before signing. Make sure you are eligible for those you have taken, and take advantage of those available to you.
Last tip? Check for typos and math errors—they are surprisingly common and will result in longer processing time of your return. If your financial portfolio is complex, be sure to speak with a trusted tax professional about strategies to legally reduce your tax liability.
Experienced guidance on tax compliance and criminal tax defense
Robert J. Fedor, Esq., LLC offers strong representation to clients throughout the U.S. and abroad on IRS audits, criminal tax investigations, and employment tax disputes. When you have questions about individual or business tax compliance, call us at 800-579-0997 or contact us. We have offices in Cleveland and Chicago.
