CST Group, CPAs, PC

How The U.S. Election Changes The Outlook For Taxes The outcome of the November 5 election is likely to significantly impact taxes. Many provisions in President-elect Donald Trump’s signature tax legislation from his first time in the White House, the Tax Cuts and Jobs Act (TCJA), are scheduled to expire at the end of 2025. Now, there’s a better chance that most provisions will be extended. Read Full Article Here: https://bit.ly/48EhEkU

Business owners can generally deduct ordinary and necessary business expenses if they have proof. But one married couple that owned six LLCs claimed they had too much proof to present in court. After they failed to file tax returns for several years, the IRS created substitute returns. In U.S. Tax Court, the taxpayers relied mostly on entries in their business journals. Additional proof was unavailable, they stated, because it was too voluminous to produce or was tied up in other litigation. The court refused to accept the taxpayers’ records because actual evidence of deductions wasn’t presented. The court didn’t accept their claims and imposed additional tax and penalties. (TC Memo 2024-95)

It’s common for individual and business taxpayers to lose financial records during a natural disaster. Unfortunately, you usually need such records to document losses for your insurance company and to qualify for federal assistance. But if you visit the IRS’s website (https://bit.ly/4dQ3XA7), you can view or obtain copies of your historical tax returns, wage and income statements, and other tax account information. Requesting online access to your records is the fastest method, but even physical transcripts can be expected to arrive in the mail within 10 calendar days. Call your bank, credit card issuers and other financial service providers for copies of other needed documents.

The “tax gap” is the difference between what the IRS estimates as the U.S. tax liability and the amount of tax that’s actually paid on time. Recently, the IRS announced its tax gap estimate for tax year (TY) 2022 is $606 billion, less than the TY 2021 estimated gap of $617 billion. A majority of the TY 2022 tax gap ($447 billion) is attributed to individual taxpayers. Corporate income, employment, estate and excise taxes make up smaller pieces of the total. The TY 2022 voluntary compliance rate rose slightly from 84.9% in TY 2021 to 85.0%. IRS Commissioner Daniel Werfel stressed the need for “adequate funding” to enable the agency to significantly boost tax compliance and reduce the tax gap.

In the wake of Hurricanes Milton and Helene, the IRS is reassuring storm victims that it stands ready to provide tax-related assistance needed to help recover from these disasters. The IRS automatically gives taxpayers located in federally declared disaster areas additional time to file tax returns and pay taxes. Currently, taxpayers in the states of Alabama, Florida, Georgia, North Carolina and South Carolina, and certain counties of Tennessee and Virginia, who received extensions to file their 2023 returns have until May 1, 2025, to file. (Note that 2023 tax year payments aren’t eligible for this extension.) May 1 is also the deadline for filing 2024 returns and paying any tax due.

Many nonprofit organizations offer 403(b) retirement savings plans to their employees. The SECURE 2.0 Act made certain long-term, part-time workers eligible for participation in these tax-advantaged plans. However, the IRS hadn’t clearly explained which plans were affected by the rules, leading to some confusion. New guidance states that only 403(b) plans subject to Title 1 of ERISA must allow long-term, part-time employees to enroll. Student employees and some other part-time workers aren’t eligible. These rules will be effective starting in 2025. For details, see Notice 2024-73: https://bit.ly/3TWWyIt

Taking the Confusion Out of Medicare Navigating the Medicare enrollment process can feel overwhelming, with questions about when to enroll, which plan to choose, and what each part covers. Do you need a supplemental plan? Are prescription drugs included? And, of course, what will this all cost? Read Full Article Here: https://bit.ly/40oJEXK

Taking the Confusion Out of Medicare Navigating the Medicare enrollment process can feel overwhelming, with questions about when to enroll, which plan to choose, and what each part covers. Do you need a supplemental plan? Are prescription drugs included? And, of course, what will this all cost? Read Full Article Here: https://bit.ly/40oJEXK

Taking the Confusion Out of Medicare Navigating the Medicare enrollment process can feel overwhelming, with questions about when to enroll, which plan to choose, and what each part covers. Do you need a supplemental plan? Are prescription drugs included? And, of course, what will this all cost? Read Full Article Here: https://bit.ly/40oJEXK