Did you miss the 2022 tax filing deadline? For most taxpayers, that was April 18, 2023. Taxpayers who are expecting a refund won't be penalized for late filing. But those who owe taxes (and don't qualify for an exception) will be charged penalties and interest for late filing and late payment. Penalties and interest apply to any taxes owed after April 18, and both are charged until the balance is paid in full. The IRS encourages late filers to limit penalties and interest by filing soon and paying as much as possible. If you can't pay what you owe, file anyway so you can eliminate the failure-to-file penalty. Contact us for help filing. Click here to find out more.
You can generally deduct casualty losses related to your home, household items and vehicles if the loss is caused by a federally declared disaster. Deductions are subject to limits and must be unreimbursed. Taxpayers must show the change in the property's value before and after the damage.
One former Coast Guard officer and his wife claimed a nearly $740,000 casualty loss deduction for storm damage to their vacation home and boat. They provided photos of their home after reconstruction began. However, they didn't submit an appraisal to show the change in property value. They submitted repair receipts for $250,875, but later admitted that $51,600 of the expenses was for home improvements. The U.S. Tax Court denied the deduction and added penalties. (TC Memo 2023-43)
For 2023, the Social Security wage base notably increased by $13,200, to $160,200. (Wages and self-employment income above the threshold aren't subject to the 6.2% Social Security tax.) For 2024, the Social Security Administration's Office of the Chief Actuary (OCA) is projecting that the wage base will increase by $7,500, to $167,700.
Note that actual annual increases to the Social Security wage base are announced in October, based on current economic conditions. Of note, the OCA is projecting that the combined Social Security trust funds will become depleted in 2033, with 77% of benefits payable at that time. This is one year sooner than the OCA projected last year.
If the IRS wants to talk to you in-person, it generally follows a three-step process.
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Reactions following the April 6 release of the IRS's $80 billion spending plan were swift, not to mention, mixed. U.S. House Ways and Means Chair Jason Smith (R-MO) complained that the plan lacks specifics on items such as hiring and audits. And many Republicans are speculating that the IRS intends to boost audits of middle-class taxpayers (something Commissioner Danny Werfel has repeatedly denied). But U.S. Senate Finance Chair Ron Wyden (D-OR) commended the Treasury and the IRS for the areas addressed in the plan. Nonpartisan National Taxpayer Advocate Erin Collins says she's hopeful the plan, "albeit general" in scope, will bring the IRS closer to realizing its stated goals.
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