Tag: Taxes

IRS issues standard mileage rates for 2023

The IRS issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning Jan. 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
  • 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
  • 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

More taxpayers will receive a Form 1099-K

The IRS emphasizes that money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable…

The Internal Revenue Service reminds taxpayers earning income from selling goods and/or providing services that in early 2023 they may receive Form 1099-K, Payment Card and Third-Party Network Transactions, for payment card transactions and third-party payment network transactions of more than $600 for the year.

There is no change to the taxability of income; the only change is to the reporting rules for Form 1099-K. As before, income, including from part-time work, side jobs or the sale of goods, is still taxable. Taxpayers must report all income on their tax return unless it is excluded by law, whether they receive a Form 1099-NEC, Nonemployee Compensation; Form 1099-K; or any other information return.

Taxpayers with an outstanding tax bill should consider an Offer in Compromise

When reviewing Offer in Compromise applications, the IRS considers the taxpayer’s unique set of facts and any special circumstances affecting the taxpayer’s ability to pay…

An Offer in Compromise can be an effective way individuals and businesses to settle federal tax debt. This federal program allows taxpayers to enter into an agreement, with the IRS, that settles a tax debt for less than the full amount owed. Sometimes taxpayers are able to settle for significantly less, especially if they have low income and few assets.

This type of agreement is an option when taxpayers can’t pay their full tax liabilities or when paying the entire balance owed would cause financial hardship. The goal is a compromise that suits the best interests of both the taxpayer and the IRS.

When reviewing OIC applications, the IRS considers the taxpayer’s unique set of facts and any special circumstances affecting the taxpayer’s ability to pay.

Individual taxpayers and business owners should review the IRS’s Offer in Compromise Booklet to learn how these agreements work and decide if it could help them resolve their tax debts.

IRS sending letters to more than 9 million potentially eligible families who didn’t claim stimulus payments, EITC, CTC, other benefits

the only way to get the valuable benefits is to file a 2021 tax return

The IRS is sending letters to more than 9 million individuals and families who appear to qualify for a variety of key tax benefits but did not claim them by filing a 2021 federal income tax return. Many in this group may be eligible to claim some or all of the 2021 Recovery Rebate Credit, the Child Tax Credit, the Earned Income Tax Credit and other tax credits depending on their personal and family situation. These and other tax benefits were expanded under last year’s American Rescue Plan Act and other recent legislation. Even so, the only way to get the valuable benefits is to file a 2021 tax return. Also, to help people claim these benefits, without charge, Free File will remain open for an extra month this year, until Nov. 17.

The Taxpayer Bill of Rights: Protection for all taxpayers

The Taxpayer Bill of Rights outlines the ten specific rights all taxpayers have any time they interact with the IRS.

Two key elements of the IRS mission are to treat taxpayers with dignity and respect, and to provide them a positive customer experience. The Taxpayer Bill of Rights outlines the ten specific rights all taxpayers have any time they interact with the IRS.

These rights cover a wide range of topics and issues and lay out what taxpayers can expect in the event they need to work with the IRS on a personal tax matter. This includes when a taxpayer is filing a return, paying taxes, responding to a letter, going through an audit or appealing an IRS decision.

https://go.usa.gov/xt3mX