IRS helps taxpayers by providing penalty relief on nearly 5 million 2020 and 2021 tax returns; restart of collection notices in 2024 marks end of pandemic-related pause

IR-2023-244, Dec. 19, 2023 WASHINGTON — In a major step to help people who owe back taxes, the Internal Revenue Service today announced new penalty relief for approximately 4.7 million individuals, businesses and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic. The IRS will be providing about $1 billion in… Continue reading IRS helps taxpayers by providing penalty relief on nearly 5 million 2020 and 2021 tax returns; restart of collection notices in 2024 marks end of pandemic-related pause

IRS: Taxpayers now have more options to correct returns electronically

WASHINGTON — The Internal Revenue Service announced today that more forms can now be amended electronically. These include people filing corrections to the Form 1040-NR, U.S. Nonresident Alien Income Tax Return and Forms 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico) and Forms 1040-PR, Self-Employment Tax Return – Puerto Rico.

Health Care Coverage Penalties

Californians who did not have qualifying health insurance throughout the year are subject to a penalty of $800 or more when they file their state tax returns. The penalty for a dependent child is half that of an adult; a family of four could face a penalty of $2,400 or more. If you had health coverage in 2021, check the “Full-year health care coverage,” box 92, on your state tax return to avoid penalties.

Like-Kind “1031” Exchanges in Real Estate

Beginning after December 31, 2017, like-kind exchange applies only to real property held for use in a trade, business or for investment. Real property includes land and generally anything built on or attached to it. An exchange of real property held primarily for sale still doesn’t qualify.

Net Operating Losses (“NOL”)

Most taxpayers no longer have the option to carryback a net operating loss (NOL). For most taxpayers, NOLs arising in tax years ending after 2020 can only be carried forward.

Got a letter from the IRS? Here are next steps

When the IRS needs to ask a question about a taxpayer’s tax return, notify them about a change to their account, or request a payment, the agency often mails a letter or notice to the taxpayer. Getting mail from the IRS is not a cause for panic but, it should not be ignored either.

Know what’s deductible after buying that first home, sweet home

Making the dream of owning a home a reality is a big step for many people. Whether a fixer-upper or dream home, homeownership is a milestone that can come with a learning curve. First-time homeowners should make themselves familiar with authorized deductions, programs that can assist with home ownership and the use of housing allowances that can be beneficial.

IRS provides inflation adjustments for 2022

WASHINGTON — The Internal Revenue Service today announced the tax year 2022 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes.