2024 Tax Season news summary | 10 April 2024
US Tax Deadline: Live Updates
- For the majority of filers, the deadline to submit their 2023 tax return is Monday, 15 April
- IRS offers insights into how large the average refund is in 2024
- IRS offers Direct File to residents of twelve states to allow filers a free option
Helpful links
- Requesting an extension on your refund
- Tax Guide: Claiming dependents on your tax return
- How to track your federal tax return
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With tax season getting underway, filers have until 15 April to submit their 2023 return. But do those receiving Social Security need to file a return? In most cases, yes. Certain tax credits and benefits allow for the sending of a refund, even in cases where the Social Security beneficiary does not have to pay taxes on their income.
The IRS is expecting your 2023 tax returns by Monday 15 April, the Tax Day deadline this year. American taxpayers before submitting there filings should take a minute to check out the multiple tax credits that are available to them.
One of these that is overlooked by many is the Retirement Savings Contributions Credit, otherwise known as the Saver’s Credit. This is related to retirement accounts such as the 401(k) and the Roth plans.
This provision helps taxpayers who have moderate incomes to contribute to their retirement plans. In this case, they can deduct up to $2,000 from their tax liability for the year while at the same time building their nest egg.
IRS free online tax filing tool, Direct File, avaiable in 12 states
The IRS rolled out a new tool for the 2024 tax season, Direct File. This will provide taxpayers in 12 states, where it is being piloted, with the choice to electronically file their federal tax return directly with the IRS for free.
The states include: Arizona, California, Florida, Massachusetts, New Hampshire, New York, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming,
It is a mobile-friendly, interview-based service that works on all devices.
Governor doesn't want Michiganders to miss out on tax breaks
Tax Day is fast approaching. Most Americans must submit their IRS tas filings by Monday 15 April, and many states also require income declarations on the same day.
If you still haven't filed, make sure that you don't miss out on tax breaks available that could save you big bucks and even put some extra cash in your pocket. For those in Michigan, Governor Grethchen Whitmer sends a friendly reminder to see if you qualify for Retirement Tax and the Working Families Tax Credit.
Americans across the nation are filing out their tax forms to submit to the IRS if they haven’t already done so for the 2023 fiscal year. One of the major credits that families with children may be able to take advantage of is the Child Tax Credit worth up to $2,000.
However, this year, when you file your state taxes, depending on where you live, you may be able to claim a state-level Child Tax Credit.
The eligibility limits for the Child Tax Credit were expanded along with the credit in 2021, up to between $3,000 and $3,600 per child. However, that increased tax cut for American households with children only lasted a year. Note though, families that qualified but still haven't claimed the credit from that year may still be able to do so.
However, this tax season, in order to claim the Child Tax Credit for the 2023 fiscal year, the income limits both minimum and maximum have reverted to those set in 2017. Likewise, which children qualify for the tax reduction.
How to report gig work to the IRS
This year, the IRS is taking additional steps to ensure that income generated through gig work, particularly on apps like Uber, Lyft, or Esty, are reported on a person's tax return. All of these platforms will be required to send users a 1099-K, which will include the income generated through the platform and that information can be reported on one's tax return. Those with an income from gig work that is less than $600 will not be required to pay tax on those funds. This webpage, set up by the IRS, offers gig workers tips to ensure that they are not missing payments to the IRS, which can lead to penalties and interest being accused on funds that are not paid on time. Gig workers, like the self-employed, are required to pay taxes and report their income to the IRS on a quarterly basis:
- April 15 for payment period January 1–March 31
- June 15 for payment period April 1–May 31
- September 15 for payment period June 1–August 31
- January 15 for payment period September 1–December 31.
Sticking to this calendar will be the most effective way to ensure that you are not incurring penalties.
Taxpayers can claim various tax benefits and credits, including the Earned Income Tax Credit (EITC) of up to $7,430. This benefit aims to help low-to-moderate-income workers. If a taxpayer qualifies, they can use the credit to reduce the taxes they owe or increase their refund. Approximately 23 million workers and families received about $57 billion in EITC last year
Thanks to the EITC, low-or moderate-income workers can claim between $600 and $7,430 on their tax return, depending on eligibility criteria. The amounts of tax support depend on the number of children the taxpayer has, as well as their annual income.
Read more on the EITC in our full coverage.
How to best avoid penalties from the IRS
Here are a few tips directly from the horse's mouth, this time the IRS, on how to avoid incurring fees and penalties this tax season. The IRS claims to be working to streamline the filing process, and for that reason, has developed the Direct File program, a software that allows people to pay their taxes and file a return for free. The program is being piloted in twelve states but will be rolled out next year for national use.
The easiest way to avoid incurring penalties is by filing one's return by the due date but check. Check out the video for additional tips to help you as tax season comes to a close.
IRS targets homeless population as filing deadline approaches
The federal government is urging people experiencing homelessness to take advantage of "health, food, housing, and other programs" for which they may qualify. However, posting on social media to target a population that may not have a reliable internet connection does not seem like the most effective strategy.
The IRS has stated that the Earned Income Tax Credit, which is only available to low and middle-income filers, may assist in boosting refunds for this vulnerable population. Additionally, there are other credits and benefits that may be worth exploring. For individuals experiencing homelessness, who are able to visit an IRS Tax Center in major cities across the country, staff can help them submit a return. Ideally, they will file in a way that ensures a refund.
There is less than a week to submit your federal tax return on time. This year returns are due on Monday, 15 April, and for those who don’t believe that they will be able to make the deadline, extensions can be requested.
Your tax return not only reports your income to the IRS, but it also allows you to claim various tax credits if you are eligible. One of the most popular tax credits available to eligible filers is the Child Tax Credit (CTC). It is designed to provide financial assistance to low- to moderate-income parents. The tax agency offers up to $2,000 for each dependent aged between six and 17 years old. To qualify for the credit, parents must meet an income threshold. If your annual AGI exceeds $200,000 for individuals and $400,000 for couples filing jointly, the IRS will reduce the credit by $50 per $1,000. But what happens if your income is really low? Can you still apply for the CTC? Read more for additional guidance.
Monday, April 15, is Tax Day in the United States, and the deadline for filing is quickly approaching. For those hurrying to submit their 2023 returns, we spoke with tax specialists about how to avoid simple mistakes and ensure you maximize your refund. Read more.
Which areas have been offered an automatic extension by the IRS?
All of these counties and tribal nations have been offered an automatic extension by the IRS after a natural disaster hit the area in 2023 or early this year.
The extension pushes the filing deadline back to 17 June; if another is needed, filers can request an extension that will make their return due on 15 October. Find out more information on these extensions in our full coverage.
- San Diego County in California
- New London county, and the Tribal Nations of Mohegan and Mashantucket Pequot in Connecticut
- Androscoggin, Franklin, Hancock, Kennebec, Oxford, Penobscot, Piscataquis, Somerset, Waldo, and Washington counties in Maine
- Eaton, Ingham, Ionia, Kent, Livingston, Macomb, Monroe, Oakland, and Wayne counties in Michigan
- Providence county in Rhode Island
- Spokane county in Washington
- Boone, Calhoun, Clay, Harrison, Kanawha, and Roane counties in West Virginia
What to do when you can't pay your taxes
The US Taxpayer Advocate Service (TAS), a public agency dedicated to supporting taxpayers, has advice for those who are unable to pay their taxes. This year, tax season comes as many households are struggling to keep up with household costs, and if a balance is due to the IRS, budgets can be stretched even further.
The TAS encourages those in this position to be proactive and consider the payment options offered by the IRS. "By taking an action as soon as possible, you’ll help ease the burden and keep the IRS from acting to collect the debt," argues the TAS.
If you need to file a tax return, you should, even if you’ll owe taxes when you file. If the amount is so great that it would create economic hardship, you can work with the IRS to establish a payment plan, and those "generally depend on how much you owe and your current financial situation," with "each option" having different requirements and fees.
Tax season for the year 2023 began on January 29, and the Internal Revenue Service (IRS) has been receiving and processing tax returns since then. Taxpayers are required to file their returns by April 15. However, if they need more time, they can request an extension, which would give them until October 15 to file. Failure to file returns or pay taxes by the deadline may result in fines and penalties.
It is worth noting that the IRS may impose penalties in cases of late filing of returns or payment of taxes.
Read more in our full coverage on how these penalities can be incurred.
Executive pay far paces federal tax bill for major companies
The Rosevelt Institute is circulating a new report by Inequality.org that found that at some major companies operating in the United States, more is paid to corporate executives than in federal taxes.
At T-Mobile US, the company received money back from the federal government, meaning their tax bill was negative. At Tesla, the situation is not far off from that of the giant telecommunications company. The topline of the report is that even with "strong profits" reported from 2018 to 2022, "thirty-five of [the firms included in the study ...] actually paid less in federal income taxes than they paid their top five executives."
Creating a more even playing field when it comes to taxation has been a priority of the Biden administration, but little has been done to force companies to pay more in taxes, still allowing for loopholes to be used that allow these companies to reduce their tax burden.
As a part of the 2017 Jobs and Tax Cuts Act, the corporate tax rate was lowered, and the funds saved through this change to the tax code can be used by companies to lobby for additional changes that will benefit their bottom lines.
There is still time to claim stimulus checks
The IRS gives taxpayers three years to submit or amend a tax return. That means this is the last year to claim the Economic Impact Payments, more commonly known as stimulus checks sent in March 2020.
The tax credit to claim the checks if they were not sent to you or deposited directly into your bank account was the 2020 Recovery Rebate Credit, and a 2020 return with that credit claimed must be submitted by 17 May 2024. If you are eligible, $1,200 will be tacked onto your refund for that year and will not impact the refund you receive this year for filing your 2023 tax return. For more information... read on in our full coverage.
IRS to offer last minute assistance to filers on Saturday
With less than a week left to file your federal taxes on time, the IRS has announced that it will offer in-person support to filers through its Taxpayer Assistance Centers at 70 locations across the country.
The IRS Commissioner, Danny Werfel, said that the additional support comes on top of the hard work of IRS employees throughout the entire tax season. "With the help of additional funding through the Inflation Reduction Act, we’ve been able to serve more taxpayers and provide additional assistance," said the Commissionare. If you are interested in finding the Center closest to you, you can use this finder developed by the IRS. All those who plan to attend should bring:
- Current government-issued photo identification,
- Social Security numbers for themselves and all members of their household, including spouse and dependents (if applicable) and
- Any IRS letters or notices received and related documents.
Average refund size is up in 2024
According to data from the IRS, the average refund being distributed this year is higher than those sent in 2023. However, both figures are down from 2022, when many pandemic-related tax benefits and credits led to much larger returns for the average filer. Mike Zaccardi, on Twitter, took a look at the data going back to 2019 and compared the refunds offered this year; there have not been major increases in the size of refunds over the last five years.
The IRS adjusted the standard deduction and tax brackets for inflation to ensure taxpayers were not handing over a disproportionate amount of their money in taxes. However, without any changes to the tax code that increase the value of essential credits, there are no substantive increases in the size of refunds.
The IRS is expecting to process more than 168 million tax returns this year. As there have been no significant changes made to the federal tax code, it is likely to be a quiet season. While there won't be any federal stimulus payments this year, taxpayers can still claim several tax credits, such as the Earned Income Tax Credit and the Child Tax Credit, which can result in thousands of dollars being added to their refunds. How you file can have a significant impact on how long it takes for your tax return to be processed and your refund to be issued.
Therefore, it is highly recommended that you prepare your filing correctly to avoid any delays. The IRS has stated that it can process most tax returns filed electronically within 21 days of receiving them, after which it will issue your tax refund. To speed up the process of receiving your refund, it is highly recommended that you opt for direct deposit. For those that choose to file a paper return, the agency says that “if you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return,” but warns that it could take up to six months before a tax refund is issued.
When are taxes due in each state?
Most states align their filing deadline with that imposed at the federal level: Monday, 15 April. However, there are a few exceptions:
- Delaware: Tuesday, April 30, 2024
- Hawaii: Monday, 22 April, 2024
- Iowa: Tuesday, April 30, 2024
- Kentucky: Thursday, 18 April 2024
- Louisiana: May 15, 2024
- Maine: Wednesday, 17 Abril 2024
- Massachusetts: Wednesday, 17 Abril 2024
- Missouri: Thursday, 18 April 2024
- New Mexico: Tuesday, April 30, 2024
- Virginia: Wednesday, 1 May, 2024
- West Virginia: Tuesday, April 30, 2024.
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Taxpayers in the United States have just over two weeks left to file their 2023 tax return and avoid penalties. The deadline for filing is Monday, April 15th, but extensions are available for those who need them. However, it's important to note that requesting an extension only applies to the filing deadline and not to the payment of any taxes owed to the IRS.
On March 29th, the tax authority reported that the average refund distributed on March 22nd was $3,081. This is a 6.14% increase compared to refunds sent on a similar day in 2023. Those receiving their refund through direct deposit are getting $3,152, which is just over 5% higher than refunds sent towards the end of March last year. Read more.
Are there ways to get a payment plan set up with the IRS?
The short answer is yes.
“If you are a qualified taxpayer or authorized representative (Power of Attorney) you can apply for a payment plan (including installment agreement) online to pay off your balance over time,” reports the US tax authority.
To do so, you can visit this webpage, which takes you to the payment portal, and will prompt those using to establish a payment plan with the tools necessary to do so.
There are two types of plans: short-term and long-term payment plans. The short-term plans can be paid off in 180 days or less and are eligible to those that "owe less than $100,000 in combined tax, penalties and interest," while those established for the long-term determine a monthly payment that will be paid in installments until the debt is paid off completely. In order to set up a long-term payment plan, one must owe the IRS "$50,000 or less in combined tax, penalties and interest." Read more on payment plans on the IRS' website.
Stories from those that have used Direct File
For the residents of the twelve states that can pilot the IRS's new filing software, Direct File. The stories from users have been quite positive, with the Center on Budget and Policy Priorities highlighting that of Emma from Texas, who was able to submit her return on her lunch break. For many, submitting their tax return can be a daunting task, but Direct File aims to make it easier. Next year, the software will be rolled out nationally.
IRS offers extension to some filers in Connecticut
After a dam was damaged in Connecticut, leading to severe flooding, the IRS has offered some filers an extension to give them more time to get their documents in order. Additionally, as is the case in Connecticut and the various other geographies where an automatic extension has been offered, filers may need to request documents from the tax authority destroyed in the storm.
Also, for those who think they are eligible for an automatic extension because of a natural disaster, see the full list here.
As the deadline for tax returns approaches, many people are searching for ways to reduce their tax liability. If you have children, you may be wondering if you qualify for the Child Tax Credit. The CTC is designed to provide financial support to families with children and alleviate the tax burden for eligible taxpayers. However, the CTC is subject to income limitations, and the credit amount gradually reduces for taxpayers with higher incomes. If you are unable to fully utilize this benefit because the amount of federal income tax you owe is less than your credit amount, you can apply for financial assistance through the Additional Child Tax Credit and receive a partial refund. Read more in our full coverage.
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The deadline to file tax returns and pay taxes, commonly known as Tax Day, is April 15. However, due to the Patriot Day and Emancipation Day holidays, residents of Maine and Massachusetts have two extra days, until April 17, to fulfill their tax obligations. If you are unable to gather all the necessary tax documents and file your return by the deadline, you can request a six-month extension to do so. Read more.
What is refund offset? How can it be avoided?
The Taxpayer Advocate Service (TAS) has published a new blog on refund offsetting and how filers can avoid it if you are experiencing economic hardship. But, what is offset? Offsetting is a practice that IRS engages with when the amount of tax owed by a filer, exceeds what they would get back, meaning that some (or in some cases all) of the refund amount is reduced.
However, the TAS, says that those experiencing financial troubles can avoid having their refund offset by demonstrating that "they are experiencing an economic hardship, which is why the IRS refers to the refund as an offset bypass refund (OBR)." Read the blog for more information on how to make this declaration, and be sure to do so before submitting your tax return, since once a refund is offset, the funds cannot be sent to the taxpayer.
Have gamblings winnings to report to the IRS?
The IRS' Interactive Tax Assistant can help those who have gambling winnings to report to the tax authority on their return this year. This can be used by those who have received a Form W-2G and those who have not.
Gambling prizes over $600, including lottery winnings, are generally eligible for taxation by the IRS. Keep that in mind as you file your returns.
Direct File is a great option for millions of filers
To celebrate Eid, the IRS is reminding tax payers that in twelve states, they have the option to use the IRS' pilot filing software Direct File that will be rolled out nationally next year.
The software is available in the states where no state taxes are levied on income: Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, or Wyoming. If you lived in one of these states for all of 2023, you can use the software. Additionally, residents of Arizona, California, Massachusetts, New York, and Washington can also take advantage of the pilot program this year.
The Child Tax Credit (CTC) is a financial benefit provided by the US government to assist families in covering the expenses of raising children. As part of the American Rescue Plan during the covid-19 pandemic, the credit became refundable, and its value was increased from $2,000 per child to $3,600 for children under 6 years old and $3,000 for those between 6 and 17. If you haven't claimed the expanded Child Tax Credit yet, you can still do so. This is because the IRS permits filers to amend their previous tax returns up to three years after the end of the filing season. You will have until next year to file your old Child Tax Credit information.
Read more in our full coverage on what you need to do to claim the enhanced Child Tax Credit offered in 2021.
The IRS offers a tool called “Where’s My Refund.” This tool allows taxpayers to easily check the status of their tax refund by providing their Social Security Number, the refund amount, and their tax filing status.
You can expect to receive information about the status of your refund within 24 hours of submitting an electronic refund or on the day that the IRS receives your paper refund in the mail. The sooner you file your tax return, the quicker you can expect to receive the result of your filing.
Hello and welcome to AS USA's live blog on the 2024 tax season. The filing deadline is Monday, 15 April, meaning there is just under a week left to submit one's 2023 tax return.
There are options for those who don't think it is feasible to meet the deadline. The extensions are free to request, but they do not alter the deadline for any owed taxes, and missing payments can incur penalties and fees.
For those looking for free filing options, some filers have various options this year. Residents of twelve states can use the Direct File program, which is a free filing software that the federal government is piloting this year. Outside of those states, filers with an annual income under $79,000 can use the IRS Free File programs that partners of the IRS have developed to meet different filing needs.