The Thanksgiving holiday often creates a chaotic yet pleasurable atmosphere, as families come together to celebrate. However, the aftermath can leave individuals feeling exhausted. This week’s edition of the Forbes Tax Breaks newsletter is a succinct version due to the festive period. The newsletter follows up on various tax updates without being heavy on details, allowing readers the chance to digest leftovers and catch up on football. It strives to maintain a balance between providing essential information about tax-related topics and offering readers a breather during the busy holiday season.
One of the major developments this year involves the IRS’s decision to delay the implementation of the $600 Form 1099-K reporting threshold for third-party settlement organizations. Instead of the originally planned cut-off, reporting requirements will only take effect for amounts exceeding $5,000 in 2024. This threshold will subsequently decrease to $2,500 in 2025 before hitting the $600 threshold in 2026. For the 2024 tax year, taxpayers should not expect to receive Form 1099-K unless they reach the previous transaction-based thresholds, although those under backup withholding may still receive the form. Taxpayers are advised not to worry if they receive unexpected forms as these do not alter the underlying tax obligations.
As the year draws to a close, taxpayers are reminded about the annual cessation of online applications for Employer Identification Numbers (EINs) typically starting from December 20 until the first business day of January. This serves as a critical reminder for those who may need an EIN during this period. Additionally, the newsletter emphasizes the importance of filing beneficial ownership information (BOI) reports for companies formed before January 1, 2024, which must be completed by January 1, 2025, to avoid penalties. Year-end is also an ideal moment for reconsidering tax strategies, specifically around charitable contributions and retirement funding, as well as anticipated changes to student loan policy.
In light of the upcoming Giving Tuesday, the newsletter highlights the philanthropic tendencies of Americans, who donated approximately $557.16 billion to charitable causes in 2023. This reflects a daily average of $1.52 billion, underscoring the significant role of individual donors in funding various sectors, particularly religious organizations, human services, and education. Understanding such trends not only supports planning for charitable giving but also opens avenues for tax deductions for individuals who wish to contribute.
A notable case awaiting a decision from the Supreme Court involves a challenge to the legality of Congress delegating taxation power to the Federal Communications Commission (FCC). This lawsuit questions if the FCC’s transfer of authority regarding the Universal Service Fund to a private company violates the separation of powers, particularly the nondelegation doctrine. The Fifth Circuit has ruled against the legality of this delegation, stating it constitutes an unconstitutional transfer of power. However, conflicting decisions from other circuits have led to the Supreme Court’s review to clarify the constitutionality of such delegations.
Finally, the newsletter provides essential upcoming tax deadlines, including the due date of January 1, 2025, for reporting companies to submit their BOI filings, alongside several disaster-related tax relief deadlines. It also lists important conferences and events pertinent to the tax community, thus encouraging professionals to stay abreast of industry developments. Through a wealth of information, curated announcements, and insights on charitable endeavors, the newsletter serves as a comprehensive tool for taxpayers and tax professionals alike, standing ready to assist them as they navigate the complexities of the tax landscape into the new year.
