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Important Tax Information for 2024

January, 2024

As noted on the IRS.gov website

Here it is, our annual blog to help get you ready for the 2024 tax filing season. The IRS begins accepting and processing 2023 tax year returns on Monday, January 29, 2024, marking the start of the 2024 tax season. The IRS expects more than 128.7 million individual tax returns to be filed by the April 15, 2024, tax deadline.

Although the IRS will not officially begin accepting and processing tax returns until Jan. 29, people do not need to wait until then to work on their taxes if they're using software companies or tax professionals. For example, most software companies accept electronic submissions and then hold them until the IRS is ready to begin processing later this month. IRS Free File will also be available on IRS.gov starting Jan. 12 in advance of the filing season opening. The IRS Direct File pilot will be rolled out in phases as final testing is completed and is expected to be widely available in mid-March to eligible taxpayers in the participating states.

Taxpayers will continue to see helpful changes at the IRS following ongoing transformation work. Building off the success of the 2023 tax season that saw significant improvements following passage of the Inflation Reduction Act, the 2024 filing season will continue reflecting the focus on improving services to taxpayers.

"As our transformation efforts take hold, taxpayers will continue to see marked improvement in IRS operations in the upcoming filing season," said IRS Commissioner Danny Werfel. "IRS employees are working hard to make sure that new funding is used to help taxpayers by making the process of preparing and filing taxes easier."

Some of the new and expanded tools and resources include:

• Expanded in-person service that meets taxpayers where they are by opening or reopening Taxpayer Assistance Centers (TACs). The IRS will also offer extended hours at many TACs nationwide.
• Increased help available on the toll-free line and an expanded customer call back feature designed to significantly reduce wait times.
• Improvements to the Where's My Refund? tool, which is the IRS' most widely used taxpayer service tool. However, the tool provides limited information, often leading taxpayers to call the IRS to inquire about their refund status. Updates to Where's My Refund? will allow taxpayers to see more detailed refund status messages in plain language. These updates will also ensure Where's My Refund works seamlessly on mobile devices. Taxpayers often see a generic message stating that their returns are still being processed and to check back later. With the improvements, taxpayers will see clearer and more detailed updates, including whether the IRS needs them to respond to a letter requesting additional information. The new updates will reduce the need for taxpayers to call the IRS for answers to basic questions.
• Enhanced paperless processing that will enable taxpayers to submit all correspondence, non-tax forms, and responses to notices digitally and will be able to e-File 20 additional tax forms. Achieving this milestone will enable up to 125 million paper documents to be submitted digitally per year.
• An enhanced IRS Individual Online Account that includes chat, the option to schedule and cancel future payments, revise payment plans and validate and save bank accounts.
• A new, pilot tax filing service called Direct File that gives eligible taxpayers a new choice to file their 2023 federal tax returns online, for free, directly with the IRS. It will be rolled out in phases and is expected to be widely available in mid-March. Find more about Direct File pilot eligibility, scope and the participating states on Direct File.

Refunds may be smaller in 2024. Taxpayers will not receive an additional stimulus payment with a 2024 tax refund because there were no Economic Impact Payments for 2022. In addition, taxpayers who do not itemize and take the standard deduction won't be able to deduct their charitable contributions.

Eligibility rules changed to claim a tax credit for clean vehicles. There are several changes taxpayers should be aware of, such as the tax credit is generally available only for qualifying electric vehicles for which final assembly occurred in North America (final assembly requirement) and a transition rule for vehicles purchased before August 16, 2022. Taxpayers who want to take advantage of this tax credit should call a tax professional for assistance in determining eligibility.

Gather 2023 Tax Documents

The best way to prepare for tax filing is to gather important tax documents - either electronic or paper - and keep them in one place. These documents include but are not limited to: Forms W-2 from employers, Forms 1099 from banks or other payers, Form 1099-K from third-party payment networks, Form 1099-NEC for non-employee compensation, Form 1099-MISC for miscellaneous income, or Form 1099-INT if you were paid interest, as well as records documenting all digital asset transactions.

Typically, year-end forms arrive by mail or are available online mid-to-late January. Taxpayers should carefully review each income statement for accuracy and contact the issuer to correct information that needs to be updated.

Ensuring their tax records are complete before filing helps taxpayers avoid errors that lead to processing delays. When they have all their documentation, taxpayers can file an accurate return and avoid processing or refund delays or IRS letters.

Avoid Refund Delays and Understand Refund Timing

Many different factors can affect the timing of a refund after the IRS receives a return. Although the IRS generally issues most refunds in less than 21 days, taxpayers should not rely on receiving a 2023 federal tax refund by a certain date. As such, making major purchases or paying bills is not wise until the refund is received. Some returns may require additional review and may take longer to process if IRS systems detect a possible error, the return is missing information, or there is suspected identity theft or fraud.

Use Direct Deposit for Faster Refunds

The fastest way to get a tax refund is by filing electronically and choosing direct deposit. Direct deposit is quicker than waiting for a paper check in the mail. It also avoids the possibility that a refund check could be lost, stolen, or returned to the IRS as undeliverable.

Prepaid debit cards or mobile apps may allow direct deposit of tax refunds. They must have routing and account numbers that can be entered on a tax return. Taxpayers can check with the mobile app provider or financial institution to confirm which numbers to use.

Taxpayers may need to consider estimated or additional tax payments due to non-wage income from unemployment, self-employment, annuity income, or even digital assets. The Tax Withholding Estimator on IRS.gov can help wage earners determine if they need to consider an additional tax payment to avoid an unexpected tax bill when they file.

Get Help From a Tax Professional

Filing taxes is inevitable for most people, and with tax law becoming more complex with every passing year, there is no better time to get ready and get advice than right now. This is why the FREE Tax Preparation & Advice is a very popular benefit included with select plans from Legal Club.

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Any accounting or tax advice contained in this communication is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. All Family Protection Plan products from Legal Club contain a Free Tax Preparation and Advice benefit. To learn more about the plans offered by Legal Club, browse this website or call us at 800-305-6816.

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