IRS Direct File Pilot Program
On October 17, 2023, the IRS announced more details on the new IRS Direct File Pilot which will be introduced during the upcoming 2024 filing season.
2023 Energy Efficient Home Improvement Credit
Energy Efficient Home Improvement Credit Included in the Inflation Reduction Act of 2022 was the Energy Efficient Home Improvement Credit (formerly known as the Nonbusiness Energy Property Credit). Is the Energy Efficient Home Improvement Credit Refundable? Taxpayers that make qualified energy-efficient improvements to their existing home in 2023 can qualify for a nonrefundable tax credit of up to $3,200 depending on what type of improvements they make to their primary residence. Business Use of Home If a taxpayer uses their home partly for business the amount of the credit is calculated as follows: What Qualifies for the Energy Efficient Home Improvement Credit? To qualify, home improvements must meet energy efficiency standards. They must be new systems and materials, not used. Some improvements have specific credit limits as follows. Heat Pumps and Biomass Stoves and Boilers For heat pumps, biomass stoves and biomass boilers the credit is 30% of their cost up to a limit of $2,000 per year. In order to qualify these items must have a thermal efficiency rating of at least 75%. The costs may include labor for installation Other Qualified Energy Efficiency Improvements and Residential Energy Expenses The credit is 30% of the cost of qualified energy efficiency improvements and residential energy expenses up to a limit of $1,200 per year. The following types of improvements or residential energy expenses (the total credit for all cannot exceed $1,200) qualify for the credit: Qualified property includes the following: The audit must identify the most significant and cost-effective energy efficiency improvements that need to be made to the residence. It must include an estimate of the energy and cost savings for each improvement. The home energy auditor must provide a written audit report to the taxpayer. How to Claim the Energy Efficient Home Improvement Credit File Form 5695, Residential Energy Credits Part II, with your tax return to claim the credit. You must claim the credit for the tax year when the property is installed, not merely purchased. For more information see the following: CrossLink Professional Tax Solutions CrossLink is the industry’s leading professional tax software solution for high-volume tax businesses. Built based on the needs of busy tax offices and mobile tax preparers that specialize in providing their taxpayer clients with fast and accurate tax returns, CrossLink has been a trusted software solution since 1989. CrossLink’s in-depth tax calculations, advanced technological features, and paperless solutions allow you to prepare the most complicated tax returns with confidence and ease while providing your customers an unparalleled experience.
2023 Used and Commercial Clean Vehicle Credits
Used and Commercial Clean Vehicle Credits The Inflation Reduction Act included two new credits for clean vehicles. They are the Credit for Previously Owned Clean Vehicles and the Commercial Clean Vehicle Credits. Both credits go into effect in 2023 and are available through 2032. Here are the details for each of these two credits: Used Clean Vehicle Credit A taxpayer who purchases an eligible used clean vehicle in 2023 may be eligible for the new nonrefundable Credit for Previously Owned Clean Vehicles. The credit is 30% of the vehicle’s purchase price or $4,000 whichever is less. Other details for this credit: For more details see the following pages on the IRS website: Commercial Clean Vehicle Credit A taxpayer who purchases a qualified commercial clean vehicle may be able to claim the new nonrefundable Commercial Clean Vehicle Credit. The credit is calculated as the lesser of: The maximum credit that may be taken on a qualifying vehicle is: Or Other details for this credit: For more details see the following pages on the IRS website: CrossLink Professional Tax Solutions CrossLink is the industry’s leading professional tax software solution for high-volume tax businesses. Built based on the needs of busy tax offices and mobile tax preparers that specialize in providing their taxpayer clients with fast and accurate tax returns, CrossLink has been a trusted software solution since 1989. CrossLink’s in-depth tax calculations, advanced technological features, and paperless solutions allow you to prepare the most complicated tax returns with confidence and ease while providing your customers an unparalleled experience.
2023 Residential Clean Energy Credit
The Inflation Reduction Act of 2022 extended and increased the Residential Energy Credit and renamed it the Residential Clean Energy Credit.
2023 IRS Security Summit
This year’s Security Summit tax professional summer campaign is emphasizing the following series of simple actions that they can take to better protect their clients and themselves from sensitive data theft.
34 Latest States with a Pass-Through Entity Tax
Pass-Through Entity Tax A total of 34 states have enacted legislation that creates a pass-through entity tax as a workaround to the $10,000 cap on the state and local taxes (SALT) itemized deduction. What is Pass-Through Entity Tax? The pass-through entity tax (PTE) allows partnerships and S Corporations to elect to be taxed at the entity level for state income tax purposes. If the entity makes this election the partner or shareholder is usually allowed to: (1) Claim a credit on their state individual income tax return for the amount of their distributive share of the pass-through entity tax paid by the partnership or S Corporation, and (2) Allows the partner or shareholder to not have to report their distributive share of income on their personal state income tax return. States with a Pass-Through Entity Tax A pass-through entity tax went into effect in the following states before 2022: States with Pass-Through Entity Tax Starting in 2022 A pass-through entity tax went into effect in 2022 in the following states: States with a Pass-Through Entity Tax that is Retroactive to 2022 A pass-through entity tax was signed into law in 2023 and is retroactive to 2022 for the following states: States with Pass-Through Entity Tax Starting in 2023 A pass-through entity tax goes into effect beginning in 2023 in the following states: Pass Through Entity Tax Rules by State Here are brief details as well as where to learn more about the pass-through entity tax rules for the following States that have enacted a pass-through entity tax: Alabama See the Alabama Electing Pass-Through Entity Tax Guidance page on the Alabama Department of Revenue website for more information. Arkansas For more information, see the Pass-Through Entity Tax: FAQs on the Arkansas Department of Finance and Administration’s website. Arizona For more information, see the Senate Fact Sheet for HB 2838 on the Arizona website. California For more information, see the Pass-through entity (PTE) elective tax page on the California Franchise Tax Board’s website. Colorado For more information, see Colorado House Bill 21-1327 on the Colorado website. Connecticut For more information, see the following on the Connecticut Department of Revenue Services website: Georgia For more information, see Rule 560-7-3-.03 Election to Pay Tax at the Pass-Through Entity Level on the Georgia Department of Revenue’s website. Idaho For more information, see the Pass-Through Entities page on the Idaho State Tax Commission’s website. Hawaii For more information, see Hawaii Tax Information Release No. 2023-01. Illinois For more information, see the following on the Illinois Department of Revenue’s website: Indiana For more information, see Pass Through Entity Tax page on the Indiana Department of Revenue’s website. Iowa For more details on how to make the election and other information see the Pass-Through Entity Tax (PTET) page on the Iowa Department of Revenue’s website. Kansas Kentucky For more information see Kentucky HB 360, Section 16 on the Kentucky Legislature website. Louisiana For more information, see Revenue Information Bulletin No. 19-019 – Guidance on Pass-Through Entity Election on the Louisiana Department of Revenue website. Maryland For more information, see the following on the Comptroller of Maryland’s website: Massachusetts For more information, see the Elective pass-through entity excise page on the Massachusetts Department of Revenue website. Michigan For more information, see the Flow-Through Entity Tax page on the Michigan Department of Revenue website. Minnesota For more information see the Pass-Through Entity (PTE) Tax page on the Minnesota Department of Revenue website. Mississippi For more information, see the Mississippi Department of Revenue Notice 80-22-001. Missouri For more information, see the Pass-Through Entity Tax FAQs on the Missouri Department of Revenue website. New Mexico For more information see the Pass-Through Entity page, in the Frequently Asked Questions About Direct Taxation of Pass-Through Entities section, on the New Mexico Taxation and Revenue Department’s website. New Jersey See the Pass Through Business Alternative Income Tax Act page on the New Jersey Division of Taxation website. New York For more information, see the following on the New York State Department Taxation and Finance’s website: North Carolina For more information see North Carolina S.B. 105 pages 594 – 599. Ohio See the Ohio’s PTE SALT Cap Workaround for “Electing Pass-Through Entities” beginning in Tax Year 2022 Tax Alert on the Ohio’s Department of Taxation website for more information. Oklahoma For more information, see page 7 of the 2021 Oklahoma Small Business Corporation Income and Franchise Tax Forms and Instructions (Form 512-S) on the Oklahoma Tax Commissions website. Oregon For more information, see the Pass-Through Entity – Elective Tax FAQs on the Oregon Department of Revenue’s website. Rhode Island For more information, see the following on the Rhode Island Division of Taxation’s website: South Carolina For more information, see SC Revenue Ruling #21-15 on the South Carolina Department of Revenue’s website. Utah For more information see the SALT Report & Tax Facts on the Utah State Tax Commission’s website. Virginia See the Pass-Thru Entities page and Virginia Tax Bulletin 22-6 on the Virginia Department of Taxation’s website for more information. West Virginia For more information see West Virginia Senate Bill 151. Wisconsin For more information, see the following on the Wisconsin Department of Revenue’s website: CrossLink Professional Tax Software CrossLink is the industry’s best professional tax software solution for high-volume tax businesses. Built based on the needs of busy tax offices that specialize in providing their taxpayer clients with fast and accurate tax returns, CrossLink has been a trusted software solution since 1989. CrossLink’s in-depth tax calculations, advanced technological features, and paperless solutions allow you to prepare the most complicated tax returns with confidence and ease while providing your customers an unparalleled experience.
Clean Vehicle Tax Credit: Qualifications and Rules for Electric Vehicle Purchases
Clean Vehicle Tax Credits for 2023 and Beyond This article provides details on the three credits for electric vehicles and fuel cell vehicles that are included in the Inflation Reduction Act that became law in August of 2022 and go into effect in 2023. New Clean Vehicle Tax Credit Tax Credit for Used Clean Vehicles Commercial Clean Vehicle Tax Credit New Clean Vehicle Tax Credit A taxpayer that purchases a new electric fuel cell vehicle in tax years 2023 – 2032 may be eligible for up to a $7,500 nonrefundable credit for New Clean Vehicles. Taxpayers may claim this credit by completing Form 8936 and Form 8936, Schedule A and including it with their federal income tax return. To see what these two forms look like see the following on the IRS website: New Clean Vehicle Tax Credit Requirements The full $7,500 credit is available for fuel cell vehicles that meet the requirements under IRC 30B(b)(3). The basic requirement is that the vehicle must be propelled by power derived from 1 or more cells which convert chemical energy directly into electricity by combining oxygen with hydrogen fuel which is stored on board the vehicle in any form. What are the Critical Minerals Requirements for EVs? Vehicle’s battery must contain a threshold percentage of critical minerals that were extracted or processed in a country with which the US has a free trade agreement or recycled in North America as follows: What are the Battery Components Requirements for EVs? To meet this requirement the vehicle’s battery components must meet a percentage threshold for manufacturing or assembly in North America as follows: For more details see the following on the IRS website: Tax Credit for Used Clean Vehicles A taxpayer who purchases an eligible used clean vehicle in tax years 2023 – 2032 may be eligible for the new nonrefundable Credit for Previously Owned Clean Vehicles. The credit is 30% of the vehicle’s purchase price or $4,000 whichever is less. Taxpayers may claim this credit by completing Form 8936 and Form 8936, Schedule A and including it with their federal income tax return. To see what these two forms look like see the following on the IRS website: Used EV Tax Credit Requirements For more details see the following pages on the IRS website: Commercial Clean Vehicle Tax Credit A taxpayer who purchases a qualified commercial clean vehicle on tax years 2023 – 2032 may be able to claim the new nonrefundable Commercial Clean Vehicle Credit. Taxpayers may claim this credit by completing Form 8936 and Form 8936, Schedule A and including it with their federal income tax return. To see what these two forms look like see the following on the IRS website: What is the Commercial Clean Vehicle Tax Credit? Businesses and tax-exempt organizations qualify for the commercial clean vehicle tax credit, also known as the commercial electric vehicle tax credit. This credit is calculated as the lesser of: The maximum credit that may be taken on a qualifying vehicle is: Or Commercial Electric Vehicle Tax Credit Requirements For more details see the following pages on the IRS website: CrossLink Professional Tax Software CrossLink is the industry’s best professional tax software solution for high-volume tax businesses. Built based on the needs of busy tax offices and mobile tax preparers that specialize in providing their taxpayer clients with fast and accurate tax returns, CrossLink has been a trusted software solution since 1989. CrossLink’s in-depth tax calculations, advanced technological features, and paperless solutions allow you to prepare the most complicated tax returns with confidence and ease while providing your customers an unparalleled experience.
Understanding Form 1099-K
Form 1099-K is an IRS information return used to report payment card and third-party network transactions on a federal tax return for businesses, sole proprietors, individuals, and gig economy workers.
2023 Tax Filing Deadline
The federal 2023 tax filing deadline for Tax Year 2022 individual tax returns, also known as Tax Day, is Tuesday, April 18, 2023. This day is also the filing deadline for calendar year C Corporations (1120) and Estate/Trust (1041) returns.
Complete List of 32 States with a Taxpayer Access Point or Online Account
The following States offer some version of a taxpayer online account.