Tax Time Corp

2024 tax filing season starts as IRS begins accepting tax returns today; taxpayer help expands this year with more in-person hours, better service, improved tools

IR-2024-24, Jan. 29, 2024

WASHINGTON — The Internal Revenue Service successfully opened the 2024 tax season today by accepting and processing federal individual tax returns as the agency continues focusing on expanding options to help taxpayers.

The IRS expects more than 146 million individual tax returns for 2023 to be filed this filing season, which has a deadline of April 15, 2024.

With the start of the 2024 filing season, the IRS will be extending hours of service in nearly 250 Taxpayer Assistance Centers (TACs) across the country, providing additional help to people. The IRS will also be working to continue improvements on its phone service as well as expanding online tools. The “Where’s My Refund?” tool on IRS.gov will add more details for taxpayers checking on the status of their tax refund.

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.

“For months, IRS employees have been working hard to be ready to help taxpayers and make tax season as easy and smooth as possible,” said IRS Commissioner Danny Werfel. “We’ve taken important steps to add more improvements to help taxpayers, ranging from expanded in-person hours, better online options and improved phone service.”

The IRS reminds taxpayers the deadline to file a 2023 tax return and pay any tax owed is Monday, April 15, 2024. Taxpayers living in Maine or Massachusetts have until April 17, 2024, due to the Patriot’s Day and Emancipation Day holidays. If a taxpayer resides in a federally declared disaster area, they may have additional time to file.

Taking distributions from your retirement plan or IRA before age 59 ½

Saving for retirement occurs over a period of perhaps 40 or more years. And over those 40-odd years, you may run into life-situations and need to withdraw from your retirement savings early. If you do, withdrawals are normally subject to ordinary income tax, and if taken prior to reaching age 59 ½ may be subject to an additional 10% tax. Here are a few things to consider before withdrawing from your retirement plan or IRA.

Additional 10% tax on early distributions

If you take distributions from retirement plans and IRAs before the age of 59 ½, you may owe an additional 10% tax on the taxable amount of the early distributions, unless you meet an exception. There are more than 20 exceptions, including several new exceptions added by the SECURE Act and SECURE 2.0 Act.

IRAs and IRA-based plans

Individuals can take distributions from their IRA, SEP-IRA or SIMPLE-IRA at any time. Taxpayers don’t need to show a hardship to take a distribution – they can just request a withdrawal from the financial institution that holds the account.

Distributions from a traditional IRA are subject to ordinary income tax. Withdrawals before age 59 ½ may be subject to the 10% early distribution tax unless an exception applies. Qualified distributions from a Roth IRA are not subject to income tax (generally, after you’ve had the Roth account for five years and reach 59 ½).

Workplace retirement plans: 401(k), 403(b) and 457(b)

Taxpayers can take distributions from these plans only when certain life events occur, for example retiring or becoming disabled. The plan's summary description should clearly state when you can take a distribution from the plan while still working for that employer. Many plans allow participants to take a distribution on account of a hardship, or take a loan from the plan for any reason.

Hardship distributions You may be able to take a distribution from a governmental 457(b) plan because of an unforeseen emergency, or from a 401(k) or 403(b) plan because of an immediate and heavy financial need. Distributions due to a hardship can only cover the amount of your emergency, or that of your spouse or dependent, and is subject to withholding.

You should report hardship distributions as gross income when you file your tax return unless the distributions are designated Roth contributions. Hardship distributions can’t be repaid to the plan or rolled over to another plan.

Any distribution before you reach age 59 ½ may result in a 10% additional tax on the amount withdrawn unless an exception applies. Distributions from a 457(b) plan are not subject to the 10% early distribution tax.

Loans Some plans may allow you to take loans if you meet certain plan limits on loan amounts and other requirements. You might be able to borrow up to the lesser of $50,000 or 50% of your account balance and must repay the loan over no more than 5 years. If the loan meets the plan rules and is repaid on time, these loans are not subject to tax.

Reporting distributions from retirement plans

People of all ages need to report distributions, including unpaid loans from retirement plans, as gross income on their tax return. Qualified distributions from Roth IRAs and designated Roth accounts are excluded from gross income.

To report distributions to the IRS:

Include distributions on your Form 1040, Individual Income Tax Return
Report early distributions on Form 5329, Additional Taxes on Qualified Plans, Including IRAs, and Other Tax-Favored Accounts
Determine if an early distribution meets one of the exceptions to the additional 10% tax on early distributions.
Report qualified disaster distributions and repayments on Form 8915-F
Exceptions to the additional 10% tax on early distributions

Distributions after age 59 ½, on account of death or disability, and certain distributions to qualified military reservists called to active duty are common exceptions to the 10% additional tax on early distributions from retirement plans and IRAs.

Some exceptions only apply to early distributions from IRAs. These include distributions for first-time homebuyers and for qualified higher education expenses.

Other exceptions only apply to early distributions from retirement plans. These include distributions after separation from service after reaching age 55, and distributions under a Qualified Domestic Relations Order.

OJO MUY IMPORTANTE

BENEFICIARIOS EN EE. UU.: INFORMES SERÁ OBLIGATORIO A PARTIR DE ENERO DE 2024
21 de mayo de 2023
Como resultado de la Ley de Transparencia Corporativa de enero de 2021, las entidades estadounidenses privadas (LLC, sociedades y corporaciones) y ciertas empresas extranjeras que hacen negocios en los EE. UU. deberán informar información al Tesoro de los EE. UU. (FinCen) sobre sus beneficiarios reales. Esta legislación tiene como objetivo prevenir el lavado de dinero, el terrorismo y otras actividades ilícitas y permitir la cooperación internacional.

A partir del 1 de enero de 2024, todas las LLC, sociedades y corporaciones existentes en EE. UU. tendrán hasta el 31 de diciembre de 2024 para completar el requisito de registro. Todas las nuevas entidades formadas a partir del 1 de enero de 2024 en adelante tendrán 30 días a partir de la fecha de constitución para presentar la información pertinente de FinCen. Una vez que se presenta el informe inicial de una empresa, cualquier cambio o corrección debe presentarse ad hoc dentro de los 30 días calendario posteriores a la fecha de los cambios. No habrá necesidad de un informe de ‘confirmación’ anual o periódico.

Los beneficiarios reales definidos en la Ley se refieren a:
– La persona que ejerce “control sustancial” sobre la entidad; o
– El individuo que, directa o indirectamente, a través de cualquier contrato, acuerdo, entendimiento, relación o de otro modo posee el veinticinco por ciento (25%) o más de las participaciones accionarias de la compañía relevante (por ejemplo, participaciones accionarias en una LLC o acciones de una corporación).

¿Quién podrá acceder a la información?
– Aplicación de la ley federal de EE. UU.
– Agencias del gobierno de los EE. UU. a pedido de fuerzas del orden extranjeras
– Instituciones Financieras en los Estados Unidos, si el cliente ha dado su consentimiento para que se consulte la base de datos.
– No se prevé en la legislación ningún intercambio automático de información con gobiernos extranjeros.

¿Qué se divulgará sobre cada beneficiario real?
– Nombre legal completo
– Fecha de nacimiento
– Domicilio actual de casa o negocio
– El número de identificación único de un documento de identificación aceptable, para los que no son residentes de EE. UU., será un pasaporte u otra identificación gubernamental.

¿Qué más se informará?
– Buen nombre
– Lugar principal de negocios
– Jurisdicción de formación y registro
– Número de Identificación Fiscal de la entidad
Sanciones por incumplimiento: El incumplimiento varía desde $500 por día, hasta $10,000 y/o hasta dos años de prisión.

IMPORTANTE
Avoid refund delays and understand refund timing

Many different factors can affect the timing of a refund after the IRS receives a tax return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a 2023 federal tax refund by a certain date, especially when making major purchases or paying bills. 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.

Also, the IRS cannot issue refunds for people claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund – not just the portion associated with the EITC or ACTC. The IRS expects most EITC and ACTC-related refunds to be available in taxpayer bank accounts or on debit cards by Feb. 27, 2024, if the taxpayer chose direct deposit and there are no other issues with the tax return.