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By: Aliza Chasen Click the link below to learn more about a new tax refund scam that the IRS warned individuals about. IRS warns of new tax refund scam - CBS News

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. As noted, the original House debt ceiling bill was much more aggressive. Republicans sought larger spending cuts and tighter work requirements. They also aimed to repeal hundreds of billions in tax incentives in the IRA intended to increase the use of renewable energy and combat climate change. On the other side of the aisle, Democrats hoped to raise taxes on corporations and taxpayers who earn more than $400,000. In addition, they wanted to institute measures to reduce Medicare spending on prescription drugs. None of these priorities are included in the new law. Experts have noted that the outcome of the latest debt ceiling challenge largely resembles the likely outcome of budget negotiations in a divided government, albeit with much more drama and more drastic potential implications for the global economy. Moreover, additional bills related to appropriations — what the parties have referred to as “agreed upon adjustments” — are expected in coming months, which could reduce the effects of some of the spending cuts. Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. The FRA includes rules designed to make it easier for new energy projects, including fossil fuel projects, to obtain permit approval. More updates on notable provisions addressed tomorrow morning. Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. Much of the remaining unspent COVID-19 relief funds, estimated to equal $30 billion to $70 billion, will be “clawed back.” Portions of that funding will be retained, though, including a certain amount for vaccines. More information on notable provisions addressed tomorrow morning. Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. Certain recipients of Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) benefits will face new work requirements, although Medicaid recipients won’t. Specifically, the FRA raises the top age at which adults without children living in their homes must work to receive SNAP assistance, from 49 to 54, phased in over three years. However, the law includes exemptions for the homeless, veterans and individuals age 24 or younger who were children in foster care. It also includes provisions that could increase the number of individuals who must satisfy work requirements to receive TANF benefits from their state programs. Yet, the CBO estimates that the various changes will actually result in more people receiving assistance. More information on notable provisions addressed tomorrow morning. Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. The new law codifies Biden’s previous announcement that the moratorium on student loan payments precipitated by the COVID-19 pandemic won’t be extended beyond this summer. His plan to cancel student loan debt for many borrowers — to the tune of $430 billion — isn’t part of the law. (However, the plan currently is under review by the U.S. Supreme Court.) More updates on notable provisions addressed tomorrow morning. Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. The FRA provides Biden’s budgeted funding for the military and veterans affairs for 2024, adjusted for inflation. Total defense spending will grow to $886 billion in 2024 and $895 billion in 2025. Over the next several days, we will address other notable provisions. Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. One of the more contentious focuses of the negotiations was non-defense discretionary funding for programs such as scientific research, domestic law enforcement, forest management, environmental protection, air traffic control, and nutritional assistance for mothers. The final result is a virtual freeze on this spending, facilitated in part by the reduced funding for the IRS. The spending will drop by about $1 billion in the 2024 fiscal year, compared to this fiscal year, with a 1% increase slated for the 2025 fiscal year. This amounts to a cut, as inflation is expected to grow at a rate greater than 1%. The final non-defense figures are $704 billion for 2024 and $711 billion for 2025. More provisions from the Fiscal Responsibility Act will be addressed in the next several days. Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. IRS Funding is one of the many notable provisions that are addressed in the Fiscal Responsibility Act. The Inflation Reduction Act (IRA), which was enacted in 2022, included an additional $80 billion in funding for the tax agency, with much of it designated for heightened enforcement activity against wealthy taxpayers. The FRA immediately rescinds $1.39 billion and pares back the funding by about $10 billion each year for 2024 and 2025. However, White House officials have indicated that they expect the funding cuts to make little difference in the IRS’s pending expansion plans because the agency planned to spend the original funding over several years. It may be able to spend some of the funds earmarked for later years earlier and then return to Congress to request more funding in the future. Over the next several days, we will address the other notable provisions. Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election. The FRA also makes a variety of changes related to domestic spending, although it falls far short of the cuts included in the Republican bill that the House passed in April 2023, with no changes to the GOP’s long-time targets of Social Security and Medicare. Nonetheless, the Congressional Budget Office (CBO) projects the law will reduce the federal deficit by about $1.5 trillion over 10 years. The new law primarily tackles discretionary spending. Over the next several days, we will address these notable provisions.

The Internal Revenue Service posted a set of answers Wednesday to frequently asked questions on the Earned Income Tax Credit. The new EITC FAQ page aims to provide information to eligible taxpayers on how to properly claim the credit when they prepare and file their 2021 tax return. The EITC helps low- to moderate-income workers and families by giving them tax credits to either decrease the amount of taxes they owe or offering an added payment to increase a tax refund. The amount of the credit can change depending on whether the taxpayer has children, dependents, is disabled, or meets other criteria. The new FAQs spell out what the EITC is, how it was expanded for 2021, which taxpayers are eligible, and how to claim it. For 2021, more workers without qualifying children can qualify for the EITC because the maximum credit has nearly tripled for eligible taxpayers and, for the first time, it’s available to younger workers and now has no age limit cap. For 2021, the EITC is generally available to filers without qualifying children who are at least 19 years old with earned income below $21,430, or $27,380 for spouses filing a joint return. The maximum EITC for filers with no qualifying children is $1,502. Another change for 2021 allows individuals to calculate the EITC using their 2019 earned income if it was higher than their 2021 earned income. In some cases, this option will give them a larger credit. The 17 new FAQs include: What Is the Earned Income Tax Credit? What is earned income? What are the earned income limits for taxpayers without qualifying children? How old must I be to claim the Earned Income Tax Credit if I do not have qualifying children? Do I need to have a Social Security number (SSN) to be eligible to claim the Earned Income Tax Credit? Do my qualifying children need to have SSNs in order for me to claim the Earned Income Tax Credit? What are the age requirements for claiming the Earned Income Tax Credit if I have a qualifying child? What are the earned income limits for individuals with a qualifying child? Will any refund that I receive because I claimed the Earned Income Tax Credit affect my government benefits? What is the maximum amount of the Earned Income Tax Credit for 2021 for eligible taxpayers without qualifying children? Is there a limit on the amount of investment income I can earn and remain eligible for the Earned Income Tax Credit? If I am not filing a joint return with my spouse, can I claim the Earned Income Tax Credit? Who is considered a qualified homeless youth for purposes of the Earned Income Tax Credit? Who is considered a qualified former foster youth for purposes of the Earned Income Tax Credit? Can I elect to use my 2019 earned income to figure my Earned Income Tax Credit for 2021? Can a student claim the Earned Income Tax Credit for 2021? What is a specified student for purposes of the Earned Income Tax Credit? Proactivity leads to success, so please email or call us if you have questions. SOURCE

March 1 is approaching and if you’re a farmer, you likely believe March 1 is your deadline to have your taxes filed and paid. In some instances that is true, but there are many factors to consider. Unlike other business owners, farmers do not have to make quarterly estimated tax payments. This is for good reason as farm income can be highly variable from year to year making it difficult to estimate what the current year tax may be. Because of this exemption from quarterly payments, farmers historically have had to file their taxes and pay by March 1. A farmer only has a March 1 deadline if they are a “qualified farmer” in the eyes of the IRS and owed tax in the prior year. A “qualified farmer” is someone who has 2/3rd of their gross income from farming. The March 1 deadline does not apply if the following circumstances apply: The farm showed a loss in the prior year and did not owe tax. You and your spouse have tax withholding payments from W-2 jobs that cover your current year tax. Tax credits offset your current year tax liability. A farmer can extend their deadline to the normal tax deadline of April 15 by making one estimated tax payment by January 15. This payment is the lessor of prior year’s tax payment or 2/3rds of the estimated current year tax. The best way to determine the amount of what this payment should be is to work with your trusted ELO advisor. Farming is a very capital-intensive industry where the cost of capital should be considered when making decisions. The decision of when to pay tax is no different. Depending on where the farmer’s current year tax amount lies, it may make the most sense to make a January 15th estimated payment or even to not worry about the March 1 deadline at all. The IRS is currently charging 3% interest on “late” tax payments. A farmer’s line of credit interest rate is likely higher than that making it make economic sense to not worry about the March 1 deadline. Let’s take a look at an example to illustrate: The farm had a tax liability in the prior year of $10,000. The farm had a good year, and the current year tax liability is estimated to be $50,000. Let’s assume the farm’s line of credit interest rate is 4.5%. If the farm pays the $50,000 by March 1, the interest cost of that payment (net of tax) to April 15 is $216. The IRS’s interest will only be $74 for waiting until April 15 to file and pay the tax. In this example, the farm should not worry about the March 1 deadline. The business side of farming continually is becoming more complicated. The list of information requested from your CPA seems to grow every year. Many times, farmers don’t have all their information until mid-February and in some instances not until March. Because of the growing complexity, it is becoming more and more difficult to get the tax return completed by March 1. Extending your tax deadline might not only make economic sense but it may relieve some stress with completing the tax return. MEET THE AUTHOR ADAM BORMANN, CPA AN AGRIBUSINESS PROFESSIONAL WITH ELO CPAS & ADVISORS, A LEADING SOUTHEASTERN SOUTH DAKOTA ACCOUNTING AND CONSULTING FIRM WITH OFFICES IN SIOUX FALLS, MITCHELL, YANKTON, HURON, CHAMBERLAIN AND MILLER. Learn More | Contact