Welcome to FKYG’s Latest Tax Insights
In our efforts to stay connected more efficiently, we have decided to enhance our communication channels. Our email newsletter will be a convenient way for us to keep you updated on important financial news, tax tips, and updates from our firm. You can expect to receive valuable insights directly to your inbox, making it easier for you to stay informed. As we step into the new year, it brings with it a landscape of updates and changes in the tax arena. In this Newsletter, we bring you essential insights tailored for both individuals and business taxpayers – let’s navigate these changes together.
For our individual clients, we examine the IRS’s announcement of a delay in $600 reporting thresholds and the evolving landscape of retirement account catch-up contributions; for our business clients, we cover topics such as FinCEN’s updated FAQs on beneficial ownership reporting, the Texas Comptroller’s latest guidance on the No Tax Due report, and changes in the first-year bonus depreciation rate under Section 179.
At FKYG, we are committed to helping our valued customers stay on top of their financial game. We look forward to this enhanced communication journey and continuing to support you in all your financial needs.
Retirement Scoop: Unpacking the New Catch-up Contribution Rules!
A quick update on retirement contributions! The SECURE Act 2.0 shook things up, especially if you’re 50 or older and keen on boosting your retirement stash.
The 401(k) contribution limit has been set at $23,000, with a catch-up limit of $7,500 for those 50 and older. When it comes to employer and employee contributions, the combined limit is now $69,000. Additionally, the 401(k) compensation limit is capped at $345,000. For the saver’s credit, the income limits have increased to $38,250 for individuals and $76,500 for couples.
In a nutshell, retirement contributions are like a superhero cape for your future. Keep saving, keep smiling, and cheers to comfy retirements!
IRS: $600 Form 1099-K Reporting Threshold Delayed
Heads up! The IRS has delayed the $600 Form 1099-K reporting threshold for third-party settlement organizations to 2023, treating it as a transition year. No reporting is required unless you exceed $20,000 and 200 transactions. For 2024, the threshold drops to $5,000. Updates to Form 1040 are expected for easier reporting in 2024. Check Fact Sheet 2023-27 for details, and stay tuned for more here. In case of any questions, feel free to follow up with us!
FinCEN's New FAQs on Beneficial Ownership Reporting
FinCEN has released updated FAQs on Beneficial Ownership Information (BOI) reporting, effective from 1/1/24 under the Corporate Transparency Act. Business entities in the U.S. are now required to report beneficial ownership details to FinCEN. FAQs cover reporting companies, owners, applicants, requirements, initial reports, and exemptions. Questions? Reach out! Consult with our team to make the most out of these changes.
Texas Comptroller's New Guidance on No Tax Due Report
The Texas Comptroller of Public Accounts has issued guidance regarding changes to the franchise tax No Tax Due Report (Form 05-163). Effective from 1/1/24, Senate Bill 3 increases the franchise tax exemption to $2.47 million. Notably, businesses under this threshold are no longer required to file a No Tax Due Report. The 2024 report year and beyond will discontinue the No Tax Due Report. To ensure compliance with the latest requirements outlined in this guidance, our team is available to assist in all possible ways.
Shrinking First-Year Bonus Depreciation Rate
The first-year bonus depreciation rate has taken a dip from 100% to 80% for assets placed in service in 2023, with a plan to hit 0% after 2026. If you are into maximizing deductions, the decision between bonus depreciation and Section 179 comes from your business and individual needs. There’s an annual limit, a phase-down twist, and a business income factor to keep in mind. You might also want to consider when to claim your deductions and state tax implications. But fret not, we’re here to guide you through these changes.