Tax Tips: Safety tips to remember during the holiday season and throughout the year
During the busiest time of the year for online shopping, the Security Summit reminds taxpayers of some important steps to protect themselves and their information from data thieves:
• Shop at online sites with web addresses that begin with the letters “https:” the “s” stands for secure communications. Also look for a padlock icon in the browser window.
• Don't shop on unsecured public Wi-Fi in places like a mall or restaurant.
• Ensure security software is updated on computers, tablets and mobile phones.
• Watch out and help protect the devices of family members who may not be technologically savvy, a wide range that goes from young children to older adults.
• Make sure anti-virus software for computers has a feature to stop malware, and that there is a firewall enabled to prevent intrusions.
• Use strong, unique passwords for online accounts.
• Use multi-factor authentication whenever possible
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Tax Tips: IRS provides transition relief for third party settlement organizations; Form 1099-K threshold is $5,000 for calendar year 2024
WASHINGTON — The Internal Revenue Service today issued Notice 2024-85 providing transition relief for third party settlement organizations (TPSOs), also known as payment apps and online marketplaces, regarding transactions during calendar years 2024 and 2025.
Under the guidance issued today, TPSOs will be required to report transactions when the amount of total payments for those transactions is more than $5,000 in 2024; more than $2,500 in 2025; and more than $600 in calendar year 2026 and after.
Notice 2024-85 also announces for calendar year 2024, that the IRS will not assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax during the calendar year.
TPSOs that have performed backup withholding for a payee during calendar year 2024 must file a Form 945 and a Form 1099-K with the IRS and furnish a copy to the payee.
For calendar year 2025 and after, the IRS will assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax.
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Tax Tips: Save for retirement now, get a tax credit later: Saver’s Credit can help low- and moderate-income taxpayers save more in 2025
WASHINGTON —The Internal Revenue Service today reminded low- and moderate-income taxpayers that they can save for retirement now and possibly earn a tax credit in 2025 and future years.
The Retirement Savings Contributions Credit, also known as the Saver’s Credit, helps taxpayers offset a portion of the first $2,000 ($4,000 if married filing jointly) they voluntarily contribute to Individual Retirement Arrangements (IRAs), 401(k) plans and similar workplace retirement programs.
The credit also helps eligible persons with a disability who are the designated beneficiary of an Achieving a Better Life Experience (ABLE) account and contributes to that account. For more information about ABLE accounts, see Publication 907, Tax Highlights for Persons with Disabilities, on IRS.gov.
The maximum Saver’s Credit is $1,000 ($2,000 for married couples). The credit can increase a taxpayer’s refund or reduce the tax owed but is affected by other deductions and credits. Rollover contributions do not qualify for the credit, and distributions from a retirement plan or ABLE account reduce the contribution amount used to figure the credit.
Who is eligible?
Taxpayers can use the Interactive Tax Assistant tool for the Saver’s Credit to determine their eligibility. A taxpayer is eligible for the credit if they’re:
• Age 18 or older,
• Not claimed as a dependent on another person’s return, and
• Not a full-time student.
Furthermore, the Saver’s Credit can be claimed by:
• Married couples filing jointly with adjusted gross incomes up to $76,500.
• Heads of household with adjusted gross incomes up to $57,375.
• Married individuals filing separately and singles with adjusted gross incomes up to $38,250.
• Qualified surviving spouse filers.
Contribution deadlines
Individuals with IRAs have until April 15, 2025 - the due date for filing their 2024 return - to set up a new IRA or add money to an existing IRA for 2024. Both Roth and traditional IRAs qualify.
Individuals with workplace retirement plans still have time to make qualifying retirement contributions and possibly get the Saver’s Credit on their 2024 tax return. Contributions to workplace retirement plans must be made by December 31 to a:
• 401(k) plan.
• 403(b) plan for employees of public schools and certain tax-exempt organizations.
• Governmental 457 plan for state or local government employees.
• Thrift Savings Plan (TSP) for federal employees.
See the instructions to Form 8880, Credit for Qualified Retirement Savings Contributions, for a list of qualifying workplace retirement plans and additional details. Finally, visit the Saver’s Credit page on IRS.gov to learn about rules, contribution rates and credit limits.
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