Some tax changes to be aware of

D. David Hebebrand CPA.

It's been an interesting year with important tax changes that will impact you. Here are some of the changes and issues you need to know about.

• Individuals must file returns by April 15, 2025 for the 2024 tax year.

• Partnerships must file returns by the 15th day of the third month following the close of the taxable year (March 15 for calendar-year taxpayers);

• C corporation returns are generally due by the 15th day of the fourth month following the close of the taxable year (April 15 for calendar-year taxpayers);

• S corporation returns will remain due by the 15th day of the third month of the taxable year (March 15 for calendar-year taxpayers); and

• W-2s and 1099s must be filed by January 31, 2025, for the 2024 tax year.

New presidential administration: The Tax Cuts and Jobs Act that was passed in December 2017 contained many tax law changes that are applicable only for the 2018 through 2025 tax year. With the scheduled expiration of so many tax provisions and a new presidential administration, 2025 will have an additional emphasis on tax planning. No matter what happens in 2025, we are certain to see many tax changes heading in 2026.

Clean vehicle credits: Starting in 2023, taxpayers have three separate tax credits available for the purchase of clean vehicles: a credit for new vehicles, a credit for previously owned vehicles and a credit for business vehicles. Each credit has many rules and limitations, and starting in 2024, some of these credits can be claimed at the dealership at the time of purchase.

Be sure to consult a tax professional before making any purchase where a salesperson asserts that you are eligible for a tax credit. It's very possible that your individual income tax situation, of which the salesperson has no knowledge, will limit your credit.

Virtual currencies: The IRS has ramped up its enforcement of virtual currencies such as bitcoin. Most taxpayers who own virtual currencies fail to report their taxable transactions when filing their tax returns. The IRS is sending letters to taxpayers with known virtual currencies accounts. The IRS requires taxpayers to affirmatively declare whether they are engaged in any virtual transactions. Intentionally failing to report taxable income can have severe consequences.

1099s and K-1s: If you received 1099s or K-1s from investments in 2024, you may extend your return in case these documents are corrected after the original filing deadline. We are seeing increasing numbers of corrected information returns, which require taxpayers to amend their original tax returns to reflect the corrected amounts. In some cases, the amounts are vastly different and can create additional costs in amending the tax returns and potential penalty problems.

1099-Ks: The filing threshold for 1099-Ks is $600 for 2024. If you receive income through a third-party settlement provider (such as a credit card company or even a mobile phone app like Venmo or Apple Pay, among many others) then you may receive a 1099-K for that income even if you haven't in the past.

In the case of mobile phone payment apps, if you designated your account as a business account, but receive payments for non-business items, then you may receive a 1099-K for income that should not be taxable to you. Do not ignore the 1099-K. The IRS will expect you to report the income.

Foreign accounts: You must report overseas assets owned by businesses as well as individuals. So, the reporting requirements are increasing and the penalties for failure to report continue to be harsh. Not all foreign holdings must be reported. If, for example, you hold stock in a foreign company through a U.S. broker, those holdings do not have to be separately reported. However, if you hold any other types of foreign assets, including bank accounts and securities accounts, you will need to discuss the situation with us. If you have any doubt as to whether any of your assets are foreign, please discuss those assets with us.

Moats and Hebebrand CPAs is located at 20231 Valley Blvd., Ste. E or call (661) 822-1750.