The advancements in tax technology, pending regulations, and the inclusion of cryptocurrency in tax forms are crucial developments to monitor in 2024.
The IRS has recently launched two new technology systems, the Information Returns Intake System portal (IRIS) and the Filing Information Returns Electronically system (FIRE), aimed at streamlining their operations.
Tax Season Game Changer
Despite facing some technical challenges, the IRS assures that these systems are functioning effectively. However, there have been issues with third parties attempting to access the FIRE system to upload documents.
Consequently, the IRS has urged FIRE users to update their information to meet enhanced security requirements before the 2024 tax season.
Moreover, the IRS is preparing for potential last-minute tax law changes that could impact this year’s tax season. Negotiations in Congress may result in the reinstatement of tax breaks like the expanded Child Tax Credit.
The IRS expects over 128.7 million individual tax returns to be filed by April 15th, and they have increased their workforce to assist taxpayers in adjusting to changes in the Tax Code.
Another significant change this year is the inclusion of a revised question about income from digital assets, such as cryptocurrency, on tax forms for individual taxpayers.
This question has also been added to tax forms for estates, trusts, partnerships, and C and S corporations.
Taxpayers must report all income related to their digital asset transactions. For example, employees who received digital assets as wages must report their value, while independent contractors who received digital assets as payment must report that income on Schedule C (Form 1040), “Profit or Loss from Business (Sole Proprietorship).”
Taxpayers must also use Schedule C if they sold, exchanged, or transferred digital assets to customers in the course of their business.
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Tax Season 2024
The advancements in tax technology, pending regulations, and the inclusion of cryptocurrency in tax forms are crucial developments to monitor in 2024.
As we progress through 2024, it’s essential to keep an eye on new tax developments, including technological updates, pending regulations, and the acknowledgment of cryptocurrency on tax forms.
The IRS has introduced new technology systems to streamline operations, but challenges like technical issues with these systems have surfaced.
Potential last-minute tax law changes are also being monitored, which could affect this year’s tax season. Additionally, the inclusion of a revised question about income from digital assets on tax forms for various entities is noteworthy.
Taxpayers should stay informed about these developments and ensure compliance with any changes to the Tax Code to avoid potential issues.
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