IRS Regulation

Your 2024 Guide to IRS Form 8300: Cash Reporting Made Easy

Hey there, business owners! It’s your team at Insogna CPA, and we’ve got some must-know updates about IRS Form 8300 that might just save you a headache or two.

💵 Collecting Over $10,000 in Cash? Here’s What the IRS Wants from You

If your business receives $10,000 or more in cash, the IRS requires you to do some extra reporting. This isn’t new, but with 2024 here, staying on top of these rules is more crucial than ever.

💡 Breaking Down IRS Form 8300: Why It Matters

IRS/FinCEN Form 8300 is the form you need to fill out when your business gets a cash payment over $10,000. This form helps the IRS keep an eye out for tax evasion, illegal activities, and other not-so-legal stuff.

When to Report: What Payments Require Form 8300?

You’re required to file Form 8300 if:

✅ You receive over $10,000 in cash in a single transaction.
✅ Multiple cash payments total over $10,000 within a year.
✅ Unreported payments sneak past $10,000 within a 12-month period.

These payments should be part of your regular business operations—not just an odd one-off from someone mysterious.

❓What Qualifies as ‘Cash’?

Cash isn’t just pocket change; it includes good ol’ U.S. Dollar bills, foreign currency, and even stuff like cashier’s checks, traveler’s checks, and money orders under $10,000 – but only if you’re smelling something fishy going on.

❓What Doesn't Count as Cash?

Not all money is created equal. Personal checks, large cashier’s checks, drafts, and traveler’s checks over $10,000 don’t require reporting. But if someone tries to sidestep the rules by breaking a large payment into smaller ones, you still need to report it.

💡 Related Transactions: Handling Multiple Payments

If a customer or their agent gives you more than $10,000 in related transactions within 24 hours, it’s considered one big transaction. File that Form 8300.

📌 Reporting Deadlines: Don’t Miss Them

So, when’s the deadline to file that form? You’ve got 15 days from when you get your hands on the cash. If the 15th day falls on a weekend or a holiday, just give it to Uncle Sam on the next business day.

📌 Handling Multiple Payments: A Step-by-Step

When the cash comes in chunks, it’s like a puzzle. If the first piece is over $10,000, file Form 8300 within 15 days. But if it’s under $10,000, hang on to it. If more payments from the same buyer push the total over $10,000 within a tax year, pull up that form again and file within 15 days.

Going Digital: Filing Form 8300 Online

You can file Form 8300 online through the BSA Electronic Filing (E-Filing) System. It’s quick, easy, and free. Plus, starting January 1, 2024, if you’re already e-filing other forms, you can include Form 8300 in the mix.

Keeping Your Records: A 5-Year Rule

Keep copies of Form 8300, any supporting documents, and the statements you send to customers for at least five years. And no, just saving an email confirmation won’t cut it.

Watch Out for Penalties!

Not following these rules can lead to civil and criminal penalties. But don’t worry—there’s a safe harbor for small errors under $100.

So, there you have it—the scoop on IRS Form 8300 for 2024. Keep your business in check and avoid unnecessary fines.

Have questions about IRS Form 8300?

Need help with reporting? Don’t wait—reach out to us today. Our team is here to help you navigate the IRS requirements, so you can focus on running your business without the stress of penalties. Let’s chat!

What to Do If You Haven’t Filed Your Tax Return Yet

There are plenty of understandable reasons why you might not have filed your income tax return in 2024. Perhaps you’re new to the job market, and the requirement to file just slipped under your radar. Maybe life got overwhelming, and taxes took a backseat. Whatever your reason—whether you’ve missed just one year or several—there comes a point when either you remember on your own, or you receive a little nudge in the form of a request for a copy.

So, what now? How much trouble are you really in?

✅ The Good News

First, if you realized you haven’t filed before receiving a notice from the IRS or your state tax authority, you’re likely not in too much hot water. Even if you’ve received a notice, there’s a clear legal process that the IRS follows when a taxpayer hasn’t filed a return. It’s a manageable procedure—nothing to lose sleep over. Nobody’s breaking down your door. Filing taxes is about paperwork and payments. If you’ve fallen behind, it’s just a matter of amending the situation, paying any penalties, and possibly some interest.

💡A Matter of Fact…

You might not have needed to file a return at all.

Certain taxpayers aren’t required to file a tax return. When that’s the case, your state often follows the IRS’ lead, which can be a good thing because state penalties for failing to file can sometimes be higher than federal penalties.

To find out if you needed to file, visit the IRS website and use their “DO I NEED TO FILE A TAX RETURN?” tool. Plug in details about the tax year in question, your income, household composition, and filing status, and you’ll get a quick answer.

Tax Filing Categories

You might be pleasantly surprised unless you fall into one (or more) of the following categories:

📌 You earned at least $400 in profit from self-employment, including freelance work or gig jobs like driving for Lyft or Uber.
📌 You sold your home, even if it was a break-even or a loss, and had no other income that year.
📌 You received unemployment benefits.
📌 You’re a tipped worker who didn’t report all tips to your employer, or your employer didn’t submit payroll taxes for those tips.

In any of these cases, you are required to file a tax return, regardless of how much you earned or whether you paid taxes on those earnings.

Fortunately, filing a tax return is always an option, even if you’re late. On the bright side, you might be due a refund.

❓ Did the Government Do It for You?

The IRS doesn’t always catch it when someone fails to file a tax return. But when they do, they’ll send you a notice. If your Social Security Number was linked to any document they received—whether it’s a W-2, 1099, or another form—they might have filed a substitute tax return for you. These substitute returns are bare-bones, using only the standard deduction and personal exemption, and they don’t account for any information you could provide to reduce your tax liability. They also use this data to calculate any penalties, interest, or fines owed.

One of the best reasons to file your own tax return instead of relying on the government’s substitute is that if you need a previous year’s return for something like a loan application, the substitute likely won’t cut it.

Better Late Than Never, But It Has to Be Right

When filing a past-due tax return, precision is key. This is not the time for mistakes or omissions. Even if your return is typically straightforward, it’s wise to work with an experienced tax professional. They can ensure that your paperwork is filed correctly, help you avoid potential pitfalls, and act on your behalf if any complex questions arise. In some cases, they may even be able to reduce or eliminate your penalties.

If you’ve missed a tax filing deadline, don’t wait for things to snowball. Contact us today to help you navigate the process and potentially save you from unnecessary penalties. Filing late doesn’t have to be a stressful experience—we’re here to make it as smooth as possible, with a side of wit and wisdom. Let’s get your 2024 tax return filed the right way!

How Long Should You Hold On To Old Tax Records?

Generally, taxpayers should hold on to their tax records for at least three years after the due date of the return to which those records apply.

However, if the original return was filed later than the due date, including if the taxpayer received an extension, the actual filing date is substituted for the due date. There are a few other circumstances that might require you to keep these records longer than three years.

The statute of limitations in many states is one year longer than the federal statute. This is because the IRS provides state tax authorities with federal audit results. The extra year gives the states adequate time to assess taxes based on any federal tax adjustments.

Federal Document Retention Guidelines Differ

In addition to the potential confusion caused by the state statutes, the federal three-year rule has several exceptions that complicate the recordkeeping issue:

💡 The assessment period is extended to six years if a taxpayer omits more than 25% of their gross income on a tax return.
💡 The IRS can assess additional taxes without time limits if a taxpayer doesn’t file a return, files a false or fraudulent return, or deliberately tries to evade tax.
💡 The IRS has unlimited time to assess additional tax when a taxpayer files an unsigned return.

If none of these exceptions apply to you, then for federal purposes, you can probably discard most of your tax records that are more than three years old. However, you may need to add a year or more if you live in a state with a longer statute of limitations.

🚩 Important note

Although you can discard backup records, do not throw away the filed copies of any tax returns or W-2s. Often, these returns provide data that can be used in future tax-return calculations or to prove the amounts of property transactions, social security benefits, and so on. You should also keep certain records for longer than three years:

✅ Stock acquisition data: If you own stock in a corporation, keep the purchase records for at least four years after selling the stock. The purchase data is needed to prove the amount of profit (or loss) you had on the sale.
✅ Statements for stocks and mutual funds with reinvested dividends: Many taxpayers use the dividends they receive from a stock or mutual fund to buy more shares of the same stock or fund. These reinvested amounts add to the basis of the property and reduce the gain when it is eventually sold. Keep these statements for at least four years after the final sale.
✅ Tangible property purchase and improvement records: Keep records of home, investment, rental property, or business property acquisitions, as well as all related capital improvements, for at least four years after the underlying property is sold.

Tax return copies from prior years are also helpful for the following:

Verifying Income: Lenders require copies of past tax returns on loan applications.
Validate Identity: Taxpayers who use tax-filing software products for the first time may need to provide their adjusted gross incomes from prior years’ tax returns to verify their identities.

The IRS Can Provide Copies Of Prior-Year Returns

Taxpayers who have misplaced a copy of a prior year’s return can order a tax transcript from the IRS. This transcript summarizes the return information and includes AGI. This service is free and is available for the most current tax year once the IRS has processed the return. These transcripts are also available for the past six years’ returns. When ordering a transcript, always plan ahead, as online and phone orders typically take 5 to 10 days to fulfill. Mail orders of transcripts can take 30 days (75 days for full tax returns). There are three ways to order a transcript:

1️⃣ Online Using Get Transcript: Use Get Transcript Online on IRS.gov to view, print, or download a copy for any of the transcript types. Users must authenticate their identities using the Secure Access process. Taxpayers who are unable to register or who prefer not to use Get Transcript Online may use Get Transcript by Mail to order a tax return or account transcript.
2️⃣ By phone: The number is 800-908-9946.
3️⃣ By mail: Taxpayers can complete and send either Form 4506-T or Form 4506T-EZ to the IRS to receive a transcript by mail.

Those who need an actual copy of a tax return can get one for the current tax year and for as far back as six years. The fee is $50 per copy. Complete Form 4506 to request a copy of a tax return and mail that form to the appropriate IRS office (which is listed on the form).

Need More Help?

If you have questions about which records you should retain and which ones you can dispose of, please give our office a call. We’re here to make sure your tax records are in perfect order, so you can focus on more important things.

Whether you need guidance on tax document retention or help navigating IRS guidelines, we’re just a phone call away.

2024 Corporate Transparency Act Reporting Requirements

Hey Business Owners!

Your friendly Insogna CPA team here with an important update on the financial front that you need to know about. The Financial Crimes Enforcement Network (FinCEN) has recently issued a rule under the Corporate Transparency Act that’s going to change how you report beneficial ownership information.

Let’s dive into what this means for you as a business owner.

Understanding the New Rule 🚩

This rule is designed to enhance transparency in the U.S. financial system. It targets illicit activities by making it harder for individuals to use corporate structures, like shell companies, to conceal their identities and launder money.

Key Aspects of the Rule 🗝️

✅ Who Needs to Report

If you have a domestic or foreign company, particularly corporations, and LLCs, you might need to report under this rule. There are exemptions, so not all entities will be affected.

✅ Reporting Beneficial Owners: A beneficial owner is anyone who directly or indirectly exercises substantial control over a company or owns at least 25% of it. The rule requires you to disclose their identities.

✅ Company Applicants: This refers to individuals who filed the documents to create your company or directed the filing.

What to Report: You’ll need to provide the names, birthdates, addresses, and identification details of the owners and applicants.

✅ Cost and Compliance

FinCEN has initially said their cost for submitting an initial report is around $85.

✅ Timeline

The rule takes effect from January 1, 2024. Existing companies have until January 1, 2025, to comply, while new companies must report within 30 days of their formation.

✅ Next Steps

FinCEN is working on more resources and guidelines to help companies comply with this new rule. They’re also developing a secure system to store this beneficial ownership information, ensuring confidentiality and security.

What You Need to Know Now

We’ll keep an eye out for you on further updates as FinCEN issues more guidance related to the reporting and filing requirements for all registered entities.

If you have questions about how this might impact your reporting requirements, please reach out to us. We’re here to help you navigate the Corporate Transparency Act reporting requirements with ease.

Ready to simplify your reporting process? Contact our team at Insogna CPA today, and let’s ensure you’re fully compliant with the new FinCEN regulations. We’re just a call or click away!

EV Tax Credits: Things Electric Vehicle Owner Should Know in 2024

The Inflation Reduction Act (IRA) contains funding for energy programs, including a $7,500 tax credit for electric vehicles (EVs). The law also provides tax credits for commercial trucks and home charging installations in rural areas. Plus, some used electric vehicles are also eligible for an incentive.

💵 How Much is the Electric Vehicle Tax Credit?

Until recently, only a small number of consumers were benefiting from EV tax credits. With Tesla and General Motors nearing their 200,000-vehicle sales cap and their long-standing tax credits set to expire, this new federal tax credit came just in time.

According to the Alternative Fuels Data Center, approximately 30 models are eligible for up to \$7,500 in tax credits, but only if their final assembly takes place in North America and 40 percent of their metals are mined in North America. Of the 30, ten have already reached their manufacturer cap. Additionally, there is an incentive of up to $4,000 on used electric cars.

“If you’re interested in an EV or a plug-in hybrid and it qualifies for a tax credit today, don’t wait, because it might not qualify next year,” says Jake Fisher, senior director of Consumer Reports’ Auto Test Center. “But if you’re considering a used EV, it is worth waiting.”

Other EV Provisions

In addition to federal tax incentives, the following IRA provisions apply:

✅ No More Caps: Removes the 200,000-vehicle cap on tax credits that made EVs and plug-in hybrids from Tesla, GM, and Toyota ineligible for tax credits.
✅ Price Restrictions: Ends tax credits for pricey EVs like the GMC Hummer EV, Lucid Air, and Tesla Model S and Model X.
✅ Assembly Requirements: Vehicles not assembled in North America, including the BMW i4, Hyundai Ioniq 5, Kia EV6, Subaru Solterra, and Toyota bZ4X, no longer qualify.
✅ Income Caps: Adds an annual adjusted gross income cap for buyers of $150,000 for single tax filers, $225,000 for heads of households, and $300,000 for married couples filing jointly.
✅ Mineral Sourcing Restrictions: Starting in 2024, if any minerals or components are sourced from “foreign entities of concern,” including China or Russia, the vehicle will not qualify for any tax credit.

🚗 Qualifying Vehicles – For Now

According to the IRS, the models that may qualify for a tax credit include:

2024 Models:

Audi Q5 PHEV
BMW 3 Series PHEV, BMW X5 PHEV
Chrysler Pacifica PHEV
Ford Escape PHEV, F-150 Lightning, Mustang Mach-E, Transit Van
Jeep Grand Cherokee PHEV, Wrangler 4xe PHEV
Lincoln Aviator PHEV, Corsair PHEV
Lucid Air
Nissan Leaf
Rivian R1S, R1T
Volvo S60 Recharge PHEV

2023 Models:

BMW 3 Series PHEV
Mercedes-Benz EQS
Nissan Leaf

Potential 2024 Models:

Tesla Model 3, Model S, Model X, Model Y (subject to eligibility)
Cadillac Lyriq
GMC Hummer Pickup/SUV (subject to eligibility)
Chevrolet Bolt, Bolt EUV

💡 Vehicle Price Cap

According to Consumer Reports, “All the vehicles on both of these lists will still be subject to new caps on how much vehicles can cost. For SUVs, pickup trucks, and vans, the threshold is $80,000. For sedans, hatchbacks, wagons, and other vehicles, the credit cuts off at $55,000.”

❓ Did You Take Possession After August 16th?

What if you bought a qualifying car before August 16, but didn’t take possession of it until on or after August 16? Can you still claim the credit? The IRS says yes!

“Individuals who entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), can claim the EV credit based on the rules that were in effect before the Inflation Reduction Act’s enactment.”

Take Your Next Steps

Check Vehicle Eligibility:
Before signing any contract, ensure your vehicle qualifies by entering its VIN into the National Highway Traffic Safety Administration’s free VIN Decoder.

Do Your EV Tax Due Diligence:
If an EV is on your wish list, do your homework to avoid tax-time disappointment. If you have questions about which vehicles qualify for the tax deduction and how much you may be able to claim, give us a call.

Ready to Drive Green and Save Green?
Let’s connect! Our team is here to help you navigate the tax benefits of electric vehicles. Give us a call today, and we’ll help you make the most of your EV investment. Don’t wait—let’s make your green dreams a reality together!

Carried Interests Undergo Significant Tax Treatments in 2024

Carried interests, partnership interests held in connection with services performed, will experience significant changes in reporting and taxation treatment this year.

2021 Changes❓

In January 2021, regulators published the final regulations in the Federal Registry, resolving some of the concerns raised in earlier versions of the proposed regulations.

Starting in November 2021, the IRS issued frequently asked questions to clarify compliance issues.

According to the IRS, owner-taxpayers (partnership investors) and passthrough entities need to comply with these final regulations when addressing their tax compliance reporting. Here are the highlights of those compliance requirements:

1️⃣ A passthrough entity is now required to attach Worksheet A along with their Applicable Partnership Interest (API) holders Schedule K-1 after December 31, 2021. The worksheet discloses one-year and three-year holdings gains and losses. For regulated investment companies (RIC) and real estate investment trusts (REIT), reporting information will be disclosed on Form 1099-DIV.
2️⃣ For tax reporting after December 31, 2021, Owner-Taxpayers (aka investors in the partnership) will now use the information filed by the passthrough entity to complete IRS Worksheet B, as well as IRS Form Table 1 and Table 2, and attach those forms to their annual tax return.
3️⃣ If a taxpayer does not hold a qualifying investment for the three-year minimum, the investment will be treated under short-term capital gains rules. The IRS calls that calculation recharacterization. Refer to Worksheet B for that calculation.
4️⃣ For reporting, taxpayers should note the recharacterization on Schedule D, as well as on Form 8949: Sales and Other Dispositions of Capital Assets, when submitting a 1040 or 1041.
5️⃣ Taxpayers with unrecaptured Section 1250 gain, gains from the sale of real property such as a commercial building, warehouse, or rental property, should also utilize Worksheet B and report the amounts on Schedule D of their tax return.

📜 Compliance requirements for partnership investments are more complex than ever

It seems clear that compliance requirements regarding partnership investments will be more complex this year. With so many moving parts in capital gains calculations, understanding the taxation treatment for carried interests can be challenging.

For expert advice on how to navigate the complex world of taxation for carried interests, including the latest changes in taxation treatment, reach out to Insogna CPAs for assistance when filing your 2024 return.