IRS waiving $1 billion in penalty taxes, will kick off 2024 tax season on Jan. 29

Date:

The Internal Revenue Service (IRS) has waived failure-to-pay penalties for eligible taxpayers affected by the collection notice pause during 2020 and 2021. This penalty relief will benefit nearly 5 million taxpayers and provide an estimated $1 billion in tax relief. 

During the COVID-19 pandemic, the IRS temporarily suspended mailing automated reminders to pay overdue tax bills. These reminders would normally have been issued as a follow-up after the initial notice. Although reminder notices were suspended, the failure-to-pay penalty continued to accrue for taxpayers who did not fully pay their bills in response to the initial balance-due notice.

The agency said it plans to make adjustments progressively to individual, business, trust, estate and tax-exempt organization accounts. The penalty relief mainly targets those earning under $100,000 a year.

The IRS has adjusted eligible individual accounts and will follow with adjustments to business accounts in late December to early January, and then trusts, estates and tax-exempt organizations in late February to early March 2024. 

For eligible taxpayers, the relief is automatic, so no action is required. Taxpayers who qualify for relief but have already settled their balance will be issued a refund or credit payments toward outstanding tax liabilities. The failure-to-pay penalty will resume on Apr. 1, 2024, for eligible taxpayers.

“As the IRS has been preparing to return to normal collection mailings, we have been concerned about taxpayers who haven’t heard from us in a while suddenly getting a larger tax bill,” IRS Commissioner Danny Werfel said in a statement. “The IRS should be looking out for taxpayers, and this penalty relief is a common-sense approach to help people in this situation.”

If you are looking to reduce your expenses amid high inflation, you could consider using a personal loan to pay down debt at a lower interest rate, saving you money each month. You can visit Credible to find your personalized interest rate without affecting your credit score.

SOCIAL SECURITY: COLA INCREASING BUT MEDICARE COSTS RISING TOO IN 2024

2024 tax season kicks off soon

The IRS said that Monday, Jan. 29, will officially kick off the 2024 tax season when the agency will begin accepting and processing 2023 tax returns. For most taxpayers, the deadline to file their personal federal tax return, pay any tax owed, or request an extension to file is Monday, Apr. 15, 2024.  

Taxpayers in Maine and Massachusetts have until Apr. 17 to file their taxes because of those states’ Patriot’s Day and Emancipation Day holidays. People living in federally declared disaster areas may also have more time to file. 

The agency expects more than 128.7 million individual tax returns to be filed by the tax deadline on Apr. 15, 2024. Most taxpayers get their refunds within 21 days with many available by Feb. 27. 

“Some returns may require additional review and may take longer,” the IRS said. 

If you think you will receive a smaller refund this tax season but have debt you need to pay down, you could consider consolidating it with a personal loan. You can visit Credible to find your personalized interest rate without affecting your credit score.

HOMEOWNERS COULD SAVE TENS OF THOUSANDS IN DAMAGES BY USING SMART DEVICES

IRS offering its own tax filing service in 2024

The IRS will roll out its pilot Direct File program this year that allows eligible taxpayers to file their 2023 federal tax returns online, for free, directly with the IRS. The program will be rolled out in phases and is expected to be widely available in mid-March.

Residents of 12 states are eligible to participate if they meet specific criteria. Four states, Arizona, California, Massachusetts and New York, are working with the IRS to integrate their state taxes into the pilot program. Taxpayers in nine other states without an income tax – Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming – are also participating.

“As our transformation efforts take hold, taxpayers will continue to see marked improvement in IRS operations in the upcoming filing season,” Werfel said. “IRS employees are working hard to make sure that new funding is used to help taxpayers by making the process of preparing and filing taxes easier.”

If you’re interested in borrowing a personal loan to help you pay off debt at a lower interest rate, you can visit Credible to compare personal loan lenders and find the right option for you.

MORTGAGE LOAN LIMIT RISES ABOVE $1.1M AS HOME PRICES SURGE

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Read the full article here

spot_img

Share post:

Subscribe to our newsletter

To be updated with all the latest news, offers and special announcements.

Popular

More like this
Related

Diabetes drugs like Ozempic may reduce risk of 10 cancers

Multiple factors contribute to someone’s risk of developing cancer....

Tampons may contain arsenic, lead, and other toxic heavy metals: study

Over 100 million cisgender women in over 120 countries...