Dec 29, 2022

New & Noteworthy!

Here are the latest developments in the personal finance, tax and business worlds. Click through for links to current reports from leading news sources.

If You Got Married This Year, Let the IRS Know!
No, the IRS isn't going to buy you something off your registry, but it does want to make it easier for you at tax time by advising you to be aware of your status changes. It's provided a checklist for married couples: You don't have to change your name, but if you do, report it to the Social Security Administration. The name on a person's tax return must match what is on file at the SSA. Couples may need to consider changing their withholding. Newly married couples must give their employers a new Form W-4, Employee's Withholding Allowance, within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the additional Medicare tax. Married couples should talk to their tax advisers about filing jointly, although in some cases filing separately makes more sense. Finally, keep in mind that if a couple is married as of December 31, the law says they're married for the whole year for tax purposes.

Fannie Mae and Freddie Mac Limits to Rise
In another sign of the pandemic’s rapid home price appreciation, the maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac will rise to $1,089,300 next year in a few expensive markets—some  in the Mountain West region, California, the Washington, D.C. metropolitan area and the great New York City metropolitan area. As home prices have risen, the new limits can help more buyers purchase homes with a conforming loan, the National Association of Realtors said. Assuming a 10% down payment, buyers in much of the country purchasing homes at prices up to about $800,000 will be eligible for a conforming loan.

Have You Heard From the IRS—Or a Scammer?
That message you just got from the IRS—is it real, or is it a criminal trying to get your private information? Understand that the IRS doesn't normally initiate contact with taxpayers by email. It says you should not reply to an email from someone who claims to be from the IRS because the IRS email address could be spoofed or fake. Emails from IRS employees will end in irs.gov.

Note especially that the agency does not send text messages or contact people through social media. Fraudsters will impersonate legitimate government agents and agencies on social media and try to initiate contact with taxpayers. Click the above link for the full details on how the IRS will contact you if it needs to, and what kind of ID you can expect from IRS employees.

Good News Letters from the IRS
Starting the week of Oct. 10, the IRS is sending letters to more than 9 million individuals and families who appear to qualify for a variety of key tax benefits but did not claim them by filing a 2021 federal income tax return. According to the agency, many in this group may be eligible to claim some or all of the 2021 Recovery Rebate Credit, the Child Tax Credit, the Earned Income Tax Credit and other tax credits depending on their personal and family situation. "The IRS wants to remind potentially eligible people, especially families, that they may qualify for these valuable tax credits," said IRS Commissioner Chuck Rettig.

April 15 Is Not April 15
Although the federal tax filing deadline is common knowledge, it can vary in some years, and 2023 will be one of them. According to provisional guidance from the IRS, the filing date for 2023 will be Tuesday, April 18. This is because April 15 is a Saturday and Monday, April 17, is Emancipation Day, a holiday in Washington, D.C. Final guidance will likely confirm this in the coming months. This gives taxpayers a few extra days, but it's still wise to file as early as possible. 

IRS Provides Additional WOTC Guidance
The IRS has updated information on the Work Opportunity Tax Credit (WOTC), available to employers that hire designated categories of workers who face significant barriers to employment. For employers facing a tight job market, the WOTC may be able to help. The recent updates include information on the pre-screening and certification process. To satisfy the requirement to pre-screen a job applicant, on or before the day a job offer is made, a pre-screening notice (Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit) must be completed by the job applicant and the employer.

Classroom Supplies May Be Tax Deductible
The IRS notes that teachers go above and beyond for their students, often buying classroom supplies needed to make learning successful. The educator expense deduction allows eligible teachers and administrators to deduct part of the cost of technology, supplies and training from their taxes. They can only claim this deduction for expenses that weren't reimbursed by their employer, a grant or other source.

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