EA Exams Testing 2023 Tax Law Begin May 1, 2024

Test takers familiar with 2022 tax law will want to brush up on essential changes impacting 2023 individual and business returns. The testing of 2023 tax law starts May 1, 2024.

Test takers should be able to identify and understand:

  • Any applicable annual inflation and cost of living adjustments for taxable year 2023, relating to returns filed in 2024 (generally 2023 returns filed in 2024).
  • Filing requirements and thresholds relating to 2023 returns.
  • Credits available to individuals and businesses for tax year 2023.
  • Penalties for individuals and businesses regarding 2023 returns.
  • Applicable changes affecting 2023 tax returns for individuals and businesses.
  • The relevant provisions of the Inflation Reduction Act of 2022 that affect 2023 returns.
  • The relevant provisions of the SECURE 2.0 Act that affect 2023 returns.
  • For individual taxpayers, the following are some of the changes for 2023:
    • Beginning in 2023, the SECURE 2.0 Act raised the age that taxpayers must begin taking required minimum distributions (RMDs) to age 73 (formerly 72).
    • Beginning in 2023, the SECURE 2.0 Act reduced the excise tax rate for distributions that are less than the required minimum distribution amount (excess accumulations) to 25% (formerly 50%). Also, taxpayers may be subject to a reduced excise tax rate of 10% of the amount not distributed.
    • Energy Efficient and Clean Energy Credits for 2023 include:
      • Energy Efficient Home Improvement Credit
      • Residential Clean Energy Property Credit
      • Clean Vehicle Credits—New Clean Vehicle Credit and Used Clean Vehicle Credit
    • The premium tax credit is available to taxpayers with household income above 400% of the federal poverty line, extended through 2025 under the Inflation Reduction Act of 2022.
  • For business taxpayers, the following are some of the changes for 2023:
    • Section 168(k) special depreciation allowance (bonus depreciation) is 80% for qualified property placed in service in 2023 (was 100% for qualified property placed in service in 2022).
    • The e-file threshold for information returns required to be filed in 2024 (2023 returns required to be filed in 2024) is reduced to 10 returns (was 250 returns for 2022 returns required to be filed in 2023).
    • Beginning January 1, 2024 (returns filed in 2024 are generally 2023 returns), S corporations are required to file Form 1120S and related forms and schedules electronically if they file 10 or more returns of any type during the tax year.
    • Beginning January 1, 2024, partnerships are required to file Form 1065 and related forms and schedules electronically if they file 10 or more returns of any type during the tax year. Partnerships with more than 100 partners are required to file Form 1065, Schedules K-1, and other related forms and schedules electronically.
    • The IRS delayed the new $600 Form 1099-K Payment Card and Third Party Network Transactions reporting threshold requirement for third-party payment organizations for tax year 2023 and is planning a threshold of $5,000 for 2024 to phase in the new law. Thus for 2023, payment settlement entities are required to report on Form 1099-K, payments in settlement of third-party network transactions if:
      • Gross payments to a participating payee exceed $20,000; and
      • There are more than 200 transactions with the participating payee.
    • For qualified plans, the plan must be set up (adopted) by the due date (including extensions) of the employer's business tax return for that year (was previously by the end of the employer's tax year).
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