The IRS plans to ramp up audits of wealthy taxpayers, large corporations, and complex partnerships. They aim to increase the audit rate for those with total positive income over $10 million by more than double by 2026. The IRS also plans to nearly triple audit rates on large corporations and boost them by tenfold for large partnerships. This emphasis on tax fairness prioritizes compliance resources for those with the highest potential for non-compliance.
In 2020, the Secure Act gave non-spouse heirs 10 years to withdraw funds from inherited IRAs, instead of the previous lifetime withdrawals. However, there are no penalties for 2024 missed withdrawals.
Before withdrawing funds, consider your financial situation and other factors that may impact your tax liability, such as your retirement date and potential changes in tax brackets after 2025.
The tax filing deadline for most Americans is April 15th. Those who haven't filed can still apply for an extension until October 15th, but taxes owed must be paid by April 15th. Many can file taxes for free through IRS Free File or Direct File. If someone owes a balance but doesn't file, they can expect penalties and interest. The IRS also suggests filing electronically for a faster refund.
If you can't pay your taxes in full by April 15th, you should still file your return and pay what you can. The IRS offers payment plans that allow you to spread out the payments over time, reducing the late-payment penalty by half. These plans can be applied for online, by phone, or by mail, and can take up to 180 days for short-term plans and up to 72 months for long-term plans.
A major update to the IRS Direct File program can now automatically import return verification information, preventing one of the most common filing errors. Direct File is now available in 12 states and accepts simple tax returns with limited income and deductions. By using Direct File, taxpayers can access their IRS account information to validate their returns before filing, making the process more efficient.
As tax season approaches, some are considering using AI chatbots like ChatGPT for help with their returns. However, experts advise caution as they may provide inaccurate answers. Despite concerns over data security and the need for personalized advice, AI chatbots can still be useful for general tax questions and education. Human tax professionals remain the most reliable source for personalized advice and error-free returns.
