In November, the IRS announced new contribution limits for retirement plans, which will take effect in 2024. For employees participating in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan, the contribution limit will increase to $23,000 (up from $22,500). The annual contribution limit to IRAs will increase to $7,000 (up from $6,500).
In September, the IRS announced a moratorium on processing new Employee Retention Credit (ERC) claims through at least the end of 2023 amidst concerns about an inundation of improper claims. The IRS has now released the details of a special withdrawal process to help those concerned about the validity of their ERC claims.
As students and teachers head back to the classroom for a new school year, the IRS wants to remind teachers and educators that they can deduct up to $300 in out-of-pocket classroom expenses for 2023 when they file their tax return in 2024. This is the same limit as 2022, although the limit can rise in $50 increments in future years based on inflation. If an educator is married and filing jointly with another educator, the limit increases to $600, although it is still limited to $300 per spouse.
In September, the IRS announced a moratorium on processing new Employee Retention Credit (ERC) claims through at least the end of 2023 amidst concerns about an inundation of improper claims. The IRS and tax professionals are worried that a large portion of new claims are actually ineligible, putting businesses at risk due to pressure and scams from aggressive promotors.
The IRS wants to remind employees and employers that companies which offer educational assistance programs can use them to help pay student loan obligations for their employees. This fairly new opportunity is only available for a limited time, so employees should take advantage now, while employers can also use it as an incentive to attract and retain workers.
Many New Jersey homeowners and renters received property tax relief benefits through the Affordable Communities for Homeowners and Renters (ANCHOR) program earlier in 2023, and the next round of benefits, for tax year 2020, will be coming soon. Changes made to the program will mean an easier application for some and more benefits for others.
In November 2022, when Pennsylvania Governor Wolf signed into law Act 122 of 2022, it established a new annual report requirement for domestic and foreign filing associations, repealing the previous decennial report requirement.
Fraud is a persistent threat every organization must face. Although most are honest and do not commit illegal activities, all it takes is one bad actor to have a significant and negative impact. The risk is especially high for nonprofit organizations that have limited resources to implement the training and controls necessary for optimal risk management. According to the Association of Certified Fraud Examiners’ (ACFE) Occupational Fraud Report 2022: Report to the Nations, there were 188 cases of nonprofit fraud reported with a median loss of $60,000 during the period examined. It was also reported that religious, charitable, and social service organizations experienced a median loss of $78,000.
Over the last few months, the State of New Jersey has been considering making significant changes to state tax rules. The focus has been on overhauling the business tax code to make it more competitive with other states. As expected, earlier this month Governor Murphy signed Assembly Bill (AB) 5323 into law. It calls for several changes to the state tax code, including an update to nexus rules, decoupling from federal R&D amortization requirements, NOL adjustments, and updates to business interest deduction rules
From August 26 to September 4, 2023, the State of New Jersey will be holding a Sales Tax Holiday on certain items sold to individual purchasers for non-business use. The tax holiday will waive the 6.625% sales tax on a long list of eligible items, many of which are needed by parents and children for the upcoming school year.
