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Information for 2024 Tax Preparation

Things to consider for the 2024 tax filing season:

1099-K: Taxpayers may receive Form 1099-K, Payment Card and Third-Party Network Transactions, if they received third party payments in tax year 2024 for goods and services that exceeded $600.

Credit Changes: The Earned Income Credit (EIC), Child Tax Credit (CTC), and Child Care Credit has each returned to the 2019 levels in 2023. This means that lower income filers with young kids could see a significant decrease in their refund.

CTC: for 2021 was $3,600 is now $2,000

EIC: Earned Income Credit varies greatly based on income and the number of dependents, some filers could see this credit drop to only 1/3 of what was received in tax year 2021.

Child and Dependent Care Credit: returns to a maximum of $2,100 for 2023 and later, down from $8,000 for 2021.

Oklahoma Parental Choice Tax Credit: Beginning in 2024 the state of Oklahoma will be starting the Oklahoma Parental Choice Tax Credit. This allows taxpayers to receive a refundable income tax credit of $5,000-$7,500 per eligible child for qualified expenses associated with an eligible private school in Oklahoma. An eligible child is a child that lives in Oklahoma and will be enrolled in pre-K through 12th grade at an eligible private school in OK. Examples of qualifying expenses are tuition and various fees. Taxpayers will have to fill out an application each year to be approved for the credit. The application process will begin December 1, 2023. Oklahoma is giving priority to those households whose federal Adjusted Gross Income (AGI) is less than $150,000 for the first two months the application is open. They will be looking at the AGI for the tax year that is 2 years prior to the year be applied for. So, if applying for the credit in 2024, they will look at the AGI for tax year 2022. After that date, they will begin processing all applications. This is on a first-come first-served basis. They are allocating $150 million for the year 2024; once that has all been issued, they will stop giving out credits for the year. The credits will be given in 2 separate payments assuming the child(ren) are going to an eligible private school for both semesters in the year.

Taxpayers with one or more eligible children homeschooled in Oklahoma will be able to receive a refundable income tax credit starting in the tax year 2024. The credit will be based on the annual qualified expenses and not to exceed $1,000 for each child. A child is considered eligible if they are able to enroll in public school in Oklahoma but receive their education in ways other than public or private school. This credit will be applied on the Oklahoma income tax return. To receive the tax credit in 2024, it will need to be a part of the state tax return which is filed in 2025. The state is also requiring that receipts for all claimed expenses during the year be sent in with the tax return.

Please visit this link for further information: Oklahoma Parental Choice Tax Credit

Corporate Transparency Act (CTA): Beginning January 1, 2024, the US Treasury Financial Crimes Enforcement Network (FinCEN) will begin requiring reporting of beneficial ownership information for many companies. They will require this report for domestic and foreign reporting companies. Domestic reporting companies are corporations, limited liability companies and any other entities created by filing a document with the secretary of state or similar office. Foreign reporting companies are entities that include corporations and limited liability companies which are formed under a foreign country’s law and have registered to do business in the US by filing a document with the secretary of state or similar office. Companies that have been formed before January 1, 2024, will have until January 1, 2025 to file the report. Companies formed on or after January 1, 2024, will have 30 days to file the report. Any changes that need to be made to an existing report (i.e., corrections, change of address, a new business name, or a change in the beneficial owners) will need to be reported within 30 days. If the beneficial ownership information report is not received on time for the initial filing or for updating changes, a fine of $500 per day with a maximum of $10,000. There will be some businesses exempt from this reporting requirement. Check with your tax professional to see if this new legislation will impact your business.

Please visit this link for further information: Beneficial Ownership Information Reporting | FinCEN.gov