Enforcement and processing – the Inflation Reduction Act of 2022, signed into law on August 16, 2022, budgeted approximately 80 billion for new IRS spending over the next 10 years. Of this amount, 46 billion will be slated towards enforcement, with almost 3.2 billion budgeted for taxpayer services.
i.e. – at the end of 2021, the IRS had a backlog of about 10.5 million paper returns and returns stopped for errors. The Service addressed its backlog of 2021 paper returns, however, as of late September 2022, the IRS had about 12.4 million returns to process, resulting in refund delays for millions of taxpayers.
Staffing – by late October, the IRS had hired 4,000 new customer service representatives and plans to hire another 1,000 to be trained to field taxpayers’ questions on the phone and provide other services during the 2023 tax season.
HOLD ON TO THAT ELECTRIC CAR PURCHASE RECEIPT!
The Treasury and Internal Revenue Service published guidance on eligibility for electric vehicle owners to claim tax credits worth between $3,500 and $7,500. According to the IRS, “You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.
The credit is available to individuals and their businesses.
To qualify, you must:
- Buy it for your own use, not for resale
- Use it primarily in the U.S.
In addition, your modified adjusted gross income (AGI) may not exceed:
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit.
The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years”.
