2023 Marcum Year-End Tax Guide

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The IRS reminded filers that beginning January 1, 2024, Form 8300 (used to report cash payments over $10,000) must be filed electronically with the Financial Criminal Enforcement Network (FinCEN). When applicable, Form 8300 must be filed within 15 days of the transaction. Since it may be difficult to know at any time during the year whether the 10-return threshold is satisfied, filers may want to file electronically. Businesses filing Form 8300 with FinCEN must set up an account with their BSA E-Filing System. New rules will apply to filing Form 1099-K for third-party settlement organizations (TPSO) like Venmo. Under prior rules, the payor was required to file Form 1099-K, where payments were made to a payee of over $200,000 for over 200 transactions. The American Rescue Plan (ARP) changed the threshold to require filing an information form where payments to a payee exceed $600, with no minimum number of transactions. While the new filing limits were to apply to 2022 returns (filed in 2023), in Notice 2023-10, the Service delayed implementation for one year. The old rules applied to 2022 forms, but the lower threshold will apply to 2023 forms 1099-K to be filed in 2024. The new filing rules raise a couple of practical problems. If a business utilizes a TPSO to pay a service provider for its business, the recipient may receive a Form 1099 MISC from the business and a Form 1099-K from the TPSO for the same payment. The recipient must be careful not to report the income

twice. Additionally, the Service may expect both payments on the individual’s tax return. New reporting rules were instituted under the Infrastructure Investment and Jobs Act of 2023 for reporting by “brokers” of transactions involving digital assets. Fortunately, the Service deferred implementation of these reporting rules for the sale of assets on or after January 1, 2025. This provides those covered under these rules additional time to institute procedures to record covered transactions. RETIREMENT PLANS Catch-Up Contributions: The IRS issued administrative guidance that ignores a technical glitch in the SECURE 2 Act, which appeared to eliminate catch-up contributions to 401(l), SIMPLE IRAs, and SEP plans beginning in 2024 for lower-earning taxpayers. The Internal Revenue Code permits those who are 50 or older as of the end of a tax year to make additional annual “catch-up” contributions to these retirement plans. The SECURE 2 Act provides that for 2024 and later years, these catch-up contributions would be required to be made as designated Roth account contributions for those earning $145,000 or more. Due to a drafting error, the text of the law eliminated language permitting catch-up contributions for those earning under $145,000. It appeared that a legislative solution would be required. Many plan administrators objected that more time was needed to apply the Roth catch-up rule for those making $145,000 or more.

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