October’s tax landscape was anything but ordinary—packed with critical updates and unexpected shifts. From hurricane tax relief in Florida to fresh Social Security adjustments and a federal funding tug-of-war, last month’s headlines offered much to consider. Plus, the IRS has introduced new processes for Employee Retention Credit claims and made headlines with a court ruling that may reshape FBAR penalties. Dive into these must-know changes, and let’s break down what they mean for you.
Hurricane Milton Tax Relief for Florida
The IRS has announced tax relief for victims of Hurricane Milton, which affected much of Florida. Affected taxpayers now have until May 1, 2025, to file various individual and business federal tax returns and make necessary tax payments. This extension is a crucial lifeline for those dealing with the aftermath of the hurricane, offering additional time to gather records and manage tax obligations during the rebuilding process.
Social Security Wage Base Increase for 2025
The Social Security Administration (SSA) has issued its annual cost-of-living adjustment, raising the maximum amount of earnings subject to Social Security tax. For 2025, this taxable wage base will increase to $176,100. This adjustment reflects rising wage levels and impacts both employers and high-earning employees, who will see higher Social Security tax contributions next year.
Maryland Seeks Federal Funding for Baltimore Bridge Rebuild
In response to the recent collapse of a bridge in Baltimore, Maryland’s House Freedom Caucus Chair has requested federal support to offset the reconstruction costs. The proposal includes rescinding unused electric vehicle (EV) credits from the Inflation Reduction Act, potentially repurposing these funds to assist with urgent infrastructure needs. This discussion underscores the complexities of balancing federal incentives with critical infrastructure demands.
IRS Simplifies Claim Process for Employee Retention Credit
On October 10, 2024, the IRS introduced a consolidated claim process for third-party payers addressing erroneous Employee Retention Credit (ERC) claims. This new approach aims to streamline the resolution of incorrect claims, helping to mitigate processing delays and ensure accurate reimbursements for employers relying on ERC benefits.
FBAR Relief for Disaster-Affected Individuals
The Financial Crimes Enforcement Network (FinCEN) has announced FBAR filing relief for individuals impacted by Hurricane Milton and the Israel-Hamas conflict. This relief provides additional time for those affected to fulfill their filing obligations under challenging circumstances.
Employer-Sponsored Student Loan Assistance
The IRS reminds employers and employees that educational assistance programs can be leveraged to help pay down student loan debt until December 31, 2025. This tax-advantaged benefit provides employers with a valuable tool for supporting employee retention and financial wellness.
FBAR Penalties and the 8th Amendment
In a recent decision by the 11th Circuit U.S. Court of Appeals, the court examined the punitive nature of FBAR penalties in the case of Schwarzbaum. The court found that these penalties, due to their substantial severity, could be subject to review under the Excessive Fines Clause of the 8th Amendment. This precedent may prompt further judicial scrutiny of similar penalties in the future.
IRS Recovers Millions from Non-Filers
The IRS has recently collected $172 million from 21,000 wealthy non-filers who had not submitted tax returns since 2017. This effort highlights the agency’s ongoing focus on ensuring compliance among high-income taxpayers, reinforcing the importance of timely tax filing for all income brackets.
Kundra & Associates: Your Trusted Partner in Tax Law
With so many tax changes and relief measures in October, it’s essential to have a dedicated partner like Kundra & Associates by your side. Our team, with offices serving clients internationally and across Maryland, Virginia, and Washington, D.C., focuses solely on tax law issues, ensuring your business and personal wealth are protected from unexpected penalties and compliance hurdles. Whether you’re affected by Hurricane Milton relief deadlines, need guidance on FBAR filing requirements, or have questions about the new Employee Retention Credit claim process (don’t forget the November 22 deadline!), our skilled attorneys are here to help.
Don’t let complex tax issues or compliance challenges slow you down. Call us at 301-859-0122 to schedule a consultation. At Kundra & Associates, we provide personalized support to businesses, individuals, and U.S. citizens abroad, making sure you’re ready to navigate both domestic and international tax matters with confidence.
