IRS penalty, try the First Time Abatement approach

 It can only apply to 1 year. Generally, the first year if you have multiple years with penalties. The idea behind the first-time penalty abatement procedure is that if you have a clean tax history for the past 3 years, you are granted a mistake without getting penalized.

Student Debt forgiveness up to $10,000

 As part of President Joe Biden’s historic student loan forgiveness plan, up to 8 million people could get automatic debt relief, according to the White House.

Across the board, most people with federal student debt will be eligible for some forgiveness: up to $10,000 if they didn’t receive a Pell Grant, which is a type of aid available to low-income undergraduate students, and up to $20,000 if they did. The aid is limited to those who make less than $125,000 per year, or married couples or heads of households earning less than $250,000.

Those who will get automatic loan cancellation are those for whom the U.S. Department of Education already has income data on file and can therefore verify eligibility without waiting for an application.

Who qualifies for the automatic loan cancellation?

To automatically verify certain borrowers’ income data for tax years 2021 or 2020 (whichever is lower), the Education Department plans to use data obtained through the Free Application for Federal Student Aid, or FAFSA, as well as via income-driven repayment plans.

The FAFSA is how families apply for financial aid for college each year, while income-driven repayment plans allow borrowers to repay their loans in a more affordable way by capping their monthly bills at a share of their earnings. Both require proof of income; however, because the government only cares about the earnings for 2020 or 2021, the timing here will matter.

1099-K reporting changes

 Advocates are pushing for Congress to restore the $20,000 threshold for reporting transactions from payment cards and third-party networks after it was lowered by the American Rescue Plan Act to just $600, warning of a tidal wave of Forms 1099-K hitting millions of unsuspecting taxpayers and an already overburdened Internal Revenue Service and overworked tax preparers.

They are hoping that lawmakers will suspend the change in the threshold during the lame duck session in Congress after the midterm elections as part of an end-of-year tax extenders package or at least find some middle ground in between. Last month, a group of over 70 mostly conservative and free market organizations, including the National Taxpayers Union, Americans for Tax Reform, the Center for a Free Economy and the American Business Defense Council, sent an open letter to congressional leaders emphasizing the urgency of the issue.

"Under the prior law, a 1099-K was issued only in the event that a business charged customers at least 200 times in a year, and $20,000 in the aggregate," they wrote. "H.R. 1319 eliminated the 200 transaction threshold entirely, and lowered the dollar hurdle to just $600. As a result, both very small business ventures and unwitting non-business taxpayers have found themselves caught in the 1099-K reporting net. Millions of Americans who have never received a 1099-K form before, and don't know what to do with it, will get one. If they seek help from the IRS, they will quickly run into an overwhelmed agency trying to process this gusher of new 1099-K returns, keep up with filing season, clear out prior backlogs, respond to correspondence, and even answer the 800-number telephone line."