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Contribuyentes deben revisar la retención de impuestos federales de su paga

Posted by Admin Posted on July 24 2017

Contribuyentes deben revisar la retención de impuestos federales de su paga

 

El Servicio de Impuestos Internos, IRS, animó a los contribuyentes a que consideren una revisión de sus retenciones, tomando en cuenta varios factores que podrían afectar su reembolso potencial o la cantidad que puedan adeudar en 2018.

Al revisar la cantidad de retención de impuestos, los contribuyentes podrán evitar que se les retenga demasiado o muy poco de sus cheques de nómina. La retención de la cantidad adecuada puede ayudar a saldar cualquier balance tributario a fines de año, lo que significa quedar sin deuda ni reembolso al presentar la declaración de impuestos.

A veces durante el año pueden ocurrir cambios en la vida de un contribuyente, tales como un cambio en su estado civil que pueda tener un impacto sobre las exenciones, ajustes o créditos que se reclaman en la declaración de impuestos. Cuando esto sucede, tiene que entregar a su empleador un nuevo Formulario W-4, Certificado de Exención de Retenciones del Empleado, para cambiar sus retenciones o el número de descuentos en la retención.

Los empleadores usan el formulario para calcular la cantidad de impuesto federal que debe retenerse de la paga de los empleados. Hacer estos cambios a finales de verano o principios de otoño puede darle suficiente tiempo para ajustar sus retenciones antes de que finalice el año tributario en diciembre.

La revisión de las retenciones es de mayor importancia ahora que la ley federal requiere que el IRS retenga los rembolsos durante varias semanas para algunas personas que presentan la declaración temprano y reclaman el Crédito Tributario por Ingreso del Trabajo y el Crédito Adicional por Hijos. Además, los pasos tomados por el IRS y los administradores de las agencias tributarias estatales para fortalecer las protecciones ante el robo de identidad y fraude de reembolsos significa que algunos reembolsos podrían someterse a revisiones adicionales el próximo año.

En lo que va de año, el IRS ha emitido más de 106 millones de reembolsos tributarios de las 142 millones de declaraciones procesadas. El promedio de los reembolsos es de más de $2,700. Históricamente, las cantidades de los reembolso han aumentado a través del tiempo.

Cómo ajustar la retención de impuestos

En muchos casos, un nuevo Formulario W-4, Certificado de exención de retenciones del empleado, es lo único requerido para hacer un ajuste. Los contribuyentes deben presentarlo a su empleador y el empleador usa el formulario para calcular la cantidad de impuesto federal que debe retenerse de la paga de sus empleados.

El IRS ofrece varios recursos en línea para ayudar a los contribuyentes a lograr que el impuesto pagado esté más cerca de la cantidad adeudada. Estos recursos están disponibles a cualquier hora en IRS.gov e incluyen:

La Calculadora de Retención del IRS– Una herramienta en línea que le permite determinar la cantidad correcta de impuestos que debe retenerse de su paga.

Publicación 505 del IRS – Retenciones y el impuesto estimado (en inglés).

Retenciones de impuestos – Información completa acerca de las retenciones, impuestos calculados, preguntas frecuentes, y más.

Los contribuyentes que trabajan por cuenta propia, incluso aquellos involucrados en la economía compartida (en inglés), pueden usar la hoja de trabajo del Formulario 1040-ES para calcular correctamente los pagos tributarios estimados. Si también trabajan para un empleador, pueden eliminar la necesidad de hacer pagos trimestrales al retener más impuesto de su paga.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Avoid Having Too Much or Too Little Federal Income Tax Withheld

Posted by Admin Posted on July 21 2017

Avoid Having Too Much or Too Little Federal Income Tax Withheld

 

WASHINGTON — The Internal Revenue Service today encouraged taxpayers to consider checking their tax withholding, keeping in mind several factors that could affect potential refunds or taxes they may owe in 2018.

Reviewing the amount of taxes withheld can help taxpayers avoid having too much or too little federal income tax taken from their paychecks. Having the correct amount taken out helps to move taxpayers closer to a zero balance at the end of the year when they file their tax return, which means no taxes owed or refund due.

During the year, changes sometimes occur in a taxpayer’s life, such as in their marital status, that impacts exemptions, adjustments or credits that they will claim on their tax return. When this happens, they need to give their employer a new Form W-4, Employee’s Withholding Allowance Certificate, to change their withholding status or number of allowances.

Employers use the form to figure the amount of federal income tax to be withheld from pay. Making these changes in the late summer or early fall can give taxpayers enough time to adjust their withholdings before the tax year ends in December.

The withholding review takes on even more importance now that federal law requires the IRS to hold refunds a few weeks for some early filers claiming the Earned Income Tax Credit and the Additional Child Tax Credit. In addition, the steps the IRS and state tax administrators are now taking to strengthen protections against identity theft and refund fraud mean some tax returns could face additional review time next year.

So far in 2017, the IRS has issued more than 106 million tax refunds out of the 142 million total individual tax returns processed, with the average refund well over $2,700. Historically, refund dollar amounts have increased over time.

 Making a Withholding Adjustment

In many cases, a new Form W-4, Employee’s Withholding Allowance Certificate, is all that is needed to make an adjustment. Taxpayers submit it to their employer, and the employer uses the form to figure the amount of federal income tax to be withheld from their employee’s pay.

The IRS offers several online resources to help taxpayers bring taxes paid closer to what they owe. They are available anytime on IRS.gov. They include:

IRS Withholding Calculator – Online tool helps determine the correct amount of tax to withhold.

IRS Publication 505 – Tax Withholding and Estimated Tax.

Tax Withholding – Complete information on withholding, estimated taxes, FAQs, and more.

Self-employed taxpayers, including those involved in the sharing economy, can use the Form 1040-ES worksheet to correctly figure their estimated tax payments. If they also work for an employer, they can often forgo making these quarterly payments by instead having more tax taken out of their pay.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

How can I ensure that I get the best possible rates on my loans?

Posted by Admin Posted on July 20 2017

How Can I Ensure That I Get The Best Possible Rates On My Loans

 

Be careful when signing up for a home equity loan or line of credit - the disclosed APR does not reflect the total fees that are associated with the loan, such as closing costs and others. Do not forget to compare this cost, as well as the APR, across multiple lenders.

The vast majority of home equity plans will utilize variable interest rates instead of fixed. A variable rate reflects the current prices of a publically available index, like the prime rate, or the U.S. Treasury Bill rate, and the rate of your loan will oscillate accordingly.

Generally a lender will offer a discounted introductory rate, often referred to as a "teaser rate". Take caution - these rates can sometimes fluctuate unless it is stated that there is a fixed rate. Sometimes the lender will give you a great introductory rate that is variable and can change with time to a rate much higher than you originally agreed to.

Since the rate is linked to an index rate, find out which one it is and how much their margin is. Some companies will have a cap on how much your rate can vary within a particular period of time.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Weddings Mean Tax Changes

Posted by Admin Posted on July 19 2017

Weddings Mean Tax Changes

 

It may not be as high on the wedding plan checklist as the venue, invitations and attire, but there are important tax issues created by a marriage that warrant some prompt attention following the wedding.

Name change. Anytime names are changed, it should be reported to the Social Security Administration (SSA). The name associated with an individual’s Social Security Number (SSN) should match the name on the tax return. To change a name with the SSA, file Form SS-5, “Application for a Social Security Card.” The form is available from www.ssa.gov, by calling (800) 772-1213, or from the local SSA office.

Address change. Let the IRS know about an address change by filing Form 8822, “Change of Address.” Also notify the U.S. Postal Service at www.usps.com to forward mail. You may also report the change at your local post office.

Change tax withholding. A change in marital status requires that a new Form W-4, “Employee’s Withholding Allowance Certificate,” be furnished to the employer(s). Combined incomes may move the taxpayers into a higher tax bracket. Search www.irs.gov for the IRS Withholding Calculator tool for help completing the new Form W-4.

Change in filing status. Marital status is determined as of December 31 each year. Spouses can choose to file jointly or separately each year. We can help you make that determination by calculating your tax liability both ways.

Change in circumstances. Taxpayers receiving an advance payment of the health care premium tax credit in 2014 should report changes in circumstances, such as a change in income or family size, to the Health Insurance Marketplace. Also, the Marketplace should be notified when you move out of the area covered by your current Marketplace to ensure you get the proper type and amount of financial assistance.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Simple Tax Savings Techniques for Security Gains

Posted by Admin Posted on July 19 2017

Simple Tax Savings Techniques for Security Gains

 

The market swings over the last several years may have you wondering whether it’s time to capitalize on some market gains. While taxes should not be the main consideration in this decision, they certainly need to be considered, as they can make a significant impact on your investment return.

With that in mind, here are a couple of tax-smart strategies to consider as you analyze your investment opportunities and decide what to do about recent gains.

Should you wait to sell until the stock qualifies for long-term capital gains treatment?

If the stock sale qualifies for long-term capital gains treatment, it will be taxed at a maximum tax rate of 23.8%. Otherwise it will be taxed at your ordinary-income tax rate, which can be as high as 43.4%.

Clearly, you’ll pay less taxes (and keep more of your gains) if the stock sale qualifies for long-term capital gains treatment. The amount of taxes you’ll save depends on your ordinary-income tax bracket.

To qualify for the preferential long-term capital gains rates, you must hold the stock for more than 12 months. The holding period generally begins the day after you purchase the stock and runs through (and includes) the date you sell it. These rules must be followed exactly, because missing the required holding period by even one day prevents you from using the preferential rates.

The question then becomes: "Are the tax savings that would be realized by holding the asset for the long-term period worth the investment risk that the asset’s value will fall during the same time period? " If you think the value will fall significantly, liquidating quickly- regardless of tax consequences- may be the better option. Otherwise, the potential risk of holding an asset should be weighed against the tax benefit of qualifying for a reduced tax rate.

Comparing the risk of a price decline to the potential tax benefit of holding an investment for a certain time is not an exact science. We’d be glad to help you weigh your options.

Use "specific ID method" to minimize taxes

If you are considering selling less than your entire interest in a security that you purchased at various times for various prices, you have a couple of options for identifying the particular shares sold:

(1) The first-in, first-out (FIFO) method and

(2) The specific ID method.

FIFO is used if you do not (or cannot) specifically identify which shares of stock are sold, so the oldest securities are assumed to be sold first. Alternatively, you can use the specific ID method to select the particular shares you wish to sell. This is typically the preferred method, as it allows you at least some level of control over the amount and character of the gain (or loss) realized on the sale, which can lead to tax-savings opportunities.

The specific ID method requires that you adequately identify the specific stock to be sold. This can be accomplished by delivering the specific shares to be sold to the broker selling the stock. Alternatively, if the securities are held by your broker, IRS regulations say you should notify your broker regarding which shares you want to sell and the broker should then issue you a written confirmation of your instructions.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

HOW WORKING IMPACTS SOCIAL SECURITY BENEFITS

Posted by Admin Posted on July 18 2017

How Working Impacts Social Security Benefits

 

Continuing to work while receiving Social Security benefits may cause the benefit to be reduced below the anticipated amount. If you are under the full retirement age (currently 66), an earnings test determines whether your Social Security retirement benefits will be reduced because you earned more from a job or business than an annual exempt amount.

As a general rule, the earnings test is based on income earned during the year as a whole, without regard to the amount you earned each month. However, in the first year, benefits you receive are not reduced for any month in which you earn less than one-twelfth of the annual exempt amount.

For 2015, Social Security beneficiaries under the full benefit retirement age who have earnings in excess of the annual exempt amount are subject to a $1 reduction in benefits for each $2 earned over the exempt amount ($15,720 in 2015) for each year before the year during which they reach the full benefit retirement age. However, in the year beneficiaries reach their full benefit retirement age, earnings above a different annual exempt amount ($41,880 in 2015) are subject to a $1 reduction in benefits for each $3 earned over the exempt amount. Social Security benefits are not affected by earned income beginning with the month the beneficiary reaches full benefit retirement age.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

CONSOLIDATE ACCOUNTS AND SIMPLIFY YOUR FINANCIAL LIFE

Posted by Admin Posted on July 18 2017

consolidate accounts and simplify your financial life

 

If you’ve accumulated many bank, investment and other financial accounts over the years, you might consider consolidating some of them. Having multiple accounts requires you to spend more time tracking and reconciling financial activities and can make it harder to keep a handle on how much you have and whether your money is being invested advantageously.

Start by identifying the accounts that offer you the best combination of excellent customer service, convenience, lower fees and higher returns. Hold on to these and consider closing the rest, keeping in mind the bank account amounts you’ll be consolidating. The Federal Deposit Insurance Corporation generally insures $250,000 per depositor, per insured bank. So if consolidation means that your balance might exceed that amount, it’s better to keep multiple accounts. You should also keep accounts with different beneficiaries separate.

When closing accounts, make sure you stop automatic payments or deposits and destroy checks and cards associated with them. To prevent any future disputes, obtain letters from the financial institutions stating that your accounts have been closed. Closing an account generally takes several weeks.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Plan Ahead for Tax Time When Renting Out Residential or Vacation Property

Posted by Admin Posted on July 17 2017

Plan Ahead for Tax Time When Renting Out Residential or Vacation Property

 

Summertime is a time of year when people rent out their property. In addition to the standard clean up and maintenance, owners need to be aware of the tax implications of residential and vacation home rentals.

Receiving money for the use of a dwelling also used as a taxpayer’s personal residence generally requires reporting the rental income on a tax return. It also means certain expenses become deductible to reduce the total amount of rental income that's subject to tax.

Dwelling Unit.  This may be a house, an apartment, condominium, mobile home, boat, vacation home or similar property. It's possible to use more than one dwelling unit as a residence during the year.

Used as a Home.  The dwelling unit is considered to be used as a residence if the taxpayer uses it for personal purposes during the tax year for more than the greater of: 14 days   or 10% of the total days rented to others at a fair rental price. Rental expenses cannot be more than the rent received.

Personal Use.  Personal use means use by the owner, owner’s family, friends, other property owners and their families. Personal use includes anyone paying less than a fair rental price.

Divide Expenses. Special rules generally apply to the rental of a home, apartment or other dwelling unit that is used by the taxpayer as a residence during the taxable year. Usually, rental income must be reported in full, and any expenses need to be divided between personal and business purposes. Special deduction limits apply.

How to Report. Use Schedule E to report rental income and rental expenses on Supplemental Income and Loss. Rental income may also be subject to Net Investment Income Tax. Use Schedule A to report deductible expenses for personal use on Itemized Deductions. This includes such costs as mortgage interest, property taxes and casualty losses.

Special Rules.  If the dwelling unit is rented out fewer than 15 days during the year, none of the rental income is reportable and none of the rental expenses are deductible. Find out more about these rules; see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).

Use IRS Free File.  Renting a vacation home can be complicated and IRS Free File can make filing a tax return easier. IRS Free File is available until Oct. 16. Taxpayers earning $64,000 or less can use brand-name tax software. Those earning more can use Free File Fillable Forms, an electronic version of IRS paper forms. Free File is available only through the IRS.gov website. You can get forms and publications on IRS.gov/forms at any time.

Avoid scams. The IRS will never initiate contact using social media or text message. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Can a Home Equity Line of Credit be beneficial?

Posted by Admin Posted on July 14 2017

Can a home equity line of credit be benefiicial?

 

A home equity line of credit is a form of credit which allows you to borrow and use your home as collateral. Since for many, a home is their greatest asset, they tend to use these sorts of credit lines for large things like a college education for their children, medical expenses or for large unexpected bills as opposed to luxuries or day to day expenses.

After receiving a home equity line, one is approved for an amount of credit, or a maximum that may be borrowed at any given time for the duration of the plan.

On many occasions a lender will set a credit limit on a home equity loan by setting a percentage, after considering the amount of the appraised value of the home and the amount owed on the home.

After the line of credit is approved, you will be able to borrow up to the set limit, usually in the form of checks. In some instances a borrower may be given credit cards to utilize, sometimes with minimum spending requirements.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Avoid Spear Phishing Emails

Posted by Admin Posted on July 12 2017

Avoid Spear Phishing Emails

 

WASHINGTON — The IRS, state tax agencies and the tax industry today warned tax professionals to beware of spear phishing emails, a common tactic used by cybercriminals to target practitioners.

Spear phishing emails, often tailored to individual practitioners, result in stolen taxpayer data and fraudulent tax returns filed in the names of individual and business clients.

Information about spear phishing kicks off a new “Don’t Take the Bait” awareness campaign aimed at tax professionals. This is the first of a special 10-part series that will run each week through mid-September.

“We are seeing repeated instances of cybercriminals targeting tax professionals and obtaining sensitive client information that can be used to file fraudulent tax returns. Spear phishing emails are a common way to target tax professionals,” said IRS Commissioner John Koskinen. “We urge practitioners to review this information and take steps to protect themselves and their clients.”

The IRS, state tax agencies and the tax industry, working together as the Security Summit, urge practitioners to learn to recognize and avoid spear phishing emails. See Protect Your Clients; Protect Yourself for more information.

Phishing emails target a broad group of users in hopes of catching a few victims. Spear phishing emails pose as familiar entities, and the cybercriminals have done extensive research and homework in order to target a specific audience. Tax professionals and taxpayers are among the groups that regularly receive phishing emails.

The security software firm Trend Micro reports that 91 percent of all cyberattacks and resulting data breaches begin with a spear phishing email. The email, disguised as being from a trusted source, may seek to have victims voluntarily disclose sensitive information such as passwords. Or, it may encourage people to open a link or attachment that actually downloads malware onto the computer.

Here’s an example of a spear phishing email that targeted a tax professional during the 2017 filing season. Note the use of “Tax return” in the subject line to bait the tax preparer as the sender impersonates a prospective client:

 

Note that the sender has done their research, obtaining the name and email address of the tax pro. And, the email is conversational but ungrammatical and oddly constructed: “hope your (sic) doing good (sic) and actively involved in the tax filing season.” This is potentially a sign that English is a second language. Finally, note the hyperlink using a “tiny” URL is used to mask the true destination – this is another red flag.

There are several other versions of spear phishing emails in which the criminal poses as a potential client. In one version, the prospective “client” directs the tax professional to open an attachment to see the 2016 tax information needed to prepare a return. However, the attachment in reality downloads malware that tracks each keystroke made by the tax professional so that the criminal can steal passwords and sensitive data.

Most spear phishing emails have a “call to action” as part of their tactics, an effort to encourage the receiver into opening a link or attachment. The example above asks the preparer to review their tax information and provide a cost estimate.

Other spear phishing emails impersonate the IRS, such as the IRS e-Services tools for tax professionals, or in some instances a private-sector tax software provider. In those examples, preparers are warned that they must immediately update their account information or suffer some consequence. The link may go to a website that has been disguised by the thieves to look like the login pages for IRS e-Services or a tax software provider.

Cybercriminals are endlessly creative. This year, some identity thieves hacked individuals’ emails accounts. Noticing that the individuals had been in email contact with tax preparers, the criminals used the individual’s email address to send a note to their preparer asking that the direct deposit refund account number be changed. The scam prompted an IRS alert to preparers about last-minute refund changes. See IR-2017-64.

Protecting Your Clients and Your Business from Spear Phishing

There is no one action to protect your clients or your business from spear phishing. It requires a series of defensive steps. Tax professionals should consider these basic steps:

Educate all employees about phishing in general and spear phishing in particular.

Use strong, unique passwords. Better yet, use a phrase instead of a word. Use different passwords for each account. Use a mix of letters, numbers and special characters.

Never take an email from a familiar source at face value; example: an email from “IRS e-Services.” If it asks you to open a link or attachment, or includes a threat to close your account, think twice. Visit the e-Services website for confirmation.

If an email contains a link, hover your cursor over the link to see the web address (URL) destination. If it’s not a URL you recognize or if it’s an abbreviated URL, don’t open it.

Consider a verbal confirmation by phone if you receive an email from a new client sending you tax information or a client requesting last-minute changes to their refund destination.

Use security software to help defend against malware, viruses and known phishing sites and update the software automatically.

Use the security options that come with your tax preparation software.

Send suspicious tax-related phishing emails to phishing@irs.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Early Withdrawals from Retirement Plans

Posted by Admin Posted on July 11 2017

Early Withdrawals from Retirement Plans

 

Many people find it necessary to take out money early from their IRA or retirement plan. Doing so, however, can trigger an additional tax on top of income tax taxpayers may have to pay. Here are a few key points to know about taking an early distribution:

Early Withdrawals. An early withdrawal normally is taking cash out of a retirement plan before the taxpayer is 59½ years old.

Additional Tax. If a taxpayer took an early withdrawal from a plan last year, they must report it to the IRS. They may have to pay income tax on the amount taken out. If it was an early withdrawal, they may have to pay an additional 10 percent tax.

Nontaxable Withdrawals. The additional 10 percent tax does not apply to nontaxable withdrawals. These include withdrawals of contributions that taxpayers paid tax on before they put them into the plan. A rollover is a form of nontaxable withdrawal. A rollover occurs when people take cash or other assets from one plan and put the money in another plan. They normally have 60 days to complete a rollover to make it tax-free.

Check Exceptions. There are many exceptions to the additional 10 percent tax. Some of the rules for retirement plans are different from the rules for IRAs.

File Form 5329. If someone took an early withdrawal last year, they may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return. Form 5329 has more details.

Use IRS e-file. Early withdrawal rules can be complex. IRS e-file is the easiest and most accurate way to file a tax return. The tax software that taxpayers use to e-file will pick the right tax forms, do the math and help get the tax benefits they are due. Seven out of 10 taxpayers qualify to use IRS Free File tax software. Free File is only available through the IRS website at IRS.gov/freefile.

More information on this topic is available on IRS.gov.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Bonos de Ahorros

Posted by Admin Posted on July 10 2017

Bonos de Ahorros

 

¿Va a recibir un cheque de reembolso este año? Si es así… ¡deje que su reembolso trabaje por usted! 

Usted puede comprar hasta cinco mil dólares cada año en bonos de la serie “I” de los Estados Unidos en incrementos de 50 dólares cada vez que presenta su declaración federal de impuestos. Consígalos para usted u  otros, como un niño o cualquier otra persona  que usted guste y gane intereses hasta por  30 años. 

Cuando presente su declaración de impuestos anexe el formulario 8888  para comprar los bonos.  Si usted  declara con e-file, su software tributario le  preguntará si usted desea dividir su reembolso, usted tiene la opción de  comprar sus bonos  de  la serie “I” en ese momento. 

También puede  elegir el depósito directo o un cheque de papel por  el correo si hay un monto restante de su reembolso que no usó para comprar bonos.

Ahorre fácilmente con los bonos de los Estados Unidos.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

NEED TO SELL REAL PROPERTY? TRY AN INSTALLMENT SALE

Posted by Admin Posted on July 06 2017

NEED TO SELL REAL PROPERTY TRY AN INSTALLMENT SALE

 

If your company owns real property, or you do so individually, you may not always be able to dispose of it as quickly as you'd like. One avenue for perhaps finding a buyer a little sooner is an installment sale.

Benefits and risks

An installment sale occurs when you transfer property in exchange for a promissory note and receive at least one payment after the tax year of the sale. Doing so allows you to receive interest on the full amount of the promissory note, often at a higher rate than you could earn from other investments, while deferring taxes and improving cash flow.

But there may be some disadvantages for sellers. For instance, the buyer may not make all payments and you may have to deal with foreclosure.

Methodology

You generally must report an installment sale on your tax return under the "installment method." Each installment payment typically consists of interest income, return of your adjusted basis in the property and gain on the sale. For every taxable year in which you receive an installment payment, you must report as income the interest and gain components.

Calculating taxable gain involves multiplying the amount of payments, excluding interest, received in the taxable year by the gross profit ratio for the sale. The gross profit ratio is equal to the gross profit (the selling price less your adjusted basis) divided by the total contract price (the selling price less any qualifying indebtedness — mortgages, debts and other liabilities assumed or taken by the buyer — that doesn't exceed your basis).

The selling price includes the money and the fair market value of any other property you received for the sale of the property, selling expenses paid by the buyer and existing debt encumbering the property (regardless of whether the buyer assumes personal liability for it).

You may be considered to have received a taxable payment even if the buyer doesn't pay you directly. If the buyer assumes or pays any of your debts or expenses, it could be deemed a payment in the year of the sale. In many cases, though, the buyer's assumption of your debt is treated as a recovery of your basis, rather than a payment.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- How and when do I collect my annuity?

Posted by Admin Posted on July 06 2017

How and when do I collect my annuity

 

There are a few choices that you have when choosing to collect your annuity. Some people opt for a lump sum, even though it negates one of the major features of the annuity: payments until death.

The amount of the monthly payments that you receive depends on:

The amount of money in your annuity contract

The life expectancy of the annuitant

The size of the minimum required payments (if any)

Whether the payments continue after death or not

There are various different settlement options. Be absolutely sure when you choose, because the decision will be final when you make it.

Fixed Amount. With a fixed amount option, you will choose a monthly amount that you will receive until your annuity runs out. There is a possibility that your money may run out before you pass on, and also the chance that you may die before your money runs out. In that case, your beneficiary will receive your payments.

Fixed Period. The company will pay you for a fixed amount of time. If you are waiting for a retirement payment from another investment, it may be a good idea to get this fixed money until you start to receive payment from another investment. Again, if you are to pass before the money is fully paid, the remainder will go to your beneficiary.

Lifetime Or Straight Life. This plan will continue to pay you money until you die. This is the safest option to ensure that you receive payment until the day you die. Conversely, if you die early, there will be no payments to the beneficiary.

Life With Period Certain. With this plan you will receive payments until death - and for a period afterwards, your beneficiary will receive payments too. The longer the period, the lower the monthly payment.

Installment. This guarantees that if you die before you have exhausted your funds, the rest will be distributed to the beneficiary.

Joint And Survivor. In this option the payments are made to the joint annuitants. In the event of one's passing, the other will continue to receive a lesser amount.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- WHAT SHOULD I TAKE INTO ACCOUNT WHEN I START INVESTING?

Posted by Admin Posted on July 05 2017

investing

 

► Risk vs. Return

The first step in the investment process is to figure out what sort of Return on Investment (ROI) that you are seeking...

► Asset Allocation

Asset Allocation is the selection of assets from across the asset classes...

► Diversification

Diversification is similar to asset allocation, but within the asset class...

► Monitoring Progress

You can start by examining your trading records and ensuring that all of the trades went through at the prices that you instructed...

Keep tabs on how your assets are performing. If they seem to be underperforming, you may want to change your investments to some that may be more lucrative. You may want to also check to make sure that the investments that you own are in line with your current investment strategy. Your strategy may change over time. Be sure to compare your investments to your current situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Simple guidelines to follow towards a comfortable retirement

Posted by Admin Posted on July 05 2017

Simple guidelines to follow towards a comfortable retirement

 

Someone starting their savings in their early 20s can save 10% of their income and have a sufficient nest egg, while someone starting in their 40s may have to bump that number up more towards 20%. This is all dependent on the time of your life that you choose to start, the size of your current nest egg, and the amount of money that you will need to retire comfortably.

It is always a good idea to contribute as much as possible to retirement plans, to take advantage of tax deferral and employer matches.

Generally people need around 80% of their pre-retirement income after they have retired for the first few years and then learn how to live on less. This will greatly depend on the expenses that you plan on having:

Is the mortgage already paid off?

Do you have car payments?

Are you sending your children through school?

Another strategy worth following is to always have an emergency fund of at least 6 months of expenses. Considering your situation and the situations of the people that you depend on or depend on you, you can adjust the number of months accordingly, but 6 is a good ballpark number. This will also depend on how many bills you need to pay.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

2017 Summertime Tax Tip Program

Posted by Admin Posted on July 05 2017

2017 Summertime Tax Tip Program

 

More than 719,000 taxpayers received plain-language Tax Tips directly to their email inbox during this past tax filing season and got the information they needed to help them file their taxes.

Because taxes are year-round for many taxpayers, and many taxable situations arise during the summer months, the Internal Revenue Service offers a Summertime Tax Tip program that begins July 3. The IRS is encouraging taxpayers to sign up now for this email service to help them get a jump-start on their taxes and learn about the tax implications of events that often occur during the summer months.

The Summertime Tax Tip series, which offers helpful consumer tips written in plain language, covers a wide range of important subjects.

Some of the 2017 Summertime Tax Tip topics include:

Tax scams don’t take vacation; what’s out there now

Teens and summer jobs

Vacation home rentals – tax implications

Getting married? Tax implications you need to know

IRS notices – What you could receive in the mail from the IRS

The IRS Tax Tips email service is available in English and Spanish. It provides new IRS Tax Tips via e-mail three times a week during the months of July and August. Subscribers will also receive a Tax Tip each day of the week during the tax filing season and Special Edition Tax Tips that are issued for “hot topics” that arise throughout the year.

Taxpayers can sign up to receive IRS Tax Tips automatically for free on www.irs.gov. From the Subscriptions link on the top right of the IRS website, choose “IRS Tax Tips” on the drop-down menu, and then click on “Subscribe.” Click on “more,” on the drop-down menu, to subscribe to the IRS Tax Tips in Spanish.

The IRS also has a number of other e-subscriptions to which taxpayers, tax professionals and others may subscribe to receive tax information via email from the IRS during the tax-filing season and the rest of the year.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Know Your Tax Hand When it Comes to Gambling

Posted by Admin Posted on July 03 2017

Know Your Tax Hand When it Comes to Gambling

 

A royal flush can be quite a rush. But the IRS casts a wide net when defining gambling income. It includes winnings from casinos, horse races, lotteries and raffles, as well as any cash or prizes (appraised at fair market value) from contests. If you participate in any of these activities, you must report such winnings as income on your federal return.

If you’re a casual gambler, report your winnings as “Other income” on Form 1040. You may also take an itemized deduction for gambling losses, but the deduction is limited to the amount of winnings.

In some cases, casinos and other payers provide IRS Form W-2G, “Certain Gambling Winnings” — particularly if the entity in question withholds federal income tax from winnings. The information from these forms needs to be included on your tax return.

If you gamble often and actively, you might qualify as a professional gambler, which comes with tax benefits: It allows you to deduct not only losses, but also wagering-related business expenses — such as transportation, meals and entertainment, tournament and casino admissions, and applicable website and magazine subscriptions.

To qualify as a professional, you must be able to demonstrate to the IRS that a “profit motive” exists. The agency looks at a list of nonexclusive factors when making this determination, including:

  • Whether the taxpayer conducts the gambling activity in a “businesslike” manner,
  • The quantity of time spent gambling, and
  • How much income is earned from nongambling activities.

But don’t “go pro” for the tax benefits, since doing so is a major financial risk. If you enjoy the occasional game of chance, or particularly if you’re considering gambling as a profession, please contact our firm. We can help you manage the tax impact.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Which Type of Mortgage Loan Meets Your Needs?

Posted by Admin Posted on June 30 2017

Which Type of Mortgage Loan Meets Your Needs

 

Few purchases during your lifetime will be as expensive as buying a home. Whether it’s your primary residence, a vacation home or an investment property, how you choose to pay for it can have a significant impact on your financial situation over time. If you’re considering a mortgage loan, understanding the main categories of mortgages — fixed-rate and adjustable-rate — and the situations they’re best designed for will help you match the right type for your needs.

Fixed-rate loans offer stability

A fixed-rate mortgage, as its name suggests, is a loan whose interest rate remains constant for the life of the loan — typically 15 or 30 years. One of the primary benefits of a fixed-rate loan is that it provides a measure of certainty about one of the biggest expenses in your monthly budget. With interest rates likely to rise after an extended period of historically low rates, you won’t have to worry about potentially higher payments in the future if you select a fixed-rate loan.

That said, if interest rates were to fall again, your fixed-rate loan would leave you unable to take advantage of the shift unless you refinance, which might involve fees. You’re also paying a premium for the stability offered by a fixed-rate mortgage. You could consider a 15-year fixed-rate loan, which would charge a lower rate than a 30-year loan, but the tradeoff will be higher monthly payments.

ARMs provide flexibility

Adjustable-rate mortgages (ARMs) typically offer a fixed interest rate for an initial period of years. This rate, which is usually lower than that of a comparable fixed-rate mortgage, resets periodically based on a benchmark interest rate. For example, a 5/1 ARM means that your interest rate is fixed for the first five years and then will adjust every year after that.

Paying less interest in the beginning frees your cash for other investments. You might also take advantage of an ARM if you’re confident that you’ll have more money in the future than you do today, or if you plan on selling your house before or soon after the initial fixed-rate period expires. When considering an ARM, you’ll need to assess your ability to keep up with potentially higher payments — say, if the initial period expires, your rate goes up and you’re unable to sell the home, or if your income changes.

The best for you

The right loan type depends, naturally, on your financial position. But whether you’re buying a primary residence, vacation home or investment property also plays a role. Regardless of which type of home you’re purchasing, having a basic knowledge of the loan types can help ease the buying process. Let our firm assist you in evaluating the best mortgage for your needs.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

[INFOGRAPHIC] How much will I be charged at the end of an auto lease?

Posted by Admin Posted on June 29 2017

How much will I be charged at the end of an auto lease?

 

[TEXT VERSION]

At the end of the lease period, the federal Consumer Leasing Act (CLA) puts a limit on how much the dealer can collect. The dealer cannot collect more than three times the average monthly payment.

For the following reasons, a dealer may collect a higher amount:

- The miles are higher than stated in the lease or the vehicle has unreasonable wear and tear.

- There was an agreement to pay an amount greater than what is stated in the original contract.

- The Lessor wins a lawsuit for a higher amount.

At the end of the term of the lease, the dealer may opt to sell the car. If the car is sold for less than the residual value specified in the leasing contract, you may be obligated to pay as much as three monthly payments to make up the difference.

You may want to negotiate to have the right to approve the final sales price as part of the lease agreement, so the dealer does not sell the leased car for less than the residual value just to get the car off the lot.

A few other things to keep in mind:

You do not get a refund if you stay under the mileage limit.

You probably won't have to pay for excess mileage if you purchase the car at the end of a closed-end lease and you exceed the mileage allowance.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

[INFOGRAPHIC]

HOW MUCH WILL I BE CHARGED AT THE END OF AN AUTO LEASE

IRS Cautions Taxpayers to Watch for Summertime Scams

Posted by Admin Posted on June 29 2017

IRS Cautions Taxpayers to Watch for Summertime Scams

 

WASHINGTON – The Internal Revenue Service today issued a warning that tax-related scams continue across the nation even though the tax filing season has ended for most taxpayers. People should remain on alert to new and emerging schemes involving the tax system that continue to claim victims.

“We continue to urge people to watch out for new and evolving schemes this summer,” said IRS Commissioner John Koskinen. “Many of these are variations of a theme, involving fictitious tax bills and demands to pay by purchasing and transferring information involving a gift card or iTunes card. Taxpayers can avoid these and other tricky financial scams by taking a few minutes to review the tell-tale signs of these schemes.”

EFTPS Scam

A new scam which is linked to the Electronic Federal Tax Payment System (EFTPS) has been reported nationwide. In this ruse, con artists call to demand immediate tax payment. The caller claims to be from the IRS and says that two certified letters mailed to the taxpayer were returned as undeliverable. The scammer then threatens arrest if a payment is not made immediately by a specific prepaid debit card. Victims are told that the debit card is linked to the EFTPS when, in reality, it is controlled entirely by the scammer. Victims are warned not to talk to their tax preparer, attorney or the local IRS office until after the payment is made.

“Robo-call” Messages

The IRS does not call and leave prerecorded, urgent messages asking for a call back. In this tactic, scammers tell victims that if they do not call back, a warrant will be issued for their arrest. Those who do respond are told they must make immediate payment either by a specific prepaid debit card or by wire transfer.

Private Debt Collection Scams

The IRS recently began sending letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies. Taxpayers should be on the lookout for scammers posing as private collection firms. The IRS-authorized firms will only be calling about a tax debt the person has had – and has been aware of – for years. The IRS would have previously contacted taxpayers about their tax debt.

Scams Targeting People with Limited English Proficiency

Taxpayers with limited English proficiency have been recent targets of phone scams and email phishing schemes that continue to occur across the country. Con artists often approach victims in their native language, threaten them with deportation, police arrest and license revocation among other things. They tell their victims they owe the IRS money and must pay it promptly through a preloaded debit card, gift card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls” or via a phishing email.

Tell Tale Signs of a Scam:

The IRS (and its authorized private collection agencies) will never:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. The IRS will usually first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.

Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.

Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

Ask for credit or debit card numbers over the phone.

For anyone who doesn’t owe taxes and has no reason to think they do:

Do not give out any information. Hang up immediately.

Contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.

Report it to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. Please add "IRS Telephone Scam" in the notes.

For anyone who owes tax or thinks they do:

View tax account information online at IRS.gov to see the actual amount you owe. Then review payment options.

Call the number on the billing notice, or

Call the IRS at 800-829-1040. IRS workers can help

How to Know It’s Really the IRS Calling or Knocking

The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as:

when a taxpayer has an overdue tax bill,

to secure a delinquent tax return or a delinquent employment tax payment, or,

to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail. For more information, visit “How to know it’s really the IRS calling or knocking on your door” on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

COULD YOUR DEBT RELIEF TURN INTO A TAX DEFEAT?

Posted by Admin Posted on June 28 2017

COULD YOUR DEBT RELIEF TURN INTO A TAX DEFEAT?

 

Restructuring debt has become a common approach to personal financial management. But many people fail to realize that there’s often a tax impact to debt relief. And if you don’t anticipate it, a winning tax return may turn into a losing one.

Less debt, more income

Income tax applies to all forms of income — including what’s referred to as “cancellation-of-debt” (COD) income. Think of it this way: If a creditor forgives a debt, you avoid the expense of making the payments, which increases your net income.

Debt forgiveness isn’t the only way to generate a tax liability, though. You can have COD income if a creditor reduces the interest rate or gives you more time to pay. Calculating the amount of income can be complex but, essentially, by making it easier for you to repay the debt, the creditor confers a taxable economic benefit.

Mortgage matters

You can also have COD income in connection with a mortgage foreclosure, including a short sale or deed in lieu of foreclosure. Here, the tax consequences depend on which of the following two categories the mortgage falls into:

  1. Nonrecourse. Here the lender’s sole remedy in the event of default is to take possession of the home. In other words, you’re not personally liable if the foreclosure proceeds are less than your outstanding loan balance. Foreclosure on a nonrecourse mortgage doesn’t produce COD income.

  2. Recourse. This type of foreclosure can trigger COD tax liability if the lender forgives the portion of the loan that’s not satisfied. In a short sale, the lender permits you to sell the property for less than the amount you owe and accepts the sale proceeds in satisfaction of your mortgage. A deed in lieu of foreclosure means you convey the property to the lender in satisfaction of your debt. In either case, if the lender agrees to cancel the excess debt, the transaction is treated like a foreclosure for tax purposes — that is, a recourse mortgage may generate COD income.

Keep in mind that COD income is taxable as ordinary income, even if the debt is related to long-term capital gains property. And, in some cases, foreclosure can trigger both COD income and a capital gain or loss (depending on your tax basis in the property and the property’s market value).

Exceptions vs. exclusions

Several types of canceled debt are considered nontaxable “exceptions” — for example, debt cancellation that’s considered a gift (such as forgiveness of a family loan). Certain student loans are also considered exceptions — as long as they’re canceled in exchange for the recipient’s commitment to public service.

Other types of canceled debt qualify as “exclusions.” For instance, homeowners can exclude up to $2 million in COD income in connection with qualified principal residence indebtedness. A recent tax law change extended this exclusion through 2016, modifying it to apply to mortgage forgiveness that occurs in 2017 as long as it’s granted pursuant to a written agreement entered into in 2016. Other exclusions include certain canceled debts relating to bankruptcy and insolvency.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Alivio para el Cónyuge Inocente

Posted by Admin Posted on June 27 2017

Alivio para el cónyugue inocente

 

Si usted califica para el alivio del cónyuge inocente… el IRS ha efectuado un cambio importante que le puede ayudar.

De ahora en adelante, el plazo de dos años ha sido eliminado  para ciertas solicitudes de cónyuge inocente.

Este es el tipo de solicitud que es comunmente conocida como el alivio equitativo, la clase de alivio que a menudo es considerado cuando las personas se encuentran en situaciones difíciles o intimidantes.   

Por ejemplo, esto puede que aplique a víctimas de abuso doméstico.

Si califica para el alivio equitativo, usted ya no tiene una fecha límite de dos años para pedir esa solicitud. 

Además de futuras solicitudes, este cambio aplica a solicitudes que estamos considerando actualmente, y si usted ha sido rechazado en el pasado basado únicamente en el plazo de dos años, usted puede volver a solicitar para el alivio usando el formulario 8857, esta es la solicitud de alivio para el cónyuge inocente.

Pero si su caso está actualmente suspendido, usted no tiene que volver a solicitar porque nosotros le daremos automáticamente otro vistazo a su caso.

Ahora le recomendamos tener cuidado.
 
También debe saber que el plazo de dos años sigue vigente a otros tipos de solicitudes de cónyuge inocente, y otras restricciones y fechas límites establecidas por la ley aplican a cualquier solicitud de cónyuge inocente.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Security Summit Warns of New Phishing Email Email Targeting Tax Pros

Posted by Admin Posted on June 26 2017

Security Summit Warns of New Phishing Email

 

The IRS, state tax agencies and the tax industry today warned tax professionals to beware of phishing emails purporting to be from a tax software education provider and seeking extensive amounts of sensitive preparer data.

The email’s origin is unknown but likely issued by cybercriminals who could be operating from the U.S. or abroad. The email is unusual for the amount of sensitive preparer data that it seeks. This preparer information will enable the thieves to steal client data and file fraudulent tax returns.

The IRS reminds all tax professionals that legitimate businesses and organizations never ask for usernames, passwords or sensitive data via email. Nor should a preparer ever provide such sensitive information via email if asked.

All tax professionals should be aware that their e-Services credentials, the Electronic Filing Information Number (EFIN), the Preparer Tax Identification Number (PTIN) and their Centralized Authorization File (CAF) number are extremely valuable to identity thieves. Anyone handling taxpayer information has a legal obligation to protect that data.

Because the IRS, state tax agencies and the tax industry, acting in partnership as the Security Summit, are making inroads on individual tax-related identity theft, cybercriminals increasingly target tax professionals. Thieves are looking for real client data so they can better impersonate the taxpayer when filing fraudulent returns for refunds.

The fake email uses the name of a real U.S.-based preparer education firm. Here’s the text as it appears in phishing emails being sent to tax professionals:

In our database, there is a failure, we need your information about your account.

In addition, we need a photo of the driver's license, send all the data to the letter. Please do it as soon as possible, this will help us to revive the account.

*Company Name *

*EServices Username *

*EServices Password *

*EServices Pin *

*CAF number*

*Answers to a secret question*

*EIN Number *

*Business Name

*Owner/Principal Name *

*Owner/Principal DOB *

*Owner/Principal SSN *

*Prior Years AGI

Mother's Maiden Name

If you received or fell victim to the scam email, forward a copy to phishing@irs.gov. If you disclosed any credential information, contact the e-Services Help Desk to reset your password. If you disclosed information and taxpayer data was stolen, contact your local stakeholder liaison. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Capital Gains and Losses

Posted by Admin Posted on June 21 2017

Capital Gain and Losses

 

Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. The IRS says when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property.

While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property. A “paper loss” — a drop in an investment's value below its purchase price — does not qualify for the deduction. The loss must be realized through the capital asset's sale or exchange.

Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term. For more information on the tax rates, refer to IRS Publication 544, Sales and Other Dispositions of Assets. If your capital losses exceed your capital gains, the excess is subtracted from other income on your tax return, up to an annual limit of $3,000 ($1,500 if you are married filing separately). Unused capital losses can be carried over indefinitely to future years to net against capital gains, however the annual limit still applies.

Capital gains and losses are reported on Form 8949, Sales and Other Dispositions of Capital Assets, summarized on Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040. Accounting and planning for the sale and purchase of capital assets is usually a very complicated matter, so please contact us so that you may receive the professional advice you deserve.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHY YOUR HEALTH INSURANCE COMPANY MAY ASK FOR YOUR SOCIAL SECURITY NUMBER

Posted by Admin Posted on June 19 2017

HEALTH INSURANCE COMPANY MAY ASK FOR YOUR SOCIAL SECURITY NUMBER

 

Your health insurance company may request that you provide the Social Security Numbers (SSNs) for you, your spouse, and your children covered by your policy. This is because the Affordable Care Act requires every provider of minimum essential coverage to report that coverage by filing an information return with the IRS and furnishing a statement to covered individuals. The information is used by the IRS to administer — and by individuals to show compliance with — the health care law.

Health coverage providers will file an information return (Form 1095-B, “Health Coverage”) with the IRS and will furnish statements to you in 2016 to report coverage information from calendar year 2015. The law requires coverage providers to list SSNs on this form. If you don’t provide your SSN and the SSNs of all covered individuals to the sponsor of the coverage, the IRS may not be able to match the Form 1095-B with the individuals to determine that they have complied with the individual shared responsibility provision.

Your health insurance company may mail you a letter that discusses these new rules and requests SSNs for all family members covered under your policy. The IRS has not designated a specific form for your health insurance company to request this information. However, it should be a written request that is mailed to you through the U.S. Postal Service, not emailed to you. If you receive an email request, it could be a phishing attempt by a hacker who is aware of this requirement, so be cautious and take precautions to protect yourself. Don’t respond directly to the email. Instead, call the insurance company at its main number (not any number contained in the email) or go directly to the insurance company’s website (not from the link or to an address contained in the email) to verify the request.

The Form 1095-B will provide information for your income tax return that shows you, your spouse, and individuals you claim as dependents had qualifying health coverage for some or all months during the year. You do not have to attach Form 1095-B to your tax return. However, it is important to keep it with your other important tax documents.

Anyone on your return who does not have minimum essential coverage, and who does not qualify for an exemption, may be liable for the individual shared responsibility payment.

The information received by the IRS will be used to verify information on your individual income tax return. If you refuse to provide this information to your health insurance company, the IRS cannot verify the information you provide on your tax return, and you may receive an inquiry from the IRS. You also may receive a notice from the IRS indicating that you are liable for the individual shared responsibility payment.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Warns of New Phone Scam

Posted by Admin Posted on June 16 2017

IRS WARNS OF NEW PHONE SCAM

 

The Internal Revenue Service today warned people to beware of a new scam linked to the Electronic Federal Tax Payment System (EFTPS), where fraudsters call to demand an immediate tax payment through a prepaid debit card. This scam is being reported across the country, so taxpayers should be alert to the details.

In the latest twist, the scammer claims to be from the IRS and tells the victim about two certified letters purportedly sent to the taxpayer in the mail but returned as undeliverable. The scam artist then threatens arrest if a payment is not made through a prepaid debit card. The scammer also tells the victim that the card is linked to the EFTPS system when, in fact, it is entirely controlled by the scammer. The victim is also warned not to contact their tax preparer, an attorney or their local IRS office until after the tax payment is made.

“This is a new twist to an old scam,” said IRS Commissioner John Koskinen. “Just because tax season is over, scams and schemes do not take the summer off. People should stay vigilant against IRS impersonation scams. People should remember that the first contact they receive from IRS will not be through a random, threatening phone call.”

EFTPS is an automated system for paying federal taxes electronically using the Internet or by phone using the EFTPS Voice Response System. EFTPS is offered free by the U.S. Department of Treasury and does not require the purchase of a prepaid debit card. Since EFTPS is an automated system, taxpayers won’t receive a call from the IRS. In addition, taxpayers have several options for paying a real tax bill and are not required to use a specific one.

Tell Tale Signs of a Scam:

The IRS (and its authorized private collection agencies) will never:

- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.

- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.

- Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

- Ask for credit or debit card numbers over the phone.

For anyone who doesn’t owe taxes and has no reason to think they do:

- Do not give out any information. Hang up immediately.

- Contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.

- Report it to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. Please add "IRS Telephone Scam" in the notes.

For anyone who owes tax or thinks they do:

- View your tax account information online at IRS.gov to see the actual amount you owe. You can then also review your payment options.

- Call the number on the billing notice, or

- Call the IRS at 800-829-1040. IRS workers can help.

- The IRS does not use email, text messages or social media to discuss personal tax issues, such as those involving bills or refunds. For more information, visit the “Tax Scams and Consumer Alerts” page on IRS.gov. Additional information about tax scams is available on IRS social media sites, including YouTube videos.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Adds New Features to Taxpayers Online Account

Posted by Admin Posted on June 15 2017

IRS Adds New Features to Taxpayers Online Account

 

WASHINGTON — The Internal Revenue Service announced today the addition of several new features to the online account tool first introduced late last year as part of the IRS’s commitment to improve and expand taxpayer services.

The online account allows individual taxpayers to access the latest information available about their federal tax account through a secure and convenient tool on IRS.gov. When it first launched in December 2016, the tool assisted taxpayers with basic account inquiries such as information about their balance due and access to the various IRS payment options. Since then, the IRS has added new features allowing taxpayers to:

View up to 18 months of tax payment history

View payoff amounts and tax balance due for each tax year

Obtain online transcripts of various Form 1040-series through Get Transcript

Give feedback on their experience with their online account and make suggestions for improvements

“We are constantly looking for ways to improve taxpayers’ interactions with the IRS and adding these new features to the taxpayer’s online account is an important step in that direction,” said IRS Commissioner John Koskinen. “The IRS is committed to serving taxpayers in multiple ways and now taxpayers who want to interact digitally with us in a secure environment have access to even more helpful features.”

Before accessing the tool, taxpayers must authenticate their identities through the rigorous Secure Access process. This is a two-step authentication process, which means returning users must have their credentials (username and password) plus a security code sent as a text to their mobile phones.

Taxpayers who have registered using Secure Access for Get Transcript Online or Get an IP PIN may use their same username and password. To register for the first time, taxpayers must have their personal and financial information including: Social Security number, specific financial information, such as a credit card number or loan numbers, email address and a text-enabled mobile phone in the user's name. Taxpayers may review the Secure Access  process prior to starting registration.

As part of the security process to authenticate taxpayers, the IRS will send verification, activation or security codes via email and text. The IRS warns taxpayers that it will not initiate contact via text or email asking for log-in information or personal data. The IRS texts and emails will only contain one-time codes.

In addition to the online account, the IRS continues to provide several self-service tools and helpful resources available on IRS.gov for individuals, businesses and tax professionals.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Contribuyentes en el extranjero: deben presentar su declaración de impuestos para el 15 de junio

Posted by Admin Posted on June 14 2017

Contribuyentes en el extranjero: deben presentar su declaración de impuestos para el 15 de junio

 

El Servicio de Impuestos Internos (IRS) recordó hoy a los contribuyentes que viven y trabajan en el extranjero que deben presentar su declaración de impuestos de 2016 para el jueves, 15 de junio.

La fecha límite especial del 15 de junio está disponible tanto para ciudadanos estadounidenses como para extranjeros residentes en el extranjero, incluidos los que tienen doble nacionalidad. Para aquellos que no pueden cumplir con la fecha límite del 15 de junio, las prórrogas están disponibles e incluso se pueden solicitar electrónicamente. Además, un nuevo plazo de presentación ahora se aplica a cualquier persona con una cuenta bancaria o financiera en el extranjero que tenga el requisito de presentar un informe anual para estas cuentas, mejor conocido como FBAR.

A continuación, un resumen de los puntos claves a tener en mente. La mayoría de las personas en el extranjero deben presentar:

Un requisito para declarar impuestos generalmente aplica incluso si un contribuyente califica para beneficios tributarios, como la exclusión de Ingreso Ganado en el Extranjero o el Crédito de Impuesto Extranjero, que reducen o eliminan sustancialmente la responsabilidad tributaria en los Estados Unidos. Estos beneficios tributarios solo están disponibles si un contribuyente elegible presenta una declaración de impuestos en los EE. UU.

Un contribuyente califica para la fecha límite especial de presentación del 15 de junio si ambos, domicilio tributario y residencia, están fuera de los EE. UU. y Puerto Rico. Aquellos que sirven en el ejército fuera de los EE. UU. y Puerto Rico también califican para la extensión al 15 de junio.

Asegúrese de adjuntar una declaración en la que indique cuál de estas dos situaciones aplica. Los intereses, actualmente al cuatro por ciento por año, compuestos diariamente, todavía se aplican a cualquier pago de impuestos recibido después de la fecha límite original del 18 de abril. Para obtener más información, consulte la sección Cuando presentar y pagar en la Publicación 54, Guía de impuestos para ciudadanos estadounidenses y extranjeros residentes en el extranjero (en inglés).

Reporte especial de declaración de impuestos para cuentas y activos extranjeros

La ley federal requiere que los ciudadanos de los EE. UU. y residentes extranjeros presenten cualquier ingreso mundial, incluyendo ingresos de fideicomisos extranjeros y cuentas de bancos y valores extranjeros. En la mayoría de los casos, los contribuyentes afectados necesitan completar y adjuntar el Anexo B a su declaración de impuestos. La Parte III del Anexo B pregunta acerca de la existencia de cuentas extranjeras, tales como cuentas bancarias y de valores, y normalmente requiere que los ciudadanos de los EE. UU. reporten el país donde se encuentra cada cuenta.

Además, ciertos contribuyentes también pueden tener que llenar y adjuntar a su declaración el Formulario 8938, Estado de Activos Financieros Extranjeros (en inglés). En general, los ciudadanos estadounidenses, los extranjeros residentes y ciertos extranjeros no residentes deben informar activos financieros extranjeros especificados en este formulario si el valor agregado de esos activos excede ciertos umbrales. Consulte las instrucciones de este formulario para detalles

Escoja Free File

Los ciudadanos de los EE. UU. y los extranjeros residentes que viven en el extranjero pueden usar Free File del IRS para preparar y presentar  electrónicamente sus declaraciones de forma gratuita. Esto significa que tanto los ciudadanos estadounidenses como los extranjeros residentes que viven en el extranjero con ingresos brutos ajustados (AGI) de $64,000 o menos pueden usar software de marca para preparar sus declaraciones y luego presentarlas de forma gratuita. Un número limitado de empresas ofrece software que acepta direcciones extranjeras.

Una segunda opción, los formularios interactivos de Free File, la versión electrónica de los formularios de papel del IRS, no tiene límite de ingresos y se adapta mejor a las personas que se sienten cómodas preparando su propia declaración de impuestos.

Tanto la presentación electrónica como las opciones de presentación electrónica de Free File están disponibles hasta el 16 de octubre de 2017, para cualquier persona que presente una declaración de 2016. Eche un vistazo al enlace de presentación electrónica en IRS.gov para obtener detalles acerca de las diversas opciones de presentación electrónica. Free File no está disponible para los extranjeros no residentes requeridos a presentar el Formulario 1040NR

Prórrogas automáticas disponibles

Los contribuyentes en el extranjero que no pueden cumplir con la fecha límite del 15 de junio pueden tener más tiempo para presentar, pero necesitan pedirlo. Su solicitud de prórroga debe presentarse antes del 15 de junio.

Las prórrogas automáticas proveen a las personas hasta el 16 de octubre de 2017 para presentar; sin embargo, esto no extiende el tiempo para pagar impuestos. Una forma fácil de obtener tiempo adicional para presentar es a través del enlace de Free File en IRS.gov. En cuestión de minutos, cualquier persona, independientemente de sus ingresos, puede usar este servicio gratuito para solicitar electrónicamente una prórroga en el Formulario 4868. Para obtener la prórroga, los contribuyentes deben calcular su obligación tributaria en este formulario y pagar cualquier deuda.

Otra opción para los contribuyentes es pagar electrónicamente y obtener una prórroga de tiempo para presentar. El IRS procesará automáticamente una prórroga cuando los contribuyentes seleccionen el Formulario 4868, hagan un pago total o parcial de impuestos federales a través de Direct Pay, el Sistema Electrónico de Pago de Impuestos Federales (EFTPS) o una tarjeta de débito o crédito. No es necesario presentar un Formulario 4868 por separado al hacer un pago electrónico e indicar que es para una prórroga. Las opciones de pago electrónico están disponibles en IRS.gov/pagos. Aquellos contribuyentes internacionales que no tienen cuenta bancaria en los EE. UU. Deben referirse a la sección de Pagos electrónicos extranjeros en IRS.gov para más opciones de pago e información.

Contribuyentes en zonas de combate obtienen más tiempo si la necesidad de 

Los miembros del ejército y el personal de apoyo elegible que sirve en una zona de combate tienen al menos 180 días luego de abandonar la zona de combate para presentar sus declaraciones de impuestos y pagar los impuestos adeudados. Esto incluye a los que sirven en Irak, Afganistán y otras zonas de combate. Un listado completo de las localidades designadas como zonas de combate puede encontrarse en la Publicación 3, Guía de impuestos para las fuerzas armadas (en inglés), disponible en IRS.gov

Diversas circunstancias afectan la duración exacta de la prórroga disponible para cualquier contribuyente dado. Detalles, que incluyen ejemplos que ilustran cómo se calculan estas prórrogas, se encuentran en la sección de Prórrogas en la Publicación 3

Nueva fecha límite para reportar cuentas extranjeras

A partir de este año, la fecha límite para presentar el Informe Anual de Cuentas Bancarias y Financieras en el Extranjero (FBAR) (en inglés), es ahora la misma que para una declaración federal de impuestos. Esto significa que el Formulario 114 del FBAR de 2016, debía presentarse electrónicamente con la Red de Cumplimiento de Crímenes Financieros (FinCEN) antes del 18 de abril de 2017. Sin embargo, FinCEN está concediendo a los contribuyentes que no puedan cumplir con el plazo original una prórroga automática hasta el 16 de octubre de 2017 para presentar el FBAR. No se requieren solicitudes específicas de prórrogas. Anteriormente, la fecha límite del FBAR era el 30 de junio y no había prórrogas disponibles.

En general, el requisito de presentación de FBAR se aplica a cualquier persona que tenía un interés en, o firma u otra autoridad, sobre cuentas financieras extranjeras cuyo valor agregado excedió $10,000 en cualquier momento durante 2016. Debido a este umbral, el IRS alienta a los contribuyentes con activos extranjeros, incluso aquellos relativamente pequeños, verificar si este requisito de presentación les aplica. El formulario sólo está disponible a través de la página web del Sistema de presentación electrónica de BSA.

Reporte en dólares americanos

Todos los ingresos recibidos o gastos deducibles pagados en moneda extranjera deben reportarse en una declaración de impuestos de EE.UU. en dólares americanos. Asimismo, los pagos de impuestos deben hacerse en dólares americanos.

Ambos formularios 114 y 8938 requieren el uso de una tasa de cambio del 31 de diciembre para todas las transacciones, independientemente de la tasa de cambio corriente para la fecha de la transacción. En general, el IRS acepta cualquier tipo de tasa de cambio publicada que se use consistentemente. Para obtener más información acerca de las tasas de cambio, consulte las Tasas de cambio de monedas y monedas extranjeras

Reportes de expatriados

Los contribuyentes que renunciaron a su ciudadanía estadounidense o dejaron de ser residentes legales permanentes de los EE. UU. durante 2016 deben presentar una declaración de extranjero de doble estatus, adjuntando el Formulario 8854, Declaración inicial y anual de expatriación (en inglés). También debe presentarse una copia del Formulario 8854 con el IRS de Philadelphia, PA 19255-0049, antes de la fecha de vencimiento de la declaración de impuestos (incluyendo prórrogas). Vea las instrucciones para este formulario y el Aviso 2009-85, Guía para expatriados bajo la Sección 877A (en inglés), para más detalles

Más información disponible  

Cualquier contribuyente estadounidense aquí o en el extranjero con preguntas de impuestos puede consultar la página principal de Contribuyentes internacionales (en inglés) y usar el Mapa tributario del IRS (en inglés) y el Índice de Temas Tributarios Internacionales para obtener respuestas. Estas herramientas en línea agrupan formularios, publicaciones y páginas web del IRS por tema y proporcionan a los usuarios un único punto de entrada para encontrar información tributaria.

Los contribuyentes que buscan preparadores de impuestos en el extranjero deben visitar el Directorio de preparadores de impuestos federales con credenciales y calificaciones selectas (en inglés).

Para evitar retrasos en los reembolsos de impuestos, los contribuyentes que viven en el extranjero deben visitar la página de Consejos útiles para recibir efectivamente un reembolso, para contribuyentes que viven en el extranjero (en inglés).

Más información acerca de las reglas tributarias que se aplican a los ciudadanos de los EE.UU. y extranjeros residentes que viven en el extranjero se puede encontrar en la Publicación 54, Guía tributaria para ciudadanos estadounidenses y extranjeros residentes que viven en el extranjero (en inglés),disponible en IRS.gov.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

New Deadline for Reporting Foreign Accounts

Posted by Admin Posted on June 13 2017

New Deadline for Reporting Foreign Accounts

 

Starting this year, the deadline for filing the annual Report of Foreign Bank and Financial Accounts (FBAR) is now the same as for a federal income tax return (June 15). This means that the 2016 FBAR, Form 114, was normally required to be filed electronically with the Financial Crimes Enforcement Network (FinCEN) by April 18, 2017. But FinCEN is granting filers missing the original deadline an automatic extension until Oct. 16, 2017 to file the FBAR. Specific extension requests are not required. In the past, the FBAR deadline was June 30 and no extensions were available. In general, the FBAR filing requirement applies to anyone who had an interest in, or signature or other authority, over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2016. Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is only available through the BSA E-filing System website. Report in U.S. Dollars Any income received or deductible expenses paid in foreign currency must be reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must be made in U.S. dollars.

Both Forms 114 and 8938 require the use of a Dec. 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign Currency and Currency Exchange Rates.

Expatriate Reporting

Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents of the United States during 2016 must file a dual-status alien return, attaching Form 8854, Initial and Annual Expatriation Statement. A copy of the Form 8854 must also be filed with Internal Revenue Service Philadelphia, PA 19255-0049, by the due date of the tax return (including extensions). See the instructions for this form and Notice 2009-85, Guidance for Expatriates Under Section 877A, for further details.

More Information Available Any U.S. taxpayer here or abroad with tax questions can refer to the International Taxpayers landing page and use the online IRS Tax Map and the International Tax Topic Index to get answers. These online tools group IRS forms, publications and web pages by subject and provide users with a single entry point to find tax information. Taxpayers who are looking for return preparers abroad should visit the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

To help avoid delays with tax refunds, taxpayers living abroad should visit the Helpful Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad page.

More information on the tax rules that apply to U.S. citizens and resident aliens living abroad can be found in, Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, available on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tax Payers Abroad: Can’t file for June 15? Learn about your options

Posted by Admin Posted on June 13 2017

Tax Payers Abroad Can’t file for June 15 Learn about your options

 

Automatic Extensions Available Taxpayers abroad who can’t meet the June 15 deadline can still get more time to file, but they need to ask for it. Their extension request must be filed by June 15. Automatic extensions give people until Oct. 16, 2017, to file; however, this does not extend the time to pay tax. An easy way to get the extra time to file is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an extension on Form 4868. To get the extension, taxpayers must estimate their tax liability on this form and pay any amount due. Another option for taxpayers is to pay electronically and get an extension of time to file. IRS will automatically process an extension when taxpayers select Form 4868 and they are making a full or partial federal tax payment using Direct Pay, the Electronic Federal Tax Payment System (EFTPS) or a debit or credit card. There is no need to file a separate Form 4868 when making an electronic payment and indicating it is for an extension. Electronic payment options are available at IRS.gov/payments. International taxpayers who do not have a U.S. bank account should refer to the Foreign Electronic Payments section on IRS.gov for more payment options and information. Combat Zone Taxpayers get More Time Without Having to Ask for it Members of the military and eligible support personnel serving in a combat zone have at least 180 days after they leave the combat zone to file their tax returns and pay any taxes due. This includes those serving in Iraq, Afghanistan and other combat zone localities. A complete list of designated combat zone localities can be found in Publication 3, Armed Forces’ Tax Guide, available on IRS.gov. Various circumstances affect the exact length of the extension available to any given taxpayer. Details, including examples illustrating how these extensions are calculated, can be found in the Extensions of Deadlines section in Publication 3.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Taxpayers Abroad: Must File by June 15

Posted by Admin Posted on June 13 2017

Taxpayers Abroad Must File by June 15

 

The Internal Revenue Service today reminded taxpayers living and working abroad that they must file their 2016 federal income tax return by Thursday, June 15.

The special June 15 deadline is available to both U.S. citizens and resident aliens abroad, including those with dual citizenship. For those who can’t meet the June 15 deadline, tax-filing extensions are available and they can even be requested electronically. In addition, a new filing deadline now applies to anyone with a foreign bank or financial account required to file an annual report for these accounts, often referred to as an FBAR.

Here is a rundown of key points to keep in mind:

Most People Abroad Need to File An income tax filing requirement generally applies even if a taxpayer qualifies for tax benefits, such as the Foreign Earned Income exclusion or the Foreign Tax credit, which substantially reduce or eliminate U.S. tax liability. These tax benefits are only available if an eligible taxpayer files a U.S. income tax return. A taxpayer qualifies for the special June 15 filing deadline if both their tax home and abode are outside the United States and Puerto Rico. Those serving in the military outside the U.S. and Puerto Rico also qualify for the extension to June 15.

Be sure to attach a statement indicating which of these two situations applies. Interest, currently at the rate of four percent per year, compounded daily, still applies to any tax payment received after the original April 18 deadline. For details, see the When To File and Pay section in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. Special Income Tax Return Reporting for Foreign Accounts and Assets

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.

In addition, certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. See the instructions for this form for details.

Choose Free File

U.S. citizens and resident aliens living abroad can use IRS Free File to prepare and electronically file their returns for free. This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes (AGI) of $64,000 or less can use brand-name software to prepare their returns and then e-file them for free. A limited number of companies provide software that can accommodate foreign addresses.

A second option, Free File Fillable Forms, the electronic version of IRS paper forms, has no income limit and is best suited to people who are comfortable preparing their own tax return. 

Both the e-file and Free File electronic filing options are available until Oct. 16, 2017, for anyone filing a 2016 return. Check out the e-file link on IRS.gov for details on the various electronic filing options. Free File is not available to nonresident aliens required to file Form 1040NR.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN?

Posted by Admin Posted on June 12 2017

ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN

 

With summer headed toward its inevitable close, you may be tempted to splurge on a pricey “last hurrah” trip. Or perhaps you’d like to buy a brand new convertible to feel the warm breeze in your hair. Whatever the temptation may be, if you’ve pondered dipping into your 401(k) account for the money, make sure you’re aware of the consequences before you take out the loan.

Pros and cons

Many 401(k) plans allow participants to borrow as much as 50% of their vested account balances, up to $50,000. These loans are attractive because:

They’re easy to get (no income or credit score requirements),

There’s minimal paperwork,

Interest rates are low, and

You pay interest back into your 401(k) rather than to a bank.

Yet, despite their appeal, 401(k) loans present significant risks. Although you pay the interest to yourself, you lose the benefits of tax-deferred compounding on the money you borrow.

You may have to reduce or eliminate 401(k) contributions during the loan term, either because you can’t afford to contribute or because your plan prohibits contributions while a loan is outstanding. Either way, you lose any future earnings and employer matches you would have enjoyed on those contributions.

Loans, unless used for a personal residence, must be repaid within five years. Generally, the loan terms must include level amortization, which consists of principal and interest, and payments must be made no less frequently than quarterly.

Additionally, if you’re laid off, you’ll have to pay the outstanding balance quickly — typically within 30 to 90 days. Otherwise, the amount you owe will be treated as a distribution subject to income taxes and, if you’re under age 59½, a 10% early withdrawal penalty.

Hardship withdrawals

If you need the money for emergency purposes, rather than recreational ones, determine whether your plan offers a hardship withdrawal. Some plans allow these to pay certain expenses related to medical care, college, funerals and home ownership — such as first-time home purchase costs and expenses necessary to avoid eviction or mortgage foreclosure.

Even if your plan allows such withdrawals, you may have to show that you’ve exhausted all other resources. Also, the amounts you withdraw will be subject to income taxes and, except for certain medical expenses or if you’re over age 59½, a 10% early withdrawal penalty.

Like plan loans, hardship withdrawals are costly. In addition to owing taxes and possibly penalties, you lose future tax-deferred earnings on the withdrawn amounts. But, unlike a loan, hardship withdrawals need not be paid back. And you won’t risk any unpleasant tax surprises should you lose your job.

The right move

Generally, you should borrow or take hardship withdrawals from a 401(k) only in emergencies or when no other financing options exist (and your job is secure). For help deciding whether such a loan would be right for you, please call us.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- HOW TO ASSESS THE IMPACT OF A CHILD'S INVESTMENT INCOME

Posted by Admin Posted on June 12 2017

child investment income

 

When they’re old enough to understand the concepts, some children start investing in the markets. If you’re helping a child learn the risks and benefits of investments, be sure you learn about the tax impact first.

Potential danger

For the 2016 tax year, if a child’s interest, dividends and other unearned income total more than $2,100, part of that income is taxed based on the parent’s tax rate. This is a critical point because, as joint filers, many married couples’ tax rate is much higher than the rate at which the child would be taxed.

Generally, a child’s $1,050 standard deduction for unearned income eliminates liability on the first half of that $2,100. Then, unearned income between $1,050 and $2,100 is taxed at the child’s lower rate.

But it’s here that potential danger sets in. A child’s unearned income exceeding $2,100 may be taxed at the parent’s higher tax rate if the child is under age 19 or a full-time student age 19–23, but not if the child is over age 17 and has earned income exceeding half of his support. (Other stipulations may apply.)

Simplified approach

In many cases, parents take a simplified approach to their child’s investment income. They choose to include their son’s or daughter’s investment income on their own return rather than have him or her file a return of their own.

Basically, if a child’s interest and dividend income (including capital gains distributions) total more than $1,500 and less than $10,500, parents may make this election. But a variety of other requirements apply. For example, the unearned income in question must come from only interest and dividends.

Many lessons

Investing can teach kids about the time value of money, the importance of patience, and the rise and fall of business success. But it can also deliver a harsh lesson to parents who aren’t fully prepared for the tax impact. We can help you determine how your child’s investment activities apply to your specific situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Interest Rates Remain the Same for the Third Quarter of 2017

Posted by Admin Posted on June 12 2017

Interest Rates Remain the Same for the Third Quarter of 2017

 

The Internal Revenue Service announced that interest rates will remain the same for the calendar quarter beginning July 1, 2017.  The rates will be:

four (4) percent for overpayments (three (3) percent in the case of a corporation);

1 and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000;

four (4) percent for underpayments; and

six (6) percent for large corporate underpayments. 

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. 

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during April 2017 to take effect May 1, 2017, based on daily compounding.

Revenue Ruling 2017-13, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2017-26, dated June 26, 2017.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

Posted by Admin Posted on June 08 2017

JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

 

Preserving and managing family wealth requires addressing a number of major issues. These include saving for your children’s education and funding your own retirement. Juggling these competing demands is no trick. Rather, it requires a carefully devised and maintained family wealth management plan.

Start with the basics

First, a good estate plan can help ensure that, in the event of your death, your children will be taken care of and, if your estate is large, that they won’t lose a substantial portion of their inheritances to estate taxes. It can also guarantee that your assets will be passed along to your heirs according to your wishes.

Second, life insurance is essential. The right coverage can provide the liquidity needed to repay debts, support your children and others who depend on you financially, and pay estate taxes.

Prepare for the challenge

Most families face two long-term wealth management challenges: funding retirement and paying for college education. While both issues can be daunting, don’t sacrifice saving for your own retirement to finance your child’s education. Scholarships, grants, loans and work-study may help pay for college — but only you can fund your retirement.

Uncle Sam has provided several education incentives that are worth checking out, including tax credits and deductions for qualifying expenses and tax-advantaged savings opportunities such as 529 plans and Education Savings Accounts (ESAs). Because of income limits and phaseouts, many higher-income families won’t benefit from some of these tax breaks. But, your children (or your parents, in the case of contributing to an ESA) may be able to take advantage of them.

Give assets wisely

Giving money, investments or other assets to your children or other family members can save future income tax and be a sound estate planning strategy as well. You can currently give up to $14,000 per year per individual ($28,000 if married) without incurring gift tax or using your lifetime gift tax exemption. Depending on the number of children and grandchildren you have, and how many years you continue this gifting program, it can really add up.

By gifting assets that produce income or that you expect to appreciate, you not only remove assets from your taxable estate, but also shift income and future appreciation to people who may be in lower tax brackets.

Also consider using trusts to facilitate your gifting plan. The benefit of trusts is that they can ensure funds are used in the manner you intended and can protect the assets from your loved ones’ creditors.

Overcome the complexities

Creating a comprehensive plan for family wealth management and following through with it may not be simple — but you owe it to yourself and your family. We can help you overcome the complexities and manage your tax burden.

Sidebar: Charitable giving’s place in family wealth management

Do charitable gifts have a place in family wealth management? Absolutely. Properly made gifts can avoid gift and estate taxes, while possibly qualifying for an income tax deduction. Consider a charitable trust that allows you to give income-producing assets to charity, but keep the income for life — or for the charity to receive the earnings and the assets to later pass to your heirs. These are just two examples; there are more ways to use trusts to accomplish your charitable goals.

NEED A DO-OVER? AMEND YOUR TAX RETURN

Like many taxpayers, you probably feel a sense of relief after filing your tax return. But that feeling can change if, soon after, you realize you’ve overlooked a key detail or received additional information that should have been considered. In such instances, you may want (or need) to amend your return.

Typically, an amended return — Form 1040X, to be exact — must be filed within three years from the date you filed the original tax return or within two years of the date the applicable tax was paid (whichever is later). Your choice of timing should depend on whether you expect a refund or a bill.

If claiming an additional refund, you should typically wait until you’ve received your original refund. Then cash or deposit the first refund check while waiting for the second. If you owe additional dollars, file the amended return and pay the tax immediately to minimize interest and penalties.

Bear in mind that, as of this writing, the IRS doesn’t offer amended returns via e-file. You can, however, track your amended return electronically. The IRS now offers an automated status-tracking tool called “Where’s My Amended Return?” at https://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

2017 Standard Mileage Rates for Business, Medical and Moving Announced

Posted by Admin Posted on June 08 2017

2017 Standard Mileage Rates for Business, Medical and Moving Announced

 

The Internal Revenue Service issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

53.5 cents per mile for business miles driven, down from 54 cents for 2016

17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016

14 cents per mile driven in service of charitable organizations

The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

These and other requirements are described in Rev. Proc. 2010-51. Notice 2016-79, posted today on IRS.gov, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

During a divorce, what are the legal issues that must be handled?

Posted by Admin Posted on June 08 2017

During a divorce, what are the legal issues that must be handled

 

Make an agreement with your spouse to plan for the legal issues that will be dealt with in the future, such as division of property, alimony or support payments and child custody. The amount of time and money that will be spent trying to reach a legal solution will be lessened dramatically if this can be done, either with the help of lawyers or court.

The following are general tips to face the legal aspects of divorce:

If there are important issues with regards to child custody, alimony or assets, find your own attorney.

Use referrals from other professionals, trusted friends or the American Academy of Matrimonial Lawyers (www.aaml.org) to find a good matrimonial lawyer.

Verify that the agreement of divorce approaches all topics such as insurance coverage, life health and auto.

On IRA accounts, life insurance policies, pension plans, 401(k) plans, and other retirement accounts make sure to modify the beneficiaries.

Update your will.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Which banking fees should I watch for with a new bank account?

Posted by Admin Posted on June 07 2017

Which banking fees should I watch for with a new bank account?

 

Keep in mind that banks are always required to notify you of the fees for their accounts. The best account to choose is usually the one with the lowest fees, regardless of the interest rate.

Keep an eye out for potential extra charges when shopping for checking accounts. Ask about monthly fees, check processing fees, and ATM fees. Also be wary of cost-free checking accounts, as the bank may charge you if your balance drops below a certain amount. Also, the charges for printing new checks can often be much higher at your bank than through an outside printing provider.

In this day and age, it doesn't really benefit you to put money into an old fashioned "passbook" savings account. Often monthly account fees overshadow the small amount of interest you will earn. Instead, put your money into a checking account. If it is a larger sum, look into a money market account. In this type of account you will earn more interest than in a savings account, but watch out for additional charges if your balance drops too low.

▼ What are the different types of bank accounts I can choose from?

CHECKING ACCOUNTS

Checking accounts provide you with quick, convenient access to your funds. You are able to make deposits as often as you wish, and most banks provide you with an ATM card to access your funds, or to charge debits at stores. Of course, you can also use the conventional method of writing checks.

Some checking accounts pay interest. These are called negotiable order of withdrawal (NOW) accounts. The more commonly used type, a demand deposit account, does not pay interest.

There are several fees that are associated with checking accounts, other than the check printing fees. These will vary depending on the bank you choose. Some will charge a monthly maintenance fee regardless of your balance, others will charge a monthly fee if your balance drops below a certain point. Further, some institutions charge you based on the transactions you make, such as each ATM withdrawal, or each check you write.

MONEY MARKET DEPOSIT ACCOUNTS (MMDA)

An MMDA is basically an account that accumulates interest. You can also write checks from it. The rate of interest is usually higher than that of checking or savings accounts. However, they require a higher minimum balance in order to earn that interest. The higher your balance becomes, the higher your interest rate may rise.

However, it is less convenient to withdraw money from an MMDA than it is from a checking account. You are limited to six transfers from the account a month, and only three of these can be through writing a check. Also, there are usually transaction fees associated with these accounts.

SAVINGS ACCOUNTS

You may make withdrawals from savings accounts, but there is less flexibility than with a checking account. Like an MMDA, the number of withdrawals or transfers may be limited.

There are a few different types of savings accounts. The two most common are passbook and statement. Passbook accounts involve a record book that tracks all deposits and withdrawals and must be presented upon making these transactions. With a statement savings account, you are mailed a statement showing all withdrawals and deposits.

Minimum balance fees may also be charged on savings accounts.

CREDIT UNION ACCOUNTS

These accounts are similar to those of banks, but with a different title. In a credit union, you would have a share draft account (a checking account), a share account (savings account), or a share certificate account (certificate of deposit account).

The great thing about credit unions is that they usually charge less for banking services than banks do. If you have access to one, use it!

CERTIFICATES OF DEPOSIT (CD)

CDs are time deposits. They offer a guaranteed rate of interest for a specified term which can be as short as a few days or as long as several years.

When you pick the term you generally can't withdraw your money until the term expires. In some cases the bank will let you withdraw the interest you have earned on the CD. Because CDs are for a set amount of time, the rate of return is usually higher - and the longer the term, the higher the annual percentage yield.

A penalty can be issued if you withdraw your funds before the maturity of your term. Sometimes the penalty can be quite high, eating into your interest earned as well as your principal investment.

Your bank will notify you before your CD matures, but often CDs renew automatically. You should keep track of your maturity date if you would like to take out your funds before the CD rolls over into a new term.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

Electronic Payment of User Fees Starts June 15; Replaces Paying by Check

Posted by Admin Posted on June 07 2017

Electronic Payment of User Fees Starts June 15; Replaces Paying by Check

 

Beginning June 15, taxpayers requesting letter rulings, closing agreements and certain other rulings from the Internal Revenue Service will need to make user fee payments electronically using the federal government’s Pay.gov system.

Pay.gov allows people to pay for a variety of government services online using a credit card, debit card or via direct debit or electronic funds withdrawal from a checking or savings account. In the past, ruling requesters could only make required user fee payments by check or money order. During a two-month transition period, June 15 to Aug. 15, requesters can choose to make user fee payments either through Pay.gov or by check or money order. After Aug. 15, 2017, Pay.gov will become the only permissible payment method.

Rulings described in Revenue Procedure 2017-1 and sent to the Docket, Records and User Fee Branch of the Legal Processing Division of the Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DRU) are affected by this change. These include private letter rulings, closing agreements, and rulings using Form 1128, 2553, 3115 or 8716. Determination letters are not affected because they are sent to other offices as described in the revenue procedure.

A letter ruling is a written determination issued to a taxpayer by IRS Chief Counsel in response to the taxpayer’s written inquiry, submitted prior to the filing of returns or reports required under federal law. In general, it concerns the requester's status for tax purposes or the tax effects of its acts or transactions. Letter rulings and other similar ruling requests interpret the tax laws and apply them to the taxpayer’s specific set of facts. User fees range from $200 to $28,300, depending upon the type of ruling being sought.

Pay.gov is used to accept payments only. The original, signed ruling request and supporting materials must still be submitted by mail or hand delivery to the IRS.

To submit a user fee, visit www.pay.gov and use the IRS Chief Counsel User Fees (or Supplemental User Fees) for Form 1128, Form 2553, Form 3115, Form 8716, Private Letter Rulings and Closing Agreements form. This form can be found by entering “IRS Chief Counsel User Fees” in the “Search the Forms” box or by clicking on the “Agency List” link under “What Federal Agencies Can I Pay?” and choosing Internal Revenue Service.

Once payment is made, print a copy of the completed form and the receipt and include these with the  letter ruling request. Then submit the complete package by mail or hand delivery: 

Mail to:
Internal Revenue Service
CC:PA:LPD:DRU
P.O. Box 7604
Ben Franklin Station
Washington, DC  20044;

or

Hand deliver, or if using a private courier service, to:

Internal Revenue Service
CC:PA:LPD:DRU
1111 Constitution Avenue, NW
Room 5336
Washington, DC  20224

In addition, for the fastest processing, please Efax a copy of the pay.gov receipt, the completed form and the ruling request to this eFax line, 877-773-4950.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

SUMMER CAMP COSTS MAY BRIGHTEN YOUR TAX RETURN

Posted by Admin Posted on June 06 2017

SUMMER CAMP COSTS MAY BRIGHTEN YOUR TAX RETURN

 

Day camp is a qualified expense under the child and dependent care credit. This tax break is worth 20% of qualifying expenses, subject to a cap — and could be worth even more if your adjusted gross income is less than $43,000. For 2016, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more.

Be aware, however, that overnight camp costs don’t qualify for the credit, nor do expenses related to summer school tutoring. In addition, certain types of child care are ineligible. These include care provided by a spouse and care provided by a child who’s under age 19 at the end of the year.

A variety of additional rules may apply. For example, eligible costs for care must be work-related. In other words, parents need to pay for the care so that they can work (or look for work). If you think you might qualify for the child and dependent care credit, please contact us. We can help you determine whether you’re eligible and then properly claim this potentially valuable tax break.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What can I do to resolve a consumer complaint?

Posted by Admin Posted on June 06 2017

What Can I do to Resolve a Consumer Complaint

 

You should first approach the seller of the item. Then, get in touch with the relevant consumer agency. If neither of the previous provides adequate results, a lawsuit can be filed or you may use arbitration.

Approach the Seller

1- Compile all necessary evidence such as canceled checks, receipt, photographs showing the issue, a warranty, bill of sale or contract.

2- Determine your goal. Would you like the product replaced? Would you like a refund? Are you just looking for an apology?

3- Schedule a meeting with the manager, customer service representative or other appropriate person by calling the store or service provider. In this meeting with the individual, describe as clearly as possible the nature of the issue and what your goal is. If you can only speak by phone, write a letter as follow-up and keep detailed notes of the dates and with whom you spoke with. It is important to note that if there is a valid warranty for the product, it is best to follow-up with the manufacturer and not the merchant.

4- Take the issue to a higher level, if this doesn't find a solution. This could be the corporate president or supervisor. At this point, you should put your complaint in writing if you have yet to do so. This letter should detail your name, phone numbers, address, and account number (if applicable). Include the date and place of purchase as well as the model and serial number if a product is involved. Concisely describe the issue at hand and the process you have gone through so far to reach a solution. Lastly, you should include what outcome you want and state a deadline for this outcome. Keep a copy of the letter for yourself and include relevant copies of documents. Make sure you keep the originals and retain copies of any correspondence you receive from the company.

Get in touch with an agency

If your desired goal has yet to be reached, you will want to look in the phone book or online for a consumer complaint agency, such as the county, city or state consumer protection office or the Better Business Bureau.

Another option is to go with the trade association method. There are industry trade associations that will offer to aid in mediating issues with regards to their members.

You may want to get in touch with the appropriate state-banking regulator if your issue deals with a bank. If an insurer is involved, you will want to get in touch with the state insurance regulator, for a securities problem contact the securities regulator or for utilities problems contact the public utilities commission.

Call the state-licensing department if you the issue deals with a state-licensed trade, such as a plumber.

Research the lemon laws of your state, unless you reside in Arkansas or South Dakota, by getting in touch with your state consumer protections agency in the event that you purchased a bad used car.

Get in contact with your area postal inspector, whose information can be located in the U.S. government section of the telephone book, for issues that pertain to mail order or mail fraud.

Look into finding a local television news program hotline for resolving consumer complaints.

Filing a lawsuit

When there are no more options, you will want to file a court case in either small claims court, if the amount is small (usually less than $5000) or if not, a regular lawsuit.

More than likely speaking with an attorney and having them draft a letter to the merchant or service provider giving the details about the lawsuit will resolve the issue.

You probably won't need to hire a lawyer if a small claims case is involved. If the case is bigger than small claims, you will want to hire a lawyer.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHAT CAN I DO TO AVOID OVERPAYING FOR A FUNERAL OF A MEMBER OF MY FAMILY?

Posted by Admin Posted on June 06 2017

AVOID OVERPAYING FOR A FUNERAL OF A MEMBER OF MY FAMILY

 

Planning ahead is the best way to avoid overpaying for a family member's funeral. You should know about the Federal Rule or the regulation of the Federal Trade Commission (FTC) dealing with practices of the funeral industry. It provides that:

You must be given, over the phone, price and other relevant information by the funeral provider to answer your questions.

You must be given 1) a disclosure of important legal rights, 2) a general price list, and 3) information about caskets for cremation, embalming and required purchases by the funeral provider.

You must be given, in writing, any service fees for the payment of goods or services such as flowers, obituary notices, and pallbearers, on your behalf by the funeral provider. Some funeral providers add a service fee to the cost, while other charge you only the cost of the item. You must also be given any information from the funeral provider about refunds, discounts or rebates from the supplier.

You must be given by the funeral provider, in writing, information regarding your right to purchase and what is available to you - an unfinished wood box, a type of casket, or an alternative for direct cremation.

In getting the products and services that you do want, you are not obligated to buy unwanted goods or services or pay any additional fees. You only need to pay for the goods and services you selected or that the state law requires in addition to the fee for the services of the funeral director and staff.

You must be given an itemized list of the total cost of the funeral goods and services selected by you. It must inform you of any cemetery, legal, or crematory requirements that you must meet to buy any funeral goods or services.

You are not allowed to be told that a certain funeral item or service can preserve the deceased's body for an indefinite time in the grave or claim that funeral goods (caskets or vaults) will not allow dirt, water, or other gravesite substances to enter.

Contact your federal, state or local consumer protection agencies, the Conference of Funeral Examining Boards (www.theconferenceonline.org), or the Funeral Service Consumer Assistance Program (FSCAP) (www.funeralservicefoundation.org) if you are having a funeral problem that cannot be resolved with the funeral director.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What are the possible implications if I co-sign for a loan?

Posted by Admin Posted on June 02 2017

What are the possible implications if I co-sign for a loan?

 

The co-signer enters an agreement to be responsible for the repayment of the loan if the borrower defaults. A lender will usually not go after the co-signer until the borrower defaults, but they can lawfully go after the co-signer at any time.

It has been stated by finance companies that in the case of a default most co-signers actually pay off the loans that they have co-signed for including the legal and late fees that end up being tacked on. Clearly this can be a large financial burden, and it can also reflect negatively on the co-signer's credit.

If you do agree to co-sign on a loan for someone, you can request that the financial institution agrees that it will refrain from collecting from you unless the primary borrower defaults. Also, make sure that your liability is limited to the unpaid principal and not any late or legal fees.

Upon co-signing you may have to brandish financial documents to the lender just as the primary borrower would have to.

Co-signing for a loan gives you the same legal responsibility for the repayment of the debt as the borrower. If there are late payments, this will affect your credit as well.

If you are asked to co-sign for someone, you may want to provide another option and suggest that they get a secured credit card. This way, they can build up their own credit history and not open themselves up to the possibility of taking on a debt too large, placing themselves, and you, in financial danger.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

RENTING OUT YOUR VACATION HOME? ANTICIPATE THE TAX IMPACT

Posted by Admin Posted on June 02 2017

Tax Impact Renting Out Vacation Home

 

When buying a vacation home, the primary objective is usually to provide a place for many years of happy memories. But you might also view the property as an income-producing investment and choose to rent it out when you’re not using it. Let’s take a look at how the IRS generally treats income and expenses associated with a vacation home.

Mostly personal use

You can generally deduct interest up to $1 million in combined acquisition debt on your main residence and a second residence, such as a vacation home. In addition, you can also deduct property taxes on any number of residences.

If you (or your immediate family) use the home for more than 14 days and rent it out for less than 15 days during the year, the IRS will consider the property a “pure” personal residence, and you don’t have to report the rental income. But any expenses associated with the rental — such as advertising or cleaning — aren’t deductible.

More rental use

If you rent out the home for more than 14 days and you (or your immediate family) occupy the home for more than 14 days or 10% of the days you rent the property — whichever is greater — the IRS will still classify the home as a personal residence (in other words, vacation home), but you will have to report the rental income.

In this situation, you can deduct the personal portion of mortgage interest, property taxes and casualty losses as itemized deductions. In addition, the rental portion of your expenses is deductible up to the amount of rental income. If your rental expenses are greater than your rental income, you may not deduct the loss against other income.

If you (or your immediate family) use the vacation home for 14 days or less, or under 10% of the days you rent out the property, whichever is greater, the IRS will classify the home as a rental property. In this instance, while the personal portion of mortgage interest isn’t deductible, you may report as an itemized deduction the personal portion of property taxes. You must report the rental income and may deduct all rental expenses, including depreciation, subject to the passive activity loss rules.

Brief examination

This has been just a brief examination of some of the tax issues related to a vacation home. Please contact our firm for a comprehensive assessment of your situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

THE TOP 6 BIGGEST MISTAKES THAT INVESTORS MAKE

Posted by Admin Posted on June 01 2017

THE TOP 6 BIGGEST MISTAKES THAT INVESTORS MAKE

 

You should think twice before it is too late for you and your money!

6- Starting Too Late

The time to start is now. The power of compound interest is astounding - the earlier you take advantage the more it will work for you. If you start out earlier, you can start with less, invest less and still end up making more than if you started out later.

5- Paying High Fees

Broker's commissions can negate all of the hard-earned interest that you have accumulated. Don't let this happen to you - pay attention to what you are being charged. The more you pay, the less you keep.

 4- Investing Emotionally

Successful investing consists of planning and reason. Once emotion gets involved, it can ruin all of the planning and reason that you had used to construct your investment strategy. Keep using the strategies that have consistently made people rich over the years, don't look to follow the new and exciting strategies that haven't yet stood the test of time.

3- Using a One-Size-Fits-All Plan

Your individual needs should trump any ideas of blindly following any plan. Keep an account of how much risk you are willing to take, and what your time frame is. Your portfolio should match your needs.

2- Not Taking Taxes Into Consideration

The net profits from stocks are taxable as capital gains. Being in a tax-deferred investment account will stop this from eating away at your savings.

1- Overly Risky Investing

Being extremely risky can pay off big time, but it can also leave you with a diminished nest egg it you gamble wrong. There are many great investments that offer decent returns without putting your funds in excessive danger.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHEN CONSIDERING A LOAN REQUEST, WHAT DO BANKS LOOK FOR?

Posted by Admin Posted on May 31 2017

WHEN CONSIDERING A LOAN REQUEST, WHAT DO BANKS LOOK FOR?

 

The bank official who reviews the loan request is focused on repayment. Most loan officers request a copy of your business credit report to determine your ability to repay.

The lending officer will consider the following issues while using the information you provided and the credit report:

Have you invested at least 25% or 50% of savings or personal equity into the business for the loan you are requesting? (Keep in mind that 100% of your business will not be financed by an investor.)

Do your work history, your credit report and letters of recommendation show a healthy record of credit worthiness? This is a key factor.

Do you have the training and experience necessary to operate a successful business?

Do your loan proposal and business plan document your knowledge of and dedication to the success of the business?

Is the cash flow of the business sufficient to make the monthly payments on the requested loan?

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- Is more insurance necessary for married couples?

Posted by Admin Posted on May 31 2017

s Is more insurance necessary for married couples?

 

[TEXT VERSION]

In the case of death, life insurance will provide a form of income for your dependents, children or whoever is your beneficiary. Because of this, married couples usually require more life insurance than singles.

Having someone dependent on your income will determine if you need to have life insurance. If someone such as a child, parent, spouse or other individual is dependent on your income, you should have life insurance. The following are situations where life insurance is necessary:

Single parents or families with young children or other dependents. The younger your children, the more insurance is necessary. Insurance should be in proportion to the amount earned. If both spouses are working, they should both be insured. If both earners cannot afford to be insured, the primary wage earner should be the first to be insured and the secondary will follow. To fill the insurance gap, a less expensive term policy may be used. Insurance should be bought to cover the absence of services such as childcare, bookkeeping, housekeeping, which are provided by the spouse that works within the home. The insurance that covers the non-wage earner is secondary to the insurance that covers the wage earner's life, if funds are scarce.

Adults that have no children or other dependents. You will need less insurance than people in the previous situation if your spouse can live comfortably without income. However, some form of life insurance is still necessary. You will want at least enough to cover burial expenses, to pay off any debts you may have acquired, and to provide an easy transition for the surviving spouse. You may want to buy more insurance if you think your spouse would go through financial hardship without your income or if your savings aren't adequate. This depends on your salary level as well as the amount of your spouse's, the amount of savings you have and the amount of debt incurred.

Single adults without dependents. Unless you would like to use insurance for the purposes of estate planning, you will only need insurance to cover expenses for burial and debts.

Children. Typically, children only need life insurance to cover burial expenses and medical debts. An insurance policy could also be used as a long-term savings instrument, in some instances.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Which type of life insurance fits me best?

Posted by Admin Posted on May 30 2017

Which type of life insurance fits me best?

 

There are 7 major types of life insurance:

Term

Term insurance is best described as a policy for which you pay over a specific amount of time. In the event that you die within that period of time, your beneficiaries will receive a payoff.

People that are under the age of 40 will find this package less costly than a whole life policy. These policies generally do not build in cash value. However, they can convert over to a whole life policy without a mandatory physical.

Renewable

The policy which is bought most frequently is the Renewable Term Policy. This policy renews every year without you having to do anything, and there is no need to input any new information or take physicals. This can continue every year until you are in your 70s. The policy will increase incrementally every year, along with your age.

Re-entry

With this life insurance policy, you will have to periodically take physicals for the company to judge your rate of risk. If you don't, you will be subject to paying an extra premium.

Level

In the Level Term policies, you will be locked into a given rate of premium and you will stay there during a certain period (although not necessarily during the entire period of coverage).

Decreasing

A Decreasing policy is one which decreases in face value with time while the premium remains the same.

Whole Life

Whole Life is the most traditional policy given; this has a cash-value build up, sometimes offers dividends, and provides death benefits. This is not a policy that needs to be renewed constantly, as long as the payments are made, the policy will continue until death.

Universal Life

This policy is similar to the whole life policy. However, it offers more flexibility in many ways; you will have different options in cash value growth and the payment of premiums.

Variable Universal

Variable Universal policies will give you the option to choose the investments for your cash value. This is more risky, but simultaneously gives you more control over where this money is invested.

Variable Whole Life

This is the same as the previous in regards to control over the investments that are made. The difference between these two is the same as the difference between Whole Life and Variable.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What is a Bond?

Posted by Admin Posted on May 30 2017

WHAT IS A BOND?

 

A bond is simply a certificate which the borrower promises to repay within a certain time period. For the privilege of using the money, the government entity, municipality or company will agree to pay a certain amount of interest per year, usually an exact percentage of the amount loaned.

Bondholders do not own any part of the companies they lend to - they do not receive the benefits of dividends or the privilege to vote on company matters as stockholders would, and the success of the investment isn't related to that company's record in the market either. A bondholder is entitled to receive the amount that was agreed upon, as well as the principal of the bond.

Corporate bonds are generally issued in the denominations of $1000. This price is referred to as the face value of the bond - this is the amount that is agreed to be paid by the company at the time that it matures. Bond prices can differ from their face values, because the prices of the bonds are correlated to the current market rates. When these rates change, the value of the bond will as well. If one were to sell the bond before the time that it matures, the bond may be worth less than was initially paid. A callable bond is one that the issuer may choose to buy back at full face value before the maturity date.

There are three major features of bonds:

Issuing Organization

Maturity

Quality

Short Term Bonds mature in two years or less and long term bonds mature in ten or more. Intermediate is between two and ten years.

 

▼ What is bond quality?

Bond quality is the rating of the creditworthiness of an issuing organization. There are organizations that specialize in judging bond quality. The higher the rating, the lower the risk of the investment. The rating system uses letters A through D. The only bond considered to be risk free is the U.S. Treasury Bond.

▼ How does the bond rating system work?

Highest Quality

Moody's

Standard & Poor's

High Quality

Aaa

AAA

Good Quality

Aa

AA

Medium Quality

Baa

BBB

Speculative Elements

Ba

BB

Speculative

B

B

More Speculative

Caa

CCC

Highly Speculative

Ca

CC

In Default

-

D

Not Rated

N

N

▼ How do interest rates affect bond prices?

Generally bond prices and interest rates have an inverse relationship - as interest rates drop, bond prices rise and vice versa.

▼ How does maturity affect bond prices?

Bond prices are heavily influenced by maturity - the longer the maturity, the greater the change in price for a change in interest rates. If interest rates rise, it would make a larger difference in the 20 year bond, as opposed to a 10 year bond. Because of this, bond fund managers will attempt to change the fund's average maturity to anticipate changes in interest rates.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How do I create a successful strategy for passing on my family business?

Posted by Admin Posted on May 26 2017

How do I create a successful strategy for passing on my family business?

 

The family must do the following to attempt to have a worthwhile transition:

- Formulate a strategy focused on the family.

- Formulate a strategy focused on the business.

- Make a Succession Plan, which includes setting dates for retirement and the training for who will follow.

- Make an Estate Plan.

These are the four key points to a successful business transfer. They basically guarantee a transition for years to come within your family when implemented correctly.

WHAT IS A STRATEGY FOCUSED ON THE FAMILY?

The purpose of the family strategy is to keep a well-functioning business. The policies for the role of the family in relation to the company are set in this strategy. There may be policies for entering and exiting the workforce of the business. It should incorporate the basic guidelines as well as a mission statement that explains what is important to the family. The strategy needs to take into consideration who in the family would like to have significant roles in the business and who would like less responsibility.

WHAT IS A STRATEGY FOCUSED ON THE BUSINESS?

A strategy focused on the business permits each new member of the family to establish their own future for the company. To make sure that everyone has the same idea as to where the business is headed, there is a need to formulate goals. The strategy should concentrate on the future of the company at a particular date.

WHAT IS INVOLVED IN A SUCCESSION PLAN?

The purpose of the succession plan is to aid those who founded or are in control of the company through the transition. It should explain the details of how to know when the next generation is ready to take over and the process for that transition.

WHAT IS CONTAINED IN AN ESTATE PLAN?

The plan for the estate is vital for the company and family. In the end, without a strategy, there will be higher estate taxes than needed, which in turns gives less to the successors. This plan should be in accordance with the succession plan to ensure the transition of the business is done in the most tax effective way.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What should I take into account when I start investing?

Posted by Admin Posted on May 26 2017

What Should I Take Into Account When I Start Investing?

 

Risk vs. Return

The first step in the investment process is to figure out what sort of Return on Investment (ROI) that you are seeking and to determine what level of risk that you are willing to take.

The risk that you are willing to take and the size of the ROI that you receive are correlated. In order to take a higher risk, you must have a reasonable chance of a higher return. The size of the risk will be affected by many factors in the market, and it is recommended that you consult trusted professionals.

These professionals will have ideas and recommendations for your investment portfolios, but never invest more aggressively than you feel comfortable with.

 Asset Allocation

Asset Allocation is the selection of assets from across the asset classes: stocks, bonds, and mutual funds. This is a way to minimize risk. It ensures that if one of these groups takes a drastic downturn, you still have investments in the other sections and hopefully won't take large losses. It is recommended to allocate through at least 5 types of classes.

 Diversification

Diversification is similar to asset allocation, but within the asset class. For instance, diversification would be buying 15 or 20 different stocks, with the same purpose in mind as asset allocation, to minimize risk and to make sure that if something tanks, it doesn't take your entire portfolio down with it.

 Monitoring Progress

You can start by examining your trading records and ensuring that all of the trades went through at the prices that you instructed and with the correct commissions. Make sure to keep a good paper trail of all the transactions that occur in your portfolio just in case you ever need to contest anything.

Keep tabs on how your assets are performing. If they seem to be underperforming, you may want to change your investments to some that may be more lucrative. You may want to also check to make sure that the investments that you own are in line with your current investment strategy. Your strategy may change over time. Be sure to compare your investments to your current situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How should unmarried couples protect their estate and financial holdings?

Posted by Admin Posted on May 25 2017

UNMARRIED COUPLES PROTECT THEIR FINANCES

 

[TEXT VERSION]

Here are some important steps to take for couples that are unmarried:

Draft wills. The chances of the intentions being followed through with after a death are greater if both partners make wills. Without wills, the probability of the unmarried surviving partner having no rights is more likely.

Think about owning property together. This is a way to guarantee that property will pass to the other joint owner at the time of the other's death due to the right of survivorship.

Make a durable power of attorney. This will permit the partner to sign papers and checks and take care of other financial issues on his/her behalf should one become incapacitated.

Make a health care proxy. Also known as a medical power of attorney, this permits the partner to talk on your behalf to make medical decisions, should you become injured.

Have a living will. This lets your wishes regarding artificial feeding and other measures to prolong your life be known.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Midyear Tax Planning Ideas

Posted by Admin Posted on May 25 2017

Midyear Tax Planning Ideas

 

Tax planning is a year-round process, so now is a good time to think about the following:

Are you considering making a cash gift to a relative? If so, consider making the gift in conjunction with the overall revamping of your stocks and mutual funds held in taxable brokerage accounts to achieve better tax results. Don’t gift loser shares (currently worth less than you paid for them). Instead, sell these shares, recognize the capital loss on your tax return, and then gift the cash proceeds to a relative. However, do gift winner shares to lower tax bracket relatives (unless they are under age 24 and subject to the Kiddie Tax). The 2014 annual gift tax exclusion is $14,000.

Are you considering making a contribution to a favorite charity? The previous strategies will also work well for contributions to qualified charities. Sell loser shares, recognize the loss on your tax return, and then give the cash proceeds to the charity and claim the resulting charitable contribution (if you itemize). Donate winner shares to the charity and deduct the full current fair market value at the time of the gift (without being taxed on the capital gain). The tax-exempt organization can sell your donated shares without owing tax.

Are you self-employed? Consider employing your child in the business (but pay a reasonable wage for their age and work skills). This practice can shift income (which is not subject to the Kiddie Tax) to the child who is normally in a lower tax bracket, decrease payroll taxes, and enable the child to contribute to an IRA.

Is your estate plan current? If you already have an estate plan, it may need updating to reflect the current estate and gift tax rules. For 2014, the unified federal gift and estate tax exemption is a generous $5.34 million, and the rate is 40%. Furthermore, the impact of the Supreme Court’s Windsor decision and resulting IRS changes in the federal definition of marriage mean that legally married same-sex couples need to revise their estate plan. Plus, there may be nontax reasons to update your estate plan.

Please contact us to discuss any tax planning strategies you are interested in implementing.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IRD Issues When Inheriting Assets & Reviewing the Innocent Spouse Relief Rules

Posted by Admin Posted on May 25 2017

IRD ISSUES WHEN INHERITING

 

Once a relatively obscure concept, income in respect of a decedent (IRD) can create a surprisingly high tax bill for those who inherit certain types of property, such as IRAs or other retirement plans. Fortunately, there are ways to minimize or even eliminate the IRD tax bite.

How it works

Most inherited property is free from income taxes, but IRD assets are an exception. IRD is income a person was entitled to but hadn’t yet received at the time of his or her death. It includes:

Distributions from tax-deferred retirement accounts, such as 401(k)s and IRAs,

Deferred compensation benefits and stock option plans,

Unpaid bonuses, fees and commissions, and

Uncollected salaries, wages, and vacation and sick pay.

IRD isn’t reported on the deceased’s final income tax return, but it’s included in his or her taxable estate, which may generate estate tax liability if the deceased’s estate exceeds the $5.49 million (for 2017) estate tax exemption, less any gift tax exemption used during life. (Be aware that President Trump and congressional Republicans have proposed an estate tax repeal. It hasn’t been passed as of this writing, but check back with us for the latest information.)

Then it’s taxed — potentially a second time — as income to the beneficiaries who receive it. This income retains the character it would have had in the deceased’s hands. So, for example, income the deceased would have reported as long-term capital gains is taxed to the beneficiary as long-term capital gains.

What can be done

When IRD generates estate tax liability, the combination of estate and income taxes can devour an inheritance. The tax code alleviates this double taxation by allowing beneficiaries to claim an itemized deduction for estate taxes attributable to amounts reported as IRD. (The deduction isn’t subject to the 2% floor for miscellaneous itemized deductions.)

The estate tax attributable to IRD is equal to the difference between the actual estate tax paid by the estate and the estate tax that would have been payable if the IRD’s net value had been excluded from the estate.

Suppose, for instance, that you’re the beneficiary of an estate that includes a taxable IRA. If the estate tax is $150,000 with the retirement account and $100,000 without, the estate tax attributable to the IRD income is $50,000. But be careful, because any deductions in respect of a decedent must also be included when calculating the estate tax impact.

When multiple IRD assets and multiple beneficiaries are involved, complex calculations are necessary to properly allocate the income and deductions. Similarly, when a beneficiary receives IRD over a period of years — IRA distributions, for example — the deduction must be prorated based on the amounts distributed each year.

We can help

If you inherit property that could be considered IRD, please consult our firm for assistance in managing the tax consequences. With proper planning, you can keep the cost to a minimum.

REVIEWING THE INNOCENT SPOUSE RELIEF RULES

Married couples don’t always agree — and taxes are no exception. In certain cases, an “innocent” spouse can apply for relief from the responsibility of paying tax, interest and penalties arising from a spouse’s (or former spouse’s) improperly handled tax return. Although it isn’t easy to qualify, potentially affected taxpayers should review the rules.

Applicants may qualify for various forms of relief if they can meet the applicable IRS conditions. One factor that’s considered is whether the applicant received any significant direct or indirect benefit from the tax understatement. For instance, an applicant’s case could be weakened if he or she had used unreported income to pay extraordinary household expenses.

The IRS will also look at the distinctive aspects of the case. The fact that a spouse applying for relief has already divorced his or her partner is significant. Whether the applicant was abused physically or mentally will also play a role, as will whether he or she was in poor mental or physical health when the return(s) in question was signed. In addition, the IRS will consider whether the applicant would experience economic hardship without relief from a significant tax debt.

Generally, an applicant must request innocent spouse relief no later than two years after the date the IRS first attempted to collect the tax. But other forms of relief may still be available thereafter. Please contact our firm for more information.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

IRS Accepting Applications for 2018 Low Income Taxpayer Clinic Grants

Posted by Admin Posted on May 24 2017

IRS Accepting Applications for 2018 Low Income Taxpayer Clinic Grants

 

The Internal Revenue Service today announced that the application period for Low Income Taxpayer Clinic (LITC) grants for calendar year 2018 will run from May 1 to June 20, 2017.

The LITC program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, led by the National Taxpayer Advocate, Nina E. Olson. The LITC program awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or maintain an LITC.  An LITC must provide services for free or for no more than a nominal fee.

The mission of LITCs is to ensure the fairness and integrity of the tax system for taxpayers who are low income or speak English as a second language:

By providing pro bono representation on their behalf in tax disputes with the IRS;

By educating them about their rights and responsibilities as taxpayers; and

By identifying and advocating for issues that impact low-income taxpayers.

LITC grants come from appropriated funds.  The clinics, their employees and their volunteers operate independently from the IRS. Examples of qualifying organizations include:

Clinical programs at accredited law, business or accounting schools whose students represent low-income taxpayers in tax disputes with the IRS; and

Organizations exempt from tax under Internal Revenue Code Section 501(a) whose employees and volunteers represent low income taxpayers in tax disputes with the IRS.

The IRS welcomes all applications and will ensure that each application receives full consideration. The IRS is committed to achieving maximum access to representation for low income taxpayers under the terms of the LITC program. Thus, in awarding LITC grants for calendar year 2018, the IRS will continue to work toward the following program goals:

Ensuring that each state (plus the District of Columbia and Puerto Rico) is served by at least one clinic;

Expanding coverage in areas identified as underserved; and

Ensuring that grant recipients demonstrate they are serving geographic areas that have sizable populations eligible for and requiring LITC services.

Copies of the 2018 Grant Application Package and Guidelines, IRS Publication 3319, can be downloaded from IRS.gov or ordered by calling the IRS toll-free at 800-TAX-FORM (800-829-3676).

The IRS is authorized to award a multi-year grant not to exceed three years. For an organization not currently receiving a grant for 2017an organization that received a single-year grant for 2017, or an organization whose multi-year grant ends in 2017, the organization must submit the application electronically at www.grants.gov. For an organization currently receiving a grant for 2017 that is requesting funding for the second or third year of a multi-year grant, the organization must submit the funding request electronically at www.grantsolutions.gov. All organizations must use the funding number of TREAS-GRANTS-052018-001, and applications and funding requests must be submitted by June 20, 2017.

Questions about the LITC Program or grant application process can be addressed to the LITC Program Office at 202-317-4700 (not a toll-free call) or by email at LITCProgramOffice@irs.gov.

More information about LITCs and the work they do to represent and educate, as well as advocate on behalf of, low income and English as a second language taxpayers is available in the LITC Program Report, IRS Publication 5066.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

When buying a car, how can I get the "best buy"?

Posted by Admin Posted on May 24 2017

When buying a car how can I get the best buy

 

[TEXT VERSION]

You first need to decide on the type, size and options of the car you would like (such as manual, automatic windows, airbags).

You then need to decide what the car dealer has to pay for the car of your choice - the "invoice cost". The difference between the sticker price and the invoice price can be negotiated.

You can obtain this information two different ways. The best way is to look at an auto pricing service supplied by a consumer group or an auto magazine. For instance, Consumer Reports New Car Price Service (http://www.consumerreports.org/cro/car-prices-build-buy-service/index.htm), will give you details of the invoice price and the sticker price that can be adjusted for options or rebates as well as tell you how to use the data for negotiating. This is the best way because it gives you the most recent information.

Another way is to use pricing guides that can be found on the Internet. Two popular sites are Intellichoice (www.intellichoice.com) or Edmund's New Car Prices (www.edmunds.com). You may also be able to obtain these books at the library and they will give you an idea about the information that you need instead of exact data.

If you have a trade-in, you will want to find the value of that car too. You can use the N.A.D.A. Official Used Car Guide (check your local library or www.nada.org) to look up your used car.

Now it's time to begin negotiating with dealers. Because you know the invoice price, you can use that information to bargain for the lowest mark-up from the dealer's cost.

An amount like $300 to $500 above the dealer's cost is a sensible mark-up, unless the car you want to buy is either difficult to get or very popular.

Any attempts by the dealership to sell you rustproofing, undercoating, or other extras should be refused. You may want to invest in an extended warranty, depending on the model's repair history.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How to know it’s really the IRS calling or knocking on your door

Posted by Admin Posted on May 23 2017

How to know it's the IRS calling or knocking on your door

 

Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee.

The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail.

Note that the IRS does not:

- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.

- Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.

- Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If you owe taxes:

The IRS instructs taxpayers to make payments to the “United States Treasury.” The IRS provides specific guidelines on how you can make a tax payment at irs.gov/payments.

Here is what the IRS will do:

- If an IRS representative visits you, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. HSPD-12 is a government-wide standard for secure and reliable forms of identification for Federal employees and contractors. You have the right to see these credentials. 

Collection

IRS collection employees may call or come to a home or business unannounced to collect a tax debt. They will not demand that you make an immediate payment to a source other than the U.S. Treasury.

The IRS can assign certain cases to private debt collectors but only after giving the taxpayer and his or her representative, if one is appointed, written notice. Private collection agencies will not ask for payment on a prepaid debit card or gift card. Taxpayers can learn about the IRS payment options on IRS.gov/payments. Payment by check should be payable to the U.S. Treasury and sent directly to the IRS, not the private collection agency. 

Audits

IRS employees conducting audits may call taxpayers to set up appointments or to discuss items with the taxpayers, but not without having first attempted to notify them by mail. After mailing an official notification of an audit, an auditor/tax examiner may call to discuss items pertaining to the audit. 

Criminal Investigations

IRS criminal investigators may visit a taxpayer’s home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment. 

Beware of Impersonations

Scams take many shapes and forms, such as phone calls, letters and emails. Many IRS impersonators use threats to intimidate and bully people into paying a fabricated tax bill. They may even threaten to arrest or deport their would-be victim if the victim doesn’t comply.

Know Who to Contact

- Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.

- Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.

- Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Is more insurance necessary for married couples?

Posted by Admin Posted on May 23 2017

Is more insurance necessary for married couples?

 

In the case of death, life insurance will provide a form of income for your dependents, children or whoever is your beneficiary. Because of this, married couples usually require more life insurance than singles.

Having someone dependent on your income will determine if you need to have life insurance. If someone such as a child, parent, spouse or other individual is dependent on your income, you should have life insurance. The following are situations where life insurance is necessary:

Single parents or families with young children or other dependents. The younger your children, the more insurance is necessary. Insurance should be in proportion to the amount earned. If both spouses are working, they should both be insured. If both earners cannot afford to be insured, the primary wage earner should be the first to be insured and the secondary will follow. To fill the insurance gap, a less expensive term policy may be used. Insurance should be bought to cover the absence of services such as childcare, bookkeeping, housekeeping, which are provided by the spouse that works within the home. The insurance that covers the non-wage earner is secondary to the insurance that covers the wage earner's life, if funds are scarce.

Adults that have no children or other dependents, you will need less insurance than people in the previous situation if your spouse can live comfortably without income. However, some form of life insurance is still necessary. You will want at least enough to cover burial expenses, to pay off any debts you may have acquired, and to provide an easy transition for the surviving spouse. You may want to buy more insurance if you think your spouse would go through financial hardship without your income or if your savings aren't adequate. This depends on your salary level as well as the amount of your spouse's, the amount of savings you have and the amount of debt incurred.

Single adults without dependents. Unless you would like to use insurance for the purposes of estate planning, you will only need insurance to cover expenses for burial and debts.

Children. Typically, children only need life insurance to cover burial expenses and medical debts. An insurance policy could also be used as a long-term savings instrument, in some instances.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What do I need to include in a good loan proposal?

Posted by Admin Posted on May 22 2017

What do I need to include in a good loan proposal?

 

[TEXT VERSION]

The following main points should be contained in a good loan proposal:

GENERAL INFORMATION

Reason for the loan: the exact purpose of the loan and why it is necessary.

Amount needed: the specific amount needed to reach your goal.

Business name and address, names of officers and their social security numbers.

DESCRIPTION OF BUSINESS

Describe the type of business you have, its age, current business assets, and number of employees.

Structure of ownership: describe the legal structure of the company.

MANAGEMENT PROFILE

Prepare a short statement that is focused on each principal in your business; give details about education, background, accomplishments and skills.

MARKET INFORMATION

State clearly the products of your company as well as its markets. Name the competition and explain how you plan to compete in the market. Describe what the business will do to satisfy the needs of its customers.

FINANCIAL INFORMATION

Submit your own personal financial statements as well as those of the principal business owners.

Financial statements: the income statements and balance sheets for the past three years. If you have a new business, provide the projected balance sheet and income statement.

Specify the collateral that you are able and willing to give as security for the loan.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

How and when do I collect my annuity?

Posted by Admin Posted on May 22 2017

 

How and when do I collect my annuity?

There are a few choices that you have when choosing to collect your annuity. Some people opt for a lump sum, even though it negates one of the major features of the annuity: payments until death.

The amount of the monthly payments that you receive depends on:

The amount of money in your annuity contract

The life expectancy of the annuitant

The size of the minimum required payments (if any)

Whether the payments continue after death or not

There are various different settlement options. Be absolutely sure when you choose, because the decision will be final when you make it.

Fixed Amount. With a fixed amount option, you will choose a monthly amount that you will receive until your annuity runs out. There is a possibility that your money may run out before you pass on, and also the chance that you may die before your money runs out. In that case, your beneficiary will receive your payments.

Fixed Period. The company will pay you for a fixed amount of time. If you are waiting for a retirement payment from another investment, it may be a good idea to get this fixed money until you start to receive payment from another investment. Again, if you are to pass before the money is fully paid, the remainder will go to your beneficiary.

Lifetime Or Straight Life. This plan will continue to pay you money until you die. This is the safest option to ensure that you receive payment until the day you die. Conversely, if you die early, there will be no payments to the beneficiary.

Life With Period Certain. With this plan you will receive payments until death - and for a period afterwards, your beneficiary will receive payments too. The longer the period, the lower the monthly payment.

Installment. This guarantees that if you die before you have exhausted your funds, the rest will be distributed to the beneficiary.

Joint And Survivor. In this option the payments are made to the joint annuitants. In the event of one's passing, the other will continue to receive a lesser amount.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

New Members for Advisory Committee on Tax Exempt and Government Entities

Posted by Admin Posted on May 18 2017

New Members for Advisory Committee on Tax Exempt and Government Entities

 

The Internal Revenue Service announced today the appointment of three new members of the Advisory Committee on Tax Exempt and Government Entities (ACT). ACT presents reports and recommendations to IRS leadership at a June 7 public meeting.

The committee includes external stakeholders and representatives who deal with employee retirement plans; tax-exempt organizations; tax-exempt bonds; federal, state, local and Indian tribal governments.

New members will begin three-year terms and join seven returning members. ACT advises the IRS on operational policy and procedural improvements.

ACT was established under the Federal Advisory Committee Act to provide an organized public forum for discussion of relevant issues affecting the tax exempt and government entities communities. At the public meeting, three ACT project teams will present reports that include recommendations pertaining to the following areas:

Federal Insurance Contributions Act (FICA) Replacement Plans: Recommendations Regarding FICA Replacement Plan Requirements.

Future of the Advisory Committee on Tax Exempt and Government Entities: Recommendations Regarding Changes Made to the ACT.

Online Accounts: Recommendations Regarding Expansion of Online Accounts for Tax Exempt Entities.

The public meeting is scheduled to begin at 2 p.m. Eastern Time on June 7, at IRS headquarters. The address is 1111 Constitution Ave. NW, Washington, D.C. 20224. Reports presented will be available on IRS.gov.

Due to limited seating and security requirements, members of the public interested in attending the meeting should email their attendance request to tege.advisory@irs.gov by May 31. Attendees must have photo identification and are encouraged to arrive at least 30 minutes before the session begins. 

The three new ACT members are:

Michael Engle, Kansas City, Mo.

Michael has extensive experience working with exempt organizations and governmental entities on various tax issues including employment tax. He has direct experience working with non-profit hospitals and colleges and universities. He has written a number of technical articles and has been a presenter for conferences and webinars. He is a Certified Public Accountant and actively involved with the AICPA. He serves on the BKD, LLP non-profit committee and is the leader of their health care committee. He is involved with the AICPA and Missouri Society of CPAs.

Andrew Lipkin, New York, N.Y.

Andrew is an attorney and now Senior Tax Counsel for New York City and has management responsibility for other attorneys. He provides counsel to his employer, and is familiar with issues affecting federal, state and local governments.

Jean Swift, Mashantucket, Conn.

Jean is a tribal leader with diverse experience in business management, administration and establishing strategic partnerships. She is a CPA in Connecticut and a Certified Credit Union Financial Counselor. She is currently Treasurer of the first Mashantucket Pequot Tribal Council.

These three will serve on the committee with the following ACT members, who will continue on the committee through June 2018:

Susan Bernstein, Schulte Roth & Zabel LLP

Judith Boyette, Hanson Bridgett LLP

Natasha Cavanaugh, Bill & Melinda Gates Foundation

David Danenfelzer, Texas State Affordable Housing Corporation

Marcelino Gomez, Private Practice

William Johnson, First Southwest Asset Management

Cindy Lott, Columbia University’s School of Professional Studies

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Empleados por cuenta propia y sus obligaciones tributarias

Posted by Admin Posted on May 18 2017

Empleados por cuenta propia y sus obligaciones tributarias

 

Generalmente, usted es un empleado por cuenta propia si alguna de las siguientes situaciones le aplica:

         1- Usted ejerce un oficio u opera un negocio como empresario por cuenta propia (en inglés) o como un contratista independiente.

        2- Usted en un miembro de una sociedad colectiva (en inglés) que ejerce u opera un oficio o negocio (en inglés).

            3- Usted de otra manera está en negocios por usted mismo (incluyendo un negocio a tiempo parcial (en inglés)).

¿Cuáles son mis obligaciones tributarias como empleado por cuenta propia?

Como empleado por cuenta propia, generalmente usted está en la obligación de presentar una declaración anual y pagar trimestralmente impuestos estimados.

Las personas que tr por cuenta propia generalmente tienen que pagar el impuesto sobre el trabajo por cuenta propia (impuesto SE, por sus siglas en inglés) como también el impuesto sobre el ingreso. El impuesto SE es principalmente el impuesto del Seguro Social y Medicare para individuos que trabajan para ellos mismos. Es similar al impuesto retenido de la paga de quienes devengan un salario, por concepto de impuestos del Seguro Social y Medicare. En general, en cualquier momento en que se utiliza la expresión  “impuesto sobre el trabajo por cuenta propia”, solo se refiere al impuesto del Seguro Social y Medicare, y no a cualquier otro tipo de impuesto (como el impuesto sobre el ingreso).

Antes de que usted pueda determinar si está sujeto al impuesto sobre el trabajo por cuenta propia y al impuesto sobre el ingreso, debe calcular el neto del ingreso o el neto de la pérdida de su negocio. Usted determina esto cuando le resta a sus ingresos del negocio, los gastos del mismo. Si sus gastos son menores que sus ingresos, la diferencia es la ganancia neta y forma parte de su ingreso en la página 1 del Formulario 1040. Si sus gastos son mayores que sus ingresos, la diferencia es una pérdida neta. Usualmente, usted puede deducir del ingreso bruto su pérdida en la página 1 del Formulario 1040. Pero en algunas situaciones su pérdida es limitada. Para más información, vea la Publicación 334, Guía tributaria para pequeños negocios (para individuos que utilizan el Anexo C o C-EZ (Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) (en inglés).

Usted tiene que presentar una declaración del impuesto sobre el ingreso si sus ganancias netas provenientes de su trabajo por cuenta propia son de $400 o más. Si sus ganancias netas provenientes de su trabajo por cuenta propia son menos de $400, usted todavía tiene que presentar una declaración del impuesto sobre el ingreso si usted reúne cualquiera de los requisitos para declarar según listados en las Instrucciones para el Formulario 1040 (Form 1040 Instructions) (en inglés) (PDF).

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

Is it possible to financially prepare for divorce?

Posted by Admin Posted on May 18 2017

Is it possible to financially prepare for divorce?

 

[TEXT VERSION]

A plan for the termination of the financial partnership of the marriage is crucial if you are thinking of divorce. All financial assets and liabilities that have been acquired during the years of marriage will need to be divided. If children play a role, the support that will be paid to the custodial parent in the future should be taken into account.

The time put into organizing this will be worth it in the long run. The following are a few steps to consider:

Prepare an inventory of your financial situation that will help you in two ways:

It will aid in determining how debts accumulated during the marriage will be paid off. (It is best to try and get all the joint debt (credit card debt) paid off before the divorce. To come to an agreement as to the method for paying them off, it is smart to make a list of the debts.)

It will give you an introductory look at the information needed to divide the property.

Prepare a list of all assets, whether joint or separate, that includes:

Your residence(s)

The value of any brokerage accounts

Your valuable antiques, jewelry, luxury items, collections, and furnishings

The current balance in all bank accounts

Your autos

The value of investments, including any IRAs

Locate copies of the last two or three years' tax returns. These will be beneficial later.

Know the exact quantity of salary and miscellaneous income brought home by your spouse and you.

Obtain all papers regarding insurance, life, health, pension, and other retirement benefits.

Make a list of debts that are owed both separately and jointly, including mortgage, credit card debt, auto loans and other liabilities.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

Are you on track for a secure retirement?

Posted by Admin Posted on May 16 2017

Are you on track for a secure retirement?

 

America Saves Week is a reminder to give your finances a checkup.

Are your savings on track? Just like your car needs an occasional tune-up, your finances may need a checkup, too. America Saves Week (February 27- March 4) is a national effort to set a savings goal, make a savings plan, and start saving  automatically, and it serves as an annual reminder for savers like you to assess your financial goals and ensure that you’re putting money away for all the right things – like your retirement.

Take this opportunity to evaluate your current savings plan by completing the America Saves Week savings assessment. If you'd like to start saving – or start saving more – but aren't sure where to begin, consider myRA®, a simple, safe, and affordable starter retirement savings option from the U.S. Treasury.

With no fees and no risk of losing money, myRA makes it easy to get started on the path to saving. It’s designed for individuals who don’t have access to retirement savings plans at work, or who lack other options to save. In the event of unforeseen expenses, savers can withdraw the money they contribute to myRA tax-free and without penalty.

Make saving automatic and watch your account grow
Are you saving automatically? Automatic saving is a key component of America Saves Week’s mission, and it makes growing your retirement savings even easier. Consider setting up recurring contributions to your myRA from your paycheck or your checking or savings account. Since myRA is a flexible savings option with no minimum balance or contribution requirements, you can deposit any amount that fits your budget. Access the myRA savings calculators to see how your contributions can add up over time.

Take advantage of tax refunds

If you’re anticipating receiving a tax refund this filing season, factor it into your plan to meet your savings goal. Consider putting it toward your retirement by depositing a portion of your refund in a myRA – it’s easy to do right when you file your taxes. Visit myRA.gov/tax to learn how.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: MYRA (Department of the Treasury)

¿Empleado o contratista independiente? Conozca las reglas

Posted by Admin Posted on May 16 2017

¿Empleado o contratista independiente? Conozca las reglas

 

El IRS anima a todos las empresas y dueños de empresas a conocer las reglas cuando se trata de clasificar a un trabajador, como un empleado o un contratista independiente.

Un empleador debe retener impuestos sobre los ingresos y pagar los impuestos al Seguro Social, Medicare y desempleo, sobre los salarios que paga a un empleado. Los empleadores normalmente no tienen que retener o pagar cualquier impuesto sobre los pagos a contratistas independientes.

Los siguientes son dos puntos claves que los dueños de pequeñas empresas deben tener en cuenta cuando se trata de clasificar los trabajadores:

1- Control. La relación entre un trabajador y un negocio es importante. Si el negocio controla qué trabajo se hace y dirige cómo se hace, ejerce el control de la conducta. Si el negocio dirige o controla aspectos financieros y ciertos relevantes al trabajo de un trabajador, ejerce el control financiero. Esto incluye:

La medida en que el trabajador incurre en gastos de negocio no reembolsados

La medida en que el trabajador invierte en las instalaciones o herramientas que utiliza en la prestación de servicios

La medida en que el trabajador hace sus servicios disponibles para el mercado aplicable  

La manera en que el negocio paga al trabajador y

La medida en que el trabajador puede obtener una ganancia o incurrir en una pérdida

2- Relación. La manera en que el empleador y el trabajador perciben su relación es también importante para determinar el estatus del trabajador. Los temas claves para considerar incluyen:

Contratos por escrito que describen la relación que las partes pretenden crear

Si el negocio proporciona al trabajador los beneficios para empleados, tales como el seguro, un plan de pensión para el retiro, pago de vacaciones o por enfermedad

La permanencia de la relación y

La medida en que los servicios realizados por el trabajador son un aspecto clave de la actividad habitual de la compañía.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

¿Pasatiempo o negocio? El IRS ofrece consejos para decidir

Posted by Admin Posted on May 16 2017

Pasatiempo o negocio El IRS ofrece consejos para decidir

 

Millones de personas gozan de pasatiempos que son también una fuente de ingresos. Desde el servicio de catering al hornear pastelitos, de crear joyería casera al soplado de vidrio – no importa cuál sea la pasión de una persona, el IRS ofrece algunos consejos acerca de pasatiempos.

Los contribuyentes deben declarar los ingresos que reciben de sus pasatiempos, en sus declaraciones de impuestos. Las reglas sobre cómo declarar los ingresos y gastos dependen de si la actividad es un pasatiempo o un negocio. Hay reglas y límites especiales sobre las deducciones que los contribuyentes pueden reclamar para los pasatiempos. Tenga en cuenta estos cinco consejos tributarios:

1- ¿Es un pasatiempo o un negocio? Una característica clave de un negocio es que la gente lo hace para recibir una ganancia. Las personas participan en un pasatiempo por deporte o recreación, no para recibir una ganancia. Considere los nueve factores (en inglés) al determinar si la actividad es un pasatiempo. Asegúrese de basar la determinación en todos los datos y circunstancias. Para obtener más información acerca de las reglas sobre las actividades “sin fines de lucro”, vea la Publicación 535, Gastos de negocio (en inglés).

2- Deducciones permitidas de los pasatiempos. Dentro de ciertos límites, los contribuyentes pueden usualmente deducir los gastos necesarios y ordinarios de los pasatiempos. Un gasto ordinario es aquel que es común y aceptado para la actividad. Un gasto necesario es aquel que es apropiado para la actividad.

3- Límite sobre los gastos de pasatiempos. Los contribuyentes pueden generalmente deducir los gastos de pasatiempos hasta la cantidad de ingresos de los mismos. Si los gastos de pasatiempos son más que sus ingresos, los contribuyentes han recibido una pérdida de la actividad. Sin embargo, una pérdida de pasatiempo no la puede deducir de otros ingresos.

4- Cómo deducir los gastos de pasatiempos. Los contribuyentes deben detallar las deducciones en sus declaraciones de impuestos, para deducir los gastos de pasatiempos. Los gastos pueden pertenecer a tres clases de deducciones y existen reglas especiales que se aplican a cada clase. Vea la Publicación 535 para las reglas sobre cómo reclamarlos en el Anexo A, Deducciones detalladas (en inglés).

5- Utilice Free File del IRS. Las reglas sobre los pasatiempos pueden ser complicadas y Free File del IRS puede hacer más fácil el presentar una declaración de impuestos. Free File del IRS está disponible hasta el 16 de octubre. Los contribuyentes que ganan $64,000 o menos, pueden utilizar el software tributario de marca. Aquellos que ganan más, pueden utilizar los Formularios Interactivos de Free File, que son las versiones electrónicas de los formularios del IRS en papel. Free File está disponible únicamente en la página web del IRS, en www.irs.gov/espanol.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

Important Facts about Filing Late and Paying Penalties

Posted by Admin Posted on May 15 2017

IMPORTANT FACTS ABOUT FILING LATE AND PAYING PENALTIES

 

April 18 was this year’s deadline for most people to file their federal tax return and pay any tax they owe. If taxpayers are due a refund, there is no penalty if they file a late tax return.

Taxpayers who owe tax, and failed to file and pay on time, will most likely owe interest and penalties on the tax they pay late. To keep interest and penalties to a minimum, taxpayers should file their tax return and pay any tax owed as soon as possible.

Here are some facts that taxpayers should know:  

Two penalties may apply. One penalty is for filing late and one is for paying late. They can add up fast. Interest accrues on top of penalties
 

Penalty for late filing. If taxpayers file their 2016 tax return more than 60 days after the due date or extended due date, the minimum penalty is $205 or, if they owe less than $205, 100 percent of the unpaid tax. Otherwise, the penalty can be as much as 5 percent of their unpaid taxes each month up to a maximum of 25 percent.  
 

Penalty for late payment. The penalty is generally 0.5 percent of taxpayers’ unpaid taxes per month. It can build up to as much as 25 percent of their unpaid taxes.

Combined penalty per month. If both the late filing and late payment penalties apply, the maximum amount charged for the two penalties is 5 percent per month.

Taxpayers should file even if they can’t pay. Filing  and paying as soon as possible will keep interest and penalties to a minimum. IRS e-file and Free File programs are available for  returns filed after the deadline. If a taxpayer can’t pay in full, getting a loan or paying by debit or credit card may be less expensive than owing the IRS.   

Payment options. Taxpayers should explore their payment options at IRS.gov/payments. For individuals, IRS Direct Pay is a fast and free way to pay directly from a checking or savings account. The IRS will work with taxpayers to help them resolve their tax debt. Most people can set up a payment plan using the Online Payment Agreement tool on IRS.gov.

Late payment penalty may not apply. If taxpayers requested an extension of time to file their income tax return by the tax due date and paid at least 90 percent of the taxes they owe, they may not face a failure-to-pay penalty. However, they must pay the remaining balance by the extended due date. Taxpayers will owe interest on any taxes they pay after the April 18 due date.

No penalty if reasonable cause.  Taxpayers will not have to pay a failure-to-file or failure-to-pay penalty if they can show reasonable cause for not filing or paying on time.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Renewing Your ITIN? Things You’ll Need

Posted by Admin Posted on May 15 2017

Renewing Your ITIN? Things You’ll Need

 

Some Individual Taxpayer Identification Numbers (ITIN) expire at the end of 2016. The IRS issues an ITIN to those who have a filing or reporting requirement but don’t have and are not eligible to get a Social Security number. If you need to renew your ITIN, you should submit a complete application this fall to avoid delays.

The following list includes the documents you’ll need to renew your ITIN:

1. Form W-7. You must submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number (Rev 9-2016). You don’t need a completed tax return for the renewal application. You must include the identification documents with the form.
 

2. Proof of foreign status and identity. Several documents satisfy this requirement. These are:

Passport. (Note: You can use a passport as a stand-alone document for dependents with a U.S. date of entry. Otherwise, an additional ID from the list below is required)

National ID card (must show photo, name, current address, date of birth and expiration)

U.S. driver's license

Birth certificate (required for dependents under 18)

Foreign driver's license

U.S. state ID card

Foreign voter's registration card

U.S. military ID card

Foreign military ID card

Visa

U.S. Citizenship and Immigration Services (USCIS) photo identification

Medical records (only dependents under 6)

School records (dependents under 14, or under 18 if a student)

Only original documents or copies certified by the issuing agency are accepted. If you would rather not mail original documents, you may use the IRS Certified Acceptance Agent (CAA) Program or make an appointment at a designated IRS Taxpayer Assistance Center.

3. Dependent requirements. If you need to renew your ITIN, you have the option to renew ITINs for your entire family at the same time. For dependents from countries other than Canada or Mexico or dependents of U.S. military members overseas, a passport with a U.S. entry date may serve as stand-alone identification. Along with the passport, dependent applications require:

U.S. medical records for dependents under age 6, or

U.S. school records for dependents under age 18

U.S. school records for dependents age 18 and over or,
• Rental statement with the applicant’s name and U.S. address or
• Utility bill with the applicant’s name and U.S. address or
• Bank statement with applicant’s name and U.S. address

To claim certain credits and to receive a timely refund, renew your ITIN before you file your taxes.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Private Debt Collection

Posted by Admin Posted on May 12 2017

Private Debt Collection

 

The Internal Revenue Service began a new private collection program of certain overdue federal tax debts selecting four contractors to implement it.

The new program, authorized under a federal law enacted by Congress, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. Authorized under a federal law enacted by Congress in December 2015, Section 32102 of the Fixing America’s Surface Transportation Act (FAST Act) requires the IRS to use private collection agencies for the collection of outstanding inactive tax receivables.

General Information

As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act.

These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working them. Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.

The IRS will give taxpayers and their representative written notice that the accounts are being transferred to the private collection agencies. The agencies will send a second, separate letter to the taxpayer and their representative confirming this transfer.

Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow provisions of the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights.

The IRS will do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities, particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment.

Private collection agencies will not ask for payment on a prepaid debit, iTunes or gift card. Taxpayers will be informed about electronic payment options for taxpayers on IRS.gov/Pay Your Tax Bill. Payment by check should be payable to the U.S. Treasury and sent directly to IRS, not the private collection agency. 

The IRS will continue to keep taxpayers informed about scams and provide tips for protecting themselves. The IRS encourages taxpayers to visit IRS.gov for information including the “Tax Scams and Consumer Alerts” page.

Private Collection Agencies Selected

The IRS will assign cases to these private collection agencies: 

CBE
P.O. Box 2217
Waterloo, IA 50704
1-800-910-5837

ConServe
P.O. Box 307
Fairport, NY 14450-0307
1-844-853-4875

Performant
P.O. Box 9045
Pleasanton CA 94566-9045
1-844-807-9367

Pioneer
PO Box 500
Horseheads, NY 14845
1-800-448-3531

If you do not wish to work with the assigned private collection agency to settle your overdue tax account, you must submit a request in writing to the private collection agency.

Accounts Not Assigned To Private Collection Agencies

IRS will not assign accounts to private collection agencies involving taxpayers who are:

Deceased

Under the age of 18

In designated combat zones

Victims of tax-related identity theft

Currently under examination, litigation, criminal investigation or levy

Subject to pending or active offers in compromise

Subject to an installment agreement

Subject to a right of appeal

Classified as innocent spouse cases

In presidentially declared disaster areas and requesting relief from collection

Private collection agencies will return accounts to the IRS if taxpayers and their accounts fall into any of these 10 situations after assignment to the private collection agencies. 

Stay Vigilant Against Scams

The IRS urges you to be on the lookout for unexpected scam phone calls from anyone claiming to be collecting on behalf of the tax agency.

The IRS will do everything it can do to help you avoid confusion and ensure you understand your rights and tax responsibilities when it assigns your case to a private collection agency. This is particularly important in light of continuing scams where callers impersonate IRS agents and request immediate payment.

Even with private debt collection, you shouldn’t receive unexpected phone calls from the IRS demanding payment. When people owe tax, the IRS always sends several collection notices through the mail before making phone calls.

TIGTA Hotline

To make a complaint about a private collection agency or report misconduct by its employee, call the TIGTA hotline at 800-366-4484 or visit www.tigta.gov or write to:

Treasury Inspector General for Tax Administration
Hotline
Post Office Box 589
Ben Franklin Station
Washington, DC 20044-0589

To report a threat, assault or attempted assault by a private collection agency employee, contact the TIGTA Office of Investigations with responsibility for your geographic area.  

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications

Posted by Admin Posted on May 12 2017

IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications

 

You must have information from your tax return in order to file a Free Application for Federal Student Aid (FAFSA®) or apply for an income-driven repayment plan.

The IRS Data Retrieval Tool (DRT) used to access your tax information for the FAFSA and income-driven repayment (IDR) plan applications is currently unavailable.

This does not limit an individual’s ability to apply for aid or an IDR plan. Applicants can manually provide their tax return information.  The online FAFSA and IDR applications remain operational, and applicants can continue filing the FAFSA or applying for an IDR plan as they normally would.

Getting Your 2015 Tax Return Information For the 2016–17 and 2017–18 FAFSA

Applicants filing a 2016–17 or 2017–18 FAFSA must use data from their 2015 tax returns.

You should always retain a copy of your tax return, either electronically or on paper, and keep it in a secure place.

If you did not keep a copy of your tax return, here are some options:

Access the tax software product you used to prepare and file your 2015 return.  You may be able to access your account to download/print a copy.

Contact the tax preparer/provider who filed your 2015 return if you used a tax professional.

Download your tax transcript (a summary) at Get Transcript Online.  Review the rigorous identity authentication requirements for Secure Access before attempting to register.

Use Get Transcript by Mail and a transcript will be mailed to the address on your return within five to 10 days.

Call our automated line at 800-908-9946 to order a transcript by mail.

If you filed an amended tax return, Form 1040X, you should use the adjusted gross income and earned income listed on your revised tax return.

Getting Your Alternative Documentation For IDR Applications

IDR plan applicants must submit alternative documentation of income to their federal loan servicers after they complete and submit the online IDR application. The process for submitting the alternative documentation of income is explained to borrowers as part of the online IDR application. As a general rule, alternative documentation of income consists of copies of pay stubs or most recently filed tax returns.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tax Tips to Consider for Cash Intensive Small Businesses in the Sharing Economy

Posted by Admin Posted on May 11 2017

Tax Tips to Consider for Cash Intensive Small Businesses in the Sharing Economy

 

Small business owners that offer goods and services through an online platform may be part of the sharing economy. Some participate part time while others operate full time. Activities such as ride sharing, freelancing, renting a spare bedroom and crowd funding are usually taxable. The IRS has a Sharing Economy Tax Center to help these taxpayers find the information and help they need to meet their tax obligations.

Some sharing economy tips for small businesses to consider:

Taxes. Sharing economy activity is generally taxable. Payments received in the form of money, goods, property or services may require filing a tax return to report that income to the IRS.Tips. People often conduct sharing-economy activities electronically but tips in cash are still a common occurrence. Tips are generally subject to withholding. Small businesses or self-employed persons should report tips they receive as income on Schedule C or C-EZ. See Publication 334, Tax Guide for Small Business, for more details.

Large Cash Amounts. Any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, within 15 days after receiving payment.

Deductions. Expenses to carry on a trade or business are usually deductible. Examples include claiming the 54 cents per mile rate for 2016 when using a car for a ride-sharing business. Or deducting the commission/fee charged by a freelancer marketplace service.

Estimated Payments. Small businesses in the sharing economy often need to make quarterly estimated tax payments to cover their tax obligation. Form 1040-ES, Estimated Tax for Individuals, will help to figure these payments. IRS Direct Pay is the fastest and easiest way to make these payments. The Treasury Department’s (EFTPS) system is also an option.

Records. Good records assist in monitoring a business’s progress, tracking deductible expenses and can substantiate items reported on tax returns. A good recordkeeping system includes a summary of all business transactions. Generally, it is best to record transactions on a daily basis.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tips to Taxpayers Preparing for Hurricanes, Floods and Other Natural Disasters

Posted by Admin Posted on May 11 2017

Tips to Taxpayers Preparing for Hurricanes, Floods and Other Natural Disasters

 

With Hurricane Preparedness Week, May 7 to 13, now in progress and the start of the Atlantic hurricane season looming on June 1, the Internal Revenue Service today offered advice to taxpayers who may be affected by these types of storms, as well as other  natural disasters. The IRS also wants taxpayers to know that the agency is here to help, including offering a special toll-free hotline to people in federally declared disaster areas, staffed with IRS specialists trained to handle disaster-related issues.

Don’t Forget to Update Emergency Plans

Because a disaster can strike any time, be sure to review emergency plans annually. Personal and business situations change over time, as do preparedness needs. When employers hire new employees or when a company or organization changes functions, they should update plans accordingly and inform employees of the changes. Make plans ahead of time and be sure to practice them.

Create Electronic Copies of Key Documents

Taxpayers can help themselves by keeping a duplicate set of key documents including bank statements, tax returns, identifications and insurance policies in a safe place such as a waterproof container and away from the original set.

Doing so is easier now that many financial institutions provide statements and documents electronically, and financial information is available on the Internet. Even if the original documents are provided only on paper, these can be scanned into an electronic format. This way, taxpayers can download them to a storage device such as an external hard drive or USB flash drive, or burn them to a CD or DVD.

Document Valuables

It’s a good idea to photograph or videotape the contents of any home, especially items of higher value. Documenting these items ahead of time will make it easier to claim any available insurance and tax benefits after the disaster strikes. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.

Photographs can help anyone prove the fair market value of items for insurance and casualty loss claims. Ideally, photos should be stored with a friend or family member who lives outside the area.

Check on Fiduciary Bonds

Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

IRS Ready to Help

In the case of a federally declared disaster, an affected taxpayer can call 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Back copies of previously filed tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return.  Alternatively, transcripts showing most line items on these returns can be ordered through the Get Transcript link on IRS.gov, by calling 1-800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Tax Return.

Find other hurricane preparedness tips and more information about Hurricane Preparedness Week on the National Weather Service web site.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Home Office Deduction Often Overlooked by Small Business Owners

Posted by Admin Posted on May 11 2017

Home Office Deduction Often Overlooked by Small Business Owners

 

The Internal Revenue Service today reminded small business owners who work from a home office that there are two options for claiming the Home Office Deduction. The Home Office Deduction is often overlooked by small business owners.

As part of National Small Business Week (April 30-May 6), the IRS is highlighting a series of tips and resources available for small business owners.

Regular Method

The first option for calculating the Home Office Deduction is the Regular Method. This method requires computing the business use of the home by dividing the expenses of operating the home between personal and business use. Direct business expenses are fully deductible and the percentage of the home floor space used for business is assignable to indirect total expenses. Self-employed taxpayers file Form 1040, Schedule C , Profit or Loss From Business (Sole Proprietorship), and compute this deduction on Form 8829, Expenses for Business Use of Your Home.

Simplified Method

The second option, the Simplified Method, reduces the paperwork and recordkeeping burden for small businesses. The simplified method has a prescribed rate of $5 a square foot for business use of the home. There is a maximum allowable deduction available based on up to 300 square feet. Choosing this option requires taxpayers to complete a short worksheet in the tax instructions and entering the result on the tax return. There is a special calculation for daycare providers. Self-employed individuals claim the home office deduction on Form 1040, Schedule C , Line 30; farmers claim it on Schedule F, Line 32 and eligible employees claim it on Schedule A, Line 21.

Regardless of the method used to compute the deduction, business expenses in excess of the gross income limitation are not deductible. Deductible expenses for business use of a home include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance and repairs. In general, expenses for the parts of the home not used for business are not deductible.

Deductions for business storage are deductible when the dwelling unit is the sole fixed location of the business or for regular use of a residence for the provision of daycare services; exclusive use isn't required in these cases.

Further details on the home office deduction and the simplified method can be found in Publication 587 on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Many Tax-Exempt Organizations Must File by May 15

Posted by Admin Posted on May 09 2017

Many Tax-Exempt Organizations Must File by May 15

 

The Internal Revenue Service today reminded tax-exempt organizations that many have a filing deadline for Form 990-series information returns in mid-May. 

With the May 15 filing deadline fast approaching, the IRS cautions these groups not to include Social Security numbers or other unnecessary personal information on their Form 990. The agency also asks them to consider taking advantage of the speed and convenience of electronic filing.

Form 990-series information returns and notices are due on the 15th day of the fifth month after an organization’s tax-year ends. Many organizations use the calendar year as their tax year, making May 15 the deadline to file for 2016.

Many Organizations Risk Loss of Tax-Exempt Status

By law, organizations that fail to file annual reports for three consecutive years will see their federal tax exemptions automatically revoked as of the due date of the third year they are required to file. The Pension Protection Act of 2006 mandates that most tax-exempt organizations file annual Form 990-series information returns or notices with the IRS. The law, which went into effect at the beginning of 2007, also imposed a new annual filing requirement for small organizations. Churches and church-related organizations are not required to file annual reports.

No Social Security Numbers on Forms 990

The IRS generally does not ask organizations for SSNs and cautions filers not to provide them on the Form 990. By law, both the IRS and most tax-exempt organizations are required to publicly disclose most parts of Form 990 filings, including schedules and attachments. Public release of SSNs and other personally identifiable information about donors, clients or benefactors could give rise to identity theft.

The IRS also urges tax-exempt organizations to file forms electronically to reduce the risk of inadvertently including SSNs or other unnecessary personal information. Electronic filing also provides acknowledgement that the IRS has received the return and reduces normal processing time, making compliance with reporting and disclosure requirements easier.

Tax-exempt forms that must be made public by the IRS are clearly marked “Open to Public Inspection” in the top right corner of the first page. These include Form 990, Form 990-EZ, Form 990-PF and others.

What to File

Small tax-exempt organizations with average annual gross receipts of $50,000 or less may file an electronic notice called a Form 990-N (e-Postcard). This form requires only a few basic pieces of information. Tax-exempt organizations with average annual gross receipts above $50,000 must file a Form 990 or 990-EZ, depending on their receipts and assets. Private foundations must file Form 990-PF.

Organizations that need additional time to file a Form 990, 990-EZ or 990-PF may obtain an automatic six-month extension. Use Form 8868, Application for Extension of Time to File an Exempt Organization Return, to request an extension. The request must be filed by the due date of the return. Note that no extension is available for filing the Form 990-N (e-Postcard).

Check Tax-Exempt Status Online

The IRS publishes a list of organizations identified as having automatically lost tax-exempt status for failing to file annual reports for three consecutive years. Organizations that have had their exemptions automatically revoked and wish to have that status reinstated must file an application and pay the appropriate user fee.

The IRS offers an online search tool, Exempt Organizations Select Check, to help users more easily find key information about the federal tax status and filings of certain tax-exempt organizations, including whether organizations have had their federal tax exemptions automatically revoked.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tips about Employee Business Expenses

Posted by Admin Posted on May 08 2017

Tips about Employee Business Expenses

 

Taxpayers who pay work-related expenses out of their own pocket may be able to deduct them. Generally, employee business expenses are deductible if they are more than two percent of adjusted gross income. In most cases, they go on IRS Schedule A, Itemized Deductions.

Other key points about employee business expenses:

They must be Ordinary and Necessary. People can only deduct unreimbursed expenses that are ordinary and necessary to their work as an employee. An ordinary expense is one that is common and accepted in the industry. A necessary expense is appropriate and helpful to a business.

Expense Examples. Some potentially deductible costs include:   

Required work clothes or uniforms not appropriate for everyday use.

Supplies and tools for use on the job.

Business use of a car.

Business meals and entertainment.  

Business travel away from home.  

Business use of a home.

Work-related education.

This list is not all-inclusive. Special rules apply for reimbursed expenses by an employer. IRS Publication 529, Miscellaneous Deductions, and Publication 463, Travel, Entertainment, Gift and Car Expenses, provide more details.

Forms to Use. In most cases, expenses are reported using Form 2106 or Form 2106-EZ. IRS Schedule A may also be used.

Educator Expenses. K-12 teachers may be able to deduct up to $250 of certain expenses paid in 2016. These may include books, supplies, equipment and other materials used in the classroom. They are an adjustment to income rather than an itemized deduction. In other words, people do not need to itemize to claim them. IRS Publication 529 has more.

Keep Records. The IRS urges people to keep good records for proof of income and expenses and also as a reminder not to overlook anything. IRS Publication 17, Your Federal Income Tax, has more on what to keep.

IRS Free File. Most people qualify to use free, brand-name software to prepare and efile their federal tax returns with IRS Free File. Free File software helps to determine what expenses may be deductible.  

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

TAX CREDIT CAN HELP EMPLOYERS HIRING NEW WORKERS

Posted by Admin Posted on May 04 2017

TAX CREDIT CAN HELP EMPLOYERS HIRING NEW WORKERS

 

The Internal Revenue Service today reminded employers planning to hire new workers that there’s a valuable tax credit available to those who hire long-term unemployment recipients and others certified by their state workforce agency. During National Small Business Week—April 30 to May 6—the IRS is highlighting tax benefits and resources designed to help new and existing small businesses.

The Work Opportunity Tax Credit (WOTC) is a long-standing income tax benefit that encourages employers to hire designated categories of workers who face significant barriers to employment. The credit, usually claimed on Form 5884, is generally based on wages paid to eligible workers during the first two years of employment.

To qualify for the credit, an employer must first request certification by filing IRS Form 8850 with the state workforce agency within 28 days after the eligible worker begins work. Other requirements and further details can be found in the instructions to Form 8850.

There are now 10 categories of WOTC-eligible workers. The newest category, added effective Jan. 1, 2016, is for long-term unemployment recipients who had been unemployed for a period of at least 27 weeks and received state or federal unemployment benefits during part or all of that time. The other categories include certain veterans and recipients of various kinds of public assistance, among others.

The 10 categories are:

Qualified IV-A Temporary Assistance for Needy Families (TANF) recipients

Unemployed veterans, including disabled veterans

Ex-felons

Designated community residents living in Empowerment Zones or Rural Renewal Counties

Vocational rehabilitation referrals

Summer youth employees living in Empowerment Zones

Food stamp (SNAP) recipients

Supplemental Security Income (SSI) recipients

Long-term family assistance recipients

Qualified long-term unemployment recipients.

Eligible businesses claim the WOTC on their income tax return. The credit is first figured on Form 5884and then becomes a part of the general business credit claimed on Form 3800.

Though the credit is not available to tax-exempt organizations for most categories of new hires, a special rule allows them to get the WOTC for hiring qualified veterans. These organizations claim the credit on Form 5884-C. Visit the WOTC page on IRS.gov for more information.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Startups Can Choose New Option for Claiming Research Credit

Posted by Admin Posted on May 03 2017

New Option for Claiming Research Credit

 

Eligible small business startups can now choose to apply part or all of their research credit against their payroll tax liability, instead of their income tax liability, according to the Internal Revenue Service. During National Small Business Week—April 30 to May 6—the IRS is highlighting tax benefits and resources designed to help new and existing small businesses.

This new option will be available for the first time to any eligible small business when filing its 2016 federal income tax return. Before 2016, the research credit, like most tax credits, could only be taken against income tax liability. The option to elect the new payroll tax credit may especially benefit any eligible startup that has little or no income tax liability.

To qualify for the new option for the current tax year, a small business must have gross receipts of less than $5 million and could not have had gross receipts prior to 2012. A small business meeting this standard with qualifying research expenses can then choose to apply up to $250,000 of its research credit against its payroll tax liability.

To choose this option, fill out Form 6765, Credit for Increasing Research Activities, and attach it to a timely-filed business income tax return. Because many business taxpayers request a tax-filing extension, they still have time to make the choice on a timely-filed return. A number of special rules and computations apply to this credit. See the instructions to Form 6765 for details.

For eligible small businesses that already filed and failed to choose this option, there is still time to make the choice. Under a special rule for tax-year 2016, they can still do so by filing an amended return. This return must be filed by Dec. 31, 2017.

Amended return forms vary depending upon the type of business. Sole proprietors file Form 1040X. Regular corporations file Form 1120X. S corporations file Form 1120S, identifying it as a corrected return (line H(4). For information on amending a partnership return, see the instructions to Form 1065.

After choosing this option, either on an original or amended return, a small business claims the payroll tax credit by filling out Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. This form must be attached to its payroll tax return, usually Form 941, Employer’s Quarterly Federal Tax Return.

Further details on how and when to claim the credit are in Notice 2017-23, available on IRS.gov. The notice also provides interim guidance on other technical issues, such as controlled groups and the definition of gross receipts.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Protect Yourself! Create Strong Passwords

Posted by Admin Posted on May 03 2017

Protect Yourself! Create Strong Passwords

 

Passwords are often the key to the identification and authentication process for access to your computer, e-mail and encrypted information, both received and transmitted. For this reason, it is critical to you (and your business) and the security of your client data that you have strong passwords and that you protect those passwords.

Here are some things you should consider in creating and protecting passwords:

- Longer passwords are safe and more difficult to guess. A strong password should be a minimum of eight characters. It should include a combination of letters, numbers and symbols or special characters. Your password should include at least one uppercase letter, one lowercase letter, one number and one symbol or character.

- Personal information should not be included in your passwords.  Names of siblings, children, pets, etc., are generally available on social media, which makes it easier for cybercriminals to figure out your password.

- Avoid using the same password for all of your information systems, accounts or devices. If someone does guess one password, they will not have access to all your systems, devices or data.

- Substitute numbers and symbols for letters in words or phrases to make it more difficult to guess a password.

- Do not share your password and be careful of attempts to trick you into revealing your password.

For additional information, see the Department of Homeland Security’s “Creating a Password Tip Card.”

This is one in a series of security awareness tax tips for tax professionals. The “Protect Your Clients; Protect Yourself” campaign’s goal is to raise awareness among tax professionals. It is an initiative of the Security Summit, a joint project by the IRS, states and the tax community to combat identity theft. Because of the sensitive client data held by tax professionals, cybercriminals increasingly are targeting the tax preparation community.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Five Reasons to Choose Direct Deposit

Posted by Admin Posted on May 03 2017

Five Reasons to Choose Direct Deposit

 

Easy, safe and fast — that’s direct deposit. It’s the best way to get a tax refund. Eighty percent of taxpayers choose it every year. The IRS knows taxpayers have a choice of how to receive their refunds.

IRS Direct Deposit:

Is Fast. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit. Use IRS Free File to prepare and e-file federal returns for free. Use direct deposit for paper tax returns, too.

Is Secure. Since refunds go right into a bank account, there’s no risk of having a paper check stolen or lost in the mail. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.

Is Convenient. There’s no need to wait for a refund check to come in the mail.

Is Easy.  Choosing direct deposit is easy. With e-file, just follow the instructions in the tax software. For paper returns, the tax form instructions serve as a guide. Make sure to enter the correct bank account and routing number.

Has Options. Taxpayers can split a refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. The U.S. Treasury Department offers a retirement account. It’s called a MyRA account.  Designate all or a part of a refund to a new MyRA account. Simply mark the “savings” box in the refund section of the return. Use IRS Form 8888, Allocation of Refund (including Savings Bond Purchases), to deposit a refund in up to three accounts. Do not use Form 8888 to designate part of a refund to pay tax preparers.

Taxpayers should deposit refunds into accounts in their own name, their spouse’s name or both. Avoid making a deposit into accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Taxpayers should check with their bank for direct deposit rules.

There is a limit of three electronic direct deposit refunds made into a single financial account or pre-paid debit card. The IRS will send a notice and a refund check in the mail to taxpayers who exceed the limit. Find tips about direct deposit and the split refund option in Publication 17, Your Federal Income Tax. View, download and print tax products anytime at IRS.gov/forms.

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Employee or Independent Contractor? Know the Rules

Posted by Admin Posted on May 02 2017

Employee or Independent Contractor? Know the Rules

 

The IRS encourages all businesses and business owners to know the rules when it comes to classifying a worker as an employee or an independent contractor.

An employer must withhold income taxes and pay Social Security, Medicare taxes and unemployment tax on wages paid to an employee. Employers normally do not have to withhold or pay any taxes on payments to independent contractors.

Here are two key points for small business owners to keep in mind when it comes to classifying workers:

1- Control. The relationship between a worker and a business is important. If the business controls what work is accomplished and directs how it is done, it exerts behavioral control. If the business directs or controls financial and certain relevant aspects of a worker’s job, it exercises financial control. This includes:

- The extent of the worker's investment in the facilities or tools used in performing services

- The extent to which the worker makes his or her services available to the relevant market

- How the business pays the worker, and

- The extent to which the worker can realize a profit or incur a loss

2- Relationship. How the employer and worker perceive their relationship is also important for determining worker status. Key topics to think about include:

1- Written contracts describing the relationship the parties intended to create

2- Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation or sick pay

3- The permanency of the relationship, and

4- The extent to which services performed by the worker are a key aspect of the regular business of the company

5- The extent to which the worker has unreimbursed business expenses

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Práctica fraudulenta de pesca de información (Phishing)

Posted by Admin Posted on May 02 2017

Práctica fraudulenta de pesca de información (Phishing)

 

El IRS no inicia comunicación con el contribuyente a través de correo electrónico, mensajes de texto o mensajes por medio de las redes sociales para solicitar información personal o financiera.  Esto incluye pedirle su número PIN o claves de acceso, información de su tarjeta de crédito, de su banco u otra cuenta financiera.

¿Qué es phishing?

Phishing es una práctica fraudulenta realizada a través de correo electrónico no solicitado y/o sitios web que se presentan como sitios legítimos y logran atrapar a las personas para que revelen su información personal y financiera.

Todo correo no solicitado el cual dice ser del IRS o de alguno de sus programas, deberá reportarse a phishing@irs.gov. Estafas recientes han utilizado el Sistema de Pago Electrónico de impuestos federales (EFTPS) para atraer a víctimas. Además, si usted experimenta pérdidas financieras debido a un incidente relacionado con el IRS por favor reporte dicho incidente al Inspector General del Tesoro para la Administración Tributaria y presente una queja con la Comisión Federal de Comercio a través del Asistente de Quejas y presente toda información disponible a los investigadores.

Qué hacer si usted recibe comunicación sospechosa, y dicha comunicación está relacionada con el IRS

Si

Entonces

Usted recibe un correo electrónico de parte de alguien que dice ser del IRS y se le pide información personal, impuestos relacionados a una gran inversión de dinero, una herencia o premio de lotería…
  1. No responda.
  2. No abra ningún archivo adjunto. Los archivos pueden contener algún código malicioso que infectará su computadora.
  3. No seleccione ningún enlace. Visite nuestra página sobre el robo de identidad si usted selecciono alguno de los enlaces de éste correo electrónico dudoso o de un sitio web, o ingresó información confidencial.
  4. Reenvíe el correo electrónico tal como lo recibió a nuestro correo, a phishing@irs.gov. No envíe imágenes escaneadas, ya que estas pueden excluir valiosa información.
  5. Borre el mensaje original que usted recibió.
Usted recibe una llamada por teléfono de un individuo que dice ser del IRS, pero usted sospecha que tal individuo no es empleado del IRS
  1. Registre el nombre del empleado, número de identificación del empleado, número telefónico del empleado y el número del identificador de llamadas si está disponible.
  2. Llame al 1-800-366-4484 para determinar si la llamada que recibió es de parte de un empleado del IRS y la razón de la llamada es legítima.
    • Si la persona que le llamo es en realidad un empleado del IRS, regrese usted la llamada.
    • Si no, reporte el incidente a TIGTA, y también a nosotros en phishing@irs.gov y anote en el espacio para el asunto del correo, (Subject: IRS Phone Scam)
Usted recibe una carta por correo, aviso, formulario o fax de parte de un individuo que dice ser del IRS, pero usted sospecha que ese individuo no es empleado del IRS

Visite la Página Principal del IRS y busque información sobre la carta, el aviso o el número del formulario. Impostores pueden modificar cartas legítimas del IRS. Usted puede encontrar información en el enlace Información sobre avisos del IRS (en inglés) y busque en Formularios y Publicaciones (en inglés).

  • Si es una carta legítima, usted encontrará instrucciones sobre cómo contestar o completar el formulario.
  • Si no encuentra información en nuestro sitio web o las instrucciones son distintas de lo que se le indica en la carta, aviso o formulario, favor de llamar al 1-800-829-1040 para determinar si dicho documento es legítimo.
  • Si el documento no es legítimo, reporte el incidente a TIGTA, y a nosotros en phishing@irs.gov.
Usted recibe un fax no solicitado, tal como el Formulario W8-BEN (en inglés) el cual dice ser de parte el IRS, y este solicita información personal…

Por favor envíe el correo electrónico o la copia escaneada de dicho correo a phishing@irs.gov, (en la línea que indica el asunto del correo, anote “Subject: FAX”).

Visite la página principal de información sobre FATCA (en inglés) y el Formulario W8-BEN (en inglés) para mayor información.

Usted recibe una llamada telefónicacorreo electrónico no solicitado el cual involucra la compra de acciones, y dicha comunicación es sospechosa e involucra al IRS o el Departamento del Tesoro, y los documentos cobran “cuotas” o “multas”…

...y usted es ciudadano de los Estados Unidos viviendo en los Estados Unidos o uno de sus territorios, o es ciudadano de los Estados Unidos viviendo en el extranjero.

  1. Llene el formulario de queja apropiado a través del U.S. Securities and Exchange Commission.
  2. Reenvíe el correo electrónico a phishing@irs.gov. (Por favor anote en la línea correspondiente al asunto de su correo, Subject: Stock).
  3. Si usted es víctima monetaria o de robo de identidad, usted puede presentar su queja a través del Asistente de Quejas de la Comisión Federal de Comercio.

...y usted no es ciudadano de los Estados Unidos y vive en el extranjero.

  1. Llene el formulario de queja apropiado a través del U.S. Securities and Exchange Commission.
  2. Comuníquese con su organismo regulador local y presente su queja.
  3. Reenvíe el correo electrónico a phishing@irs.gov. (Por favor anote en la línea correspondiente al asunto de su correo, Subject: Stock).
  4. Si usted es víctima monetaria o de robo de identidad, usted puede presentar su queja a econsumer.gov.
Usted descubre un sitio web en el Internet que dice ser del IRS pero usted sospecha que es fraudulento... ...envíe el URL del sitio web fraudulento al IRS a phishing@irs.gov. Por favor anote en la línea correspondiente al asunto de su correo, (Subject: Suspicious Website).
Usted recibe un mensaje de texto o de un servicio de mensajes el cual dice ser de parte del IRS
  1. No responda.
  2. No abra ningún archivo adjunto. Los archivos pueden contener algún código malicioso que infectará su computadora o teléfono móvil.
  3. No seleccione ningún enlace. Si usted seleccionó alguno de los enlaces de éste mensaje, e ingresó información confidencial, visite nuestra página de protección de identidad
  4. Reenvíe el mensaje de texto tal como lo recibió al 202-552-1226. Tenga en mente que podría cobrársele gastos de texto.
  5. Si le es posible, envíe el texto original al 202-552-1226.
  6. Borre el mensaje original que usted recibió.

 

Que hacer si usted recibió un correo electrónico sospechoso que pretende ser de parte del IRS

Si

Entonces

Usted recibe un correo electrónico phishingsospechoso que no pretende ser de parte del IRS... Reenvíe el correo electrónico tal y como lo recibió reportphishing@antiphishing.org.
Usted recibe un correo electrónico el cual usted sospecha contiene códigos maliciosos y algún adjunto dañino y usted SELECCIONÓ un enlace o descargó el archivo adjunto...

Visite OnGuardOnline.gov para informarse sobre lo que debe hacer si descargo programas dañinos a su computadora.

Usted recibió un correo electrónico y usted sospecha que este contiene códigos dañinos y algún archivo adjunto contiene códigos dañinos y usted NO HA seleccionado el enlace ni descargó el archivo adjunto...

Reenvíe el correo electrónico a su proveedor de servicio de Internet al departamento de quejas y/o a spam@uce.gov.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

¿Cómo puedo reportar actividad tributaria fraudulenta?

Posted by Admin Posted on May 01 2017

¿Cómo puedo reportar actividad tributaria fraudulenta?

 

Si sospecha de una persona o conoce de un negocio que no cumple con las leyes tributarias sobre asuntos como: Deducciones o exenciones falsas, sobornos, documentación falsa o alterada, incumplimiento con el pago de impuestos, ingreso no declarado, crimen organizado, incumplimiento con la retención tributaria, usted puede reportarlos con las autoridades.

Utilice el Formulario 3949-A, Referido de Información. Luego imprima el formulario y envíelo por correo a Internal Revenue Service, Fresno, CA 93888. También puede pedir el formulario por correo (información en inglés) o llamar a la Línea Directa para denunciar Fraude Tributario al 1-800-829-0433. Tome en cuenta que no se aceptarán por teléfono referidos alegando violaciones de la ley tributaria.

Una opción alterna al Formulario 3949-A, es enviar por correo, a la dirección indicada anteriormente, una carta escrita. Por favor, incluya la mayor cantidad de información posible, y sobre todo, información importante de interés, tal como:

1- El nombre y la dirección de la persona o negocio que usted esté reportando

2- El número de Seguro Social del individuo, o el Número de Identificación Patronal del negocio reportado

3- Una descripción breve de la(s) alegación(es), e incluya como usted supo y adquirió información sobre la(s) misma(s)

4- Los años que abarca la alegación

5- Un estimado de la suma total (en dólares) del ingreso no declarado

6- Su nombre, dirección y número de  teléfono

A pesar de que usted no tiene que identificarse, sería de gran utilidad hacerlo. El IRS garantiza que su identidad se mantendrá confidencial. Contribuyentes que presentan el Formulario 3949-A no serán informados sobre el estado o progreso del caso, ya que las normas de confidencialidad de las declaraciones de impuestos, definidas en la sección 6103 del Código de Impuestos Internos, lo prohíben. 

¿Cuándo NO utilizar el Formulario 3949-A?

No utilice el formulario 3949-A para reportar sobre los siguientes asuntos:

Si sospecha que alguien le robó su identidad y está utilizando su SSN (número de Seguro Social, por sus siglas en inglés) para propósitos de empleo, o para presentar una declaración de impuestos, utilice el Formulario 14039SP. Complete el formulario en línea, imprima el mismo y envíelo por correo a la oficina adecuada para atender su caso, según la lista de opciones que aparece en la página 2 del formulario. Incluya fotocopias de al menos uno de los documentos que aparecen en el formulario para verificar su identidad. Para más información, refiérase a la Guía del Contribuyente sobre Robo de Identidad.

Si cree que existe alguna actividad fraudulenta o de un esquema tributario abusivo relacionado con un preparador de declaraciones de impuestos o una compañía dedicada a la preparación de declaraciones de impuestos Utilice el Formulario 14157 (en inglés). El Formulario 1457-A podría también ser requerido. Usted podrá completar el formulario en línea, imprimirlo y enviarlo por correo a la dirección del IRS que aparece en el formulario.

Si sospecha que un preparador de declaraciones de impuestos entregó una declaración, o alteró una declaración suya sin su consentimiento, y usted está buscando un cambio a su cuenta, utilice el Formulario 14157 (en inglés) (PDF) y el Formulario 14157-A (en inglés). Envíe AMBOS formularios (el formulario 14157 y el formulario 14157-A) a la dirección de correo que aparece en las instrucciones del Formulario 14157-A.

Si sabe de un promotor o de una promoción tributaria abusiva, utilice el Formulario 14242 (en inlgés) (PDF). Envíelo por correo, a la dirección postal o número de fax que aparece en el formulario.

Si observa alguna conducta inapropiada o delito cometido por una organización exenta o de un plan de empleados, utilice el Formulario 13909 (en inglés) y envíe el formulario a la dirección de correo que aparece en el mismo.

Si tiene información y desea reclamar una recompensa, utilice el Formulario 211 (en inglés) (PDF). Envíe el formulario a la dirección de correo que aparece en el mismo.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

What are the biggest mistakes investors make?

Posted by Admin Posted on Apr 28 2017

What are the biggest mistakes investors make?

 

The biggest mistakes that investors make are:

1- Starting Too Late

The time to start is now. The power of compound interest is astounding - the earlier you take advantage the more it will work for you. If you start out earlier, you can start with less, invest less and still end up making more than if you started out later.

2- Paying High Fees

Broker's commissions can negate all of the hard-earned interest that you have accumulated. Don't let this happen to you - pay attention to what you are being charged. The more you pay, the less you keep.

3- Investing Emotionally

Successful investing consists of planning and reason. Once emotion gets involved, it can ruin all of the planning and reason that you had used to construct your investment strategy. Keep using the strategies that have consistently made people rich over the years, don't look to follow the new and exciting strategies that haven't yet stood the test of time.

4- Using a One-Size-Fits-All Plan

Your individual needs should trump any ideas of blindly following any plan. Keep an account of how much risk you are willing to take, and what your time frame is. Your portfolio should match your needs.

5- Not Taking Taxes Into Consideration

The net profits from stocks are taxable as capital gains. Being in a tax-deferred investment account will stop this from eating away at your savings.

6- Overly Risky Investing

Being extremely risky can pay off big time, but it can also leave you with a diminished nest egg it you gamble wrong. There are many great investments that offer decent returns without putting your funds in excessive danger.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Guidelines to follow towards a comfortable retirement

Posted by Admin Posted on Apr 27 2017

 

Someone starting their savings in their early 20s can save 10% of their income and have a sufficient nest egg, while someone starting in their 40s may have to bump that number up more towards 20%. This is all dependent on the time of your life that you choose to start, the size of your current nest egg, and the amount of money that you will need to retire comfortably.

It is always a good idea to contribute as much as possible to retirement plans, to take advantage of tax deferral and employer matches.

Generally people need around 80% of their pre-retirement income after they have retired for the first few years and then learn how to live on less. This will greatly depend on the expenses that you plan on having:

Is the mortgage already paid off?

Do you have car payments?

Are you sending your children through school?

Another strategy worth following is to always have an emergency fund of at least 6 months of expenses. Considering your situation and the situations of the people that you depend on or depend on you, you can adjust the number of months accordingly, but 6 is a good ballpark number. This will also depend on how many bills you need to pay.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IRS Sees Millions of Tax Returns Last Days of Tax Filing Season

Posted by Admin Posted on Apr 26 2017

IRS Sees Millions of Tax Returns Last Days of Tax Filing Season

 

The Internal Revenue Service today announced that the agency has received 135.6 million returns this year following a late surge of filings last week.

During the week ending April 21, the IRS received more than 17 million tax returns. The vast majority, 13.6 million returns, were filed through IRS e-file. 

Looking at the entire tax filing season, the IRS has received 135.6 million tax returns through April 21. With the influx of returns last week, the number of filings is now close to the number of returns from last year’s filing season.

With the mid-April filings, the number of refunds issued this year swelled to 97 million worth $268.3 billion. The average refund was $2,763, up slightly from last year’s average of $2,711.

Taxpayers have filed 11.6 million extension forms this filing season, up 0.9 percent compared to the same time last year. The vast majority of extensions were e-filed, 9.7 million, an increase of 11 percent from the same time last year.

An extension form filed by the deadline allows a taxpayer to hold off on filing the actual tax return for six months, although any tax due must have been paid by the April 18 deadline to avoid interest and penalties.

2017 FILING SEASON STATISTICS

Cumulative statistics comparing 04/22/2016 and 04/21/2017

Individual Income Tax Returns:

2016

2017

% Change

Total Returns Received

136,528,000

135,638,000

-0.7

Total Returns Processed

129,456,000

128,789,000

-0.5

 

 

 

 

E-filing Receipts:

 

 

 

TOTAL           

122,546,000

122,164,000

-0.3

Tax Professionals

70,864,000

70,401,000

-0.7

Self-prepared

51,682,000

51,763,000

0.2

 

 

 

 

Web Usage:

 

 

 

Visits to IRS.gov

325,525,568

312,255,666

-4.1

 

 

 

 

Total Refunds:

 

 

 

Number

97,079,000

97,104,000

0.0

Amount

$263.197

Billion

$268.296

Billion

1.9

Average refund

$2,711

$2,763

1.9

 

Direct Deposit Refunds:

 

 

 

Number

81,221,000

81,646,000

0.5

Amount

$234.269

Billion

$239.410

Billion

2.2

Average refund

$2,884

$2,932

1.7

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Helpful Tips to Keep in Mind When Amending Your Tax Return

Posted by Admin Posted on Apr 25 2017

Helpful Tips to Keep in Mind When Amending Your Tax Return

 

Taxpayers can fix mistakes or omissions on their tax return by filing an amended tax return. Those who need to amend will find the following tips helpful.

1- File using paper form. Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct the tax return. Taxpayers can’t file amended returns electronically. They can obtain the form on IRS.gov/forms at any time. Mail the Form 1040X to the address listed in the form’s instructions.

2- Amend to correct errors. File an amended tax return to correct errors or make changes to an original tax return. For example, taxpayers should amend to change their filing status, or to correct their income, deductions or credits.

3- Don’t amend for math errors, missing forms. Taxpayers generally don’t need to file an amended return to correct math errors on their original return. The IRS will automatically correct these items. In addition, taxpayers do not need to file an amended return if they forgot to attach tax forms, such as a Form W-2 or a schedule. The IRS will mail a request to the taxpayer, if needed.

4- File within three-year time limit. Taxpayers usually have three years from the date they filed the original tax return to file Form 1040X to claim a refund. A taxpayer can file it within two years from the date they paid the tax, if that date is later. That means the last day for most people to file a claim for a refund for tax year 2013 is April 18, 2017. See Form 1040X instructions for special rules that may apply.  

5- Use separate forms for each year. Taxpayers who are amending more than one tax return must file a Form 1040X for each tax year. Mail each year’s Form 1040X in separate envelopes to avoid confusion. Note the tax year of the amended return on the top of the Form 1040X. Check the form’s instructions for where to mail the amended return.

6- Attach other forms with changes. If a taxpayer uses other IRS forms or schedules to make changes, they need to attach them to the Form 1040X.

7- Wait to file for corrected refund for tax year 2016. If due a refund from their original tax year 2016 return, taxpayers should wait to get it before filing Form 1040X to claim an additional refund. Amended returns may take up to 16 weeks to process.

8- Pay additional tax. If the taxpayer will owe more tax, they should file Form 1040X and pay the tax as soon as possible to avoid penalties and interest. Consider using IRS Direct Pay to pay any tax directly from a checking or savings account at no cost.

9- Track your amended return. Generally, a taxpayer can track the status of their amended tax return three weeks after they file with ‘Where’s My Amended Return?’ It is available in English, Spanish, Chinese, Korean, Vietnamese and Russian. The tool can track the status of an amended return for the current year and up to three years back. If a taxpayer has filed amended returns for multiple years, they can check each year, one at a time.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Missed the Tax Return Deadline? IRS Offers Help

Posted by Admin Posted on Apr 25 2017

Missed the Tax Return Deadline? IRS Offers Help

 

The tax deadline for most taxpayers was Tuesday, April 18, 2017. The IRS has some advice for taxpayers who missed the filing deadline.

File and pay as soon as possible. Taxpayers who owe federal income tax should file and pay as soon as they can to minimize any penalty and interest charges. For taxpayers due a refund, there is no penalty for filing a late return.

Use IRS Free File. Nearly everyone can use IRS Free File to e-file their federal taxes for free. Taxpayers whose income was $64,000 or less can use free brand-name tax software. Those who made more than $64,000 can use Free File Fillable Forms to e-file. This program uses electronic versions of IRS paper forms. Fillable forms work best for those who are used to doing their own taxes. Taxpayers can file -- even if they missed the deadline -- using free options on IRS.gov through the Oct. 16 extension period. 

 File electronically. No matter who prepares a tax return, taxpayers can use IRS e-file through Oct. 16. E-file is the easiest, safest and most accurate way to file a tax return. The IRS will send electronic confirmation when it receives the tax return and issues more than nine out of 10 refunds in less than 21 days.

Pay as much as possible. If taxpayers owe but can’t pay in full, they should pay as much as they can when they file their tax return. IRS electronic payment options are the quickest and easiest way to pay taxes. IRS Direct Pay is a free, secure and easy way to pay a balance due directly from a checking or savings account. Pay any owed amounts as soon as possible to minimize penalties and interest.

Make monthly payments through an installment agreement. Those who need more time to pay taxes can apply for a direct debit installment agreement through the IRS Online Payment Agreement tool. There’s no need to write and mail a check each month with a direct debit plan. Taxpayers who don’t use the online tool can still apply on Form 9465, Installment Agreement Request. Get the form at IRS.gov/forms.

File as soon as possible to get a refund. Taxpayers who are not required to file may still get a refund if they had taxes withheld from wages or they qualified for certain tax credits like the Earned Income Tax Credit. Those who don’t file their return within three years could lose their right to the refund.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tips on Determining If It’s Really The IRS At Your Door

Posted by Admin Posted on Apr 21 2017

Tips on Determining If It’s Really The IRS At Your Door

 

WASHINGTON — The Internal Revenue Service has created a special new page on IRS.gov to help taxpayers determine if a person visiting their home or place of business claiming to be from the IRS is legitimate or an imposter.

With continuing phone scams and in-person scams taking place across the country, the IRS reminds taxpayers that IRS employees do make official, sometimes unannounced, visits to taxpayers as part of their routine casework. Taxpayers should keep in mind the reasons these visits occur and understand how to verify if it is the IRS knocking at their door.

Visits typically fall into three categories:

IRS revenue officers will sometimes make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed or tax returns due. Revenue officers are IRS civil enforcement employees whose role involves education, investigation, and when necessary, appropriate enforcement.

IRS revenue agents will sometimes visit a taxpayer who is being audited. That taxpayer would have first been notified by mail about the audit and set an agreed-upon appointment time with the revenue agent. Also, after mailing an initial appointment letter to a taxpayer, an auditor may call to confirm and discuss items pertaining to the scheduled audit appointment.

IRS criminal investigators may visit a taxpayer’s home or place of business unannounced while conducting an investigation. However, these are federal law enforcement agents, and they will not demand any sort of payment. Criminal investigators also carry law enforcement credentials, including a badge.

For more information, visit “How to know it’s really the IRS calling or knocking on your door” on IRS.gov.

The IRS reminds people who owe taxes – or think they do – to stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more information, visit “Tax Scams and Consumer Alerts” on IRS.gov.

Taxpayers have a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore these rights and the agency’s obligations to protect them on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Some Taxpayers Get Extensions without Asking

Posted by Admin Posted on Apr 18 2017

Some Taxpayers Get Extensions without Asking

 

Taxpayers Abroad, in Combat Zones and Disaster Areas Qualify

Even though April 18 is the tax-filing deadline for most people, some taxpayers in special situations qualify for more time without having to ask for it, according to the Internal Revenue Service.

Taxpayers in Presidentially-declared disaster areas, members of the military serving in a combat zone and Americans living and working abroad get extra time to both file their returns and pay any taxes due. Here are details on each of these special tax relief provisions.

Victims of Natural Disasters

Taxpayers in several disaster area localities qualify for more time to file their tax returns and pay any taxes due. Currently, taxpayers in parts of Georgia and Mississippi have until May 31, 2017, to file and pay, while those in parts of Louisiana have until June 30, 2017, to file and pay. These extensions also apply to other tax-related actions, including the deadline for contributing to an individual retirement arrangement (IRA). The IRS automatically provides extensions to anyone living in these areas so there’s no reason for these residents to contact the IRS to request an extension.

The IRS generally provides relief, including postponing filing and payment deadlines, to any area covered by a disaster declaration for individual assistance issued by the Federal Emergency Management Agency (FEMA). Among other things, this relief includes extensions for relief workers, disaster area businesses and anyone whose tax records are located in the disaster area. For details on available relief and information on how to take advantage of it, visit the Around the Nation page on IRS.gov.

Combat Zone Taxpayers

Members of the military and eligible support personnel serving in a combat zone have at least 180 days after they leave the combat zone to file their tax returns and pay any taxes due. This includes those serving in Iraq, Afghanistan and other combat zone localities. A complete list of designated combat zone localities can be found in Publication 3, Armed Forces’ Tax Guide, available on IRS.gov.

Combat zone extensions give affected taxpayers more time for a variety of other tax-related actions, including contributing to an IRA. Various circumstances affect the exact length of the extension available to any given taxpayer. Details, including examples illustrating how these extensions are calculated, can be found in the Extensions of Deadlines section in Publication 3.

Taxpayers Outside the United States

U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico have until June 15, 2017, to file their 2016 returns and pay any taxes due. The special June 15 deadline also applies to members of the military, on duty outside the U.S. and Puerto Rico, who do not qualify for the longer combat zone extension. Be sure to attach a statement to the return explaining which of these situations applies.  Though taxpayers abroad get more time to pay, interest, currently at the rate of four percent per year, compounded daily, applies to any payment received after April 18. For more information about the special tax rules for U.S. taxpayers abroad, see Publication 54 on IRS.gov.

Everyone Else

Taxpayers who don’t qualify for any of these three special situations can still get more time to file, but they need to ask for it. Automatic extensions give people until Oct. 16, 2017, to file; tax payments are still due April 18, 2017.

An easy way to get the extra time to file is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an extension on Form 4868. To get the extension, taxpayers must estimate their tax liability on this form and pay any amount due.

Another option for taxpayers is to pay electronically and get an extension of time to file. IRS will automatically process an extension when taxpayers select Form 4868 and they are making a full or partial federal tax payment using Direct Pay, Electronic Federal Tax Payment System or a debit or credit card by the April due date. There is no need to file a separate Form 4868 when making an electronic payment and indicating it is for an extension. Electronic payment options are available at IRS.gov/payments.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tax Rules on Rental Property

Posted by Admin Posted on Apr 17 2017

Tax Rules on Rental Property

 

Provided by Eyal "Alan" Galinsky, ChFC®

Buying or selling income property has definite tax consequences. A taxpayer should clearly understand them, whether he or she intends to acquire a property or put one on the market. 

 

A sale of income property incurs either a capital gain or loss. If you profit from the sale of income property, that profit is considered fully taxable by the Internal Revenue Service. Fortunately, if you have owned that property for at least a year, you will pay only capital gains tax on those profits rather than income tax.1

Your capital gain is determined by subtracting the adjusted basis of the property (i.e., the price you paid for it, plus the total of any renovations, closing costs, and eligible legal fees) from the sale price. For most taxpayers, the capital gains rate is but 15%. If you sell an investment property for a capital gain of $30,000 and your capital gains rate is 15%, you will pay $4,500 of capital gains tax from the sale.1

Depreciation can factor into this. If the market turns south and you can deduct $20,000 in depreciation within your ownership period, then your capital gain from the sale is $10,000 instead of $30,000.2

Should you happen to sell one investment property at a gain and another at a loss in the same year, you can subtract your capital loss from your capital gain, resulting in a net capital gain or loss for that tax year.1

Should you buy & hold, you could qualify for the homeowner exclusion. If you live in an investment property for two or more years during a five-year period, the I.R.S. will consider that investment property to be your primary residence, whether you do or not. You are, thereby, eligible for the federal homeowner exclusion when you sell such property, which enables you to shield up to $250,000 of capital gains from tax. Joint filers may exclude up to $500,000 of capital gains from tax through this break.1,3

Income property investors may also qualify for some federal tax deductions. If you happen to utilize an investment property (or even a vacation home) for your personal use, you may be able to take advantage of property tax deductions, the mortgage interest deduction, even the home office deduction. The size of a deduction typically corresponds to how frequently you use the property. For example, you can deduct property management fees, insurance premiums, and certain other costs only when you use the property for longer than 14 days or 10% of the total days it is rented or leased.4

This article is simply an overview of the tax rules on rental property. To fully explore the tax implications of a sale or purchase and the deductions and exclusions you may qualify to receive, speak to a qualified tax, real estate, or financial professional today.

Eyal " Alan " Galinsky, ChFC® may be reached at (561) 368-6388 or admin@archfg.com| www.archfg.com   

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. 

Citations.

1 - finance.zacks.com/tax-liability-selling-investment-property-5957.html [3/28/17]

2 - investopedia.com/articles/mortgages-real-estate/08/rental-property.asp [2/22/17]

3 - irs.gov/taxtopics/tc701.html [1/7/17]

4 - ajc.com/business/personal-finance/these-tax-breaks-can-help-make-homeownership-more-affordable/1rauoRXHzDmeWZVgbfmsoI [3/16/17]

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

 

Deductible Home Offices

Posted by Admin Posted on Apr 14 2017

Deductible Home Offices

 

Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Be Wary of Schemes as Filing Season Deadline Approaches

Posted by Admin Posted on Apr 03 2017

Be Wary of Schemes as Filing Season Deadline Approaches

 

The Internal Revenue Service, state tax agencies and the tax industry today warned tax professionals to beware of phishing email scams claiming to be from IRS e-Services and of schemes in general as the April 18 deadline nears.

Acting as the Security Summit, the IRS, state tax agencies and the tax industry warned that this time of year is the high season for identity thieves scams to steal sensitive data from tax professionals. All tax preparers and their employees must be on guard against phishing activities.

The IRS noted a particular surge in the past 24 hours related to a phishing email scam that seeks to steal practitioners’ usernames and passwords for IRS e-Services.

The subject lines on these scam emails vary but they generally are related to e-Service account closures. Some examples include:

Account Closure!

e-Service Account is Blocked

Few Hours to Close Your Account

Your Account is Closed

Your Account is Terminated

24Hrs to Block Your Account

Links in the scam email send practitioners to a fake e-Services login page where thieves can steal the user’s credentials. It is “signed” by “IRS gov e-Services.” 

The thieves are keying off on IRS efforts to increase protections for e-Services, including recent IRS efforts to encourage tax professionals to revalidate their identity to avoid delays accessing their e-Services account.

E-Services account holders should beware of schemes to obtain their password information. If an account has been closed because of failure to revalidate, users should contact the e-Services Help Desk to have it reopened. Users who are in doubt about the validity of emails should never open a link or attachment, but instead go directly to https://www.irs.gov/eservices. Users also should sign up for Quick Alerts, e-News for Tax Professionals or other subscription services to receive information directly from the IRS.  

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

For Small Business Startups, IRS Explains New Option for Claiming Research Credit; Option Still Available for Those That Already Filed

Posted by Admin Posted on Apr 03 2017

Research credit for small business

 

The Internal Revenue Service today issued interim guidance explaining how eligible small businesses can take advantage of a new option enabling them to apply part or all of their research credit against their payroll tax liability, instead of their income tax liability. Before 2016, taxpayers could only take the research credit against their income tax liability.

Notice 2017-23, posted today on IRS.gov, provides guidance on a new provision included in the Protecting Americans From Tax Hikes (PATH) Act enacted in December 2015. This new option will be available for the first time to any eligible small business filing its 2016 federal income tax return this tax season. Those who already filed still have time to choose this option.

The option to elect the new payroll tax credit may especially benefit any eligible startup that has little or no income tax liability. To qualify for the new option for the current tax-year, a business must have gross receipts of less than $5 million and could not have had gross receipts prior to 2012.

An eligible small business with qualifying research expenses can choose to apply up to $250,000 of its research credit against its payroll tax liability. An eligible small business chooses this option by filling out Form 6765, Credit for Increasing Research Activities, and attaching it to a timely-filed business income tax return. But under a special rule for tax-year 2016, a small business that failed to choose this option and still wishes to do so, can still make the election by filing an amended return by Dec. 31, 2017. See the notice for further details.

After choosing this option, a small business claims the payroll tax credit by filling out Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. This form must be attached to its payroll tax return, for example Form 941, Employer’s Quarterly Federal Tax Return. Further details on how and when to claim the credit are in the notice.

The notice provides interim guidance on controlled groups, the definition of gross receipts, and other issues. The notice also requests public comment on various payroll tax credit issues to be addressed in future guidance. See the notice for details on how and when to submit comments. For more information on the research credit itself, see the instructions to Form 6765.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Refinancing Your Home?

Posted by Admin Posted on Mar 30 2017

Refinancing Your Home?

 

Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans.

Generally, for taxpayers who itemize, the “points” paid to obtain a home mortgage may be deductible as mortgage interest. Points paid to obtain an original home mortgage can be, depending on circumstances, fully deductible in the year paid. However, points paid solely to refinance a home mortgage usually must be deducted over the life of the loan.

For a refinanced mortgage, the interest deduction for points is determined by dividing the points paid by the number of payments to be made over the life of the loan. This information is usually available from lenders. Taxpayers may deduct points only for those payments made in the tax year. For example, a homeowner who paid $2,000 in points and who would make 360 payments on a 30-year mortgage could deduct $5.56 per monthly payment, or a total of $66.72 if he or she made 12 payments in one year.

However, if part of the refinanced mortgage money was used to finance improvements to the home and if the taxpayer meets certain other requirements, the points associated with the home improvements may be fully deductible in the year the points were paid. Also, if a homeowner is refinancing a mortgage for a second time, the balance of points paid for the first refinanced mortgage may be fully deductible at pay off.

Other closing costs — such as appraisal fees and other non-interest fees — generally are not deductible. Additionally, the amount of Adjusted Gross Income can affect the amount of deductions that can be taken.  Please contact us if you've recently refinanced, and we can be a big help!

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What you need to know about Car Donations

Posted by Admin Posted on Mar 30 2017

What you need to know about Car Donations

 

The IRS reminds taxpayers that specific rules apply for taking a tax deduction for donating cars to charities. If the claimed value of the donated motor vehicle, boat or plane exceeds $500, you can deduct the smaller of the vehicle's FMV on the date of the contribution or the gross proceeds received from the sale of the vehicle.

People who want to take a deduction for the donation of their vehicle on their tax return should take quite a few steps, but here is the most obvious:

Check that the Organization is Qualified.

Taxpayers must make certain that they contribute their car to an eligible organization; otherwise, their donation will not be tax deductible. Taxpayers can search Exempt Organizations Select Check online tool to check that an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified.  Please contact us if you're considering a car donation for your tax return!

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Got Nexus? & Four Tips for Donating Artwork to Charity

Posted by Admin Posted on Mar 28 2017

Got Nexus? & Four Tips for Donating Artwork to Charity

 

For many years, business owners had to ask themselves one question when it came to facing taxation in another state: Do we have “nexus”? This term indicates a business presence in a given state that’s substantial enough to trigger the state’s tax rules and obligations.

Well, the question still stands. And if you’re considering operating your business in multiple states, or are already doing so, it’s worth reviewing the concept of nexus and its tax impact on your company.

Common criteria

Precisely what activates nexus in a given state depends on that state’s chosen criteria. Triggers can vary but common criteria include:

Employing workers in the state,

Owning (or, in some cases, even leasing) property there,

Marketing your products or services in the state,

Maintaining a substantial amount of inventory there, and

Using a local telephone number.

Then again, one generally can’t say that nexus has a “hair trigger”. A minimal amount of business activity in a given state probably won’t create tax liability there.

For example, an HVAC company that makes a few tech calls a year across state lines probably wouldn’t be taxed in that state. Or let’s say you ask a salesperson to travel to another state to establish relationships or gauge interest. As long as he or she doesn’t close any sales, and you have no other activity in the state, you likely won’t have nexus.

Strategic moves

As with many tax issues, the totality of facts and circumstances will determine whether you have nexus in a state. So it’s important to make assumptions either way. The tax impact could be significant, and its specifics will vary widely depending on just how the state in question approaches taxation.

For starters, strongly consider conducting a nexus study. This is a systematic approach to identifying the out-of-state taxes to which your business activities may expose you. The results of a nexus study may not necessarily be negative. You may find that your company’s overall tax liability is lower in a neighboring state. In such cases, it may be advantageous to create nexus in that state by, say, setting up a small office there. If all goes well, you may be able to allocate some income to that state and lower your tax bill.

Taxation and profitability

“The grass is always greener on the other side of the fence”, so the saying goes. If profitability beckons in another state, please contact our firm for help projecting how setting up shop there might affect your tax liability.

Sidebar: Service companies, beware of market-based sourcing

Nexus has been and remains the primary focus of companies considering whether and how they’d be taxed across state lines. (See main article.) But, recently, many states have established “market-based sourcing” for determining the tax liability of service companies that operate within their borders.

Under this approach, if the benefits of a service occur and will be used in another state, that state will tax the revenue gained from said service. “Service revenue” generally is defined as revenue from intangible assets — not the sales of tangible personal property.

Thus, in market-based sourcing states, the destination state of a service is the relevant taxation factor rather than the state in which the income-producing activity is performed (also known as the “cost of performance” method).

 

FOUR TIPS FOR DONATING ARTWORK TO CHARITY

Individuals may want to donate artwork so it can be enjoyed by a wider audience or available for scholarly study or simply to make room for new artwork in their home. Here are four tips for donating artwork with an eye toward tax savings:

1. Get an appraisal. Donations of artwork valued at over $5,000 require a “qualified appraisal” by a “qualified appraiser”. IRS rules detail the requirements. In addition, auditors are required to refer all gifts of art valued at $20,000 or more to the agency’s Art Advisory Panel. The panel’s findings are the IRS’s official position on the art’s value, so it’s critical to provide a solid appraisal to support your valuation.

2. Donate to a public charity. Donations to a qualified public charity (such as a museum or university) potentially entitle you to deduct the artwork’s full fair market value. If you donate to a private foundation, your deduction will be limited to your cost. The total amount of charitable donations you may deduct in a given year is limited to a percentage of your adjusted gross income (50% for public charities, 30% for private foundations) with the excess carried forward for up to five years.

3. Beware the related-use rule. To qualify for a full fair-market-value deduction, the charity’s use of the artwork must be related to its tax-exempt purpose. Even if the related-use rule is satisfied initially, you may lose some or all of your deductions if the artwork is worth more than $5,000 and the charity sells or otherwise disposes of it within three years of receipt. If that happens, you may be able to preserve your tax benefits via a certification process. (For further details, please contact us.)

4. Consider a fractional donation. Donating a fractional interest allows you to save tax dollars without completely giving up the artwork. Say you donate a 25% interest in your art collection to a museum for it to display for three months annually. You could then deduct 25% of the collection’s fair market value and continue displaying the art in your home or business for most of the year.

The rules for fractional donations, and charitable contributions of artwork in general, can be tricky. Plus, tax law changes affecting deductions may occur in the coming year. Contact our firm for help.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Business or Hobby?

Posted by Admin Posted on Mar 28 2017

Business or Hobby?

 

It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take. You must include on your return income from an activity from which you do not expect to make a profit. An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. You cannot use a loss from the activity to offset other income. Activities you do as a hobby, or mainly for sport or recreation, come under this limit. So does an investment activity intended only to produce tax losses for the investors.

The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. For additional information on these entities, refer to business structures. It does not apply to corporations other than S corporations. In determining whether you are carrying on an activity for profit, all the facts are taken into account. No one factor alone is decisive. Among the factors to consider are whether:

You carry on the activity in a business-like manner,

The time and effort you put into the activity indicate you intend to make it profitable,

You depend on income from the activity for your livelihood,

Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business),

You change your methods of operation in an attempt to improve profitability,

You, or your advisors, have the knowledge needed to carry on the activity as a successful business,

You were successful in making a profit in similar activities in the past,

The activity makes a profit in some years, and

You can expect to make a future profit from the appreciation of the assets used in the activity.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

BE ON THE LOOKOUT FOR UNSCRUPULOUS RETURN PREPARERS

Posted by Admin Posted on Mar 28 2017

BE ON THE LOOKOUT FOR UNSCRUPULOUS RETURN PREPARERS

 

WASHINGTON — The Internal Revenue Service warns taxpayers to be on the lookout for unscrupulous return preparers, one of the most common “Dirty Dozen” tax scams seen during tax season.

The vast majority of tax professionals provide honest, high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. That's why unscrupulous preparers who prey on unsuspecting taxpayers with outlandish promises of overly large refunds make the Dirty Dozen list every year.

"Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected," said IRS Commissioner John Koskinen. "Most preparers provide high-quality service but we run across cases each year where unscrupulous preparers steal from their clients and misfile their taxes."

Return preparers are a vital part of the U.S. tax system. About 60 percent of taxpayers use tax professionals to prepare their returns.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

Here are a few tips when choosing a tax preparer:

-Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on your filed tax return.

-Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant, or attorney), belongs to a professional organization or attends continuing education classes. A number of tax law changes, including the Affordable Care Act provisions, can be complex. A competent tax professional needs to be up-to-date in these matters. Tax return preparers aren’t required to have a 
professional credential, but make sure you understand the qualifications of the preparer you select. IRS.gov has more information regarding the national tax professional organizations.

-Check the preparer’s qualifications.  Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help you find a tax return preparer with the qualifications that you prefer. The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:

-Attorneys 
-CPAs
-Enrolled Agents
-Enrolled Retirement Plan Agents
-Enrolled Actuaries
-Annual Filing Season Program participants

-Check the preparer’s history.  Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory. 
 
-Ask about service fees.  Preparers are not allowed to base fees on a percentage of their client’s refund. Also avoid those who boast bigger refunds than their competition. Make sure that your refund goes directly to you – not into your preparer’s bank account.

-Ask to e-file your return.  Make sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally must offer electronic filing. The IRS has processed more than 1.5 billion e-filed tax returns. It’s the safest and most accurate way to file a return.

-Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask questions to determine your total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file your return 
using your last pay stub instead of your Form W-2. This is against IRS e-file rules.

-Make sure the preparer is available.  In the event questions come up about your tax return, you may need to contact your preparer after the return is filed. Avoid fly-by-night preparers.

-Understand who can represent you. Attorneys, CPAs, and enrolled agents can represent any client before the IRS in any situation. Non-credentialed tax return preparers can represent clients before the IRS in only limited situations, 
depending upon when the tax return was prepared and signed.  For all returns prepared and signed after Dec. 31, 2015, a non-credentialed tax return preparer can represent clients before the IRS in limited situations only if the preparer is a participant in the IRS Annual Filing Season Program.

-Never sign a blank return.  Don’t use a tax preparer that asks you to sign an incomplete or blank tax form.

-Review your return before signing.  Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.

-Report tax preparer misconduct to the IRS. You can report improper activities by tax return preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms on IRS.gov.

Remember: Taxpayers are legally responsible for what is on their tax return even if it is prepared by someone else. Make sure the preparer you hire is up to the task.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS, los estados y la industria de impuestos alertan sobre recientes estafas por email

Posted by Admin Posted on Mar 27 2017

IRS, los estados y la industria de impuestos alertan sobre recientes estafas por email

 

El Servicio de Impuestos Internos (IRS), las agencias tributarias estatales y la industria de impuestos advirtieron tanto a los profesionales de impuestos como a los contribuyentes de estafas recientes por correo electrónico tipo phishing, especialmente aquellos que solicitan cambios de última hora de depósito para reembolsos o actualizaciones de cuentas.

A medida que se acerca el final de la temporada de presentación de impuestos de 2017, el 18 de abril, las estafas relacionadas con impuestos de diversos tipos están en su apogeo. El IRS instó tanto a los profesionales de impuestos como a los contribuyentes a estar en guardia contra actividad sospechosa.

El IRS, las agencias tributarias estatales y la industria de impuestos, actuando como la Cumbre de Seguridad, promulgaron muchas medidas contra el robo de identidad para 2017, pero los delincuentes cibernéticos están en constante evolución y hacen uso de estafas sofisticadas para engañar a la gente a que divulguen información confidencial.

Por ejemplo, una nueva estafa se presenta como un contribuyente pidiendo a su preparador de impuestos que haga un cambio de último minuto a su destino de reembolso, a menudo a una tarjeta de débito prepagada. El IRS insta a los preparadores de impuestos a reconfirmar verbalmente la información con el cliente si reciben una solicitud por correo electrónico de último momento para cambiar una dirección o una cuenta de depósito para reembolsos.

El IRS también sugiere que los profesionales de impuestos cambien y fortalezcan sus propias contraseñas de correo electrónico para proteger mejor sus cuentas de correo electrónico utilizadas para intercambiar datos confidenciales con los clientes.

Esta es también la época del año cuando los contribuyentes pueden ver los correos electrónicos fraudulentos de su proveedor de software de impuestos u otros que les piden que actualicen las cuentas en línea. Los contribuyentes deben aprender a reconocer correos electrónicos, llamadas o textos de tipo phishing, que aparentan provenir de organizaciones familiares tales como bancos, compañías de tarjetas de crédito, proveedores de software de impuestos o incluso el IRS. Estas estrategias generalmente instan a los contribuyentes a proveer datos confidenciales como contraseñas, números de seguro social y números de cuenta bancaria o de tarjetas de crédito.

Los contribuyentes que reciben correos electrónicos sospechosos que pretenden ser de un proveedor de software de impuestos o del IRS deben enviarlos a phishing@irs.gov. Recuerde: nunca abra un archivo adjunto o enlace desde una fuente desconocida o sospechosa. Puede infectar su computadora con malware o robar información. Además, el IRS no envía correos electrónicos no solicitados o solicita datos confidenciales a través de correos electrónicos.

La Cumbre de Seguridad mantiene una campaña de concienciación pública para los contribuyentes - Impuestos. Seguridad. Unidos. - y una campaña para los profesionales de impuestos - Proteja a sus clientes; Protéjase a sí mismo - como parte de su esfuerzo para combatir el robo de identidad.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Guía para la temporada de impuestos

Posted by Admin Posted on Mar 24 2017

Guía para la temporada de impuestos

 

El IRS ha desarrollado una serie de consejos para ayudarle a navegar problemas tributarios comunes al acercarse la fecha límite del 18 de abril de 2017 para los contribuyentes individuales.

Esta página se actualizará regularmente con información valiosa para completar su declaración de impuestos del 2016.

Guía de la temporada de impuestos: Obtenga una prórroga automática de seis meses para presentar; Free File ahora disponible para prórrogas — El Servicio de Impuestos Internos (IRS) les recordó hoy a los contribuyentes que si no podrán presentar sus impuestos para la fecha límite del 18 de abril, existe una opción fácil en línea para obtener más tiempo para completar su declaración.  Vea IR-2017-65SP.

Guía de la temporada de impuestos: “¿Dónde está mi reembolso?” es la mejor herramienta para verificar el estado de su reembolso — El Servicio de Impuestos Internos (IRS) recordó hoy a los contribuyentes que mientras que más del 90 por ciento de los reembolsos de impuestos federales se emiten en 21 días o menos, algunos pueden tomar más tiempo. Vea IR-2017-62SP.
 

Guía de la temporada de impuestos: Aún puede contribuir a una cuenta de retiro IRA para 2016 — El Servicio de Impuestos Internos (IRS) hoy recordó a los contribuyentes que aún tienen tiempo para contribuir a una cuenta de retiro tipo IRA para el año 2016 y en muchos casos, calificar para una deducción o crédito tributario.  Vea IR-2017-60SP.

Guía de la temporada de impuestos: Opciones de pago electrónico y acuerdo de pagos para aquellos que adeudan impuestos — El Servicio de Impuestos Internos (IRS) recordó hoy a los contribuyentes que es más fácil que nunca pagar sus impuestos electrónicamente. Existen varias opciones, rápidas y fáciles, disponibles para aquellos que no pueden pagar a tiempo. Vea IR-2017-59SP.

Guía de la temporada de impuestos: Proteja su computadora e información personal, financiera y tributaria — El Servicio de Impuestos Internos (IRS) recordó hoy a los contribuyentes que tomen precaución y protejan su información personal, financiera y tributaria, particularmente durante la temporada de impuestos. Vea IR-2017-55SP.

Guía de la temporada de impuestos: Ahorre tiempo, haga una cita antes de visitar un Centro de Asistencia al Contribuyente del IRS  — El Servicio de Impuestos Internos (IRS) recordó hoy a los contribuyentes que el servicio en todos sus Centros de Asistencia al Contribuyente (TAC, por sus siglas en inglés) es por cita previa. Vea IR-2017-54SP.

Guía de la temporada de impuestos: Publicación 17 del IRS ayuda con impuestos de 2016 — Los contribuyentes pueden sacar el máximo provecho de varios beneficios tributarios y obtener consejos útiles acerca de la preparación de sus declaraciones de impuestos federales de 2016 mediante la consulta de una guía de impuestos gratuita e integral, disponible en IRS.gov. Vea IR-2017-52SP.

Guía de la temporada de impuestos: Use IRS.gov para seleccionar un profesional de impuestos calificado — El Servicio de Impuestos Internos (IRS) hoy les recordó a los contribuyentes que IRS.gov 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Electronic Payment/Payment Agreement Options Available to Those Who Owe Taxes

Posted by Admin Posted on Mar 21 2017

electronic payments to those who owe taxes

 

The Internal Revenue Service today reminded taxpayers that it’s easier than ever to pay taxes electronically. For those unable to pay on time, several quick and easy solutions are available.

This is the seventh in a series of 10 IRS tips called the Tax Time Guide. Taxpayers can use these tips to find solutions to common tax issues as the April 18 tax deadline approaches. 

Taxpayers who owe taxes can now choose among several quick and easy electronic payment options, including the following:

- Electronic Funds Withdrawal allows taxpayers to e-file and pay from their bank account when using tax preparation software or a tax professional. EFW is only available when electronically filing a tax return.

- Direct Pay. Available at IRS.gov/directpay, this free online tool allows taxpayers to securely pay their taxes directly from checking or savings accounts without any fees or preregistration. Taxpayers can schedule payments up to 30 days in advance. Those using the tool will receive instant confirmation when they submit their payment.

- Credit or Debit Card. Taxpayers can pay online, by phone or with their mobile device through any of the authorized debit and credit card processors. The processor charges a fee. The IRS doesn’t receive or charge any fees for payments made with a debit or credit card. Go to https://www.irs.gov/payments for authorized card processors and phone numbers.

- IRS2Go. The IRS2Go mobile app is free and offers taxpayers the option to make a payment with Direct Pay for free or by debit or credit card through an approved payment processor for a fee. Download IRS2Go free from Google Play, the Apple App Store or the Amazon App Store.

- Electronic Federal Tax Payment System. This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll or for more information, call 800-555-4477, or visit eftps.gov.

- Cash. Taxpayers paying with cash can use the PayNearMe option. Payments are limited to $1,000 per day, and a $3.99 fee applies to each payment. The IRS urges taxpayers choosing this option to start early, because PayNearMe involves a four-step process. Initiating a payment well ahead of the tax deadline will help taxpayers avoid interest and penalty charges. The IRS offers this option in cooperation with OfficialPayments.com/fed and participating 7-Eleven stores in 34 states. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.    

Taxpayers can electronically request an extension of time to file. An extension of time to file is not an extension to pay. Taxes are still due by the original due date. Taxpayers can get an automatic extension when making a payment with Direct Pay, Electronic Federal Tax Payment System or by debit or credit card. Select “Form 4868” as the payment type to receive the automatic extension.

Taxpayers who choose to pay by check or money order should make the payment out to the “United States Treasury.” To help ensure that the payment gets credited promptly, also enclose a Form 1040-V payment voucher. Also, print on the front of the check or money order: “2016 Form 1040”; name; address; daytime phone number; and Social Security number.

Taxpayers can view their federal tax account balances online. It’s safe, secure and available on the "Finding out How Much You Owe" page on IRS.gov. They can also access payment options or apply for an installment agreement on this page.

The IRS advises taxpayers to file either an income tax return or a request for a tax-filing extension by this year’s April 18 deadline to avoid late-filing penalties. This penalty can be ten times as costly as the penalty for paying late.

Taxpayers who owe, but can’t pay the balance in full, do have options. Often they qualify for one of several relief programs, including:

Payment Plans, Installment Agreements -- Most people can set up a payment plan with the IRS online in a matter of minutes. Those who owe $50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement application to set up a short-term payment plan of 120-days or less, or a monthly payment agreement for up to 72 months. With the Online Payment Agreement, no paperwork is required, there is no need to call, write or visit the IRS and qualified taxpayers can avoid the IRS filing a Notice of Federal Tax Lien unless it previously filed one. Alternatively, taxpayers can request a payment agreement by filing Form 9465. This form can be downloaded from IRS.gov and mailed along with a tax return, IRS bill or notice.

Offer In Compromise -- Some struggling taxpayers may qualify for an offer-in-compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to make a determination on their ability to pay. To help determine eligibility, use the Offer in Compromise Pre-Qualifier, a free online tool available on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Still Time to Contribute to an IRA for 2016

Posted by Admin Posted on Mar 21 2017

Still time to contribute to an IRA for 2016

 

The Internal Revenue Service today reminded taxpayers that they still have time to contribute to an IRA for 2016 and, in many cases, qualify for a deduction or even a tax credit.

This is the eighth in a series of 10 IRS tips called the Tax Time Guide. These tips are designed to help taxpayers navigate common tax issues as this year’s tax deadline approaches.

Available in one form or another since the mid-1970s, individual retirement arrangements (IRAs) are designed to enable employees and the self-employed to save for retirement. Contributions to traditional IRAs are often deductible, but distributions, usually after age 59½, are generally taxable. Though contributions to Roth IRAs are not deductible, qualified distributions, usually after age 59½, are tax-free. Those with traditional IRAs must begin receiving distributions by April 1 of the year following the year they turn 70½, but there is no similar requirement for Roth IRAs.

Most taxpayers with qualifying income are either eligible to set up a traditional or Roth IRA or add money to an existing account. To count for a 2016 tax return, contributions must be made by April 18, 2017. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the saver’s credit when they complete their 2016 tax returns.

Generally, eligible taxpayers can contribute up to $5,500 to an IRA. For someone who was at least age 50 at the end of 2016, the limit is increased to $6,500. There’s no age limit for those contributing to a Roth IRA, but anyone who was at least age 70½ at the end of 2016 is barred from making contributions to a traditional IRA for 2016 and subsequent years.

The deduction for contributions to a traditional IRA is generally phased out for taxpayers covered by a workplace retirement plan whose incomes are above certain levels. For someone covered by a workplace plan during any part of 2016, the deduction is phased out if the taxpayer’s modified adjusted gross income (MAGI) for that year is between $61,000 and $71,000 for singles and heads of household and between $0 and $10,000 for those who are married filing separately. For married couples filing a joint return where the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range for the deduction is $98,000 to $118,000. Where the IRA contributor is not covered by a workplace retirement plan but is married to someone who is covered, the MAGI phase-out range is $184,000 to $194,000.

The deduction for contributions to a traditional IRA is claimed on Form 1040 Line 32 or Form 1040A Line 17. Any nondeductible contributions to a traditional IRA must be reported on Form 8606.  

Even though contributions to Roth IRAs are not tax deductible, the maximum permitted amount of these contributions is phased out for taxpayers whose incomes are above certain levels. The MAGI phase-out range is $184,000 to $194,000 for married couples filing a joint return, $117,000 to $132,000 for singles and heads of household and $0 to $10,000 for married persons filing separately. For detailed information on contributing to either Roth or Traditional IRAs, including worksheets for determining contribution and deduction amounts, see Publication 590-A, available on IRS.gov.

Taxpayers whose employer does not offer a retirement plan may want to consider enrolling in myRA®, a retirement savings plan offered by the U.S. Department of the Treasury. It's safe, affordable and a great option for people who don't have a retirement savings plan at work. Taxpayers can direct deposit their entire refund or a portion of it into an existing myRA – Retirement Account.  For further details and to open a myRA account online, visit www.myRA.gov.

Also known as the Retirement Savings Contributions Credit, the Saver’s Credit is often available to IRA contributors whose adjusted gross income falls below certain levels. For 2016, the income limit is $30,750 for singles and married filing separate, $46,125 for heads of household and $61,500 for married couples filing jointly.

Eligible taxpayers get the credit even if they qualify for other retirement-related tax benefits. Like other tax credits, the Saver’s Credit can increase a taxpayer’s refund or reduce the taxes they owe. The amount of the credit is based on a number of factors, including the amount contributed to either a Roth or Traditional IRA and other qualifying retirement programs. Form 8880 is used to claim the Saver’s Credit, and its instructions have details on figuring the credit correctly.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

‘Where’s My Refund?’ Tool Best Way to Check Tax Refund Status

Posted by Admin Posted on Mar 21 2017

‘Where’s My Refund?’ Tool Best Way to Check Tax Refund Status

 

The Internal Revenue Service reminded taxpayers today that while more than 90 percent of federal tax refunds are issued in 21 days or less, some refunds may take longer. Many factors can affect the timing of a refund after the IRS receives the return. Also, taxpayers should take into consideration the time it takes a financial institution to post the refund to an account or for it to arrive in the mail.

The best way to check the status of a refund is online through the “Where’s My Refund?” tool at IRS.gov or via the IRS2Go mobile app.

"The majority of taxpayers receive a refund, and we understand those filers want to know when their refund will be issued. Our ‘Where’s My Refund?’ tool continues to be the best way for taxpayers to get the latest information," said IRS Commissioner John Koskinen.

This is the ninth in a series of 10 IRS tips called the Tax Time Guide. The guide is designed to help taxpayers as they near the April 18 tax filing deadline.

Taxpayers eager to know when their refund will be arriving should use the "Where's My Refund" tool rather than calling the IRS and waiting on hold or ordering a tax transcript. The IRS updates the status of refunds once a day, usually overnight, so checking more than once a day will not produce new information. “Where’s My Refund?” has the same information available to IRS telephone assistors so there is no need to call unless requested to do so by ”Where’s My Refund?”

Contrary to a myth rumored in social media, ordering a tax transcript will not help taxpayers find out when they will get their refund. The IRS notes that the information on a transcript does not necessarily reflect the amount or timing of a refund. While taxpayers can use a transcript to validate past income and tax filing status for mortgage, student and small business loan applications and to help with tax preparation, they should use “Where’s My Refund?” to check the status of their refund.

“Where’s My Refund?” can be checked 24 hours after the IRS has received an e-filed return or four weeks after receipt of a mailed paper return. "Where’s My Refund?" has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent.

Users who access “Where’s My Refund?” on IRS.gov or the IRS2Go app must have information from their current, pending tax return to access their refund information.

The IRS continues to strongly encourage the use of e-file and direct deposit as the fastest and safest way to file an accurate return and receive a tax refund. The IRS expects that more than four out of five tax returns will be filed electronically, with a similar proportion of refunds issued through direct deposit.

The IRS Free File program offers free brand-name software to those with incomes of $64,000 or less. Seventy percent of the nation’s taxpayers are eligible for IRS Free File. All taxpayers, regardless of income, can use Free File fillable forms, which provide electronic versions of IRS paper forms to complete and file. Both options are available only through IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Reminds Taxpayers of April 1 Deadline to Take Required Retirement Plan Distributions

Posted by Admin Posted on Mar 21 2017

Deadline to Take Required Retirement Plan Distributions

 

The Internal Revenue Service today reminded taxpayers who turned age 70½ during 2016 that, in most cases, they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Saturday, April 1, 2017.

The April 1 deadline applies to owners of traditional (including SEP and SIMPLE) IRAs but not Roth IRAs. It also typically applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.

The April 1 deadline only applies to the required distribution for the first year. For all subsequent years, the RMD must be made by Dec. 31. A taxpayer who turned 70½ in 2016 (born after June 30, 1945 and before July 1, 1946) and receives the first required distribution (for 2016) on April 1, 2017, for example, must still receive the second RMD by Dec. 31, 2017. 

Affected taxpayers who turned 70½ during 2016 must figure the RMD for the first year using the life expectancy as of their birthday in 2016 and their account balance on Dec. 31, 2015. The trustee reports the year-end account value to the IRA owner on Form 5498 in Box 5. Worksheets and life expectancy tables for making this computation can be found in the appendices to Publication 590-B.

Most taxpayers use Table III  (Uniform Lifetime) to figure their RMD. For a taxpayer who reached age 70½ in 2016 and turned 71 before the end of the year, for example, the first required distribution would be based on a distribution period of 26.5 years. A separate table, Table II, applies to a taxpayer married to a spouse who is more than 10 years younger and is the taxpayer’s only beneficiary. Both tables can be found in the appendices to Publication 590-B.  

Though the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD. Employees who are still working usually can, if their plan allows, wait until April 1 of the year after they retire to start receiving these distributions. See Tax on Excess Accumulation  in Publication 575. Employees of public schools and certain tax-exempt organizations with 403(b) plan accruals before 1987 should check with their employer, plan administrator or provider to see how to treat these accruals.

The IRS encourages taxpayers to begin planning now for any distributions required during 2017. An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner. Often, the trustee shows the RMD amount in Box 12b on Form 5498. For a 2017 RMD, this amount would be on the 2016 Form 5498 that is normally issued in January 2017.

IRA owners can use a qualified charitable distribution (QCD) paid directly from an IRA to an eligible charity to meet part or all of their RMD obligation. Available only to IRA owners age 70½ or older, the maximum annual exclusion for QCDs is $100,000. For details, see the QCD discussion in Publication 590-B.

A 50 percent tax normally applies to any required amounts not received by the April 1 deadline. Report this tax on Form 5329 Part IX. For details, see the instructions for Part IX of this form.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS, States and Tax Industry Warn of Last-Minute Email Scams

Posted by Admin Posted on Mar 21 2017

IRS, States and Tax Industry Warn of Last-Minute Email Scams

 

The Internal Revenue Service, state tax agencies and the tax industry today warned both tax professionals and taxpayers of last-minute phishing email scams, especially those requesting last-minute deposit changes for refunds or account updates.

As the 2017 tax filing season winds down to the April 18 deadline, tax-related scams of various sorts are at their peak. The IRS urged both tax professionals and taxpayers to be on guard against suspicious activity.

The IRS, state tax agencies and the tax industry, acting as the Security Summit, enacted many safeguards against identity theft for 2017, but cybercriminals are ever evolving and make use of sophisticated scams to trick people into divulging sensitive data.

For example, one new scam poses as taxpayers asking their tax preparer to make a last-minute change to their refund destination, often to a prepaid debit card. The IRS urges tax preparers to verbally reconfirm information with the client should they receive last-minute email request to change an address or direct deposit account for refunds.

The IRS also suggests that tax professionals change and strengthen their own email passwords to better protect their email accounts used to exchange sensitive data with clients.

This is also the time of year when taxpayers may see scam emails from their tax software provider or others asking them to update online accounts. Taxpayers should learn to recognize phishing emails, calls or texts that pose as familiar organizations such as banks, credit card companies, tax software providers or even the IRS. These ruses generally urge taxpayers to give up sensitive data such as passwords, Social Security numbers and bank account or credit card numbers.

Taxpayers who receive suspicious emails purporting to be from a tax software provider or from the IRS should forward them to phishing@irs.gov. Remember: never open an attachment or link from an unknown or suspicious source. It may infect your computer with malware or steal information. Also, the IRS does not send unsolicited emails or request sensitive data via email.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Get an Automatic Six More Months to File; Free File Now Available for Extensions

Posted by Admin Posted on Mar 21 2017

Get an Automatic Six More Months to File

 

The Internal Revenue Service reminded taxpayers today that if they are unable to file their tax returns by this year’s April 18 deadline there is an easy, online option to get more time to complete their return.

The advice for those who cannot complete their tax return by April 18: Do not panic. Taxpayers who need more time to complete their return can request an automatic six-month extension. An extension allows for extra time to gather, prepare and file paperwork with the IRS, however, it does not extend the time to pay any tax due.

The fastest and easiest way to get an extension is through Free File on IRS.gov. Taxpayers can electronically request an extension on Form 4868. This service is free for everyone, regardless of income. Filing this form gives taxpayers until Oct. 16 to file their tax return. To get the extension, taxpayers must estimate their tax liability on this form and should pay any amount due.

Other fast, free and easy ways to get an extension include using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card. There is no need to file a separate Form 4868 extension request when making an electronic payment and indicating it is for an extension. The IRS will automatically count it as an extension.

Direct Pay is available online and on the IRS2Go app. It’s free, does not require preregistration and gives instant confirmation when taxpayers submit a payment. It also provides the option of scheduling a payment up to 30 days in advance. Taxpayers using a credit or debit card can pay online, by phone or with the IRS2Go app. The card processor charges a fee, but the IRS does not charge any fees for this service.

Besides Free File and electronic payments, taxpayers can request an extension through a paid tax preparer, by using tax-preparation software or by mailing in a paper Form 4868. Tax forms can be downloaded from IRS.gov/forms.

The IRS reminds taxpayers that a request for an extension provides extra time to file a tax return, but not extra time to pay any taxes owed. Payments are still due by the original deadline. Taxpayers should file even if they can’t pay the full amount. By filing either a regular return or requesting an extension by the April 18 filing deadline, they will avoid the late-filing penalty, which can be 10 times as costly as the penalty for not paying.

Taxpayers who pay as much as they can by the due date reduce the overall amount subject to penalty and interest charges. The interest rate is currently four percent per year, compounded daily. The late-filing penalty is generally five percent per month and the late-payment penalty is normally 0.5 percent per month.

The IRS will work with taxpayers who cannot pay the full amount of tax they owe. Other options to pay, such as getting a loan or paying by credit card may help resolve a tax debt. Most people can set up an installment agreement with the IRS using the Online Payment Agreement tool on IRS.gov.       

When the President makes a disaster area declaration, the IRS can postpone certain taxpayer deadlines for residents and businesses in the affected area. Taxpayers who are victims of a natural disaster may apply for automatic filing and payment relief. Taxpayers outside the covered disaster area but whose tax records required for filing or payment are located in a covered disaster area may also be eligible for this tax relief. Taxpayers who have been affected by recent severe weather should check Around the Nation on IRS.gov for disaster tax relief for their state.

Other taxpayers who get more time to file without having to ask for extensions include:

U.S. citizens and resident aliens who live and work outside of the United States and Puerto Rico get an automatic two-month extension to file their tax returns. They have until June 15 to file. However, tax payments are still due April 18.

Members of the military on duty outside the United States and Puerto Rico also receive an automatic two-month extension to file. Those serving in combat zones have up to180 days after they leave the combat zone to file returns and pay any taxes due. Details are available in the Armed Forces’ Tax Guide Publication 3.

This is the 10th in a series of 10 IRS tips called the Tax Time Guide. The tips are intended to help taxpayers as they get closer to the April 18 income tax filing deadline.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Know these Facts Before Deducting a Charitable Donation

Posted by Admin Posted on Mar 21 2017

Know these Facts Before Deducting a Charitable Donation

 

If taxpayers gave money or goods to a charity in 2016, they may be able to claim a deduction on their federal tax return. Taxpayers can use the Interactive Tax Assistant tool, Can I Deduct my Charitable Contributions?, to help determine if their charitable contributions are deductible.

Here are some important facts about charitable donations:

Qualified Charities. Taxpayers must donate to a qualified charity. Gifts to individuals, political organizations or candidates are not deductible. To check the status of a charity, use the IRS Select Check tool.

Itemize Deductions. To deduct charitable contributions, taxpayers must file Form 1040 and itemize deductions. File Schedule A, Itemized Deductions, with a federal tax return.

Benefit in Return. If taxpayers get something in return for their donation, they may have to reduce their deduction. Taxpayers can only deduct the amount that exceeds the fair market value of the benefit received. Examples of benefits include merchandise, meals, tickets to events or other goods and services.

Type of Donation. If taxpayers give property instead of cash, their deduction amount is normally limited to the item’s fair market value. Fair market value is generally the price they would get if the property sold on the open market. If they donate used clothing and household items, those items generally must be in good condition or better. Special rules apply to cars, boats and other types of property donations.

Noncash Charitable Contributions. File Form 8283, Noncash Charitable Contributions, for all noncash gifts totaling more than $500 for the year. Complete section-A for noncash property contributions worth $5,000 or less. Complete section-B for noncash property contributions more than $5,000 and include a qualified appraisal to the return. Taxpayers may be able to prepare and e-file their tax return for free using IRS Free File. The type of records they must keep depends on the amount and type of their donation. To learn more about what records to keep, see Publication 526, Charitable Contributions.

Donations of $250 or More. If taxpayers donated cash or goods of $250 or more, they must have a written statement from the charity. It must show the amount of the donation and a description of any property given. It must also say whether they received any goods or services in exchange for the gift.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Five Tax Tips on Unemployment Benefits

Posted by Admin Posted on Mar 17 2017

Five Tax Tips on Unemployment Benefits

 

Taxpayers who received unemployment benefits need to remember that it may be taxable. Here are five key facts about unemployment:

Unemployment is Taxable. Include all unemployment compensation as income for the year. Taxpayers should receive a Form 1099-G, Certain Government Payments, by Jan. 31. This form shows the amount received and the amount of any federal income tax withheld.

There are Different Types. Unemployment compensation includes amounts paid under federal law or state law as well as railroad, trade readjustment and airline deregulation laws. Even some forms of disability payments can count. For more information, see IRS Publication 525.

Union Benefits May be Taxable. Benefits received from regular union dues as income might be taxable. Other rules may apply if a taxpayer contributed to a special union fund and those contributions to the fund are not deductible. In this case, report only income exceeding the amount of contributions made.

Tax May be Withheld. Those who receive unemployment can choose to have federal income tax withheld by using Form W-4V, Voluntary Withholding Request. Those choosing not to have tax withheld may need to make estimated tax payments during the year.

Visit IRS.gov for Help. Taxpayers facing financial difficulties should visit the IRS.gov page: “What Ifs” for Struggling Taxpayers. This page explains the tax effect of various life events such as job loss. For those who owe federal taxes and can’t pay, the Payments tab on IRS.gov provides some options. In many cases, the IRS can take steps to help ease financial burden.

Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.  

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

HAVE A HOUSEHOLD EMPLOYEE? BE SURE TO FOLLOW THE TAX RULES

Posted by Admin Posted on Mar 17 2017

HAVE A HOUSEHOLD EMPLOYEE? BE SURE TO FOLLOW THE TAX RULES

 

Many families hire people to work in their homes, such as nannies, housekeepers, cooks, gardeners and health care workers. If you employ a domestic worker, make sure you know the tax rules.

Important distinction

Not everyone who works at your home is considered a household employee for tax purposes. To understand your obligations, determine whether your workers are employees or independent contractors. Independent contractors are responsible for their own employment taxes, while household employers and employees share the responsibility.

Workers are generally considered employees if you control what they do and how they do it. It makes no difference whether you employ them full time or part time, or pay them a salary or an hourly wage.

Social Security and Medicare taxes

If a household worker’s cash wages exceed the domestic employee coverage threshold of $2,000 in 2016, you must pay Social Security and Medicare taxes — 15.3% of wages, which you can either pay entirely or split with the worker. (If you and the worker share the expense, you must withhold his or her share.) But don’t count wages you pay to:

Your spouse,

Your children under age 21,

Your parents (with some exceptions), and

Household workers under age 18 (unless working for you is their principal occupation).

The domestic employee coverage threshold is adjusted annually for inflation, and there’s a wage limit on Social Security tax ($118,500 for 2016, adjusted annually for inflation).

Social Security and Medicare taxes apply only to cash wages, which don’t include the value of food, clothing, lodging and other noncash benefits you provide to household employees. You can also exclude reimbursements to employees for certain parking or commuting costs. One way to provide a valuable benefit to household workers while minimizing employment taxes is to provide them with health insurance.

Unemployment and federal income taxes

If you pay total cash wages to household employees of $1,000 or more in any calendar quarter in the current or preceding calendar year, you must pay federal unemployment tax (FUTA). Wages you pay to your spouse, children under age 21 and parents are excluded.

The tax is 6% of each household employee’s cash wages up to $7,000 per year. You may also owe state unemployment contributions, but you’re entitled to a FUTA credit for those contributions, up to 5.4% of wages.

You don’t have to withhold federal income tax or, usually, state income tax unless the worker requests it and you agree. In these instances, you must withhold federal income taxes on both cash and noncash wages, except for meals you provide employees for your convenience, lodging you provide in your home for your convenience and as a condition of employment, and certain reimbursed commuting and parking costs (including transit passes, tokens, fare cards, qualifying vanpool transportation and qualified parking at or near the workplace).

Other obligations

As an employer, you have a variety of tax and other legal obligations. This includes obtaining a federal Employer Identification Number (EIN) and having each household employee complete Forms W-4 (for withholding) and I-9 (which documents that he or she is eligible to work in the United States).

After year end, you must file Form W-2 for each household employee to whom you paid more than $2,000 in Social Security and Medicare wages or for whom you withheld federal income tax. And you must comply with federal and state minimum wage and overtime requirements. In some states, you may also have to provide workers’ compensation or disability coverage and fulfill other tax, insurance and reporting requirements.

The details

Having a household employee can make family life easier. Unfortunately, it can also make your tax return a bit more complicated.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

IRS Criminal Investigation Releases Fiscal Year 2016 Annual Report

Posted by Admin Posted on Mar 16 2017

IRS Criminal Investigation Releases Fiscal Year 2016 Annual Report

 

WASHINGTON — The Internal Revenue Service today announced the release of its IRS Criminal Investigation (CI) annual report, reflecting the significant accomplishments and criminal enforcement actions taken in fiscal year 2016.

IRS CI initiated 3,395 cases in FY 2016 that focused on tax-related identity theft, money laundering, public corruption, cybercrime and terrorist financing.

“The IRS continues to work to ensure that everyone is playing by the same rules and paying their fair share,” said IRS Commissioner John Koskinen. “The IRS is committed to fairly administering and enforcing the tax code, and our criminal investigators play a critical role in that effort.”

The CI report is released each year for the purpose of highlighting the agency’s successes while providing a historical snapshot of the make-up and priorities of the organization. The very first Chief of IRS CI, Elmer Lincoln Irey, served from 1919 to 1946 and envisioned releasing such a document each year to showcase the agency’s investigative work.

“I could not be more proud of all that our special agents and professional staff have accomplished in spite of our budget challenges,” said Richard Weber, Chief, IRS Criminal Investigation Division. “Though the total number of cases has dropped for the third consecutive year due to fewer agents and professional staff, we have continued to find ways to become even more efficient and the quality of our cases has never been greater.”

CI is the only federal law enforcement agency with jurisdiction over federal tax crimes. This year, CI again boasted a conviction rate rivaling all of federal law enforcement at 92.1percent. That conviction rate speaks to the thoroughness of the investigations. CI is routinely called upon by prosecutors across the country to lead financial investigations on a wide variety of financial crimes including international tax evasion, identity theft, terrorist financing and transnational organized crime.

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law. The 50-page report summarizes a wide variety of IRS CI activity throughout the fiscal year and includes case examples on a range of tax crimes, money laundering, public corruption, terrorist financing and narcotics trafficking financial crimes.

“I’m proud of IRS-CI and the reputation that this agency has as the best financial investigators in the world,” Weber said. “Regardless of our budget challenges over the past several years, I am proud that we have not lost sight of our impact or mission and that the quality of our cases remains high.”

[ Click Here to see the Annual Report]  

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

 

IRS Has Refunds Totaling $1 Billion for People Who Have Not Filed a Federal Income Tax Return

Posted by Admin Posted on Mar 16 2017

IRS Has Refunds Totaling $1 Billion for People Who Have Not Filed a 2013 Federal Income Tax Return

 

The Internal Revenue Service announced today that unclaimed federal income tax refunds totaling more than $1 billion may be waiting for an estimated 1 million taxpayers who did not file a 2013 federal income tax return.

To collect the money, taxpayers must file a 2013 tax return with the IRS no later than this year's tax deadline, Tuesday, April 18.

"We’re trying to connect a million people with their share of 1 billion dollars in unclaimed refunds for the 2013 tax year,” said IRS Commissioner John Koskinen. “People across the nation haven’t filed tax returns to claim these refunds, and their window of opportunity is closing soon. Students and many others may not realize they’re due a tax refund. Remember, there’s no penalty for filing a late return if you’re due a refund.”

The IRS estimates the midpoint for potential refunds for 2013 to be $763; half of the refunds are more than $763 and half are less.

In cases where a tax return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If they do not file a return within three years, the money becomes the property of the U.S. Treasury. For 2013 tax returns, the window closes April 18, 2017. The law requires taxpayers to properly address mail and postmark the tax return by that date.

The IRS reminds taxpayers seeking a 2013 refund that their checks may be held if they have not filed tax returns for 2014 and 2015. In addition, the refund will be applied to any amounts still owed to the IRS, or a state tax agency, and may be used to offset unpaid child support or past due federal debts, such as student loans.

By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2013. Many low-and-moderate income workers may have been eligible for the Earned Income Tax Credit (EITC). For 2013, the credit was worth as much as $6,044. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2013 were:

$46,227 ($51,567 if married filing jointly) for those with three or more qualifying children;

$43,038 ($48,378 if married filing jointly) for people with two qualifying children;

$37,870 ($43,210 if married filing jointly) for those with one qualifying child, and;

$14,340 ($19,680 if married filing jointly) for people without qualifying children.

Current and prior year tax forms (such as the Tax Year 2013 Form 1040, 1040A and 1040EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free: 800- TAX-FORM (800-829-3676). Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2013, 2014 or 2015 should request copies from their employer, bank or other payer.

Taxpayers who are unable to get missing forms from their employer or other payer should go to IRS.gov and use the “Get Transcript Online” tool to obtain a Wage and Income transcript.  Taxpayers can also file Form 4506-T to request a transcript of their 2013 income. A Wage and Income transcript shows data from information returns we receive such as Forms W-2, 1099, 1098 and Form 5498, IRA Contribution Information. Taxpayers can use the information on the transcript to file their tax return.

State-by-state estimates of individuals who may be due 2013 tax refunds: 

State or District

Estimated

Number of

Individuals

Median

Potential

Refund

Total

Potential

Refunds*

Alabama

18,100

$729

$17,549,000

Alaska

4,700

$917

$5,665,000

Arizona

24,800

$650

$22,642,000

Arkansas

9,900

$722

$9,571,000

California

97,200

$696

$93,406,000

Colorado

20,200

$699

$19,454,000

Connecticut

11,500

$846

$12,691,000

Delaware

4,300

$776

$4,321,000

District of Columbia

3,200

$762

$3,341,000

Florida

66,900

$776

$67,758,000

Georgia

34,400

$671

$32,082,000

Hawaii

6,500

$793

$6,876,000

Idaho

4,500

$619

$3,919,000

Illinois

40,000

$834

$42,673,000

Indiana

21,700

$788

$22,060,000

Iowa

10,200

$808

$10,193,000

Kansas

11,100

$746

$10,700,000

Kentucky

12,900

$772

$12,627,000

Louisiana

20,300

$767

$21,209,000

Maine

4,000

$715

$3,645,000

Maryland

22,200

$770

$23,080,000

Massachusetts

23,000

$838

$24,950,000

Michigan

33,600

$763

$33,998,000

Minnesota

15,600

$691

$14,544,000

Mississippi

10,400

$702

$10,041,000

Missouri

22,400

$705

$20,787,000

Montana

3,600

$727

$3,480,000

Nebraska

5,300

$745

$5,084,000

Nevada

12,300

$753

$12,078,000

New Hampshire

4,400

$892

$4,930,000

New Jersey

29,900

$873

$33,207,000

New Mexico

8,100

$753

$8,162,000

New York

54,700

$847

$59,416,000

North Carolina

29,800

$656

$26,874,000

North Dakota

2,900

$888

$3,209,000

Ohio

36,000

$749

$34,547,000

Oklahoma

17,700

$773

$17,979,000

Oregon

15,500

$658

$14,188,000

Pennsylvania

39,400

$835

$41,078,000

Rhode Island

2,900

$796

$2,906,000

South Carolina

12,100

$674

$11,267,000

South Dakota

2,700

$823

$2,709,000

Tennessee

19,500

$743

$18,829,000

Texas

104,700

$829

$115,580,000

Utah

7,900

$667

$7,443,000

Vermont

2,000

$747

$1,859,000

Virginia

29,000

$752

$29,578,000

Washington

27,600

$829

$30,330,000

West Virginia

5,000

$855

$5,258,000

Wisconsin

12,700

$675

$11,619,000

Wyoming

2,800

$911

$3,189,000

Totals

1,042,100

$763

$1,054,581,000

 * Excluding the Earned Income Tax Credit and other credits. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

¿Tiene una casa de vacaciones que a veces alquila?

Posted by Admin Posted on Mar 16 2017

alquiler casa vacaciones

 

Si es así, debe saber que hay algunas reglas especiales que afectan la manera de reportar sus ingresos y gastos de alquiler.

Por ejemplo…si  alquila su casa de vacaciones solo por un corto tiempo, menos de 15 días al año, puede que no tenga que reportarlo.  

Esto significa que, en general, mientras usted esté dentro del plazo de dos semanas, sus ingresos serán exentos de impuestos y no necesitará reportarlo en su declaración.  

Y si usted detalla sus deducciones en el anexo A, aún puede reclamar deducciones de intereses hipotecarios calificados e impuestos de propiedad que usted paga, así como tambien las pérdidas fortuitas elegibles.

Por otro lado, si usted alquila su casa al menos 15 días durante el año, la ley es muy clara, los ingresos por alquiler que usted recibe siempre son tasables.  

Eso significa que usted debe reportarlo en su declaración usando el anexo E.

Sin embargo, las reglas para reclamar sus gastos son un poco más complicadas.

Los factores, como el número de días que  alquila su casa comparado con el número de días que la usa, también entran en juego.  

Esto afecta cuánto puede deducir, que gastos puede reclamar, y como los reporta en su declaración de impuestos.

La  publicación 527 del irs sobre la renta de alquiler y gastos tiene mucha información sobre las reglas que se aplican a las casas de vacaciones, incluyendo una hoja de trabajo y algunos ejemplos.  

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

For business financing, what kinds of loans exist?

Posted by Admin Posted on Mar 15 2017

For business financing, what kinds of loans exist?

 

You must know the exact amount of money that you need, what your purpose is and how you will repay it in order to be successful in getting a loan. You must convince the lender in a written proposal that you are a good credit risk.

There are two basic kinds of loans, although terms vary by lender:

Short-term and long-term, maturity periods of up to one year are generally short-term, which include accounts receivable loans, working capital loans and lines of credit.

Maturities greater than a year and less than seven years is a typical long-term loan. Equipment and real estate loans can have maturity up to 25 years. Major business expenses such as purchasing real estate and facilities, durable equipment, construction, vehicles, furniture and fixtures, etc. are a few purposes for long-term loans.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Possible Jail and Fines for Falsely Padding Deductions on Returns

Posted by Admin Posted on Mar 15 2017

Possible Jail and Fines for Falsely Padding Deductions on Returns

 

The Internal Revenue Service warns against the temptation of falsely inflating deductions or expenses on tax returns to under pay what is owed and possibly receive larger refunds.

The vast majority of taxpayers file honest and accurate tax returns on time every year. However, each year some taxpayers fail to resist the temptation of fudging their information. That’s why falsely claiming deductions, expenses or credits on tax returns is on the “Dirty Dozen” tax scams list for the 2016 filing season.

"Taxpayers should file accurate returns to receive the refunds they are entitled to receive and shouldn't gamble with their taxes by padding their deductions," said IRS Commissioner John Koskinen.

Taxpayers should think twice before overstating deductions such as charitable contributions, padding their claimed business expenses or including credits that they are not entitled to receive – like the Earned Income Tax Credit or Child Tax Credit. Increasingly efficient automated systems generate most IRS audits. The IRS can normally audit returns filed within the last three years. Additional years can be added if substantial errors are identified or fraud is suspected.

Significant civil penalties may apply for taxpayers who file incorrect tax returns including:

-20 percent of the disallowed amount for filing an erroneous claim for a refund or credit.

-$5,000 if the IRS determines a taxpayer has filed a frivolous tax return.” A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax reported is substantially incorrect.

-In addition to the full amount of tax owed, a taxpayer could be assessed a penalty of 75 percent of the amount owed if the underpayment on the return resulted from tax fraud.

Taxpayers even may be subject to criminal prosecution (brought to trial) for actions such as:

-Tax evasion 

-Willful failure to file a return, supply information, or pay any tax due Fraud and false statements Preparing and filing a fraudulent return, or Identity theft.

Criminal prosecution could lead to additional penalties and even prison time.

Taxpayers should remember that they are legally responsible for what is on their tax return even if it is prepared by someone else, so be wise when selecting a tax professional. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source:  IRS

Phishing-Fake Emails and Websites try to steal your Information

Posted by Admin Posted on Mar 15 2017

Phishing-Fake Emails and Websites try to steal your Information

 

The Internal Revenue Service warns taxpayers to watch out for fake emails or websites looking to steal personal information. These “phishing” schemes continue to be on the annual IRS list of “Dirty Dozen” tax scams for the 2017 filing season.

Criminals pose as a person or organization you trust and/or recognize. They may hack an email account and send mass emails under another person’s name.  They may pose as a bank, credit card company, tax software provider or government gency. Criminals go to great lengths to create websites that appear legitimate but contain phony log-in pages. These criminals hope victims will take the bait to get the victim’s money, passwords, Social Security number and identity.

"Criminals are constantly looking for new ways to trick you out of your personal financial information so be extremely cautious about opening strange emails," said IRS Commissioner John Koskinen. "The IRS won't send you an email about a tax bill or refund out of the blue. We urge taxpayers not to click on any unexpected emails claiming to be from the IRS."

Scam emails and websites also can infect your computer with malware without you even knowing it. The malware can give the criminal access to your device, enabling them to access all your sensitive files or track your keyboard strokes, exposing login information.

If a taxpayer receives an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov. 

It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information online that can help protect taxpayers from email scams.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source:  IRS

HAVE A PENSION? BE SURE TO PLAN CAREFULLY

Posted by Admin Posted on Mar 08 2017

HAVE A PENSION? BE SURE TO PLAN CAREFULLY

 

The traditional pension may seem like a thing of the past. But many workers are still counting on payouts from one of these “defined benefit” plans in retirement. If you’re among this group, it’s important to start thinking now about how you’ll receive the money from your pension.

Making a choice

Some defined benefit plans give retirees a choice between receiving payouts in the form of a lump sum or an annuity. Taking a lump sum distribution allows you to invest the money as you please. Plus, if you manage and invest the funds wisely, you may be able to achieve better returns than those provided by an annuity.

On the other hand, if you’re concerned about the risks associated with investing your pension benefits (you could lose principal) — or don’t want the responsibility — an annuity offers guaranteed income for life. (Bear in mind that guarantees are subject to the claims-paying ability of the issuing company.)

Choosing yet again

If you choose to receive your pension benefits in the form of an annuity — or if your plan doesn’t offer a lump sum option — your plan likely will require you to choose between a single-life or joint-life annuity. A single-life annuity provides you with monthly benefits for life. The joint-life option (also referred to as “joint and survivor”) provides a smaller monthly benefit, but the payments continue over the joint lifetimes of both you and your spouse.

Deciding between the two annuity options requires some educated guesswork. To determine the option that will provide the greatest overall financial benefit, you’ll need to consider several factors — including your and your spouse’s actuarial life expectancies as well as factors that may affect your actual life expectancies, such as current health conditions and family medical histories.

You might choose the single-life option, for example, if you and your spouse have comparable life expectancies or if you expect to live longer. Under those circumstances, the higher monthly payment will maximize your overall benefits.

But there’s a risk, too: Because the payments will stop at your death, if you die prematurely and your spouse outlives you, the overall financial benefit may be smaller than if you’d chosen the joint-life option. The difference could be substantial if your spouse outlives you by many years.

Your overall financial situation — that is, your expenses and your other assets and income sources — also play a major role. Even if you expect a joint-life annuity to yield the greatest total benefit over time, you may want to consider a single-life annuity if you need additional liquidity in the short term.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Get Credit for Making a Home Energy Efficient

Posted by Admin Posted on Mar 08 2017

Get Credit for Making a Home Energy Efficient

 

Taxpayers who made certain energy efficient improvements to their home last year may qualify for a tax credit this year. Here are some key facts to know about home energy tax credits:

Non-Business Energy Property Credit

Part of this credit is worth 10 percent of the cost of certain qualified energy-saving items added to a taxpayer’s main home last year. Qualified improvements include adding insulation, energy-efficient exterior windows and doors, and certain roofs. Do not include the cost to install these items.

The other part of the credit is not a percentage of the cost. It includes the installation costs of certain high-efficiency heating and air-conditioning systems, high-efficiency water heaters and stoves that burn biomass fuel. The credit amount for each type of property has a different dollar limit.

This credit has a maximum lifetime limit of $500. Taxpayers may only use $200 of this limit for windows.

A taxpayer’s main home must be located in the U.S. to qualify for the credit. The non-business energy property credit is only available for existing homes.

Be sure to have the written certification from the manufacturer that their product qualifies for this tax credit. They usually post it on their website or include it with the product’s packaging. Taxpayers can use this to claim the credit. Do not attach it to a tax return. Keep it with tax records.

Taxpayers may claim the credit on their 2016 tax return if they didn’t reach the lifetime limit in past years. Under current law, Dec. 31, 2016, was the deadline for qualifying improvements to the taxpayer’s main U. S. home.

Residential Energy Efficient Property Credit

This tax credit is 30 percent of the cost of alternative energy equipment installed on or in a home. This includes the cost of installation.

Qualified equipment includes solar hot water heaters, solar electric equipment, wind turbines and fuel cell property.

There is no dollar limit on the credit for most types of property. If the credit is more than the tax owed, carry forward the unused portion of this credit to next year’s tax return.

The home must be in the U.S. It does not have to be a taxpayer’s main home, unless the alternative energy equipment is qualified fuel cell property. The residential energy efficient property credit is available for both existing homes and homes under construction.

This credit is available through 2016.

Use Form 5695, Residential Energy Credits, to claim these credits. For more information on this topic, refer to the form’s instructions. Get IRS forms anytime on IRS.gov/forms.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

SCAM ARTISTS THREATEN TAXPAYERS WITH POLICE ARREST, DEPORTATION AND LICENSE REVOCATION

Posted by Admin Posted on Mar 08 2017

 SCAM ARTISTS THREATEN TAXPAYERS

 

Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, headlining the annual "Dirty Dozen" list of tax scams for the 2017 filing season, the Internal Revenue Service announced today. The IRS has seen a surge of these phone scams as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season.

The caller may threaten you with arrest or court action to trick you into making a payment,” said IRS Commissioner John Koskinen. “Some schemes may say you're entitled to a huge refund."

This January, the Treasury Inspector General for Tax Administration (TIGTA) announced they have received reports of roughly 896,000 contacts since October 2013 and have become aware of over 5,000 victims who have collectively paid over $26.5 million as a result of the scam.  

Protect yourself.

The IRS will never:

-Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.

-Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

-Require you to use a specific payment method for your taxes, such as a prepaid debit card.

-Ask for credit or debit card numbers over the phone.

-Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you don’t owe taxes, or have no reason to think that you do:

-Do not give out any information. Hang up immediately.

-Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.

-Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.


If you know you owe, or think you may owe tax:

-Call the IRS at 800-829-1040. IRS workers can help you.

Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source:  IRS

Capital Gains and Losses – 10 Helpful Facts to Know

Posted by Admin Posted on Mar 06 2017

Capital Gains and Losses – 10 Helpful Facts to Know

 

When a person sells a capital asset, the sale normally results in a capital gain or loss. A capital asset includes inherited property or property someone owns for personal use or as an investment.

Here are 10 facts that taxpayers should know about capital gains and losses:

Capital Assets. Capital assets include property such as a home or a car. It also includes investment property, like stocks and bonds.

Gains and Losses. A capital gain or loss is the difference between the basis and the amount the seller gets when they sell an asset. The basis is usually what the seller paid for the asset. For details about inherited property, see IRS Publication 544, IRS Publication 550 and IRS Publication 551.

Net Investment Income Tax. Taxpayers must include all capital gains in their income. Capital gains may be subject to the Net Investment Income Tax if the taxpayer’s income is above certain amounts. The rate of this tax is 3.8 percent. For details, visit IRS.gov.

Deductible Losses. Taxpayers can deduct capital losses on the sale of investment property but can’t deduct losses on the sale of property they hold for their personal use.

Limit on Losses. If a taxpayer’s capital losses are more than their capital gains, they can deduct the difference as a loss on their tax return. This loss is limited to $3,000 per year, or $1,500 if married and filing a separate return.

Carryover Losses. If a taxpayer’s total net capital loss is more than the limit they can deduct, they can carry it over to next year’s tax return.

Long and Short Term. Capital gains and losses are either long-term or short-term. It depends on how long the taxpayer holds the property. If the taxpayer holds it for one year or less, the gain or loss is short-term.

Net Capital Gain.  If a taxpayer’s long-term gains are more than their long-term losses, the difference between the two is a net long-term capital gain. If the net long-term capital gain is more than the net short-term capital loss, the taxpayer has a net capital gain.

Tax Rate. The tax rate on a net capital gain usually depends on the taxpayer’s income. The maximum tax rate on a net capital gain is 20 percent. However, for most taxpayers a zero or 15 percent rate will apply. A 25 or 28 percent tax rate can also apply to certain types of net capital gain.

Forms to File. Taxpayers often will need to file Form 8949, Sales and Other Dispositions of Capital Assets. Taxpayers also need to file Schedule D, Capital Gains and Losses, with their tax return.

For more on this topic, see Schedule D instructions. Taxpayers can visit IRS.gov to get tax forms and documents anytime.

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Debt Cancellation May be Taxable

Posted by Admin Posted on Mar 03 2017

Debt Cancellation May be Taxable

 

If a lender cancels part or all of a debt, a taxpayer must generally consider this as income. However, the law allows an exclusion that may apply to homeowners who had their mortgage debt canceled in 2016.

Here are 10 tips about debt cancellation:

1- Main Home. If the canceled debt was a loan on a taxpayer’s main home, they may be  able to exclude the canceled amount from their income. They must have used the loan to buy, build or substantially improve their main home to qualify. Their main home must also secure the mortgage. 

2- Loan Modification. If a taxpayer’s lender canceled or reduced part of their mortgage balance through a loan modification or ‘workout,’ the taxpayer may be able to exclude that amount from their income. They may also be able to exclude debt discharged as part of the Home Affordable Modification Program, or HAMP. The exclusion may also apply to the amount of debt canceled in a foreclosure.

3- Refinanced Mortgage. The exclusion may apply to amounts canceled on a refinanced mortgage. This applies only if the taxpayer used proceeds from the refinancing to buy, build or substantially improve their main home and only up to the amount of the old mortgage principal just before refinancing. Amounts used for other purposes do not qualify.

4- Other Canceled Debt. Other types of canceled debt such as second homes, rental and business property, credit card debt or car loans do not qualify for this special exclusion. On the other hand, there are other rules that may allow those types of canceled debts to be nontaxable.

5- Form 1099-C. If a lender reduced or canceled at least $600 of a taxpayer’s debt, the taxpayer should receive Form 1099-C, Cancellation of Debt, by Feb. 1. This form shows the amount of canceled debt and other information. 

6- Form 982. If a taxpayer qualifies, report the excluded debt on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. They should file the form with their income tax return.

7- IRS.gov Tool. Taxpayers should use the Interactive Tax Assistant tool - Do I Have Cancellation of Debt Income on My Personal Residence? - on IRS.gov to find out if their canceled mortgage debt is taxable.

8- Exclusion Extended. The law that authorized the exclusion of cancelled debt from income was extended through Dec. 31, 2016.

9- IRS Free File.  IRS e-file is fastest, safest and easiest way to file. Taxpayers can use IRS Free File to e-file their tax return for free. If they earned $64,000 or less, they can use brand name tax software. The software does the math and completes the right forms for them. If they earned more than $64,000, they can use Free File Fillable Forms. This option uses electronic versions of IRS paper forms. It is best for those who are used to doing their own taxes. Free File is available only on IRS.gov/freefile.

10- More Information. For more on this topic see Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Reminds International Taxpayers of Tax Obligations; Clarifies Rules for Tax Withholding Agents

Posted by Admin Posted on Feb 28 2017

IRS Reminds International Taxpayers of Tax Obligations

 

The Internal Revenue Service today reminded non-U.S. citizens who may have taxable income, such as international students and scholars who may be working or receiving scholarship funds, that they may have special requirements to file a U.S. tax return.

The IRS also reminded withholding agents -- such as payroll professionals or universities -- that accurately filed Forms 1042-S help speed any refunds due to their non-U.S. citizen taxpayers. Errors on forms or returns could result in some refunds being delayed.

What Non-U.S. Citizen Taxpayers Must Do

The Internal Revenue Code generally requires non-U.S. citizens, whom the code defines as either resident or non-resident aliens, who are engaged in a trade or business within the U.S. to file tax returns. Non-resident aliens such as foreign students, teachers or trainees temporarily in the United States on F, J, M or Q visas are considered engaged in a trade or business.

Most individuals in F-1, J-1, M-1, Q-1 and Q-2 non-immigrant status are eligible to be employed in the U.S. and are eligible to apply for a Social Security number if they are actually employed in the United States. Those not eligible for an SSN but who have a tax filing requirement may request an Individual Taxpayer Identification Number from the IRS.

The non-U.S. citizen’s name must be reported exactly as it appears on the official documentation provided to the withholding agent (such as a Social Security Administration card or some other form of official governmental documentation).

Filing a Form 1040-NR or 1040NR-EZ is required by non-U.S. citizens who have a taxable event such as:

A taxable scholarship or fellowship, as described in Chapter 1 of Publication 970, Tax Benefits for Education;

Income partially or totally exempt from tax under the terms of a tax treaty; and/or

Any other income, which is taxable under the Internal Revenue Code.

Non-U.S. citizens also must attach one copy (generally Copy B) for each Form 1042-S received to their tax returns. Non-U.S. citizens should review the Form 1042-S to ensure it accurately reflects their name and income. If the form does not contain accurate information, they must contact the withholding agent for an amended Form 1042-S.

What Withholding Agents Must Do

Generally, non-U.S. citizens who have taxable income also may have withholding of taxes by the source of their income. Withholding agents are required to complete Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding.

Withholding agents must provide five copies of the Form 1042-S. Copy A should go to the IRS; Copies B, C and D to the recipient of the income; and copy E should be retained by the withholding agent. All information, including the name of the taxpayer, must match exactly on all copies of Form 1042-S.

If withholding agents create a substitute Form 1042-S, all five copies must be in the same physical format. The size, shape and format of any substitute form must adhere to the rules of Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns. The official Form 1042-S is the standard for substitute forms.

A common error is to have a Form 1042-S listing two or more recipients in box 13a. The 2016 instructions to Form 1042-S have been updated to clarify that in the case of joint owners, Form 1042-S can only list one of the owners in box 13a.

Withholding agents should review Fact Sheet 2017-3, where they can find the latest changes to Form 1042-S instructions and common errors that delay processing of tax returns.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Cash Transactions Subject to Scrutiny for an Additional 6-Month Period!!!

Posted by Admin Posted on Feb 27 2017

Cash Transactions Subject to Scrutiny for an Additional 6-Month Period!!!

 

Foreign buyers purchased $102.6 billion of residential property between April 2015 – March 2016.  Fifty percent of the reported transactions were all-cash sales, according to the 2016 Profile of International Activity in U.S. Residential Real Estate report issued by the National Association of Realtors. The Financial Crimes Enforcement Network (FinCEN), aware of the number of all cash real estate purchases, has been concerned that some of those transactions may be conducted by individuals attempting to hide their assets and identity. For this reason, the FinCEN announced on February 23, 2017 the renewal of the existing Geographic Targeting Orders (“GTO”). The first GTO was implemented from March 1, 2016 thru August 27, 2016 and the second one from August 28, 2016 thru February 23, 2017.

FinCEN has found that about 30% of the transactions covered by the prior GTOs involve a beneficial owner or a purchaser representative that is also subject of a previous suspicious activity report. According to the FinCEN Acting Director Jamal El-Hind:  “These GTOs are producing valuable data that is assisting law enforcement and is serving to inform our future efforts to address money laundering in the real estate sector”. At this moment it is not clear whether or not the GTO will be extended to other counties in the nation or if they will become permanent in the future, but if the FinCEN keeps gathering meaningful data that is allowing them to fight money laundering more efficiently, chances are, in my opinion, that they will be implemented nationwide.

Effective on February 24, 2017 and for the next 180 days ending on August 22, 2017, title insurance companies in the following areas will be receiving GTOs.

 ·       All boroughs of New York City (Manhattan, Brooklyn, Queens, Bronx and Staten Island).
·        Miami-Dade County, Broward and Palm Beach Counties.
·        Los Angeles County, San Diego County and San Francisco, San Mateo and Santa Clara Counties (part of the San Francisco area).
·        Bexar County in Texas that includes the city of San Antonio.

The reporting threshold in the NY City boroughs will be $1.5 million except Manhattan that will remain at $3 million. The threshold for the three Florida counties will be $1 million and $2 million for the California counties. Bexar County will have a $500,000 reporting threshold.

The title insurance companies that receive a GTO must file a FinCEN Form 8300 within 30 days of closing to report the transactions over the required thresholds. Form 8300 requires the disclosure of information about the individual responsible for representing the legal entity that is purchasing the property, information about the beneficial owner of the purchaser and information about the transaction and method of payment.

The GTOs do not impose any new requirements on real estate professionals, but the National Association of Realtors has collaborated with FinCEN by developing Anti-Money Laundering Guidelines for Real Estate Professionals to help increase knowledge and understanding of potential money laundering activities. I suggest that you become familiar with the guidelines and also that you make  aware your foreign clients of the temporary reporting requirements.

Please do not hesitate to call me with any questions you may have regarding the above-mentioned issue or any other questions regarding your foreign clients. Our firm has a network of professionals that include International Tax Attorneys as well as Real Estate and Immigration Attorneys that will assist you and your clients to ensure that the whole process of buying, holding and selling real estate in the United States goes without any unpleasant surprises from the U.S. income and estate tax standpoint.

 

Kind regards,

 

Jose Huerta, EMST

International Tax Consultant

E-mail: jose@lbcpa.com

NEED A DO-OVER? AMEND YOUR TAX RETURN

Posted by Admin Posted on Feb 27 2017

NEED A DO-OVER? AMEND YOUR TAX RETURN

 

Like many taxpayers, you probably feel a sense of relief after filing your tax return. But that feeling can change if, soon after, you realize you’ve overlooked a key detail or received additional information that should have been considered. In such instances, you may want (or need) to amend your return.

Typically, an amended return — Form 1040X, to be exact — must be filed within three years from the date you filed the original tax return or within two years of the date the applicable tax was paid (whichever is later). Your choice of timing should depend on whether you expect a refund or a bill.

If claiming an additional refund, you should typically wait until you’ve received your original refund. Then cash or deposit the first refund check while waiting for the second. If you owe additional dollars, file the amended return and pay the tax immediately to minimize interest and penalties.

Bear in mind that, as of this writing, the IRS doesn’t offer amended returns via e-file. You can, however, track your amended return electronically. The IRS now offers an automated status-tracking tool called “Where’s My Amended Return?” at https://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Avoid the Rush: Be Prepared to Validate Identity if Calling the IRS

Posted by Admin Posted on Feb 27 2017

Avoid the Rush: Be Prepared to Validate Identity if Calling the IRS

 

The Internal Revenue Service said mid-February marks the agency’s busiest time of the year for telephone calls. The IRS is reminding taxpayers who have questions about their tax accounts to be prepared to validate their identity when speaking with an IRS assistor. This will help avoid the need for a repeat call.

The IRS recognizes the importance of protecting taxpayers’ identities. That’s why IRS call center assistors take great care to make certain that they only discuss personal information with the taxpayer or someone authorized to speak on the taxpayer’s behalf.

Customer service representatives can answer refund questions beginning 21 days after the return was filed. Taxpayers should use “Where’s My Refund?” to track the status of their refund. Taxpayers who are e-filing their return and need their prior year adjusted gross income should use the Get Transcript tool on IRS.gov. IRS telephone assistors cannot provide prior-year adjusted gross income over the phone for filing purposes.

“Where’s My Refund?” will be updated Feb. 18 for the vast majority of early filers who claimed the Earned Income Tax Credit or the Additional Child Tax Credit. Before Feb. 18, some taxpayers may see a projected date or a message that the IRS is processing their return.

By law, the IRS is required to hold EITC and ACTC refunds until Feb. 15. However, taxpayers may not see those refunds until the week of Feb. 27. Due to differing timeframes with financial institutions, weekends and the Presidents Day holiday, these refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27 -- if there are no processing issues with the tax return and the taxpayer chose direct deposit.

The IRS phone assistors do not have additional information on refund dates beyond what taxpayers have access to on "Where's My Refund?”. Given high call volumes, taxpayers should not call unless directed to do so by the refund tool. In addition, a common myth is that people can get their refund date earlier by ordering a tax transcript. There is no such "secret" option to find a refund date by calling the IRS or ordering a transcript; just check "Where's My Refund?" once a day.

If Calling About a Personal Tax Account

Before calling about a personal tax account, have the following information handy:

Social Security numbers and birth dates for those listed on the tax return

An Individual Taxpayer Identification Number (ITIN) for those without a Social Security number (SSN)

Filing status – Single, Head of Household, Married Filing Joint or Married Filing Separate

Prior-year tax return. The IRS may need to verify identity before answering certain questions

A copy of the tax return in question

Any letters or notices received from the IRS.

If Calling About a Letter 4883C

At this time of year, the IRS begins sending letters to taxpayers inquiring about suspicious tax returns it has identified. It’s important for the IRS and the taxpayer to confirm whether or not the taxpayer actually filed the return in question. Taxpayers have 30 days to call, which allows time to avoid the rush around Presidents’ Day.

To expedite the process when calling, taxpayers MUST have: 

The IRS letter  

Copy of prior year tax return (if filed)

Current year tax return (if filed)  

Any supporting documents for each year's return (such as W-2's, 1099's, Schedule C, Schedule F, etc.)

If Calling About Someone Else’s Account

IRS call center assistors will only speak with the taxpayer or their legally designated representative. Before calling, have the following information handy:

Verbal or written authorization to discuss the account

The ability to verify the taxpayer’s name, SSN/ITIN, tax period, form(s)

If the caller is a third party designee, a PTIN or PIN must be provided

A current, completed, and signed Form 8821, Tax Information Authorization or

A completed and signed Form 2848, Power of Attorney and Declaration of Representative

If Calling About a Deceased Taxpayer

Be prepared to fax:

The deceased taxpayer’s death certificate, and

Either copies of the Letter of Testamentary approved by the court or IRS Form 56, Notice Concerning Fiduciary Relationship (for estate executors)

To better serve taxpayers around the President’s Day holiday, the peak time of the year for telephone calls to the IRS, the IRS toll-free lines will be open Saturday, Feb. 18, from 9 a.m. to 5 p.m. (callers’ local time) and Monday, Feb. 20, from 7 a.m. to 7 p.m. (callers’ local time).

This tip is part of the IRS Avoid the Rush news release series designed to provide taxpayers with the information they need, when they need it. More details on this series, including information on additional online resources, are available on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source:  IRS

Don’t Fall for Scam Calls and Emails Posing as IRS

Posted by Admin Posted on Feb 24 2017

Don’t Fall for Scam Calls and Emails Posing as IRS

 

Scams continue to use the IRS as a lure. These tax scams take many different forms. The most common scams are phone calls and emails from thieves who pretend to be from the IRS. Scammers use the IRS name, logo or a fake website to try and steal money from taxpayers. Identity theft can also happen with these scams.

Taxpayers need to be wary of phone calls or automated messages from someone who claims to be from the IRS. Often these criminals will say the taxpayer owes money. They also demand payment right away. Other times scammers will lie to a taxpayer and say they are due a refund. The thieves ask for bank account information over the phone. The IRS warns taxpayers not to fall for these scams.

Below are several tips that will help filers avoid becoming a scam victim.

IRS employees will NOT:

Call demanding immediate payment. The IRS will not call a taxpayer if they owe tax without first sending a bill in the mail.

Demand payment without allowing the taxpayer to question or appeal the amount owed.

Require the taxpayer pay their taxes a certain way. For example, demand taxpayers use a prepaid debit card.

Ask for credit or debit card numbers over the phone.

Threaten to contact local police or similar agencies to arrest the taxpayer for non-payment of taxes.

Threaten legal action such as a lawsuit.

If a taxpayer doesn’t owe or think they owe any tax, they should:

Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.

Report the incident to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" to the comments of your report.

In most cases, an IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. Criminals often use fake refunds, phony tax bills or threats of an audit. Some emails link to sham websites that look real. The scammers’ goal is to lure victims to give up their personal and financial information. If they get what they’re after, they use it to steal a victim’s money and their identity.

For those taxpayers who get a ‘phishing’ email, the IRS offers this advice:

Don’t reply to the message.

Don’t give out your personal or financial information.

Forward the email to phishing@irs.gov. Then delete it.

Do not open any attachments or click on any links. They may have malicious code that will infect your computer.

More information on how to report phishing or phone scams is available on IRS.gov.

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.  

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Warns of Video Relay Scam Targeting Deaf and Hard of Hearing

Posted by Admin Posted on Feb 24 2017

IRS Warns of Video Relay Scam Targeting Deaf and Hard of Hearing

 

Every day scammers come up with new ways to steal taxpayers’ identities and personal information. Some scammers pretend to be from the IRS with one goal in mind: to steal money.

Be aware that con artists will use video relay services (VRS) to try to scam deaf and hard of hearing individuals. Don’t become a victim. Deaf and hard of hearing taxpayers should avoid giving out personal and financial information to anyone they do not know. Always confirm that the person requesting personal information is who they say they are.

Do not automatically trust calls just because they are made through VRS. VRS interpreters do not screen calls for validity.

The IRS has procedures in place for taxpayers who are experiencing tax issues. If you receive a call through VRS from someone claiming to be from the IRS, keep this in mind:

The IRS Will Never:

- Demand immediate payment and require the payment be made a specific way, such as by prepaid debit card, gift card or wire transfer. In most cases, the IRS will not call taxpayers about taxes owed without first having mailed a letter to the taxpayer.

- Threaten that local police or other law-enforcement groups will immediately arrest taxpayers for not paying a tax bill.

- Demand that taxpayers pay taxes without giving them the opportunity to question or appeal the amount owed.

- Ask for credit or debit card numbers over the phone.

Receive a Suspicious Call? Here’s What to Do:

Deaf and hard of hearing taxpayers who owe taxes or think they might owe taxes should call the IRS at 800-829-1040 through VRS. IRS employees can help with a payment issue or confirm if there really is a tax issue.

Taxpayers who know they don’t owe taxes or have no reason to think that they owe any taxes (for example, they’ve never received an IRS letter or the caller made bogus threats or demands as described above), should call and report the incident to the Treasury Inspector General for Tax Administration, or TIGTA, at 800-366-4484.

Taxpayers can file a complaint using the FTC Complaint Assistant. If the complaint involves someone impersonating the IRS, include the words “IRS Telephone Scam” in the notes.

To learn more about the latest tax phone scams, go to IRS.gov and type “scam” in the search field. IRS YouTube videos are available on a variety of topics in American Sign Language (ASL) with open-captions and voice over.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Identity Theft is the Number One Tax Scam

Posted by Admin Posted on Feb 23 2017

Identity Theft is the Number One Tax Scam

 

Identity Theft: Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using Someone else’s Social Security number. Though the agency is making progress on this front, taxpayers still need to be Extremely careful and do everything they can to avoid being victimized. (IR-2016-12)

“We urge people to use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues because scams can take on many sophisticated forms," said IRS Commissioner John Koskinen. "Keep your personal information secure by protecting your computers and only giving out your Social Security numbers when absolutely necessary."

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. While the IRS has made significant strides over the past several years to address this issue, it remains a top concern for the IRS, which is why identity theft remains on the Dirty Dozen list again this year as the IRS works to protect taxpayers and help victims. In the most recent three fiscal years, Criminal Investigation (CI) helped convict approximately 2,000 identity thieves. In fiscal year 2015, the IRS initiated 776 identity theft related investigations, which resulted in 774 sentencings through CI enforcement efforts. The courts continue to impose significant jail time with the average months to serve in fiscal year 2015 at 38 months — the longest sentencing being over 27 years. The IRS understands that identity theft is a frustrating, complex process for victims. While identity thieves steal information from sources outside the tax system, the IRS is often the first to inform a victim that identity theft occurred. The IRS is working hard to resolve identity theft cases as quickly as possible.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Frivolous Tax Arguments Can Cost you Thousands

Posted by Admin Posted on Feb 22 2017

Frivolous Tax Arguments Can Cost you Thousands

 

Frivolous Tax Arguments: Don’t use frivolous tax arguments in an effort to avoid paying tax. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims Even though they are wrong and have been repeatedly thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes. The penalty for filing a frivolous tax return is $5,000. (IR-2016-27)

WASHINGTON – The Internal Revenue Service is warning taxpayers against using frivolous tax arguments to avoid paying their taxes.

Also, the IRS released the 2016 version of “The Truth about Frivolous Tax Arguments.” The document describes and responds to some of the common frivolous tax arguments made by those who oppose compliance with federal tax laws. Examples include contentions that taxpayers can refuse to pay taxes on religious or moral grounds by invoking the First Amendment. Other examples mentioned also include contentions that the only “employees” subject to federal income tax are employees of the federal government; and that only foreign-source income is taxable. The cases cited in the document demonstrate how frivolous arguments are treated by the IRS and the courts.

"The IRS and the courts hear many outlandish arguments from people trying to avoid their legal filing and tax obligations," said IRS Commissioner John Koskinen. "Taxpayers should avoid unscrupulous promoters of false tax-avoidance arguments because taxpayers end up paying what they owe plus potential penalties and interest mandated by law."

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.

Perpetrators of illegal scams may be subject to significant penalties and interest as well as possible criminal rosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shut down scams and prosecute the criminals behind them.

Debunking Frivolous Tax Arguments

“The Truth about Frivolous Tax Arguments” describes and responds to some of the common frivolous tax arguments made by those who oppose compliance with federal tax laws. The 2016 version includes numerous recently-decided cases hat demonstrate that the courts continue to regard such arguments as illegitimate.

Don’t Get Talked into Using a Frivolous Argument

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. These arguments are wrong and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes..

The penalty for filing a frivolous tax return is $5,000. The penalty applies to anyone who submits a purported tax return or other specified submission, if any portion of the submission is based on a position the IRS identified as frivolous in Notice 2010-33, 2010-17 I.R.B. 609, or reflects a desire to delay or impede administration of the tax laws.

Those who promote or adopt frivolous positions also risk a variety of other penalties.  For example, taxpayers could be responsible for an accuracy-related penalty, a civil fraud penalty, an erroneous refund claim penalty, or a failure to file penalty.  The Tax Court may also impose a penalty against taxpayers who make frivolous arguments in court.   

Taxpayers who rely on frivolous arguments and schemes may also face criminal prosecution for attempting to evade or defeat tax. Similarly, taxpayers may be convicted of a felony for willfully making and signing under penalties of perjury any return, statement, or other document that the person does not believe to be true and correct as to every material matter.  Persons who promote frivolous arguments and those who assist taxpayers in claiming tax benefits based on frivolous arguments may be prosecuted for a felony.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Hiding money and income offshore? The IRS is looking for you!

Posted by Admin Posted on Feb 22 2017

Hiding money and income offshore?  The IRS is looking for you!

 

Offshore Tax Avoidance: The recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore. Taxpayers are best served by coming in voluntarily and getting caught up on their tax-filing responsibilities. The IRS offers the Offshore Voluntary Disclosure Program (OVDP) to enable people catch up on their filing and tax obligations. 

The Internal Revenue Service today said avoiding taxes by hiding money or assets in unreported offshore accounts remains on its annual list of tax scams known as the “Dirty Dozen” for the 2015 filing season.

"Our continued enforcement actions should discourage anyone from trying to illegally hide money and income offshore," said IRS Commissioner John Koskinen. "We have voluntary options to help taxpayers get their taxes and filing obligations in order."

Since the first Offshore Voluntary Disclosure Program (OVDP) opened in 2009, there have been more than 54,000 disclosures and we have collected more than $8 billion from this initiative alone. The IRS conducted thousands of offshore-related civil audits that have produced tens of millions of dollars. The IRS has also pursued criminal charges leading to billions of dollars in criminal fines and restitutions.

The IRS remains committed to our priority efforts to stop offshore tax evasion wherever it occurs. Even though the IRS has faced several years of budget reductions, the IRS continues to pursue cases in all parts of the world, regardless of whether the person hiding money overseas chooses a bank with no offices on U.S. soil.

Through the years, offshore accounts have been used to lure taxpayers into scams and schemes.

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime, but many of these schemes peak during filing season as people prepare their returns or hire people to help with their taxes.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shut down scams and prosecute the criminals behind them.

Hiding Income Offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities and then using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice (DOJ) to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution.

Since 2009, tens of thousands of individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to comply with the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore is increasingly more difficult.

At the beginning of 2012, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. This program will be open for an indefinite period until otherwise announced.

Third-Party Reporting

Under the Foreign Account Tax Compliance Act (FATCA) and the network of intergovernmental agreements (IGAs) between the U.S. and  partner jurisdictions, automatic third-party account reporting began in 2015,  making it less likely that offshore financial accounts will go unnoticed by the IRS. In addition to FATCA and reporting through IGAs, the Department of Justice’s Swiss Bank Program continues to reach non-prosecution agreements with Swiss financial institutions that facilitated past non-compliance.  As part of these agreements, banks provide information on potential non-compliance by U.S. taxpayers. Potential civil penalties increase substantially if U.S. taxpayers associated with participating banks wait to apply to OVDP to resolve their tax obligations.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

 

Abusive Tax Shelters to Avoid Paying Taxes Can Give you a Big Headache

Posted by Admin Posted on Feb 21 2017

Abusive Tax Shelters to Avoid Paying Taxes Can Give you a Big Headache

 

ABUSIVE TAX SCHEMES HAVE EVOLVED!!!

The Internal Revenue Service said that using abusive tax shelters and structures to avoid paying taxes continues to be a problem and remains on its annual list of tax scams known as the “Dirty Dozen” for the 2017 filing season.

"Taxpayers should steer clear of unscrupulous promoters who sell phony tax shelters with no real purpose other than to avoid paying what is owed,” said IRS Commissioner John Koskinen. "These schemes can end up costing taxpayers more in back taxes, penalties and interest than they saved in the first place.”

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or hire people to help with their taxes.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shut down scams and prosecute the criminals behind them.

Abusive Tax Structures

Abusive tax schemes have evolved from simple structuring of abusive domestic and foreign trust arrangements into sophisticated strategies that take advantage of the financial secrecy laws of some foreign jurisdictions and the availability of credit/debit cards issued from offshore financial institutions.

IRS Criminal Investigation (CI) has developed a nationally coordinated program to combat these abusive tax schemes. CI's primary focus is on the identification and investigation of the tax scheme promoters as well as those who play a substantial or integral role in facilitating, aiding, assisting, or furthering the abusive tax scheme, such as accountants or lawyers. Just as important is the investigation of investors who knowingly participate in abusive tax schemes.

Multiple flow-through entities are commonly used as part of a taxpayer's scheme to evade taxes. These schemes may use Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs), International Business Companies (IBCs), foreign financial accounts, offshore credit/debit cards and other similar instruments. They are designed to conceal the true nature and ownership of the taxable income and/or assets.

Whether something is “too good to be true” is important to consider before buying into any arrangements that promise to “eliminate” or “substantially reduce” your tax liability.  If an arrangement uses unnecessary steps or a form that does not match its substance, then that arrangement is an abusive scheme.  Another thing to remember  is that the promoters of abusive tax schemes often employ financial instruments in their schemes; however, the instruments are used for improper purposes including the facilitation of tax evasion.

The IRS encourages taxpayers to report unlawful tax evasion.

Where Do You Report Suspected Tax Fraud Activity?

Misuse of Trusts

Trusts also commonly show up in abusive tax structures. They are highlighted here because unscrupulous promoters continue to urge taxpayers to transfer large amounts of assets into trusts. These assets include not only cash and investments, but also successful on-going businesses. There are legitimate uses of trusts in tax and estate planning, but the IRS commonly sees highly questionable transactions. These transactions promise reduced taxable income, inflated deductions for personal expenses, reduced (even to zero) self-employment taxes, and reduced estate or gift transfer taxes.These transactions commonly arise when taxpayers are transferring wealth from one generation to another. Questionable trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS. IRS personnel continue to see an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses, as well as to avoid estate transfer taxes. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.

Captive Insurance

Another abuse involving a legitimate tax structure involves certain small or “micro” captive insurance companies.  Tax law allows businesses to create “captive” insurance companies to enable those businesses to protect against certain risks. The insured claims deductions under the tax code for premiums paid for the insurance policies while the premiums end up with a captive insurance company owned by the owners of the insured or family members.

The captive insurance company, in turn, can elect under a separate section of the tax code to exclude up to $1.2 million of its net premium income per year, so that the captive is taxed only on its investment income.

In the abusive structure, unscrupulous promoters, accountants, or wealth planners persuade the owners of closely held entities to participate in these schemes.  The promoters assist the owners to create captive insurance companies onshore or offshore and cause the creation and sale of the captive “insurance” policies to the closely held entities.  The policies may cover ordinary business risks or esoteric, implausible risks for exorbitant “premiums,” while the insureds continue to maintain their far less costly commercial coverages with traditional insurers.  Captive “insurance” policies may attempt to cover the same risks as are covered by the entities’ existing commercial coverage, but the captive policies’ “premiums” may be double or triple the premiums of the policy owners’ commercial policies.

Annual premium amounts are frequently targeted to the amounts of deductions business entities seek in order to reduce their taxable income. In these abusive schemes, total premiums can equal up to $1.2 million annually to take full advantage of the premium income exclusion provision.  Underwriting and actuarial substantiation for the insurance premiums paid are either absent or illusory.  The promoters manage the entities’ captive insurance companies for substantial fees, assisting taxpayers unsophisticated in insurance, to continue the charade from year to year.

The Protecting Americans from Tax Hikes Act of 2015 reins in certain of the micro captive abuses that the IRS is currently combatting.  Those provisions are effective for small insurance companies’ taxable years beginning after Dec. 31, 2016.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

What can I do to raise money for my small business?

Posted by Admin Posted on Feb 21 2017

What can I do to raise money for my small business?

 

Although the process is complex and frustrating, raising capital is the most basic of all business activities. When looking for financing, there are various sources to consider. For most new businesses, the main source of capital comes from savings and other forms of personal resources. There are better options available than credit cards that are often used for financing, even a small business loan.

When beginning, entrepreneurs usually look to private sources like friends and family. Generally, the money is loaned at a low interest rate or interest free, which is very beneficial at the beginning.

The most common source of funding, not including personal resources, are credit unions and banks who will provide a loan if it is possible to show that your offer is worthwhile. Other sources are venture capital firms that aid businesses in exchange for partial or equity ownership.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Inventing Income to Qualify for a Tax Credit can Lead to Big Bills in Back Taxes, Penalties and Jail

Posted by Admin Posted on Feb 21 2017

Inventing Income can Lead to Penalties and Jail

 

WASHINGTON — The Internal Revenue Service warns taxpayers to avoid schemes to erroneously claim tax credits on their returns.

“Taxpayers should not falsify their income or other nformation on their tax returns to improperly claim tax credits,” said IRS Commissioner John Koskinen. "Misrepresenting facts is cheating and taxpayers are legally responsible for all the information reported on their tax returns.”

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or hire professionals to do so.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

Don’t Fake Income

Some people falsely increase the income they report to the IRS. This scam involves inflating or including income on a tax return that was never earned, either as wages or as self-employment income, usually in order to maximize refundable credits.

Just like falsely claiming an expense or deduction you did not pay, claiming income you did not earn in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions. This could result in taxpayers facing a large bill to repay the erroneous refunds, including interest and penalties. In some cases, they may even face criminal prosecution.

Taxpayers may encounter unscrupulous return preparers who make them aware of this scam. Make sure the preparer you hire is ethical and up to the task.

Choose Return Preparers Carefully

It is important to choose carefully when hiring an individual or firm to prepare your return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to in order to increase their fee. Every year, these types of tax preparers face everything from penalties to even jail time for defrauding their clients.

Here are a few tips when choosing a tax preparer:

-Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on your filed tax return.

-Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant, or attorney), belongs to a professional organization or attends continuing education classes. A number of tax law changes, including the Affordable Care Act provisions, can be complex. 
A competent tax professional needs to be up-to-date in these matters. Tax return preparers aren’t required to have a professional credential, but make sure you understand the qualifications of the preparer you select.

-Check the preparer’s qualifications.  Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help you find a tax return preparer with the qualifications that you prefer. The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:

Attorneys
CPAs
Enrolled Agents
Enrolled Retirement Plan Agents
Enrolled Actuaries
Annual Filing Season Program participants

-Check the preparer’s history.  Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory. 

-Ask about service fees.  Preparers are not allowed to base fees on a percentage of their client’s refund. Also avoid those who boast bigger refunds than their competition. Make sure that your refund goes directly to you – not into your preparer’s bank account.

-Ask to e-file your return.  Make sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally must offer electronic filing. The IRS has processed more than 1.5 billion e-filed tax returns. It’s the safest and most accurate way to file a return.

-Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask questions to determine your total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.

-Make sure the preparer is available.  In the event questions come up about your tax return, you may need to contact your preparer after the return is filed. Avoid fly-by-night preparers.

-Understand who can represent you. Attorneys, CPAs, and enrolled agents can represent any client before the IRS in any situation. Non-credentialed tax return preparers can represent clients before the IRS in only limited situations, depending upon when the tax return was prepared and signed.  For all returns prepared and signed after December 31, 2015, a non-credentialed tax return preparer can represent clients before the IRS in limited situations only if the preparer is a participant in the IRS Annual Filing Season Program

-Never sign a blank return.  Don’t use a tax preparer that asks you to sign an incomplete or blank tax form.

-Review your return before signing.  Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it. -Report tax preparer misconduct to the IRS. You can report improper activities by tax return preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source:  IRS

Benefits and Protections Under Federal Tax Law for Same-Sex Married Couples

Posted by Admin Posted on Feb 17 2017

Federal Tax Law for Same-Sex Married Couples

 

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) state that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. This applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

The August, 2013 ruling implements federal tax aspects of the June 26, 2013 Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act. Under the ruling, same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.

Other agencies may provide guidance on other federal programs that they administer that are affected by the Code. Revenue Ruling 2013-17, along with updated Frequently Asked Questions for same-sex couples and updated FAQs for registered domestic partners and individuals in civil unions, are available today on IRS.gov. See also Publication 555, Community Property.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

WHICH BUSINESS TRAVEL EXPENSES CAN YOU DEDUCT?

Posted by Admin Posted on Feb 17 2017

TRAVEL EXPENSES YOU CAN DEDUCT

 

Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Generally, employees deduct these expenses by using Form 2106 (PDF), Employee Business Expenses, or Form 2106-EZ (PDF), Unreimbursed Employee Business Expenses, and Form 1040, Schedule A (PDF), Itemized Deductions. You cannot deduct expenses that are lavish or extravagant, or that are for personal purposes.

You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.

You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you cannot deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you will work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes. For an exception to the 1-year rule for federal crime investigations or prosecutions, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

You may deduct travel expenses, including meals and lodging you incurred in looking for a new job in your present trade or business. You may not deduct these expenses if you had them while looking for work in a new trade or business or while looking for work for the first time. If you are unemployed and there is a substantial break between the time of your past work and your looking for new work, you may not deduct these expenses, even if the new work is in the same trade or business as your previous work. Refer to Publication 529, Miscellaneous Deductions.

Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

Deductible travel expenses while away from home include, but are not limited to the costs of:

-Travel by airplane, train, bus or car between your home and your business  destination. (If you are provided with a ticket or you are riding free as a result of a  frequent traveler or similar program, your cost is zero.)

-Fares for taxis or other types of transportation between the airport or train station and  your hotel, the hotel and the work location, and from one customer to another, or  from  one place of business to another.

-Shipping of baggage, and sample or display material between your regular and  temporary work locations.

-Using your car while at your business destination. You can deduct actual expenses or  the standard mileage rate, as well as business-related tolls and parking fees. If you  rent a car, you can deduct only the business-use portion for the expenses.

-Meals and lodging.

-Dry cleaning and laundry.

-Business calls while on your business trip. (This includes business communications by  fax  machine or other communication devices.)

-Tips you pay for services related to any of these expenses.

-Other similar ordinary and necessary expenses related to  your business travel.  (These  expenses might include transportation to and from a business  meal, public  stenographer's  fees, computer rental fees, and operating and maintaining a  house  trailer.)

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.

If you are an employee, your allowable travel expenses are figured on Form 2106 or Form 2106-EZ. Your allowable unreimbursed expenses are carried from Form 2106 or Form 2106-EZ to Form 1040, Schedule A (PDF), and are subject to a limit based on 2% of adjusted gross income. Refer to Topic 508 for information on the 2% limit. If you do not itemize your deductions, you cannot deduct these expenses. If you are self-employed, you can deduct travel expenses on Form 1040, Schedule C (PDF), Profit or Loss From Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit From Business (Sole Proprietorship), or if you are a farmer, on Form 1040, Schedule F (PDF), Profit or Loss From Farming.

If you are a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income rather than an itemized deduction on Form 1040, Schedule A This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Claim these expenses on Form 2106 or Form 2106-EZ and carry them to the appropriate line on Form 1040. Expenses in excess of the limit can be claimed only as an itemized deduction on Form 1040, Schedule A.

Good records are essential. Refer to Topic 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

FUNDING A COLLEGE EDUCATION? DON'T FORGET THE 529

Posted by Admin Posted on Feb 17 2017

FUNDING A COLLEGE EDUCATION? DON'T FORGET THE 529

 

When 529 plans first hit the scene, circa 1996, they were big news. Nowadays, they’re a common part of the college-funding landscape. But don’t forget about them — 529 plans remain a valid means of saving for the rising cost of tuition and more.

Flexibility is king

529 plans are generally sponsored by states, though private institutions can sponsor 529 prepaid tuition plans. Just about anyone can open a 529 plan. And you can name anyone, including a child, grandchild, friend, or even yourself, as the beneficiary.

Investment options for 529 savings plans typically include stock and bond mutual funds, as well as money market funds. Some plans offer age-based portfolios that automatically shift to more conservative investments as the beneficiaries near college age.

Earnings in 529 savings plans typically aren’t subject to federal tax, so long as the funds are used for the beneficiary’s qualified educational expenses. This can include tuition, room and board, books, fees, and computer technology at most accredited two- and four-year colleges and universities, vocational schools, and eligible foreign institutions.

Many states offer full or partial state income tax deductions or other tax incentives to residents making 529 plan contributions, at least if the contributions are made to a plan sponsored by that state.

You’re not limited to participating in your own state’s plan. You may find you’re better off with another state’s plan that offers a wider range of investments or lower fees.

The downsides

While 529 plans can help save taxes, they have some downsides. Amounts not used for qualified educational expenses may be subject to taxes and penalties. A 529 plan also might reduce a student’s ability to get need-based financial aid, because money in the plan isn’t an “exempt” asset. That said, 529 plan money is generally treated more favorably than, for instance, assets in a custodial account in the student’s name.

Just like other investments, those within 529s can fluctuate with the stock market. And some plans charge enrollment and asset management fees.

Finally, in the case of prepaid tuition plans, there may be some uncertainty as to how the benefits will be applied if the student goes to a different school.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Five Things to Know About the Child Tax Credit

Posted by Admin Posted on Feb 16 2017

Five Things to Know About the Child Tax Credit

 

The Child Tax Credit is a tax credit that may save taxpayers up to $1,000 for each eligible qualifying child. Taxpayers should make sure they qualify before they claim it. Here are five facts from the IRS on the Child Tax Credit:

1. Qualifications. For the Child Tax Credit, a qualifying child must pass several tests:

      - Age. The child must have been under age 17 on Dec. 31, 2016.

     - Relationship. The child must be the taxpayer’s son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother or half-sister. The child may be a descendant of any of these individuals. A qualifying child could also include grandchildren, nieces or nephews. Taxpayers would always treat an adopted child as their own child. An adopted child includes a child lawfully placed with them for legal adoption.

     - Support. The child must have not provided more than half of their own support for the year.

     - Dependent. The child must be a dependent that a taxpayer claims on their federal tax return.

     - Joint return. The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.

    - Citizenship. The child must be a U.S. citizen, a U.S. national or a U.S. resident alien.

    - Residence. In most cases, the child must have lived with the taxpayer for more than half of 2016.

The IRS Interactive Tax Assistant tool – Is My Child a Qualifying Child for the Child Tax Credit? – helps taxpayers determine if a child is a qualifying child for the Child Tax Credit.

2. Limitations. The Child Tax Credit is subject to income limitations. The limits may reduce or eliminate a taxpayer’s credit depending on their filing status and income.

3. Additional Child Tax Credit. If a taxpayer qualifies and gets less than the full Child Tax Credit, they could receive a refund, even if they owe no tax, with the Additional Child Tax Credit.

Because of a new tax-law change, the IRS cannot issue refunds before Feb. 15 for tax returns that claim the Earned Income Tax Credit (EITC) or the ACTC. This applies to the entire refund, even the portion not associated with these credits. The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS expects these refunds to be available in bank accounts or debit cards at the earliest, during the week of Feb. 27. This will happen as long as there are no processing issues with the tax return and the taxpayer chose direct deposit. Read more about refund timing for early EITC/ACTC filers.

4. Schedule 8812. If a taxpayer qualifies to claim the Child Tax Credit, they need to check to see if they must complete and attach Schedule 8812, Child Tax Credit, with their tax return. Taxpayers can visit IRS.gov to view, download or print IRS tax forms anytime.

5. IRS E-file. The easiest way to claim the Child Tax Credit is with IRS E-file. This system is safe, accurate and easy to use. Taxpayers can also use IRS Free File to prepare and e-file their taxes for free. Go to IRS.gov/filing to learn more.

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

GO, SAVE GREEN WITH SUSTAINABLE TAX BREAKS

Posted by Admin Posted on Feb 16 2017

GO, SAVE GREEN WITH SUSTAINABLE TAX BREAKS

 

Many people want to do something, however small, to contribute to a healthier environment. There are many ways to do so and, for some of them, you can even save a few tax dollars for your efforts.

Indeed, with the passage of the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) late last year, a couple of specific ways to go green and claim a tax break have been made permanent or extended. Let’s take a closer look at each.

Not driving for dollars

Air pollution is a problem in many areas of the country. Among the biggest contributors are vehicle emissions. So it follows that cutting down on the number of vehicles on the road can, in turn, diminish air pollution.

To help accomplish this, many people choose to commute to work via van pools or using public transportation. And, helpfully, the PATH Act is doing its part as well. The law made permanent the requirement that limits on the amounts that can be excluded from an employee’s wages for income and payroll tax purposes be the same for both parking benefits and van pooling / mass transit benefits.

Before the PATH Act’s parity provision, the monthly limit for 2015 was only $130 for van pooling / mass transit benefits. But, because of the new law, the 2015 monthly limit for these benefits was boosted to the $250 parking benefit limit and the 2016 limit is $255.

Sprucing up the homestead

Energy consumption can also have a negative impact on the environment and use up limited natural resources. Many homeowners want to reduce their energy consumption for environmental reasons or simply to cut their utility bills.

The PATH Act lends a helping hand here, too, by extending through 2016 the credit for purchases of residential energy property. This includes items such as:

New high-efficiency heating and air conditioning systems,

Qualifying forms of insulation,

Energy-efficient exterior windows and doors, and

High-efficiency water heaters and stoves that burn biomass fuel.

The provision allows a credit of 10% of eligible costs for energy-efficient insulation, windows and doors. A credit is also available for 100% of eligible costs for energy-efficient heating and cooling equipment and water heaters, up to a lifetime limit of $500 (with no more than $200 from windows and skylights).

Doing it all

Going green and saving some green on your tax bill? Yes, you can do both. Van pooling or taking public transportation and improving your home’s energy efficiency are two prime examples. Please contact us for more information about how to claim these tax breaks or identify other ways to save this year.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Check Out These Tax Benefits for Parents

Posted by Admin Posted on Feb 16 2017

Check Out These Tax Benefits for Parents

 

Taxpayers with children may qualify for certain tax benefits. Parents should consider child-related tax benefits when filing their federal tax return:

Dependent. Most of the time, taxpayers can claim their child as a dependent. Use the Interactive Tax Assistant to help determine who can be claimed as a dependent. Taxpayers can generally deduct $4,050 for each qualified dependent. If the taxpayer’s income is above a certain limit, this amount may be reduced. For more on these rules, see Publication 501, Exemptions, Standard Deduction and Filing Information.

Child Tax Credit.  Generally, taxpayers can claim the Child Tax Credit for each qualifying child under the age of 17. The maximum credit is $1,000 per child. Taxpayers who get less than the full amount of the credit may qualify for the Additional Child Tax Credit. Use the Interactive Tax Assistant to determine if a child qualifies for the Child Tax Credit. For more information, see Schedule 8812 and Publication 972, Child Tax Credit.

Child and Dependent Care Credit. Taxpayers may be able to claim this credit if they paid for the care of one or more qualifying persons. Dependent children under age 13 are among those who qualify. Taxpayers must have paid for care so that they could work or look for work. Use the Interactive Tax Assistant to determine if a child qualifies for the Child Tax Credit. See Publication 503, Child and Dependent Care Expenses, for more on this credit.

Earned Income Tax Credit. Taxpayers who worked but earned less than $53,505 last year should look into the EITC. They can get up to $6,269 in EITC. Taxpayers may qualify with or without children. Use the 2016 EITC Assistant tool at IRS.gov or see Publication 596, Earned Income Tax Credit, to learn more.

EITC and ACTC Refunds. Because of new tax-law change, the IRS cannot issue refunds before Feb. 15 returns that claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). This applies to the entire refund, even the portion not associated with these credits. The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS expects the earliest of these refunds to be available in bank accounts or debit cards during the week of Feb. 27, as long as there are no processing issues with the tax return and the taxpayer chose direct deposit. Read more about refund timing for early EITC/ACTC filers.

Adoption Credit. It is possible to claim a tax credit for certain costs paid to adopt a child. For details, see Form 8839, Qualified Adoption Expenses.

Education Tax Credits. An education credit can help with the cost of higher education. Two credits are available: the American Opportunity Tax Credit and the Lifetime Learning Credit. These credits may reduce the amount of tax owed. If the credit cuts a taxpayer’s tax to less than zero, it could mean a refund. Taxpayers may qualify even if they owe no tax. Complete Form 8863, Education Credits, and file a return to claim these credits. Taxpayers can use the Interactive Tax Assistant tool on IRS.gov to see if they can claim them. Visit the IRS’s Education Credits web page to learn more on this topic. Also, see Publication 970, Tax Benefits for Education.  

Student Loan Interest. Taxpayers may be able to deduct interest paid on a qualified student loan. They can claim this benefit even if they do not itemize deductions. Use the Interactive Tax Assistant to determine if interest paid on a student or educational loan is deductible. For more information, see Publication 970.

Self-employed Health Insurance Deduction. Taxpayers who were self-employed and paid for health insurance may be able to deduct premiums paid during the year. See Publication 535, Business Expenses, for details.   

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Answers Common Early Tax Season Refund Questions and Addresses Surrounding Myth

Posted by Admin Posted on Feb 08 2017

 Tax Season Refund Questions and Addresses Surrounding Myth

 

WASHINGTON — As millions of people begin filing their tax returns, the Internal Revenue Service reminded taxpayers about some basic tips to keep in mind about their refunds.

During the early parts of the tax season, early filers are anxious to get details about their tax refunds. And in some social media, this can lead to misunderstandings and speculation about refunds. The IRS offers some tips to keep in mind.

Myth 1: All Refunds Are Delayed

While more than 90 percent of federal tax refunds are issued in the normal timeframe – less than 21 days – it is true some refunds may be delayed – but not all of them. Recent legislation requires the IRS to hold refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until mid-February. Other returns may require additional review for a variety of reasons and take longer. For example, the IRS, along with its partners in the state’s and the nation’s tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud. The IRS encourages taxpayers to file as they normally would.

Myth 2: Calling the IRS or My Tax Professional Will Provide a Better Refund Date

Many people mistakenly think that talking to the IRS or calling their tax professional is the best way to find out when they will get their refund. In reality, the best way to check the status of a refund is online through the “Where’s My Refund?” tool at IRS.gov or via the IRS2Go mobile app.

Taxpayers eager to know when their refund will be arriving should use the "Where's My Refund" tool rather than calling and waiting on hold or ordering a tax transcript. The IRS updates the status of refunds once a day, usually overnight, so checking more than once a day will not produce new information. “Where’s My Refund” has the same information available to IRS telephone assistors so there is no need to call unless requested to do so by the refund tool.

Myth 3: Ordering a Tax Transcript a “Secret Way” to Get a Refund Date

Ordering a tax transcript will not help taxpayers find out when they will get their refund. The IRS notes that the information on a transcript does not necessarily reflect the amount or timing of a refund. While taxpayers can use a transcript to validate past income and tax filing status for mortgage, student and small business loan applications and to help with tax preparation they should use “Where’s My Refund?” to check the status of their refund.

Myth 4: “Where’s My Refund,” Must be Wrong Because There’s No Deposit Date Yet

Where's My Refund? ‎on both IRS.gov and the IRS2Go mobile app will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after Feb. 15. Taxpayers claiming EITC or ACTC will not see a refund date on Where's My Refund? ‎or through their software package until then. The IRS, tax preparers and tax software will not have additional information on refund dates.

The IRS cautions taxpayers that these refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27 -- if there are no processing issues with the tax return and the taxpayer chose direct deposit. This additional period is due to several factors, including banking and financial systems needing time to process deposits. Taxpayers who have filed early in the filing season, but are claiming EITC or ACTC, should not expect their refund until the week of Feb. 27. The IRS reminds taxpayers that President’s Day weekend may impact when they get their refund since many financial institutions do not process payments on weekends or holidays.

Myth 5: Delayed Refunds, those Claiming EITC and/or ACTC, will be Delivered on Feb. 15

By law, the IRS cannot issue refunds before Feb. 15 for any tax return claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). The IRS must hold the entire refund, not just the part related to the EITC or ACTC. The IRS will begin to release these refunds starting Feb. 15.

These refunds likely won’t arrive in bank accounts or on debit cards until the week of Feb. 27. This is true as long as there is no additional review of the tax return required and the taxpayer chose direct deposit. Banking and financial systems need time to process deposits, which can take several days.

More Information About “Where’s My Refund”

“Where’s My Refund?” can be checked within 24 hours after the IRS has received an e-filed return or four weeks after receipt of a mailed paper return. "Where’s My Refund?" has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent.

Users who access “Where’s My Refund?” on IRS.gov or the IRS2Go app must have information from their current, pending tax return to access their refund information. The IRS reminds taxpayers claiming the EITC or the ACTC that recent legislation requires the IRS to hold those refunds until mid-February. Keep in mind that only a small percentage of total filers will fall into this situation. The change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent tax fraud.

The IRS continues to strongly encourage the use of e-file and direct deposit as the fastest and safest way to file an accurate return and receive a tax refund. More than four out of five tax returns are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit.

Help for Taxpayers

The IRS reminds taxpayers they have a variety of options to get help filing and preparing their tax return on IRS.gov. Taxpayers can also, if eligible, receive help from a community volunteer. Go to IRS.gov and click on the “Filing” tab for more information.

Seventy percent of the nation’s taxpayers are eligible for IRS Free File. Commercial IRS partners offer free brand-name software to about 100 million individuals and families with incomes of $64,000 or less.

Online fillable forms provides electronic versions of IRS paper forms to all taxpayers regardless of income that can be prepared and filed by people comfortable with completing their own returns.

Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) offer free tax help to people who qualify. Go to irs.gov and enter “free tax prep” in the search box to learn more and find a nearby VITA or TCE site, or download the IRS2Go smartphone app to find a free tax prep provider. 

The IRS also reminds taxpayers that a trusted tax professional can provide helpful information and advice about the ever-changing tax code. Tips for choosing a return preparer and details about national tax professional groups are available on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Use IRS Free File Software on Smart Phones or Tablets

Posted by Admin Posted on Feb 08 2017

Use IRS Free File Software on Smart Phones or Tablets

 

WASHINGTON – The Internal Revenue Service announced that taxpayers now may use their smart phones or tablets to electronically prepare and file their federal and state tax returns through IRS Free File.

The IRS and its private-sector partners who offer their brand-name software products for free now support a new design that allows for the use of desktops, laptops, mobile phones and tablets.

You may access the products using mobile devices in two ways: (1) Use the IRS app, IRS2Go, which has a link to the Free File Software Lookup Tool or (2) use the device’s browser to go to www.IRS.gov/freefile and select the “Free File Software Lookup Tool” or “Start Free File Now” to find the software product that matches your situation. The IRS2Go app is available for Android and iOS devices.

Taxpayers with adjusted gross income of $64,000 or less will find one or more free software options. Each of the 12 software providers set the eligibility requirements for their product, generally based on age, income or state residency. The Free File Software Lookup Tool asks a few questions to help you identify the appropriate software products.

Some partners offer free federal and free state tax return preparation; some charge a fee for state return preparation. Active duty military personnel whose income was $64,000 or less are exempt from any eligibility requirements and may use any Free File product they choose to file their federal return for free.

The Free File software allows for free electronic tax preparation and filing and direct deposit of refunds. Some taxpayers may need their 2015 adjusted gross income if they filed a return, in order to validate their identities and complete the electronic filing process.

Also, taxpayers who are eligible for the Earned Income Tax Credit or the Additional Child Tax Credit are reminded that, by law, the IRS must hold refunds that contain those credits until February 15. The refunds likely won’t arrive into taxpayers’ financial accounts until the week of February 27.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS “Dirty Dozen” Series of Tax Scams for 2017

Posted by Admin Posted on Feb 07 2017

IRS DIRTY DOZEN TAX SCAMS 2017

 

WASHINGTON — The Internal Revenue Service today warned taxpayers to be on the lookout for unscrupulous return preparers, one of the most common “Dirty Dozen” tax scams seen during tax season. 

The vast majority of tax professionals provide honest, high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. That's why unscrupulous preparers who prey on unsuspecting taxpayers with outlandish promises of overly large refunds make the Dirty Dozen list every year. 

"Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected," said IRS Commissioner John Koskinen. "Most preparers provide high-quality service but we run across cases each year where unscrupulous preparers steal from their clients and misfile their taxes."  

Return preparers are a vital part of the U.S. tax system. About 60 percent of taxpayers use tax professionals to prepare their returns. 

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them. 

Choosing Return Preparers Carefully 

It is important to choose carefully when hiring an individual or firm to prepare a tax return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to in order to increase their fee. Every year, these types of tax preparers face everything from penalties to jail time for defrauding their clients. 

Here are a few tips when choosing a tax preparer:

Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on tax returns.

- Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant or attorney), belongs to a professional organization or attends continuing education classes. A number of tax law changes can be complex. A competent tax professional needs to be up-to-date in these matters. Tax return preparers aren’t required to have a professional credential. The IRS website has more information regarding the national tax professional organizations.

- Check the preparer’s qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help locate a tax return preparer with the preferred qualifications

- The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:

Attorneys

CPAs

Enrolled Agents

Enrolled Retirement Plan Agents

Enrolled Actuaries

Annual Filing Season Program participants

- Check the preparer’s history. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory.

- Ask about service fees. Avoid preparers who base fees on a percentage of their client’s refund or boast bigger refunds than their competition. Don’t give your tax documents, SSNs, and other information to a preparer when only inquiring about their services and fees. Unfortunately, some preparers have improperly filed returns without the taxpayer’s permission once the records were obtained.

- Ask to e-file your return. Make sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally must file electronically. The IRS has processed more than 1.5 billion e-filed tax returns. It’s the safest and most accurate way to file a return.

- Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask questions to determine your total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.

- Make sure the preparer is available. In the event questions come up about your tax return, you may need to contact your preparer after the return is filed. Avoid fly-by-night preparers.

- Understand who can represent you. Attorneys, CPAs, and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent you in limited situations if they prepared and signed your return. However, non-credentialed preparers who do not participate in the Annual Filing Season Program may only represent clients before the IRS on returns they prepared and signed on or before Dec. 31, 2015.

- Never sign a blank return. Don’t use a tax preparer that asks you to sign an incomplete or blank tax form.

- Review your return before signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it and that your refund goes directly to you – not into the preparer’s bank account. Reviewing the routing and bank account number on the completed return is always a good idea.

- Report abusive tax preparers to the IRS. You can report abusive tax return preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms on IRS.gov.

To find other tips about choosing a preparer, understanding the differences in credentials and qualifications, researching the IRS preparer directory, and learning how to submit a complaint regarding a tax return preparer, visit www.irs.gov/chooseataxpro.

Remember: Taxpayers are legally responsible for what is on their tax return even if someone else prepares it. Make sure the preparer you hire is up to the task.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN?

Posted by Admin Posted on Feb 06 2017

ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN?

 

With summer headed toward its inevitable close, you may be tempted to splurge on a pricey “last hurrah” trip. Or perhaps you’d like to buy a brand new convertible to feel the warm breeze in your hair. Whatever the temptation may be, if you’ve pondered dipping into your 401(k) account for the money, make sure you’re aware of the consequences before you take out the loan.

Pros and cons

Many 401(k) plans allow participants to borrow as much as 50% of their vested account balances, up to $50,000. These loans are attractive because:

- They’re easy to get (no income or credit score requirements),

- There’s minimal paperwork,

- Interest rates are low, and

- You pay interest back into your 401(k) rather than to a bank.

Yet, despite their appeal, 401(k) loans present significant risks. Although you pay the interest to yourself, you lose the benefits of tax-deferred compounding on the money you borrow.

You may have to reduce or eliminate 401(k) contributions during the loan term, either because you can’t afford to contribute or because your plan prohibits contributions while a loan is outstanding. Either way, you lose any future earnings and employer matches you would have enjoyed on those contributions.

Loans, unless used for a personal residence, must be repaid within five years. Generally, the loan terms must incl