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CHANGES IN TAX LAW AND EFFECTS ON YOU AND YOUR BUSINESS

Posted by Admin Posted on Nov 20 2018

TEST

 

The new tax reform law, commonly called the “Tax Cuts and Jobs Act” (TCJA), signed into law by President Trump on December 22, 2017, is the biggest federal tax law overhaul in 31 years, and it has both good and bad news for taxpayers.

Below are highlights of some of the most significant changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017.

Individuals

  • Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025 (Please see the tax rate schedules at the bottom of the article, or visit https://www.lbcpa.com/tax-rates  ).
  • Near doubling of the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) — through 2025
  • Elimination of personal exemptions — through 2025
  • Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit — through 2025
  • Elimination of the individual mandate under the Affordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty — effective for months beginning after December 31, 2018
  • Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT (Alternative Minimum Tax)  purposes — for 2017 and 2018
  • New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) — through 2025
  • Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions — through 2025
  • Elimination of the deduction for interest on home equity debt — through 2025
  • Elimination of the personal casualty and theft loss deduction (with an exception for federally declared disasters) — through 2025
  • Elimination of miscellaneous itemized deductions subject to the 2% floor (such as certain investment expenses, professional fees and unreimbursed employee business expenses) — through 2025
  • Elimination of the AGI-based reduction of certain itemized deductions — through 2025
  • Elimination of the moving expense deduction (with an exception for members of the military in certain circumstances) — through 2025
  • Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year
  • AMT (Alternative Minimum Tax) exemption increase, to $109,400 for joint filers, $70,300 for singles and heads of households, and $54,700 for separate filers — through 2025
  • Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 million for 2018 with inflation indexing) — through 2025

 

Businesses

  • Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of 21%
  • Repeal of the 20% corporate AMT
  • New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships — through 2025
  • Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets — effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023
  • Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million
  • Other enhancements to depreciation-related deductions
  • New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply)
  • New limits on net operating loss (NOL) deductions
  • Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers
  • New rule limiting like-kind exchanges to real property that is not held primarily for sale
  • New tax credit for employer-paid family and medical leave — through 2019
  • New limitations on excessive employee compensation
  • New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation

More to consider

This is just a brief overview of some of the most significant TCJA provisions. There are additional rules and limits that apply, and the law includes many additional provisions.

If you have any questions please contact us at 305-274-5811 to review how these changes will affect you in 2018 and beyond.

 

2018 Tax Rates

2018 Tax Rates Schedule X - Single

If taxable income is over

But not over

The tax is

$0

$9,525

10% of the taxable amount

$9,525

$38,700

$952.50 plus 12% of the excess over $9,525

$38,700

$82,500

$4,453.50 plus 22% of the excess over $38,700

$82,500

$157,500

$14,089.50 plus 24% of the excess over $82,500

$157,500

$200,000

$32,089.50 plus 32% of the excess over $157,500

$200,000

$500,000

$45,689.50 plus 35% of the excess over $200,000

Over $500,000

no limit

$150,689.50 plus 37% of the excess over $500,000

2018 Tax Rates Schedule Y-1 - Married Filing Jointly or Qualifying Widow(er)

If taxable income is over

But not over

The tax is

$0

$19,050

10% of the taxable amount

$19,050

$77,400

$1,905 plus 12% of the excess over $19,050

$77,400

$165,000

$8,907 plus 22% of the excess over $77,400

$165,000

$315,000

$28,179 plus 24% of the excess over $165,000

$315,000

$400,000

$64,179 plus 32% of the excess over $315,000

$400,000

$600,000

$91,379 plus 35% of the excess over $400,000

$600,000

no limit

$161,379 plus 37% of the excess over $600,000

2018 Tax Rates Schedule Y-2 - Married Filing Separately

If taxable income is over

But not over

The tax is

$0

$9,525

10% of the taxable amount

$9,525

$38,700

$952.50 plus 12% of the excess over $9,525

$38,700

$82,500

$4,453.50 plus 22% of the excess over $38,700

$82,500

$157,500

$14,089.50 plus 24% of the excess over $82,500

$157,500

$200,000

$32,089.50 plus 32% of the excess over $157,500

$200,000

$300,000

$45,689.50 plus 35% of the excess over $200,000

Over $300,000

no limit

$80,689.50 plus 37% of the excess over $300,000

2018 Tax Rates Schedule Z - Head of Household

If taxable income is over

But not over

The tax is

$0

$13,600

10% of the taxable amount

$13,600

$51,800

$1,360 plus 12% of the excess over $13,600

$51,800

$82,500

$5,944 plus 22% of the excess over $51,800

$82,500

$157,500

$12,698 plus 24% of the excess over $82,500

$157,500

$200,000

$30,698 plus 32% of the excess over $157,500

$200,000

$500,000

$44,298 plus 35% of the excess over $200,000

$500,000

no limit

$149,298 plus 37% of the excess over $500,000

2018 Tax Rates Estates & Trusts

If taxable income is over

But not over

The tax is

$0

$2,550

10% of the taxable income

$2,550

$9,150

$255 plus 24% of the excess over $2,550

$9,150

$12,500

$1,839 plus 35% of the excess over $9,150

$12,500

no limit

$3,011.50 plus 37% of the excess over $12,500

Social Security 2018 Tax Rates

Base Salary

$128,400

Social Security Tax Rate

6.2%

Maximum Social Security Tax

$7,960.80

Medicare Base Salary

unlimited

Medicare Tax Rate

1.45%

Additional Medicare 2018 Tax Rates

Additional Medicare Tax

0.9%

Filing status

Compensation over

Married filing jointly

$250,000

Married filing separate

$125,000

Single

$200,000

Head of household (with qualifying person)

$200,000

Qualifying widow(er) with dependent child

$200,000

Education 2018 Credit and Deduction Limits

American Opportunity Tax Credit (Hope)

$2,500

Lifetime Learning Credit

$2,000

Student Loan Interest Deduction

$2,500

Coverdell Education Savings Contribution

$2,000

Miscellaneous 2018 Tax Rates

Standard Deduction:

 
  • Married filing jointly or Qualifying Widow(er)

$24,000

  • Head of household

$18,000

  • Sinlge or Married filling separately

$12,000

Business Equipment Expense Deduction

$1,000,000

Prior-year safe harbor for estimated taxes of higher-income

110% of your 2017 tax liability

Standard mileage rate for business driving

54.5 cents

Standard mileage rate for medical/moving driving

18 cents

Standard mileage rate for charitable driving

14 cents

Child Tax Credit

$2,000 per qualifying child

Maximum capital gains tax rate for taxpayers with adjusted net capital gain up to $77,200 for joint filers and surviving spouses, $51,700 for heads of household, $38,600 for single filers, $38,600 for married taxpayers filing separately, and $2,600 for estates and trusts

0%

Maximum capital gains tax rate for taxpayers with adjusted net capital gain over the amount subject to the 0% rate, and up to $479,000 for joint filers and surviving spouses, $452,400 for heads of household, $425,800 for single filers, $239,500 for married taxpayers filing separately, and $12,700 for estates and trusts

15%

Maximum capital gains tax rate for taxpayers with adjusted net capital gain over $479,000 for joint filers and surviving spouses, $452,400 for heads of household, $425,800 for single filers, $239,500 for married taxpayers filing separately, and $12,700 for estates and trusts

20%

Capital gains tax rate for unrecaptured Sec. 1250 gains

25%

Capital gains tax rate on collectibles and qualified small business stock

28%

Maximum contribution for Traditional/Roth IRA

$5,500 if under age 50
$6,500 if 50 or older

Maximum employee contribution to SIMPLE IRA

$12,500 if under age 50
$15,500 if 50 or older

Maximum Contribution to SEP IRA

25% of compensation up to $55,000

401(k) maximum employee contribution limit

$18,500 if under age 50
$24,500 if 50 or older

Self-employed health insurance deduction

100%

Estate tax exemption

$11,180,000

Annual Exclusion for Gifts

$15,000

Foreign Earned Income Exclusion

$104,100

If you have any questions regarding Essential Business 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

-SPECIAL CIRCUMSTANCES

Posted by Admin Posted on Nov 15 2018

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When it comes to tax records, some are required to be kept under special circumstances.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), it may go back six years in an audit. If there is any indication of fraud, or you do not file a return, no period of limitation exists. To be safe, use the following guidelines.

  • Car Records (keep until the car is sold)
  • Credit Card Receipts (keep until verified on your statement)
  • Insurance Policies (keep for the life of the policy)
  • Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
  • Pay Stubs (keep until reconciled with your W-2)
  • Sales Receipts (keep for life of the warranty)
  • Stock and Bond Records (keep for 6 years beyond selling)
  • Warranties and Instructions (keep for the life of the product)
  • Other Bills (keep until payment is verified on the next bill)
  • Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)

If you have any questions regarding Essential Business 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

-PERSONAL DOCUMENTS

Posted by Admin Posted on Nov 15 2018

TEST

 

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), it may go back six years in an audit. If there is any indication of fraud, or you do not file a return, no period of limitation exists. To be safe, use the following guidelines.

 

April 15 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?

 

Please be aware that if the IRS believes you have significantly underreported your income (by 25 percent or more), it may go back six years in an audit. If there is any indication of fraud, or you do not file a return, no period of limitation exists. To be safe, use the following guidelines.

Personal Documents To Keep For One Year

While it's important to keep year-end mutual fund and IRA contribution statements forever, you don't have to save monthly and quarterly statements once the year-end statement has arrived.

Personal Documents To Keep For Three Years

  • Credit Card Statements
  • Medical Bills (in case of insurance disputes)
  • Utility Records
  • Expired Insurance Policies

Personal Documents To Keep For Six Years

  • Supporting Documents For Tax Returns
  • Accident Reports and Claims
  • Medical Bills (if tax-related)
  • Sales Receipts
  • Wage Garnishments
  • Other Tax-Related Bills

Personal Records To Keep Forever

  • CPA Audit Reports
  • Legal Records
  • Important Correspondence
  • Income Tax Returns
  • Income Tax Payment Checks
  • Property Records / Improvement Receipts (or six years after property sold)
  • Investment Trade Confirmations
  • Retirement and Pension Records (Forms 5448, 1099-R and 8606 until all distributions are made from your IRA or other qualified plan)

If you have any questions regarding Essential Business 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 Nov 15 2018

TEST

 

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 Essential Business 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

-BUSINESS DOCUMENTS

Posted by Admin Posted on Nov 15 2018

TEST

 

Business Documents To Keep For One Year

  • Correspondence with Customers and Vendors
  • Duplicate Deposit Slips
  • Purchase Orders (other than Purchasing Department copy)
  • Receiving Sheets
  • Requisitions
  • Stenographer's Notebooks
  • Stockroom Withdrawal Forms

Business Documents To Keep For Three Years

  • Employee Personnel Records (after termination)
  • Employment Applications
  • Expired Insurance Policies
  • General Correspondence
  • Internal Audit Reports
  • Internal Reports
  • Petty Cash Vouchers
  • Physical Inventory Tags
  • Savings Bond Registration Records of Employees
  • Time Cards For Hourly Employees

Business Documents To Keep For Six Years

  • Accident Reports, Claims
  • Accounts Payable Ledgers and Schedules
  • Accounts Receivable Ledgers and Schedules
  • Bank Statements and Reconciliations
  • Cancelled Checks
  • Cancelled Stock and Bond Certificates
  • Employment Tax Records
  • Expense Analysis and Expense Distribution Schedules
  • Expired Contracts, Leases
  • Expired Option Records
  • Inventories of Products, Materials, Supplies
  • Invoices to Customers
  • Notes Receivable Ledgers, Schedules
  • Payroll Records and Summaries, including payment to pensioners
  • Plant Cost Ledgers
  • Purchasing Department Copies of Purchase Orders
  • Records related to net operating losses (NOL's)
  • Sales Records
  • Subsidiary Ledgers
  • Time Books
  • Travel and Entertainment Records
  • Vouchers for Payments to Vendors, Employees, etc.
  • Voucher Register, Schedules

Business Records To Keep Forever

While federal guidelines do not require you to keep tax records "forever," in many cases there will be other reasons you'll want to retain these documents indefinitely.

  • Audit Reports from CPAs/Accountants
  • Cancelled Checks for Important Payments (especially tax payments)
  • Cash Books, Charts of Accounts
  • Contracts, Leases Currently in Effect
  • Corporate Documents (incorporation, charter, by-laws, etc.)
  • Documents substantiating fixed asset additions
  • Deeds
  • Depreciation Schedules
  • Financial Statements (Year End)
  • General and Private Ledgers, Year End Trial Balances
  • Insurance Records, Current Accident Reports, Claims, Policies
  • Investment Trade Confirmations
  • IRS Revenue Agent Reports
  • Journals
  • Legal Records, Correspondence and Other Important Matters
  • Minutes Books of Directors and Stockholders
  • Mortgages, Bills of Sale
  • Property Appraisals by Outside Appraisers
  • Property Records
  • Retirement and Pension Records
  • Tax Returns and Worksheets
  • Trademark and Patent Registrations

If you have any questions regarding Essential Business 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

-SHOULD I REFINANCE?

Posted by Admin Posted on Nov 15 2018

TEST

 

In order to refinance your home, the current market rate should be at least 2 percentage points lower than what you are paying on your mortgage. Speak with a lender to see what rate you may be able to get. Remember to factor in costs like appraisals, points from the lender, and others, which may not be apparent in your initial price assessment.

After assessing that cost, get a quote of what your total payment would be after refinancing. The simplest way to find out how long it will take to recover the refinancing costs will be to divide your closing costs by the monthly savings with your new monthly payment.

Also take into consideration how long you plan on holding your home. It may not make sense to refinance the home if you plan on selling in the near future.

If you have any questions regarding Essential Business 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

-TAX SAVING TECHNIQUES

Posted by Admin Posted on Nov 15 2018

TEST

 

Following are some generally recognized financial planning tools that may help you reduce your tax bill.

Charitable Giving - Instead of selling your appreciated long-term securities, donate the stock instead and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.

Health Savings Accounts (HSAs) - If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.

ROTH IRAs - Contributions to a ROTH IRA are not tax deductible but the qualified distributions, including earnings are tax-free.

Municipal Bonds - Interest earned on these types of investments is tax-exempt.

Own a home - most of the cost of this type of investment is financed and the interest (on mortgages up to $750,000) is tax deductible. When the property is sold, individuals may exclude up to $250,000 ($500,000 if married jointly) of the gain.

Retirement Plans - Participate in your employer sponsored retirement plan, especially if there is a matching component. You will receive a current tax deduction and the tax-deferred compounding can add up to a large retirement savings.

If you have any questions regarding Essential Business 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 Nov 15 2018

TEST

 

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 Essential Business 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

-DEDUCTING MORTGAGE INTEREST

Posted by Admin Posted on Nov 15 2018

Deduct

 

If you own a home, and you itemize your deductions on Schedule A, you can claim a deduction for the interest paid. To be deductible, the interest you pay must be on a loan secured by your main home or a second home (including a second home that is also rented out for part of the year, so long as the personal use requirement is met). The loan can be a first or second mortgage, a home improvement loan, or a home equity loan. To be deductible, the loan must be secured by your home but the proceeds can be used for other than home improvements. You can refinance and use the proceeds to pay off credit card debt, go on vacation or buy a car and the interest will remain deductible. There are other financial reasons for not wanting to do this but it will not disqualify the deduction.

The interest deduction for home acquisition debt (that is, a loan taken out after October 13, 1987 to buy, build, or substantially improve a qualified home) is limited to debt of $750,000 ($375,000 if married filing separately).

In addition to the deduction for mortgage interest, points paid on the original purchase of your residence are also generally deductible. Taxpayers who are required to pay mortgage insurance premiums may also be able to deduct this amount subject to certain income limits. For more information about the mortgage interest deduction, see IRS Publication 936.

If you have any questions regarding Essential Business 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

DEDUCTIBLE TAXES

Posted by Admin Posted on Nov 09 2018

DEDUCTIBLE TAXES

 

Did you know that you may be able to deduct certain taxes on your federal income tax return? The IRS says you can if you file Form 1040 and itemize deductions on Schedule A. Deductions decrease the amount of income subject to taxation. There are four types of deductible non-business taxes:

  • State and local income taxes, or general sales taxes;
  • Real estate taxes;
  • Personal property taxes; and
  • Foreign income taxes.

You can deduct estimated taxes paid to state or local governments and prior year's state or local income tax as long as they were paid during the tax year. If deducting sales taxes instead, you may deduct actual expenses or use optional tables provided by the IRS to determine your deduction amount, relieving you of the need to save receipts. Sales taxes paid on motor vehicles and boats may be added to the table amount, but only up to the amount paid at the general sales tax rate. The Tax Cuts and Jobs Act (TCJA) limit the total amount of the above state and local taxes an individual can deduct in a calendar year to $10,000.

Taxpayers will check a box on Schedule A, Itemized Deductions, to indicate whether their deduction is for income or sales tax.

Deductible real estate taxes are usually any state, local, or foreign taxes on real property. If a portion of your monthly mortgage payment goes into an escrow account and your lender periodically pays your real estate taxes to local governments out of this account, you can deduct only the amount actually paid during the year to the taxing authorities. Your lender will normally send you a Form 1098, Mortgage Interest Statement, at the end of the tax year with this information.

Call us or contact us today to find out how we can save you money!

To claim a deduction for personal property tax you paid, the tax must be based on value alone and imposed on a yearly basis. For example, the annual fee for the registration of your car would be a deductible tax, but only the portion of the fee that was based on the car's value.

If you have any questions regarding Essential Business 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

AMENDED RETURNS

Posted by Admin Posted on Nov 09 2018

TEST

 

Oops! You've discovered an error after your tax return has been filed. What should you do? You may need to amend your return.

The IRS usually corrects math errors or requests missing forms (such as W-2s) or schedules. In these instances, do not amend your return. However, do file an amended return if any of the following were reported incorrectly:

  • Your filing status
  • Your total income
  • Your deductions or credits

Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct a previously filed paper or electronically-filed Form 1040, 1040A, or 1040EZ return. Be sure to enter the year of the return you are amending at the top of Form 1040X. If you are amending more than one tax return, use a separate 1040X for each year and mail each in a separate envelope to the IRS processing center for your state. The 1040X instructions list the addresses for the centers.

Form 1040X has three columns. Column A is used to show original or adjusted figures from the original return. Column C is used to show the corrected figures. The difference between the figures in Columns A and C is shown in Column B. You should explain the items you are changing and the reason for each change on the back of the form.

If the changes involve another schedule or form, attach it to the 1040X. For example, if you are filing a 1040X because you have a qualifying child and now want to claim the Earned Income Tax Credit, you must complete and attach a Schedule EIC to the amended return.

If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund. If you owe additional tax for the prior year, Form 1040X must be filed and the tax paid by April 15 of this year, to avoid any penalty and interest.

You generally must file Form 1040X to claim a refund within three years from the date you filed your original return, or within two years from the date you paid the tax, whichever is later.  Please contact us for more!

 

If you have any questions regarding Essential Business 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

FOR BUSINESS FINANCING, WHAT KINDS OF LOANS EXIST?

Posted by Admin Posted on Nov 09 2018

TEST

 

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 Essential Business 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

FOREIGN-INCOME

Posted by Admin Posted on Nov 09 2018

TEST

 

With more and more United States citizens earning money from foreign sources, the IRS reminds people that they must report all such income on their tax return, unless it is exempt under federal law. U.S. citizens are taxed on their worldwide income.

This applies whether a person lives inside or outside the United States. The foreign income rule also applies regardless of whether or not the person receives a Form W-2, Wage and Tax Statement, or a Form 1099 (information return).

Foreign source income includes earned income, such as wages and tips, and unearned income, such as interest, dividends, capital gains, pensions, rents and royalties.

An important point to remember is that citizens living outside the U.S. may be able to exclude up to $102,100 for 2017 and $104,100 for 2018, of their foreign source income if they meet certain requirements. However, the exclusion does not apply to payments made by the U.S. government to its civilian or military employees living outside the U.S. Please contact us if you feel you may have earned foreign income to learn more!

If you have any questions regarding Essential Business 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

FILING AN EXTENSION

Posted by Admin Posted on Nov 01 2018

FILING AN EXTENSION

 

If you can't meet the April 15 deadline to file your tax return, you can get an automatic six-month extension of time to file from the IRS. The extension will give you extra time to get the paperwork into the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.

You must make an accurate estimate of any tax due when you request an extension. You may also send a payment for the expected balance due, but this is not required to obtain the extension.

To get the automatic extension, file Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April 15 deadline, or make an extension-related electronic payment. You can file your extension request by computer or mail the paper Form 4868 to the IRS.

The system will give you a confirmation number to verify that the extension request has been accepted. Put this confirmation number on your copy of Form 4868 and keep it for your records. Do not send the form to the IRS.  As this is the area of our expertise, please contact us for more detailed information on how to file an extension properly!

If you have any questions regarding Essential Business 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

TIPS FOR EARLY PREPARATION

Posted by Admin Posted on Oct 31 2018

TEST

 

 

Earlier is better when it comes to working on your taxes. The IRS encourages everyone to get a head start on tax preparation. Not only do you avoid the last-minute rush, early filers also get a faster refund.

There are five easy ways to get a good jump on your taxes long before the April 15 deadline rolls around:

  • Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don't forget to save a copy for your files.
  • Get the right forms. They're available around the clock on IRS.gov in the Forms and Publications section.
  • Take your time. Don't forget to leave room for a coffee break when filling out your tax return. Rushing can mean making a mistake - and that can be expensive!
  • Double-check your math and Social Security number. These are among the most common errors on tax returns. Taking care on these reduces your chances of hearing from the IRS.
  • Get the fastest refund. When you file early, you get your refund faster. Using e-filing with direct deposit gets you a refund in half the time as paper filing.

If you have any questions regarding Essential Business 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

CHECK WITHHOLDING TO AVOID A TAX SURPRISE

Posted by Admin Posted on Oct 30 2018

NEW LAW=TAX SURPRISES

 

Whether or not you owed taxes or received a refund last year you check your tax withholding due to the massive changes brought about by the Tax Cuts and Jobs Act of 2017. Owing tax at the end of the year could result in penalties being assessed. On the other end, if you had a large refund you lost out on having the money in your pocket throughout the year. Changing jobs, getting married or divorced, buying a home or having children can all result in changes in your tax calculations.

The IRS withholding calculator on IRS.gov can help compute the proper tax withholding. The worksheets in Publication 505, Tax Withholding and Estimated Tax can also be used to do the calculation. If the result suggests an adjustment is necessary, you can submit a new W-4, Withholding Allowance Certificate, to your employer.

If you have any questions regarding Essential Business 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

INFORMATION ABOUT IRS NOTICES

Posted by Admin Posted on Oct 29 2018

INFORMATION ABOUT IRS NOTICES

 

It's a moment any taxpayer dreads. An envelope arrives from the IRS — and it's not a refund check. But don't panic. Many IRS letters can be dealt with simply and painlessly.

Each year, the IRS sends millions of letters and notices to taxpayers to request payment of taxes, notify them of a change to their account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return. Each letter and notice provides specific instructions explaining what you should do if action is necessary to satisfy the inquiry. Most notices also give a phone number to call if you need further information.

Most correspondence can be handled without calling or visiting an IRS office, if you follow the instructions in the letter or notice. However, if you have questions, call the telephone number in the upper right-hand corner of the notice, or call the IRS at 1-800-829-1040. Have a copy of your tax return and the correspondence available when you call so your account can be readily accessed.

Before contacting the IRS, review the correspondence and compare it with the information on your return. If you agree with the correction to your account, no reply is necessary unless a payment is due. If you do not agree with the correction the IRS made, it is important that you respond as requested. Write an explanation why you disagree, and include any documents and information you wish the IRS to consider. Mail your information along with the bottom tear-off portion of the notice to the address shown in the upper left-hand corner of the IRS correspondence. Allow at least 30 days for a response.

Sometimes, the IRS sends a second letter or notice requesting additional information or providing additional information to you. Be sure to keep copies of any correspondence with your records.  If you've received a notice and are confused about what to do next, please contact us and we can help!

If you have any questions regarding Essential Business 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

CHARITABLE CONTRIBUTIONS

Posted by Admin Posted on Oct 23 2018

CHARITY

 

When preparing to file your federal tax return, don't forget your contributions to charitable organizations. Your donations (up to 10% of taxable income) can add up to a nice tax deduction for your corporation.

Here are a few tips to help make sure your contributions pay off on your tax return:

You cannot deduct contributions made to specific individuals, political organizations and candidates, the value of your time or services and the cost of raffles, bingo, or other games of chance. To be deductible, contributions must be made to qualified organizations. Cash contributions must be substantiated by a bank record, or a receipt, letter or other written communication from the doCHARnee organization indicating the name of the organization, the date of the contribution, and the amount of the contribution. In addition, if the contribution is $250 or more, a written acknowledgement showing the amount of cash contributed, any property contributed, and a description and a good faith estimate of the value of any goods or services provided in return for the contribution or statement that no goods or services were provided in return for the contribution, is required. Non-cash contributions over $500 must be supported by an attachment to the return which states the kind of property contributed, along with the method used to determine its fair market value. Form 8283, Non-cash Charitable Contributions is required for contributions with a claimed value of more than $5,000. Contributions which exceed the 10% limitation can be carried over for five years.

Organizations can tell you if they are qualified and if donations to them are deductible. IRS.gov has an Exempt Organizations Select Check online tool to help you see if 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. Alternatively, contact us for more information!

If you have any questions regarding Essential Business 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

DEDUCTIBLE HOME OFFICE

Posted by Admin Posted on Oct 23 2018

TEST

 

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 Essential Business 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

GETTING MARRIED? NEW TAX IMPLICATIONS!

Posted by Admin Posted on Oct 22 2018

Getting married? New tax implications!!

 

You are entitled to file a joint income tax return upon marriage. Although this simplifies the filing process, you will more than likely discover that your tax bill is either higher or lower than when you were single. It's higher when you file together, as more of your income is taxed in the higher tax brackets. This is commonly known as the marriage tax penalty. In 2003, a tax law that intended to reduce the marriage penalty went into effect, but this law didn't get rid of the penalty for higher bracket taxpayers.

Once married, you may not file separately in an attempt to avoid the marriage penalty. Actually, filing as married filing separately can raise your taxes. For the optimal filing status for your situation you should speak with your tax advisor.

If you have any questions regarding Essential Business 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

LEGAL ISSUES DURING A DIVORCE

Posted by Admin Posted on Oct 22 2018

LEGAL ISSUES DURING A DIVORCE

 

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 Essential Business 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

4 QUESTIONS TO ASK BEFORE HIRING HOUSEHOLD

Posted by Admin Posted on Oct 18 2018

HIRING HOUSEHOLD HELP MEANS TAX OBLIGATIONS!

 

When you hire someone to work in your home, you may become an employer. Thus, you may have specific tax obligations, such as withholding and paying Social Security and Medicare (FICA) taxes and possibly federal and state unemployment insurance. Here are four questions to ask before you say, “You’re hired.”

1. Who’s considered a household employee?

A household worker is someone you hire to care for your children or other live-in family members, clean your house, cook meals, do yard work or provide similar domestic services. But not everyone who works in your home is an employee.

For example, some workers are classified as independent contractors. These self-employed individuals typically provide their own tools, set their own hours, offer their services to other customers and are responsible for their own taxes. To avoid the risk of misclassifying employees, however, you may want to assume that a worker is an employee unless your tax advisor tells you otherwise.

2. When do I pay employment taxes?

You’re required to fulfill certain state and federal tax obligations for any person you pay $2,100 or more annually (in 2018) to do work in or around your house. (The threshold is adjusted annually for inflation.)

In addition, you’re required to pay the employer’s half of FICA (Social Security and Medicare) taxes (7.65% of cash wages) and to withhold the employee’s half. For employees who earn $1,000 or more in a calendar quarter, you must also pay federal unemployment taxes (FUTA) equal to 6% of the first $7,000 in cash wages. And, depending on your resident state, you may be required to make state unemployment contributions, but you’ll receive a FUTA credit for those contributions, up to 5.4% of wages.

You don’t have to withhold federal (and, in most cases, state) income taxes, unless you and your employees agree to a withholding arrangement. But regardless of whether you withhold income taxes, you’re required to report employees’ wages on Form W-2.

3. Are there exceptions?

Yes. You aren’t required to pay employment taxes on wages you pay to your spouse, your child under age 21, your parent (unless an exception is met) or an employee who is under age 18 at any time during the year, providing that performing household work isn’t the employee’s principal occupation. If the employee is a student, providing household work isn’t considered his or her principal occupation.

4. How do I make tax payments?

You pay any federal employment and withholding taxes by attaching Schedule H to your Form 1040. You may have to pay state taxes separately and more frequently (usually quarterly). Keep in mind that this may increase your own tax liability at filing, though the Schedule H tax isn’t subject to estimated tax penalties.

If you owe FICA or FUTA taxes or if you withhold income tax from your employee’s wages, you need an employer identification number (EIN).

There’s no statute of limitations on the failure to report and remit federal payroll taxes. You can be audited by the IRS at any time and be required to pay back taxes, penalties and interest charges. Our firm can help ensure you comply with all the requirements.

If you have any questions regarding Essential Business 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 does legal treatment differ between married and unmarried couples?

Posted by Admin Posted on Oct 18 2018

The difference between married and unmarried!!

 

Unmarried couples don't:

Inherit each other's property automatically. Married couples have the state intestacy laws to support them if they do not have a will. Under the law, the surviving spouse will inherit (at the minimum) a fraction of the deceased spouse's property.
Have the privilege to speak for one another in a medical crisis. In the case that your life partner loses capacity or consciousness, someone will have to make the go-ahead decision for a medical purpose. It should be you, but if you haven't filed certain paperwork, you may not have the ability to do so.
Have the privilege to handle one another's finances in a crisis. A married couple that jointly own assets is less affected by this problem than an unmarried couple.

 

If you have any questions regarding Essential Business 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 IS BETTER, BUYING OR LEASING MY NEXT CAR?

Posted by Admin Posted on Oct 18 2018

Is it better to lease or to buy?

 

It depends on factors such as 1) what kind of deal you can make with the dealership, 2) the typical mileage you put on your car, 3) how much you wear down a car, and 4) the primary use for the car.

To determine whether leasing or buying is best, compare the costs and other issues involved in a lease or purchase. The following factors should be considered:

•             Beginning costs

•             Continual costs

•             Total costs

•             Is there a possibility of deduction of any of the costs due to the car being used for business?

•             How important is it to have ownership of the car

If you have any questions regarding Essential Business 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

HELP YOUR PARENTS WHILE AVOIDING THE GIFT TAX AND SPREAD THE WEALTH

Posted by Admin Posted on Oct 17 2018

Help your parents while avoiding the gift tax.

 

If you decide the best approach for helping your parents is to give them monetary gifts, it’s relatively easy to avoid gift tax liability. Under the annual gift tax exclusion, you can give each recipient up to $15,000 (for 2018) without paying any gift tax. Plus, payments to medical providers aren’t considered gifts, so you may make such payments on your parents’ behalf without using any of your annual exclusion or lifetime exemption amount.

If you have any questions regarding Essential Business 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

Tax Incentives for Higher Edcuation

Posted by Admin Posted on Oct 12 2018

The tax code provides a variety of tax incentives for families who are paying higher education costs or are repaying student loans. You may be able to claim an American Opportunity Credit (formerly called the Hope Credit) or Lifetime Learning Credit for the qualified tuition and related expenses of the students in your family (i.e. you, your spouse, or dependent) who are enrolled in eligible educational institutions. Different rules apply to each credit and the ability to claim the credit phases out at higher income levels. 

If you don't qualify for the credit, you may be able to claim the "tuition & fees deduction" for qualified educational expenses. You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. This deduction phases out at higher income levels. 

You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income so you do not have to itemize your deductions on Schedule A Form 1040. However, this deduction is also phased out at higher income levels.  

If you have any questions regarding Essential Business 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 

THIS MIGHT GET YOU INTO A LOT OF TROUBLE

Posted by Admin Posted on Oct 12 2018

Audit Triggers

 

 

Not Reporting all Taxable Income

Data Entry Errors

Participation in a Tax Shelter

Rental Losses

Failure to properly pay household help

Large travel and entertainment expense

Discrepancy Between Individual Taxpayers and Corporation Filings Associated to Taxpayer

Self Employed (not reporting profit in 3 out of 5 years)

Large charitable contributions

Home office deductions

Not Hiring a Reputable Tax Preparer

Claiming 100% business use of a vehicle

 

If you have any questions regarding Essential Business 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 ALGORITHMS COULD DETECT FRAUD AND INACCURACIES IN TAX RETURNS

Posted by Admin Posted on Oct 12 2018

TAX AUDIT RED FLAGS: BEWARE

 

According to the IRS, returns are chosen for examination by computer scoring, information received from third party documentation (W-2, 1099 questionable treatment of an item), information received from other sources on potential non-compliance (newspapers, public records and individuals). 

A computer program called the Discriminant Inventory Function System (DIF) assigns a numeric score to each individual and some corporate tax returns after they have been processed. If your return is selected because of a high score under the DIF system, the potential is high that an examination of your return will result in a change to your income tax liability.

Your return may also be selected for examination on the basis of information received from third-party documentation, such as Forms 1099 and W-2, that do not match the information reported on your return.

If you have any questions regarding Essential Business 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 issues guidance on Tax Cuts and Jobs Act changes on business expense deductions for meals, entertainment.

Posted by Admin Posted on Oct 11 2018

Dramatic changes for entertainment, amusement and recreation expenses.

 

WASHINGTON — The Internal Revenue Service issued guidance today on the business expense deduction for meals and entertainment following law changes in the Tax Cuts and Jobs Act (TCJA).

 

The 2017 TCJA eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation.

Taxpayers may continue to deduct 50 percent of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact.

 

Food and beverages that are provided during entertainment events will not be considered entertainment if purchased separately from the event.

 

Prior to 2018, a business could deduct up to 50 percent of entertainment expenses directly related to the active conduct of a trade or business or, if incurred immediately before or after a bona fide business discussion, associated with the active conduct of a trade or business.

 

The Department of the Treasury and the IRS expect to publish proposed regulations clarifying when business meal expenses are deductible and what constitutes entertainment. Until the proposed regulations are effective, taxpayers can rely on guidance in Notice 2018-76.

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 to highlight tax reform changes affecting small businesses; Small business owners, self-employed should plan now for new changes.

Posted by Admin Posted on Oct 11 2018

New tax rates for you and your business under new law!

 

WASHINGTON — With just a few months left in tax year 2018, the Internal Revenue Service today urges small business owners to learn about how the new tax law changes may affect them.

 

The Tax Cuts and Jobs Act, passed in December 2017, made tax law changes that will affect virtually every business and individual in 2018 and the years ahead. Among other things, the new law may change their tax rates and impact the quarterly estimated tax payments they are required to make during the year.

 

For many passthrough businesses, the law changes created a new 20-percent qualified business income deduction. Other deductions and credits have been changed as well, including revised depreciation methods and expanded options for expensing business property. There are also new rules for like-kind exchanges and fringe benefits. In addition, small business employers who provide paid family and medical leave to their employees during tax years 2018 and 2019 may qualify for a new business credit. Business owners can refer to the Tax Reform Provisions that Affect Businesses page for updates and resources on these topics and other business-related changes.

 

The IRS is highlighting these changes and more as part of its on-going initiative to help small businesses and self-employed individuals understand and meet their tax responsibilities. Pass-through businesses, small C-Corporations, Schedule C filers (independent contractors and gig economy workers) and farmers are all affected by the new law.

 

The IRS has issued a number of news releases, tax tips, YouTube videos and webinars to help small businesses navigate the new tax law, and more of these products are on the way. Tax tips are written in plain language and people can subscribe to them by using the IRS’s Tax Tips email-subscription program. A variety of additional products and resources can be found on the Tax Reform Resources page.

 

Business owners are encouraged to check the Tax Reform page for the latest guidance on the tax law provisions that may affect them. Partner groups are also encouraged to share this important information with their members.

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 alerts taxpayers: How fake donation scams work.

Posted by Admin Posted on Oct 05 2018

IRS alerts taxpayers: How fake donation scams work.

 

Special serie Part 3

 

The agency warns that scammers continue to pose as the IRS, making threatening phone calls and using email phishing schemes to lure taxpayers. The scams may be particularly prevalent ahead of the Oct. 15 tax-filing extension deadline. Another tax scam, where criminals pose as charity organizations, tends to peak during hurricane season or following a natural disaster. Taxpayers should learn about these ongoing tax scams and know what to do if they’re targeted.

 

The IRS urges taxpayers to look out for suspicious calls, emails and donation requests and take appropriate action if they experience any of the following:

Fake charity donation requests

How the scam works: Criminals set up fake charities to attract donations from unsuspecting contributors. The scammers prey on well-intentioned taxpayers, especially during times of distress, such as following a natural disaster. They solicit money either by phone, email or even in person. The scammers may even contact disaster victims and claim to be working on behalf of the IRS with the goal of gaining access to personal information under the pretext of filing a casualty loss claim.

 

What taxpayers should do: Don’t give out personal or financial information such as Social Security numbers. Be wary of charities with names that resemble nationally-known charity organizations. The IRS has an online search tool called the Tax Exempt Organization Search which allows people to find legitimate, qualified charities to whom a donation may be tax deductible. For security and tax record purposes, contribute by check or another way that provides documentation of the gift. Taxpayers who want to report suspected tax fraud activity can do so by completing Form 3949-A, Information Referral.

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 ALERTS TAXPAYERS: HOW EMAIL SCAMS WORK.

Posted by Admin Posted on Oct 05 2018

IRS alerts taxpayers: How email scams work.

 

Special serie Part 2                     

The agency warns that scammers continue to pose as the IRS, making threatening phone calls and using email phishing schemes to lure taxpayers. The scams may be particularly prevalent ahead of the Oct. 15 tax-filing extension deadline. Another tax scam, where criminals pose as charity organizations, tends to peak during hurricane season or following a natural disaster. Taxpayers should learn about these ongoing tax scams and know what to do if they’re targeted.

 

The IRS urges taxpayers to look out for suspicious calls, emails and donation requests and take appropriate action if they experience any of the following:

Phishing emails

How the scam works: Criminals send an email to your personal or business account(s) appearing to be from the IRS. The email usually features the IRS logo, uses agency language and asks taxpayers to provide sensitive information. It may also ask recipients to open an attachment or click on a link embedded within the email to supposedly give the taxpayer account access. In a more recent variation called “spear phishing,” the criminal, having done research on the victim ahead of time, will send an email posing as a trusted source. The email will make an urgent plea to click on a link and update an account immediately. The link will then direct the victim to what seems to be a trusted website but is in reality a phishing website controlled by the thief who can install malicious software.

 

What taxpayers should do: Do not provide personal information, click on links or open attachments from emails pretending to be from the IRS. Know that the IRS does not initiate contact by email or social media channels. The agency gets in touch with taxpayers through paper letters mailed by the U.S. Postal Service. IRS letters and notices are mailed to the taxpayer’s most recent address on file. Forward the email as-is, preferably with the full email headers to phishing@irs.gov. Delete the original 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

IRS ALERTS TAXPAYERS: HOW TELEPHONE SCAMS WORK.

Posted by Admin Posted on Oct 04 2018

How telephone scams work.

 

Special serie Part 1

The agency warns that scammers continue to pose as the IRS, making threatening phone calls and using email phishing schemes to lure taxpayers. The scams may be particularly prevalent ahead of the Oct. 15 tax-filing extension deadline. Another tax scam, where criminals pose as charity organizations, tends to peak during hurricane season or following a natural disaster. Taxpayers should learn about these ongoing tax scams and know what to do if they’re targeted.

 

The IRS urges taxpayers to look out for suspicious calls, emails and donation requests and take appropriate action if they experience any of the following:

 

Telephone scams

How the scam works: Criminals pose as IRS employees and call victims, demanding immediate payment of a so-called tax debt. Payments are often requested via prepaid debit cards and/or money wires. The caller will ask to stay on the line or otherwise call repeatedly while the victim completes the transaction. The caller may use a condescending tone and will often threaten to file a lawsuit, call the police or involve federal law enforcement agencies if the victim doesn’t comply. The call may appear to come from emergency services and/or a local/federal law enforcement agency but the fraudsters are faking, or “spoofing” the caller ID to only appear to come from a legitimate agency.

 

What taxpayers should do: Hang up the phone. Know that the IRS would never call to threaten or demand immediate tax payment. The agency offers taxpayers a chance to appeal any amount in question and offers numerous ways of resolving a tax liability.

 

Anyone wishing to check their account after receiving this type of call can visit the IRS website and register to view your account information online. The tool allows taxpayers to view up to 24 months of payment history and balance due for any given tax year. Taxpayers who want to report scam calls can visit the Treasury Inspector General for Tax Administration’s website, TIGTA.gov, and also email phishing@irs.gov (Subject: IRS Phone Scam). 

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 know it's really the IRS calling or knocking on your door.

Posted by Admin Posted on Sept 26 2018

Is it the IRS calling?

 

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:                                       

  • Demand that you use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for your debit or credit card numbers over the phone.
  • Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. Generally, the IRS will first mail you a bill if you owe any taxes. 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, but not without having first notified 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

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

Revenue officers are IRS civil enforcement employees who work cases that involve an amount owed by a taxpayer or a delinquent tax return. Their role involves education, investigation, and when necessary, appropriate enforcement.

Generally, home or business visits are unannounced because scheduling appointments for such matters would be inconsistent with their proactive and urgent nature. For example, many urgent and complex cases involve employers’ employment tax withholding requirement.

Revenue officers carry two forms of official identification.  Both forms of Identification have serial numbers – and you can ask to see both.

Revenue Officer Visits

  • The vast majority of collection cases begin as letters (called “notices”) sent to taxpayers because the case is unresolved.  A significant number of these cases are also previously worked by the Automated Collection System – an IRS program that tries to resolve the taxpayer’s account over the phone directly with the taxpayer after a notice sent to the taxpayer was unsuccessful at resolving the situation.  
  • A small portion of the revenue officers’ work involves proactive outreach to employers, called Federal Tax Deposit Alerts, sent at the earliest sign that a business taxpayer is falling behind on payroll tax deposits. These are generally not preceded by a notice.

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

The IRS examines or audits tax returns to verify that what the taxpayer reported is correct. This doesn’t mean that the taxpayer has made an error or been dishonest. In fact, some examinations result in a refund to the taxpayer or acceptance of the return without change.

There are various reasons the IRS may telephone or visit a taxpayer at home during an audit, but at that point the taxpayer would be well aware of the audit.   

Audit Contacts

  • After mailing an initial appointment letter we may call to confirm and discuss items needed for the audit. An audit may include an interview with the taxpayer or his or her Power of Attorney, if one is appointed, and sometimes include a tour of the taxpayer’s business operation.
  • Third party contacts – if while examining one taxpayer’s return, we need information from someone else, we will first issue a letter to that third party requesting the information.  After that we may contact them by telephone

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 Sept 23 2018

benefits and under

 

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 Sept 23 2018

which business travel expenses

 

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

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

Posted by Admin Posted on Sept 23 2018

are you sure you want

 

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).

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

—MARRIED FILERS, THE CHOICE IS YOURS

Posted by Admin Posted on Sept 23 2018

married filers

 

Some married couples assume they have to file their tax returns jointly. Others may know they have a choice but not want to rock the boat by filing separately. The truth is that there’s no harm in at least considering your options every year.

Granted, married taxpayers who file jointly can take advantage of certain credits not available to separate filers. They’re also more likely to be able to make deductible IRA contributions and less likely to be subject to the alternative minimum tax.

But there are circumstances under which filing separately may be a good idea. For example, filing separately can save tax when one spouse’s income is much higher than the others, and the spouse with lower income has miscellaneous itemized deductions exceeding 2% of his or her adjusted gross income (AGI) or medical expenses exceeding 10% of his or her AGI — but jointly the couple’s expenses wouldn’t exceed the applicable floor for their joint AGI. However, in community property states, income and expenses generally must be split equally unless they’re attributable to separate funds.

Many factors play into the joint vs. separate filing decision. If you’re interested in learning more, please give us a call.

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

—HAVE A PENSION? BE SURE TO PLAN CAREFULLY

Posted by Admin Posted on Sept 23 2018

have a pension

 

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.

Managing this asset

Although increasingly uncommon, these defined benefit plans can be a highly valuable asset. Please contact us for help managing yours appropriately.

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

—Capital Gains and Losses

Posted by Admin Posted on Sept 23 2018

capital gains

 

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

—CONSOLIDATE ACCOUNTS AND SIMPLIFY YOUR FINANCIAL LIFE

Posted by Admin Posted on Sept 23 2018

accounts consolidate

 

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

—THE MANY BENEFITS OF A HEALTH SAVINGS ACCOUNT (HSA)

Posted by Admin Posted on Sept 23 2018

many benefits of a h

 

A Health Savings Account (HSA) represents an opportunity for eligible individuals to lower their out-of-pocket health care costs and federal tax bill. Since most of us would like to take advantage of every available tax break, now might be a good time to consider an HSA, if eligible.

An HSA operates somewhat like a Flexible Spending Account (FSA) that employers offer to their eligible employees. An FSA permits eligible employees to defer a portion of their pay, on a pretax basis, which is used later to reimburse out-of-pocket medical expenses. However, unlike an FSA, whatever remains in the HSA at year end can be carried over to the next year and beyond. In addition, there are no income phaseout rules, so HSAs are available to high-earners and low-earners alike.

Naturally, there are a few requirements for obtaining the benefits of an HSA. The most significant requirement is that an HSA is only available to an individual who carries health insurance coverage with a relatively high annual deductible. For 2015, the individual's health insurance coverage must come with at least a $1,300 deductible for single coverage or $2,600 for family coverage. For many self-employed individuals, small business owners, and employees of small and large companies alike, these thresholds won't be a problem. In addition, it's okay if the insurance plan doesn't impose any deductible for preventive care (such as annual checkups). Other requirements for setting up an HSA are that an individual can't be eligible for Medicare benefits or claimed as a dependent on another person's tax return.

Individuals who meet these requirements can make tax-deductible HSA contributions in 2015 of up to $3,350 for single coverage or $6,650 for family coverage. The contribution for a particular tax year can be made as late as April 15 of the following year. The deduction is claimed in arriving at adjusted gross income (the number at the bottom of page 1 on your return). Thus, eligible individuals can benefit whether they itemize or not. Unfortunately, however, the deduction doesn't reduce a self-employed person's self-employment tax bill.

When an employer contributes to an employee's HSA, the contributions are exempt from federal income, Social Security, Medicare, and unemployment taxes.

An account beneficiary who is age 55 or older by the end of the tax year for which the HSA contribution is made may make a larger deductible (or excludible) contribution. Specifically, the annual tax-deductible contribution limit is increased by $1,000.

An HSA can generally be set up at a bank, insurance company, or other institution the IRS deems suitable. The HSA must be established exclusively for the purpose of paying the account beneficiary's qualified medical expenses. These include uninsured medical costs incurred for the account beneficiary, spouse, and dependents. However, for HSA purposes, health insurance premiums don't qualify.

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.

—Why am I going to have an Audit?

Posted by Admin Posted on Sept 23 2018

why am i going to have audit

 

RED FLAGS

According to the IRS, returns are chosen for examination by computer scoring, information received from third party documentation (W-2, 1099 questionable treatment of an item), information received from other sources on potential non compliance (newspapers, public records and individuals). 

A computer program called the Discriminant Inventory Function System (DIF) assigns a numeric score to each individual and some corporate tax returns after they have been processed. If your return is selected because of a high score under the DIF system, the potential is high that an examination of your return will result in a change to your income tax liability.

Your return may also be selected for examination on the basis of information received from third-party documentation, such as Forms 1099 and W-2, that do not match the information reported on your return.

AUDIT TRIGGERS

  • Not Reporting all Taxable Income
  • Data Entry Errors
  • Participation in a Tax Shelter
  • Rental Losses
  • Failure to properly pay household help
  • Large travel and entertainment expense
  • Discrepancy Between Individual Taxpayers and Corporation Filings Associated to Taxpayer
  • Self Employed (not reporting profit in 3 out of 5 years)
  • Large charitable contributions
  • Home office deductions
  • Not Hiring a Reputable Tax Preparer
  • Claiming 100% business use of a vehicle

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.

 

Got a big tax refund? Use IRS Withholding Calculator to boost take-home pay in 2018

Posted by Admin Posted on Aug 28 2018

got a big tax refund use irs

 

Taxpayers who received large refunds earlier this year may be able to get more of their money included in their paychecks during the rest of 2018 by using the Withholding Calculator on IRS.gov.

According to the Internal Revenue Service, most taxpayers – more than seven out of 10 –  receive refunds averaging around $2,800. Typically, taxpayers who receive large refunds could receive more of their money throughout the year, rather than waiting until they file their tax return after the end of the year.

Tax reform has big impact

The Tax Cuts and Jobs Act, enacted in December, made major changes to the tax law. Any of these far-reaching changes could have an impact on the refund many taxpayers will receive when they file their 2018 tax return. The IRS encourages every employee, including those who typically receive big tax refunds, to do a “paycheck checkup” soon to ensure they have the appropriate amount of tax taken out of their pay.

TCJA changes that could have a big impact on tax refunds this year include:

  • Reduced tax rates and changed tax brackets.
  • Eliminated personal exemptions.
  • Increased standard deduction.
  • Expanded and increased Child Tax Credit.
  • A new credit for other dependents.
  • Some limited or discontinued deductions.

Do a ‘paycheck checkup’ soon

The IRS urges taxpayers to complete their “paycheck checkup” now so that if a withholding amount adjustment is necessary, there’s more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to withhold the necessary federal tax – so more tax will have to be withheld from each remaining paycheck.

Adjusting withholding can prevent taxpayers from having too little tax or too much withheld. Too little withheld could result in an unexpected tax bill or penalty at tax time in 2019.

Using the Withholding Calculator

It’s helpful if taxpayers have their completed 2017 tax return available when using the Withholding Calculator to estimate the amount of income, deductions, adjustments and credits to enter. Filers also need their most recent pay stubs to compute the employee’s withholding so far this year.

Calculator results depend on the accuracy of information entered. If a taxpayer’s personal circumstances change during the year, they should return to the calculator to check whether their withholding should be changed.

Employees can use the results from the Withholding Calculator to help determine if they should complete a new Form W-4 and, if so, what information to enter on a new Form W-4.

Taxpayers who change their withholding for 2018 should recheck their withholding at the start of 2019, especially those who reduced their withholding sometime in 2018. A mid-year withholding change in 2018 may have a different full-year impact in 2019. Taxpayers who do not file a new Form W-4 for 2019, may have a higher or lower withholding than intend. To help protect against having too little withheld in 2019, IRS encourages all filers to check their withholding again early in 2019.

The Withholding Calculator does not request personally-identifiable information, such as name, Social Security number, address or bank account number. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the Withholding Calculator or the information entered in it.

Adjusting withholding

Employees who need to complete a new Form W-4 should submit it to their employers as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances must submit a new Form W-4 with corrected withholding allowances to their employer within 10 days of the change.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state's department of revenue to learn more.

Taxpayers with high incomes, complex returns: Check withholding soon

Posted by Admin Posted on Aug 28 2018

taxpayers with high incomes complex returns

 

The Internal Revenue Service today urged high-income taxpayers and those with complex tax returns to check their withholding soon to avoid an unexpected tax bill or penalty when they file their 2018 federal income tax return in 2019.

The Tax Cuts and Jobs Act, the tax reform legislation passed in December, made major changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the Child Tax Credit, limiting or discontinuing certain deductions and changing tax rates and tax brackets.

Any of these far-reaching changes could have a big impact on the tax refund or balance due on the tax return taxpayers file next year. That’s why the IRS encourages every employee to do a “paycheck checkup” soon to check that they are having the right amount of tax taken out of their pay. The IRS Withholding Calculator and Publication 505, Tax Withholding and Estimated Tax, can help.

A checkup is especially important for those with high incomes and complex returns because they are often affected by more of these changes than people with simpler returns. This is also true if they also make quarterly estimated tax payments to cover other sources of income or are subject to the self-employment tax or alternative minimum tax.

Changes that affect high-income taxpayers

For 2018, the standard deduction nearly doubled to $24,000 for joint filers and $12,000 for singles. There were also numerous changes to itemized deductions, including:

  • A $10,000 cap on deductions for state and local property, sales and income taxes.
  • New limits on deductions for some mortgage interest and home equity debt. 
  • Higher limits on the percent of income a taxpayer can deduct as charitable contributions.
  • No deduction for those miscellaneous expenses that, in prior tax years, had to exceed 2 percent of a filer’s income to qualify. These included investment expenses and un-reimbursed employee expenses such as travel, meals, entertainment and uniforms.

Many who itemized in the past may find they’ll pay less tax in 2018 by taking the standard deduction.

Do a ‘paycheck checkup’ soon

Checking and adjusting how much tax is withheld from pay now can prevent an unexpected tax bill and penalties next year at tax time. It can also help taxpayers avoid a large tax refund, if they’d prefer to have their money in their paychecks throughout the year.

Taxpayers need to adjust their withholding as soon as possible for an even, consistent amount of withholding throughout the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax – so more tax will have to be withheld from each remaining paycheck.

Whether someone uses the Withholding Calculator or Publication 505, it’s helpful to have their completed 2017 tax return handy to help estimate the amount of income, deductions, adjustments and credits to enter. They’ll also need their most recent pay stubs to help compute their withholding to date.

Employees can use the results from the Withholding Calculator or Publication 505 to help determine if they should complete a new Form W-4, Employee’s Withholding Allowance Certificate, and what information to include on the form.

Though primarily designed for employees who receive wages, the Withholding Calculator can also be helpful to some taxpayers receiving pension and annuity income. Recipients of pensions and annuities can change their withholding by completing Form W-4P and submitting it to their payer.

All taxpayers should remember that if their personal circumstances change during the year, they should re-check their withholding.

Taxpayers who change their withholding for 2018 should recheck their withholding at the start of 2019. This is especially important for taxpayers who reduce their withholding sometime during 2018. A mid-year withholding change in 2018 may have a different full-year impact in 2019. So, if taxpayers don’t submit a new Form W-4 for 2019, their withholding might be higher or lower than intended. To help protect against having too little withheld in 2019, taxpayers should check their withholding again early in 2019.

People with more complex situations may need to use Publication 505

Taxpayers with more complex situations might need to use Publication 505 instead of the Withholding Calculator. This includes employees who owe self-employment tax, the alternative minimum tax or tax on unearned income from dependents. It can also help those who receive non-wage income such as dividends, capital gains, rents and royalties. The publication includes worksheets and examples to guide taxpayers through these special situations.

In some of these situations, a household may make estimated tax payments but also have tax withheld by an employer. It’s important to account for both amounts when figuring how much tax to have an employer withhold. Publication 505 helps taxpayers include estimated tax payments; the Withholding Calculator does not. 

Adjusting withholding

If an employee determines they should adjust their withholding, they should complete a new Form W-4 and submit it to their employer as soon as possible. Some employers have an electronic method to update a Form W-4.

If an employee has a change in personal circumstances that reduces the number of withholding allowances they can claim, they must submit a new Form W-4 within 10 days of the change with the correct number of allowances.

As a general rule, the fewer withholding allowances an employee enters on the Form W-4, the higher their tax withholding will be. Entering “0” or “1” on line 5 of the Form W-4 means more tax will be withheld. Entering a bigger number means less tax withholding, resulting in a smaller tax refund or potentially a tax bill or penalty.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state's department of revenue to learn more.

Additional information

The Withholding Calculator does not request personally identifiable information such as name, Social Security number, address or bank account number. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the calculator or the information entered in it.

The calculator and Publication 505 are not tax-planning tools. Taxpayers needing advice regarding the new tax law and their personal situation should consult a trusted tax professional.

Key tax change affects taxpayers with dependents

Posted by Admin Posted on Aug 27 2018

key tax change affects taxpayers with dependents

 

The Internal Revenue Service urges taxpayers who support dependents who can’t be claimed for the Child Tax Credit to do a paycheck checkup soon. The IRS Withholding Calculator can help these taxpayers make sure they have the right amount of tax taken out of their pay.

The Tax Cuts and Jobs Act, enacted in December 2017, added a new tax credit – Credit for Other Dependents. It is a non-refundable credit of up to $500 per qualifying person. Taxpayers may be able to claim the new credit for dependents that these taxpayers claimed a dependency exemption for in the past. 

This change, along with others, can affect a family’s tax situation in 2018. Checking and adjusting withholding now can prevent an unexpected tax bill and even penalties next year at tax time.

The Credit for Other Dependents is available for dependents for whom taxpayers cannot claim the newly expanded Child Tax Credit. These dependents may include dependent children who are age 17 or older at the end of 2018, or parents or other qualifying relatives supported by the taxpayer. Families with qualifying children under the age of 17 should first review their eligibility for the expanded Child Tax Credit, which is larger.

The Credit for Other Dependents and the Child Tax Credit begin to phase out at $400,000 of modified adjusted gross income for joint filers and $200,000 for other taxpayers. For more information about these credits, visit Steps to Take Now to Get a Jump on Next Year’s Taxes on IRS.gov.

These credits are among many changes in the new law that will affect 2018 tax returns that people will file in 2019. The IRS Withholding Calculator, available on IRS.gov, can help people with dependents – and others – apply the new law correctly.

The IRS urges all taxpayers to complete their “paycheck checkup” as early as possible so that if a withholding amount adjustment is necessary, there’s more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to withhold the necessary federal tax – so more tax will have to be withheld from each remaining paycheck. 

Taxpayers who change their withholding for 2018 should recheck their withholding at the start of 2019, especially taxpayers who reduce their withholding sometime during 2018. A mid-year withholding change in 2018 may have a different full-year impact in 2019. If taxpayers don’t submit a new Form W-4 for 2019, their withholding might be higher or lower than intended.

Using the Withholding Calculator 

To use the Withholding Calculator, taxpayers should have their 2017 tax returns and most recent paystubs available to determine their proper withholding for 2018.   

Calculator results depend on the accuracy of information entered. If a taxpayer’s personal circumstances change during the year, they should return to the calculator to check whether their withholding should be changed. 

Employees can use the results from the Withholding Calculator to determine if they should complete a new Form W-4 and, if so, what information to enter on that form.

The Withholding Calculator does not request personally-identifiable information, such as name, Social Security number, address or bank account number. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the Withholding Calculator or the information entered on it.

Adjusting withholding 

The Withholding Calculator will recommend how to complete new Forms W-4. If a taxpayer is at risk of being under-withheld, the calculator will recommend an additional amount of tax withholding for each job. The taxpayer can enter these amounts on their respective Forms W-4. 

Employees who need to complete a new Form W-4 should submit it to their employers as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances must submit a new Form W-4 with corrected withholding allowances to their employer within 10 days of the change.

Certain taxpayers – including those who don’t have enough income tax withheld by their employer – may have to pay estimated taxes. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state's department of revenue to learn more.

Do a ‘Paycheck Checkup’ now, avoid a surprise year-end tax bill

Posted by Admin Posted on Aug 27 2018

do a paycheck checkup now avoid a surprise year end tax bill

 

The Internal Revenue Service urges anyone working in the sharing economy to perform a Paycheck Checkup now to avoid an unexpected tax bill when they file their return next year.

Many people working in the sharing economy are employees, in which case their employers should be withholding taxes from their wages. Many others are not working as employees, so they need to make sure they pay their taxes either through withholding from other jobs they may have, or through estimated taxes.

Either way, because of the far-reaching tax changes taking effect this year, IRS urges taxpayers, including those in the sharing economy, to perform a Paycheck Checkup now. The easiest way for most employees to check their withholding is through the Withholding Calculator available on IRS.gov.

The U.S. tax system operates on a pay-as-you-go basis, so taxes must be paid as income is received rather than at the end of the year. This includes anyone involved in the sharing economy.

People who participate in the sharing economy but do not have an employer, usually need to make quarterly estimated tax payments to cover their tax obligation. In this case Publication 505, Tax Withholding and Estimated Tax, and the worksheet in  Form 1040-ES, Estimated Tax for Individuals, can help people check their withholding and figure their payments correctly. IRS Direct Pay is the fastest and easiest way to pay.

In recent years, the IRS has seen the number of taxpayers who paid the estimated tax penalty jump from 7.2 million in 2010 to 10 million in 2015, an increase of nearly 40 percent. Using the Withholding Calculator or Publication 505 and following the recommended steps can help avoid this underpayment penalty.

Sharing Economy Tax Center and other resources

The IRS has created the Sharing Economy Tax Center to help people quickly find answers to tax questions and forms for the sharing economy. The Center features:

The IRS’s Pay As You Go web page and Publication 505 can help people understand withholding and estimated payments.

People with more complex situations may need to use Publication 505

Taxpayers with more complex situations might need to use Publication 505 instead of the Withholding Calculator. This includes employees who owe self-employment tax, the alternative minimum tax or tax on unearned income from dependents. It can also help those who receive non-wage income such as dividends, capital gains, rents and royalties. The publication includes worksheets and examples to guide taxpayers through these special situations.

In some of these situations, a household may make estimated tax payments but also have tax withheld by an employer. It’s important to account for both amounts when figuring how much tax to have an employer withhold. Publication 505 helps taxpayers include estimated tax payments; the Withholding Calculator does not. 

Do a ‘Paycheck Checkup’ soon

Taxpayers need to adjust their withholding as soon as possible for an even, consistent amount of withholding throughout the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax – so more tax will have to be withheld from each remaining paycheck.

Whether someone uses the Withholding Calculator or Publication 505, it’s helpful to have their completed 2017 tax return handy to help estimate the amount of income, deductions, adjustments and credits to enter. They’ll also need their most recent pay stubs to help compute their withholding to date.

Employees can use the results from the Withholding Calculator or Publication 505 to help determine if they should complete a new Form W-4, Employee’s Withholding Allowance Certificate, and what information to include on the form.

Though primarily designed for employees who receive wages, the Withholding Calculator can also be helpful to some taxpayers receiving pension and annuity income. Recipients of pensions and annuities can change their withholding by completing Form W-4P and submitting it to their payer.

All taxpayers should remember that if their personal circumstances change during the year, they should re-check their withholding.

Taxpayers who change their withholding for 2018 should recheck their withholding at the start of 2019. This is especially important for taxpayers who reduce their withholding sometime during 2018. A mid-year withholding change in 2018 may have a different full-year impact in 2019. If taxpayers don’t submit a new Form W-4 for 2019, their withholding might be higher or lower than intended. To help protect against having too little withheld in 2019, taxpayers should check their withholding again early in 2019.

Adjusting withholding

If an employee determines they should adjust their withholding, they should complete a new Form W-4 and submit it to their employer as soon as possible. Some employers have an electronic method to update a Form W-4.

If an employee has a change in personal circumstances that reduces the number of withholding allowances they can claim, they must submit a new Form W-4 within 10 days of the change with the correct number of allowances.

As a general rule, the fewer withholding allowances an employee enters on the Form W-4, the higher their tax withholding will be. Entering “0” or “1” on line 5 of the Form W-4 means more tax will be withheld. Entering a bigger number means less tax withholding, resulting in a smaller tax refund or potentially a tax bill or penalty.

Employees may also need to determine if they should make adjustments to their state or local withholding. Contact the state's department of revenue to learn more.

Additional information

The Withholding Calculator does not request personally identifiable information such as name, Social Security number, address or bank account numbers. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the calculator or the information entered in it.

The IRS also reminds taxpayers needing advice regarding the new tax law and their personal situation should consider consulting a trusted tax professional.

Taxpayers can get more information on these topics at www.irs.gov/withholding. Additionally, IRS.gov/getready has information about steps taxpayers can take now to get a jump on next year’s taxes, including how the new tax law may affect them.

Treasury, IRS issue proposed regulations on charitable contributions and state and local tax credits

Posted by Admin Posted on Aug 27 2018

treasury irs issue proposed regulaions on charitable contributions and state and state

 

Today the U.S. Department of the Treasury and the Internal Revenue Service issued proposed regulations providing rules on the availability of charitable contribution deductions when the taxpayer receives or expects to receive a corresponding state or local tax credit.

The proposed regulations issued today are designed to clarify the relationship between state and local tax credits and the federal tax rules for charitable contribution deductions. The proposed regulations are available in the Federal Register.

Under the proposed regulations, a taxpayer who makes payments or transfers property to an entity eligible to receive tax deductible contributions must reduce their charitable deduction by the amount of any state or local tax credit the taxpayer receives or expects to receive.

For example, if a state grants a 70 percent state tax credit and the taxpayer pays $1,000 to an eligible entity, the taxpayer receives a $700 state tax credit. The taxpayer must reduce the $1,000 contribution by the $700 state tax credit, leaving an allowable contribution deduction of $300 on the taxpayer’s federal income tax return. The proposed regulations also apply to payments made by trusts or decedents’ estates in determining the amount of their contribution deduction.

The proposed regulations provide exceptions for dollar-for-dollar state tax deductions and for tax credits of no more than 15 percent of the payment amount or of the fair market value of the property transferred. A taxpayer who makes a $1,000 contribution to an eligible entity is not required to reduce the $1,000 deduction on the taxpayer’s federal income tax return if the state or local tax credit received or expected to be received is no more than $150.

Treasury and IRS welcome public comments on these proposed regulations. For details on submitting comments, see the proposed regulations.

New law makes clear: Combat-zone contract workers qualify for foreign earned income exclusion

Posted by Admin Posted on Aug 27 2018

new law makes clearcombat zone contract workers qualify for foreign

 

Certain U.S. citizens or resident aliens, specifically contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones, may now qualify for the foreign earned income exclusion.

The Bipartisan Budget Act of 2018, enacted in February, changed the tax home requirement for eligible taxpayers, enabling them to claim the foreign earned income exclusion even if their “abode” is in the United States. The new law applies for tax year 2018 and subsequent years.

This means that these taxpayers, if eligible, will be able to claim the foreign earned income exclusion on their income tax return for 2018 when they file. Under the exclusion, taxpayers can choose to exclude their foreign earned income from gross income, up to a certain dollar amount. For tax year 2018, that dollar amount limit is $103,900.

The foreign earned income exclusion is not automatic. Eligible taxpayers must file a U.S. income tax return each year with either a Form 2555 or Form 2555-EZ attached. These forms, instructions and Publication 54,Tax Guide for U.S. Citizens and Resident Aliens Abroad, will be revised later this year to reflect this clarification.

Foreign earned income is the income a taxpayer receives for performing personal services in a foreign country or countries during a period in which he or she meets both of the following requirements:

  • His or her tax home is in a foreign country, and
  • He or she meets either the bona fide residence test or the physical presence test.

Full details on these tests can be found in Publication 54.

Under prior law, many otherwise eligible taxpayers who lived and worked in designated combat zones failed to qualify because they had an abode in the United States. The new law makes it clear that contractors or employees of contractors providing support to U.S. Armed Forces in designated combat zones are eligible to claim the foreign earned income exclusion.

Taxpayers choosing the foreign earned income exclusion cannot take advantage of any other exclusion, deduction or credit related to the excluded income. This includes any expenses, losses or other items that would have been deductible had the exclusion not been claimed.

As in the past, the foreign earned income exclusion is not available to federal employees or members of the military. But service members in combat zones continue to qualify for the combat pay exclusion. 

-ASSESSING YOUR EXPOSURE TO THE ESTATE TAX AND GIFT TAX

Posted by Admin Posted on Aug 27 2018

assesing your exposure to the estate tax and gift tax

 

When Congress was debating tax law reform last year, there was talk of repealing the federal estate and gift taxes. As it turned out, rumors of their demise were highly exaggerated. Both still exist and every taxpayer with a high degree of wealth shouldn’t let either take their heirs by surprise.

Exclusions and exemptions

For 2018, the lifetime gift and estate tax exemption is $11.18 million per taxpayer. (The exemption is annually indexed for inflation.) If your estate doesn’t exceed your available exemption at your death, no federal estate tax will be due.

Any gift tax exemption you use during life does reduce the amount of estate tax exemption available at your death. But not every gift you make will use up part of your lifetime exemption. For example:

  • Gifts to your U.S. citizen spouse are tax-free under the marital deduction, as are transfers at death (bequests).
  • Gifts and bequests to qualified charities aren’t subject to gift and estate taxes.
  • Payments of another person’s health care or tuition expenses aren’t subject to gift tax if paid directly to the provider.
  • Each year you can make gifts up to the annual exclusion amount ($15,000 per recipient for 2018) tax-free without using up any of your lifetime exemption.

It’s important to be aware of these exceptions as you pass along wealth to your loved ones.

A simple projection

Here’s a simplified way to help project your estate tax exposure. Take the value of your estate, net of any debts. Also subtract any assets that will pass to charity on your death.

Then, if you’re married and your spouse is a U.S. citizen, subtract any assets you’ll pass to him or her. (But keep in mind that there could be estate tax exposure on your surviving spouse’s death, depending on the size of his or her estate.) The net number represents your taxable estate.

You can then apply the exemption amount you expect to have available at death. Remember, any gift tax exemption amount you use during your life must be subtracted. But if your spouse predeceases you, then his or her unused estate tax exemption, if any, may be added to yours (provided the applicable requirements are met).

If your taxable estate is equal to or less than your available estate tax exemption, no federal estate tax will be due at your death. But if your taxable estate exceeds this amount, the excess will be subject to federal estate tax.

Be aware that many states impose estate tax at a lower threshold than the federal government does. So, you could have state estate tax exposure even if you don’t need to worry about federal estate tax.

Strategies to consider

If you’re not sure whether you’re at risk for the estate tax, or if you’d like to learn about gift and estate planning strategies to reduce your potential liability, please contact us.

- WHAT ARE THE BIGGEST MISTAKES INVESTORS MAKE?

Posted by Admin Posted on Aug 05 2018

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

- TAX RULES ON RENTAL PROPERTY

Posted by Admin Posted on Aug 05 2018

tax rules on rental property

 

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.

 

- REFINANCING YOUR HOME?

Posted by Admin Posted on Aug 05 2018

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

- FIVE TAX TIPS ON UNEMPLOYMENT BENEFITS

Posted by Admin Posted on Aug 05 2018

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

- GET CREDIT FOR MAKING A HOME ENERGY EFFICIENT

Posted by Admin Posted on Aug 05 2018

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

- DEBT CANCELLATION MAY BE TAXABLE

Posted by Admin Posted on Aug 05 2018

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

- FRIVOLOUS TAX ARGUMENTS CAN COST YOU THOUSANDS

Posted by Admin Posted on Aug 05 2018

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

- WHAT CAN I DO TO RAISE MONEY FOR MY SMALL BUSINESS?

Posted by Admin Posted on Aug 05 2018

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

- CHECK OUT THESE TAX BENEFITS FOR PARENTS

Posted by Admin Posted on Aug 05 2018

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

- AGE 50 OR OLDER? CATCH-UP CONTRIBUTIONS ARE FOR YOU

Posted by Admin Posted on Aug 05 2018

age 50 or older catch up contributions are for

 

Are you in your 50s or 60s and thinking more about retirement? If so, and you’re still not completely comfortable with the size of your nest egg, don’t forget about “catch-up” contributions. These are additional amounts beyond the regular annual limits that workers age 50 or older can contribute to certain retirement accounts.

Catch-up contributions give you the chance to take maximum advantage of the potential for tax-deferred or, in the case of Roth accounts, tax-free growth.

401(k) feature

Under 2016 401(k) limits, if you’re age 50 or older, after you’ve reached the $18,000 maximum limit for all employees, you can contribute an extra $6,000, for a total of $24,000. If your employer offers a Savings Incentive Match Plan for Employees (SIMPLE) instead, your regular contribution maxes out at $12,500 in 2016. If you’re 50 or older, you’re allowed to contribute an additional $3,000 — or $15,500 in total for the year.

But, check with your employer because, while most 401(k) plans and SIMPLEs offer catch-up contributions, not all do.

IRA benefits

Another way to save more after age 50 is through a traditional IRA or a Roth IRA. With either plan, those 50 or older generally can contribute another $1,000 above the $5,500 limit for 2016. Plus, you can make 2016 IRA contributions as late as April 18, 2017.

The benefits of making the additional contribution differ depending on which account you’re considering. With a traditional IRA, contributions may be tax deductible, providing you with immediate tax savings. (The deductibility phases out at higher income levels if you or your spouse is covered by an employer retirement plan.)

Roth contributions are made with after-tax dollars, but qualified withdrawals are tax-free. By contributing to a Roth IRA and taking the tax hit up front, you won’t lose any of the income to taxes at withdrawal, provided you’re at least 59½ and have held a Roth IRA at least five years. However, be aware that the ability to contribute to a Roth IRA is phased out based on income level.

Another option if you’d like to enjoy tax-free withdrawals is to convert some or all of your traditional IRA to a Roth IRA — but you’ll also take an up-front tax hit.

Self-employed limits

If you’re self-employed, retirement plans such as an individual 401(k) — or solo 401(k) — also allow catch-up contributions. A solo 401(k) is a plan for those with no other employees. You can defer 100% of your self-employment income or compensation, up to the regular yearly deferral limit of $18,000, plus a $6,000 catch-up contribution in 2016. But that’s just the employee salary deferral portion of the contribution.

You can also make an “employer” contribution of up to 20% of self-employment income or 25% of compensation. The total combined employee-employer contribution is limited to $53,000, plus the $6,000 catch-up contribution.

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

-JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

Posted by Admin Posted on Aug 05 2018

juggling wealth family 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.

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

- ASSESSING YOUR EXPOSURE TO THE ESTATE TAX AND GIFT TAX

Posted by Admin Posted on Aug 05 2018

assesing your exposure to the estate tax and gift tax

 

When Congress was debating tax law reform last year, there was talk of repealing the federal estate and gift taxes. As it turned out, rumors of their demise were highly exaggerated. Both still exist and every taxpayer with a high degree of wealth shouldn’t let either take their heirs by surprise.

Exclusions and exemptions

For 2018, the lifetime gift and estate tax exemption is $11.18 million per taxpayer. (The exemption is annually indexed for inflation.) If your estate doesn’t exceed your available exemption at your death, no federal estate tax will be due.

Any gift tax exemption you use during life does reduce the amount of estate tax exemption available at your death. But not every gift you make will use up part of your lifetime exemption. For example:

  • Gifts to your U.S. citizen spouse are tax-free under the marital deduction, as are transfers at death (bequests).
  • Gifts and bequests to qualified charities aren’t subject to gift and estate taxes.
  • Payments of another person’s health care or tuition expenses aren’t subject to gift tax if paid directly to the provider.
  • Each year you can make gifts up to the annual exclusion amount ($15,000 per recipient for 2018) tax-free without using up any of your lifetime exemption.

It’s important to be aware of these exceptions as you pass along wealth to your loved ones.

A simple projection

Here’s a simplified way to help project your estate tax exposure. Take the value of your estate, net of any debts. Also subtract any assets that will pass to charity on your death.

Then, if you’re married and your spouse is a U.S. citizen, subtract any assets you’ll pass to him or her. (But keep in mind that there could be estate tax exposure on your surviving spouse’s death, depending on the size of his or her estate.) The net number represents your taxable estate.

You can then apply the exemption amount you expect to have available at death. Remember, any gift tax exemption amount you use during your life must be subtracted. But if your spouse predeceases you, then his or her unused estate tax exemption, if any, may be added to yours (provided the applicable requirements are met).

If your taxable estate is equal to or less than your available estate tax exemption, no federal estate tax will be due at your death. But if your taxable estate exceeds this amount, the excess will be subject to federal estate tax.

Be aware that many states impose estate tax at a lower threshold than the federal government does. So, you could have state estate tax exposure even if you don’t need to worry about federal estate tax.

Strategies to consider

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

TAKE NOTE OF THE DISTINCTIVE FEATURES OF ROTH IRAS

Posted by Admin Posted on Aug 05 2018

take note of the distinctive features of roth iras

 

For some people, Roth IRAs can offer income and estate tax benefits that are preferable to those offered by traditional IRAs. However, it’s important to take note of just what the distinctive features of a Roth IRA are before making the choice.

Traditional vs. Roth

The biggest difference between traditional and Roth IRAs is how taxes affect contributions and distributions. Contributions to traditional IRAs generally are made with pretax dollars, reducing your current taxable income and lowering your current tax bill. You pay taxes on the funds when you make withdrawals. As a result, if your current tax bracket is higher than what you expect it will be after you retire, a traditional IRA can be advantageous.

In contrast, contributions to Roth IRAs are made with after-tax funds. You pay taxes on the funds now, and your withdrawals won’t be taxed (provided you meet certain requirements). This can be advantageous if you expect to be in a higher tax bracket in retirement or if tax rates increase.

Roth distributions differ from traditional IRA distributions in yet another way. Withdrawals aren’t counted when calculating the taxable portion of your Social Security benefits.

Additional advantages

A Roth IRA may offer a greater opportunity to build up tax-advantaged funds. Your contributions can continue after you reach age 70½ as long as you’re earning income, and the entire balance can remain in the account until your death. In contrast, beginning with the year you reach age 70½, you can’t contribute to a traditional IRA — even if you do have earned income. Further, you must start taking required minimum distributions (RMDs) from a traditional IRA no later than April 1 of the year following the year you reach age 70½.

Avoiding RMDs can be a valuable benefit if you don’t need your IRA funds to live on during retirement. Your Roth IRA can continue to grow tax-free over your lifetime. When your heirs inherit the account, they’ll be required to take distributions — but spread out over their own lifetimes, allowing a continued opportunity for tax-free growth on assets remaining in the account. Further, the distributions they receive from the Roth IRA won’t be subject to income tax.

Many vehicles

As you begin planning for retirement (or reviewing your current plans), it’s important to consider all retirement planning vehicles. A Roth IRA may or may not be one of them. Please contact our firm for individualized help in determining whether it’s a beneficial choice.

Sidebar: TCJA eliminated option to recharacterize Roth IRAs

The passage of the Tax Cuts and Jobs Act late last year had a marked impact on Roth IRAs: to wit, taxpayers who wish to convert a pretax traditional IRA into a post-tax Roth IRA can no longer “recharacterize” (that is, reverse) the conversion for 2018 and later years.

The IRS recently clarified in FAQs on its website that, if you converted a traditional IRA into a Roth account in 2017, you can still reverse the conversion as long as it’s done by October 15, 2018. (This deadline applies regardless of whether you extend the deadline for filing your 2017 federal income tax return to October 15.)

Also, recharacterization is still an option for other types of contributions. For example, you can still make a contribution to a Roth IRA and subsequently recharacterize it as a contribution to a traditional IRA (before the applicable 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: Thomson Reuters

 

— CONTRIBUYENTES DEBEN REVISAR LA RETENCIÓN DE IMPUESTOS FEDERALES DE SU PAGA

Posted by Admin Posted on July 29 2018

-- 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

— SOLICITUD ELECTRÓNICA PARA EL ACUERDO DE PAGOS A PLAZOS

Posted by Admin Posted on July 29 2018

-- SOLICITUD ELECTRÓNICA PARA EL ACUERDO DE PAGOS A PLAZOS

 

Esta solicitud le permite a usted o a su representante autorizado (por Poder Legal) la oportunidad de evitar largas esperas telefónicas o la necesidad para escribir a, o visitar una oficina del IRS para solicitar un plan de pagos a plazos. Al completar el proceso por Internet, recibirá notificación inmediata de la aprobación o denegación del acuerdo solicitado.

También puede usar los enlaces a continuación para “solicitar” la mayoría de las revisiones a un Plan de Pagos ya establecido (en inglés) o modificar sus datos de seguridad para la autenticación electrónica.

Cargos Administrativos y Disponibilidad del Sistema

Si aprobamos su plan de pagos, uno de los siguientes cargos se le añadirá a su deuda tributaria:

- $31 por un plan de pagos a plazos por débito directo establecido a través del Acuerdo de Pagos a Plazos por internet (OPA)

- $149 por un plan de pagos establecido a través del OPA pero sin débito directo desde su cuenta bancaria

- $107 por un plan de pagos a plazos por débito directo que no fue establecido a través del OPA

- $225 por un plan de pagos a plazos sin débito directo desde su cuenta bancaria y que no fue establecido a través del OPA

- $43 si su ingreso está por debajo de cierto nivel ($31 por un plan de pagos a plazos por débito directo asegurado a través del OPA)

- No habrá cargo administrativo si califica para un acuerdo a corto plazo (120 días o menos)

Disponibilidad del Sistema

- Lunes a viernes 6 a.m. a las 12:30 a.m. Horario del este

- Sábado, 6 a.m. a las 10 p.m. Horario del este

- Domingo, 6 p.m. a la medianoche. Horario del este

Individuos

¿Reúne usted los requisitos?

Usted adeuda $50,000 o menos en impuestos, multas e intereses y presentó todas las declaraciones requeridas. También puede calificar para un acuerdo de pago a corto plazo si su deuda es menor de $100,000.

¿Qué necesita para solicitar?

- Nombre

- Dirección de correo electrónico válida

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Fecha de nacimiento

- Estado civil para efectos de la declaración

- Su número de Seguro Social (o de su cónyuge si presentaron un declaración conjunta) o el de identificación de contribuyente individual (ITIN). Si su estado civil para efectos de la declaración es de casado que presenta conjuntamente, la solicitud por Internet para un Plan de Pagos solo aceptará el primer Número de Seguro Social (SSN, por sus siglas en inglés) que aparece en su declaración de impuestos. Si su SSN aparece en segundo lugar, usted debe llamar al número que aparece en su factura o aviso, o seguir las instrucciones en nuestra página de información sobre los acuerdos de planes de pagos.

Poder Legal para un individuo

¿Está solicitando un Poder Legal (POA) para una persona física? Usted necesita:

- El número de Seguro Social (SSN) del contribuyente o el Número de identificación de contribuyente individual (ITIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

- El ingreso ajustado bruto del año anterior (AGI) (si recientemente presentó el del 2016, utilice el AGI del 2015)

Negocios

¿Reúne usted los requisitos?

Usted adeuda $25,000 o menos en impuestos, multas e intereses para el año actual o el año anterior, y presentó todas las declaraciones requeridas.

¿Qué necesita para solicitar?

- Su Número de identificación de empleador (EIN)

- Fecha en que se asignó su EIN (mes y año)

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Su número de identificación de llamada en el Aviso

- Poder Legal

- ¿Está solicitando un Poder Legal (POA) para un negocio? Usted necesita:

- Su Número de identificación de empleador (EIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

Basado en el tipo de acuerdo solicitado, puede que también necesite:

- Domicilio del negocio según mostrado en la declaración de impuesto que presentó más recientemente

- Formulario de impuestos que presentó o que fue examinado

- Periodo de impuestos que presentó o que fue examinado

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

- 5 THINGS TO KNOW ABOUT SUBSTANTIATING DONATIONS

Posted by Admin Posted on July 29 2018

- 5 THINGS TO KNOW ABOUT SUBSTANTIATING DONATIONS

 

There are virtually countless charitable organizations to which you might donate. You may choose to give cash or to contribute noncash items such as books, sporting goods, or computers or other tech gear. In either case, once you do the good deed, you owe it to yourself to properly claim a tax deduction.

No matter what you donate, you’ll need documentation. And precisely what you’ll need depends on the type and value of your donation. Here are five things to know:

1. Cash contributions of less than $250 are the easiest to substantiate. A canceled check or credit card statement is sufficient. Alternatively, you can obtain a receipt from the recipient organization showing its name, as well as the date, place and amount of the contribution. Bear in mind that unsubstantiated contributions aren’t deductible anymore. So you must have a receipt or bank record.

2. Noncash donations of less than $250 require a bit more. You’ll need a receipt from the charity. Plus, you typically must estimate a reasonable value for the donated item(s). Organizations that regularly accept noncash donations typically will provide you a form for doing so. Keep in mind that, for donations of clothing and household items to be deductible, the items generally must be in at least good condition.

3. Bigger cash donations mean more paperwork. If you donate $250 or more in cash, a canceled check or credit card statement won’t be sufficient. You’ll need a contemporaneous written acknowledgment from the recipient organization that meets IRS guidelines.

Among other things, a contemporaneous written acknowledgment must be received on or before the earlier of the date you file your return for the year in which you made the donation or the due date (including an extension) for filing the return. In addition, it must include a disclosure of whether the charity provided anything in exchange. If it did, the organization must provide a description and good-faith estimate of the exchanged item or service. You can deduct only the difference between the amount donated and the value of the item or service.

4. Noncash donations valued at $250 or more and up to $5,000 require still more. You must get a contemporaneous written acknowledgment plus written evidence that supports the item’s acquisition date, cost and fair market value. The written acknowledgment also must include a description of the item.

5. Noncash donations valued at more than $5,000 are the most complicated. Generally, both a contemporaneous written acknowledgment and a qualified appraisal are required — unless the donation is publicly traded securities. In some cases additional requirements might apply.

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

- NEWLY MARRIED COUPLES SHOULD REPORT MARRIAGE TO MARKETPLACE

Posted by Admin Posted on July 29 2018

- NEWLY MARRIED COUPLES SHOULD REPORT MARRIAGE TO MARKETPLACE

 

If you’re recently married, you probably have a list of things to do.  There’s one other thing you should add to that list: a health insurance review. This is particularly important if you enrolled in coverage through a Health Insurance Marketplace and you receive premium assistance in the form of advance payments of the premium tax credit.

When you apply for assistance to help pay the premiums for health coverage through the Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year using information you provide. This information includes details about your family composition and your projected household income.

It is important for you to report life changes – known as changes in circumstances – to your Marketplace to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace. Be sure to report all changes directly to that Marketplace because they can affect both your coverage and your final credit when you file your federal tax return.

Other changes you should report to the Marketplace include:

Birth or adoption

Marriage or divorce

Moving to a different address

Increases or decreases in your household income

These changes may also open the door for the Marketplace special enrollment period that permits health care plan changes. In most cases, the special enrollment period for Marketplace coverage is open for 60 days from the date of the life event.

The Premium Tax Credit Change Estimator can help you estimate how your premium tax credit will change if your income or family size changes during the year. This estimator tool does not report changes in circumstances to your Marketplace. Because these tools provide only an estimate, you should not rely upon them as an accurate calculation of the information you will report on your tax return. You should use these estimators only as a guide to assist you in making decisions regarding your tax 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

— HOW IDENTITY THEFT CAN AFFECT YOUR TAXES

Posted by Admin Posted on July 29 2018

-- HOW IDENTITY THEFT CAN AFFECT YOUR TAXES

 

Tax-related identity theft normally occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Many people first find out about it when they do their taxes.

The IRS is working hard to stop identity theft with a strategy of prevention, detection and victim assistance. Here are nine key points:

- Taxes. Security. Together. The IRS, the states and the tax industry need your help. We can’t fight identity theft alone. The Taxes. Security. Together. awareness campaign is an effort to better inform you about the need to protect your personal, tax and financial data online and at home.

- Protect your Records. Keep your Social Security card at home and not in your wallet or purse. Only provide your Social Security number if it’s absolutely necessary. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for internet accounts.

- Don’t Fall for Scams.  Criminals often try to impersonate your bank, your credit card company, even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts. Also, the IRS will not call you threatening a lawsuit, arrest or to demand an immediate tax payment. Normal correspondence is a letter in the mail. Beware of threatening phone calls from someone claiming to be from the IRS.

- Report Tax-Related ID Theft to the IRS. If you cannot e-file your return because a tax return already was filed using your SSN, consider the following steps: • File your taxes by paper and pay any taxes owed. • File an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper return. • File a report with the Federal Trade Commission using the FTC Complaint Assistant; • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on your account;

- IRS Letters. If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.

- IP PIN. If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-file your tax return. Each year, you will receive an IRS letter with a new IP PIN.

- Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

- Combating ID Theft.  In 2015, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft 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

- TOP 5 TAX SAVING TECHNIQUES!!!

Posted by Admin Posted on July 29 2018

TOP 5 TAX SAVING TECHNIQUES!!!

 

Following are some generally recognized financial planning tools that may help you reduce your tax bill.

5- Charitable Giving: Instead of selling your appreciated long-term securities, donate the stock instead and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.

4-   Health Savings Accounts (HSAs): If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.

3-   Municipal Bonds: Interest earned on these types of investments is tax-exempt.

2- Own a home: Most of the cost of this type of investment is financed and the interest (on mortgages up to $1,000,000) is tax deductible. When the property is sold, individuals may exclude up to $250,000 ($500,000 if married jointly) of the gain.

1- Retirement Plans: Participate in your employer sponsored retirement plan, especially if there is a matching component. You will receive a current tax deduction and the tax-deferred compounding can add up to a large retirement savings.

- BONUS - 

ROTH IRAs: Contributions to a ROTH IRA are not tax deductible but the qualified distributions, including earnings are tax-free.

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 IS BETTER? BUYING OR LEASING MY NEXT CAR?

Posted by Admin Posted on July 29 2018

WHICH IS BETTER? BUYING OR LEASING MY NEXT CAR?

 

It depends on factors such as 1) what kind of deal you can make with the dealership, 2) the typical mileage you put on your car, 3) how much you wear down a car, and 4) the primary use for the car.

To determine whether leasing or buying is best, compare the costs and other issues involved in a lease or purchase. The following factors should be considered:

Beginning costs

Continual costs

Total costs

Is there a possibility of deduction of any of the costs due to the car being used for business?

How important is it to have ownership of the car?

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

— 5 KEYS TO DISASTER PLANNING FOR INDIVIDUALS

Posted by Admin Posted on July 29 2018

5 keys to disaster plannig for individuals-

 

Disaster planning is usually associated with businesses. But individuals need to prepare for worst-case scenarios, as well. Unfortunately, the topic can seem a little overwhelming. To help simplify matters, here are five keys to disaster planning that everyone should consider:

1. Insurance. Start with your homeowners’ coverage. Make sure your policy covers flood, wind and other damage possible in your region and that its dollar amount is adequate to cover replacement costs. Also review your life and disability insurance.

2. Asset documentation. Create a list of your bank accounts, titles, deeds, mortgages, home equity loans, investments and tax records. Inventory physical assets not only in writing (including brand names and model and serial numbers), but also by photographing or videoing them.

3. Document storage. Keep copies of financial and personal documents somewhere other than your home, such as a safe deposit box or the distant home of a trusted friend or relative. Also consider “cloud computing” — storing digital files with a secure Web-based provider.

4. Cash. You may not receive insurance money right away. A good rule of thumb is to set aside three to six months’ worth of living expenses in a savings or money market account. Also maintain a cash reserve in your home in a durable, fireproof safe.

5. An emergency plan. Establish a family emergency plan that includes evacuation routes, methods of getting in touch and a safe place to meet. Because a disaster might require you to stay in your home, stock a supply kit with water, nonperishable food, batteries and a first aid kit.

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 29 2018

bonos de ahorros 1

 

Si va a recibir un cheque de reembolso este año, 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

- UN ALIVIO PARA EL CÓNYUGE INOCENTE

Posted by Admin Posted on July 29 2018

UN ALIVIO PARA EL CONYUGE 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

- ORGANIZING YOUR FINANCIAL RECORDS FOR BEST RESULTS

Posted by Admin Posted on July 29 2018

ORGANIZING YOUR FINANCIAL RECORDS BEST RESULTS

 

Throwing all your important documents into a drawer won’t help much when an emergency occurs and you (or a family member) need to find a certain piece of paper.

Make a list

Of course, emergencies aren’t the only reason to organize your records. For example, you may need to be able to access relevant personal records if you’re ever audited or a victim of theft. Or your home could be damaged in a storm or fire. Or you may need proof to cash in investments or claim insurance benefits.

To get started, make a list of important records. These include items related to:

Bank and investment accounts,

Real estate and homeownership,

Insurance policies,

Credit card accounts,

Health care benefits and medical history, and

Marriage and your estate.

Grouping the items into broad categories such as these will make them easier to file and find later.

Establish your approach

With your list in hand, it’s time to start organizing and storing your records. Here are some tips for streamlining the process:

Create a central filing system. The ideal storage medium for personal documents is a fire-, water- and impact-resistant security cabinet or safe. Create a master list of the cabinet contents and provide a copy of the key to your executor or a trusted family member.

Designate a second storage location. Maintain a duplicate set of the records in another location, such as a bank safety deposit box, and provide access to a trusted individual (preferably not the same individual with access to the original documents). Consider keeping originals of your important legal documents, such as your will, with your attorney.

Back up records electronically. It also makes sense to store copies of records electronically. Simply scan your documents and save them to a trustworthy external storage device. If opting for a cloud-based backup system, choose your provider carefully to ensure its security measures are as stringent as possible.

Follow the ritual

Make organizing your records an annual ritual and not just a one-time event. Need assistance? We can help you identify the specific documents pertinent to your situation and organize them appropriately.

Sidebar: Create an emergency checklist to cope with calamity

Having an emergency checklist of important personal records handy is essential in the event you must evacuate your home. In a crisis, you’ll likely be able to take only what you can easily carry with you. That means storing the bare essentials in a portable container. Include these items:

Driver’s license, passport and Social Security card,

Credit cards,

Vital medical condition and medication information,

Health insurance cards, and

Emergency family and physician contacts.

Also set up an “In Case of Emergency” (ICE) directory in your cell phone. In your phone directory, simply type in “ICE” before each contact (ICE-1 Jane Smith, ICE-2 Dr. John Smith, etc.). Also consider storing and carrying electronic copies of key personal records on a USB flash drive.

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 WARNS OF BACK-TO-SCHOOL SCAMS!!!

Posted by Admin Posted on July 29 2018

IRS WARNS OF BACK TO SCHOOL SCAMS

 

The Internal Revenue Service warned taxpayers against telephone scammers targeting students and parents during the back-to-school season and demanding payments for non-existent taxes, such as the “Federal Student Tax.”

People should be on the lookout for IRS impersonators calling students and demanding that they wire money immediately to pay a fake “federal student tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested. As schools around the nation prepare to re-open, it is important for taxpayers to be particularly aware of this scheme going after students and parents.    

“Although variations of the IRS impersonation scam continue year-round, they tend to peak when scammers find prime opportunities to strike”, said IRS Commissioner John Koskinen. “As students and parents enter the new school year, they should remain alert to bogus calls, including those demanding fake tax payments from students.”

The IRS encourages college and school communities to share this information so that students, parents and their families are aware of these scams.

Scammers are constantly identifying new tactics to carry out their crimes in new and unsuspecting ways. This year, the IRS has seen scammers use a variety of schemes to fool taxpayers into paying money or giving up personal information. Some of these include:

Altering the caller ID on incoming phone calls in a “spoofing” attempt to make it seem like the IRS, the local police or another agency is calling

Imitating software providers to trick tax professionals--IR-2016-103

Demanding fake tax payments using iTunes gift cards--IR-2016-99

Soliciting W-2 information from payroll and human resources professionals--IR-2016-34

“Verifying” tax return information over the phone--IR-2016-40

Pretending to be from the tax preparation industry--IR-2016-28

If you receive an unexpected call from someone claiming to be from the IRS, here are some of the telltale signs to help protect yourself.

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 FACTS ABOUT THE SMALL BUSINESS HEALTH CARE TAX CREDIT

Posted by Admin Posted on July 29 2018

facts five about the small business health care tax credit

 

If you are a small employer, there is a tax credit that can put money in your pocket. The small business health care tax credit benefits employers that:

- Offer coverage through the small business health options program, also known as the SHOP marketplace

- Have fewer than 25 full-time equivalent employees

- Pay an average wage of less than $50,000 a year

- Pay at least half of employee health insurance premiums

Here are five facts about this credit:

- The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers. 

- To be eligible for the credit, you must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace, or qualify for an exception to this requirement.

- The credit is available to eligible employers for two consecutive taxable years beginning in 2014 or later. You may be able to amend prior year tax returns to claim the credit for tax years 2010 through 2013 in addition to claiming this credit for those two consecutive years.

- You can carry the credit back or forward to other tax years if you do not owe tax during the year.

- You may get both a credit and a deduction for employee premium payments. Since the amount of your health insurance premium payments will be more than the total credit, if you are eligible, you can still claim a business expense deduction for the premiums in excess of the credit.    For more information, see the small business health care tax credit page 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

-WHAT WILL I NEED IF A MEMBER OF THE FAMILY DIES?

Posted by Admin Posted on July 29 2018

What will i need if a member of the family dies

 

-The following is a list of papers that will be necessary:

Copies of all insurance policies.

Marriage Certificate (if the deceased's spouse will be requesting benefits). You may obtain copies at the Office of the County Clerk where the marriage license was issued.

Certified copies of the death certificate (a minimum of 10). These can be bought from the funeral director or from the Health Department in your county.

Birth Certificates of dependent children. These may be obtained at either the County or State Public Health offices where the child was born.

Social Security numbers of the spouse, deceased and any dependent children.

Military discharge, if the deceased was a veteran. Write to The Department of Defense if you are unable to find copies.

A complete list of all property, including stocks, savings accounts, real estate, and personal property of the deceased.

Will, which will more than likely be with the lawyer of the deceased.

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 BUSINESS TRAVEL EXPENSES CAN YOU DEDUCT?

Posted by Admin Posted on July 26 2018

WHICH BUSINESS TRAVEL EXPENSES CAN YOU 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

- Capital Gains and Losses

Posted by Admin Posted on July 25 2018

Capital Gains 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

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

Posted by Admin Posted on July 23 2018

are you sure want to take that 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).

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

MARRIED FILERS, THE CHOICE IS YOURS

Posted by Admin Posted on July 23 2018

MARRIED FILERS, THE CHOICE IS YOURS

 

Some married couples assume they have to file their tax returns jointly. Others may know they have a choice but not want to rock the boat by filing separately. The truth is that there’s no harm in at least considering your options every year.

Granted, married taxpayers who file jointly can take advantage of certain credits not available to separate filers. They’re also more likely to be able to make deductible IRA contributions and less likely to be subject to the alternative minimum tax.

But there are circumstances under which filing separately may be a good idea. For example, filing separately can save tax when one spouse’s income is much higher than the others, and the spouse with lower income has miscellaneous itemized deductions exceeding 2% of his or her adjusted gross income (AGI) or medical expenses exceeding 10% of his or her AGI — but jointly the couple’s expenses wouldn’t exceed the applicable floor for their joint AGI. However, in community property states, income and expenses generally must be split equally unless they’re attributable to separate funds.

Many factors play into the joint vs. separate filing decision. If you’re interested in learning more, please give us a call.

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 MANY BENEFITS OF A HEALTH SAVINGS ACCOUNT (HSA)

Posted by Admin Posted on July 22 2018

THE MANY BENEFITS OF A HEALTH SAVINGS ACCOUNT (HSA)

 

A Health Savings Account (HSA) represents an opportunity for eligible individuals to lower their out-of-pocket health care costs and federal tax bill. Since most of us would like to take advantage of every available tax break, now might be a good time to consider an HSA, if eligible.

An HSA operates somewhat like a Flexible Spending Account (FSA) that employers offer to their eligible employees. An FSA permits eligible employees to defer a portion of their pay, on a pretax basis, which is used later to reimburse out-of-pocket medical expenses. However, unlike an FSA, whatever remains in the HSA at year end can be carried over to the next year and beyond. In addition, there are no income phaseout rules, so HSAs are available to high-earners and low-earners alike.

Naturally, there are a few requirements for obtaining the benefits of an HSA. The most significant requirement is that an HSA is only available to an individual who carries health insurance coverage with a relatively high annual deductible. For 2015, the individual's health insurance coverage must come with at least a $1,300 deductible for single coverage or $2,600 for family coverage. For many self-employed individuals, small business owners, and employees of small and large companies alike, these thresholds won't be a problem. In addition, it's okay if the insurance plan doesn't impose any deductible for preventive care (such as annual checkups). Other requirements for setting up an HSA are that an individual can't be eligible for Medicare benefits or claimed as a dependent on another person's tax return.

Individuals who meet these requirements can make tax-deductible HSA contributions in 2015 of up to $3,350 for single coverage or $6,650 for family coverage. The contribution for a particular tax year can be made as late as April 15 of the following year. The deduction is claimed in arriving at adjusted gross income (the number at the bottom of page 1 on your return). Thus, eligible individuals can benefit whether they itemize or not. Unfortunately, however, the deduction doesn't reduce a self-employed person's self-employment tax bill.

When an employer contributes to an employee's HSA, the contributions are exempt from federal income, Social Security, Medicare, and unemployment taxes.

An account beneficiary who is age 55 or older by the end of the tax year for which the HSA contribution is made may make a larger deductible (or excludible) contribution. Specifically, the annual tax-deductible contribution limit is increased by $1,000.

An HSA can generally be set up at a bank, insurance company, or other institution the IRS deems suitable. The HSA must be established exclusively for the purpose of paying the account beneficiary's qualified medical expenses. These include uninsured medical costs incurred for the account beneficiary, spouse, and dependents. However, for HSA purposes, health insurance premiums don't qualify.

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 am I going to have an Audit?

Posted by Admin Posted on July 22 2018

Why am I going to have an Audit?

 

RED FLAGS

According to the IRS, returns are chosen for examination by computer scoring, information received from third party documentation (W-2, 1099 questionable treatment of an item), information received from other sources on potential non compliance (newspapers, public records and individuals). 

A computer program called the Discriminant Inventory Function System (DIF) assigns a numeric score to each individual and some corporate tax returns after they have been processed. If your return is selected because of a high score under the DIF system, the potential is high that an examination of your return will result in a change to your income tax liability.

Your return may also be selected for examination on the basis of information received from third-party documentation, such as Forms 1099 and W-2, that do not match the information reported on your return.

AUDIT TRIGGERS

  • Not Reporting all Taxable Income
  • Data Entry Errors
  • Participation in a Tax Shelter
  • Rental Losses
  • Failure to properly pay household help
  • Large travel and entertainment expense
  • Discrepancy Between Individual Taxpayers and Corporation Filings Associated to Taxpayer
  • Self Employed (not reporting profit in 3 out of 5 years)
  • Large charitable contributions
  • Home office deductions
  • Not Hiring a Reputable Tax Preparer
  • Claiming 100% business use of a vehicle

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: LBCPA

- EMPLEADOS POR CUENTA PROPIA Y SUS OBLIGACIONES TRIBUTARIAS

Posted by Admin Posted on July 22 2018

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

 

- ¿PASATIEMPO O NEGOCIO?

Posted by Admin Posted on July 22 2018

pasatiempo o negocio

 

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

- BENEFITS AND PROTECTIONS UNDER FEDERAL TAX LAW FOR SAME-SEX MARRIED COUPLES

Posted by Admin Posted on July 22 2018

benefits and protections under 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

Posted by Admin Posted on July 22 2018

- HAVE A PENSION? BE SURE TO PLAN CAREFULLY

Posted by Admin Posted on July 22 2018

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.

Managing this asset

Although increasingly uncommon, these defined benefit plans can be a highly valuable asset. Please contact us for help managing yours appropriately.

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 22 2018

consolidate accounts and simplify your financial lif

 

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

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

- MIDYEAR TAX PLANNING IDEAS

Posted by Admin Posted on July 16 2018

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

- WHAT IS A BOND?

Posted by Admin Posted on July 16 2018

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

Posted by Admin Posted on July 16 2018

- Veterans owed refunds for overpayments attributable to disability severance payments should file amended returns to claim tax refunds

Posted by Admin Posted on July 16 2018

Veterans owed refunds for overpayments attributable to disability severance payments should file amended returns to claim tax refunds

 

The Internal Revenue Service today is advising certain veterans who received disability severance payments after January 17, 1991, and included that payment as income that they should file Form 1040X, Amended U.S. Individual Income Tax Return, to claim a credit or refund of the overpayment attributable to the disability severance payment.

This is a result of the Combat-Injured Veterans Tax Fairness Act passed in 2016.

Most veterans who received a one-time lump-sum disability severance payment when they separated from their military service will receive a letter from the Department of Defense with information explaining how to claim tax refunds they are entitled to; the letters include an explanation of a simplified method for making the claim. The IRS has worked closely with the DoD to produce these letters, explaining how veterans should claim the related tax refunds.

Statute of Limitations

The amount of time for claiming these tax refunds is limited. However, the law grants veterans an alternative timeframe – one year from the date of the letter from DoD. Veterans making these claims have the normal limitations period for claiming a refund or one year from the date of their letter from the DoD, whichever expires later. As taxpayers can usually only claim tax refunds within 3 years from the due date of the return, this alternative time frame is especially important since some of the claims may be for refunds of taxes paid as far back as 1991.

Amount to Claim

Veterans can submit a claim based on the actual amount of their disability severance payment by completing Form 1040X, carefully following the instructions. However, there is a simplified method. Veterans can choose instead to claim a standard refund amount based on the calendar year (an individual’s tax year) in which they received the severance payment. Write “Disability Severance Payment” on line 15 of Form 1040X and enter on lines 15 and 22 the standard refund amount listed below that applies:

  • $1,750 for tax years 1991 – 2005
  • $2,400 for tax years 2006 – 2010
  • $3,200 for tax years 2011 – 2016

Claiming the standard refund amount is the easiest way for veterans to claim a refund, because they do not need to access the original tax return from the year of their lump-sum disability severance payment.

Special Instructions

All veterans claiming refunds for overpayments attributable to their lump-sum disability severance payments should write either “Veteran Disability Severance” or “St. Clair Claim” across the top of the front page of the Form 1040X that they file. Because all amended returns are filed on paper, veterans should mail their completed Form 1040X, with a copy of the DoD letter, to:

Internal Revenue Service
333 W. Pershing Street, Stop 6503, P5
Kansas City, MO  64108

Veterans eligible for a refund who did not receive a letter from DoD may still file Form 1040X to claim a refund but must include both of the following to verify the disability severance payment:

  • A copy of documentation showing the exact amount of and reason for the disability severance payment, such as a letter from the Defense Finance and Accounting Services (DFAS) explaining the severance payment at the time of the payment or a Form DD-214, and
  • A copy of either the VA determination letter confirming the veteran’s disability or a determination that the veteran’s injury or sickness was either incurred as a direct result of armed conflict, while in extra-hazardous service, or in simulated war exercises, or was caused by an instrumentality of war.

Veterans who did not receive the DoD letter and who do not have the required documentation showing the exact amount of and reason for their disability severance payment will need to obtain the necessary proof by contacting the Defense Finance and Accounting Services (DFAS)

Source: IRS

Preparing for a Disaster: Taxpayers and Businesses

Posted by Admin Posted on July 16 2018

Preparing for a Disaster: Taxpeyers and businesses

 

Planning what to do in case of a disaster is an important part of being prepared. The Internal Revenue Service encourages taxpayers to safeguard their records. Some simple steps can help taxpayers and businesses protect financial and tax records in case of disasters.

Listed below are tips for individuals and businesses on preparing for a disaster.

Take Advantage of Paperless Recordkeeping for Financial and Tax Records

Many people receive bank statements and documents by e-mail. This method is an outstanding way to secure financial records. Important tax records such as W-2s, tax returns and other paper documents can be scanned onto an electronic format.

Be sure you back up your electronic files and store them in a safe place. Making duplicates and keeping them in a separate location is a good business practice. Other options include copying files onto a CD or DVD. Also, many retail stores sell computer software packages that you can use for recordkeeping.

When choosing a place to keep your important records, convenience to your home should not be your primary concern. Remember, a disaster that strikes your home is also likely to affect other facilities nearby, making quick retrieval of your records difficult and maybe even impossible.

Document Valuables and Business Equipment

The IRS has disaster loss workbooks for individuals ( Publication 584, Casualty, Disaster, and Theft Loss Workbook) and businesses ( Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook) that can help you compile a room-by-room list of your belongings or business equipment. This will help you recall and prove the market value of items for insurance and casualty loss claims.

One option is to photograph or videotape the contents of your home and/or business, especially items of greater value. You should store the photos with a friend or family member who lives away from the geographic area at risk.

Check on Fiduciary Bonds

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

Continuity of Operations Planning for Businesses

How quickly your company can get back to business after a disaster often depends on emergency planning done today. Start planning now to improve the likelihood that your company will survive and recover. Review your emergency plans annually. Just as your business changes over time, so do your preparedness needs. When you hire new employees or when there are changes in how your company functions, you should update your plans and inform your people.

There are real benefits to being prepared for disasters. The following preparedness strategies are common to all disasters. You plan only once, and are able to apply your plan to all types of hazards.

  • Get informed about hazards and emergencies and learn what to do for specific hazards.
  • Develop an emergency plan.
  • Learn where to seek shelter from all types of hazards.
  • Back up your computer data systems regularly.
  • Decide how you will communicate with employees, customers and others.
  • Use cell phones, walkie-talkies, or other devices that do not rely on electricity as a backup to your telecommunications system.
  • Collect and assemble a disaster supplies kit. Include a portable generator.
  • Identify the community warning systems and evacuation routes.
  • Include required information from community and school plans.
  • Practice and maintain your plan.

Update Emergency Plans

Emergency plans should be reviewed annually. Personal and business situations change over time and so do preparedness needs. Individual taxpayers should make sure they are saving documents everybody should keep including such things as W-2s, home closing statements and insurance records. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

Make sure you have a means of receiving severe weather information; if you have a NOAA Weather Radio, put fresh batteries in it. Make sure you know what you should do if threatening weather approaches.

Count on the IRS

Immediately after a casualty, you can request a copy of a return and all attachments (including Form W-2) by using Form 4506, Request for Copy of Tax Return (PDF).

If you just need information from your return, you can order a free transcript by calling (800) 829-1040 or using Form 4506-T, Request for Transcript of Tax Return (PDF). Requests for Transcripts are also available using the online and mail options found on the Get Transcript page. Transcripts are available for the current year and returns processed in the three prior years. IRS.gov is an indispensable resource as you prepare for and recover from disaster.

Source: IRS

- BLINDA TU IDENTIDAD CON EL IP PIN

Posted by Admin Posted on July 15 2018

blinda tu identidad con el ip pin

 

A los aspirantes a contribuyentes se les asigna un número de 6 dígitos llamado IP PIN, el cual te ayuda a prevenir el uso indebido de sus números de Seguro Social  en  cualquier declaración fraudulenta del impuesto federal sobre los ingresos.

Después de haber obtenido tu IP PIN no puedes renunciar a él. Este número deberá ser utilizado cada vez que realices una declaración de impuesto federal, ya sea del presente año o en años posteriores para poder verificar su identidad.

A través del portal web de IRS podrás solicitar tu IP PIN.

 

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.

Con información de: IRS

- CONSEJOS PARA AGRICULTORES EN LOS ESTADOS UNIDOS

Posted by Admin Posted on July 15 2018

consejos para agricultores en los estados unidos

 

Si eres agricultor: Estos 10 tips te facilitarán el pago de impuestos

1. Seguro de cosecha.  Los pagos que recibe del seguro por daños a la cosecha cuentan como ingreso. Generalmente, debe reportar estos pagos el año que los recibe.

2. Venta de artículos comprados para reventa.  Ya sea ganado u otros artículos que se van a revender, deben declararse.

3. Ventas relacionadas al clima.  El mal tiempo como una sequía o una inundación puede forzarlo a vender más ganado de lo normal para ese año. De ser así, podría retrasar la declaración de las ganancias por vender los animales adicionales.

4. Gastos de granja.  Puedes deducir gastos ordinarios y necesarios  que hayas pagado por tu negocio.

5. Salarios de empleados.  Puede deducir los sueldos razonables que haya pagado a trabajadores en su granja de tiempo completo y tiempo parcial. Debe retener el Seguro Social, Medicare e impuestos federales de los salarios.

6. Pago de préstamos. Se pueden deducir los intereses que pagó por un préstamo si éste se utilizó para su negocio agrícola, no personales.

7. Pérdidas netas de operación. Si sus gastos son mayores que sus ingresos para ese año, es posible que tenga una pérdida neta de operación. Puede aplicar la pérdida a otros años y entonces deducirla. Podría obtener un reembolso por una fracción o el monto total de los impuestos que pagó en años anteriores. También podría reducir sus impuestos en años futuros.

8. Promedio de ingresos agrícolas.  Es posible que pueda promediar  todos o algunos de los ingresos agrícolas del año en curso con la distribución a lo largo de los últimos tres años. Esto puede reducir sus impuestos si su ingreso agrícola es alto en el año en curso y bajo en uno o más en los últimos tres años.

9. Crédito o reembolso tributario. Es posible que pueda reclamar un crédito tributario o el reembolso de los impuestos por el costo del combustible usado en las actividades de su granja.

10. Guía tributaria para granjeros.  Para más detalles sobre este tema, vea la Publicación 225 (en inglés) Guía Tributaria para Granjeros. Se puede conseguir en IRS.gov/forms en cualquier momento.

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

- ¿QUÉ REGISTROS PODRÍA PEDIRTE EL IRS EN UNA AUDITORÍA?

Posted by Admin Posted on July 15 2018

que registros podria pedirte el irs en una auditoria

 

El IRS te pedirá llevar ciertos documentos para comprobar los ingresos, créditos o deducciones que usted reclamó en su declaración de impuestos. Se supone que usted contó con todos estos documentos para preparar la declaración, por eso, la solicitud de los mismos no debería acarrear otra preparación.

Recuerde que nunca debe enviar los registros originales. Envíe copias. Para mayor rapidez organice los registros por año y clase de ingreso o gasto, e incluya un resumen de las transacciones.

Registros que podrían solicitar:

- Recibos: Presente los recibos por fecha, con notas que indican para qué fueron y qué tiene que ver el recibo con su negocio. Además de indicar los dólares pagados o recibidos por un servicio o producto.

- Facturas:  Incluya el nombre de la persona u organización que recibe el pago, la clase de servicio y las fechas en  que pagó las facturas.

- Cheques cancelados: Agrupe los cheques con copias de las facturas que pagaron, y con cualquier reintegro aplicable recibido del empleador.

- Papeles legales: Incluya una descripción del asunto bajo juicio, y cuándo ocurrió y qué tiene que ver con el negocio, el crédito o la deducción. Ejemplos incluyen:  

- Decretos de divorcio que incluyen acuerdos de custodia de hijos.

- Papeles de defensa criminal o civil.

- Adquisición de propiedad

- Preparación de impuestos o asesoramiento

- Contratos de préstamo: Incluya una copia del préstamo original, junto con los siguientes:

- Nombres de los prestatarios

- Ubicación de la propiedad

- Institución financiera prestataria

- Cantidad prestada

- Términos (el número de meses permitidos para el pago)

- Hoja de liquidación: Si el préstamo fue prestado por una institución, incluya un estado del final del año tributario que muestra los intereses pagados.

Si el préstamo fue realizado por una institución, incluya una declaración del beneficiario que indica los intereses pagados ese año además de la dirección y número de Seguro Social del beneficiario.

- Libros o diarios: Estos pueden mostrar las fechas y destinos de sus viajes del negocio, además del propósito de negocio y las millas recorridas en las mismas. También podrían mostrar las ganancias o pérdidas de juegos de azar, y las fechas y lugares de los mismos. También podrían mostrar actividades y gastos de buscar trabajo.

- Boletos: Escriba en los boletos de viaje el propósito de negocio del viaje, y agrúpelos con otros recibos del mismo viaje. Boletos de lotería ayudan a comprobar las ganancias o pérdidas.

- Registros médicos y dentales.

- Estados de sus cuentas de ahorros médicos

- Copia de  una guía u otro estado, que muestre las políticas de beneficio y reintegro.

- Declaraciones de los médicos.

- Registros de mejoras de capital por propósitos médicos, inclusive tasación de propiedad antes y después de las mejoras.

- Contrato del cuidado de un asistente médico.

- Documentos de robo o pérdida.

- Informes del seguro que detallan la naturaleza de la pérdida o el daño. Si no tiene seguro, copias de los informes de policía o bomberos sobre el robo, pérdida o accidente.

- Fotos o video que muestra la gravedad de los daños (si los hay).

- Formulario de tasación de un perito calificado que muestra el valor justo del mercado de la propiedad antes y después, además de un estimado de los daños.

- Documentos de empleo: Pueden incluir políticas sobre uniformes o de vestimenta, requisitos de educación continua, estados de reintegro o políticas del W-2.

- Anexos K-1: Estos se usan para declarar la parte correspondiente a cada accionista de los ingresos, pérdidas, deducciones, y créditos cuando una sociedad anónima de tipo S presenta su declaración anual de impuestos.

Cuestionarios

Si el IRS practica su auditoría por correo, también pueden solicitarles que rellenen un cuestionario. Estos son algunos de los formularios más comunes, todos en inglés.

 

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

- SOLICITUD ELECTRÓNICA PARA EL ACUERDO DE PAGOS A PLAZOS

Posted by Admin Posted on July 15 2018

solicitud electronica para el acuerdo de pagos a plazos

 

Esta solicitud le permite a usted o a su representante autorizado (por Poder Legal) la oportunidad de evitar largas esperas telefónicas o la necesidad para escribir a, o visitar una oficina del IRS para solicitar un plan de pagos a plazos. Al completar el proceso por Internet, recibirá notificación inmediata de la aprobación o denegación del acuerdo solicitado.

También puede usar los enlaces a continuación para “solicitar” la mayoría de las revisiones a un Plan de Pagos ya establecido (en inglés) o modificar sus datos de seguridad para la autenticación electrónica.

Cargos Administrativos y Disponibilidad del Sistema

Si aprobamos su plan de pagos, uno de los siguientes cargos se le añadirá a su deuda tributaria:

- $31 por un plan de pagos a plazos por débito directo establecido a través del Acuerdo de Pagos a Plazos por internet (OPA)

- $149 por un plan de pagos establecido a través del OPA pero sin débito directo desde su cuenta bancaria

- $107 por un plan de pagos a plazos por débito directo que no fue establecido a través del OPA

- $225 por un plan de pagos a plazos sin débito directo desde su cuenta bancaria y que no fue establecido a través del OPA

- $43 si su ingreso está por debajo de cierto nivel ($31 por un plan de pagos a plazos por débito directo asegurado a través del OPA)

- No habrá cargo administrativo si califica para un acuerdo a corto plazo (120 días o menos)

Disponibilidad del Sistema

- Lunes a viernes 6 a.m. a las 12:30 a.m. Horario del este

- Sábado, 6 a.m. a las 10 p.m. Horario del este

- Domingo, 6 p.m. a la medianoche. Horario del este

Individuos

¿Reúne usted los requisitos?

Usted adeuda $50,000 o menos en impuestos, multas e intereses y presentó todas las declaraciones requeridas. También puede calificar para un acuerdo de pago a corto plazo si su deuda es menor de $100,000.

¿Qué necesita para solicitar?

- Nombre

- Dirección de correo electrónico válida

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Fecha de nacimiento

- Estado civil para efectos de la declaración

- Su número de Seguro Social (o de su cónyuge si presentaron un declaración conjunta) o el de identificación de contribuyente individual (ITIN). Si su estado civil para efectos de la declaración es de casado que presenta conjuntamente, la solicitud por Internet para un Plan de Pagos solo aceptará el primer Número de Seguro Social (SSN, por sus siglas en inglés) que aparece en su declaración de impuestos. Si su SSN aparece en segundo lugar, usted debe llamar al número que aparece en su factura o aviso, o seguir las instrucciones en nuestra página de información sobre los acuerdos de planes de pagos.

Poder Legal para un individuo

¿Está solicitando un Poder Legal (POA) para una persona física? Usted necesita:

- El número de Seguro Social (SSN) del contribuyente o el Número de identificación de contribuyente individual (ITIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

- El ingreso ajustado bruto del año anterior (AGI) (si recientemente presentó el del 2016, utilice el AGI del 2015)

Negocios

¿Reúne usted los requisitos?

Usted adeuda $25,000 o menos en impuestos, multas e intereses para el año actual o el año anterior, y presentó todas las declaraciones requeridas.

¿Qué necesita para solicitar?

- Su Número de identificación de empleador (EIN)

- Fecha en que se asignó su EIN (mes y año)

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Su número de identificación de llamada en el Aviso

- Poder Legal

- ¿Está solicitando un Poder Legal (POA) para un negocio? Usted necesita:

- Su Número de identificación de empleador (EIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

Basado en el tipo de acuerdo solicitado, puede que también necesite:

- Domicilio del negocio según mostrado en la declaración de impuesto que presentó más recientemente

- Formulario de impuestos que presentó o que fue examinado

- Periodo de impuestos que presentó o que fue examinado

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

- FACING THE TAX CHALLENGES OF SELF-EMPLOYMENT & PHASEOUTS AND REDUCTIONS

Posted by Admin Posted on July 15 2018

Facing the Tax Challenges of self- exployment

 

Today’s technology makes self-employment easier than ever. But if you work for yourself, you’ll face some distinctive challenges when it comes to your taxes. Here are some important steps to take:

Learn your liability. Self-employed individuals are liable for self-employment tax, which means they must pay both the employee and employer portions of FICA taxes. The good news is that you may deduct the employer portion of these taxes. Plus, you might be able to make significantly larger retirement contributions than you would as an employee.

However, you’ll likely be required to make quarterly estimated tax payments, because income taxes aren’t withheld from your self-employment income as they are from wages. If you fail to fully make these payments, you could face an unexpectedly high tax bill and underpayment penalties.

Distinguish what’s deductible. Under IRS rules, deductible business expenses for the self-employed must be “ordinary” and “necessary.” Basically, these are costs that are commonly incurred by businesses similar to yours and readily justifiable as needed to run your operations.

The tax agency stipulates, “An expense does not have to be indispensable to be considered necessary.” But pushing this grey area too far can trigger an audit. Common examples of deductible business expenses for the self-employed include licenses, accounting fees, equipment, supplies, legal expenses and business-related software.

Don’t forget your home office! You may deduct many direct expenses (such as business-only phone and data lines, as well as office supplies) and indirect expenses (such as real estate taxes and maintenance) associated with your home office. The tax break for indirect expenses is based on just how much of your home is used for business purposes, which you can generally determine by either measuring the square footage of your workspace as a percentage of the home’s total area or using a fraction based on the number of rooms.

The IRS typically looks at two questions to determine whether a taxpayer qualifies for the home office deduction:

1. Is the specific area of the home that’s used for business purposes used only for business purposes, not personal ones?

2. Is the space used regularly and continuously for business?

If you can answer in the affirmative to these questions, you’ll likely qualify. But please contact our firm for specific assistance with the home office deduction or any other aspect of filing your taxes as a self-employed individual.

- AVOID IDENTITY THEFT; LEARN HOW TO RECOGNIZE PHISHING SCAMS

Posted by Admin Posted on July 15 2018

avoid identity theft learn how pishing scams

 

Simply ask for it. That’s the easiest way for an identity thief to steal your personal information.

Each day, people fall victim to phishing scams through emails, texts or phone calls and mistakenly turn over important data. In turn, cybercriminals try to use that data to file fraudulent tax returns or commit other crimes.

The Internal Revenue Service, state tax agencies and the tax industry -- all partners in the fight against identity theft -- urge you to learn to recognize and avoid phishing scams.

We need your help in the fight against identity theft. That’s why, as part of the Security Summit effort, we launched a public awareness campaign that we call Taxes. Security. Together. We’ve launched a series of security awareness tips that can help protect you from cybercriminals.

It’s called “phishing” because thieves attempt to lure you into the scam mainly through impersonations. The scam may claim to be from a friend, a company with whom you do business, a prize award – anything to get you to open the email or text.

A good general rule: Don’t give out personal information based on an unsolicited email request.

Here are a few basic tips to recognize and avoid a phishing email:

It contains a link. Scammers often pose as the IRS, financial institutions, credit card companies or even tax companies or software providers. They may claim they need you to update your account or ask you to change a password. The email offers a link to a spoofing site that may look similar to the legitimate official website. Do not click on the link. If in doubt, go directly to the legitimate website and access your account.

It contains an attachment. Another option for scammers is to include an attachment to the email. This attachment may be infected with malware that can download malicious software onto your computer without your knowledge. If it’s spyware, it can track your keystrokes to obtain information about your passwords, Social Security number, credit cards or other sensitive data. Do not open attachments from sources unknown to you.

It’s from a government agency. Scammers attempt to frighten people into opening email links by posing as government agencies. Thieves often try to imitate the IRS and other government agencies.

It’s an “off” email from a friend. Scammers also hack email accounts and try to leverage the stolen email addresses. You may receive an email from a “friend” that just doesn’t seem right. It may be missing a subject for the subject line or contain odd requests or language. If it seems off, avoid it and do not click on any links.

It has a lookalike URL. The questionable email may try to trick you with the URL. For example, instead of www.irs.gov, it may be a false lookalike such as www.irs.gov.maliciousname.com. You can place your cursor over the text to view a pop-up of the real URL.

Use security features. Your browser and email provider generally will have anti-spam and phishing features. Make sure you use all of your security software features.

Opening a phishing email and clicking on the link or attachment is one of the most common ways thieves are able not just steal your identity or personal information but also to enter into computer networks and create other mischief.

Learning to recognize and avoid phishing emails – and sharing that knowledge with your family members – is critical to combating identity theft and data loss. Businesses should educate employees about the dangers. 

The IRS, state tax agencies and the tax industry joined as the Security Summit to enact a series of initiatives to help protect you from tax-related identity theft in 2017. You can help by taking these basic steps.

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 IDENTITY THEFT CAN AFFECT YOUR TAXES

Posted by Admin Posted on July 15 2018

how identity theft can affect your taxes

 

Tax-related identity theft normally occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Many people first find out about it when they do their taxes.

The IRS is working hard to stop identity theft with a strategy of prevention, detection and victim assistance. Here are nine key points:

- Taxes. Security. Together. The IRS, the states and the tax industry need your help. We can’t fight identity theft alone. The Taxes. Security. Together. awareness campaign is an effort to better inform you about the need to protect your personal, tax and financial data online and at home.

- Protect your Records. Keep your Social Security card at home and not in your wallet or purse. Only provide your Social Security number if it’s absolutely necessary. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for internet accounts.

- Don’t Fall for Scams.  Criminals often try to impersonate your bank, your credit card company, even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts. Also, the IRS will not call you threatening a lawsuit, arrest or to demand an immediate tax payment. Normal correspondence is a letter in the mail. Beware of threatening phone calls from someone claiming to be from the IRS.

- Report Tax-Related ID Theft to the IRS. If you cannot e-file your return because a tax return already was filed using your SSN, consider the following steps: • File your taxes by paper and pay any taxes owed. • File an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper return. • File a report with the Federal Trade Commission using the FTC Complaint Assistant; • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on your account;

- IRS Letters. If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.

- IP PIN. If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-file your tax return. Each year, you will receive an IRS letter with a new IP PIN.

- Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

- Combating ID Theft.  In 2015, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft 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

- DON'T MISS THIS!!! ARE YOU GETTING MARRIED THIS SUMMER?

Posted by Admin Posted on July 15 2018

are you getting married this summer

 

Getting married this summer? Congratulations! You’ve tied the knot and cut the cake. Soon, you’ll be filing your first joint income tax return. Here are some simple steps to make this event less stressful.

Step 1: Marriage can mean a change in name. Make sure that the names you enter on your first tax return match the names and Social Security numbers on file with the Social Security Administration. For example, if you are taking your spouse’s surname, you should notify SSA of the change in your name.

Step 2: No matter when you get married, even on Dec. 31, the IRS considers you to have been married for the entire year for tax purposes. To make sure you are having enough taxes taken out of your paychecks, check your withholding. If both you and your spouse work, your combined income may place you in a higher tax bracket.

The IRS Withholding Calculator will help you figure the correct amount of withholding for a married couple. Making a change to your withholding now can eliminate or reduce a tax bill when it’s time to file your tax return. Use Form W-4, Employee’s Withholding Allowance Certificate, to make the needed adjustments and give the form to your employer.

Step 3: Let the IRS know your new address by completing Form 8822, Change of Address. Mail the completed change of address form to the address listed on Page 2 of the form.

Step 4: The U.S. postmaster will also want to make sure the post office has your correct address. So, don’t forget to notify the U.S. Postal Service when you move, so it can forward any IRS correspondence or refunds.

Step 5: Just in case you forgot to invite your employer to the wedding, make sure you let them know about any name and address changes. This will ensure that you receive your Form W-2, Wage and Tax Statement, after the end of the year. Make sure banks or other payers that may send you year-end tax statements have your updated name and address as well.

Step 6: If you receive advance payments of the premium tax credit, you should report changes in circumstances, such as your marriage, to your Health Insurance Marketplace. Other changes that you should report include a change in your income or family size. Advance payments of the Premium Tax Credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

If one or both of you received the benefit of advance credit payments for the year, you may be eligible to use an alternative calculation to determine your excess advance credit payments. The alternative calculation can be used to reduce excess advance credit payments, but not to increase your net premium tax credit. See the instructions for Form 8962, Premium Tax Credit, for eligibility. If you’re eligible, you need to complete Form 8962, Part 5, Alternative Calculation of Year of Marriage.

 Step 7: Select the right tax form. Choosing the right individual income tax form can help save money. Newly married taxpayers may find that they now have enough deductions to itemize on their tax returns. You must claim itemized deductions on a Form 1040, U.S. Individual Income Tax Return, not a Form 1040A or Form 1040EZ. Step

8: Choose the best filing status. A person’s marital status on Dec. 31 determines whether the person is considered married for that year. Generally, the tax law allows married couples to choose to file their federal income tax return either jointly or separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but usually filing jointly is more beneficial. When it comes to wedding planning, details are important. Why not take these steps now to be sure your first tax season as a married couple goes smoothly.

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

- SAVING FOR RETIREMENT WHEN YOU BELONG TO MULTIPLE RETIREMENT PLANS

Posted by Admin Posted on July 15 2018

saving for retirement when you belong to multiple retirement plans

 

The most you can contribute from your wages to retirement plans each calendar year is your individual contribution limit. Although your limit is affected by the plan terms, it generally doesn’t depend on how many plans you participate in or on the type of employer who is sponsoring those plans. If you exceed your individual contribution limit and the excess isn’t returned by April 15 (sooner for a 457(b) plan) of the next year, you could be subject to double taxation:

• once in the year you deferred your salary, and

• again when you receive a distribution. Limits

• General limit for 2016 — You may contribute a total of $18,000 in pre-tax or designated Roth contributions to all your plans (not counting 457(b) plans).

• Age-50 catch-up contributions — If you are age 50 or older by the end of 2016, you may be able contribute an additional $6,000 in total to your 401(k), 403(b) or governmental 457(b) plan.

• 403(b) plans’ 15-year catch-up contribution — If you have at least 15 years of service with your employer, you may be able to contribute up to an additional $3,000 to your 403(b) plan.

• 457(b) plans’ separate contribution limit — A separate individual contribution level for 457(b) plans and additional catch-up amounts depend on whether the plan sponsor is a state or local government, or some other tax-exempt organization. Check your plan documents for the amount you can contribute to the plan, and make sure you don’t exceed your limit.

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

- IF YOU MISSED THE TAX DEADLINE, THESE TIPS CAN HELP

Posted by Admin Posted on July 15 2018

if you missed the tax dedline these tips can help

 

The tax filing deadline has come and gone. If you didn’t file a tax return or an extension, but should have, you need to take action now. Here are some tips to help you.

• File as soon as you can. If you owe taxes, you should file and pay as soon as you can. This will stop the interest and penalties that you’ll owe. IRS Direct Pay offers a free, secure and easy way to pay your tax directly from your checking or savings account. There is no penalty for filing a late return if you are due a refund. The sooner you file, the sooner you’ll get it.

• Use IRS e-file to do your taxes. No matter who prepares your tax return, you can use IRS e-file through Oct. 17. E-file is the easiest, safest and most accurate way to file your taxes. The IRS will confirm that it received your tax return. The IRS issues more than nine out of 10 refunds in less than 21 days.

• E-file using IRS Free File, if you qualify. Nearly everyone can use IRS Free File to e-file their federal taxes for free. If your income was $62,000 or less, you can use free brand-name tax software. If you made more than $62,000, use Free File Fillable Forms to e-file. This program uses electronic versions of IRS paper forms. It does some of the math, and it works best for those who are used to doing their own taxes. Either way, you have a free option that you can only access on IRS.gov. It’s available at least through the Oct. 17 extension period.

• Pay as much as you can. If you owe tax but can’t pay it in full, you should pay as much as you can when you file your tax return. IRS electronic payment options are the quickest and easiest way to pay your taxes. Pay the rest of the tax you still owe as soon as possible. Doing so will reduce future penalties and interest.

• Use the IRS.gov tool to pay over time. If you need more time to pay your tax, you can apply for an installment agreement with the IRS. The best way to apply is to use the IRS Online Payment Agreement tool. You can use the IRS.gov tool to set up a direct debit agreement. You don’t need to write and mail a check each month with a direct debit plan. If you don’t use the tool, you can use Form 9465, Installment Agreement Request, to apply. You can get the form on the IRS.gov Forms and Publications page at any time.

• A refund may be waiting. If you are due a refund, you should file as soon as possible to get it. Even if you are not required to file, you may still get a refund. This could apply if you had taxes withheld from your wages or you qualify for certain tax credits. If you do not file your return within three years, you could lose your right to the refund.

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

- CONSEJOS SOBRE PROPINAS QUE DEBES TENER EN CUENTA

Posted by Admin Posted on July 08 2018

consejos sobre propinas para tener en cuenta

 

¿Sabías que todo lo que recibas en propinas es tributable? Toma en cuenta lo siguiente:

1.- Usa el Asistente Tributario Interactivo. El Asistente Tributario Interactivo es un recurso de ley tributaria que hace a los contribuyentes una serie de preguntas y proporciona respuestas.

2.- Declarar todas las propinas en la declaración de impuestos. Usa el Formulario 4137 (en inglés), Impuesto al Seguro Social y al Medicare sobre los ingresos de propinas no declaradas, para declarar la cantidad de todo ingreso de propinas no declaradas, para incluirlas como salarios adicionales. Esto incluye el valor de artículos no monetarios que alguien recibe como propina, tales como entradas o boletos a un evento.

3.- Declara todo tipo de propinas. Como contribuyente debes pagar impuestos sobre todas las propinas que recibas durante el año, incluyendo las que recibas:

- Directamente de los clientes.

- Agregadas a las tarjetas de crédito.

- De un acuerdo de compartir las propinas con otros empleados.

4.- Declara las propinas a tu jefe. Si recibes $20 o más en propinas en cualquier mes, debes informar a tu jefe las propinas para ese mes, a más tardar el 10º día del mes siguiente, incluyendo las propinas recibidas en efectivo, cheque y tarjeta de crédito. Pues como empleador éste debe retener el impuesto federal sobre los ingresos y los impuestos al Seguro Social y al Medicare sobre las propinas declaradas.

5.- Lleva un registro diario de propinas. Usa la Publicación 1244(PR), Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informa al Patrono, para registrar las propinas. Esto ayudará a declarar la cantidad correcta de propinas en una declaración de impuestos.

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

- ¿SABES QUÉ ES EL PHISHING?

Posted by Admin Posted on July 08 2018

que es el phishing w

 

Ten en cuenta que los correos no solicitados que dicen ser del IRS o de alguno de sus programas, deberá reportarse a la dirección phishing@irs.gov, pues se han reportado casos en que el Sistema de Pago Electrónico de impuestos federales (EFTPS) es utilizado para atraer a víctimas.

Cabe destacar que, si experimentas pérdidas financieras debido a un incidente relacionado con el IRS debe reportarlo al Inspector General del Tesoro para la Administración Tributaria y presentar una queja con la Comisión Federal de Comercio a través del Asistente de Quejas.

 

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

- ASÍ PROTEGE TU IDENTIDAD EL IRS

Posted by Admin Posted on July 08 2018

asi protege tu identidad el irs

 

El robo de identidad representa un problema para sus víctimas y todo un desafío para los negocios, organizaciones y agencias gubernamentales, incluyendo al IRS. El IRS combate el robo de identidad relacionado a los impuestos por medio de una estrategia estricta de prevención, detección y asistencia a las víctimas. Aunque se ha ido progresando en la lucha contra este crimen, continúa siendo una de sus principales prioridades.

El robo de identidad relacionado a los impuestos, sucede cuando alguien utiliza su número de Seguro Social robado y presenta una declaración de impuestos reclamando un reembolso fraudulento. Si llegas a ser una víctima de este crimen, el IRS está comprometido a ayudarte a resolver tu caso lo más pronto posible.

Cumbre de Seguridad

El IRS, los estados y la industria privada de impuestos trabajan juntos para identificar nuevas medidas de seguridad para proteger de manera más efectiva a los contribuyentes y combatir el robo de identidad. Pero necesitan tu ayuda.

Recuerda: el IRS no se comunica con los contribuyentes por correo electrónico para solicitar información personal o financiera. Esto incluye cualquier tipo de comunicación electrónica, tales  como mensajes de texto y redes sociales. El IRS no llama a los contribuyentes con amenazas de demandas o detenciones.

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

- 6 TIPS PARA USAR TUS TARJETAS DE CRÉDITO

Posted by Admin Posted on July 08 2018

6 tips para usar tus tarjetas de credito

 

1- Realiza los consumos posteriores a tu fecha de corte.

2- Apréndete los datos básicos:  conoce la fecha de corte, fecha de pago y el límite de crédito.

3- Trata de pagar antes de la fecha indicada para que te cataloguen como responsable.

4- Te recomendamos tener un máximo de 3 tarjetas y utilizarlas de la siguiente manera: una para tus gastos comunes, otra como herramienta de crédito para adquirir activos o gastos necesarios, ejemplo comprar un electrodoméstico. Por último, ten una tarjeta de crédito para emergencias, por cualquier gasto imprevisto.

5- Cuando vayas a realizar el pago, trata de abonar más del mínimo requerido para que vean que tienes facilidad de pago.

6- Recuerda que los bancos evaluarán qué tan disciplinado eres con ellas para aumentar los límites, necesitas ganarse su confianza.

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.

Con información de: instituto-finanzas

- WHAT EVERY STUDENT SHOULD KNOW ABOUT SUMMER JOBS AND TAXES

Posted by Admin Posted on July 08 2018

WHAT EVERY STUDENT SHOULD KNOW ABOUT SUMMER JOBS AN TAXES

 

Many students take a job in the summer after school lets out. If it’s your first job, it gives you a chance to learn about the working world. That includes taxes we pay to support the place we live, our state and our nation. Here are eight things you should know about taxes:

1. Don’t be surprised when your employer withholds taxes from your paychecks. That’s how you pay your taxes when you’re an employee. If you’re selfemployed, you may have to pay estimated taxes directly to the IRS on certain dates during the year. This is how our pay-as-you-go tax system works.

2. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use it to figure how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on IRS.gov can help you fill out the form.

3. Keep in mind that all tip income is taxable. If you get tips, you must keep a daily log so you can report them. You must report $20 or more in cash tips in any one month to your employer, and you must report all of your yearly tips on your tax return.

4. Money you earn doing work for others is taxable. Some work you do may count as self-employment. This can include jobs like baby-sitting and lawn mowing. Keep good records of expenses related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction may help lower your taxes.

5. If you’re in ROTC, your active duty pay, such as pay you get for summer camp, is taxable. A subsistence (living) allowance you get while in advanced training isn’t taxable.

6. You may not earn enough from your summer job to owe income tax, but your employer usually must withhold Social Security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count toward your coverage under the Social Security system.

7. If you’re a newspaper carrier or distributor, special rules apply. If you meet certain conditions, you’re considered self-employed. If you don’t meet those conditions and are under age 18, you are usually exempt from Social Security and Medicare taxes.

8. You may not earn enough money from your summer job to be required to file a tax return. Even if that’s true, you may still want to file. For example, if your employer withheld income tax from your pay, you’ll have to file a return to get your taxes refunded. You can prepare and e-file your tax return for free using IRS Free File. It’s available exclusively 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

Posted by Admin Posted on July 08 2018

- FIVE TAX TIPS ABOUT HOBBIES THAT EARN INCOME

Posted by Admin Posted on July 08 2018

five tax tips about hobbies that earn income

 

Millions of people enjoy hobbies. Hobbies can also be a source of income. Some of these types of hobbies include stamp or coin collecting, craft making and horse breeding. You must report any income you get from a hobby on your tax return. How you report the income from hobbies is different from how you report income from a business. There are special rules and limits for deductions you can claim for a hobby. Here are five basic tax tips you should know if you get income from your hobby:

Business versus Hobby. There are nine factors to consider to determine if you are conducting business or participating in a hobby. Make sure to base your decision on all the facts and circumstances of your situation.

- Allowable Hobby Deductions. You may be able to deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is helpful or appropriate.

- Limits on Expenses. As a general rule, you can only deduct your hobby expenses up to the amount of your hobby income. If your expenses are more than your income, you have a loss from the activity. You can’t deduct that loss from your other income.

- How to Deduct Expenses. You must itemize deductions on your tax return in order to deduct hobby expenses. Your costs may fall into three types of expenses. Special rules apply to each type. See Publication 535 for how you should report them on Schedule A, Itemized Deductions.

- Use IRS Free File. Hobby rules can be complex. IRS Free File can make filing your tax return easier. IRS Free File is available until Oct. 17. If you make $62,000 or less, you can use brand-name tax software. If you earn more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. You can only access Free File 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

- COLLEGE FOR THE KIDS OR RETIREMENT

Posted by Admin Posted on July 08 2018

COLLEGE FOR THE KIDS AND RETIREMENT

 

JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

Family Wealth Management & Amending Your Tax Return
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 pportunities 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 anagement? 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, please do not hesitate to call me at (305) 274-5811, our firm has a network of professionals that includes International Tax Attorneys, Real Estate Attorneys 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 is smooth.  

Source: PDI Global, Inc.

-FIVE FACTS ABOUT THE SMALL BUSINESS HEALTH CARE TAX CREDIT

Posted by Admin Posted on July 08 2018

five facts about small business healt care tax credit

 

If you are a small employer, there is a tax credit that can put money in your pocket. The small business health care tax credit benefits employers that:

- Offer coverage through the small business health options program, also known as the SHOP marketplace

- Have fewer than 25 full-time equivalent employees

- Pay an average wage of less than $50,000 a year

- Pay at least half of employee health insurance premiums

Here are five facts about this credit:

- The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers. 

- To be eligible for the credit, you must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace, or qualify for an exception to this requirement.

- The credit is available to eligible employers for two consecutive taxable years beginning in 2014 or later. You may be able to amend prior year tax returns to claim the credit for tax years 2010 through 2013 in addition to claiming this credit for those two consecutive years.

- You can carry the credit back or forward to other tax years if you do not owe tax during the year.

- You may get both a credit and a deduction for employee premium payments. Since the amount of your health insurance premium payments will be more than the total credit, if you are eligible, you can still claim a business expense deduction for the premiums in excess of the credit.    For more information, see the small business health care tax credit page 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

- STORING TAX RECORDS: HOW LONG IS LONG ENOUGH?

Posted by Admin Posted on July 08 2018

storing tax records how long is long enough

 

April 18 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), it may go back six years in an audit. If there is any indication of fraud, or you do not file a return, no period of limitation exists.To be safe, use the following guidelines.

Business Records To Keep...

Personal Records To Keep...

1 Year

1 Year

3 Years

3 Years

6 Years

6 Years

Forever

Forever

Special Circumstances

 Business Documents To Keep For One Year

Correspondence with Customers and Vendors

Duplicate Deposit Slips

Purchase Orders (other than Purchasing Department copy)

Receiving Sheets

Requisitions

Stenographer's Notebooks

Stockroom Withdrawal Forms

 Business Documents To Keep For Three Years

Employee Personnel Records (after termination)

Employment Applications

Expired Insurance Policies

General Correspondence

Internal Audit Reports

Internal Reports

Petty Cash Vouchers

Physical Inventory Tags

Savings Bond Registration Records of Employees

Time Cards For Hourly Employees

 Business Documents To Keep For Six Years

Accident Reports, Claims

Accounts Payable Ledgers and Schedules

Accounts Receivable Ledgers and Schedules

Bank Statements and Reconciliations

Cancelled Checks

Cancelled Stock and Bond Certificates

Employment Tax Records

Expense Analysis and Expense Distribution Schedules

Expired Contracts, Leases

Expired Option Records

Inventories of Products, Materials, Supplies

Invoices to Customers

Notes Receivable Ledgers, Schedules

Payroll Records and Summaries, including payment to pensioners

Plant Cost Ledgers

Purchasing Department Copies of Purchase Orders

Sales Records

Subsidiary Ledgers

Time Books

Travel and Entertainment Records

Vouchers for Payments to Vendors, Employees, etc.

Voucher Register, Schedules

 Business Records To Keep Forever

While federal guidelines do not require you to keep tax Records "forever," in many cases there will be other reasons you'll want to retain these documents indefinitely.

Audit Reports from CPAs/Accountants

Cancelled Checks for Important Payments (especially tax payments)

Cash Books, Charts of Accounts

Contracts, Leases Currently in Effect

Corporate Documents (incorporation, charter, by-laws, etc.)

Documents substantiating fixed asset additions

Deeds

Depreciation Schedules

Financial Statements (Year End)

General and Private Ledgers, Year End Trial Balances

Insurance Records, Current Accident Reports, Claims, Policies

Investment Trade Confirmations

IRS Revenue Agent Reports

Journals

Legal Records, Correspondence and Other Important Matters

Minutes Books of Directors and Stockholders

Mortgages, Bills of Sale

Property Appraisals by Outside Appraisers

Property Records

Retirement and Pension Records

Tax Returns and Worksheets

Trademark and Patent Registrations

 Personal Documents To Keep For One Year

While it's important to keep year-end mutual fund and IRA contribution statements forever, you don't have to save monthly and quarterly statements once the year-end statement has arrived.

 Personal Documents To Keep For Three Years

Credit Card Statements

Medical Bills (in case of insurance disputes)

Utility Records

Expired Insurance Policies

 Personal Documents To Keep For Six Years

Supporting Documents For Tax Returns

Accident Reports and Claims

Medical Bills (if tax-related)

Sales Receipts

Wage Garnishments

Other Tax-Related Bills

 Personal Records To Keep Forever

CPA Audit Reports

Legal Records

Important Correspondence

Income Tax Returns

Income Tax Payment Checks

Property Records / Improvement Receipts (or six years after property sold)

Investment Trade Confirmations

Retirement and Pension Records (Forms 5448, 1099-R and 8606 until all distributions are made from your IRA or other qualified plan)

 Special Circumstances

Car Records (keep until the car is sold)

Credit Card Receipts (keep until verified on your statement)

Insurance Policies (keep for the life of the policy)

Mortgages / Deeds / Leases (keep 6 years beyond the agreement)

Pay Stubs (keep until reconciled with your W-2)

Sales Receipts (keep for life of the warranty)

Stock and Bond Records (keep for 6 years beyond selling)

Warranties and Instructions (keep for the life of the product)

Other Bills (keep until payment is verified on the next bill)

Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)

 

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 SHOULD I HAVE LIFE INSURANCE?

Posted by Admin Posted on July 08 2018

why should i have life insurance

 

The main reason that people purchase life insurance is to know that in the event of their passing, their children and loved ones will be taken care of. Life insurance can also help with the distribution of your estate. Your payout could go to family, charity, or wherever you choose to distribute it.

The main reasons to buy life insurance would be because you have dependents that would be put in a tough position without you providing for them. For example, if you have a spouse, a child, or a parent who is dependent on your income, you should have life insurance.

If you have a spouse and young children, you will need more insurance than someone with older children, because they will be dependents for a longer amount of time than older children. If you are in a position where you and your spouse both earn for the family, then you should both be insured in proportion to the incomes that you garner.

If you have a spouse and older children or no children, you will still want to have life insurance, but you won't need the same level of insurance as in the first example, just enough to ensure that your spouse will be provided for, to cover your burial expenses, and to settle the debts that you have accumulated.

If you don't have children or a spouse, you will only need enough insurance to make sure that your burial expenses are covered, unless you would like to have an insurance policy in order to help in the distribution of your estate.

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

- Tax Saving Techniques

Posted by Admin Posted on July 02 2018

Tax Saving Techniques

 

Following are some generally recognized financial planning tools that may help you reduce your tax bill.

Charitable Giving - Instead of selling your appreciated long-term securities, donate the stock instead and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.

Health Savings Accounts (HSAs) - If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.

ROTH IRAs - Contributions to a ROTH IRA are not tax deductible but the qualified distributions, including earnings are tax-free.

Municipal Bonds - Interest earned on these types of investments is tax-exempt.

Own a home - most of the cost of this type of investment is financed and the interest (on mortgages up to $1,000,000) is tax deductible. When the property is sold, individuals may exclude up to $250,000 ($500,000 if married jointly) of the gain.

Retirement Plans - Participate in your employer sponsored retirement plan, especially if there is a matching component. You will receive a current tax deduction and the tax-deferred compounding can add up to a large retirement savings.

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

Posted by Admin Posted on July 02 2018

- Combined business and vacation travel

Posted by Admin Posted on July 01 2018

Combined business and vacation travel

 

If you go on a business trip within the U.S. and add on some vacation days, you know you can deduct some of your expenses. The question is how much.

First, let’s cover just the pure transportation expenses. Transportation costs to and from the scene of your business activity are 100% deductible as long as the primary reason for the trip is business rather than pleasure. On the other hand, if vacation is the primary reason for your travel, then generally none of your transportation expenses are deductible. Transportation costs include travel to and from your departure airport, the airfare itself, baggage fees and tips, cabs, and so forth. Costs for rail travel or driving your personal car also fit into this category.

The number of days spent on business vs. pleasure is the key factor in determining if the primary reason for domestic travel is business. Your travel days count as business days, as do weekends and holidays if they fall between days devoted to business, and it would be impractical to return home. Standby days (days when your physical presence is required) also count as business days, even if you are not called upon to work on those days. Any other day principally devoted to business activities during normal business hours is also counted as a business day, and so are days when you intended to work, but could not due to reasons beyond your control (local transportation difficulties, power failure, etc.).

You should be able to claim business was the primary reason for a domestic trip whenever the business days exceed the personal days. Be sure to accumulate proof and keep it with your tax records. For example, if your trip is made to attend client meetings, log everything on your daily planner and copy the pages for your tax file. If you attend a convention or training seminar, keep the program and take some notes to show you attended the sessions.

Once at the destination, your out-of-pocket expenses for business days are fully deductible. Out-of-pocket expenses include lodging, hotel tips, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. Expenses for personal days are nondeductible.

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

Posted by Admin Posted on July 01 2018

Which type of mortage loan meets your needs?

Posted by Admin Posted on July 01 2018

Which type of mortage 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

4 QUESTIONS TO ASK BEFORE HIRING HOUSEHOLD HELP

Posted by Admin Posted on July 01 2018

4 questions to ask before hiring household help

 

When you hire someone to work in your home, you may become an employer. Thus, you may have specific tax obligations, such as withholding and paying Social Security and Medicare (FICA) taxes and possibly federal and state unemployment insurance. Here are four questions to ask before you say, “You’re hired.”

1. Who’s considered a household employee?

A household worker is someone you hire to care for your children or other live-in family members, clean your house, cook meals, do yard work or provide similar domestic services. But not everyone who works in your home is an employee.

For example, some workers are classified as independent contractors. These self-employed individuals typically provide their own tools, set their own hours, offer their services to other customers and are responsible for their own taxes. To avoid the risk of misclassifying employees, however, you may want to assume that a worker is an employee unless your tax advisor tells you otherwise.

2. When do I pay employment taxes?

You’re required to fulfill certain state and federal tax obligations for any person you pay $2,100 or more annually (in 2018) to do work in or around your house. (The threshold is adjusted annually for inflation.)

In addition, you’re required to pay the employer’s half of FICA (Social Security and Medicare) taxes (7.65% of cash wages) and to withhold the employee’s half. For employees who earn $1,000 or more in a calendar quarter, you must also pay federal unemployment taxes (FUTA) equal to 6% of the first $7,000 in cash wages. And, depending on your resident state, you may be required to make state unemployment contributions, but you’ll receive a FUTA credit for those contributions, up to 5.4% of wages.

You don’t have to withhold federal (and, in most cases, state) income taxes, unless you and your employees agree to a withholding arrangement. But regardless of whether you withhold income taxes, you’re required to report employees’ wages on Form W-2.

3. Are there exceptions?

Yes. You aren’t required to pay employment taxes on wages you pay to your spouse, your child under age 21, your parent (unless an exception is met) or an employee who is under age 18 at any time during the year, providing that performing household work isn’t the employee’s principal occupation. If the employee is a student, providing household work isn’t considered his or her principal occupation.

4. How do I make tax payments?

You pay any federal employment and withholding taxes by attaching Schedule H to your Form 1040. You may have to pay state taxes separately and more frequently (usually quarterly). Keep in mind that this may increase your own tax liability at filing, though the Schedule H tax isn’t subject to estimated tax penalties.

If you owe FICA or FUTA taxes or if you withhold income tax from your employee’s wages, you need an employer identification number (EIN).

There’s no statute of limitations on the failure to report and remit federal payroll taxes. You can be audited by the IRS at any time and be required to pay back taxes, penalties and interest charges. Our firm can help ensure you comply with all the 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

5 Tips For Early Preparation

Posted by Admin Posted on June 30 2018

5 tips early preparation

 

Earlier is better when it comes to working on your taxes. The IRS encourages everyone to get a head start on tax preparation. Not only do you avoid the last-minute rush, early filers also get a faster refund.

There are five easy ways to get a good jump on your taxes long before the April 15 deadline rolls around:

  1. Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don't forget to save a copy for your files.
  2. Get the right forms. They're available around the clock on IRS.gov in the Forms and Publications section.
  3. Take your time. Don't forget to leave room for a coffee break when filling out your tax return. Rushing can mean making a mistake — and that can be expensive!
  4. Double-check your math and Social Security number. These are among the most common errors on tax returns. Taking care on these reduces your chances of hearing from the IRS.
  5. Get the fastest refund. When you file early, you get your refund faster. Using e-filing with direct deposit gets you a refund in half the time as paper filing.

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

Top 3 Summer Scams

Posted by Admin Posted on June 30 2018

Top 3 Summer Scams

 

With tax season completed, the Internal Revenue Service warned taxpayers to remain vigilant for phishing emails and telephone scams. Summertime tends to be a favorite period for scammers because many taxpayers have recently filed a return and may be waiting for a response from the IRS.

The IRS and its Security Summit partners – the state tax agencies and the tax industry – urge taxpayers to remain alert to tax scams year-round, especially immediately after the tax filing season ends. Even after the April deadline passes, the tax scam season doesn’t end.

While many of the scams are variations on a theme and tend to evolve over time, taxpayers should be on the lookout for any attempt to get them to disclose personal information like Social Security numbers, account information or passwords. If in doubt, don’t give it out. Those receiving such calls should hang up and initiate correspondence with the agency that is purportedly inquiring about their account using a well-known phone number or email address. Clicking on links provided in emails or calling back unfamiliar phone numbers is not recommended.

Phone scams

The IRS does not call and leave pre-recorded, urgent messages asking for a call back. In this tactic, the victim is told if they do not call back, a warrant will be issued for their arrest. Other variations may include threat of other law-enforcement agency intervention, deportation or revocation of licenses.

Criminals are able to fake or “spoof” caller ID numbers to appear to be anywhere in the country, including from an IRS office. This prevents taxpayers from being able to verify the true call number. Fraudsters also have spoofed local sheriff’s offices, state Department of Motor Vehicles, federal agencies and others to convince taxpayers the call is legitimate.

Email phishing scams

If a taxpayer receives an unsolicited email that appears to be from either the IRS or a program closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov. Learn more by going to the Report Phishing and Online Scamspage.

The IRS does not initiate contact with taxpayers by email to request personal or financial information. 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.

Telltale 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.Report the caller ID and/or callback number to the IRS by sending it to phishing@irs.gov(Subject: IRS Phone Scam).Report it to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. 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 owed. Taxpayers can then also review their payment options.Call the number on the billing notice, orCall the IRS at 800-829-1040. IRS workers can help.

The IRS does not use 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 also 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

 

¿Factura tributaria este año? Verifique la retención pronto, evite otra el próximo año

Posted by Admin Posted on June 30 2018

¿Factura tributaria este año? Verifique la retención pronto, evite otra el próximo año

 

Los contribuyentes que adeudaban impuestos adicionales cuando presentaron su declaración de impuestos federales de 2017 a principios de este año, pueden evitar otra factura tributaria posiblemente mayor el próximo año si hacen una "revisión de su cheque de pago" tan pronto como sea posible, según el Servicio de Impuestos Internos (IRS).

La Ley de Empleos y Reducción de Impuestos, la legislación de reforma tributaria aprobada en diciembre, introdujo cambios importantes en la ley tributaria, que incluyen el aumento de la deducción estándar, eliminación de exenciones personales, aumento del crédito tributario por hijos, limitación o descontinuación de ciertas deducciones, y cambios en las tasas y categorías tributarias.

Estos cambios de largo alcance podrían tener un gran impacto en el reembolso de impuestos o en la factura adeudada en la declaración de impuestos que los contribuyentes presentarán el próximo año. El IRS alienta a cada empleado a hacer una "revisión de su cheque de pago" pronto para verificar que se les retenga la cantidad correcta de impuestos de su sueldo.

Verificar y ajustar la retención ahora puede evitar una factura tributaria inesperada, así como multas el próximo año. La Calculadora de Retención del IRS y la