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Information on the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Posted by Admin Posted on Mar 30 2020

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On March 27th, 2020 President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law, to support 30 million small businesses, which employ nearly half of the nation’s workforce. Hundreds of billions of dollars will be available in an expedited manner to provide financial relief for the owners of small businesses across the country through the Small Business Administration.

Lord Breakspeare Callaghan LLC would like to share the following information regarding the relief programs offered by the SBA.  If we may be of assistance please send us an e-mail to ClientServices@LBCPA.com.

Overview

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides relief for small businesses that have trouble covering payroll and operating expenses because of the COVID-19 pandemic.  The new law creates a Small Business Administration (SBA) loan program, called the “Paycheck Protection Program” (PPP), that expands benefits and eligibility for SBA disaster loans, covers payments on existing SBA loans, and creates new tax credits to help cover the cost of paid leave and payroll.

SBA Paycheck Protection Program

The Paycheck Protection Program provides small businesses with zero-fee loans of up to $10 million to cover payroll and other operating expenses.  Up to 8 weeks of payroll, mortgage interest, rent, and utility costs can be forgiven.  Payments on principal and interest are deferred for one year.  More information on this program is available here.

SBA Economic Injury Disaster Loans

The CARES Act creates a new emergency grant of $10,000 for small businesses that apply for an SBA economic injury disaster loan (EIDL).  EIDLs are loans up to $2 million with interest rates of 3.75% for businesses and 2.75% for nonprofits, and principal and interest payments deferred up to 4 years.  The EIDL loans may be used to pay for expenses that could have been met had the disaster not happened, including payroll and other operating expenses.  The EIDL grant does not need to be repaid even if the applicant is denied an EIDL.  A small business may apply for an EIDL grant and a Paycheck Protection loan.  The EIDL grant will be subtracted from the amount of the Paycheck Protection loan that is forgivable.  More information on this program is available here.

Debt Relief for New and Existing SBA Borrowers

For small businesses that already have an SBA loan (such as a 7(a), 504, or microloan) or take one out within 6 months after the CARES Act is enacted, the SBA will pay all loan costs for borrowers, including principal, interest, and fees, for six-months.  SBA borrowers may also seek an extension of the duration of their loan and delay certain reporting requirements.  More information on this program is available here.

Relief for Small Business Government Contractors

If you are a government contractor, there are a number of ways that Congress has provided relief and protection for your business. Agencies will be able to modify terms and conditions of a contract and to reimburse contractors at a billing rate of up to 40 hours per week of any paid leave, including sick leave. The contractors eligible are those whose employees or subcontractors cannot perform work on site and cannot telework due to federal facilities closing because of COVID-19.  If you need additional assistance, please reach out to your local Small Business Development Center, Women’s Business Center, SCORE chapter, or SBA District Office.  You should also work with your agency’s contracting officer, as well as the agency’s Office of Small and Disadvantaged Business Utilization (OSDBU).

Employee Retention Tax Credit

The CARES Act creates a refundable payroll tax credit for businesses, large and small, that retain their employees during the COVID-19 crisis.  Employers are eligible if they have been fully or partially suspended as a result of a government order, or they experience a 50% reduction in quarterly receipts as a result of the crisis.  For employers with 100 or fewer full-time employees, they may claim a credit for wages paid to all of their employees, up to $10,000 a person.  For employers with more than 100 employees, they may claim a credit for those employees who are furloughed or face reduced hours as a result of the employer’s closure or economic hardship.  The Department of the Treasury is authorized to advance payment of the employee retention tax credit.  This tax credit is not available if the employer takes an SBA paycheck protection loan.  More information is available here.

Payroll Tax Delay

The CARES Act allows employers to delay paying the employer-portion of payroll taxes through the end of 2020.  The deferred amount is due in two installments - 50% is due before December 31, 2021, and the other 50% is due before December 31, 2022.  Deferral is not available if the employer takes an SBA paycheck protection loan. More information is available here.

Advance Payment of Tax Credits for Paid Leave

The CARES Act allows the Treasury to send advance payments of tax credits available to employers that are required to provide up to 12 weeks of coronavirus-related paid leave to their employees.

Business Tax Relief

The CARES Act provides other forms of tax relief for businesses, including loosening requirements for net operating losses, and limitations on business interest deductions.  The CARES Act also permanently fixes the qualified improvement property (QIP) error in the 2017 tax law, so that QIP investments are entitled to 100% recovery over 15 years.  Distillers are exempt from excise taxes on undenatured alcohol for the purpose of producing hand sanitizer. More information is available here.

Delay for Single Employer Pension Plans

Single employer pension plans are allowed to delay quarterly contributions for 2020 until the end of the year.  Employers may also use 2019 funded status for the purposes of determining funding-based limits on plan benefits for the plan years that include 2020.

Source: https://www.schatz.senate.gov/coronavirus/small-businesses

-Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed

Posted by Admin Posted on Mar 23 2020

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WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.

Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.

"Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically," said IRS Commissioner Chuck Rettig. "Filing electronically with direct deposit is the quickest way to get refunds. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds. As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding – and your patience. I'm incredibly proud of our employees as we navigate through numerous different challenges in this very rapidly changing environment."

The IRS will continue to monitor issues related to the COVID-19 virus, and updated information will be posted on a special coronavirus page on IRS.gov.

This announcement comes following the President's emergency declaration last week pursuant to the Stafford Act. The Stafford Act is a federal law designed to bring an orderly and systematic means of federal natural disaster and emergency assistance for state and local governments in carrying out their responsibilities to aid citizens. It was enacted in 1988.

Treasury and IRS will issue additional guidance as needed and continue working with Congress, on a bipartisan basis, on legislation to provide further relief to the American people.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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         

Día de impuestos ahora es el 15 de julio: Tesoro, IRS extienden fecha límite de presentación de impuestos y pagos de impuestos federales, independientemente de cantidad adeudada

Posted by Admin Posted on Mar 23 2020

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WASHINGTON — El Departamento del Tesoro y el Servicio de Impuestos Internos (IRS) anunciaron hoy que la fecha límite de la presentación del impuesto federal se extiende desde el 15 de abril de 2020 hasta el 15 de julio de 2020.

Los contribuyentes también podrán aplazar los pagos del impuesto federal adeudado el 15 de abril de 2020 al 15 de julio de 2020, sin multas e intereses, independientemente de la cantidad adeudada. Este aplazamiento se aplica a todos los contribuyentes, incluidos los individuos, las corporaciones y otros contribuyentes no corporativos, así como aquellos que pagan impuestos sobre el trabajo por cuenta propia.

Los contribuyentes no necesitan presentar ningún formulario adicional o llamar al IRS para calificar para este alivio de presentación de declaración de impuestos y pago. Los contribuyentes individuales que necesitan tiempo adicional para presentar una declaración después del 15 de julio pueden solicitar una extensión de presentación con el Formulario 4868 a través de su profesional de impuestos, software de impuestos o a través del enlace de Free File en IRS.gov. Las empresas que necesitan tiempo adicional deben presentar el Formulario 7004.

El IRS insta a los contribuyentes que se les debe un reembolso a presentar tan pronto como sea posible. La mayoría de los reembolsos de impuestos se emiten en un plazo de 21 días.

"Incluso con el plazo de presentación, instamos a los contribuyentes a los que se les adeudan reembolsos a presentar lo antes posible y presentar electrónicamente," dijo Chuck Rettig, Comisionado del IRS. "La presentación electrónica con depósito directo es la manera más rápida de obtener reembolsos. Aunque estamos restringiendo algunas operaciones durante este período, el IRS continúa con operaciones de misión crítica para apoyar a la nación, y eso incluye aceptar declaraciones de impuestos y enviar reembolsos. Como agencia federal vital para las operaciones generales de nuestro país, solicitamos su apoyo personal, su comprensión y su paciencia. Estoy increíblemente orgulloso de nuestros empleados mientras navegamos a través de numerosos desafíos diferentes en este entorno que cambia rápidamente."

El IRS continuará monitorizando los problemas relacionados con el virus COVID-19, y la información actualizada se publicará en una página especial del coronavirus en IRS.gov.

Este anuncio se produce después de la declaración de emergencia del Presidente a principios de esta semana en conformidad con la Ley Stafford. La Ley Stafford es una ley federal diseñada para traer un medio ordenado y sistemático de asistencia federal para desastres naturales para los gobiernos estatales y locales en el cumplimiento de sus responsabilidades de ayudar a los ciudadanos. Fue promulgada en 1988.

El Tesoro y el IRS emitirán directrices adicionales según sea necesario y continuarán trabajando con el Congreso, sobre una base bipartidista, en legislación para proporcionar más alivio al pueblo estadounidense.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS        

 

-Contribuyentes pueden pagar impuestos de cinco maneras

Posted by Admin Posted on Mar 23 2020

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El pago de impuestos no es opcional, es la ley. Los contribuyentes tienen opciones cuando se trata de cómo pagar sus impuestos. El IRS ofrece varias maneras fáciles de pagar impuestos. Los contribuyentes pueden pagar en línea, por teléfono o con su dispositivo móvil a través de la aplicación IRS2Go, por nombrar algunos.

Algunos contribuyentes deben efectuar pagos de impuestos estimados trimestralmente durante todo el año. Esto incluye los contribuyentes empleados por cuenta propia, socios y accionistas de corporaciones tipo S que esperan adeudar $1,000 o más cuando presenten su declaración. También las personas que participan en la economía compartida podrían tener que hacer pagos estimados.

Aquí hay cinco opciones para los contribuyentes que necesitan pagar sus impuestos. Pueden:

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS

-HOW DO I FILE AN AUTO INSURANCE CLAIM?

Posted by Admin Posted on Mar 23 2020

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A few tips to ensure that you claim correctly and receive your money as quickly as possible:

  • File the claim immediately; take note of hospital bills, police accident reports, and copies of claims that have been submitted.
  • Take notes of exactly what was said every time you speak with a company representative, make a note of the date and keep the information together in a file.
  • If you get the feeling that the company isn't being forthcoming with the results that you need, complain to the state insurance regulator.
  • If you still feel that your claim isn't getting the attention it deserves, call a lawyer.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

Taxpayer Bill of Rights: The right to confidentiality

Posted by Admin Posted on Mar 23 2020

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The IRS won’t share any information a taxpayer gives IRS  with outside parties, unless allowed by the taxpayer or by law.  This is the right to confidentiality - the eighth of ten rights taxpayers have under the Taxpayer Bill of Rights.

The right to confidentiality means:

  • The IRS won’t give an any information to a third party without permission from the taxpayer. 
  • The agency can’t contact third parties such as an employer, neighbor, or bank for information unless the they give taxpayer reasonable notice first.
  • The same confidentiality a taxpayer has with an attorney also applies to tax professionals working with the IRS on the taxpayer’s behalf.

Confidential communications include conversations, messages, documents, and info that:

  • Fall within the tax professional’s authority to practice before the IRS, but it doesn’t include tax return preparation.
  • Are considered private or restricted between the taxpayer and their attorney.
  • Relate to noncriminal tax matters with the IRS, or noncriminal tax cases in federal court.

Also, tax professionals can’t share or use their clients’ tax information for any reason other than preparing a return. 

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 MUCH IS IT POSSIBLE TO SAVE BY COMPARISON SHOPPING?

Posted by Admin Posted on Mar 23 2020

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It is possible to save up to 50% by changing your companies.

There are many factors that are taken into account by the issuing company, such as:

  • Gender
  • Age
  • Driving Record
  • State
  • Vehicle
  • Average Mileage Driven

Do not choose your insurer strictly on price, however. Quality and level of service should be a factor in your choice as well, and their ratings should be checked.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

DOES MY CAR AFFECT MY INSURANCE RATE?

Posted by Admin Posted on Mar 23 2020

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It is a good idea to check the insurance rates that are given to certain cars before you buy them. Usually as the cost of the car rises, so does the insurance premium. The insurance rates on used cars are generally substantially lower than those of new cars.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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  

Guía de la Temporada de Impuestos: proteja su información personal, financiera y tributaria todo el año

Posted by Admin Posted on Mar 23 2020

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WASHINGTON — El Servicio de Impuestos Internos (IRS) les recuerda a los contribuyentes que se mantengan vigilantes con su información personal al asegurar las computadoras y teléfonos móviles. La protección apropiada de seguridad cibernética y saber reconocer estafas puede reducir la amenaza del robo de identidad dentro y fuera del sistema tributario.  

Este aviso de prensa es parte de una serie llamada Guía de la Temporada de Impuestos, un recurso para ayudar a los contribuyentes a presentar una declaración de impuestos precisa. Ayuda adicional está disponible en la Publicación 17 (SP), Su  Impuesto Federal sobre los Ingresos.

El IRS no inicia contacto con los contribuyentes por correo electrónico, mensajes de texto o redes sociales para solicitar información personal o financiera. Las personas deben estar alerta de estafadores que se hacen pasar por el IRS para robar información personal. Hay maneras de saber si el IRS en verdad está llamando o tocando a la puerta de alguien.

El IRS también trabaja con la Cumbre de Seguridad, una asociación con las agencias estatales y la industria tributaria del sector privado, para ayudar a proteger la información de los contribuyentes y defender contra el robo de identidad. Los contribuyentes y los profesionales de impuestos pueden tomar pasos para ayudar en este esfuerzo.

A continuación, hay algunos consejos para ayudar a minimizar la exposición al fraude y al robo de identidad.

  • Proteja su información personal. Trate la información personal como dinero en efectivo, no la deje tirada por ahí. Números de seguro social, números de tarjetas de crédito, cuentas bancarias e incluso números de cuenta de servicios públicos pueden usarse para robarle dinero o abrir cuentas a su nombre.
     
  • Evite las estafas de phishing. La manera más fácil para que los criminales roben información confidencial es sencillamente pidiéndola. El IRS insta a las personas a que aprendan a reconocer correos electrónicos fraudulentos como phishing  (en inglés), llamadas telefónicas o textos en los que las personas se hacen pasar por una organización reconocida como bancos, compañías de tarjetas de crédito o hasta el IRS. Mantenga información confidencial en un lugar seguro y:
     
    • Tenga en cuenta que un correo electrónico no solicitado que pide que descargue un archivo adjunto podría parecer que proviene de alguien que usted conoce como un amigo, colega de trabajo o profesional de impuestos si su correo electrónico se ha falsificado o comprometido.
       
    • No asuma que anuncios de publicidad en internet, anuncios en ventanas emergentes o "pop-ups" provienen de compañías respetables. Si un anuncio u oferta parece demasiado bueno para ser cierta, tome un momento para investigar la compañía detrás  del anuncio.
       
    • Nunca descargue software de un anuncio "pop-up" que diga ser de "seguridad". Una estrategia muy dominante es aquella en la que aparece un anuncio emergente que le dice que ha detectado un virus en su computadora. No se deje engañar. La descarga probablemente instalará algún tipo de malware. Compañías de software de seguridad respetables no promueven sus servicios de esta manera.
       
  • Proteja datos personales. Provea un número de seguro social, por ejemplo, solo cuando necesario. Ofrezca información personal únicamente por medio de sitios web codificados y de buena reputación. Compras o transacciones bancaria en línea, solo deben realizarse en sitios que usan codificación.
     
  • Use contraseñas fuertes. Entre más larga la contraseña, más difícil será descifrarla. Use por lo menos 10 caracteres especiales; 12 es el número ideal para la mayoría de los usuarios en casa. Hágase impredecible en línea – no use nombres, fechas de nacimiento ni palabras comunes. No use la misma contraseña para cuentas distintas y no las comparta. Mantenga las contraseñas en un lugar seguro o use software de administración de contraseñas.

    Establezca software de seguridad para que se actualice automáticamente por las redes inalámbricas. Si el wifi en casa o negocio no está asegurado eso permite que cualquier computadora con alcance a la señal de la red tenga el potencial de robar información de los aparatos conectados. Siempre que sea una opción para una cuenta protegida por contraseña, los usuarios también deben optar por un proceso de autenticación de múltiples factores.

     
  • Use software de seguridad. Un programa antimalware debe proveer protección para virus, troyanos, spyware y adware. El IRS urge a las personas, especialmente a los profesionales de impuestos, a usar un programa antimalware y que se mantenga al día.

    Establezca software de seguridad para que se actualice automáticamente conforme surjan amenazas. Eduque a sus hijos y a esos que no pasan tanto tiempo en línea acerca  de los riesgos de abrir páginas web, correos electrónicos o documentos sospechosos.

     
  • Respalde sus archivos. No hay sistema que esté completamente seguro. Copie archivos  importantes, incluyendo declaraciones de impuestos federales y estatales, en un disco externo o "drive" o sistema de respaldo y guárdelos en un lugar seguro.
     
  • Página centrada en el robo de identidad. Nueva en IRS.gov. Diseñada para mejorar el acceso en línea a información acerca de robo de identidad. Sirve a contribuyentes, profesionales de impuestos y empresas.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS       

-HOW CAN I KEEP MY CAR INSURANCE COSTS LOW?-

Posted by Admin Posted on Mar 23 2020

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The first thing to do is bargain shop to make sure that the rates you are getting are reasonable in comparison to other companies. Within the policy that you have, these are a few tips that could save you a few bucks.

  • Buy a cheaper or a lower profile car
  • Take out a higher deductible
  • Look into different insurance costs in different communities
  • Pay annually
  • Drop collision damage coverage

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

Multistate Resident? Watch Out for Double Taxation & Fewer Taxpayers to Qualify for Home Office Deduction MULTISTATE RESIDENT? WATCH OUT FOR DOUBLE TAXATION-

Posted by Admin Posted on Mar 23 2020

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Contrary to popular belief, there’s nothing in the U.S. Constitution or federal law that prohibits multiple states from collecting tax on the same income. Although many states provide tax credits to prevent double taxation, those credits are sometimes unavailable. If you maintain residences in more than one state, here are some points to keep in mind.

Domicile vs. residence

Generally, if you’re “domiciled” in a state, you’re subject to that state’s income tax on your worldwide income. Your domicile isn’t necessarily where you spend most of your time. Rather, it’s the location of your “true, fixed, permanent home” or the place “to which you intend to return whenever absent.” Your domicile doesn’t change — even if you spend little or no time there — until you establish domicile elsewhere.

Residence, on the other hand, is based on the amount of time you spend in a state. You’re a resident if you have a “permanent place of abode” in a state and spend a minimum amount of time there — for example, at least 183 days per year. Many states impose their income taxes on residents’ worldwide income even if they’re domiciled in another state.

Potential solution

Suppose you live in State A and work in State B. Given the length of your commute, you keep an apartment in State B near your office and return to your home in State A only on weekends. State A taxes you as a domiciliary, while State B taxes you as a resident. Neither state offers a credit for taxes paid to another state, so your income is taxed twice.

One possible solution to such double taxation is to avoid maintaining a permanent place of abode in State B. However, State B may still have the power to tax your income from the job in State B because it’s derived from a source within the state. Yet State B wouldn’t be able to tax your income from other sources, such as investments you made in State A.

Minimize unnecessary taxes

This example illustrates just one way double taxation can arise when you divide your time between two or more states. Our firm can research applicable state law and identify ways to minimize exposure to unnecessary taxes.

Sidebar: How to establish domicile

Under the law of each state, tax credits are available only with respect to income taxes that are “properly due” to another state. But, when two states each claim you as a domiciliary, neither believes that taxes are properly due to the other. To avoid double taxation in this situation, you’ll need to demonstrate your intent to abandon your domicile in one state and establish it in the other.

There are various ways to do so. For example, you might obtain a driver’s license and register your car in the new state. You could also open bank accounts in the new state and use your new address for important financially related documents (such as insurance policies, tax returns, passports and wills). Other effective measures may include registering to vote in the new jurisdiction, subscribing to local newspapers and seeing local health care providers. Bear in mind, of course, that laws regarding domicile vary from state to state.

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

-REFUND, WHERE'S MY REFUND?

Posted by Admin Posted on Mar 23 2020

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Are you expecting a tax refund from the Internal Revenue Service this year? If you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return. If you file your return electronically, your refund should be issued in about half the time it would take if you filed a paper return — even faster when you choose direct deposit.

You can have a refund check mailed to you, buy up to $5,000 in U.S. Series I Savings Bonds with your refund, or you may be able to have your refund electronically deposited directly into your bank account (either in one account, or in multiple accounts). Direct deposit into a bank account is more secure because there is no check to get lost. And it takes the U.S. Treasury less time than issuing a paper check. If you prepare a paper return, fill in the direct deposit information in the “Refund” section of the tax form, making sure that the routing and account numbers are accurate. Incorrect numbers can cause your refund to be misdirected or delayed. Direct deposit is also available if you electronically file your return.

A few words of caution — some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted.

You may not receive your refund as quickly as you expected. A refund can be delayed for a variety of reasons. For example, a name and Social Security number listed on the tax return may not match the IRS records. You may have failed to sign the return or to include a necessary attachment, such as Form W-2, Wage and Tax Statement. Or you may have made math errors that require extra time for the IRS to correct.

To check the status of an expected refund, use "Check your Federal Refund" an interactive tool available on our Links page. Simple online instructions guide you through a process that checks the status of your refund after you provide identifying information from your tax return. Once the information is processed, results could be one of several responses.

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

Source: Thomson Reuters

WHAT CAN I DO TO ENSURE THAT I AM INSURED ADEQUATELY?

Posted by Admin Posted on Mar 23 2020

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Make a list of your possessions in your household. The better documented this is the more likely you will be to be able to replace them.

Make sure that you inform your agents of any changes that you make to the home so that if anything happens to the structure, the recent changes will be reflected in the payout.

Check to see if there are any specific limits to what is insured by your company. Sometimes a person may think they are covered for certain things, but the limits negate that.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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? DO I REALLY NEED IT?-

Posted by Admin Posted on Mar 23 2020

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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, essential business accounting, 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 SIGNIFICANTLY DOES MY ADDRESS AFFECT MY INSURANCE?

Posted by Admin Posted on Mar 23 2020

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There is a big difference in the premiums that people pay in the suburbs where there is much less traffic congestion as opposed to people that live in big cities with many accidents per capita. Usually this is judged by the zip code of which you register as your home.

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

Source: Thomson Reuters  

-WHAT CAN I DO TO GET A GOOD PRICE ON MY HOMEOWNER'S INSURANCE?-

Posted by Admin Posted on Mar 23 2020

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Clearly you should always perform a good amount of due diligence when searching for any policy. Be sure to compare the differences in services offered and prices quoted. There are many discounts available for different things, don't forget to ask if you qualify for any of them.

Remember that the deductible will largely affect the price of the premium. It is a good idea to keep the deductible as high as you feel comfortable with to keep the premium down.

You can generally get a better deal when you purchase your auto and house policies from the same company and you can also get a better rate by not insuring the land.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 pueden verificar estado de su reembolso en IRS.gov o en aplicación móvil IRS2Go

Posted by Admin Posted on Mar 23 2020

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Los contribuyentes que presentaron su declaración de impuestos de 2019 y esperan su reembolso pueden verificar el estado de su reembolso en IRS.gov y luego oprimir "Verificar el estado de mi reembolso" para acceder a la herramienta ¿Dónde está mi reembolso?

Las personas pueden verificar el estado de su declaración de impuestos aproximadamente 24 horas después de que el IRS la recibe electrónicamente y hasta cuatro semanas después que el contribuyente la envía en papel por correo postal. La herramienta ¿Dónde está mi reembolso? se actualiza una vez cada 24 horas, generalmente durante la noche, por lo que los contribuyentes solo necesitan verificar una vez al día.

Los contribuyentes también pueden verificar el estado de su reembolso, hacer un pago y buscar servicios de ayuda gratuita para preparar su declaración de impuestos a través de la aplicación IRS2Go para su dispositivo móvil.

Los contribuyentes necesitan tres cosas para usar la herramienta:

  • Su número de seguro social
  • Su estado civil tributario
  • La cantidad exacta del reembolsoreclamadoensudeclaración de impuestos

Una vez que el contribuyente ingresa esa información, la herramienta mostrará el progreso de su declaración de impuestos a través de las siguientes etapas:

  • Declaración recibida
  • Reembolso aprobado
  • Reembolso enviado

Los contribuyentes deben usar la aplicación móvil IRS2Go o la herramienta oficial ¿Dónde está mi reembolso? en IRS.gov para evitar a los estafadores que pueden crear sitios web falsos para intentar robar información personal confidencial. Deben ir directamente a IRS.gov y no confiaren los resultados de búsqueda en línea u oprimir en enlaces de sitios web de reembolsos que reciben por correo electrónico o mensaje de texto.

En ciertos casos, un contribuyente debe llamar al IRS:

  • Si pasaron 21 días o más desde que presentó electrónicamente su declaración de impuestos
  • Si pasaron más de seis semanas desde que envió su declaración por correo postal
  • Cuando los resultados de ¿Dónde está mi reembolso? le dice que se comunique con el IRS

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS       

PAYMENT DEADLINE EXTENDED TO JULY 15, 2020

Posted by Admin Posted on Mar 19 2020

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The Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns remains April 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can’t file by the April 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request a six-month extension to file their return.

This payment relief includes:

Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.

Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.

Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.

The IRS reminds individual taxpayers the easiest and fastest way to request a filing extension is to electronically file Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses must file Form 7004.

This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details. More information is available at https://www.taxadmin.org/state-tax-agencies.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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       

 

-FOREIGN INCOME-

Posted by Admin Posted on Mar 12 2020

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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.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 KEEP COLLISION COVERAGE ON MY OLD CAR?-

Posted by Admin Posted on Mar 12 2020

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Collision coverage ensures the repair of your car whether you were at fault or not, even if your car is damaged by fire, flood, wind or hail. Depending on the value of your car, this coverage may not be cost effective.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 AMOUNT OF LIFE INSURANCE SHOULD I HAVE?

Posted by Admin Posted on Mar 12 2020

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In order to figure out how much insurance you need, you will need to explore your current household expenses, debts, assets, and streams of income. If you need assistance in this, consult either your accountant or financial advisor.

The amount of money that you want to leave behind for your dependents should allow them to use some of the money to maintain their current standard of living, then reinvest another lump sum to ensure that they will be well off in the future.

When attempting to calculate the amount of money that you need to leave behind, be extremely meticulous. If you err low, your family may not receive the help that they need from the insurance company, and if you err the other way, you will be spending more than necessary in insurance premiums.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 CAN I EASILY COMPARE PRICES BETWEEN INSURANCE COMPANIES?

Posted by Admin Posted on Mar 12 2020

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In most states there will be a set of rules laid down by a group of insurance regulators. Agents may be required to calculate two different types of indexes to aid in price shopping.

  • Net payment index
  • Surrender cost index

The net payment index calculates the cost of carrying the policy for ten to twenty years. This can be judged easily by remembering that the lower this number is, the more inexpensive the policy is. This is most helpful if you are more concerned with the death payout than the investment.

On the other hand, the surrender cost index is more useful to those who are concerned with the cash value of the investment. The lower this number is, the better.

The cash surrender value is what you will receive in return if you were to surrender the policy, which is different than the cash accumulation value. If you are checking the prices of universal life policies, if the policies have different premiums and death benefits, the policy with the higher cash surrender value would be the better investment.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 TIME GUIDE: IRS.GOV’S "WHERE’S MY REFUND?" TOOL IS FASTEST, EASIEST WAY TO CHECK ON TAX REFUNDS

Posted by Admin Posted on Mar 04 2020

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Tax Time Guide: IRS.gov’s "Where’s My Refund?" tool is fastest, easiest way to check on tax refunds

WASHINGTON — The Internal Revenue Service is reminding taxpayers today that the best way to check on their tax refund is by using the "Where's My Refund?" tool at IRS.gov or through the IRS2Go Mobile App.

This news release is part of a group of IRS tips called the Tax Time Guide. The guide is designed to help taxpayers as they near the April 15 tax filing deadline.

As of February 21, the IRS had already issued more than 37.4 million refunds averaging $3,125.

While the majority of tax refunds are issued within 21 days, some may take longer. Just as each tax return is unique and individual, so is each taxpayer's refund. There are a few things taxpayers should keep in mind if they are waiting on their refund but hear or see on social media that other taxpayers have already received theirs.

The IRS works hard to issue refunds as quickly as possible, but some tax returns take longer to process than others. Many different factors can affect the timing of your refund after we receive your return. Also, remember to take into consideration the time it takes for your financial institution to post the refund to your account or for you to receive it by mail.

There are several reasons a tax refund may take longer:

  • Some tax returns require additional review.
  • The return may include errors or be incomplete.
  • The return could be affected by identity theft or fraud.
  • The return includes a claim for the Earned Income Tax Credit or Additional Child Tax Credit.
  • The time between the IRS issuing the refund and the bank posting it to an account since many banks do not process payments on weekends or holidays.

The IRS will contact taxpayers by mail if more information is needed to process a 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

WHAT LEVEL OF HOME INSURANCE SHOULD I BUY?

Posted by Admin Posted on Mar 04 2020

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Make sure that you are insured against whatever natural disasters are common in your area, because insurance against these differs. If you don't specifically ask, you may not be covered.

Be sure to insure for 100% of rebuilding costs. The price of rebuilding your home could differ greatly from the amount that your home is valued at today.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

-REFINANCING YOUR HOME-

Posted by Admin Posted on Mar 04 2020

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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, essential business accounting, 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 COVERAGE IS ESSENTIAL FOR MY AUTO POLICY?-

Posted by Admin Posted on Mar 04 2020

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You will need to have liability coverage, property damage, and bodily injury. This way you will be protected if you are at fault and cause damage to a person or their property. It is recommended to have $300,000 per accident to pay medical costs and other costs that may be affiliated. You should also have at least $50,000 in property damage.

You should have uninsured motorist coverage, which will protect you against financial damages caused by an uninsured motorist or a hit and run, should one occur.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

Taxpayers must only pay what they owe

Posted by Admin Posted on Feb 26 2020

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When taxpayers complete their tax returns, some of them will owe money when they file. Here’s the thing…they have the right to pay only the amount of tax that is legally due.

This is one of ten Taxpayer Bill of Rights. They are fundamental rights taxpayers have when dealing with the IRS. One of which is the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly. 

This means taxpayers are entitled to:

  • File for a refund if the they believe they overpaid.
  • Write or call the IRS office that sent the taxpayer a notice or bill. Taxpayers can do this if they believe the notice or bill is incorrect in any way. When challenging information in a bill or notice, taxpayers should be ready to provide copies of any records that may help correct the error. If the taxpayer is correct, the IRS will make the necessary adjustment to their account and send a corrected notice.
  • Amend a tax return if they discover an error. They can also amend this return if there were mistakes in their filing status, income, deductions or credits.
  • Request any amount owed be removed if it’s more than the correct amount due.
  • Request the IRS remove any interest from their account if the IRS caused unreasonable errors or delays.
  • Submit an offer in compromise, asking the agency to accept less than the full tax debt, if the taxpayer believes they don’t owe all or part of the debt.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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              

Recopilar registros antes de preparar la declaración de impuestos hace que la temporada de impuestos sea más fácil

Posted by Admin Posted on Feb 26 2020

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A medida que los contribuyentes se preparan para presentar sus impuestos, una de las primeras cosas que harán es reunir sus registros. Para evitar demoras en los reembolsos, los contribuyentes deben reunir todos los documentos de ingresos de fin de año antes de presentar una declaración de impuestos de 2019.

Es importante que la gente tenga a mano todos los documentos necesarios antes de comenzar a preparar su declaración. Hacerlo les ayuda a presentar una declaración de impuestos completa y precisa. Aquí hay algunas cosas que los contribuyentes deben tener antes de comenzar a hacer sus impuestos.

  • Números de Seguro Social (SSN, por sus siglas en inglés) de todos los que están listados en la declaración de impuestos. Muchos contribuyentes tienen estos números memorizados. Aún así, es una buena idea tenerlos a mano para verificar que el número en la declaración de impuestos sea correcto. Un SSN con un número incorrecto o dos números cambiados causará demoras en el procesamiento.
     
  • Números de cuenta bancaria y de ruta. Las personas los necesitarán para reembolsos por depósito directo. El depósito directo (en inglés) es la forma más rápida para que los contribuyentes obtengan su dinero y evitar que un cheque se pierda, sea robado o devuelto al IRS por no poder entregarse.
     
  • Formulario W-2 (en inglés) para empleadores.
     
  • Formularios 1099 (en inglés) para bancos y otros pagadores.
     
  • Cualquier documento que muestre ingresos, incluidos los ingresos de transacciones en moneda virtual. Los contribuyentes deben mantener registros que muestren recibos, ventas, intercambios o depósitos de moneda virtual y el valor justo de mercado de la moneda virtual.
     
  • Formulario 1095-A, Declaración del mercado de seguros de salud (en inglés). Los contribuyentes necesitarán este formulario para conciliar los pagos por adelantado o reclamar el crédito tributario de prima.
     
  • El ingreso bruto ajustado de la declaración de impuestos del año pasado del contribuyente. Las personas que usan un producto de software por primera vez necesitarán su AGI de 2018 para firmar su declaración de impuestos. Aquellos que usan el mismo software de impuestos que usaron el año pasado no necesitarán ingresar su información del año anterior para firmar electrónicamente su declaración de impuestos de 2019.

Los formularios generalmente comienzan a llegar por correo o están disponibles en línea de empleadores e instituciones financieras en enero. Los contribuyentes deben revisarlos cuidadosamente. Si alguna información que se muestra en los formularios está incorrecta, el contribuyente debe comunicarse con el pagador lo antes posible para una corrección.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS 

Taxpayers should know the difference between standard and itemized deductions

Posted by Admin Posted on Feb 26 2020

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It’s a good idea for people to find out if they should file using the standard deduction or itemize their deductions. Deductions reduce the amount of taxable income when filing a federal income tax return. In other words, they can reduce the amount of tax someone owes.

Individuals should understand they have a choice of either taking a standard deduction or itemizing their deductions. Taxpayers can use the method that gives them the lower tax. Due to tax law changes in the last couple years, people who itemized in the past might not want to continue to do so, so it’s important for all taxpayers to look into which deduction to take.

Here are some details about the two methods to help people understand which they should use:

Standard deduction
The standard deduction amount adjusts every year and can vary by filing status. The standard deduction amount depends on the taxpayer’s filing status, whether they are 65 or older or blind, and whether another taxpayer can claim them as a dependent. Taxpayers who are age 65 or older on the last day of the year and don't itemize deductions are entitled to a higher standard deduction.

Most filers who use Form 1040 or Form 1040-SR, U.S. Tax Return for Seniors, can find their standard deduction on the first page of the form.

Taxpayers who can't use the standard deduction include:

  • A married individual filing as married filing separately whose spouse itemizes deductions.
  • An individual who files a tax return for a period of less than 12 months. This could be due to a change in their annual accounting period.
  • An individual who was a nonresident alien or a dual-status alien during the year. However, nonresident aliens who are married to a U.S. citizen or resident alien can take the standard deduction in certain situations.

Itemized deductions
Taxpayers may need to itemize deductions because they can't use the standard deduction. They may also itemize deductions when this amount is greater than their standard deduction.

Taxpayers who itemize file Schedule A, Form 1040, Itemized Deductions or Form 1040-SR, U.S. Tax Return for Seniors.

A taxpayer may benefit by itemizing deductions for things that include:

  • State and local income or sales taxes
  • Real estate and personal property taxes
  • Mortgage interest
  • Mortgage insurance premiums
  • Personal casualty and theft losses from a federally declared disaster
  • Donations to a qualified charity
  • Unreimbursed medical and dental expenses that exceed 7.5% of adjusted gross income

Individual itemized deductions may be limited. Form 1040, Schedule A Instructions can help determine what limitations may apply.

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

Source: IRS 

Contribuyentes solo deben pagar lo que adeudan

Posted by Admin Posted on Feb 26 2020

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Cuando los contribuyentes completen sus declaraciones de impuestos, algunos de ellos adeudarán dinero cuando presenten la declaración. Aquí está la cosa... tienen derecho a pagar solo la cantidad de impuestos legalmente adeudados.

Este es uno de los diez Derechos del contribuyente. Son derechos fundamentales que los contribuyentes tienen al tratar con el IRS. Uno de éstos es el derecho de pagar no más de la cantidad correcta de impuestos, incluidos intereses y multas, y que el IRS aplique todos los pagos de impuestos correctamente.

Esto significa que los contribuyentes tienen derecho a:

  • Solicitar un reembolso si creen que pagaron en exceso.
     
  • Escribir o llamar a la oficina del IRS que le envió al contribuyente un aviso o factura. Los contribuyentes pueden hacer esto si creen que el aviso o la factura están incorrectos. Cuando se cuestiona la información en una factura o aviso, los contribuyentes deben estar listos para proporcionar copias de cualquier archivo que pueda ayudar a corregir el error. Si el contribuyente está en lo correcto, el IRS hará los ajustes necesarios en su cuenta y enviará un aviso corregido.
     
  • Enmendar una declaración de impuestos si descubren un error. También pueden enmendar esta declaración si hubo errores en su estado civil tributario, ingresos, deducciones o créditos.
     
  • Solicitar que se elimine cualquier cantidad adeudada si es mayor que la cantidad adeudada correcta.
     
  • Solicitar al IRS que elimine cualquier interés de su cuenta si el IRS causó errores o demoras irrazonables.
     
  • Presentar un ofrecimiento de transacción, pidiéndole a la agencia que acepte menos de la deuda tributaria total, si el contribuyente cree que no debe toda o parte de la deuda.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS   

Many taxpayers don’t realize they could benefit from the earned income tax credit

Posted by Admin Posted on Feb 26 2020

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The earned income tax credit benefits millions of taxpayers who qualify by putting more money in their pockets. This money can help with things like food, gas, clothing and even saving for a rainy day.

Here’s some information for people who often miss out on claiming the credit:

Native Americans:
As with all taxpayers, Native Americans can claim the credit if they meet basic rules.

  • Taxpayers must have earned income. In other words, they must receive income as an employee, or from owning or operating their own business.
  • This includes home-based businesses and work in the service industry, construction and farming.

Grandparents:
Grandparents who work and are also raising grandchildren can also benefit from the EITC. These individuals who are caring for their grandchildren should find out if they qualify. It’s important because they’re often not aware they could claim these children for the EITC.

The EITC is a refundable tax credit. This means those who qualify and claim the credit could pay less federal tax, pay no tax, or even get a tax refund. Grandparents who are the primary caretakers of their grandchildren – as with all taxpayers – should remember these facts about the credit:

  • A grandparent who works and has a qualifying child may be eligible for the EITC, even if the grandparent is 65 years of age or older.
  • The grandchild must meet the qualifying child requirements for EITC.
  • Special rules and restrictions  apply if the child’s parents or other family members also qualify for EITC. 
  • Eligible grandparents must file a tax return and claim the credit, even if they don’t owe any tax or aren’t required to file.

Taxpayers living in rural areas:
Many taxpayers living in small towns and rural areas may qualify for EITC. Here are some things that people living in these areas should know about the credit and how it can benefit them:

  • EITC is a refundable tax credit. This means those who qualify and claim the credit could pay less federal tax, pay no tax, or even get a tax refund.
  • To get the credit, taxpayers must file a tax return and claim the credit, even if they don’t owe any tax or aren’t required to file.
  • Unmarried workers without a qualifying child who earn less than $15,570 may qualify for a smaller amount of the credit.

Taxpayers can use the EITC Assistant to determine if they qualify for EITC. Available in English and Spanish, this tool also estimates the amount of the taxpayer’s credit.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

Los contribuyentes deben saber la diferencia entre las deducciones estándar y las deducciones detalladas

Posted by Admin Posted on Feb 26 2020

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Es una buena idea que las personas averigüen si deben presentar la declaración con la deducción estándar o detallar sus deducciones. Las deducciones reducen la cantidad de ingresos sujetos a impuestos al presentar una declaración de impuestos federales. En otras palabras, pueden reducir la cantidad de impuestos que adeudan.

Las personas deben entender que tienen la opción de tomar una deducción estándar o detallar sus deducciones. Los contribuyentes pueden usar el método que les permite pagar menos impuestos. De acuerdo a los cambios de la ley tributaria en los últimos dos años, es posible que las personas que detallaron en el pasado no tengan que continuar haciéndolo, por lo que es importante que todos los contribuyentes analicen cual de las dos deducciones les beneficia más.

Aquí hay algunos detalles acerca de los dos métodos para ayudar a las personas a entender cuál de ellos deben usar:

Deducción estándar

El monto de la deducción estándar se ajusta cada año y puede variar según el estado civil. El monto de la deducción estándar depende del estado civil del contribuyente, si son mayores de 65 años o ciegos, y si otro contribuyente puede reclamarlos como dependientes. Los contribuyentes que tienen 65 años o más el último día del año y no detallan las deducciones tienen derecho a una deducción estándar más alta.

La mayoría de los contribuyentes que usan el Formulario 1040 o el Formulario 1040-SR, Declaración de Impuestos de los Estados Unidos para personas mayores (en inglés), pueden encontrar en la primera página su deducción estándar.

Los contribuyentes que no pueden usar la deducción estándar incluyen:

  • Una persona casada que presenta una declaración como casada que presenta una declaración por separadcuyo cónyuge detalla las deducciones.
  • Una persona que presenta una declaración de impuestos por un período de menos de 12 meses. Esto podría deberse a un cambio en su período contable annual.
  • Una persona que fue un extranjero no residente con doble estatus durante el año. Sin embargo, los extranjeros no residentes que están casados ​​con un ciudadano estadounidense o extranjero residente pueden tomar la deducción estándar en ciertas situaciones (en inglés).

Deducciones detalladas

Los contribuyentes tendrían que detallar las deducciones porque no pueden usar la deducción estándar. También pueden detallar las deducciones cuando esta cantidad es mayor que su deducción estándar.

Los contribuyentes que detallan el Anexo A, Formulario 1040, Deducciones detalladas (en inglés) o el Formulario 1040-SR, Declaración de Impuestos de los EE. UU. para personas mayores (en inglés).

Un contribuyente puede beneficiarse al detallar deducciones por cosas que incluyen:

  • Impuestos estatales y locales sobre ingresos o las ventas
  • Impuestos de bienes raices y bienes personales
  • Intereses hipotecarios
  • Primas de seguro hipotecario
  • Pérdidas fortuitas y robo de un desastre declarado a nivel federal
  • Donativos a una organización benéfica calificada
  • Gastos médicos y dentales no reembolsados ​​que exceden el 7.5% del ingreso bruto ajustado

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS 

Gathering records before preparing tax return makes filing go smoother

Posted by Admin Posted on Feb 26 2020

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As taxpayers are getting ready to file their taxes, one of the first things they’ll do is gather their records. To avoid refund delays, taxpayers should gather all year-end income documents before filing a 2019 tax return.

It’s important for folks to have all the needed documents on hand before starting to prepare their return. Doing so helps them file a complete and accurate tax return. Here are some things taxpayers need to have before they begin doing their taxes.

  • Social Security numbers of everyone listed on the tax return. Many taxpayers have these number memorized. Still, it’s a good idea to have them on hand to double check that the number on the tax return is correct. An SSN with one number wrong or two numbers switched will cause processing delays.
  • Bank account and routing numbers. People will need these for direct deposit refunds. Direct deposit is the fastest way for taxpayers to get their money and avoids a check getting lost, stolen or returned to IRS as undeliverable.
  • Forms W-2 from employers.
  • Forms 1099 from banks and other payers.
  • Any documents that show income, including income from virtual currency transactions. Taxpayers should keep records showing receipts, sales, exchanges or deposits of virtual currency and the fair market value of the virtual currency.
  • Forms 1095-A, Health Insurance Marketplace Statement. Taxpayers will need this form to reconcile advance payments or claim the premium tax credit.
  • The taxpayer’s adjusted gross income from their last year’s tax return. People using a software product for the first time will need their 2018 AGI to sign their tax return.  Those using the same tax software they used last year won’t need to enter their prior year information to electronically sign their 2019 tax return.

Forms usually start arriving by mail or are available online from employers and financial institutions in January. Taxpayers should review them carefully. If any information shown on the forms is inaccurate, the taxpayer should contact the payer ASAP for a correction.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 takes next step on abusive micro-captive transactions; nearly 80% accept settlement, 12 new audit teams established

Posted by Admin Posted on Feb 26 2020

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WASHINGTON − The Internal Revenue Service announced the overwhelming acceptance of a time-limited settlement offer made to certain taxpayers under audit who participated in abusive micro-captive insurance transactions.

Nearly 80% of taxpayers who received offer letters elected to accept the settlement terms. In addition, the IRS is establishing 12 new examination teams that are expected to open audits related to thousands of taxpayers in coming months.

“The overwhelming acceptance rate of the private settlement offer is a reflection of the success of the government’s work to stop this abuse,” said IRS Commissioner Chuck Rettig. “Taxpayers who elected to accept the IRS’ terms have done the right thing by coming into compliance with their federal tax obligations and putting this behind them. Putting an end to abusive schemes is a high priority for the IRS.”

Abusive micro-captives have been a threat to tax administration and a concern to the IRS for several years. The transaction has appeared on the IRS “Dirty Dozen” list of tax scams since 2014. In 2016, the Department of the Treasury and IRS issued Notice 2016-66, which identified certain micro-captive transactions as having the potential for tax avoidance and evasion. 

The settlement offer followed three U.S. Tax Court decisions confirming that certain micro-captive arrangements are not eligible for federal tax benefits. The terms of the settlement required substantial concession of the income tax benefits claimed by the taxpayer together with appropriate penalties.

The IRS will continue to vigorously pursue those involved in these and other similar abusive transactions going forward. Enforcement activity in this area is being significantly increased. To that end, the IRS is deploying additional resources, which includes standing up 12 new examination teams comprised of employees from the IRS Large Business and International and Small Business/Self-Employed divisions that will be working to address these abusive transactions and open additional exams. These teams will use all available enforcement tools, including summonses, to obtain necessary information.
 
Examinations impacting micro-captive insurance transactions of several thousand taxpayers will be opened by these teams in the coming months. Potential civil outcomes can include full disallowance of claimed captive insurance deductions, inclusion of income by the captive entity and imposition of all applicable penalties.
 
The IRS reminds taxpayers and advisors that disclosure of participation in micro-captive insurance transactions is required with the IRS Office of Tax Shelter Analysis under Notice 2016-66. Failure to properly disclose can result in significant civil penalties. Taxpayers involved in these abusive transactions should immediately consult with independent, competent tax advisors on the proper treatment for past and future tax years to consider best available options.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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          

IRA CONTRIBUTIONS

Posted by Admin Posted on Feb 13 2020

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One popular tax savings outlet available to taxpayers today is the Individual Retirement Account, more commonly referred to as an IRA. There are several options you have when deciding which type of IRA account to enter into. You may be able to take a tax deduction for the contributions to a traditional IRA, depending on whether you or your spouse, if filing jointly, are covered by an employer's pension plan and how much total income you have. Conversely, you cannot deduct Roth IRA contributions, but the earnings on a Roth IRA may be tax-free if you meet the conditions for a qualified distribution.

Generally, you can contribute a percentage of your earnings for the current year or a larger, catch-up contribution if you are age 50 or older. You can fund a traditional IRA, a Roth IRA (if you qualify), or both, but your total contributions cannot be more than these annual amounts (currently $5,500, or $6,500 if you are age 50 or older).

You can file your tax return claiming a traditional IRA deduction before the contribution is actually made. However, the contribution must be made by the due date of your return, not including extensions. If you haven't contributed funds to an Individual Retirement Account (IRA) for last tax year, or if you've put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 15 due date for filing your tax return for last year, not including extensions.

Be sure to tell the IRA trustee that the contribution is for last year. Otherwise, the trustee may report the contribution as being for this year, when they get your funds.

If you report a contribution to a traditional IRA on your return, but fail to contribute by the deadline, you must file an amended tax return by using Form 1040X, Amended U.S. Individual Income Tax Return. You must add the amount you deducted to your income on the amended return and pay the additional tax accordingly.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

Home office deduction benefits small business owners

Posted by Admin Posted on Feb 13 2020

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Small business owners who work from home may qualify for a home office deduction.

They have two options for figuring this deduction.

The regular method divides expenses of operating the home between personal and business use. Self-employed taxpayers file Form 1040, Schedule C, and compute this deduction on Form 8829.

The simplified method has a rate of $5 a square foot for business use of the home. The maximum deduction is $1,500.

Special rules apply for certain business owners:

  • Daycare providers complete a special worksheet, found in Publication 587.
  • Self-employed individuals use Form 1040, Schedule C, Line 30 to claim deduction
  • Farmers claim the deduction on Schedule F, Line 32.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 DO I NEED TO INCLUDE IN A GOOD LOAN PROPOSAL?-

Posted by Admin Posted on Feb 13 2020

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

GENERAL INFORMATION        

  • Reason for the loan: the exact purpose of the loan and why it is necessary.
  • Amount needed: the specific amount needed to reach your goal.
  • Business name and address, names of officers and their social security numbers.

DESCRIPTION OF BUSINESS

  • Describe the type of business you have, its age, current business assets, and number of employees.
  • Structure of ownership: describe the legal structure of the company.

MANAGEMENT PROFILE

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

MARKET INFORMATION

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

FINANCIAL INFORMATION

  • Submit your own personal financial statements as well as those of the principal business owners.
  • Financial statements: the income statements and balance sheets for the past three years. If you have a new business, provide the projected balance sheet and income statement.
  • Specify the collateral that you are able and willing to give as security for the loan.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 ADVANTAGES OF PREPAYING A MORTGAGE, AND SHOULD I IF I CAN?-

Posted by Admin Posted on Feb 13 2020

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It is highly recommended that you prepay as much of your mortgage as possible every month, which will drastically reduce the total amount that you pay.

However, there are times where this could be disadvantageous.

If you are in a situation where you don't have funds to cover three to six months of expenses, it is recommended that you save that amount before you pay additional amounts on your mortgage.

If you have a large amount of credit card debt, over the long run, you will save more money by knocking down those high interest loans first.

There also may be times where that money would be more wisely invested in the market, depending on the expected rate of return versus how much you would save in early payments.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

-Credit for the elderly or disabled-

Posted by Admin Posted on Feb 13 2020

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You may be able to take the Credit for the Elderly or the Disabled if you were age 65 or older at the end of last year, or if you are retired on permanent and total disability, according to the IRS. Like any other tax credit, it's a dollar-for-dollar reduction of your tax bill. The maximum amount of this credit is constantly changing.

You can take the credit for the elderly or the disabled if:

  • You are a qualified individual,
  • Your nontaxable income from Social Security or other nontaxable pension is less than $3,750 to $7,500 (also depending on your filing status).

Generally, you are a qualified individual for this credit if you are a U.S. citizen or resident at the end of the tax year and you are age 65 or older, or you are under 65, retired on permanent and total disability, received taxable disability income, and did not reach mandatory retirement age before the beginning of the tax year.

If you are under age 65, you can qualify for the credit only if you are retired on permanent and total disability. This means that:

  • You were permanently and totally disabled when you retired, and
  • You retired on disability before the end of the tax year.

Even if you do not retire formally, you are considered retired on disability when you have stopped working because of your disability. If you feel you might be eligible for this credit, please contact us for assistance.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 launches Identity Theft Central

Posted by Admin Posted on Feb 05 2020

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WASHINGTON – The Internal Revenue Service launched Identity Theft Central, designed to improve online access to information on identity theft and data security protection for taxpayers, tax professionals and businesses.

Located on IRS.gov, Identity Theft Central is available 24/7 at irs.gov/identitytheft. It is a resource on how to report identity theft, how taxpayers can protect themselves against phishing, online scams and more.   

Improving awareness and outreach are hallmarks of initiatives to combat identity theft coordinated by the IRS, state tax agencies and the nation’s tax industry, all working in partnership under the Security Summit banner.

Since 2015, the Security Summit partners have made substantial progress in the fight against tax-related identity theft. But thieves are still constantly looking for ways to steal the identities of individuals, tax professionals and businesses in order to file fraudulent tax returns for refunds.

The partnership has taken a number of steps to help educate and improve protections for taxpayers, tax professionals and businesses. As part of this effort, the IRS has redesigned the information into a new, streamlined page − Identity Theft Central − to help people get information they need on ID theft, scams and schemes.

From this special page, people can get specific information including:

  • Taxpayer Guide to Identity Theft, including what to do if someone becomes a victim of identity theft
  • Identity Theft Information for Tax Professionals, including knowing responsibilities under the law
  • Identity Theft Information for Businesses, including how to recognize the signs of identity theft

The page also features videos on key topics that can be used by taxpayers or partner groups. The new page includes a video message from IRS Commissioner Chuck Rettig, warning signs for phishing email scams – a common tactic used for identity theft – and steps for people to protect their computer and phone.

Tax professionals and others may want to bookmark Identity Theft Central and check their specific guidance periodically for updates.

This is part of an ongoing effort by the IRS to share identity theft-related information with the public. The IRS continues to look for ways to raise awareness and improve education and products related to identity theft for taxpayers and the tax professional community.

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    

Muchos contribuyentes no se dan cuenta que podrían beneficiarse del Crédito Tributario por Ingreso del Trabajo

Posted by Admin Posted on Feb 05 2020

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El Crédito Tributario por Ingreso del Trabajo beneficia a millones de contribuyentes que califican, al poner más dinero en sus bolsillos. Este dinero puede ayudar con cosas como comida, gasolina, ropa, e incluso para ahorrar para días lluviosos.

Aquí hay información para las personas que a menudo pasan por alto este crédito.

Nativos Americanos:

Al igual que con todos los contribuyentes, los nativos americanos pueden reclamar el crédito si cumplen con los requisitos básicos,

  • Los contribuyentes deben haber ganado ingresos. En otras palabras, deben haber recibido ingresos como empleado, o por ser dueño y manejar su propio negocio.
  • Esto incluye negocios en el hogar y trabajo en la industria de servicios, construcción y agricultura.

Abuelos:

Los abuelos que trabajan y también cuidan a sus nietos también pudieran beneficiarse del EITC (en inglés) y deberían averiguar si califican. Esto es importante porque a menudo no están conscientes de que podrían reclamar estos niños para el EITC.

El EITC es un crédito tributario reembolsable. Esto significa que aquellos que califican y reclamen el crédito podrían pagar menos impuestos federales, no pagar impuestos, o incluso obtener un reembolso de impuestos. Los abuelos que son los principales cuidadores de sus nietos deben recordar estos datos acerca del crédito.

  • Un abuelo que trabaja y tiene un niño que califica podría ser elegible para el EITC, incluso si el abuelo tiene 65 años o más. 
  • El nieto debe cumplir los requisitos de hijo calificado para EITC. 
  • Reglas y restricciones especiales (en inglés) se aplican si los padres del niño u otra familia también califican para el EITC
  • Los abuelos elegibles deben presentar una declaración de impuestos, incluso si no deben ningún impuesto o no están obligados a presentar una declaración.

Contribuyentes que viven en áreas rurales:

Muchos contribuyentes que viven en ciudades pequeñas o áreas rurales podrían calificar para el EITC. Aquí hay algunas cosas que las personas que viven en estas áreas deben saber acerca del crédito y cómo los podría beneficiar.

  • EITC es un crédito reembolsable. Esto significa que aquellos que califican y reclaman el crédito podrían pagar mucho menos en impuestos federales, no pagar impuestos y hasta recibir un reembolso.
  • Para obtener el crédito, los contribuyentes deben presentar una declaración de impuestos y reclamar el crédito, aún si no deben impuestos o no tienen el requisito de presentar.
  • Los trabajadores solteros sin un hijo calificado que ganen menos de $15,570 podrían calificar para una cantidad menor del crédito.

Los contribuyentes pueden usar el Asistente EITC para determinar si califican para el crédito. La herramienta está disponible en inglés y español y ayuda a estimar la cantidad del crédito del contribuyente.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS  

IRS lanza página centrada en robo de identidad

Posted by Admin Posted on Feb 05 2020

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Se enfoca en necesidades de contribuyentes, profesionales de impuestos y empresas

WASHINGTON – El Servicio de Impuestos Internos lanzó una página centrada en el robo de identidad, diseñada para mejorar el acceso en línea a información acerca de robo de identidad y protección de seguridad de datos para contribuyentes, profesionales de impuestos y empresas.

Ubicada en IRS.gov, esta página está disponible en irs.gov/identitytheft. Es un recurso acerca de cómo denunciar el robo de identidad, cómo los contribuyentes pueden protegerse del phishing, estafas en línea y más.

Mejorar la conciencia y la divulgación han sido los sellos distintivos de las iniciativas para combatir el robo de identidad coordinadas por el IRS, las agencias tributarias estatales y la industria tributaria de la nación que trabajan en asociación bajo la Cumbre de Seguridad.

Desde 2015, los socios de la Cumbre de Seguridad han logrado un progreso sustancial en la lucha contra el robo de identidad relacionado con los impuestos, pero los ladrones constantemente buscan maneras de robar las identidades de individuos, profesionales de impuestos y empresas para presentar declaraciones de impuestos fraudulentas para reembolsos.

La asociación tomó pasos para ayudar a educar y mejorar las protecciones para los contribuyentes, profesionales de impuestos y empresas. Como parte de este esfuerzo, el IRS rediseñó la información en una nueva página optimizada para ayudar a las personas a obtener información acerca de cómo lidiar con el robo de identidad y la información más reciente sobre estafas y esquemas.

Desde esta página especial, se puede obtener información específica al visitar recursos que incluyen:

  • Guía para el contribuyente sobre el robo de identidad, que incluye qué hacer si las personas se convierten en víctimas de robo de identidad
  • Información de robo de identidad para profesionales de impuestos, que incluye las responsabilidades legales
  • Información de robo de identidad para empresas, que incluye cómo reconocer las señales del robo de identidad

La página también presenta vídeos acerca de temas clave que pueden usarse por los contribuyentes o grupos de socios. La nueva página incluye un mensaje de vídeo de Chuck Rettig, Comisionado del IRS, señales de advertencia para estafas de correo electrónico de phishing, una táctica común usada para el robo de identidad, y pasos para que las personas protejan su computadora y teléfono.

Los profesionales de impuestos y otros pueden querer marcar esta página y verificar periódicamente sus directrices específicas para obtener actualizaciones.

Esto es parte de un esfuerzo continuo del IRS para compartir información relacionada con el robo de identidad con el público. El IRS continúa buscando maneras de crear conciencia y mejorar la educación y los productos relacionados con el robo de identidad para los contribuyentes y la comunidad profesional de impuestos.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS 

IRS: Don’t be victim to "ghost" tax return preparers

Posted by Admin Posted on Feb 05 2020

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WASHINGTON — With the start of the 2020 tax filing season near, the Internal Revenue Service is reminding taxpayers to avoid unethical "ghost" tax return preparers.

According to the IRS, a ghost preparer does not sign a tax return they prepare. Unscrupulous ghost preparers will print the return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost will prepare but refuse to digitally sign as the paid preparer.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number, or PTIN. Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a fast buck by promising a big refund or charging fees based on the size of the refund.

Ghost tax return preparers may also:

  • Require payment in cash only and not provide a receipt.
  • Invent income to qualify their clients for tax credits.
  • Claim fake deductions to boost the size of the refund.
  • Direct refunds into their bank account, not the taxpayer's account.

The IRS urges taxpayers to choose a tax return preparer wisely. The Choosing a Tax Professional page on IRS.gov has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.

Free basic income tax return preparation with e-file is available to qualified individuals from IRS-certified volunteers at Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites across the country. For more information and to find the closest visit Free Tax Return Preparation for Qualifying Taxpayers on IRS.gov

No matter who prepares the return, the IRS urges taxpayers to review it carefully and ask questions about anything not clear before signing. Taxpayers should verify both their routing and bank account number on the completed tax return for any direct deposit refund. And taxpayers should watch out for ghost preparers inserting their bank account information onto the returns.

Taxpayers can report preparer misconduct to the IRS using IRS Form 14157, Complaint: Tax Return Preparer (PDF). If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit (PDF).

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.

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

Contribuyentes deben averiguar si pueden beneficiarse del Crédito Tributario por Ingreso del Trabajo

Posted by Admin Posted on Feb 05 2020

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Consejo Tributario del IRS 2020-11SP, 30 de enero de 2020

El Crédito Tributario por Ingreso del Trabajo

Para aprovechar este crédito, los contribuyentes deben presentar una declaración de impuestos y reclamar el crédito. Deberían hacerlo incluso si no adeudan impuestos y no están obligados a presentar una declaración. El EITC puede ser de hasta $6,557 para el año tributario 2019

Los contribuyentes primero deben averiguar si califican

  • Los eventos importantes de la vida pueden hacer que los contribuyentes entren y salgan de la elegibilidad para el crédito año tras año. Debido a esto, es una buena idea que las personas sepan si califican.
  • Los contribuyentes elegibles deben haber obtenido ingresos al trabajar para un empleador o al administrar o poseer un negocio o granja. También deben cumplir con las reglas básicas.
  • Los contribuyentes sin hijos también pueden calificar para EITC.
  • Los contribuyentes no pueden reclamar el EITC si su estado civil es casado que presenta la declaración por separado.
  • Los contribuyentes deben tener números de Seguro Social válidos para ellos, su cónyuge y cualquier hijo calificado que figure en la lista para el crédito en su declaración de impuestos.

Antes de reclamar el crédito, los contribuyentes también deben conocer las reglas del EITC:

  • Los contribuyentes pueden estar casados ​​o solteros. Si están casados, deben presentar una declaración conjunta.
  • Quienes reclaman el crédito sin un hijo calificado (en inglés) deben cumplir con las reglas de edad, residencia y dependencia.
  • Para que un niño califique, debe vivir con el contribuyente por más de seis meses al año.
  • Además, el niño debe cumplir con las reglas de edad, relación, apoyo, ciudadanía y declaración de impuestos conjunta.
  • Se aplican reglas especiales (en inglés) para los miembros del ejército de los EE. UU. que sirven en una zona de combate.

Los contribuyentes pueden usar el Asistente de EITC para determinar si son elegibles para el crédito. Esta herramienta también estima el monto del crédito del contribuyente. El Asistente EITC está disponible en inglés o español.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS    

The Right to Quality Service

Posted by Admin Posted on Jan 30 2020

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Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to have a way to file complaints about inadequate service.

What This Means for You

  • The IRS must include information about your right to Taxpayer Advocate Service (TAS) assistance, and how to contact TAS, in all notices of deficiency. IRC § 6212(a)
  • When collecting tax, the IRS should treat you with courtesy. Generally, the IRS should only contact you between 8 a.m. and 9 p.m. The IRS should not contact you at your place of employment if the IRS knows or has reason to know that your employer does not allow such contacts. IRC § 6304
  • If you are an individual taxpayer eligible for Low Income Taxpayer Clinic (LITC) assistance (generally your income is at or below 250% of the federal poverty level), the IRS may provide information to you about your eligibility for assistance from an LITC. IRC § 7526

For more information, see IRS Publication 4134, Low Income Taxpayer Clinic List. Or find an LITC near you.

  • Certain notices written by the IRS must contain the name, phone number, and identifying number of the IRS employee, and all notices must include a telephone number that the taxpayer may contact. During a phone call or in-person interview, the IRS employee must provide you with his or her name and ID number. RRA 98 § 3705(a)
  • The IRS is required to publish the local address and phone number of the IRS in local phone books. RRA 98 § 3709

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: TAS 

How to Confirm the Identity of a Field Revenue Officer If They Come Knocking at Your Door

Posted by Admin Posted on Jan 30 2020

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The Internal Revenue Service (IRS) has begun conducting face-to-face meetings with individual and business taxpayers as a part of a special compliance effort entitled Revenue Officer Compliance Sweep (ROCS). This is an extremely high priority effort where IRS field revenue officers (RO’s) will be working to resolve compliance issues, including missing tax returns and taxes owed, with a special emphasis on payroll taxes.

The RO’s will visit areas where there is little to no IRS presence. They will interview taxpayers while gathering financial information to help them become compliant now and remain so in the future. The new effort began Wisconsin, Texas, and Arkansas and will eventually rollout nationwide.

To avoid confusion with IRS scam artists and other imposters, the IRS will announce general details about these efforts in specific locations as an important step to raise community awareness around IRS activity during a specified time.

Visits from IRS agents shouldn't be confused as a scam. Here’s what to look for:

Taxpayers may receive an appointment letter requesting certain information and providing an opportunity to call the IRS to set up an appointment prior to the visit.

The first face-to-face contact from a RO will most likely be unannounced. Taxpayers should be aware they have a tax issue before they receive a visit from a RO because the IRS would have previously sent correspondence attempting to resolve the issue.

When a RO visits a taxpayer, they will always provide two forms of official credentials, called a pocket commission and a HSPD-12 card.

Both forms include a serial number and photo of the IRS employee. The HSPD-12 card is a government-wide standard for secure and reliable forms of identification for federal employees and contractors. Taxpayers have the right to see each of these credentials and can verify information on the RO’s HSPD-12 card by calling a dedicated IRS telephone number, provided by the RO, for verifying the information and confirming his or her identity.

A legitimate RO is there to help taxpayers understand and meet their tax obligations, not to make threats or demand some unusual form of payment for a nonexistent liability. The RO will explain the liability to the taxpayer. Taxpayers may request the name and telephone number of the manager of the field revenue officer if they have any concerns.

If the taxpayer has an outstanding federal tax debt, the visiting officer will request payment and provide a range of payment options, including a check payable to the U.S. Treasury.

When interacting with taxpayers, RO’s have the responsibility to educate the taxpayer about the Taxpayer Bill of Rights (TBOR), identify economic hardships if there is an outstanding federal tax debt and payment creates a hardship, and advise and seriously consider collection alternatives.

Taxpayers should be aware that RO’s may also consider other means of resolving the tax debt including:

Setting up an installment agreement to allow the taxpayer to pay the bill over time;

Recommending relief from penalties (when available) imposed when the tax bill is overdue (e.g., if there is reasonable cause) or recommending adjustment or abatement if the tax debt is in doubt;

Evaluating whether the taxpayer is a good candidate for an offer in compromise, where the IRS would accept less than the full amount of the tax liability; or

Suspending collection due to currently not collectible accounts, which could include In Business Trust Fund taxpayers.

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: TAS   

The Right to Be Informed

Posted by Admin Posted on Jan 30 2020

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Taxpayers have the right to know what they need to do to comply with tax laws. They are entitled to clear explanations of the law and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

What This Means for You

If you receive a notice fully or partially disallowing your refund claim, including a refund you claim on your income tax return, it must explain the specific reasons why the claim is being disallowed. IRC § 6402(l)

Generally, if you owe a penalty, each written notice of such penalty must provide an explanation of the penalty, including the name of the penalty, the authority under the Internal Revenue Code, and how it is calculated. IRC § 6751(a)

During an in-person interview with the IRS as part of an audit, the IRS employee must explain the audit process and your rights under that process. Likewise, during an in-person interview with the IRS concerning the collection of your tax, the IRS employee must explain the collection process and your rights under that process. IRC § 7521(b)(1)

Generally, the IRS uses Publication 1, Your Rights as a Taxpayer to meet this requirement.

The IRS must include on certain notices the amount (if any) of the tax, interest, and certain penalties you owe and must explain why you owe these amounts. IRC § 7522

The IRS must inform you in certain publications and instructions that when you file a joint income tax return with your spouse, both of you are responsible for all tax due and any additional amounts due for that tax year, unless “innocent spouse” relief applies. RRA 98 § 3501(a)

The IRS must inform you in Publication 1 Your Rights as a Taxpayer and all collection related notices that in certain circumstances you may be relieved of all or part of the tax owed with your joint return. This is sometimes referred to as “innocent spouse relief.” RRA 98 § 3501(b)

The IRS must explain in Publication 1 Your Rights as a Taxpayer how it selects which taxpayers will be audited. RRA 98 § 3503

If the IRS proposes to assess tax against you, it will send you a letter providing the examination report, stating the proposed changes, and providing you with the opportunity for a review by an Appeals Officer if you respond generally within 30 days. This letter, which in some cases is the first communication from the examiner, must provide an explanation of the entire process from examination (audit) through collection and explain that the Taxpayer Advocate Service may be able to assist you. RRA § 3504

Generally, Publication 3498, The Examination Process, or Publication 3498-A The Examination Process (Audits by Mail) is included with this letter.

If you enter into a payment plan, known as an installment agreement, the IRS must send you an annual statement that provides how much you owe at the beginning of the year, how much you paid during the year, and how much you still owe at the end of the year. RRA § 98 3506, Treas. Reg. § 301.6159-1(h)

You have the right to access certain IRS records, including instructions and manuals to staff, unless such records are required or permitted to be withheld under the Internal Revenue Code, the Freedom of Information Act, or the Privacy Act. Certain IRS records must be available to you electronically.

If the IRS is proposing to adjust the amount of tax you owe, you will typically be sent a statutory notice of deficiency, which informs you of the proposed change. This notice provides you with a right to challenge the proposed adjustment in Tax Court without first paying the proposed adjustment. To exercise this right, you must file a petition with the Tax Court within 90 days of the date of the notice being sent (or 150 days if the taxpayer’s address on the notice is outside the United States or if the taxpayer is out of the country at the time the notice is mailed). Thus, the statutory notice of deficiency is your ticket to Tax Court. IRC §§ 6212; 6213(b)

For more information about the United States Tax Court, see the Court’s taxpayer information page.

The IRS should ensure that its written guidance and correspondence is accessible, consistent, written in plain language, and easy to understand.

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: TAS               

Important information you need to know about refunds

Posted by Admin Posted on Jan 30 2020

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Planning for a refund this year? Use these tax tips and find out what you need to know and understand about tax refund timing, when you could receive it and why you may only get part or none at all.

General Information

Different factors can affect the timing of a refund. The IRS and partners in the tax industry continue to strengthen tax security reviews to help protect against identity theft and refund fraud.

While some tax returns require additional review and take longer to process than others, it may be necessary when a return has errors, is incomplete or is affected by identity theft or fraud. A refund delay can happen when the IRS must contact you by mail to request additional information needed to process your tax return.

Generally, the IRS issues most refunds in less than 21 days. However, if information from reporting sources such as your employer, your bank or others is not received timely when the IRS cross-checks your data, it can delay the issuance of your refund.

Direct deposit is the fastest way to get your refund. Simply request it in the software you are using or add your bank routing information to your paper return.

The quickest and easiest way to track your refund is to use the Where's My Refund? ‎tool on IRS.gov or download the IRS2Go app on your mobile device. You can also check the IRS’s What to Expect for Refunds web page for answers to frequently asked questions. The IRS “When Will I Get My Refund? video provides details on what info you’ll need to check your refund status.

Delayed Release

Refund timing for Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) filers is different than from anyone else. By law, neither the IRS nor the Taxpayer Advocate Service can release refunds related to these tax returns until after mid-February.

Generally, the earliest EITC/ACTC related refunds are available in taxpayer bank accounts or on debit cards by the first week of March, if you chose direct deposit and there are no other issues with the tax return. If there are other items that need addressing, the refund may be delayed further.

If you claim these two tax credits, you should know that you won’t see the status of your refund on Where's My Refund?, the IRS2Go app or through tax software packages until at least the end of February.

Certain Past-due Debts Can Reduce Refunds

By law, the Department of Treasury's Bureau of the Fiscal Service (BFS) issues IRS tax refunds and conducts the Treasury Offset Program (TOP). BFS may reduce a taxpayer’s refund and offset all or part of the refund to pay past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or other federal nontax debts, such as student loans.

BFS will reduce the refund to pay off the debt owed and send a notice to the taxpayer if a refund offset occurs. Any portion of the remaining refund after offset is issued in a check or direct deposited to you as originally requested on your tax return.

Separate from the TOP, refund amounts may also be adjusted due to changes the IRS made to the tax return.

For more information on any of these refund offset possibilities, including lost or stolen refunds, see our website’s Get Help tax topic pages.

Financial Hardship

Have you tried to get your refund, and now are having financial hardship? There are certain types of issues where the IRS itself can generally provide the service you need, without our involvement.

However, if you've contacted the IRS and tried to get your refund unsuccessfully, unless it is because of a law, and not having the refund is causing you a financial hardship, the Taxpayer Advocate Service may be able to help. Our priority is always helping the taxpayers who need us most, so you may need to provide evidence to support your hardship claim in order to request an expedited refund.

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: TAS    

-FILING AN EXTENSION-

Posted by Admin Posted on Jan 23 2020

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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 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 TECHNIQUE

Posted by Admin Posted on Jan 23 2020

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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

THE TAX ADVOCATE SERVICE, PROVIDED BY THE IRS

Posted by Admin Posted on Jan 23 2020

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Have you tried everything to resolve a tax problem with the IRS but are still experiencing delays? Are you facing what you consider to be an economic burden or hardship due to IRS collection or other actions? If so, you can seek the assistance of the Taxpayer Advocate Service.

You may request the assistance of the Taxpayer Advocate if you find that you can no longer provide for basic necessities such as housing, transportation or food because of IRS actions. You can also seek help from the Taxpayer Advocate Service if you own a business and are unable to meet basic expenses such as payroll because of IRS actions. A delay of more than 30 days to resolve a tax related problem or no response by the date promised may also qualify you for assistance.

Qualified taxpayers will receive personalized service from a knowledgeable Taxpayer Advocate. The Advocate will listen to your situation, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved to the fullest extent permitted by law.

The Taxpayer Advocate Service is an independent organization within the IRS and can help clear up problems that resulted from previous contacts with the IRS. Taxpayer Advocates will ensure that your case is given a complete and impartial review. What's more, if your problem affects other taxpayers, the Taxpayer Advocate Service can work to change the system.

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

Direct deposit fastest way to receive federal tax refund

Posted by Admin Posted on Jan 15 2020

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IRS YouTube Videos:
Direct Deposit for Your Tax Refund − English

WASHINGTON — With tax season beginning soon, the Internal Revenue Service reminds taxpayers that choosing to have their tax refund directly deposited into their checking or savings account is the fastest way to get their money.

It’s simple, safe and secure. Taxpayers can also get their refund deposited into one, two or three different accounts, if desired.

Eight out of 10 taxpayers get their refunds by using direct deposit. The IRS uses the same electronic transfer system to deposit tax refunds that is used by other federal agencies to deposit nearly 98% of all Social Security and Veterans Affairs benefits into millions of accounts.

Direct deposit also avoids the possibility that a refund check could be lost or stolen or returned to the IRS as undeliverable. And it saves taxpayer money. It costs more than $1 for every paper refund issued, but only a dime for each direct deposit.

Easy to use

A taxpayer simply selects direct deposit as the refund method when using tax software or working with a tax preparer, and then types in their account and routing number. It’s important to double check entries to avoid errors.

The IRS reminds taxpayers they should only deposit refunds directly into accounts that are in their name, their spouse’s name or both if it’s a joint account.

Split refunds

By using direct deposit, a taxpayer can split their refund into up to three financial accounts, including a bank or Individual Retirement Account. Part of the refund can even be used to purchase up to $5,000 in U.S. Series I Savings Bonds.

A taxpayer can split their refund by using tax software or by using IRS Form 8888, Allocation of Refund (including Savings Bond Purchases), if they file a paper return. Some people use split refunds as a convenient option for managing their money, sending some of their refund to an account for immediate use and some for future savings.

No more than three electronic tax refunds can be deposited into a single financial account or prepaid debit card. Taxpayers who exceed the limit will receive an IRS notice and a paper refund will be issued for the refunds exceeding that limit.

E-file plus direct deposit yields fastest refunds

The IRS also encourages taxpayers to file electronically. While a person can choose direct deposit whether they file their taxes on paper or electronically, a taxpayer who e-files will typically see their refund in less than 21 days. Taxpayers can track their refund using "Where’s My Refund?" on IRS.gov or by downloading the IRS2Go mobile app.

“Where’s My Refund?” is updated once daily, usually overnight, so there’s no reason to check more than once per day or call the IRS to get information about a refund. Taxpayers can check “Where’s My Refund?” within 24 hours after the IRS has received their e-filed return or four weeks after receipt of a mailed paper return. “Where’s My Refund?” has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved, and (3) Refund Sent.

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 ayuda a trabajadores, negocios con el nuevo Centro de Ayuda Tributaria para la Economía Compartida

Posted by Admin Posted on Jan 15 2020

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WASHINGTON — El Servicio de Impuestos Internos lanzó esta semana un nuevo Centro de Ayuda Tributaria para la Economía Compartida (en inglés) en IRS.gov para ayudar a las personas en esta área de rápido desarrollo a cumplir con sus obligaciones tributarias a través de información más simplificada.

"El IRS desarrolló este centro en línea para ayudar a los contribuyentes en este segmento emergente de la economía", dijo Chuck Rettig, Comisionado del IRS. "Ya sea que alquilen un dormitorio o proporcionen paseos en auto, queremos que la gente entienda las reglas para que puedan cumplir con sus impuestos y evitar sorpresas."

La economía compartida también se conoce como disponible por encargo o de acceso. Por lo general, incluye empresas que operan una aplicación o sitio en línea para conectar a las personas que usan su propio equipo o propiedad para proporcionar servicios a los clientes. Aunque hay muchos tipos de negocios de economía compartida, el alquiler de autos y casas son dos de los más populares.

Educar a trabajadores de la economía compartida acerca de sus obligaciones y beneficios tributarios es vital pues muchos no reciben formularios W-2 o 1099 para reportar sus ingresos al IRS. Sin embargo, ingresos de estas fuentes generalmente están sujetos a impuestos, independientemente de si los trabajadores reciben formularios de reportes informativos o no. Esto es cierto incluso si el trabajo es secundario, un negocio a corto plazo o si la persona se paga en efectivo. También se puede exigir a los trabajadores que presenten pagos trimestrales de impuestos estimados, que paguen su porción de impuestos de la Contribución de Seguro Federal (FICA), Medicare y Medicare Adicional si son empleados y pagan impuestos sobre el trabajo por cuenta propia si no les considera empleados.

La economía compartida reorganiza varios recursos, facilitándole a los contribuyentes la búsqueda de información acerca de las implicaciones tributarias para las empresas que prestan los servicios y las personas que los realizan.

Ofrece consejos y recursos acerca de una variedad de temas que incluyen:

  • requisitos de presentación
  • pagos trimestrales de impuestos estimados
  • pagos de impuestos sobre el trabajo por cuenta propia
  • pago de FICA, Medicare y Medicare Adicional
  • deducción de ingresos calificados de negocios
  • reglas para alquileres de viviendas

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente : IRS                      

EVERY BUSINESS OWNER NEEDS AN EXIT STRATEGY

Posted by Admin Posted on Jan 15 2020

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As a business owner, you have to keep your eye on your company’s income and expenses and applicable tax breaks. But you also must look out for your own financial future. And that includes creating an exit strategy.

Buy-sell agreement

When a business has more than one owner, a buy-sell agreement can be a powerful tool. The agreement controls what happens to the business if a specified event occurs, such as an owner’s retirement, disability or death. A well-drafted agreement provides a ready market for the departing owner’s interest in the business and prescribes a method for setting a price for that interest. It also allows business continuity by preventing disagreements caused by new owners.

A key issue with any buy-sell agreement is providing the buyer(s) with a means of funding the purchase. Life or disability insurance often helps fulfill this need and can give rise to several tax issues and opportunities. One of the biggest advantages of life insurance as a funding method is that proceeds generally are excluded from the beneficiary’s taxable income, provided certain conditions are met.

Succession within the family

You can pass your business on to family members by giving them interests, selling them interests or doing some of each. Be sure to consider your income needs, the tax consequences, and how family members will feel about your choice.

Under the annual gift tax exclusion, you can currently gift up to $15,000 of ownership interests without using up any of your lifetime gift and estate tax exemption. Valuation discounts may further reduce the taxable value of the gift.

With the gift and estate tax exemption approximately doubled through 2025 ($11.4 million for 2019), gift and estate taxes may be less of a concern for some business owners. But others may want to make substantial transfers now to take maximum advantage of the high exemption. What’s right for you will depend on the value of your business and your timeline for transferring ownership.

Get started now

To be successful, your exit strategy will require planning well in advance of retirement or any other reason for ownership transition. Please contact us for 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                   

Depósito directo es la manera más rápida de recibir un reembolso de impuestos federales

Posted by Admin Posted on Jan 15 2020

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WASHINGTON — Dado que la temporada de impuestos comenzará pronto, el Servicio de Impuestos Internos les recuerda a los contribuyentes que elegir que se deposite su reembolso de impuestos directamente en su cuenta corriente o de ahorros es la manera más rápida de obtener su dinero.

Es simple y seguro. Los contribuyentes también pueden obtener su reembolso depositado en una, dos o tres cuentas diferentes, si así lo desean.

Ocho de cada 10 contribuyentes obtienen sus reembolsos mediante depósito directo (en inglés). El IRS usa el mismo sistema de transferencia electrónica para depositar reembolsos de impuestos que usan otras agencias federales para depositar casi el 98% de todos los beneficios de Seguro Social y Asuntos de Veteranos en millones de cuentas.

El depósito directo también evita la posibilidad de que un cheque de reembolso se pierda o sea robado o devuelto al IRS por no poder entregarse. Y ahorra dinero a los contribuyentes. Cuesta más de $1 por cada reembolso en papel emitido, pero solo un centavo por cada depósito directo.

Fácil de usar

Un contribuyente simplemente selecciona el depósito directo como método de reembolso cuando usa un software de impuestos o trabaja con un preparador de impuestos, y luego ingresa su número de cuenta y ruta. Es importante verificar las entradas para evitar errores.

El IRS les recuerda a los contribuyentes que solo deben depositar los reembolsos directamente en las cuentas que están a su nombre, el nombre de su cónyuge o ambos si es una cuenta conjunta.

Reembolsos divididos

Al usar el depósito directo, un contribuyente puede dividir su reembolso en hasta tres cuentas financieras, que incluyen una cuenta de banco o una cuenta individual de jubilación (IRA). Parte del reembolso incluso se puede usar para comprar hasta $5,000 en bonos de ahorro de la Serie I de EE. UU.

Un contribuyente puede dividir su reembolso mediante el uso de software de impuestos o mediante el Formulario 8888 del IRS, Asignación de reembolso (incluidas las compras de bonos de ahorro), si presentan una declaración en papel. Algunas personas usan reembolsos divididos como una opción conveniente para administrar su dinero, enviando parte de su reembolso a una cuenta para uso inmediato y otra para ahorros.

No se pueden depositar más de tres reembolsos de impuestos electrónicos en una sola cuenta financiera o tarjeta de débito prepagada. Los contribuyentes que excedan el límite recibirán un aviso del IRS y se emitirá un reembolso en papel por los reembolsos que excedan ese límite.

E-file y depósito directo producen reembolsos más rápidos

El IRS también alienta a los contribuyentes a presentar electrónicamente. Si bien una persona puede elegir el depósito directo ya sea que presenten sus impuestos en papel o electrónicamente, un contribuyente que presenta electrónicamente normalmente verá su reembolso en menos de 21 días. Los contribuyentes pueden realizar un seguimiento de su reembolso a través de "¿Dónde está mi reembolso?" en IRS.gov o descargando la aplicación móvil IRS2Go.

"¿Dónde está mi reembolso?" se actualiza una vez al día, generalmente durante la noche, por lo que no hay razón para verificar más de una vez por día o llamar al IRS para obtener información acerca de un reembolso. Los contribuyentes pueden verificar "¿Dónde está mi reembolso?" dentro de las 24 horas posteriores a que el IRS haya recibido su declaración electrónica o cuatro semanas después de recibir una declaración por correo. "¿Dónde está mi reembolso?" tiene un rastreador que muestra el progreso a través de tres etapas: (1) Declaración recibida, (2) Reembolso aprobado y (3) Reembolso enviado.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS                     

DO YOU KNOW YOUR TAX BRACKET?

Posted by Admin Posted on Jan 15 2020

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Although the Tax Cuts and Jobs Act (TCJA) generally reduced individual tax rates through 2025, there’s no guarantee you’ll receive a refund or lower tax bill. Some taxpayers have actually seen their taxes go up because of reductions or eliminations of certain tax breaks. For this reason, it’s important to know your bracket.

Some single and head of household filers could be pushed into higher tax brackets more quickly than was the case pre-TCJA. For example, the beginning of the 32% bracket for singles for 2019 is $160,725, whereas it was $191,651 for 2017 (though the rate was 33% then). For heads of households, the beginning of this bracket has decreased even more significantly, to $160,700 for 2019 from $212,501 for 2017.

Married taxpayers, on the other hand, won’t be pushed into some middle brackets until much higher income levels through 2025. For example, the beginning of the 32% bracket for joint filers for 2019 is $321,450, whereas it was $233,351 for 2017. (Again, the rate was 33% then.)

As before the TCJA, the tax brackets are adjusted annually for inflation. Because there are so many variables under the law, it’s hard to say exactly how a specific taxpayer’s bracket might change from year to year. Contact us for help assessing what your tax rate likely will be for 2020 — and for help filing your 2019 tax 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: Thomson Reuters                 

IRS inicia temporada de presentación de impuestos 2020 para contribuyentes individuales el 27 de enero

Posted by Admin Posted on Jan 15 2020

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WASHINGTON — El Servicio de Impuestos Internos confirmó que la temporada de impuestos de la nación comenzará para los contribuyentes individuales el lunes, 27 de enero de 2020, cuando la agencia tributaria comenzará a aceptar y procesar las declaraciones del año tributario 2019.

La fecha límite para presentar las declaraciones de impuestos de 2019 y pagar cualquier impuesto adeudado es el miércoles, 15 de abril de 2020. Se espera que se presenten más de 150 millones de declaraciones de impuestos individuales para el año tributario 2019, y la gran mayoría se presentará antes de la fecha límite tradicional de abril.

"A la vez que nos adentramos a la temporada de presentación, los contribuyentes deben saber que la fuerza laboral dedicada del IRS está lista para ayudar," dijo Chuck Rettig, Comisionado del IRS. "Alentamos a los contribuyentes a planificar y usar las herramientas e información disponibles en IRS.gov. El IRS y la comunidad tributaria de la nación están comprometidos a lograr otra temporada de presentación sin problemas."

El IRS fijó la fecha de apertura del 27 de enero para garantizar la seguridad y la preparación de los sistemas clave de procesamiento de impuestos y para abordar el impacto potencial de la legislación tributaria reciente en las declaraciones de impuestos de 2019.

Si bien los contribuyentes pueden preparar declaraciones a través del programa Free File del IRS, así como muchas compañías de software de impuestos y profesionales de impuestos antes de la fecha de inicio, el procesamiento de esas declaraciones comenzará después de que los sistemas del IRS abran más adelante este mes.

"El IRS alienta a todos a considerar la presentación electrónica y la elección del depósito directo," dijo Rettig. "Es rápido, preciso y la mejor manera de obtener su reembolso lo más rápido posible."

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.

Fuente: IRS        

IRS helps workers, businesses with new Gig Economy Tax Center

Posted by Admin Posted on Jan 15 2020

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WASHINGTON — The Internal Revenue Service this week launched a new Gig Economy Tax Center on IRS.gov to help people in this growing area meet their tax obligations through more streamlined information.

“The IRS developed this online center to help taxpayers in this emerging segment of the economy,” said IRS Commissioner Chuck Rettig. “Whether renting out a spare bedroom or providing car rides, we want people to understand the rules so they can stay compliant with their taxes and avoid surprises down the line.”

The gig economy is also known as the sharing, on-demand or access economy. It usually includes businesses that operate an app or website to connect people to provide services to customers. While there are many types of gig economy businesses, ride-sharing and home rentals are two of the most popular.

Educating gig economy workers about their tax obligations is vital because many don’t receive form W-2s, 1099s or other information returns for their work in the gig economy. However, income from these sources is generally taxable, regardless of whether workers receive information returns. This is true even if the work is fulltime, part-time or if the person is paid in cash. Workers may also be required to make quarterly estimated income tax payments, pay their share of Federal Insurance Contribution (FICA), Medicare and Additional Medicare taxes if they are employees and pay self-employment taxes if they are not considered to be employees.

The Gig Economy Tax Center streamlines various resources, making it easier for taxpayers to  find information about the tax implications for the companies that provide the services and the individuals who perform them.

It offers tips and resources on a variety of topics including:

  • filing requirements
  • making quarterly estimated income tax payments
  • paying self-employment taxes
  • paying FICA, Medicare and Additional Medicare
  • deductible business expenses
  • special rules for reporting vacation home rentals

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    

Adultos pueden transmitir estos consejos a adolescentes para enseñarles la seguridad en línea

Posted by Admin Posted on Jan 15 2020

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Los adultos enseñan a sus hijos a conducir, equilibrar una chequera y cocinar. También es una buena idea enseñar a los usuarios más jóvenes cómo explorar Internet con precaución.

Todos los usuarios de Internet deben tener en cuenta los riesgos que las personas pueden tomar cuando comparten dispositivos, compran en línea e interactúan en las redes sociales. Los adolescentes y los usuarios más jóvenes, como otros que tienen menos experiencia con la tecnología, a menudo se ponen en riesgo al dejar un rastro de información personal para que los estafadores y estafadores sigan.

Los contribuyentes pueden encontrar abrumadora la frase "seguridad en línea", pero no tiene por qué ser así. Incluso aquellos que no son expertos en tecnología, sin importar su edad, pueden mantenerse seguros en línea. Aquí hay algunos consejos que los adultos pueden transmitir a los niños en sus vías:

  • Recuerde que la seguridad es importante.
    Nadie debería revelar demasiada información acerca de sí mismos. Las personas pueden mantener los datos seguros proporcionando solo lo necesario. Esto reduce la exposición en línea a estafadores y delincuentes. Por ejemplo, los cumpleaños, las direcciones, la edad y especialmente los números de Seguro Social son algunas cosas que no deben compartirse libremente. De hecho, las personas no deben llevar rutinariamente una tarjeta de Seguro Social en su billetera o cartera.

     
  • Use software con firewall y protección antivirus.
    Las personas deben asegurarse de que el software de seguridad esté siempre activado y pueda actualizarse automáticamente. Deben cifrar los archivos confidenciales almacenados en las computadoras. Los archivos confidenciales incluyen cosas como archivos de impuestos, transcripciones escolares y solicitudes de ingreso a la universidad. Deben usar contraseñas seguras y únicas para cada cuenta. También deben asegurarse de que todos los miembros de la familia tengan protección integral para sus dispositivos ... particularmente en dispositivos compartidos.

     
  • Aprenda a reconocer y evitar estafas.
    Todos deberían estar atentos a las estafas. Los ladrones usan correos electrónicos de tipo phishing, llamadas telefónicas y mensajes de texto amenazantes para hacerse pasar por empleados del IRS u otras agencias legítimas del gobierno o la policía. Las personas deben recordar nunca hacer clic en enlaces o descargar archivos adjuntos de correos electrónicos desconocidos o sospechosos. Si alguien llama para pedir información personal, la gente debe recordar no dar esos detalles.

     
  • Proteger los datos personales.
    Los adultos deben aconsejar a los niños, adolescentes y otros usuarios más jóvenes que compren en tiendas de buena reputación en línea. Deben tratar la información personal como el efectivo; no dejarlo por ahí.

     
  • Conozca el riesgo de la conexión pública de wifi. La conexión a wifi en un centro comercial o cafetería es conveniente y, a menudo, gratuita, pero puede no ser segura. Los hackers y ciberdelincuentes pueden robar fácilmente información personal de estas redes. Use siempre una red privada virtual cuando se conecte a una red pública de wifi.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.                                    

Fuente: IRS                               

Get ready for taxes: Here’s what to know about the amount of a tax refund

Posted by Admin Posted on Dec 23 2019

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After filing their tax return, a taxpayer will know whether they are receiving a refund. Sometimes, however, a taxpayer's refund will be for a different amount than they expect.

Here are some reasons a taxpayer's refund might be less than they thought it would be:

  • Financial transactions happening late in the year can have an unexpected tax impact if a taxpayer's 2019 federal income tax withholding unexpectedly falls short of their tax liability for the year. Certain transactions can affect 2019 tax withholding and influence the taxpayer's anticipated refund next year. This includes things like:
    • Year-end and holiday bonuses.
    • Stock dividends.
    • Capital gain distributions from mutual funds and stocks.
    • Real estate or other property sold at a profit.

If this happens, taxpayers can still make a quarterly estimated tax payment directly to the IRS for tax year 2019. The deadline for making a payment for the fourth quarter of 2019 is Wednesday, January 15, 2020. Form 1040-ES includes a worksheet to help taxpayers figure the right amount of estimated taxes to pay.

  • A taxpayer's refund can be used to pay other debts a taxpayer owes. All or part of a refund can go to pay a taxpayer's:
    • Past-due federal tax.
    • State income tax.
    • State unemployment compensation debts.
    • Child and spousal support.
    • Other federal nontax debts, such as student loans.

A taxpayer receives a notice if their debt meets the criteria for an offset. The IRS issues any remaining refund in a check or direct deposit as the taxpayer originally requested on the 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         

Get ready for taxes: Here’s what to know about getting a tax refund

Posted by Admin Posted on Dec 23 2019

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Tax returns, like snowflakes and thumbprints are unique and individual. So too, is each taxpayer’s refund. This is something for taxpayers to remember next year when someone they know says or posts on social media about receiving a federal tax refund.

Even though the IRS issues most refunds in less than 21 days, it’s possible a taxpayer’s refund may take longer. Several factors can affect the timing of a taxpayer’s refund after the IRS receives their tax return. Here are a few things taxpayers should keep in mind if they are waiting on their refund but hear or see on social media that other taxpayers have already received theirs.

  • The IRS and its partners in the tax industry continue to strengthen security reviews. This helps protect against identity theft and refund fraud. This means some tax returns need additional review, taking longer to process them.
  • It can take longer for the IRS to process a tax return that has errors. Therefore, taxpayers should consider filing their return electronically. The e-file software walks the taxpayer through the steps of filling out the return and does all the math.
  • E-file software can also help make sure a tax return is complete. This is important because it can also take longer to process an incomplete return. The IRS contacts a taxpayer by mail when more info is needed to process the return.
  • By law, the IRS cannot issue refunds for people claiming the earned income tax credit or additional child tax credit before mid-February. The law requires the IRS to hold the entire refund. This includes the portion of the refund not associated with EITC or ACTC.
  • It can take banks or other financial institutions time to post the refund to the taxpayer’s account. It can take even longer for a taxpayer to receive their refund check by mail.

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  tatements, please give us a call at 305-274-5811.                                   

Source: IRS                  

Here’s how taxpayers can avoid the hooks of phishing scams

Posted by Admin Posted on Dec 23 2019

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Knowledge and awareness. Those two things can protect taxpayers and their family members from getting caught up in a phishing scam.

A phishing scam is often an unsolicited email or a website that looks like a legitimate site designed to trick users. The scams convince people into providing personal and financial information.  Scam emails can arrive to personal and work accounts on computers, smartphones and tablets. 

Phishing scams often use one or more of these tactics. The scammers:

  • Pose as a trusted bank, favorite retail store, government agency, or even a tax professional.
  • Tell the taxpayer there’s something wrong with their account.
  • Tell the recipient they’re in violation of a law.
  • Tell the taxpayer to open a link in email or download an attachment.
  • Send the taxpayer a familiar looking – but fake – website and ask them to log in to it.

Thieves do these to trick taxpayers into revealing account numbers and passwords. The thieves secretly download malicious software on to someone’s device to collect personal information. The criminal might also try to fool the recipient into sending money to the scammers.

It’s important to remember that the IRS never:

  • Calls to demand immediate payment using a specific payment method such as a prepaid debit card, iTunes gift card or wire transfer.
  • Asks a taxpayer to make a payment to a person or organization other than the U.S. Treasury.
  • Threatens to immediately bring in local police or other law-enforcement groups saying they can have the taxpayer arrested for not paying.
  • Demands taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

When in doubt, taxpayers can always check the status of their taxes by registering at IRS.gov. From there, taxpayers can check their account balance for the current tax year or any previous tax year with a balance due.

Taxpayers who receive an IRS-related or tax-themed phishing email should forward it to phishing@irs.gov. Taxpayers can also report scam letters and phone calls to phishing@irs.gov as well as the Treasury Inspector General for Tax Administration.

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   

Using strong password is a strong defense against identity thieves

Posted by Admin Posted on Dec 23 2019

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Two things taxpayers can do to prevent themselves from identity theft is to use strong passwords and keep those passwords secure.

While many people use fingerprint or facial recognition technology to protect their devices, sometimes it's still necessary to use a password. In recent years, cybersecurity experts' recommendations on what constitutes a strong password has changed. With that in mind, here are four tips for building a better password:

  • Use word phrases that are easy to remember rather than random letters, characters and numbers that cannot be easily recalled.
  • Use a minimum of eight characters; longer is better.
  • Use a combination of letters, numbers and symbols, i.e., XYZ, 567, !@#.
  • Avoid personal information or common passwords.

Writing strong passwords isn't the only way to keep data secure. Here are a few more tips for folks to remember. People should:

  • Change default and temporary passwords that come with accounts or devices.
  • Not reuse passwords. Rather use a completely different password for every account and device.
  • Give a password a total makeover when changing it. For example, simply changing Bgood!17 to Bgood!18 is not good enough.
  • Not use email addresses as usernames, if that's an option.
  • Store any password list in a secure location, such as a safe or locked file cabinet.
  • Not disclose passwords to anyone for any reason.
  • Use a password manager program to track passwords if you have numerous accounts.

Whenever it is an option for a password-protected account, users also should opt for a multi-factor authentication process. Many email providers, financial institutions and social media sites now offer customers two-factor authentication protections.

Two-factor authentication helps by adding an extra layer of protection. Often two-factor authentication means the returning user must first enter credentials like a username and password. Then they must do another step, such as entering a security code texted to a mobile phone.

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

Prepárese para los impuestos: lo que debe saber acerca del monto de un reembolso de impuestos

Posted by Admin Posted on Dec 23 2019

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Después de presentar su declaración de impuestos, un contribuyente sabe si recibirá un reembolso. A veces, sin embargo, el reembolso de un contribuyente será por una cantidad diferente de la que espera.

Estas son algunas de las razones por las que el reembolso de un contribuyente podría ser menor de lo esperado:

  • Las transacciones financieras que ocurren a finales de año pueden tener un impacto tributario inesperado si la retención del impuesto federal de 2019 de un contribuyente es menor que su responsabilidad tributaria para el año. Ciertas transacciones pueden afectar la retención de impuestos de 2019 y afectar el reembolso anticipado del contribuyente el próximo año. Esto incluye cosas como:
    • Bonos de fin de año y vacaciones.
    • Dividendos de acciones.
    • Distribuciones de ganancias de capital de fondos mutuos y acciones
    • Bienes raíces u otras propiedades vendidas con ganancias.

Si esto sucede, los contribuyentes todavía pueden hacer un pago de impuestos estimados trimestralmente directamente al IRS para el año tributario 2019. La fecha límite para realizar un pago para el cuarto trimestre de 2019 es el miércoles, 15 de enero de 2020. El Formulario 1040-ES (en inglés) incluye una hoja de trabajo útil para calcular la cantidad correcta que debe pagar.

  • El reembolso de un contribuyente se puede usar para pagar otras deudas que un contribuyente debe. Todo o parte de un reembolso puede ir para cubrir una deuda de un contribuyente:
    • Impuesto federal vencido.
    • Impuesto estatal.
    • Deudas estatales de compensación por desempleo.
    • Manutención infantil y manutención conyugal.
    • Otras deudas federales no tributarias, como préstamos estudiantiles.

Un contribuyente recibe un aviso si su deuda cumple con los criterios contra una cantidad adeudada. El IRS emite cualquier reembolso restante en un cheque o depósito directo como el contribuyente solicitó originalmente en la declaración.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.                                    

Fuente: IRS

YEAR-END TAX AND FINANCIAL TO-DO LIST FOR INDIVIDUALS

Posted by Admin Posted on Dec 23 2019

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With the dawn of 2020 on the near horizon, here’s a quick list of tax and financial to-dos you should address before 2019 ends:

Check your Flexible Spending Account (FSA) balance. If you have an FSA for health care expenses, you need to incur qualifying expenses by December 31 to use up these funds or you’ll potentially lose them. (Some plans allow you to carry over up to $500 to the following year or give you a 2½-month grace period to incur qualifying expenses.) Use expiring FSA funds to pay for eyeglasses, dental work or eligible drugs or health products.

Max out tax-advantaged savings. Reduce your 2019 income by contributing to traditional IRAs, employer-sponsored retirement plans or Health Savings Accounts to the extent you’re eligible. (Certain vehicles, including traditional and SEP IRAs, allow you to deduct contributions on your 2019 return if they’re made by April 15, 2020.)

Take required minimum distributions (RMDs). If you’ve reached age 70½, you generally must take RMDs from IRAs or qualified employer-sponsored retirement plans before the end of the year to avoid a 50% penalty. If you turned 70½ this year, you have until April 1, 2020, to take your first RMD. But keep in mind that, if you defer your first distribution, you’ll have to take two next year.

Consider a qualified charitable distribution (QCD). If you’re 70½ or older and charitably inclined, a QCD allows you to transfer up to $100,000 tax-free directly from your IRA to a qualified charity and to apply the amount toward your RMD. This is a big advantage if you wouldn’t otherwise qualify for a charitable deduction (because you don’t itemize, for example).

Use it or lose it. Make the most of annual limits that don’t carry over from year to year, even if doing so won’t provide an income tax deduction. For example, if gift and estate taxes are a concern, make annual exclusion gifts up to $15,000 per recipient. If you have a Coverdell Education Savings Account, contribute the maximum amount you’re allowed.

Contribute to a Section 529 plan. Sec. 529 prepaid tuition or college savings plans aren’t subject to federal annual contribution limits and don’t provide a federal income tax deduction. But contributions may entitle you to a state income tax deduction (depending on your state and plan).

Review withholding. The IRS cautions that people with more complex tax situations face the possibility of having their income taxes underwithheld because of changes under the Tax Cuts and Jobs Act. Use its withholding estimator (available at https://www.irs.gov/individuals/tax-withholding-estimator) to review your situation.

If it looks like you could face underpayment penalties, increase withholding from your or your spouse’s wages for the remainder of the year. (Withholding, unlike estimated tax payments, is treated as if it were paid evenly over the year.)

For assistance with these and other year-end planning ideas, please contact us.

 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 

Mayoría de jubilados tienen hasta la fecha límite del 31 de diciembre para tomar distribuciones mínimas requeridas

Posted by Admin Posted on Dec 23 2019

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WASHINGTON — El Servicio de Impuestos Internos les recuerda a los jubilados nacidos antes del 1ro de julio de 1949 que generalmente deben tomar distribuciones de sus planes de jubilación antes del 31 de diciembre.

Los pagos, llamados distribuciones mínimas requeridas (RMD, por sus siglas en inglés), normalmente se realizan a finales de año. Los que cumplieron 70½ años en 2019 pueden esperar hasta el 1ro de abril de 2020 para tomar sus primeras RMD.

La fecha límite especial del 1ro de abril solo se aplica a la RMD para el primer año. Para todos los años subsiguientes, la RMD debe realizarse antes del 31 de diciembre. Por ejemplo, un contribuyente que tenga 70½ años en 2018 y reciba la primera RMD el 1ro de abril de 2019, debe recibir una segunda RMD antes del 31 de diciembre de 2019.

Las reglas de distribución requeridas se aplican a:

  • Propietarios de acuerdos individuales de jubilación tradicionales (IRA)
  • Propietarios de IRA tradicionales de Pensión Simplificada de Empleados (SEP)
  • Propietarios de IRA de planes de incentivos de ahorro para empleados (SIMPLE)
  • Participantes en varios planes de jubilación en el lugar de trabajo, incluidos los planes 401(k), 40 (b) y 457(b)

Las cuentas IRA Roth no requieren distribuciones mientras el propietario original está vivo.

Un administrador de IRA, o administrador del plan, debe informar el monto de la RMD al propietario de la IRA. Alternativamente, un administrador de IRA puede ofrecer calcular el monto de la RMD para el propietario.

Un propietario de IRA, o fideicomisario, debe calcular el RMD por separado para cada IRA que posea. Sin embargo, pueden optar por retirar el monto total de una o más de las cuentas IRA. En contraste, las RMD requeridas de los planes de jubilación en el lugar de trabajo deben tomarse por separado de cada cuenta.

El RMD se basa en la esperanza de vida del contribuyente y el saldo de su cuenta.

Para la mayoría de los contribuyentes, la esperanza de vida usada para calcular la RMD se basa en la Tabla III (Tabla Uniforme de Vida) en la Publicación 590-B, Distribuciones de IRA (en inglés). Por ejemplo, muestra que para un contribuyente que cumplió 72 años en 2019, la distribución requerida se basa en una esperanza de vida de 25.6 años. La Tabla II se aplica a un contribuyente cuyo cónyuge es más de 10 años menor y es el único beneficiario del contribuyente.

El administrador informa el valor de la cuenta de fin de año al propietario de la IRA en el encasillado 5 del Formulario 5498, Información de contribución de la IRA (en inglés).

Las personas pueden usar hojas de trabajo en línea (en inglés) en IRS.gov para calcular la RMD. Las hojas de trabajo también se pueden encontrar en los Apéndices de la Publicación 590-B (en inglés).

A menudo, un administrador usará el encasillado 12b del Formulario 5498, para informar la RMD al destinatario. En ese caso, un destinatario puede encontrar su RMD de 2019 en el Formulario 5498 de 2018. El Formulario 5498 de 2018 normalmente se emite al propietario durante enero de 2019.

Las reglas de RMD son obligatorias para todos los propietarios de IRA tradicionales, SEP y SIMPLE y para los participantes en planes de jubilación en el lugar de trabajo. Sin embargo, algunas personas en planes de trabajo pueden esperar más tiempo para recibir sus RMD. Si su plan lo permite, los empleados actuales pueden esperar hasta el 1ro de abril del año posterior a la jubilación para comenzar a tomar RMD, independientemente de su edad. Sin embargo, puede haber consecuencias tributarias al hacerlo. Consulte el Impuesto sobre acumulaciones en exceso en la Publicación 575, Ingreso de pensiones y anualidades (en inglés).

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.                                   

Fuente: IRS                    

PUMP THE BRAKES BEFORE DONATING THAT VEHICLE TO CHARITY

Posted by Admin Posted on Dec 23 2019

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Many people might consider donating their vehicles to charity at year end to start the new year. Why not get a fresh ride and a tax deduction, eh? Pump the brakes — this strategy doesn’t always work out as intended.

Donating an old car to a qualified charity may seem like a hassle-free way to dispose of an unneeded vehicle, satisfy your philanthropic desires and enjoy a tax deduction (provided you itemize). But in most cases, it’s not the most tax-efficient strategy. Generally, your deduction is limited to the actual price the charity receives when it sells the car.

You can deduct the vehicle’s fair market value (FMV) only if the charity 1) uses the vehicle for a significant charitable purpose, such as delivering meals to homebound seniors, 2) makes material improvements to the vehicle that go beyond cleaning and painting, or 3) disposes of the vehicle for less than FMV for a charitable purpose, such as selling it at a below-market price to a needy person.

If you decide to donate a car, be sure to comply with IRS substantiation and acknowledgment requirements. And watch out for disreputable car donation organizations that distribute only a fraction of what they take in to charity and, in some cases, aren’t even eligible to receive charitable gifts. We can help you double-check the idea before going through with it.

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

Uso de una contraseña fuerte es una gran defensa contra ladrones de identidad

Posted by Admin Posted on Dec 23 2019

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Dos cosas que los contribuyentes pueden hacer para evitar el robo de identidad es usar contraseñas fuertes y mantener esas contraseñas seguras.

Mientras que muchas personas usan la tecnología de reconocimiento facial o de huellas digitales para proteger sus dispositivos, a veces todavía es necesario usar una contraseña. En los últimos años, las recomendaciones de expertos en seguridad cibernética acerca de lo que constituye una contraseña fuerte han cambiado. Con esto en mente, aquí hay cuatro consejos para construir una mejor contraseña:

  • Use frases de palabras que sean fáciles de recordar en lugar de letras, caracteres y números que no se pueden recuperar fácilmente.
  • Use un mínimo de ocho caracteres; mientras más larga mejor.
  • Use una combinación de letras, números y símbolos; algo como XYZ,567,!@#
  • Evite la información personal o contraseñas comunes.

Tener contraseñas fuertes no es la única manera de mantener los datos seguros. Aquí hay algunos consejos adicionales que la gente debe recordar. Las personas Deben:

  • Cambiar las contraseñas predeterminadas y temporales que vienen con cuentas o dispositivos.
  • No reusar contraseñas. En su lugar, use una contraseña completamente diferente para cada cuenta y dispositivo.
  • Dele a una contraseña un cambio de imagen total al cambiarla. Por ejemplo, simplemente cambiar Bgood!17 a Bgood!18 no es suficiente.
  • No use direcciones de correo electrónico como nombres de usuario, si es una opción.
  • Almacenar cualquier lista de contraseñas en una ubicación segura, como un archivo seguro con candado.
  • No divulgar contraseñas a nadie por ningún motivo.
  • Use un programa de administrador de contraseñas para rastrear contraseñas si tiene muchas cuentas.

Siempre que sea una opción para una cuenta protegida por contraseña, los usuarios también deben optar por un proceso de autenticación multifactor. Use la autenticación de dos factores siempre que sea posible. Muchos proveedores de correo electrónico y sitios de redes sociales ahora ofrecen esta función a los clientes de protecciones de autenticación de dos factores.

La autenticación de dos factores ayuda al agregar una capa adicional de protección. A menudo, la autenticación de dos factores significa que el usuario que regresa debe escribir primero credenciales como un nombre de usuario y una contraseña. A continuación, deben realizar otro paso, como introducir un código de seguridad recibido en un teléfono móvil.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.               

Fuente: IRS            

Jan. 31 filing deadline remains for employer wage statements, independent contractor forms

Posted by Admin Posted on Dec 23 2019

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WASHINGTON — The Internal Revenue Service reminds employers and other businesses that wage statements and independent contractor forms still have a Jan. 31 filing deadline.

Before the Protecting Americans from Tax Hikes (PATH) Act, employers generally had a longer period of time to file these forms. But the 2015 law made a permanent requirement for employers to file their copies of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by Jan. 31.

Certain Forms 1099-MISC, Miscellaneous Income, filed with the IRS to report non-employee compensation to independent contractors are also due at this time. Such payments are reported in box 7 of this form.

The early filing date means that the IRS can more easily detect refund fraud by verifying income that individuals report on their tax returns. Employers can avoid penalties by filing the forms on time and without errors. The IRS recommends e-file as the quickest, most accurate and convenient way to file these forms.

Get a jump on the due date

Employers should verify employees’ information. This includes names, addresses, and Social Security or individual taxpayer identification numbers. They should also ensure their company’s account information is current and active with the Social Security Administration before January.  If paper Forms W-2 are needed, they should be ordered early.

Automatic extensions of time to file Forms W-2 are not available. The IRS will only grant extensions for very specific reasons. Details can be found on the instructions for Form 8809, Application for Time to File Information Returns.

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 

Good recordkeeping is just good business

Posted by Admin Posted on Nov 26 2019

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Recordkeeping is an important part of running a small business. In fact, keeping good records helps business owners make sure their business stays successful.

Here are some things small business owners should remember about recordkeeping:

  • Good records will help business owners:
    • Monitor the progress of their business
    • Prepare financial statements
    • Identify income sources
    • Keep track of expenses
    • Prepare tax returns and support items reported on tax returns
  • Small business owners may choose any recordkeeping system that fits their business. They should choose one that clearly shows income and expenses. Except in a few cases, the law does not require special kinds of records. 
  • How long an owner should keep a document depends on several factors. These factors include the action, expense and event recorded in the document. The IRS generally suggests taxpayers keep records for three years.
  • A good recordkeeping system includes a summary of all business transactions. Businesses usually record these transactions in books called journals and ledgers, which business owners can buy at an office supply store, or keep them electronically. All requirements that apply to hard copy books and records also apply to electronic business records.
  • The responsibility to validate information on tax returns is known as the burden of proof. Small business owners must be able to prove expenses to deduct them.
  • Business owners should keep all records of employment taxes for at least four years.
  • Businesses that keep paper records should keep them in a secure location, preferably under lock and key, such as a desk drawer or a safe.
  • Businesses that keep records electronically on a computer should always have an electronic back-up, in case the hard drive crashes.

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                     

Nuevamente es tiempo de renovar ITINs...aquí hay algunas cosas para recordar

Posted by Admin Posted on Nov 26 2019

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Los contribuyentes con Números de Identificación Personal del Contribuyente (ITIN, por sus siglas en inglés) deben averiguar si su número expira este año. Si es así, deben renovarlo ahora para evitar retrasos con su reembolso al presentar sus impuestos el próximo año.

Un ITIN es un número de identificación tributario usado por los contribuyentes que no califican para un número de seguro social. Esto es lo que estos contribuyentes necesitan saber acerca de cuáles números expiran y cómo renovarlos.

¿Qué números expiran a finales de este año?

Cualquier ITIN con dígitos medios 83, 84, 85, 86 u 87.

Cualquier ITIN que no se hayan usado en una declaración de impuestos en los últimos tres años.

¿Qué hacer con los números que vencieron en los últimos años?

También se pueden renovar los ITINs con dígitos medios 70 a 82 que vencieron en 2016, 2017 o 2018.

¿Cómo alguien renueva su número?

Los contribuyentes con ITINs que expiran necesitan completar la solicitud de renovación, Formulario W-7, Solicitud de Número de Identificación Individual del Contribuyente del IRS. Deben incluir todos los documentos requeridos de identidad y residencia. Si no lo hacen, se retrasará el procesamiento hasta que el IRS reciba estos documentos.

¿Cuándo alguien debe presentar su solicitud de renovación?

Lo antes posible. Con cerca de dos millones de hogares de contribuyentes afectados, la solicitud ahora ayudará a evitar las prisas.

¿Cuáles son algunos consejos para evitar errores comunes que se hacen al enviar su renovación?

  • Indicar el motivo de la solicitud de un ITIN en el Formulario W-7.
  • Enviar por correo los documentos correctos de identificación. Los contribuyentes que envíen sus solicitudes de renovación de ITIN deben incluir documentos de identificación originales o copias certificadas por la agencia emisora y cualquier otro documento adjunto requerido.
  • Incluir toda la documentación de apoyo, como la residencia en los EE. UU. o documentación oficial para apoyar los cambios de nombre.
  • Completar la nueva aplicación W-7.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.                                   

Fuente: IRS                      

Some taxpayers might need to amend a tax return…here’s what they should know

Posted by Admin Posted on Nov 26 2019

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Taxpayers may discover an error after filing their tax return. They shouldn’t panic, they just need to correct it by filing an amended tax return.

Here are some common reasons to file an amended return:

  • Using the wrong filing status
  • Entering income incorrectly
  • Not claiming credits for which they’re eligible
  • Claiming deductions incorrectly

The IRS may correct math or clerical errors on a return and may accept returns without certain required forms or schedules. In these instances, there's no need for taxpayers to amend the return.

Taxpayers who do need to amend their tax return might have questions about how to do so. Here are some things they should know. The taxpayer should:

  • Complete paper Form 1040-X, Amended U.S. Individual Income Tax Return. Taxpayers must file an amended return on paper even if they filed the original return electronically.
  • Mail the Form 1040-X to the IRS address listed in the form’s instructions (PDF) under Where to File. Taxpayers filing Form 1040-X in response to an IRS notice should mail it to the IRS address indicated on the notice.
  • Attach copies of any forms or schedules affected by the change.
  • File a separate Form 1040-X for each tax year. Mail each tax year in a separate envelope and enter the year of the original return being amended at the top of Form 1040-X.
  • Wait – if expecting a refund – for the original tax return to be processed before filing an amended return.
  • Pay additional tax owed as soon as possible to limit interest and penalty charges.
  • File Form 1040-X to claim a refund within three years from the date they timely filed their original tax return or within two years from the date the person pays the tax – usually April 15 – whichever is later.
  • Track the status of an amended return three weeks after mailing using Where’s My Amended Return? It can take up to 16 weeks for the IRS to process an amended tax 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        

Contribuyentes pueden tomar pasos ahora para prepararse para presentar sus impuestos en 2020

Posted by Admin Posted on Nov 26 2019

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Hay pasos que las personas pueden tomar ahora para asegurarse de que su experiencia de presentación de impuestos transcurra sin problemas el próximo año. Estas son algunas otras cosas que la gente puede hacer ahora:

Revise su retención y realice cualquier ajuste pronto

Ya que típicamente a los empleados sólo les quedan una o dos fechas de pago este año, es especialmente importante revisar su retención pronto. Es aún más importante para aquellos que:

  • Recibieron un reembolso menor de lo esperado después de presentar sus impuestos de 2018 este año.
  • Adeudaron una factura de impuestos inesperada el año pasado.
  • Experimentaron cambios personales o financieros que podrían cambiar su responsabilidad tributaria.

Algunos pueden incluso recibir una cuenta inesperada de impuestos cuando presenten su declaración de impuestos de 2019 el próximo año. Para evitar este tipo de sorpresas, los contribuyentes deben usar el Estimador de Retención de Impuestos para realizar una revisión de su cheque de pago o de ingresos de pensión. Hacer esto les ayuda a decidir si necesitan ajustar sus retenciones o hacer pagos de impuestos estimados o adicionales ahora.

Reunir documentos

Todos deberían tener un sistema de mantenimiento de archivos. Ya sea electrónico o en papel, deben usar un sistema para mantener la información importante en un solo lugar. Tener todos los documentos necesarios antes de preparar su declaración les ayuda a presentar una declaración de impuestos completa y precisa. Esto incluye:

  • Declaración de impuestos de 2018
  • Formularios W-2 de los empleadores
  • Formularios 1099 de bancos y otros pagadores.
  • Formularios 1095-A del Mercado para aquellos que reclaman el Crédito Tributario de Prima.

Confirmar dirección postal y de correo electrónico

Para asegurarse de que estos formularios lleguen al contribuyente a tiempo, las personas deben confirmar ahora que cada empleador, banco y otro pagador tiene la dirección postal o dirección de correo electrónico actual del contribuyente. Por lo general, los formularios comienzan a llegar por correo o están disponibles en línea en enero.

Las personas deben guardar copias de las declaraciones de impuestos y todos los documentos justificativos durante al menos tres años. Además, los contribuyentes que usan un producto de software por primera vez pueden necesitar el monto de ingresos brutos ajustado de su declaración de 2018 para validar su declaración de 2019 presentada electrónicamente.

Elija la presentación electrónica y el depósito directo para un reembolso más rápido

Los errores retrasan los reembolsos. La manera más fácil de evitar los errores y una demora de su reembolso es con la presentación electrónica. El uso de software de preparación de impuestos es la mejor manera de presentar una declaración de impuestos completa y precisa. El software de preparación de impuestos guía a los contribuyentes a través del proceso y hace todas las matemáticas. De hecho, los contribuyentes pueden comenzar a buscar sus opciones de presentación ahora.

Otra forma de acelerar las cosas es usar el depósito directo. Combinando el depósito directo con la presentación electrónica es la forma más rápida para que un contribuyente obtenga su reembolso. Con depósito directo, un reembolso va directamente a la cuenta bancaria de un contribuyente. No tienen que preocuparse por un cheque de reembolso perdido, robado o no entregado.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.                             

Fuente: IRS         

Four common tax errors that can be costly for small businesses

Posted by Admin Posted on Nov 26 2019

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A small business owner often wears many different hats. They might have to wear their boss hat one day, and the employee hat the next. When tax season comes around, it might be their tax hat.

They may think of doing their taxes as just another item to quickly cross off their to-do list. However, this approach could leave taxpayers open to mistakes when filing and paying taxes.

Accidentally failing to comply with tax laws, violating tax codes, or filling out forms incorrectly can leave taxpayers and their businesses open to possible penalties. Using IRS Free File or a certified public accountant is the easiest ways to avoid these kinds of errors.

Being aware of common mistakes can also help tame the stress of tax time. Here are a few mistakes small business owners should avoid:

Underpaying estimated taxes
Business owners should generally make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed. If they don’t pay enough tax through withholding and estimated tax payments, they may be charged a penalty.

Depositing employment taxes
Business owners with employees are expected to deposit taxes they withhold, plus the employer’s share of those taxes, through electronic fund transfers.  If those taxes are not deposited correctly and on time, the business owner may be charged a penalty.

Filing late
Just like individual returns, business tax returns must be filed in a timely manner. To avoid late filing penalties, taxpayers should be aware of all tax requirements for their type of business the filing deadlines.

Not separating business and personal expenses 
It can be tempting to use one credit card for all expenses especially if the business is a sole proprietorship. Doing so can make it very hard to tell legitimate business expenses from personal ones. This could cause errors when claiming deductions and become a problem if the taxpayer or their business is ever audited.       

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       

Cuatro errores tributarios comunes que pueden ser costosos para pequeños negocios

Posted by Admin Posted on Nov 26 2019

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Frecuentemente, el dueño de un pequeño negocio realiza muchas funciones. Podría tener que ser jefe algún día, y empleado al siguiente. Cuando llega la temporada de impuestos, podrían realizar funciones de impuestos.

Pueden pensar en hacer sus impuestos (en inglés) como otra tarea más para borrarla rápidamente de su lista de tareas pendientes. Sin embargo, este enfoque podría causar que los contribuyentes cometan errores al presentar y pagar sus impuestos.

El incumplimiento accidental de las leyes tributarias, la violación de los códigos tributarios o llenar los formularios incorrectamente conlleva a los contribuyentes y sus negocios a posibles multas. Usar Free File del IRS o un contador público certificado es la manera más fácil de evitar este tipo de errores.

Ser consciente de los errores comunes también puede ayudar a controlar el estrés de la temporada de impuestos. Estos son algunos errores que los propietarios de pequeños negocios deben evitar:

Pago incompleto de impuestos estimados

Los propietarios de negocios generalmente deben hacer pagos de impuestos estimados si esperan adeudar impuestos de $1,000 o más cuando presenten su declaración. Si no pagan suficientes impuestos a través de la retención y los pagos de impuestos estimados, se harán acreedores de multas.

Depósito de impuestos sobre el empleo

Se espera que los propietarios de negocios con empleados depositen los impuestos que retienen, más la parte del empleador de esos impuestos, a través de transferencias electrónicas de fondos. Si esos impuestos no se depositan correctamente y a tiempo, se le puede cobrar una multa al propietario del negocio.

Presentación tardía

Al igual que las declaraciones individuales, las declaraciones de impuestos de negocios deben presentarse a tiempo. Para evitar multas por presentación tardía, los contribuyentes deben ser conscientes de todos los requisitos tributarios y los plazos de presentación para su tipo de negocio.

No separar gastos empresariales y personales

Puede ser tentador usar una tarjeta de crédito para todos los gastos, especialmente si el negocio es una propiedad única. Hacer esto puede causar dificultades para distinguir los gastos comerciales legítimos de los personales. También, esto podría causar errores al reclamar deducciones y convertirse en un problema en caso, que el contribuyente o su negocio sea auditado.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de los Estados Unidos de las transacciones de bienes inmuebles o los estados financieros, llámenos al 305-274-5811.                                   

Fuente: IRS                 

Get Ready for Taxes: Important things to know about tax credits

Posted by Admin Posted on Nov 11 2019

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WASHINGTON – With the tax filing season quickly approaching, the Internal Revenue Service recommends taxpayers take time now to determine if they are eligible for important tax credits.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a refundable federal income tax credit for working people with low to moderate incomes who meet certain eligibility requirements. Because it’s a refundable credit, those who qualify and claim EITC pay less federal tax, pay no tax or may even get a tax refund. EITC can mean a credit of up to $6,557 for working families with three or more qualifying children. Workers without a qualifying child may be eligible for a credit up to $529.

To get the credit, people must have earned income and file a federal tax return — even if they don’t owe any tax or aren’t otherwise required to file.

Taxpayers can use the EITC Assistant to find out if they are eligible for EITC, determine if their child or children meet the tests for a qualifying child and estimate the amount of their credit.

Child Tax Credit

Taxpayers can claim the Child Tax Credit if they have a qualifying child under the age of 17 and meet other qualifications. The maximum amount per qualifying child is $2,000. Up to $1,400 of that amount can be refundable for each qualifying child. So, like the EITC, the Child Tax Credit can give a taxpayer a refund even if they owe no tax.

The qualifying child must have a valid Social Security number issued before the due date of the tax return, including extensions. For tax year 2019, this means April 15, 2020, or if a taxpayer gets a tax-filing extension, Oct. 15, 2020.

The amount of the Child Tax Credit begins to reduce or phase out at $200,000 of modified adjusted gross income, or $400,000 for married couples filing jointly.

Credit for Other Dependents

This credit is available to taxpayers with dependents for whom they cannot claim the Child Tax Credit. These include dependent children who are age 17 or older at the end of 2019 or parents or other qualifying individuals supported by the taxpayer.

Publication 972, Child Tax Credit, available now on IRS.gov, has further details and will soon be updated for tax year 2019.

Education Credits

Two credits can help taxpayers paying higher education costs for themselves, a spouse or dependent. The American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) are claimed on Form 8863, Education Credits. The AOTC is partly refundable.

To get either credit, the taxpayer or student usually must receive Form 1098-T, Tuition Statement, from the school attended. Some exceptions apply. See the instructions to Form 8863 for details.

Interactive Tax Assistant

The IRS urges taxpayers to use the agency’s Interactive Tax Assistant (ITA) to help determine if they can claim any of these credits. The ITA also provides answers to general questions on filing status, claiming dependents, filing requirements and other topics.

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           

-Prepárese para los impuestos: planifique hoy para presentar su declaración de impuestos de 2019

Posted by Admin Posted on Nov 11 2019

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WASHINGTON — El Servicio de Impuestos Internos les exhortó a los contribuyentes que tomen medidas ahora para evitar sorpresas cuando presenten el próximo año y garantizar un procesamiento sin problemas de su declaración de impuestos de 2019.

Este es el primero de una serie de recordatorios para ayudar a los contribuyentes a prepararse para la próxima temporada de presentación de impuestos. Para esto, el IRS actualizó recientemente una página especial en su sitio web que describe los pasos que los contribuyentes pueden tomar ahora para prepararse para la temporada de presentación de impuestos de 2020.

Ajustar retención; realizar pagos de impuestos estimados o pagos adicionales de impuestos

El IRS alienta a todos a usar el Estimador de Retención de Impuestos para realizar una revisión rápida de su cheque de pago o una revisión de ingresos de su pensión. Esto es aún más importante para aquellos que recibieron un reembolso menor de lo esperado o que audedaron impuestos no anticipados el año pasado.

También es buena idea para aquellos que tuvieron un evento de vida significativo, como casarse, divorciarse, tener o adoptar un hijo, comprar una casa o comenzar estudios universitarios.

Si el Estimador de Retención recomienda un cambio, un contribuyente puede presentarle un nuevo Formulario W-4, Certificado de Exención de la Retención del Empleado, a su empleador No envie esta informacion al IRS. De igualk manera, los contribuyentes que reciben ingresos de pensión o anualidad, pueden usar los resultados del estimador para completar un Formulario W-4P, Certificado de retención para pagos de pensión o anualidad (en inglés), y entregárselo a quien le paga.

Los contribuyentes que reciben una cantidad sustancial de ingresos no salariales deben realizar pagos de impuestos estimados Estos ingresos incluyen el trabajo por cuenta propia, ingresos de inversiones, la porción tributaria de los beneficios del seguro social y en algunos casos, los ingresos por pensiones y anualidades Realizar pagos de impuestos estimados también puede ayudar a un asalariado a cubrir una necesidad inesperada de retención.

Los pagos de impuestos estimados se vencen trimestralmente. La fecha de vencimiento restante para los pagos estimados de 2019 es el 15 de enero de 2020. El Formulario 1040-ES, Impuesto Estimado para Individuos (en inglés) también tiene una hoja de trabajo para ayudarlo a calcular sus pagos estimados. Visite IRS.gov/pagos para explorar las opciones de pago.

Los trabajadores y retirados que también reciben ingresos por trabajo por cuenta propia, ingresos por economía compartida o pagos en forma de moneda virtual deben asegurarse de tomar esto en cuenta cuando usen el Estimador de Retención de Impuestos. Los pagos con moneda virtua (en inglés) por contratistas independientes y otros proveedores de servicios están sujetos a impuestos, y generalmente se aplican las reglas de impuestos de trabajo por cuenta propia. Normalmente, los que pagan deben emitir el Formulario 1099-MISC. Los salarios pagados a los empleados que usan moneda virtual son tributables para el empleado, sujetos a retención y deben ser informados por un empleador en un Formulario W-2.

Las personas con situaciones tributarias más complejas deben usar las instrucciones de la Publicación 505, Retención de Impuestos e Impuestos Estimados (en inglés). Esto incluye a los contribuyentes que adeudan un impuesto mínimo alternativo o ciertos otros impuestos, y personas con ganancias de capital a largo plazo o dividendos calificados.

Reúna documentos y organice archivos de impuestos

El IRS insta a todos los contribuyentes a desarrollar un sistema de mantenimiento de archivos, electrónico o en papel, que mantenga información importante en un solo lugar. Guarde copias de las declaraciones presentadas y los documentos de respaldo por al menos tres años. Agregue archivos a medida que se reciben. Tener a mano los documentos necesarios antes de comenzar a preparar su declaración ayuda a los contribuyentes a presentar una declaración de impuestos completa y precisa.

Los contribuyentes deben confirmar que cada empleador, banco u otro pagador tenga una dirección postal o correo electrónico actual. Por lo general, estos formularios comienzan a llegar por correo, o están disponibles en línea, en enero. Revíselos cuidadosamente y, si alguna de la información que se muestra es incorrecta, comuníquese con el pagador de inmediato para una corrección.

Para evitar demoras en los reembolsos, los contribuyentes deben evitar el uso de archivos incompletos y, en su lugar, esperar para presentar hasta que hayan reunido toda la documentación de ingresos de fin de año. Esto minimizará las posibilidades de que tengan que presentar una declaración enmendada más tarde, lo que es un trabajo adicional para los contribuyentes y puede demorar hasta 16 semanas en procesarse una vez que el IRS lo reciba.

Los contribuyentes que usan un producto de software por primera vez podrían necesitar el monto del ingreso bruto ajustado (AGI) que se muestra en la Línea 7 de su declaración de 2018 para presentar su declaración de impuestos de 2019 electrónicamemnte. Se debe consultar la declaración del año anterior o el enlace de ver su cuenta en IRS.gov. Obtenga más información acerca de la verificación de identidad y la firma electrónica de una declaración en Verifique su declaración de impuestos después de presentar electrónicamente.

Notifique al IRS (en inglés) los cambios de dirección y notifique a la Administración del Seguro Social de un cambio de nombre legal para evitar un retraso en el procesamiento de su declaración de impuestos.

Renueve los ITIN que caducan

Los contribuyentes con Números de Identificación de Contribuyente (ITIN) vencidos pueden renovar sus ITINs más rápidamente y evitar demoras en los reembolsos el próximo año al presentar su solicitud de renovación pronto.

Un ITIN es un número de identificación tributaria usado por los contribuyentes que no califican para obtener un número de Seguro Social. Cualquier ITIN con dígitos medios 83, 84, 85, 86 u 87 caducará a fines de este año. Además, cualquier ITIN que no usado en una declaración de impuestos en los últimos tres años caducará. Como recordatorio, los ITIN con dígitos medios 70 a 82 que expiraron en 2016, 2017 o 2018 también se pueden renovar.

El IRS insta a cualquier persona afectada a presentar una solicitud de renovación completa, el Formulario W-7, Solicitud de Número de Identificación Personal del Contribuyente del IRS, lo antes posible. Asegúrese de incluir todos los documentos de identificación y residencia requeridos. De lo contrario, se retrasará el procesamiento hasta que el IRS reciba estos documentos.

Una vez que se presenta un formulario completo, generalmente toma alrededor de siete semanas recibir una carta de asignación de ITIN del IRS. Pero puede tomar más tiempo, de nueve a 11 semanas, si un solicitante espera hasta la temporada de presentación para enviar este formulario o lo envía desde el extranjero. Los contribuyentes deben tomar medidas ahora para evitar demoras.

Los contribuyentes que no renueven un ITIN antes de presentar una declaración de impuestos el próximo año podrían enfrentar un reembolso diferido y podrían no ser elegibles para ciertos créditos tributarios. Con cerca de 2 millones de hogares de contribuyentes afectados, la solicitud ahora ayudará a evitar prisa, así como los retrasos en el reembolso y el procesamiento en 2020. Para obtener más información, visite la página de información de ITIN en IRS.gov.

Prepárese para presentar electrónicamente; use depósito directo para reembolsos

La presentación electrónica es fácil, segura y la manera más precisa de presentar impuestos. Hay una variedad de opciones de presentación electrónica gratuita para la mayoría de los contribuyentes, incluido el uso de Free File del IRS para los contribuyentes con ingresos menor de $66,000 o los formularios interactivos para los que ganan mas. Los contribuyentes que ganan $56,000 o menos puede obtener ayuda gratuita para la preparación de su declaracion de impuestos en un sitio de Ayuda Voluntaria a los Contribuyentes o de Asesoramiento Tributario para Personas de Edad Avanzada.

Combinar el depósito directo (en inglés) con la presentación electrónica es la manera más rápida para que un contribuyente obtenga su reembolso. Con el depósito directo, un reembolso va directamente a la cuenta bancaria del contribuyente. No tiene que preocuparse por un cheque de reembolso perdido, robado o no entregado. Este es el mismo sistema de transferencia electrónica que ahora se usa para depositar casi el 98 por ciento de todos los beneficios del Seguro Social y Asuntos de Veteranos. Casi cuatro de cada cinco reembolsos de impuestos federales se depositan directamente.

El depósito directo es fácil de usar. Los contribuyentes simplemente lo seleccionan como su método de reembolso a través del software de impuestos o informan a su preparador de impuestos que desean un depósito directo. Los contribuyentes pueden incluso usar el depósito directo si presentan una declaración en papel. Asegúrese de tener a mano la cuenta bancaria y los números de ruta cuando presente y verifique la información para evitar errores.

El depósito directo también ahorra dinero de los contribuyentes. A los contribuyentes les cuesta más de $1 por cada cheque de reembolso emitido, pero solo un centavo por cada depósito directo.

Por ley, el IRS no puede emitir reembolsos para quienes reclaman el Crédito Tributario por Ingreso del Trabajo (EITC) o el Crédito Tributario Adicional por Hijos (ACTC) antes de mediados de febrero. La ley exige que el IRS retenga el reembolso completo, incluso la parte no asociada con EITC o ACTC. Este cambio de ley, que entró en vigencia a principios de 2017, ayuda a garantizar que los contribuyentes reciban el reembolso que les corresponde al darle al IRS más tiempo para detectar y prevenir el fraude.

Como siempre, el IRS advierte a los contribuyentes que no confíen en obtener un reembolso en una fecha determinada, especialmente al realizar compras importantes o pagar facturas. Tenga en cuenta que algunas declaraciones pueden requerir una revisión adicional por una variedad de razones y pueden tomar más tiempo. Por ejemplo, el IRS, junto con sus socios en la industria tributaria del estado y de la nación, continúan fortaleciendo las revisiones de seguridad para ayudar a proteger contra el robo de identidad y el fraude de reembolso.

Comience con IRS.gov para obtener ayuda que incluye herramientas, opciones de presentación de impuestos, otros servicios y recursos. Los contribuyentes usan cada vez más IRS.gov como su primer recurso para asuntos tributarios. La información en otros idiomas además del inglés está disponible en la pestaña "Idioma" en IRS.gov. La página Permítanos ayudarle presenta enlaces que llevan a los usuarios a información y recursos acerca de una amplia gama de temas.

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

Fuente: IRS       

-Small business owners should find out if they can benefit from claiming this deduction

Posted by Admin Posted on Nov 11 2019

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The home office deduction can help small business owners save money on their taxes. Taxpayers can take this deduction when they file their taxes if they use a portion of their home exclusively, and on a regular basis, for any of the following:

  • As the taxpayer’s main place of business.
  • As a place of business where the taxpayer meets patients, clients or customers. The taxpayer must meet these people in the normal course of business.
  • If it is a separate structure that is not attached to the taxpayer’s home. The taxpayer must use this structure in connection with their business
  • A place where the taxpayer stores inventory or samples. This place must be the sole, fixed location of their business.
  • Under certain circumstances, the structure where the taxpayer provides day care services.

Deductible expenses for business use of a home include:

  • Real estate taxes
  • Mortgage interest
  • Rent
  • Casualty losses
  • Utilities
  • Insurance
  • Depreciation
  • Repairs and Maintenance

Certain expenses are limited to the net income of the business. These are known as allocable expenses. They include things such as utilities, insurance, and depreciation.  While allocable expenses cannot create a business loss, they can be carried forward to the next year. If the taxpayer carries them forward, the expenses are subject to the same limitation rules.

There are two options for figuring and claiming the home office deduction.

  • Regular method: This method requires dividing the above expenses of operating the home between personal and business use. Self-employed taxpayers file Form 1040, Schedule C, and compute this deduction on Form 8829.
  • Simplified method: The simplified method reduces the paperwork and recordkeeping for small businesses. The simplified method has a set rate that is capped at $1,500 per year, based on $5 a square foot for up to 300 square feet.

There are special rules for certain business owners:

  • Daycare providers complete a special worksheet, which is found in Publication 587.
  • Self-employed individuals use Form 1040, Schedule C, Line 30 to claim deduction.
  • Farmers claim the home office deduction on Schedule F, Line 32.

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    

401(k) contribution limit increases to $19,500 for 2020; catch-up limit rises to $6,500

Posted by Admin Posted on Nov 11 2019

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WASHINGTON — The Internal Revenue Service today announced that employees in 401(k) plans will be able to contribute up to $19,500 next year.

The IRS announced this and other changes in Notice 2019-59, posted today on IRS.gov. This guidance provides cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020.

Highlights of changes for 2020

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500.

The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500.

The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019.

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver’s Credit all increased for 2020.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2020:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $65,000 to $75,000, up from $64,000 to $74,000.
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $104,000 to $124,000, up from $103,000 to $123,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $196,000 and $206,000, up from $193,000 and $203,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is $124,000 to $139,000 for singles and heads of household, up from $122,000 to $137,000. For married couples filing jointly, the income phase-out range is $196,000 to $206,000, up from $193,000 to $203,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $65,000 for married couples filing jointly, up from $64,000; $48,750 for heads of household, up from $48,000; and $32,500 for singles and married individuals filing separately, up from $32,000.

Key limit remains unchanged

The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

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 provides tax inflation adjustments for tax year 2020

Posted by Admin Posted on Nov 11 2019

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WASHINGTON — The Internal Revenue Service today announced the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2019-44 provides details about these annual adjustments.

The tax law change covered in the revenue procedure was added by the Taxpayer First Act of 2019, which increased the failure to file penalty to $330 for returns due after the end of 2019. The new penalty will be adjusted for inflation beginning with tax year 2021.

The tax year 2020 adjustments generally are used on tax returns filed in 2021.
 
The tax items for tax year 2020 of greatest interest to most taxpayers include the following dollar amounts:

  • The standard deduction for married filing jointly rises to $24,800 for tax year 2020, up $400 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,400 in for 2020, up $200, and for heads of households, the standard deduction will be $18,650 for tax year 2020, up $300.
  • The personal exemption for tax year 2020 remains at 0, as it was for 2019, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act. 
  • Marginal Rates: For tax year 2019, the top tax rate remains 37% for individual single taxpayers with incomes greater than $518,400 ($622,050 for married couples filing jointly).
    The other rates are:
    35%, for incomes over $207,350 ($414,700 for married couples filing jointly);
    32% for incomes over $163,300 ($326,600 for married couples filing jointly);
    24% for incomes over $85,525 ($171,050 for married couples filing jointly);
    22% for incomes over $40,125 ($80,250 for married couples filing jointly);
    12% for incomes over $9,875 ($19,750 for married couples filing jointly).
    The lowest rate is 10% for incomes of single individuals with incomes of $9,875 or less ($19,750 for married couples filing jointly).
  • For 2020, as in 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
  • The Alternative Minimum Tax exemption amount for tax year 2020 is $72,900 and begins to phase out at $518,400 ($113,400 for married couples filing jointly for whom the exemption begins to phase out at $1,036,800).The 2019 exemption amount was $71,700 and began to phase out at $510,300 ($111,700, for married couples filing jointly for whom the exemption began to phase out at $1,020,600).
  • The tax year 2020 maximum Earned Income Credit amount is $6,660 for qualifying taxpayers who have three or more qualifying children, up from a total of $6,557 for tax year 2019. The revenue procedure contains a table providing maximum credit amounts for other categories, income thresholds and phase-outs.
  • For tax year 2020, the monthly limitation for the qualified transportation fringe benefit is $270, as is the monthly limitation for qualified parking, up from $265 for tax year 2019.
  • For the taxable years beginning in 2020, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements is $2,750, up $50 from the limit for 2019.
  • For tax year 2020, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,350, the same as for tax year 2019; but not more than $3,550, an increase of $50 from tax year 2019. For self-only coverage, the maximum out-of-pocket expense amount is $4,750, up $100 from 2019. For tax year 2020, participants with family coverage, the floor for the annual deductible is $4,750, up from $4,650 in 2019; however, the deductible cannot be more than $7,100, up $100 from the limit for tax year 2019. For family coverage, the out-of-pocket expense limit is $8,650 for tax year 2020, an increase of $100 from tax year 2019.
  • For tax year 2020, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $118,000, up from $116,000 for tax year 2019.
  • For tax year 2020, the foreign earned income exclusion is $107,600 up from $105,900 for tax year 2019.
  • Estates of decedents who die during 2020 have a basic exclusion amount of $11,580,000, up from a total of $11,400,000 for estates of decedents who died in 2019.
  • The annual exclusion for gifts is $15,000 for calendar year 2020, as it was for calendar year 2019.
  • The maximum credit allowed for adoptions for tax year 2020 is the amount of qualified adoption expenses up to $14,300, up from $14,080 for 2019.

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        

Dueños de pequeñas empresas deben averiguar si pueden beneficiarse al reclamar esta deducción

Posted by Admin Posted on Nov 11 2019

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La deducción por el uso comercial del hogar (en inglés) puede ayudar a los dueños de pequeñas empresas a ahorrar dinero en sus impuestos. Los contribuyentes pueden tomar esta deducción cuando presentan sus impuestos si usan una parte de su hogar exclusivamente, y de manera regular, para cualquiera de los siguientes:

  • Como el principal lugar de negocio del contribuyente
  • Como lugar de negocio donde el contribuyente se encuentra con pacientes, clientes o consumidores. El contribuyente debe encontrarse con estas personas en el curso normal del negocio.
  • Si se trata de una estructura separada que no está unida a la casa del contribuyente. El contribuyente debe usar esta estructura exclusivamente para su negocio.
  • Un lugar donde el contribuyente almacena inventario o muestras. Este lugar debe ser la única ubicación fija de su negocio.
  • Bajo ciertas circunstancias, la estructura donde el contribuyente presta servicios de guardería.

Los gastos deducibles para el uso comercial de una casa incluyen:

  • Impuestos de la propiedad
  • Intereses hipotecarios
  • Alquiler
  • Pérdidas fortuitas
  • Servicios de agua, electricidad, étc.
  • Seguros
  • Depreciación
  • Reparaciones y mantenimiento

Ciertos gastos se limitan a los ingresos netos de la empresa. Estos se conocen como gastos asignables. Incluyen cosas como servicios públicos, seguros y depreciación. Si bien los gastos asignables no pueden crear una pérdida de negocio, se pueden transferir al año siguiente. Si el contribuyente transfiere los gastos, estos están sujetos a los mismos límites de las reglas.

Hay dos opciones para calcular y reclamar la deducción de la oficina en el hogar.

  • Método regular: Este método requiere dividir los gastos anteriores de operar el hogar entre uso personal y comercial. Los contribuyentes independientes presentan el Formulario 1040, Anexo C (en inglés) y calculan esta deducción en el Formulario 8829 (en inglés).
  • Método simplificado: El método simplificado (en inglés) reduce el papeleo y el mantenimiento de archivos para los pequeñas negocios. El método simplificado tiene una tasa establecida que está limitada a $1,500 por año, a base de $5 por pie cuadrado para hasta 300 pies cuadrados.

Hay reglas especiales para ciertos dueños de negocios:

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

Fuente: IRS                              

IRS provides tax inflation adjustments for tax year 2020

Posted by Admin Posted on Nov 11 2019

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WASHINGTON — The Internal Revenue Service today announced the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2019-44 provides details about these annual adjustments.

The tax law change covered in the revenue procedure was added by the Taxpayer First Act of 2019, which increased the failure to file penalty to $330 for returns due after the end of 2019. The new penalty will be adjusted for inflation beginning with tax year 2021.

The tax year 2020 adjustments generally are used on tax returns filed in 2021.

The tax items for tax year 2020 of greatest interest to most taxpayers include the following dollar amounts:

  • The standard deduction for married filing jointly rises to $24,800 for tax year 2020, up $400 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,400 in for 2020, up $200, and for heads of households, the standard deduction will be $18,650 for tax year 2020, up $300.
  • The personal exemption for tax year 2020 remains at 0, as it was for 2019, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
  • Marginal Rates: For tax year 2020, the top tax rate
    remains 37% for individual single taxpayers with
    incomes greater than $518,400 ($622,050 for married
    couples filing jointly).
    The other rates are:
    35%, for incomes over $207,350
    ($414,700 for married couples
    filing jointly);
    32% for incomes over $163,300
    ($326,600 for married couples filing jointly);
    24% for incomes over $85,525 ($171,050 for married
    couples filing jointly);
    22% for incomes over $40,125 ($80,250 for married
    couples filing jointly);
    12% for incomes over $9,875
    ($19,750 for married couples filing jointly).
    The lowest rate is 10% for incomes of single individuals
    with incomes of $9,875 or less ($19,750 for married
    couples filing jointly).
  • For 2020, as in 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
  • The Alternative Minimum Tax exemption amount for tax year 2020 is $72,900 and begins to phase out at $518,400 ($113,400 for married couples filing jointly for whom the exemption begins to phase out at $1,036,800).The 2019 exemption amount was $71,700 and began to phase out at $510,300 ($111,700, for married couples filing jointly for whom the exemption began to phase out at $1,020,600).
  • The tax year 2020 maximum Earned Income Credit amount is $6,660 for qualifying taxpayers who have three or more qualifying children, up from a total of $6,557 for tax year 2019. The revenue procedure contains a table providing maximum credit amounts for other categories, income thresholds and phase-outs.
  • For tax year 2020, the monthly limitation for the qualified transportation fringe benefit is $270, as is the monthly limitation for qualified parking, up from $265 for tax year 2019.
  • For the taxable years beginning in 2020, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements is $2,750, up $50 from the limit for 2019.
  • For tax year 2020, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,350, the same as for tax year 2019; but not more than $3,550, an increase of $50 from tax year 2019. For self-only coverage, the maximum out-of-pocket expense amount is $4,750, up $100 from 2019. For tax year 2020, participants with family coverage, the floor for the annual deductible is $4,750, up from $4,650 in 2019; however, the deductible cannot be more than $7,100, up $100 from the limit for tax year 2019. For family coverage, the out-of-pocket expense limit is $8,650 for tax year 2020, an increase of $100 from tax year 2019.
  • For tax year 2020, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $118,000, up from $116,000 for tax year 2019.
  • For tax year 2020, the foreign earned income exclusion is $107,600 up from $105,900 for tax year 2019.
  • Estates of decedents who die during 2020 have a basic exclusion amount of $11,580,000, up from a total of $11,400,000 for estates of decedents who died in 2019.
  • The annual exclusion for gifts is $15,000 for calendar year 2020, as it was for calendar year 2019.
     
  • The maximum credit allowed for adoptions for tax year 2020 is the amount of qualified adoption expenses up to $14,300, up from $14,080 for 2019.

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 

Get Ready for Taxes: Get ready today to file 2019 federal income tax returns

Posted by Admin Posted on Nov 11 2019

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WASHINGTON – The Internal Revenue Service today urged taxpayers to act now to avoid a tax-time surprise and ensure smooth processing of their 2019 federal tax return.

This is the first in a series of reminders to help taxpayers get ready for the upcoming tax filing season.  To that end, a special page, newly updated and available on IRS.gov, outlines things taxpayers can do now to prepare for the 2020 tax season ahead.

Adjust withholding; Make estimated or additional tax payments

The IRS urges everyone to use the Tax Withholding Estimator to perform a  paycheck or pension income checkup. This is even more important for those who received a smaller refund than expected or owed an unexpected tax bill last year.

It’s also a good idea for anyone who had a key life event, such as getting married, getting divorced, having or adopting a child, retiring, buying a home or starting college.

If the Tax Withholding Estimator recommends a change, an employee can then submit a new Form W-4, Employee's Withholding Allowance Certificate, to their employer. Don’t send this form to the IRS.

Similarly, recipients of pension or annuity income can use the results from the estimator to complete a Form W-4P, Withholding Certificate for Pension or Annuity Payments, and give it to their payer.

Taxpayers who receive a substantial amount of non-wage income should make quarterly estimated tax payments. This can include self-employment income, investment income (including gain from the sale, exchange or other disposition of virtual currency), taxable Social Security benefits and in some instances, pension and annuity income. Making estimated tax payments can also help a wage-earner cover an unexpected withholding shortfall.

Estimated tax payments are due quarterly, with the last payment for 2019 due on Jan. 15, 2020. Form 1040-ES, Estimated Tax for Individuals, has a worksheet to help figure these payments. Payment options can be found at IRS.gov/payments.

Workers and retirees who receive self-employment income or income from the gig economy, including payments in the form of virtual currency, should make sure to take these amounts into account when they fill out the Tax Withholding Estimator. Payments received in virtual currency by independent contractors and other service providers are taxable, and self-employment tax rules generally apply. Normally, payers must issue Form 1099-MISC. Similarly, wages paid using virtual currency are taxable to the employee, subject to withholding, and must be reported by the employer on a Form W-2.

People with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes those who owe alternative minimum tax or various other taxes, and people with long-term capital gains or qualified dividends.

Gather documents and organize tax records

The IRS urges all taxpayers to develop a recordkeeping system − electronic or paper − that keeps important information in one place. Keep copies of filed tax returns and all supporting documents for at least three years. This includes year-end Forms W-2 from employers, Forms 1099 from banks and other payers, other income documents, records documenting all virtual currency transactions, and Forms 1095-A for those claiming the Premium Tax Credit. Add tax records to the files as they are received. Having complete and timely records can help any taxpayer file a complete and accurate return.

Taxpayers should confirm that each employer, bank or other payer has a current mailing address or email address. Typically, year-end forms start arriving by mail – or are available online – in January. Review them carefully and, if any of the information shown is inaccurate, contact the payer right away for a correction.

To avoid refund delays, be sure to gather all year-end income documents before filing a 2019 return. Filing too early, before receiving a key document, often means a taxpayer must file an amended return to report additional income or claim a refund. It can take up to 16 weeks to get an amended return refund.

Anyone using a software product for the first time may need the Adjusted Gross Income (AGI) amount shown on Line 7 of their 2018 return to file their 2019 return electronically. Consult the taxpayer’s copy of last year’s return, or alternatively, visit the View Your Tax Account link on IRS.gov. Learn more about verifying identity and electronically signing a return at Validating Your Electronically Filed Tax Return.

Notify the IRS of address changes and notify the Social Security Administration of a legal name change to avoid refund delays.

Renew expiring tax ID numbers

Taxpayers with expiring Individual Taxpayer Identification Numbers can get their ITINs renewed more quickly and avoid refund delays next year by submitting their renewal application soon.

An ITIN is a tax ID number used by any taxpayer who doesn't qualify to get a Social Security number. Any ITIN with middle digits 83, 84, 85, 86 or 87 will expire at the end of this year. In addition, any ITIN not used on a tax return in the past three years will expire. ITINs with middle digits 70 through 82 that expired in 2016, 2017 or 2018 can also be renewed.

The IRS urges anyone affected to file a complete renewal application, Form W-7, Application for IRS Individual Taxpayer Identification Number, as soon as possible. Be sure to include all required ID and residency documents. Failure to do so will delay processing until the IRS receives these documents.

Once a completed form is filed, it typically takes about seven weeks to receive an ITIN assignment letter from the IRS. But it can take longer — nine to 11 weeks — if an applicant waits until the peak of the filing season to submit this form or sends it from overseas.

Taxpayers who fail to renew an ITIN before filing a tax return next year could face a delayed refund and may be ineligible for certain tax credits. With nearly 2 million taxpayer households impacted, applying now will help avoid the rush as well as refund and processing delays in 2020. For more information, visit the ITIN information page on IRS.gov.

Be prepared to file electronically; Use Direct Deposit for refunds

Filing electronically is easy, safe and the most accurate way to file taxes. There are a variety of free electronic filing options for most taxpayers including using IRS Free File for taxpayers with income below $66,000, or Fillable Forms for taxpayers who earn more. Taxpayers who generally earn $56,000 or less can have their return prepared at a Volunteer Income Tax Assistance site. Tax Counseling for the Elderly sites offer free tax help for all taxpayers, particularly those who are 60 years of age and older.

Combining Direct Deposit with electronic filing is the fastest way to get a  refund. With Direct Deposit, a refund goes directly into the taxpayer’s bank account. No need to worry about a lost, stolen or undeliverable refund check. This is the same electronic transfer system used to deposit nearly 98% of all Social Security and Veterans Affairs benefits. Nearly four out of five federal tax refunds are deposited directly.

Direct Deposit is easy to use. Taxpayers select it as their refund method through tax software or let their tax preparer know they want direct deposit. Taxpayers can even choose Direct Deposit on a paper return. Be sure to have bank account and routing numbers handy and double check entries to avoid errors.

Direct Deposit also saves taxpayer dollars. It costs the nation’s taxpayers more than $1 for every paper refund check issued but only a dime for each Direct Deposit.

By law, the IRS cannot issue refunds for people claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund − even the portion not associated with EITC or ACTC. This law change, which took effect in 2017, helps ensure that taxpayers receive the refund they’re due by giving the IRS more time to detect and prevent fraud.

The IRS cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer. For example, the IRS, along with its partners in the tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud.

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               

2 million ITINs set to expire in 2019; to avoid refund delays apply soon

Posted by Admin Posted on Nov 07 2019

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WASHINGTON —Taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) can get their ITINs renewed more quickly and avoid refund delays next year by submitting their renewal   application soon, the Internal Revenue Service said today.

An ITIN is a tax ID number used by taxpayers who don't qualify to get a Social Security number. Any ITIN with middle digits 83, 84, 85, 86 or 87 will expire at the end of this year. In addition, any ITIN not used on a tax return in the past three years will expire. As a reminder, ITINs with middle digits 70 through 82 that expired in 2016, 2017 or 2018 can also be renewed.

The IRS urges anyone affected to file a complete renewal application, Form W-7, Application for IRS Individual Taxpayer Identification Number, as soon as possible. Be sure to include all required ID and residency documents. Failure to do so will delay processing until the IRS receives these documents. With nearly 2 million taxpayer households impacted, applying now will help avoid the rush as well as refund and processing delays in 2020.

If you have any questions regarding accounting, domestic taxation, international taxation, essential business accounting, 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 urges families, teens to make online safety a priority

Posted by Admin Posted on Nov 07 2019

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Agency focuses on cybersecurity awareness during National Work and Family Month

WASHINGTON – The Internal Revenue Service urged families and teens to stay vigilant in protecting personal information while connected to the internet. Although the IRS is making huge strides in fighting identity theft and thwarting fraudulent tax returns, help is needed.

During National Work and Family Month, IRS is asking parents and families to be mindful of all the pitfalls that can be found by sharing devices at home, shopping online and through navigating various social media platforms. Often, those who are less experienced can put themselves and others at risk by leaving an unnecessary trail of personal information for fraudsters.

The IRS has joined with representatives of the software industry, tax preparation firms, payroll and tax financial product processors and state tax administrators to combat identity theft refund fraud to protect the nation's taxpayers. This group, the Security Summit, has found methods to help reduce fraudulent tax returns entering tax processing systems.

Staying safe online

Here are a few common-sense suggestions that can make a difference for children, teens and those who are less experienced:

  • Remind them why security is important. People of all ages should not reveal too much information about themselves. Keeping data secure and only providing what is necessary minimizes online exposure to scammers and criminals. Birthdates, addresses, age and especially Social Security numbers are among things that should not be shared freely.
  • Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and can automatically update. Encrypt sensitive files such as tax records stored on computers. Use strong, unique passwords for each account. Be sure all family members have comprehensive protection especially if devices are being shared.
  • Teach them to recognize and avoid scams. Phishing emails, threatening phone calls and texts from thieves posing as IRS or from legitimate organizations pose risks. Do not click on links or download attachments from unknown or suspicious emails.
  • Protect personal data. Don't routinely carry a Social Security card. Keep it at home. Be sure any financial records are secure. Advise children and teens to shop at reputable online retailers. Treat personal information like cash; don't leave it lying around.
  • Teach them about public Wi-Fi networks. Connection to Wi-Fi in a mall or coffee shop is convenient but it may not be safe. Hackers and cybercriminals can easily intercept personal information. Always use a virtual private network when connecting to public Wi-Fi.

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. Also see Publication 4524, Security Awareness for Taxpayers (PDF).

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

Source: IRS

Virtual currency: IRS issues additional guidance on tax treatment and reminds taxpayers of reporting obligations

Posted by Admin Posted on Nov 07 2019

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WASHINGTON — As part of a wider effort to assist taxpayers and to enforce the tax laws in a rapidly changing area, the Internal Revenue Service issued two new pieces of guidance for taxpayers who engage in transactions involving virtual currency.

Expanding on guidance from 2014, the IRS is issuing additional detailed guidance to help taxpayers better understand their reporting obligations for specific transactions involving virtual currency. The new guidance includes Revenue Ruling 2019-24 and frequently asked questions (FAQs).

The new revenue ruling addresses common questions by taxpayers and tax practitioners regarding the tax treatment of a cryptocurrency hard fork. In addition, a set of FAQs address virtual currency transactions for those who hold virtual currency as a capital asset.

"The IRS is committed to helping taxpayers understand their tax obligations in this emerging area," said IRS Commissioner Chuck Rettig. "The new guidance will help taxpayers and tax professionals better understand how longstanding tax principles apply in this rapidly changing environment. We want to help taxpayers understand the reporting requirements as well as take steps to ensure fair enforcement of the tax laws for those who don't follow the rules."

The new guidance supplements the guidance the IRS issued on virtual currency in Notice 2014-21. The IRS is also soliciting public input on additional guidance in this area.

In Notice 2014-21, the IRS applied general principles of tax law to determine that virtual currency is property for federal tax purposes. The Notice explained, in the form of 16 FAQs, the application of general tax principles to the most common transactions involving virtual currency.

The IRS is aware that some taxpayers with virtual currency transactions may have failed to report income and pay the resulting tax or did not report their transactions properly. The IRS is actively addressing potential non-compliance in this area through a variety of efforts, ranging from taxpayer education to audits to criminal investigations.

For example, in July of this year the IRS announced that it began mailing educational letters to more than 10,000 taxpayers who may have reported transactions involving virtual currency incorrectly or not at all. Taxpayers who did not report transactions involving virtual currency or who reported them incorrectly may, when appropriate, be liable for tax, penalties and interest. In some cases, taxpayers could be subject to criminal prosecution.

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

Source: IRS

IRS reminds employers about the benefits of EFTPS

Posted by Admin Posted on Nov 07 2019

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WASHINGTON — The Internal Revenue Service today wants small business owners who are employers to know that the Electronic Federal Tax Payment System has features that can help them in meeting their tax obligations. EFTPS can help employers whether they prepare and submit payroll taxes themselves or if they hire a payroll service provider to do it on their behalf.

Many employers outsource to third-party payroll service providers some or all their payroll and related tax duties, such as tax withholding, reporting and making tax deposits. Third-party payroll service providers can help assure filing deadlines and deposit requirements are met and streamline business operations. Most payroll service providers administer payroll and employment taxes on behalf of an employer, where the employer provides the funds initially to the third party. They also report, collect and deposit employment taxes with state and federal authorities.

Treasury regulations require that employment tax deposits be made electronically and employers should ensure their third-party payer uses the Electronic Federal Tax Payment System (EFTPS).

EFTPS helps employers keep an eye on their tax responsibilities, even if they have hired a payroll service provider. EFTPS is secure, accurate, easy to use and provides an immediate confirmation for each transaction. Anyone can use EFTPS. The service is offered free of charge from the U.S. Department of Treasury and enables employers to make and verify federal tax payments electronically 24 hours a day, seven days a week through the internet or by phone.

Additionally, employers who use payroll service providers can verify that payments are made by using EFTPS online. The EFTPS webpage has information for employers who use payroll service providers. For more information, employers can enroll online at EFTPS.gov, or call EFTPS Customer Service at 800-555-4477 for an enrollment form.

The IRS recommends that employers do not change their address of record to that of the payroll service provider as it may limit the employer's ability to be informed of tax matters.

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

Source: IRS

Renueve los ITIN que caducan

Posted by Admin Posted on Nov 06 2019

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Los contribuyentes con Números de Identificación de Contribuyente (ITIN) vencidos pueden renovar sus ITINs más rápidamente y evitar demoras en los reembolsos el próximo año al presentar su solicitud de renovación pronto.

Un ITIN es un número de identificación tributaria usado por los contribuyentes que no califican para obtener un número de Seguro Social. Cualquier ITIN con dígitos medios 83, 84, 85, 86 u 87 caducará a fines de este año. Además, cualquier ITIN que no usado en una declaración de impuestos en los últimos tres años caducará. Como recordatorio, los ITIN con dígitos medios 70 a 82 que expiraron en 2016, 2017 o 2018 también se pueden renovar.

El IRS insta a cualquier persona afectada a presentar una solicitud de renovación completa, el Formulario W-7, Solicitud de Número de Identificación Personal del Contribuyente del IRS, lo antes posible. Asegúrese de incluir todos los documentos de identificación y residencia requeridos. De lo contrario, se retrasará el procesamiento hasta que el IRS reciba estos documentos.

Una vez que se presenta un formulario completo, generalmente toma alrededor de siete semanas recibir una carta de asignación de ITIN del IRS. Pero puede tomar más tiempo, de nueve a 11 semanas, si un solicitante espera hasta la temporada de presentación para enviar este formulario o lo envía desde el extranjero. Los contribuyentes deben tomar medidas ahora para evitar demoras.

Los contribuyentes que no renueven un ITIN antes de presentar una declaración de impuestos el próximo año podrían enfrentar un reembolso diferido y podrían no ser elegibles para ciertos créditos tributarios. Con cerca de 2 millones de hogares de contribuyentes afectados, la solicitud ahora ayudará a evitar prisa, así como los retrasos en el reembolso y el procesamiento en 2020. Para obtener más información, visite la página de información de ITIN en IRS.gov.

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

Fuente: IRS          

ACT NOW TO SAVE 2019 TAXES ON YOUR INVESTMENTS

Posted by Admin Posted on Nov 06 2019

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Do you have investments outside of tax-advantaged retirement plans? If so, you might still have time to reduce your 2019 tax bill by selling some investments — you just need to carefully select which investments you sell.

Balance gains and losses

If you’ve sold investments at a gain this year, consider selling some losing investments to absorb the gains. This is commonly referred to as “harvesting” losses.

If, however, you’ve sold investments at a loss this year, consider selling other investments in your portfolio that have appreciated, to the extent the gains will be absorbed by the losses. If you believe those appreciated investments have peaked in value, you’ll essentially lock in the peak value and avoid tax on your gains.

Review tax rates

At the federal level, long-term capital gains (on investments held more than one year) are taxed at lower rates than short-term capital gains (on investments held one year or less). The Tax Cuts and Jobs Act (TCJA) retained the 0%, 15% and 20% rates on long-term capital gains. But, through 2025, these rates have their own brackets, instead of aligning with various ordinary-income brackets. For example, for 2019, the thresholds for the top long-term gains rate are $434,551 for singles, $461,701 for heads of households and $488,851 for married couples.

But the top ordinary-income rate of 37%, which also applies to short-term capital gains, doesn’t go into effect for 2019 until taxable income exceeds $510,300 for singles and heads of households or $612,350 for joint filers. The TCJA also retained the 3.8% net investment income tax (NIIT) and its $200,000 and $250,000 thresholds.

Check the netting rules

Before selling investments, consider the netting rules for gains and losses, which depend on whether gains and losses are long term or short term. To determine your net gain or loss for the year, long-term capital losses offset long-term capital gains before they offset short-term capital gains. In the same way, short-term capital losses offset short-term capital gains before they offset long-term capital gains.

You may use up to $3,000 of total capital losses in excess of total capital gains as a deduction against ordinary income in computing your adjusted gross income. Any remaining net losses are carried forward to future years.

Consider everything

Keep in mind that tax considerations alone shouldn’t drive your investment decisions. Also consider factors such as your risk tolerance, investment goals and the long-term potential of the investment. 

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                     

LIVING THE DREAM OF EARLY RETIREMENT

Posted by Admin Posted on Nov 06 2019

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Many people dream of retiring early so they can pursue activities other than work, such as volunteering, traveling and pursuing their hobbies full-time. But making this dream a reality requires careful planning and diligent saving during the years leading up to the anticipated retirement date.

It all starts with retirement savings accounts such as IRAs and 401(k)s. Among the best ways to retire early is to build up these accounts as quickly as possible by contributing the maximum amount allowed by law each year.

From there, consider other potential sources of retirement income, such as a company pension plan. If you have one, either under a past or current employer, research whether you can receive benefits if you retire early. Then factor this income into your retirement budget.

Of course, you’re likely planning on Social Security benefits composing a portion of your retirement income. If so, keep in mind that the earliest you can begin receiving Social Security retirement benefits is age 62 (though waiting until later may allow you to collect more).

The flip side of saving up enough retirement income is reducing your living expenses during retirement. For example, many people strive to pay off their home mortgages early, which can possibly free up enough monthly cash flow to make early retirement feasible.

By saving as much money as you can in your retirement savings accounts, carefully planning your Social Security strategies and cutting your living expenses in retirement, you just might be able to make this dream a reality. 

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           

- TAXABLE VS. TAX-ADVANTAGED: WHERE TO HOLD INVESTMENTS-

Posted by Admin Posted on Oct 18 2019

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When investing for retirement or other long-term goals, people usually prefer tax-advantaged accounts, such as IRAs, 401(k)s or 403(b)s. Certain assets are well suited to these accounts, but it may make more sense to hold other investments in traditional taxable accounts.

Know the rules

Some investments, such as fast-growing stocks, can generate substantial capital gains, which may occur when you sell a security for more than you paid for it.

If you’ve owned that position for over a year, you face long-term gains, taxed at a maximum rate of 20%. In contrast, short-term gains, assessed on holding periods of a year or less, are taxed at your ordinary-income tax rate — maxing out at 37%. (Note: These rates don’t account for the possibility of the 3.8% net investment income tax.)

Choose tax efficiency

Generally, the more tax efficient an investment, the more benefit you’ll get from owning it in a taxable account. Conversely, investments that lack tax efficiency normally are best suited to tax-advantaged vehicles.

Consider municipal bonds (“munis”), either held individually or through mutual funds. Munis are attractive to tax-sensitive investors because their income is exempt from federal income taxes and sometimes state and local income taxes. Because you don’t get a double benefit when you own an already tax-advantaged security in a tax-advantaged account, holding munis in your 401(k) or IRA would result in a lost opportunity.

Similarly, tax-efficient investments such as passively managed index mutual funds or exchange-traded funds, or long-term stock holdings, are generally appropriate for taxable accounts. These securities are more likely to generate long-term capital gains, which have more favorable tax treatment. Securities that generate more of their total return via capital appreciation or that pay qualified dividends are also better taxable account options.

Take advantage of income

What investments work best for tax-advantaged accounts? Taxable investments that tend to produce much of their return in income. This category includes corporate bonds, especially high-yield bonds, as well as real estate investment trusts (REITs), which are required to pass through most of their earnings as shareholder income. Most REIT dividends are nonqualified and therefore taxed at your ordinary-income rate.

Another tax-advantaged-appropriate investment may be an actively managed mutual fund. Funds with significant turnover — meaning their portfolio managers are actively buying and selling securities — have increased potential to generate short-term gains that ultimately get passed through to you. Because short-term gains are taxed at a higher rate than long-term gains, these funds would be less desirable in a taxable account.

Get specific advice

The above concepts are only general suggestions. Please contact our firm for specific advice on what may be best for you.

Sidebar: Doing due diligence on dividends

If you own a lot of income-generating investments, you’ll need to pay attention to the tax rules for dividends, which belong to one of two categories:

  • Qualified. These dividends are paid by U.S. corporations or qualified foreign corporations. Qualified dividends are, like long-term gains, subject to a maximum tax rate of 20%, though many people are eligible for a 15% rate. (Note: These rates don’t account for the possibility of the 3.8% net investment income tax.)
  • Nonqualified. These dividends — which include most distributions from real estate investment trusts and master limited partnerships — receive a less favorable tax treatment. Like short-term gains, nonqualified dividends are taxed at your ordinary-income tax rate.

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

Alert: Planning to travel outside of the U.S. this year? Don’t risk a passport revocation - arrange to settle large IRS debts now

Posted by Admin Posted on Oct 17 2019

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The Internal Revenue Service is urging taxpayers to resolve their significant tax debts, $50,000 or more, to avoid putting their passports in jeopardy. If you owe $50,000 or more and haven’t made payment arrangements, please contact the IRS now to avoid travel delays later.

Why is the State Department allowed to limit or revoke my passport due to unpaid taxes?

In December 2015, Congress passed the Fixing America’s Surface Transportation (FAST) Act. That act authorized the IRS to certify to the State Department taxpayers who owe a seriously delinquent tax debt. A seriously delinquent tax debt is an unpaid, legally enforceable federal tax debt totaling more than $50,000 (Please note that this amount is adjusted annually for inflation.) for which a notice of federal tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted, or a levy has been issued. The IRS began certifying these debts to the State Department in 2018. Under the law, the State Department must deny your passport application and may revoke or limit your passport if the IRS has certified you as having a seriously delinquent tax debt. A seriously delinquent tax debt does not include non-tax debts collected by the IRS, such as the FBAR penalty and child support.

When will my seriously delinquent tax debt be certified to the State Department?

The IRS already began certifying certain taxpayers in phases and will continue certifying all seriously delinquent individual taxpayer accounts. The IRS will send a Notice CP 508C to your last known address at the time it certifies your seriously delinquent tax debt to the State Department.

There are some exceptions from passport certification; see more on denying, revoking passports because of tax debt for a list of those special circumstances. For taxpayers serving in a combat zone and who have a seriously delinquent tax debt, the IRS will postpone certifying their tax debt to the State Department while they remain performing such service.

In addition, taxpayers who have open cases with the Taxpayer Advocate Service will now temporarily be excepted thanks to TAS’s past advocacy efforts.

How will I know if I’m at risk of revocation?

Before contacting the State Department about revoking your passport, the IRS will send you a Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, to let you know what it intends to do and give you another opportunity to resolve the debt before it takes that action.

What should I do if I receive an IRS Notice or Letter about passport revocation?

Don’t delay! Call the IRS immediately or at least within 30 days from the date of the letter. There will be a special telephone number to call listed on the notice or see the IRS Contact information below. Generally, the IRS won’t recommend revoking your passport if you’re making a good-faith attempt to resolve the tax debts. However, some payment resolutions take longer than others, so don’t take a risk by waiting.

If you believe you have been a victim of identity theft which has resulted in your receiving Letter 6152 or other IRS notice concerning your tax debt, use the resources available at Identity Protection: Prevention, Detection and Victim Assistance to correct your account.

What if I’ve already been certified and my travel plans are in jeopardy?

The IRS has an expedited decertification procedure for taxpayers who live abroad or have plans to travel within 45 days.

If you’re leaving soon for international travel, need to resolve passport issues and have a pending application for a U.S. passport, you should call the phone number listed on top right-hand corner of your Notice CP 508C.

If your passport is cancelled or revoked after you’re certified, you must resolve the tax debt by paying the debt in full, making alternative payment arrangements or showing that the certification was erroneous.

The IRS will reverse your certification within 30 days of the date you resolve the tax debt and provide notification to the State Department as soon as practicable.

However, if you’re unable to resolve your balance with the IRS or your passport issue, the Taxpayer Advocate Service may be able to 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 : Taxpayer Advocate Service

-DOUBLE UP ON TAX BENEFITS BY DONATING APPRECIATED ARTWORK-

Posted by Admin Posted on Oct 17 2019

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From a tax perspective, appreciated artwork can make one of the best charitable gifts. Generally, donating appreciated property is doubly beneficial because you can both enjoy a valuable tax deduction and avoid the capital gains taxes you’d owe if you sold the property.

The extra benefit from donating artwork comes from the fact that the top long-term capital gains rate for art and other “collectibles” is 28%, as opposed to 20% for most other appreciated property.

Requirements

The first thing to keep in mind if you’re considering a donation of artwork is that you must itemize deductions to deduct charitable contributions. Now that the Tax Cuts and Jobs Act has nearly doubled the standard deduction and put tighter limits on many itemized deductions (but not the charitable deduction), many taxpayers who have itemized in the past will no longer benefit from itemizing.

For 2019, the standard deduction is $12,200 for singles, $18,350 for heads of households and $24,400 for married couples filing jointly. Your total itemized deductions must exceed the applicable standard deduction for you to enjoy a tax benefit from donating artwork.

Something else to be aware of is that most artwork donations require a “qualified appraisal” by a “qualified appraiser.” IRS rules contain detailed requirements about the qualifications an appraiser must possess and the contents of an appraisal.

IRS auditors are required to refer all gifts of art valued at $50,000 or more to the IRS Art Advisory Panel. The panel’s findings are the IRS’s official position on the art’s value, so it’s critical to provide a solid appraisal to support your valuation.

Finally, note that, if you own both the work of art and the copyright to the work, you must assign the copyright to the charity to qualify for a charitable deduction.

Deduction tips

The charity you choose and how the charity will use the artwork can have a significant impact on your tax deduction. Donations of artwork to a public charity, such as a museum or university with public charity status, can entitle you to deduct the artwork’s full fair market value. If you donate art to a private foundation, however, your deduction will be limited to your cost.

For your donation to a public charity to qualify for a full fair-market-value deduction, the charity’s use of the donated artwork must be related to its tax-exempt purpose. If, for example, you donate a painting to a museum for display or to a university’s art history department for use in its research, you’ll satisfy the related-use rule. But if you donate it to, say, a children’s hospital to auction off at its annual fundraising gala, you won’t satisfy the rule.

Careful planning

To reap the maximum tax benefit of donating appreciated artwork, you must plan your gift carefully and follow all applicable rules. Contact us for assistance.

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                    

-MORTGAGE MATTERS: TO PAY DOWN OR NOT TO PAY DOWN-

Posted by Admin Posted on Oct 17 2019

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If you’re a homeowner and manage your finances well, you might have extra cash after you’ve paid your monthly bills. What should you do with this extra money? Some would say make additional mortgage payments toward your principal to pay off your mortgage early. Others would say: No, invest those dollars in the stock market!

The decision is very much about risk vs. return. There’s little, if any, risk in prepaying a mortgage, because you already know what your rate of return will be: the interest rate on your mortgage. For instance, if your mortgage interest rate is 4.5%, this would be the return earned by every dollar that goes toward prepayment (not factoring in the mortgage interest deduction if you qualify).

However, if you invest the money in the stock market, you’ll assume much more risk. The level of risk depends on the assets you invest in, but there’s no such thing as a risk-free investment.

Your mortgage interest rate is indeed an important factor. If your rate is relatively low, so is the return from prepaying your mortgage. The final decision for many people comes down to whether they believe they can earn a higher return investing the money than they would prepaying their mortgage.

Clearly there’s the potential to outperform your mortgage interest rate by investing your money for the long term. Remember, though, that the stock market may be volatile in the short term and offers no guarantees.

There’s no single answer to the “pay down the mortgage or invest in the market?” question. We can provide additional, more specific guidance on

making the right decision for you.

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

-KNOW A TEACHER? TELL THEM ABOUT THIS TAX BREAK

Posted by Admin Posted on Oct 17 2019

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When teachers are setting up their classrooms for the new school year, it’s common for them to pay for a portion of their classroom supplies out of pocket. A special tax break allows these educators to deduct some of their expenses. This educator expense deduction is especially important now due to some changes under the Tax Cuts and Jobs Act (TCJA).

Old school

Before 2018, employee business expenses were potentially deductible if they were unreimbursed by the employer and ordinary and necessary to the “business” of being an employee. A teacher’s out-of-pocket classroom expenses could qualify.

But these expenses had to be claimed as a miscellaneous itemized deduction and were subject to a 2% of adjusted gross income (AGI) floor. This meant employees, including teachers, could enjoy a tax benefit only if they itemized deductions (rather than taking the standard deduction) and only to the extent that all their deductions subject to the floor, combined, exceeded 2% of their AGI.

Now, for 2018 through 2025, the TCJA has suspended miscellaneous itemized deductions subject to the 2% of AGI floor. Fortunately, qualifying educators can still deduct some of their unreimbursed out-of-pocket classroom costs under the educator expense deduction.

New school

Back in 2002, Congress created the above-the-line educator expense deduction because, for many teachers, the 2% of AGI threshold for the miscellaneous itemized deduction was difficult to meet. An above-the-line deduction is one that’s subtracted from your gross income to determine your AGI.

You don’t have to itemize to claim an above-the-line deduction. This is especially significant with the TCJA’s near doubling of the standard deduction, which means fewer taxpayers will benefit from itemizing.

Qualifying elementary and secondary school teachers and other eligible educators (such as counselors and principals) can deduct above the line up to $250 of qualified expenses. If you’re married filing jointly and both you and your spouse are educators, you can deduct up to $500 of unreimbursed expenses — but not more than $250 each.

Qualified expenses include amounts paid or incurred during the tax year for books, supplies, computer equipment (including related software and services), other equipment and supplementary materials that you use in the classroom. For courses in health and physical education, the costs of supplies are qualified expenses only if related to athletics.

More details

Some additional rules apply to the educator expense deduction. If you’re an educator or know one who might be interested in this tax break, please contact us for more details.

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

-IS "BUNCHING" MEDICAL EXPENSES STILL FEASIBLE IN 2019?

Posted by Admin Posted on Oct 17 2019

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Some medical expenses may be tax deductible, but only if you itemize deductions and you have enough expenses to exceed the applicable floor for deductibility. With proper planning, you may be able to time controllable medical expenses to your tax advantage.

The Tax Cuts and Jobs Act (TCJA) made bunching such expenses beneficial for some taxpayers. At the same time, certain taxpayers who’ve benefited from the medical expense deduction in previous years might no longer benefit because of the TCJA’s increase to the standard deduction.

The changes

Various limits apply to most tax deductions, and one type of limit is a “floor,” which means expenses are deductible only to the extent that they exceed that floor (typically a specific percentage of your income). One example of a tax break with a floor is the medical expense deduction.

Because it can be difficult to exceed the floor, a common strategy is to “bunch” deductible expenses into one year where possible. The TCJA reduced the floor for the medical expense deduction for 2017 and 2018 from 10% to 7.5% of adjusted gross income (AGI).

However, beginning January 1, 2019, taxpayers may once again deduct only the amount of the unreimbursed allowable medical care expenses for the year that exceeds 10% of their AGI. Medical expenses that aren’t reimbursed by insurance or paid through a tax-advantaged account (such as a Health Savings Account or Flexible Spending Account) may be deductible.

Itemized deductions

If your total itemized deductions won’t exceed your standard deduction, bunching medical expenses into 2019 won’t save you tax. The TCJA nearly doubled the standard deduction. For 2019, it’s $12,200 for singles and married couples filing separately, $18,350 for heads of households, and $24,400 for married couples filing jointly.

If your total itemized deductions for 2019 will exceed your standard deduction, then bunching nonurgent medical procedures and other controllable expenses into 2019 may allow you to exceed the floor and benefit from the medical expense deduction. Controllable expenses might include prescription drugs, eyeglasses, contact lenses, hearing aids, dental work, and some types of elective surgery.

Exploring the concept

As mentioned, bunching doesn’t work for everyone. For help determining whether you could benefit, please contact us.

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

-TAXABLE VS. TAX-ADVANTAGED: WHERE TO HOLD INVESTMENTS-

Posted by Admin Posted on Oct 17 2019

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When investing for retirement or other long-term goals, people usually prefer tax-advantaged accounts, such as IRAs, 401(k)s or 403(b)s. Certain assets are well suited to these accounts, but it may make more sense to hold other investments in traditional taxable accounts.

Know the rules

Some investments, such as fast-growing stocks, can generate substantial capital gains, which may occur when you sell a security for more than you paid for it.

If you’ve owned that position for over a year, you face long-term gains, taxed at a maximum rate of 20%. In contrast, short-term gains, assessed on holding periods of a year or less, are taxed at your ordinary-income tax rate — maxing out at 37%. (Note: These rates don’t account for the possibility of the 3.8% net investment income tax.)

Choose tax efficiency

Generally, the more tax efficient an investment, the more benefit you’ll get from owning it in a taxable account. Conversely, investments that lack tax efficiency normally are best suited to tax-advantaged vehicles.

Consider municipal bonds (“munis”), either held individually or through mutual funds. Munis are attractive to tax-sensitive investors because their income is exempt from federal income taxes and sometimes state and local income taxes. Because you don’t get a double benefit when you own an already tax-advantaged security in a tax-advantaged account, holding munis in your 401(k) or IRA would result in a lost opportunity.

Similarly, tax-efficient investments such as passively managed index mutual funds or exchange-traded funds, or long-term stock holdings, are generally appropriate for taxable accounts. These securities are more likely to generate long-term capital gains, which have more favorable tax treatment. Securities that generate more of their total return via capital appreciation or that pay qualified dividends are also better taxable account options.

Take advantage of income

What investments work best for tax-advantaged accounts? Taxable investments that tend to produce much of their return in income. This category includes corporate bonds, especially high-yield bonds, as well as real estate investment trusts (REITs), which are required to pass through most of their earnings as shareholder income. Most REIT dividends are nonqualified and therefore taxed at your ordinary-income rate.

Another tax-advantaged-appropriate investment may be an actively managed mutual fund. Funds with significant turnover — meaning their portfolio managers are actively buying and selling securities — have increased potential to generate short-term gains that ultimately get passed through to you. Because short-term gains are taxed at a higher rate than long-term gains, these funds would be less desirable in a taxable account.

Get specific advice

The above concepts are only general suggestions. Please contact our firm for specific advice on what may be best for you.

Sidebar: Doing due diligence on dividends

If you own a lot of income-generating investments, you’ll need to pay attention to the tax rules for dividends, which belong to one of two categories:

  • Qualified. These dividends are paid by U.S. corporations or qualified foreign corporations. Qualified dividends are, like long-term gains, subject to a maximum tax rate of 20%, though many people are eligible for a 15% rate. (Note: These rates don’t account for the possibility of the 3.8% net investment income tax.)
  • Nonqualified. These dividends — which include most distributions from real estate investment trusts and master limited partnerships — receive a less favorable tax treatment. Like short-term gains, nonqualified dividends are taxed at your ordinary-income tax rate.

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

-TAS TAX TIP: Filing Past Due Tax Returns

Posted by Admin Posted on Oct 17 2019

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Did you forget to file your 2018 tax return by April 15, 2019? Have you not filed tax returns for several years?

If the answer is yes to either, here’s some information to help you catch up with your filing requirements. It’s important to file past due tax returns before the IRS does it for you (see Consequences of Not Filing below).

First, figure out if you need to file a federal income tax return or not. If you live outside the United States, see Tax Responsibilities of U.S. Citizens and Resident Aliens Living Abroad. If you are not required to file, you don’t need to do anything further.

Filing a 2018 Tax Return

If you need to file your current year federal income tax return, file it as soon as you are able. There are options for filing, and return preparation assistance available. If you owe money and can’t pay, there are solutions to help with that too.

Filing 2017 or Older Prior Year Tax Returns

Okay, so what if you do need to file, and discover you didn’t file for several past years?

 First, don’t wait to start gathering your income information for each year and then file or find help to file all the returns required. If you need return preparation assistance with a prior year tax return and the IRS has already contacted you about that return, you may be available for assistance from a low income taxpayer clinic.

Consequences of Not Filing

Penalty, interest charges and other pitfalls

If you do need to file and you owe money, filing and paying sooner will generally limit interest charges and penalties, which can otherwise add up significantly.

If you are self-employed and do not file your federal income tax return, any self-employment income you earned will not be reported to the Social Security Administration and you will not receive credits toward Social Security retirement or disability benefits. Loan approvals may also be delayed if you don't file your return.

Loss of refund

The IRS will hold income tax refunds in cases where the IRS’s records show that one or more federal income tax returns are past due. In addition, if you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date or risk losing the refund altogether. The same rule applies to a right to claim tax credits, such as the Earned Income Credit.

The IRS will file for you, but the IRS-filed return may not be as accurate as it should be

If you fail to file voluntarily, at some point the IRS may file a substitute return for you. First, they will send you a Notice of Deficiency proposing a tax assessment, then you will have 90 days to file your past due tax return or file a petition in the United States Tax Court (150 days if the Notice of Deficiency is addressed to you outside the United States). Filing a timely petition allows you to challenge the IRS’s determination without having to pay the liability in advance.

If the IRS files a substitute return, generally the tax the IRS assesses is much higher than if you filed on your own. The reason for that is the IRS is not allowed to determine filing statuses, other than single, for which you may qualify, and the IRS cannot give credit for deductions or exemptions you may be entitled to receive. So, it is in your best interest to file your own tax return.

The IRS will begin enforcement actions

If you do not file a return nor file a petition with the United States Tax Court, then the IRS will proceed with the proposed tax assessment, bill you and, if not paid, begin collection and enforcement actions. This can include such actions as a levy on your wages or bank account or the filing of a notice of federal tax lien. But that’s not all, depending on the amount owed, and in certain instances, your passport can be revoked or denied or your account could be assigned to a private collection agency.

If you repeatedly do not file, you could be subject to additional enforcement measures, such as additional penalties and criminal prosecution.

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: Taxpayer Advocate Service 

-TAS Tax Tip: It’s Time to Check Your Tax Withholding

Posted by Admin Posted on Oct 17 2019

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The Internal Revenue Service recently launched the new Tax Withholding Estimator, an expanded, mobile-friendly online tool designed to make it easier to have the right amount of tax withheld during the year.

The new Estimator features include:

  • plain language to improve comprehension;
  • ability to move back and forth through the steps and correct previous entries and skip questions that don’t apply;
  • tips and links to help users quickly determine if they qualify for various tax credits and deductions;
  • automatic calculation of the taxable portion of any Social Security benefits;
  • and much more…

In addition, the Tax Withholding Estimator tool makes it easier to enter wages and withholding for more than one job held by each taxpayer, their spouse, as well as separately entering pensions and other sources of income. At the end of the process, it provides specific withholding recommendations for each job and each spouse and clearly explains what to do next.

Why check it at all?

The Tax Cuts and Jobs Act created a lot of changes for 2018 and for this year too. One change directly affects the rate at which taxes are withheld from paychecks for last year and again for this year, generally reducing the amount taken out. This change, combined with the other changes, may reduce the amount of an expected refund or may even cause an amount to be owed. But if you check now, you can make any adjustments needed before tax time.

Who should check and when?

It is a good practice for everyone to do a paycheck check-up every year. The earlier in the year that you do, the more accurate you can be when it comes time to file your tax return next year. Whether you did this already or not, it is a good idea to take the few minutes it takes to use the tool – to double check that you won’t be overpaying, or worse, underpaying and end up owing taxes. Checking now allows for several months still to catch-up if the results show you may owe. Keep in mind that the results will only be as accurate as the information you provide.

This tool works for most taxpayers, however, people with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe self-employment tax, alternative minimum tax, the tax on unearned income of dependents or certain other taxes, and people with long-term capital gains or qualified dividends.

Plan ahead before trying the Tax Withholding Estimator

Before using this tool, you’ll need to have your latest paycheck handy, and it may help to have last year’s tax return to estimate income from investments or a side job.

What if I don’t have enough withholding or none?

If you think you need to make changes to the amount withheld, the tool gives you the information you need to fill out a new Form W–4, Employee’s Withholding Allowance Certificate. Because this form tells your employer how much you want them to withhold, submit the completed W-4 to your employer as soon as possible to make the changes.

Since our federal income tax is a pay-as-you-go tax system, there are two ways to pay as you go, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, if you don’t have any at all, or if you receive income such as interest, dividends, self-employment income, capital gains, prizes and awards, or other income, you may have to make estimated tax payments. Also, if you are in business for yourself, you might need to make estimated tax payments.

What about next year?

The IRS recommends that you also recheck your withholding at the start of 2020. This is especially important if you reduce your withholding sometime during 2019. A mid-year withholding change in 2019 may have a different full-year impact in 2020.

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 : Taxpayer Advocate Service 

-THE TAX COST OF DIVORCE HAS RISEN FOR MANY

Posted by Admin Posted on Oct 17 2019

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Are you divorced or in the process of divorcing? If so, it’s critical to understand how the Tax Cuts and Jobs Act (TCJA) has changed the tax treatment of alimony. Unfortunately, for many couples, the news isn’t good — the tax cost of divorce has risen.

What’s changed?

Under previous rules, a taxpayer who paid alimony was entitled to a deduction for payments made during the year. The deduction was “above-the-line,” which was a big advantage, because there was no need to itemize. The payments were included in the recipient spouse’s gross income.

The TCJA essentially reverses the tax treatment of alimony, effective for divorce or separation instruments executed after 2018. In other words, alimony payments are no longer deductible by the payer and are excluded from the recipient’s gross income.

What’s the impact?

The TCJA will likely cause alimony awards to decrease for post-2018 divorces or separations. Paying spouses will argue that, without the benefit of the alimony deduction, they can’t afford to pay as much as under previous rules. The ability of recipients to exclude alimony from income will at least partially offset the decrease, but many recipients will be worse off under the new rules.

For example, let’s say John and Lori divorced in 2018. John is in the 35% federal income tax bracket and Lori is a stay-at-home mom with no income who cares for John and Lori’s two children. The court ordered John to pay Lori $100,000 per year in alimony. He’s entitled to deduct the payments, so the after-tax cost to him is $65,000. Presuming Lori qualifies to file as head of household, and the children qualify for the full child credit, Lori’s net federal tax on the alimony payments (after the child credit) is approximately $8,600, leaving her with $91,400 in after-tax income.

Suppose, under the same circumstances, that John and Lori divorce in 2019. John argues that, without the alimony deduction, he can afford to pay only $65,000, and the court agrees. The payments are tax-free to Lori, but she’s still left with $26,400 less than she would have received under pre-TCJA rules.

The pre-2019 rules can create a tax benefit by reducing the divorced couple’s overall tax liability (assuming the recipient is in a lower tax bracket). The new rules eliminate this tax advantage. Of course, if the recipient is in a higher tax bracket than the payer, a couple is better off under the new rules.

What to do?

If you’re contemplating a divorce or separation, be sure to familiarize yourself with the post-TCJA divorce-related tax rules. Or, if you’re already divorced or separated, determine whether you would benefit by applying the new rules to your alimony payments through a modification of your divorce or separation instrument. (See “What if you’re already divorced?”) We can help you sort out the details.

Sidebar: What if you’re already divorced?

Existing divorce or separation instruments, including those executed during 2018, aren’t affected by the TCJA changes. The previous rules still apply unless a modification expressly provides that the TCJA rules must be followed. However, spouses who would benefit from the TCJA rules — for example, because their relative income levels have changed — may voluntarily apply them if the modification expressly provides for such treatment.

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

PLANNING FOR THE NET INVESTMENT INCOME TAX

Posted by Admin Posted on Oct 17 2019

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Despite its name, the Tax Cuts and Jobs Act (TCJA) didn’t cut all types of taxes. It left several taxes unchanged, including the 3.8% tax on net investment income (NII) of high-income taxpayers.

You’re potentially liable for the NII tax if your modified adjusted gross income (MAGI) exceeds $200,000 ($250,000 for joint filers and qualifying widows or widowers; $125,000 for married taxpayers filing separately). Generally, MAGI is the same as adjusted gross income. However, it may be higher if you have foreign earned income and certain foreign investments.

To calculate the tax, multiply 3.8% by the lesser of 1) your NII, or 2) the amount by which your MAGI exceeds the threshold. For example, if you’re single with $250,000 in MAGI and $75,000 in NII, your tax would be 3.8% × $50,000 ($250,000 - $200,000), or $1,900.

NII generally includes net income from, among others, taxable interest, dividends, capital gains, rents, royalties and passive business activities. Several types of income are excluded from NII, such as wages, most nonpassive business income, retirement plan distributions and Social Security benefits. Also excluded is the nontaxable gain on the sale of a personal residence.

Given the way the NII tax is calculated, you can reduce the tax either by reducing your MAGI or reducing your NII. To accomplish the former, you could maximize contributions to IRAs and qualified retirement plans. To do the latter, you might invest in tax-exempt municipal bonds or in growth stocks that pay little or no dividends.

There are many strategies for reducing the NII tax. Consult with one of our tax advisors before implementing any of them. And remember that, while tax reduction is important, it’s not the only factor in prudent investment decision-making.

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

-YOUR APPEAL RIGHTS-

Posted by Admin Posted on Oct 17 2019

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Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.

IRS Publication 1, Your Rights as a Taxpayer, explains some of your most important taxpayer rights. During their contact with taxpayers, IRS employees are required to explain and protect these taxpayer rights, including the right to appeal.

The IRS appeals system is for people who do not agree with the results of an examination of their tax returns or other adjustments to their tax liability. In addition to examinations, you can appeal many other things, including:

  • Collection actions such as liens, levies, seizures, installment agreement terminations and rejected offers-in-compromise
  • Penalties and interest
  • Employment tax adjustments and the trust fund recovery penalty

Appeals conferences are informal meetings. The local Appeals Office, which is independent of the IRS office that proposed the disputed action, can sometimes resolve an appeal by telephone or through correspondence.

The IRS also offers an option called Fast Track Mediation, during which an appeals or settlement officer attempts to help you and the IRS reach a mutually satisfactory solution. Most cases not docketed in court qualify for Fast Track Mediation. You may request Fast Track Mediation at the conclusion of an audit or collection determination, but prior to your request for a normal appeals hearing. Fast Track Mediation is meant to promote the early resolution of a dispute. It doesn't eliminate or replace existing dispute resolution options, including your opportunity to request a conference with a manager or a hearing before Appeals. You may withdraw from the mediation process at any time.

When attending an informal meeting or pursuing mediation, you may represent yourself or you can be represented by an attorney, certified public accountant or individual enrolled to practice before the IRS.

If you and the IRS appeals officer cannot reach agreement, or if you prefer not to appeal within the IRS, in most cases you may take your disagreement to federal court. But taxpayers can settle most differences without expensive and time-consuming court trials.

For more information on the appeals process, please contact us!

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 OR HOBBY?-

Posted by Admin Posted on Oct 10 2019

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It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take. You must include on your return income from an activity from which you do not expect to make a profit. An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. You cannot use a loss from the activity to offset other income. Activities you do as a hobby, or mainly for sport or recreation, come under this limit. So does an investment activity intended only to produce tax losses for the investors.

The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. For additional information on these entities, refer to business structures. It does not apply to corporations other than S corporations. In determining whether you are carrying on an activity for profit, all the facts are taken into account. No one factor alone is decisive. Among the factors to consider are whether:

  • You carry on the activity in a business-like manner,
  • The time and effort you put into the activity indicate you intend to make it profitable,
  • You depend on income from the activity for your livelihood,
  • Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business),
  • You change your methods of operation in an attempt to improve profitability,
  • You, or your advisors, have the knowledge needed to carry on the activity as a successful business,
  • You were successful in making a profit in similar activities in the past,
  • The activity makes a profit in some years, and
  • You can expect to make a future profit from the appreciation of the assets used in the activity.

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

Source: Thomson Reuters

IS NOW THE TIME FOR SOME LIFE INSURANCE?-

Posted by Admin Posted on Oct 09 2019

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Many people reach a point in life when buying some life insurance is highly advisable. Once you determine that you need it, the next step is calculating how much you should get and what kind.

Careful calculations

If the coverage is to replace income and support your family, this starts with tallying the costs that would need to be covered, such as housing and transportation, child care, and education — and for how long. For many families, this will be only until the youngest children are on their own.

Next, identify income available to your family from Social Security, investments, retirement savings and any other sources. Insurance can help bridge any gaps between the expenses to be covered and the income available.

If you’re purchasing life insurance for another reason, the purpose will dictate how much you need:

Funeral costs. An average funeral bill can top $7,000. Gravesite costs typically add thousands more to this number.

Mortgage payoff. You may need coverage equal to the amount of your outstanding mortgage balance.

Estate planning. If the goal is to pay estate taxes, you’ll need to estimate your estate tax liability. If it’s to equalize inheritances, you’ll need to estimate the value of business interests going to each child active in your business and purchase enough coverage to provide equal inheritances to the inactive children.

Term vs. permanent

The next question is what type of policy to purchase. Life insurance policies generally fall into two broad categories: term or permanent.

Term insurance is for a specific period. If you die during the policy’s term, it pays out to the beneficiaries you’ve named. If you don’t die during the term, it doesn’t pay out. It’s typically much less expensive than permanent life insurance, at least if purchased while you’re relatively young and healthy.

Permanent life insurance policies last until you die, so long as you’ve paid the premiums. Most permanent policies build up a cash value that you may be able to borrow against. Over time, the cash value also may reduce the premiums.

Because the premiums are typically higher for permanent insurance, you need to consider whether the extra cost is worth the benefits. It might not be if, for example, you may not require much life insurance after your children are grown.

But permanent life insurance may make sense if you’re concerned that you could become uninsurable, if you’re providing for special-needs children who will never be self-sufficient, or if the coverage is to pay estate taxes or equalize inheritances.

Some comfort

No one likes to think about leaving loved ones behind. But you’ll no doubt find some comfort in having a life insurance policy that helps cover your family’s financial needs and plays an important role in your estate plan. Let us help you work out the details.

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

-ORGANIZATIONAL AND START UP COSTS-

Posted by Admin Posted on Oct 09 2019

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Have you just started a new business? Did you know expenses incurred before a business begins operations are not allowed as current deductions? Generally, these start up costs must be amortized over a period of 180 months beginning in the month in which the business begins. However, based on the current tax provisions, you may elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred. The $5,000 deduction is reduced by any start-up or organizational costs which exceed $50,000. If you want to deduct a larger portion of your start up cost in the first year, a new business will want to begin operations as early as possible and hold off incurring some of those expenses until after business begins. Contact us to help determine how you can maximize your deduction for start-up and/or organizational expenses. For additional information on what costs constitute start-up or organizational expenses, refer to IRS publication 535, Business Expenses.

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 EDUCATION-

Posted by Admin Posted on Oct 09 2019

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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

USE CAPITAL LOSSES TO OFFSET CAPITAL GAINS

Posted by Admin Posted on Oct 09 2019

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When is a loss actually a gain? When that loss becomes an opportunity to lower tax liability, of course. Now’s a good time to begin your year-end tax planning and attempt to neutralize gains and losses by year end. To do so, it might make sense to sell investments at a loss in 2018 to offset capital gains that you’ve already realized this year.

Now and later

A capital loss occurs when you sell a security for less than your “basis,” generally the original purchase price. You can use capital losses to offset any capital gains you realize in that same tax year — even if one is short term and the other is long term.

When your capital losses exceed your capital gains, you can use up to $3,000 of the excess to offset wages, interest and other ordinary income ($1,500 for married people filing separately) and carry the remainder forward to future years until it’s used up.

Research and replace

Years ago, investors realized it could be beneficial to sell a security to recognize a capital loss for a given tax year and then — if they still liked the security’s prospects — buy it back immediately. To counter this strategy, Congress imposed the wash sale rule, which disallows losses when an investor sells a security and then buys the same or a “substantially identical” security within 30 days of the sale, before or after.

Waiting 30 days to repurchase a security you’ve sold might be fine in some situations. But there may be times when you’d rather not be forced to sit on the sidelines for a month.

Fortunately, there’s an alternative. With a little research, you might be able to identify a security in the same sector you like just as well as, or better than, the old one. Your solution is now simple and straightforward: Simultaneously sell the stock you own at a loss and buy the competitor’s stock, thereby avoiding violation of the “same or substantially identical” provision of the wash sale rule. You maintain your position in that sector or industry and might even add to your portfolio a stock you believe has more potential or less risk.

If you bought shares of a security at different times, give some thought to which lot can be sold most advantageously. The IRS allows investors to choose among several methods of designating lots when selling securities, and those methods sometimes produce radically different results.

Good with the bad

Investing always carries the risk that you will lose some or even all of your money. But you have to take the good with the bad. In terms of tax planning, you can turn investment losses into opportunities — and potentially end the year on a high note.

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

-PERSONAL DOCUMENTS-

Posted by Admin Posted on Oct 01 2019

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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

-IS NOW THE TIME FOR SOME LIFE INSURANCE?-

Posted by Admin Posted on Sept 30 2019

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Many people reach a point in life when buying some life insurance is highly advisable. Once you determine that you need it, the next step is calculating how much you should get and what kind.

Careful calculations

If the coverage is to replace income and support your family, this starts with tallying the costs that would need to be covered, such as housing and transportation, child care, and education — and for how long. For many families, this will be only until the youngest children are on their own.

Next, identify income available to your family from Social Security, investments, retirement savings and any other sources. Insurance can help bridge any gaps between the expenses to be covered and the income available.

If you’re purchasing life insurance for another reason, the purpose will dictate how much you need:

  • Funeral costs. An average funeral bill can top $7,000. Gravesite costs typically add thousands more to this number.
  • Mortgage payoff. You may need coverage equal to the amount of your outstanding mortgage balance.
  • Estate planning. If the goal is to pay estate taxes, you’ll need to estimate your estate tax liability. If it’s to equalize inheritances, you’ll need to estimate the value of business interests going to each child active in your business and purchase enough coverage to provide equal inheritances to the inactive children.

Term vs. permanent

The next question is what type of policy to purchase. Life insurance policies generally fall into two broad categories: term or permanent.

Term insurance is for a specific period. If you die during the policy’s term, it pays out to the beneficiaries you’ve named. If you don’t die during the term, it doesn’t pay out. It’s typically much less expensive than permanent life insurance, at least if purchased while you’re relatively young and healthy.

Permanent life insurance policies last until you die, so long as you’ve paid the premiums. Most permanent policies build up a cash value that you may be able to borrow against. Over time, the cash value also may reduce the premiums.

Because the premiums are typically higher for permanent insurance, you need to consider whether the extra cost is worth the benefits. It might not be if, for example, you may not require much life insurance after your children are grown.

But permanent life insurance may make sense if you’re concerned that you could become uninsurable, if you’re providing for special-needs children who will never be self-sufficient, or if the coverage is to pay estate taxes or equalize inheritances.

Some comfort

No one likes to think about leaving loved ones behind. But you’ll no doubt find some comfort in having a life insurance policy that helps cover your family’s financial needs and plays an important role in your estate plan. Let us help you work out the details.

For more information on the appeals process, please contact us!

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 Sept 30 2019

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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

-EARNED INCOME TAX CREDIT FOR CERTAIN WORKERS-

Posted by Admin Posted on Sept 30 2019

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Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

The IRS estimates that 25 percent of people who qualify don't claim the credit and at the same time, there are millions of Americans who have claimed the credit in error, many of whom simply don't understand the criteria.

EITC is based on the amount of your earned income and the number of qualifying children in your household. If you have children, they must meet the relationship, age and residency requirements. And, you must file a tax return to claim the credit.

It's easier than ever to find out if you qualify for EITC using the online tool, EITC Assistant. Please contact us for more information!

Are you eligible for any of these tax credits?

Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns, advises the IRS. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Below are some of the credits taxpayers could be eligible to claim:

  • Earned Income Tax Credit This is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the EITC. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. For more information, see IRS Publication 596, Earned Income Credit (EIC).
  • Child Tax Credit This credit is for people who have a qualifying child. The maximum amount of the credit is $2,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see Pub. 972, Child Tax Credit.
  • Child and Dependent Care Credit This is for expenses paid for the care of children under age 13, or for a disabled spouse or dependent, to enable the taxpayer to work. There is a limit to the amount of qualifying expenses. The credit is a percentage of those qualifying expenses. For more information, see Pub. 503, Child and Dependent Care Expenses.
  • Adoption Credit Adoptive parents can take a tax credit of up to $13,460 for 2016 and $13,570 for 2017 for qualifying expenses paid to adopt an eligible child. For more information, see Form 8839, Qualified Adoption Expenses.
  • Credit for the Elderly and Disabled This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are citizens or residents. There are income limitations. For more information, see Pub.524, Credit for the Elderly or the Disabled.
  • Education Credits There are two credits available, the American Opportunity Credit (formerly called the Hope Credit) and the Lifetime Learning Credit, for people who pay higher education costs. The American Opportunity Credit is for the payment of the first four years of tuition and related expenses for an eligible student for whom the taxpayer claims an exemption on the tax return. The Lifetime Learning Credit is available for all post-secondary education for an unlimited number of years. A taxpayer cannot claim both credits for the same student in one year. For more information, see Publication 970, Tax Benefits for Education.
  • Retirement Savings Contribution Credit Eligible individuals may be able to claim a credit for a percentage of their qualified retirement savings contributions, such as contributions to a traditional or Roth IRA or salary reduction contributions to a SEP or SIMPLE plan. To be eligible, you must be at least age 18 at the end of the year and not a full-time student or an individual for whom someone else claims a personal exemption. Also, your adjusted gross income (AGI) must be below a certain amount. For more information, see chapter three in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

There are other credits available to eligible taxpayers.  Please contact us so we may realize your specific situation, and offer advice.

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 Sept 20 2019

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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

-AMENDED RETURNS-

Posted by Admin Posted on Sept 19 2019

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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 Sept 19 2019

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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

-TAX SAVING TECHNIQUES-

Posted by Admin Posted on Sept 19 2019

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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

-DEDUCTIBLE TAXES

Posted by Admin Posted on Sept 19 2019

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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

-WHAT ARE THE POSSIBLE IMPLICATIONS IF I CO-SIGN FOR A LOAN?-

Posted by Admin Posted on Aug 30 2019

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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

should I refinance?

Posted by Admin Posted on Aug 30 2019

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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

-deducting mortgage interest-

Posted by Admin Posted on Aug 30 2019

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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

WHAT DO BANKS LOOK FOR IN A LOAN REQUEST?

Posted by Admin Posted on Aug 30 2019

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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

- HOW DOES LEGAL TREATMENT DIFFER BETWEEN MARRIED AND UNMARRIED COUPLES?

Posted by Admin Posted on Aug 30 2019

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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 accounting, domestic taxation, essential business accounting, 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 Aug 30 2019

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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

-WHICH IS BETTER, BUYING OR LEASING MY NEXT CAR?

Posted by Admin Posted on Aug 30 2019

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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, essential business accounting, 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 Aug 30 2019

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Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 EDUCATION

Posted by Admin Posted on Aug 29 2019

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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 accounting, domestic taxation, essential business accounting, 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 Aug 19 2019

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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 accounting, domestic taxation, essential business accounting, 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 Aug 19 2019

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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, essential business accounting, 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 ALGORITHMS COULD DETECT FRAUD AND INACCURACIES IN TAX RETURNS

Posted by Admin Posted on Aug 19 2019

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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 accounting, domestic taxation, essential business accounting, 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

SELF EMPLOYED? YOU MAY NEED TO INCREASE OR LOWER THE AMOUNT OF TAXES YOU PAY

Posted by Admin Posted on Aug 07 2019

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Self-employed workers are responsible for paying taxes directly to the IRS. One way is to make estimated tax payments during the year. The next due date for 2019 is Sept. 16.

The Tax Cuts and Jobs Act changed the way tax is calculated for those with substantial income not subject to withholding. As a result, many self-employed workers may need to raise or lower the amount of tax they pay each quarter.

The revised estimated tax package, Form 1040-ES, on IRS.gov is designed to help taxpayers calculate their estimated payments correctly. The package includes a quick rundown of key tax changes, income tax rate schedules for 2019, and a worksheet for figuring the right amount to pay.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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  

YOU CAN CHECK THE STATUS OF YOUR REFUND

Posted by Admin Posted on Aug 07 2019

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Employees and other wage earners who filed an extension and are submitting their 2018 tax return this summer can easily check the status of their refund by using the IRS “Where’s My Refund?” tool.

This tool is available on IRS.gov and through the IRS2Go app. Taxpayers can use Where’s My Refund? to start checking the status of their tax return within 24 hours after the IRS receives an e-filed return. For paper returns, the wait is four to six weeks after the return was mailed to the IRS.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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   

Aquí está la información acerca de quién puede deducir gastos de vehículos en sus declaraciones de impuestos

Posted by Admin Posted on Aug 07 2019

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Los contribuyentes que han deducido el uso de gastos de operar un vehículo en declaraciones de impuestos anteriores deben revisar si todavía pueden reclamar esta deducción. Algunos contribuyentes pueden, otros no.

Aquí hay una lista de los contribuyentes que pueden reclamar esta deducción cuando presentan sus declaraciones de impuestos:

Dueños de negocios y trabajadores por cuenta propia

Las personas que son dueños de un negocio o son trabajadores por cuenta propia y usan su vehículo para negocios pueden deducir los gastos de automóvil en su declaración de impuestos. Si un contribuyente usa el automóvil para ambos propósitos, negocio y personal, debe dividir sus gastos. La deducción se basa en la porción de millaje real usada para el negocio.

Hay dos métodos para determinar sus gastos deducibles de medio de transporte:

1.   Usando los gastos actuales.

o    Algunos ejemplos de gastos actuales incluyen:

  • Depreciación
  • Pagos de arrendamiento
  • Gasolina y aceite
  • Llantas
  • Reparaciones
  • Seguro
  • Gastos de registración/licencias
     

2.   Usando la tasa estándar de millaje.

o    Los contribuyentes que quieren usar la tasa estándar de millaje para un auto propio deben escoger este método en el primer año en que el automóvil está disponible para su uso en su negocio. 

o    Si un negocio desea usar la tasa estándar de millaje por un auto de alquiler, deben usar esta tasa por el periodo completo del alquiler.

o    La tasa estándar de millaje para 2018 es de 54.5 centavos por milla. Para 2019, es de .58 centavos por milla.

Hay requisitos de mantenimiento de archivos (en inglés) para ambos métodos.

Empleados

Los empleados que usan su automóvil para trabajar ya no pueden tomar una deducción de gastos de negocio según el empleado como parte de sus deducciones detalladas diversas reportadas en el Anexo A.  Los empleados no pueden deducir este costo incluso si su empleador no reembolsa al empleado por usar su propio auto. Esto es para los años tributarios posteriores a diciembre de 2017. La Ley de Empleos y Reducción de Impuestos suspendió varias deducciones detalladas sujetas al piso del 2 por ciento. 

Sin embargo, ciertos contribuyentes todavía pueden deducir los gastos de viaje de los empleados no reembolsados, esto incluye a los reservistas de las Fuerzas Armadas, artistas calificados y funcionarios del gobierno estatal o local.

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

Fuente: IRS  

IRS has begun sending letters to virtual currency owners advising them to pay back taxes, file amended returns; part of agency’s larger efforts

Posted by Admin Posted on Aug 07 2019

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WASHINGTON — The Internal Revenue Service has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly.

"Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," said IRS Commissioner Chuck Rettig. "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."

The IRS started sending the educational letters to taxpayers last week. By the end of August, more than 10,000 taxpayers will receive these letters. The names of these taxpayers were obtained through various ongoing IRS compliance efforts.

For taxpayers receiving an educational letter, there are three variations: Letter 6173, Letter 6174 or Letter 6174-A, all three versions strive to help taxpayers understand their tax and filing obligations and how to correct past errors.

Taxpayers are pointed to appropriate information on IRS.gov, including which forms and schedules to use and where to send them.

Last year the IRS announced a Virtual Currency Compliance campaign to address tax noncompliance related to the use of virtual currency through outreach and examinations of taxpayers. The IRS will remain actively engaged in addressing non-compliance related to virtual currency transactions through a variety of efforts, ranging from taxpayer education to audits to criminal investigations.

Virtual currency is an ongoing focus area for IRS Criminal Investigation.

IRS Notice 2014-21 states that virtual currency is property for federal tax purposes and provides guidance on how general federal tax principles apply to virtual currency transactions. Compliance efforts follow these general tax principles. The IRS will continue to consider and solicit taxpayer and practitioner feedback in education efforts and future guidance.

The IRS anticipates issuing additional legal guidance in this area in the near future.

Taxpayers who do not properly report the income tax consequences of virtual currency transactions are, when appropriate, liable for tax, penalties and interest. In some cases, taxpayers could be subject to criminal prosecution.

More information on virtual currencies can be found on IRS.gov. 

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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      

Year-round tax planning includes reviewing eligibility for credits and deductions

Posted by Admin Posted on July 31 2019

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Tax credits and deductions can mean more money in a taxpayer’s pocket. Most people only think about this when they file their tax return. However, thinking about it now can help make filing easier next year.

Taxpayers should be prepared to claim tax credits and deductions. So, here are a few facts about credits and deductions that can help a taxpayer with their year-round tax planning:

  • Taxable income is what’s left over after someone subtracts any eligible deductions from their adjusted gross income. This includes the standard deduction. In fact, most individual taxpayers take the standard deduction. On the other hand, some taxpayers may choose to itemize their deductions because it could lower their AGI even more.
  • The Tax Cuts and Jobs Act made changes to itemized deductions. Many individuals who formerly itemized may find it more beneficial to take the standard deduction.
  • As a general rule, if a taxpayer’s itemized deductions are larger than their standard deduction, they should itemize. Also, in some cases, taxpayers may even be required to itemize.
  • Taxpayers can use the Interactive Tax Assistant to see what expenses they may be able to itemize.
  • Taxpayers can subtract tax credits from the total amount of tax they owe. To claim a credit, taxpayers should keep records that show their eligibility for it.
  • Here are a few examples of taxpayers who can benefit from certain credits:
    • Parents may qualify for credits like the child tax credit and child and dependent care credit.
    • Families with students may qualify for the American opportunity credit or lifetime learning credit.
    • Low to moderate income taxpayers may qualify for the earned income tax credit.
  • Properly claiming these tax credits can reduce taxes owed and boost refunds. Taxpayers can check now see if they qualify to claim it next year on their tax return. Some tax credits, like the EITC, are even refundable, which means a taxpayer can get money refunded to them even if they don’t owe any taxes.

The IRS has several online tools taxpayers can use to stay updated on important tax information that may help with tax planning. In addition to visiting IRS.gov, they can download the IRS2Go app, watch IRS YouTube videos, and follow the IRS on Twitter and Instagram.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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                      

Planificación tributaria incluye determinar estado civil tributario

Posted by Admin Posted on July 31 2019

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¿Soltero o casado? ¿Hijos o no hijos? Estas son solo un par de preguntas que ayudarán a alguien a determinar su estado civil tributario. Los contribuyentes, generalmente, solo piensan en su estado civil al presentar sus declaraciones. Sin embargo, esto es algo en lo que deben pensar todo el año, especialmente si cambia.

Estas son algunas cosas sobre el estado civil tributario que los contribuyentes deben considerar ahora:

El estado civil de un contribuyente se usa para determinar su:

  • Requisito de presentación
  • Deducción estándar
  • Elegibilidad para ciertos créditos
  • Cantidad correcta de impuestos

Si se aplica más de un estado civil tributario a alguien, puede usar el Asistente Tributario Interactivo (en inglés) para ayudarle a elegir el que resultará en la menor cantidad de impuestos.

Los cambios en la vida familiar pueden afectar la situación tributaria de alguien. Estos cambios incluyen:

  • Matrimonio
  • Divorcio
  • Nacimiento de un bebé
  • Adopción de un hijo
  • Muerte

Generalmente, el estado civil tributario de un contribuyente al 31 de diciembre se aplica a todo el año para propósitos del impuesto federal. Por ejemplo, si alguien se casa a finales de año, para propósitos del impuesto federal se le considera como casados por todo el año.

El IRS tiene varias herramientas que los contribuyentes pueden usar para mantenerse actualizados sobre información tributaria importante que puede ayudarles con la planificación tributaria. Además de visitar IRS.gov/espanol, pueden descargar la aplicación móvil IRS2Go, ver videos de YouTube del IRS y seguir al IRS en Twitter (en inglés) e Instagram (en inglés).

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

Fuente: IRS      

Earned Income Tax Credit (EITC)

Posted by Admin Posted on July 31 2019

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The Earned Income Tax Credit, EITC or EIC, is a benefit for working people with low to moderate income. To qualify, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file. EITC reduces the amount of tax you owe and may give you a refund.

When Can I Expect My Refund?

If you claim the earned income tax credit (EITC) or the additional child tax credit (ACTC) on your tax return, by law the IRS, can’t issue your refund before mid-February. Find out more on when to expect your refund.

After you file your return, the best way to track your refund is Where's My Refund? or the IRS2Go mobile app.

Who Qualifies

Do I Qualify for EITC?

To qualify for EITC you must have earned income from working for someone or from running or owning a business or farm and meet basic rules. And, you must either meet additional rules for workers without a qualifying child or have a child that meets all the qualifying child rules for you.

You can use Publication 5334, Do I Qualify for EITC? to see if you are eligible for EITC.

EITC Assistant

Use the EITC Assistant to see if you qualify for tax years: 2018, 2017, and 2016. The EITC Assistant helps you find out your filing status, if your child is a qualifying child, if you are eligible and estimate the amount of the EITC you may get.

Income Limits and Table

See the EITC Income Limits, Maximum Credit Amounts and Tax Law Updates for the current year, previous years and the upcoming tax year.

Claiming EITC

How Do I Claim EITC?

You need to file a tax return to claim EITC. Find out:

  • the documents you need
  • the common errors to watch for
  • the consequences of filing an EITC return with an error
  • how to get help preparing your return
  • what you need to do if your EITC was denied in a previous year
  • how to claim the credit for earlier tax years

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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      

Foreign Tax Credit

Posted by Admin Posted on July 31 2019

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If you paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.

Qualifying Foreign Taxes

You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U.S. possession. Generally, only income, war profits and excess profits taxes qualify for the credit. See What Foreign Taxes Qualify For The Foreign Tax Credit? for more information.

Taken as a deduction, foreign income taxes reduce your U.S. taxable income. Deduct foreign taxes on Schedule A (Form 1040), Itemized Deductions

Taken as a credit, foreign income taxes reduce your U.S. tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit.

If you choose to exclude either foreign earned income or foreign housing costs, you cannot take a foreign tax credit for taxes on income you can exclude. If you do take the credit, one or both of the choices may be considered revoked.

How to Claim the Foreign Tax Credit

File Form 1116, Foreign Tax Credit, to claim the foreign tax credit if you are an individual, estate or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession.

Corporations file Form 1118, Foreign Tax Credit—Corporations, to claim a foreign tax credit.

French Contribution Sociale Generalisee (CSG) and Contribution au Remboursement de la Dette Sociate (CRDS)

In 2019, the United States and the French Republic memorialized through diplomatic communications an understanding that the French Contribution Sociale Generalisee (CSG) and Contribution au Remboursement de la Dette Sociate (CRDS) taxes are not social taxes covered by the Agreement on Social Security between the two countries. Accordingly, the IRS will not challenge foreign tax credits for CSG and CRDS payments on the basis that the Agreement on Social Security applies to those taxes.

The IRS’s change in policy means individual taxpayers, who paid or accrued these taxes but did not claim them, can file amended returns to claim a foreign tax credit.

Generally individual taxpayers have ten (10) years to file a claim for refund of U.S. income taxes paid if they find they paid or accrued more creditable foreign taxes than what they previously claimed.  The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the foreign taxes were paid or accrued.  This means that amended returns may be filed, using Form 1040X to include accompanying Form 1116, going back to tax year 2009.

Individual taxpayers should write “French CSG/CRDS Taxes” in red at the top of Forms 1040-X, file them with accompanying Forms 1116 in accordance with the instructions for these forms.  U.S. employers may not file for refunds claiming a foreign tax credit for CSG/CRDS withheld or otherwise paid on behalf of their employees.

Compliance Issues

The foreign tax credit laws are complex.  Refer to Foreign Tax Credit Compliance Tips for help in understanding some of the more complex areas of the law.  Below are some of the compliance issues:  

  • Foreign sourced qualified dividends and/or capital gains (including long-term capital gains, collectible gains, unrecaptured section 1250 gains, and section 1231 gains) that are taxed in the United States at a reduced tax rate must be adjusted in determining foreign source income on Form 1116, Foreign Tax Credit, line 1a.
  • Interest expense must be apportioned between U.S. and foreign source income.
  • Charitable contributions are usually not apportioned against foreign source income; however, contributions to charities organized in Mexico, Canada, and Israel must be apportioned against foreign source income.
  • The amount of foreign tax that qualifies as a foreign tax credit is not necessarily the amount of tax withheld by the foreign country. If you are entitled to a reduced rate of foreign tax based on an income tax treaty between the United States and a foreign country, only that reduced tax qualifies for the credit. It is up to you whether you want to ask for a refund from the foreign country of the difference (excess) for which a foreign tax credit is not allowed.
  • If a foreign tax redetermination occurs, a redetermination of your U.S. tax liability is required in most situations. You must file a Form 1040-X or Form 1120-X. Failure to notify the IRS of a foreign tax redetermination can result in a failure to notify penalty.
  • A foreign tax credit may not be claimed for taxes on income that you exclude from U.S. gross income.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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       

Planificación tributaria debe llevarse a cabo a través del año e incluir repaso de créditos y deducciones para los que califican

Posted by Admin Posted on July 31 2019

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Las deducciones y los créditos tributarios pueden rendirle más dinero a su bolsillo. La mayoría de las personas solo piensan en esto cuando presentan la declaración de impuestos. Sin embargo, pensar en ello ahora puede ayudar a facilitar la presentación de solicitudes el próximo año.

El contribuyente debe prepararse para reclamar créditos tributarios y deducciones. Por esa razón, aquí le presentamos algunos datos sobre créditos y deducciones que le podrían ayudar con su planificación de impuestos a través del año.

  • El ingreso tributable es lo que sobra luego de restar las deducciones elegibles de su ingreso bruto ajustado (AGI, por sus siglas en inglés). Esto incluye la deducción estándar. De hecho, la mayoría de los contribuyentes individuales toman la deducción estándar. Por otro lado, algunos contribuyentes optan por detallar sus deducciones porque de esa manera logran disminuir el AGI aun más. 
     
  • La Ley de Empleos y Reducción de Impuestos hizo cambios a las deducciones detalladas. Muchos contribuyentes que anteriormente detallaban sus deducciones podrían encontrar mayor beneficio al tomar la deducción estándar. 
     
  • Como regla general, si las deducciones detalladas son mayores que la deducción estándar, debería detallar. Además, en algunos casos, puede que el contribuyente tenga el requisito de detallar.
     
  • El contribuyente puede usar el Asistente Tributario Interactivo (en inglés) para ver qué gastos podrá detallar.
     
  • El contribuyente puede restar los créditos tributarios de la cantidad total que adeuda. Para reclamar un crédito, el contribuyente debe mantener registros y archivos que muestre que es elegible para tomarlos. 
     
  • Aquí le presentamos algunos ejemplos del tipo de contribuyente que se puede beneficiar de ciertos créditos:
  • Si reclama estos créditos adecuadamente, podría reducir sus impuestos adeudados y aumentar su reembolso. Los contribuyentes ya pueden revisar si califican para reclamar los créditos el próximo año en la declaración de impuestos. Algunos créditos como el EITC, también son reembolsables, lo cual significa que el contribuyente puede recibir un reembolso aun sin adeudar impuestos.

El IRS dispone de varias herramientas en línea que los contribuyentes pueden usar para mantenerse actualizados acerca de información tributaria importante que le pueda ayudar con la planificación tributaria. Además de visitar IRS.gov/espanol, pueden descargar la aplicación móvil IRS2Go, ver los videos de IRS en YouTube y seguir al IRS en Twitter e Instagram.

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

Fuente: IRS     

Buena planificación tributaria incluye mantener buenos registros

Posted by Admin Posted on July 26 2019

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La planificación tributaria debe ocurrir durante todo el año, no sólo cuando alguien presenta su declaración de impuestos. Una parte importante de la planificación tributaria es el buen mantenimiento de registros. Los registros bien organizados facilitan que un contribuyente prepare su declaración de impuestos. También puede ayudar a proporcionar respuestas en caso de que la declaración del contribuyente sea seleccionada para una auditoria o si el contribuyente recibe una notificación del IRS.

Aquí hay algunas sugerencias para ayudar a los contribuyentes a mantener buenos registros:

  • Los contribuyentes deben desarrollar un sistema que mantenga junta toda su información importante. Pueden usar un programa de software para el registro electrónico. También podrían almacenar documentos en papel en carpetas etiquetadas.
     
  • Durante todo el año, deben agregar registros de impuestos a sus archivos a medida que los reciben. Tener registros a la mano facilita la preparación de una declaración de impuestos.
     
  • También puede ayudarles a descubrir deducciones o créditos potencialmente pasados ​​por alto. Los contribuyentes deben notificar al IRS si su dirección cambia. También deben notificar a la Administración del Seguro Social de un cambio de nombre legal para evitar un retraso en el proceso de su declaración de impuestos.
     
  • Los registros que los contribuyentes deben mantener incluyen recibos, cheques cancelados y otros documentos que respaldan los ingresos, una deducción o un crédito en una declaración de impuestos.
     
  • Los contribuyentes también deben mantener registros relacionados con los bienes que transfieren o venden. Deben mantener estos registros para determinar su costo para calcular la ganancia o la pérdida.
     
  • En general, el IRS sugiere que los contribuyentes mantengan registros durante tres años a partir de la fecha en que presentaron la declaración.
     
  • Para los empresarios, no hay un método particular de contabilidad que deban usar. Sin embargo, los contribuyentes deben encontrar un método que refleje de manera clara y precisa sus ingresos y gastos brutos. Los registros deben corroborar los ingresos y los gastos. Los contribuyentes que tienen empleados deben mantener todos los registros de impuestos de empleo durante al menos cuatro años después de la fecha de vencimiento o pago del impuesto, lo que ocurra más tarde.

El IRS tiene varias herramientas en línea que los contribuyentes pueden usar para estar actualizados sobre información importante que puede ayudar con la planificación tributaria. Además de visitar IRS.gov/espanol, pueden descargar la aplicación IRS2Go, ver videos de YouTube del IRS y seguir al IRS en Twitter e Instagram (en inglés).

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

Fuente: IRS     

Tax planning includes determining filing status

Posted by Admin Posted on July 26 2019

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Single or married? Kids or no kids? These are just a couple of questions that will help someone determine their tax filing status. Taxpayers usually only think about their filing status when filing their returns. However, this is something to think about all year, especially if it changes.

Here are some things about filing status that taxpayers should consider now:

A taxpayer’s filing status is used to determine their:

  • Filing requirements
  • Standard deduction
  • Eligibility for certain credits
  • Correct amount of tax

If more than one filing status applies to someone, they can use the Interactive Tax Assistant to help them choose the one that will result in the lowest amount of tax.

Changes to family life may affect someone’s tax situation. These changes include:

  • Marriage
  • Divorce
  • Birth of a new baby
  • Adoption of a child
  • Death

Typically, a taxpayer’s status on December 31 applies to the entire year for tax purposes. For example, if someone gets married late in the year, for tax purposes they’re considered married for the entire year.

The IRS has several tools taxpayers can use to stay updated on important tax information that may help with tax planning. In addition to visiting IRS.gov, they can download the IRS2Go app, watch IRS YouTube videos, and follow the IRS on Twitter and Instagram.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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                

Good tax planning includes good recordkeeping

Posted by Admin Posted on July 26 2019

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Tax planning should happen all year long, not just when someone is filing their tax return.  An important part of tax planning is recordkeeping. Well-organized records make it easier for a taxpayer to prepare their tax return. It can also help provide answers if a taxpayer’s return is selected for examination or if the taxpayer receives an IRS notice.

Here are some suggestions to help taxpayers keep good records:

  • Taxpayers should develop a system that keeps all their important info together. They can use a software program for electronic recordkeeping. They could also store paper documents in labeled folders.
  • Throughout the year, they should add tax records to their files as they receive them. Having records readily at hand makes preparing a tax return easier.
  • It may also help them discover potentially overlooked deductions or credits. Taxpayers should notify the IRS if their address changes. They should also notify the Social Security Administration of a legal name change to avoid a delay in processing their tax return.
  • Records that taxpayers should keep include receipts, canceled checks, and other documents that support income, a deduction, or a credit on a tax return.
  • Taxpayers should also keep records relating to property they dispose of or sell. They must keep these records to figure their basis for computing gain or loss.
  • In general, the IRS suggests that taxpayers keep records for three years from the date they filed the return.
  • For business taxpayers, there's no particular method of bookkeeping they must use. However, taxpayers should find a method that clearly and accurately reflects their gross income and expenses. The records should confirm income and expenses. Taxpayers who have employees must keep all employment tax records for at least four years after the tax is due or paid, whichever is later.

The IRS has several online tools taxpayers can use to stay updated on important tax information that may help with tax planning. In addition to visiting IRS.gov, they can download the IRS2Go app, watch IRS YouTube videos, and follow the IRS on Twitter and Instagram.

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

Source: IRS                        

Contribuyentes que necesitan transcripción de impuestos primero deben visitar IRS.gov

Posted by Admin Posted on July 26 2019

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Los contribuyentes pueden necesitar una transcripción de impuestos por muchas razones, como solicitar una hipoteca o un préstamo estudiantil. La página Permítanos ayudarle en IRS.gov ayudará a los contribuyentes a entender las transcripciones de impuestos. Esta página tiene enlaces a información que ayudará a los contribuyentes a conocer los diferentes tipos de transcripciones y el proceso de cómo obtener una.

Ordenar transcripción

  • Desde aquí, los contribuyentes pueden visitar las páginas donde pueden solicitar una transcripción, ya sea en línea o por correo. Los contribuyentes pueden obtener diferentes tipos de transcripciones de la serie 1040 de esta página.

Tipos de transcripción

  • Dependiendo de por qué un contribuyente necesita una transcripción, determinará qué tipo necesita. Esta página contiene información detallada acerca d lo que se incluye en los cinco tipos diferentes de transcripciones.

Preguntas frecuentes

  • Los contribuyentes pueden visitar la página de Preguntas y Respuestas para preguntas específicas sobre el servicio de Ordenar Transcripción en línea. Encontrarán preguntas frecuentes acerca de cómo obtener una transcripción tanto en línea como por correo.

Sin embargo, los contribuyentes podrían no necesitar una transcripción completa. Si solo necesitan averiguar cuánto deben o verificar los pagos que realizaron en los últimos 18 meses, pueden visitar la página de su cuenta de impuestos.

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

Fuente: IRS  

I got an IRS notice; now what do I do?

Posted by Admin Posted on July 25 2019

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The IRS will send a notice or a letter for any number of reasons. It may be about a specific issue on your federal tax return or account, explain changes to your account, ask for more information, or request a payment.

You can handle most of this correspondence without calling or visiting an IRS office if you follow the instructions in the notice.

However, sometimes these communications can be confusing and hard to understand. So, here are some tips to help you when you receive a notice or letter from the IRS. The first step is to identify the important information in the notice or letter.

Start by determining:

Reason the Notice or Letter Was Sent

Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. If you still aren’t able to understand the information provided, the IRS has a Search Notice and Letters feature on the Understanding Your IRS Notice or Letter page.

You can find the notice (CP) or letter (LTR) number on either the top or the bottom right-hand corner of your correspondence. Once you find it, you can enter that number in the search box and you will be taken to a corresponding page that has more general information that may help.

In the Taxpayer Advocate Service, we also have a GET HELP section on various topics that can lead you through important information, steps and actions necessary to help you resolve many common tax issues.

Sometimes you do not need to take any further action, but sometimes you will.

Do I Need to Reply?

Whether you need to reply or not will depend on the issue.

If you agree with the information or change listed on the notice, generally there is no need to reply. That is unless the action causes a balance due, then you would need to take some action. Other times, even if you do agree, you may need to provide specific information to resolve the issue, particularly if you need to verify your identity.

If you disagree, you will need to act as soon as possible, as penalties and interest may be accruing, depending on the circumstances. The letter should outline what that action is and include a due date for your response.

Whether you agree or not, if it requires a reply – do not delay! Delaying can create more issues. See more on this below.

When to Respond By

If your notice or letter requires a response by a specific date, there are many reasons you’ll want to comply. Here are just a few:

  • minimize additional interest and penalty charges;  
  • prevent further action from being taken on the account or against you; and
  • preserve your appeal rights if you don’t agree.

 

How and Where to Reply

All notices and letters should tell you where to send your response, whether it’s to a mailing address or fax number. (Note: The IRS generally does not allow communication via email yet, although they are currently working on developing some alternative digital communication options.)

Most correspondence can be handled without calling or visiting an IRS office if you follow the instructions in your letter or notice.

 What If I Want to Talk to Someone?

Each notice or letter should include contact information. Some phone numbers on letters or notices are general IRS toll-free numbers, but if a specific employee is working your case, it will show a specific phone number to reach that employee or the department manager. The telephone number is usually found in the upper right-hand corner of your notice or letter.

As a last resort, you can use the IRS toll-free number, 1-800-829-1040. Have a copy of your tax return and the correspondence available when you call. But your best option is to use the specific number or address provided.

When Should I Ask for Help?

You can resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional.

If you can’t afford help from a tax professional, you may be eligible for free or low cost representation from an attorney, certified public accountant, or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). In addition, LITCs can provide language assistance if you speak English as a second language and need help understanding the notice or letter.

If your IRS problem is causing you financial hardship, you've tried repeatedly and aren't receiving a response from the IRS, or you feel your taxpayer rights are not being respected, consider contacting us, the Taxpayer Advocate Service.

What Are Your Rights?

Every taxpayer has ten Rights when dealing with the IRS. For example, the Right to Be Informed, means the IRS should give you clear instructions about what you need to do to comply. You also have the Right to Pay No More Than the Correct Amount of Tax and the Right to Challenge the IRS’s Position and Be Heard. So, exercise those Rights and reply to the notice or letter if you disagree with the IRS, or provide the information needed so the IRS can get it right.

If any of those Rights aren’t being respected, again, you can contact us for assistance.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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    

Filing Past Due Tax Returns

Posted by Admin Posted on July 23 2019

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Did you forget to file your 2018 tax return by April 15, 2019? Have you not filed tax returns for several years?

If the answer is yes to either, here’s some information to help you catch up with your filing requirements. It’s important to file past due tax returns before the IRS does it for you (see Consequences of Not Filing below).

First, figure out if you need to file a federal income tax return or not. If you live outside the United States, see Tax Responsibilities of U.S. Citizens and Resident Aliens Living Abroad. If you are not required to file, you don’t need to do anything further.

Filing a 2018 Tax Return

If you need to file your current year federal income tax return, file it as soon as you are able. There are options for filing and return preparation assistance available. If you owe money and can’t pay, there are solutions to help with that too.

Filing 2017 or Older Prior Year Tax Returns

Okay, so what if you do need to file, and discover you didn’t file for several past years?

First, don’t wait to start gathering your income information for each year and then file or find help to file all the returns required. If you need return preparation assistance with a prior year tax return and the IRS has already contacted you about that return, you may be available for assistance from a low income taxpayer clinic.

Consequences of Not Filing

Penalty, interest charges and other pitfalls

If you do need to file and you owe money, filing and paying sooner will generally limit interest charges and penalties, which can otherwise add up significantly.

If you are self-employed and do not file your federal income tax return, any self-employment income you earned will not be reported to the Social Security Administration and you will not receive credits toward Social Security retirement or disability benefits. Loan approvals may also be delayed if you don't file your return.

Loss of refund

The IRS will hold income tax refunds in cases where the IRS’s records show that one or more federal income tax returns are past due. In addition, if you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date or risk losing the refund altogether. The same rule applies to a right to claim tax credits, such as the Earned Income Credit.

The IRS will file for you, but the IRS-filed return may not be as accurate as it should be

 If you fail to file voluntarily, at some point the IRS may file a substitute return for you. First, they will send you a Notice of Deficiency proposing a tax assessment, then you will have 90 days to file your past due tax return or file a petition in the United States Tax Court (150 days if the Notice of Deficiency is addressed to you outside the United States). Filing a timely petition allows you to challenge the IRS’s determination without having to pay the liability in advance.

If the IRS files a substitute return, generally the tax the IRS assesses is much higher than if you filed on your own. The reason for that is the IRS is not allowed to determine filing statuses, other than single, for which you may qualify, and the IRS cannot give credit for deductions or exemptions you may be entitled to receive. So, it is in your best interest to file your own tax return.

The IRS will begin enforcement actions

If you do not file a return nor file a petition with the United States Tax Court, then the IRS will proceed with the proposed tax assessment, bill you and, if not paid, begin collection and enforcement actions. This can include such actions as a levy on your wages or bank account or the filing of a notice of federal tax lien. But that’s not all, depending on the amount owed, and in certain instances, your passport can be revoked or denied or your account could be assigned to a private collection agency.

If you repeatedly do not file, you could be subject to additional enforcement measures, such as additional penalties and criminal prosecution.

Alternatives for Help

For filing help, see the links below. However, if;

  • your problem is causing financial difficulties for you, your family or your business,;  
  • you've tried repeatedly to contact the IRS but no one has responded, or
  • you face (or your business is facing) an immediate threat of adverse action, you should contact us right away.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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          

Filing, Requesting an Extension of Time to File and Payment Options

Posted by Admin Posted on July 23 2019

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 The tax return filing deadline is almost here. Have you filed yet? The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.

So, if you haven’t filed yet, you should file timely to avoid possible penalties and interest. See below for tax return filing help.

Filing Help

If you need assistance with filing your 2018 tax return still, see our TAS Tax Tip: Tax Filing Help Information. You can also visit the Filing for Individuals page, Online tools and resources can help or Free tax preparation available for millions of families pages on IRS.gov.

If you haven’t filed yet and you cannot do so by the due date, you can request more time. See below for how to request more time to file. Please be aware - there are consequence to not filing at all.

Requesting an Extension of Time to File

To request more time to file your tax return, individuals can file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. This allows you six more months to file. However, if you can file sooner, do it and don’t wait the whole six months. Instead of filing Form 4868, you can apply for an automatic extension by making an electronic payment by the due date of your return. You can pay online or by phone.

See Extension of Time To File Your Tax Return on IRS.gov for more details and for information on filing extension requests for special situations.

An Extension to File Does Not Mean You Can Wait to Pay

The IRS urges people with a filing requirement and a balance due to file by the April deadline even if they cannot pay in full. Taxpayers in this situation should pay what they can and consider a payment plan for the remaining balance. This is because any monies paid after the due date will incur interest and penalties (up to the maximum allowed by law) until the balance is fully paid. There are certain instances when some or all of the penalties charged can be waived, but interest isn’t generally waived for any reason other than an IRS delay.

Payment Options

There are several payment options, but you need to review them all and understand the consequences of each before you choose. You can visit our I can't pay my taxes for more information on where to start.

Other great resources are, IRS provides various payment options for taxpayers who owe but can’t pay in full and Paying Your Taxes.

Don’t Wait

The worst thing you can do is take no action! Get help for filing, paying or both from the IRS, a Tax Return Preparer or the Taxpayer Advocate Service, if appropriate.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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         

Educators can claim deduction to get money back for classroom expenses

Posted by Admin Posted on July 15 2019

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Educators may be able to deduct unreimbursed expenses on their tax return. This deduction can put money right back in the pockets of eligible teachers and other educators.

Here are some things to know about this deduction:

  • Educators can deduct up to $250 of trade or business expenses that were not reimbursed. As teachers prepare for the next school year, they should remember to keep receipts after making any purchase to support claiming this deduction.
  • The deduction is $500 if both taxpayers are eligible educators and file their return using the status married filing jointly. These taxpayers cannot deduct more than $250 each.
  • Qualified expenses are amounts the taxpayer paid themselves during the tax year.
    • Examples of expenses the educator can deduct include:
    • Professional development course fees
    • Books
    • Supplies
    • Computer equipment, including related software and services
    • Other equipment and materials used in the classroom
  • Taxpayers claim the deduction on Form 1040 or Form 1040NR. The taxpayer should remember to complete and attach Form 1040, Schedule 1 to their return.
  • To be considered an eligible educator, the taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal or aide. They must also work at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

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

Source: IRS 

Have a sunnier tax season with these summertime IRS tax tips

Posted by Admin Posted on July 15 2019

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WASHINGTON — Buying a home? Working a summer job? Volunteering? Activities that are common in the summer often qualify for tax credits or deductions. And, while summertime and part-time workers may not earn enough to owe federal income tax, they should remember to file a return to get a refund for taxes withheld early next year.

Here are some summertime tax tips from the IRS that can help taxpayers during tax season next year:

  • Marital tax bliss. Newlyweds should report any name change to the Social Security Administration before filing next year’s tax return. Then, report any address change to the United States Postal Service, employers and the IRS to ensure receipt of tax-related items.
  • Cash back for summer day camp. Unlike overnight camps, the cost of summer day camp may count as an expense towards the Child and Dependent Care Credit. See IRS Publication 503, Child and Dependent Care Expenses, for more information.
  • Part-time and summer work. Employers usually must withhold Social Security and Medicare taxes from pay for part-time and season workers even if the employees don’t earn enough to meet the federal income tax filing threshold. Self-employed workers or independent contractors need to pay their own Social Security and Medicare taxes, even if they have no income tax liability. Normally, employees receive a Form W-2, Wage and Tax Statement, from their employer — even if they don’t work there anymore — to account for the summer’s work by January 31 of the following year. The Form W-2 shows the amount of earnings, withholdings for state and federal taxes, Social Security, Medicare wages and tips. Employees use the information on this form when they file their annual tax returns.
  • Worker classification matters.  Business owners must correctly determine whether summer workers are employees or independent contractors. Independent contractors are not subject to withholding, making them responsible for paying their own income taxes plus Social Security and Medicare taxes. Workers can avoid higher tax bills and lost benefits if they know their proper status.

Though the higher standard deduction means fewer taxpayers are itemizing their deductions, those that still plan to itemize next year should keep these tips in mind:

  • Deducting state and local income, sales and property taxes. The total deduction that taxpayers can deduct for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 or $5,000 if married filing separately. Any state and local taxes paid above this amount cannot be deducted.
  • Refinancing a home. The deduction for mortgage interest is limited to interest paid on a loan secured by the taxpayer’s main home or second home that they used to buy, build, or substantially improve their main home or second home.
  • Buying a home. New homeowners buying after Dec. 15, 2017, can only deduct mortgage interest they pay on a total of $750,000, or $375,000 if married filing separately, in qualifying debt for a first and second home. For existing mortgages if the loan originated on or before Dec. 15, 2017, taxpayers continue to deduct interest on a total of $1 million in qualifying debt secured by first and second homes.
  • Donate items. Deduct money. Those long-unused items in good condition found during a summer cleaning and donated to a qualified charity may qualify for a tax deduction. Taxpayers must itemize deductions to deduct charitable contributions and have proof of all donations. Use the Interactive Tax Assistant to help determine whether you can deduct your charitable contributions.
  • Donate time. Deduct mileage. Driving a personal vehicle while donating services on a trip sponsored by a qualified charity could qualify for a tax break. Itemizers can deduct 14 cents per mile for charitable mileage driven in 2019.
  • Reporting gambling winnings and claiming gambling losses. Taxpayers who itemize can deduct gambling losses up to the amount of gambling winnings. Use the Interactive Tax Assistant to find out more about reporting gambling winnings and  losses next year.

The last two tips are for taxpayers who have not yet filed but may be due a refund and those who may need to adjust their withholding.

  • Refunds require a tax return. Although workers may not have earned enough money from a summer job to require filing a tax return, they may still want to file when tax time comes around. It is essential to file a return to get a refund of any income tax withheld. There is no penalty for filing a late return for those receiving refunds, however, by law, a return must be filed within three years to get the refund. See the Interactive Tax Assistant, Do I need to file a tax return?
  • Check withholding. Newlyweds, summertime workers, homeowners and every taxpayer in between should take some time this summer to check their tax withholding to make sure they are paying the right amount of tax as they earn it throughout the year. The Withholding Calculator on IRS.gov helps employees estimate their income tax, credits, adjustments and deductions and determine whether they need to adjust their withholding by submitting a new Form W-4, Employee's Withholding Allowance Certificate. Taxpayers should remember that, if needed, they should submit their new W-4 to their employer, not the IRS.

In addition to these tips, taxpayers can get helpful consumer tips by signing up for the IRS Tax Tips email service. For details on any of these tips, visit IRS.gov.

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

Source: IRS        

Contribuyentes pueden revisar en línea para actualizaciones sobre estado de su reembolso

Posted by Admin Posted on July 15 2019

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Los contribuyentes que solicitaron una prórroga y presentan su declaración de impuestos de 2018 este verano podrían estar esperando por su reembolso.  Es fácil para estos contribuyentes revisar el estado de su dinero. Pueden ir a IRS.gov y usar la herramienta ¿Dónde está mi reembolso? 

Esta herramienta está disponible en IRS.gov y a través de la aplicación móvil IRS2Go. Los contribuyentes pueden revisar ¿Dónde está mi reembolso? para revisar el estado de su declaración de impuestos dentro de las 24 horas luego que el IRS confirma recibir una declaración presentada electrónicamente. Para declaraciones en papel, son cuatro semanas.

La herramienta tiene un rastreador que muestra el progreso a través de tres fases:  

  • Declaración recibida
  • Reembolso aprobado
  • Reembolso enviado

Lo único que el contribuyente necesita para usar “¿Dónde está mi reembolso?” son estas tres cosas:

  • Número de seguro social
  • Estado civil tributario
  • Suma exacta del reembolso reclamado en su declaración de impuestos

Los contribuyentes deben recordar que “¿Dónde está mi reembolso?” está disponible solo en IRS.gov o a través de la aplicación móvil IRS2Go.

“¿Dónde está mi reembolso?” se actualiza una vez cada 24 horas, normalmente durante la noche, por lo cual no es necesario verificar el estado con mayor frecuencia.

Los contribuyentes solo deben llamar al número de servicio al cliente del IRS acerca del estado de su reembolso si:

  • Pasaron más de 21 días desde que presentó su declaración electrónicamente.
  • Pasaron más de seis semanas desde que envió su declaración por correo.
  • La herramienta “¿Dónde está mi reembolso?” le indica que se comunique con el IRS. 

Contribuyentes quienes adeudan deben pagar lo más posible para minimizar cargos de intereses y multas. Los contribuyentes deben visitar la página IRS.gov/pagos para explorar opciones de pago.

Los contribuyentes también deben tener cuidado con los correos electrónicos o las estafas de texto que solicitan información personal para verificar el estado de un reembolso del IRS. El IRS no contacta a los contribuyentes de esta manera. 

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

Fuente: IRS                                   

Tips for taxpayers who make money from a hobby

Posted by Admin Posted on July 15 2019

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Many people enjoy hobbies that are also a source of income. From painting and pottery to scrapbooking and soap making, these activities can be sources of both fun and finances. Taxpayers who make money from a hobby must report that income on their tax return.

If someone has a business, they operate the business to make a profit. In contrast, people engage in a hobby for sport or recreation, not to make a profit. Taxpayers should consider nine factors when determining whether their activity is a business or a hobby.

In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is done mainly for recreation or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

  • Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
  • Whether the time and effort you put into the activity indicate you intend to make it profitable.
  • Whether you depend on income from the activity for your livelihood.
  • Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
  • Whether you change your methods of operation in an attempt to improve profitability.
  • Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
  • Whether you were successful in making a profit in similar activities in the past.
  • Whether the activity makes a profit in some years and how much profit it makes.
  • Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

They should base their determination on all the facts and circumstances of their activity.

If a taxpayer receives income for an activity that they don’t carry out to make a profit, the expenses they pay for the activity are miscellaneous itemized deductions and can no longer be deducted. The taxpayer must still report the income they receive on Schedule 1, Form 1040, line 21.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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   

ESTATE PLANNING PORTABILITY LIVES ON UNDER THE TCJA

Posted by Admin Posted on July 15 2019

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When the TCJA was passed, the big estate planning news was that the federal gift and estate tax exclusion doubled from $5 million to an inflation-indexed $10 million. It was further indexed for inflation to $11.18 million for 2018 and now $11.4 million for 2019.

Somewhat lost in the clamor, however, was (and is) the fact that the new law preserves the “portability” provision for married couples. Portability allows your estate to elect to permit your surviving spouse to use any of your available estate tax exclusion that is unused at your death.

A brief history

At the turn of this century, the exclusion was a mere $675,000 before being hiked to $1 million in 2002. By 2009, the exclusion increased to $3.5 million, while the top estate tax rate was reduced from 55% in 2000 to 35% in 2010, among other changes.

After a one-year estate tax moratorium in 2010, the Tax Relief Act (TRA) of 2010 reinstated the estate tax with a generous $5 million exclusion, indexed for inflation, and a top 35% tax rate. The American Taxpayer Relief Act (ATRA) of 2012 made these changes permanent, aside from increasing the top rate to 40%.

Most important, the TRA authorized portability of the estate tax exclusion, which was then permanently preserved by the ATRA. Under the portability provision, the executor of the estate of the first spouse to die can elect to have the “deceased spousal unused exclusion” (DSUE) transferred to the estate of the surviving spouse.

How the DSUE works

Let’s say Kevin and Debbie, who have two children, each own $5 million individually and $10 million jointly with rights of survivorship, for a total of $20 million. Under their wills, all assets pass first to the surviving spouse and then to the children.

If Debbie had died in early 2019, the $10 million ($5 million owned individually and $5 million held jointly) in assets would be exempt from estate tax because of the unlimited marital deduction. Thus, her entire $11.4 million exclusion would remain unused. However, if the election is made upon her death, Kevin’s estate can later use the $11.4 million of the DSUE from Debbie, plus the exclusion for the year in which Kevin dies, to shelter the remaining $8.6 million from tax, with plenty to spare for some appreciation in value.

What would have happened without the portability provision? For simplicity, let’s say that Kevin dies later in 2019. Without being able to benefit from the unused portion of Debbie’s exclusion, the $11.4 million exclusion for Kevin in 2019 leaves the $8.6 million subject to estate tax. At the 40% rate, the federal estate tax bill would amount to a whopping $3.44 million.

Although techniques such as a traditional bypass trust may be used to avoid or reduce estate tax liability, this example demonstrates the potential impact of the portability election. It also emphasizes the need for planning.

Other points of interest

Be aware that this discussion factors in only federal estate taxes. State estate taxes may also have a significant impact, particularly in some states where the estate tax exemption isn’t tied to the federal exclusion.

Also, keep in mind that, absent further legislation, the exclusion amount is slated to revert to pre-2018 levels after 2025. Portability continues, although, for those whose estates will no longer be fully sheltered, additional planning must be considered.

Furthermore, portability isn’t always the best option. Consider all relevant factors, including nontax reasons that might affect the distribution of assets under a will or living trust. For instance, a person may want to divide assets in other ways if matters are complicated by a divorce, a second marriage, or unusual circumstances.

Details, details

Every estate plan includes details that need to be checked and rechecked. Our firm can help you do so, including deciding whether portability is right for you.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 estar atentos a nuevas versiones de dos estafas

Posted by Admin Posted on July 15 2019

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Contribuyentes deben estar atentos a nuevas versiones de dos estafas

Mientras los estafadores trabajan duro todo el año, los contribuyentes deben estar atentos a una oleada de correos electrónicos de phishing y estafas telefónicas.

Los contribuyentes deben estar atentos a las nuevas versiones de dos estafas relacionadas con los impuestos. Uno involucra números de seguro social relacionados con asuntos de impuestos. La segunda, amenaza a los contribuyentes con una factura de impuestos de una agencia gubernamental ficticia. Aquí hay algunos detalles acerca de estas estafas para ayudar a los contribuyentes a reconocerlas:

El esquema del número de seguro social (SSN, por sus siglas en inglés)

  • El último giro incluye a los estafadores que afirman poder suspender o cancelar el número de seguro social de la víctima. Esta estafa es similar y a menudo asociada con la estafa de suplantación del IRS.
  • Es otro intento de los estafadores para asustar a los contribuyentes para que devuelvan los mensajes automatizados.
  • Los estafadores pueden mencionar impuestos vencidos además de amenazar con cancelar el número de seguro social del contribuyente.

Agencia de impuestos falsa

  • Este esquema involucra una carta que amenaza con un embargo o gravamen del IRS.
  • El estafador envía la carta al contribuyente por correo.
  • El embargo o gravamen se basa en impuestos atrasados falsos adeudados a una agencia inexistente.
  • La agencia falsa se llama “Bureau of Tax Enforcement” (“Oficina de Control de Impuestos”). No existe tal agencia.
  • La estafa de notificación de gravamen también hace referencia al IRS para confundir a las posibles víctimas al pensar que la carta es de una agencia legítima.

Ambos esquemas muestran señales clásicas de ser estafas. El IRS y sus socios de la Cumbre de Seguridad, las agencias tributarias estatales y la industria tributaria, les recuerdan a todos que estén alertas a las estafas que usan al IRS o los impuestos de referencia. Estar alerta es especialmente importante a fines de la primavera y principios del verano, ya que es en esta época cuando llegan facturas de impuestos y reembolsos.

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

Fuente: IRS           

Why You Should Check Your Tax Bracket

Posted by Admin Posted on July 15 2019

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Many taxpayers learned some tough lessons upon completing their 2018 tax returns regarding the changes brought forth by the Tax Cuts and Jobs Act (TCJA). If you were one of them, or even if you weren’t, now’s a good time to check your bracket to avoid any unpleasant surprises next April.

Under the TCJA, the top income tax rate is now 37% (down from 39.6%) for taxpayers with taxable income over $500,000 for 2018 (single and head-of-household filers) or $600,000 for 2018 (married couples filing jointly). These thresholds are higher than they were for the top rate in 2017 ($418,400, $444,550 and $470,700, respectively), so the top rate probably wasn’t too much of a concern for many upper-income filers.

But some singles and heads of households in the middle and upper brackets were likely pushed into a higher tax bracket much more quickly for the 2018 tax year. For example, for 2017 the threshold for the 33% tax bracket was $191,650 for singles and $212,500 for heads of households. For 2018, the rate for this bracket was reduced slightly to 32% — but the threshold for the bracket is now only $157,500 for both singles and heads of households.

So, a lot more of these filers found themselves in this bracket and many more could so again in 2019. Fortunately for joint filers, their threshold for this bracket has increased from $233,350 for 2017 to $315,000 for 2018. The thresholds for these brackets have increased slightly for 2019, due to inflation adjustments. If you expect this year’s income to be near the threshold for a higher bracket, consider strategies for reducing your taxable income and staying out of the next bracket. For example, you could take steps to accelerate deductible expenses.

But carefully consider the changes the TCJA has made to deductions. For example, you might no longer benefit from itemizing because of the nearly doubled standard deduction and the reduction or elimination of certain itemized deductions. For 2019, the standard deduction is $12,200 for singles and married individuals filing separately, $18,350 for heads of households and $24,400 for joint filers.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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                              

Disfrute de una temporada de impuestos más soleada con estos consejos tributarios de verano del IRS

Posted by Admin Posted on July 15 2019

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WASHINGTON — ¿Compra una casa? ¿Tiene un trabajo de verano? ¿Hace voluntariado? Las actividades que son comunes en el verano a menudo califican para créditos tributarios o deducciones. Y aunque puede que los que trabajan en el verano o a tiempo parcial no ganen lo suficiente como para adeudar impuestos federales, deben recordar completar una declaración de impuestos a principios del próximo año para recibir un reembolso por impuestos retenidos.

Aquí están los consejos tributarios de verano del IRS que pueden ayudar a los contribuyentes durante la temporada de impuestos el próximo año.

  • Felicidad tributaria matrimonial. Los recién casados deben informar cualquier cambio de nombre a la Administración del Seguro Social antes de presentar la próxima declaración de impuestos. Luego deben informar cualquier cambio de dirección al Servicio Postal de los Estados Unidos, a los empleadores y al IRS, para asegurarse de recibir documentación relacionada con los impuestos.
     
  • Reembolso en efectivo para campamento de verano diurno. A diferencia de los campamentos nocturnos, el costo del campamento de verano diurno puede contar como un gasto para el Crédito por Cuidado de Menores y Dependientes. Consulte la Publicación 503 del IRS, Gastos del cuidado de menores y dependientes (en inglés), para más información.
     
  • Trabajo a tiempo parcial o de verano. Es posible que los trabajadores de verano no ganen lo suficiente para adeudar impuestos, pero los empleadores generalmente deben retener los impuestos de Seguro Social y Medicare del salario. Los trabajadores por cuenta propia o contratistas independientes deben pagar sus propios impuestos del Seguro Social y Medicare, incluso si no tienen ninguna obligación tributaria. Normalmente, los empleados reciben un Formulario W-2, Declaración de Salarios e Impuestos (en inglés), de su empleador - incluso si ya no trabajan con el mismo empleador - antes del 31 de enero del año siguiente. El Formulario W-2 muestra la cantidad de ganancias, retención de impuestos estatales y federales, Seguro Social, salarios de Medicare y propinas. Los empleados usan la información de este formulario cuando presentan sus declaraciones de impuestos cada año.
     
  • La clasificación del trabajador importa. Los dueños de negocios deben determinar correctamente si los trabajadores de verano son empleados o contratistas independientes. Los contratistas independientes no están sujetos a retención, haciéndoles responsables de pagar sus propios impuestos además de impuestos de Seguro Social y Medicare. Los trabajadores pueden evitar facturas de impuestos más altas y beneficios perdidos si conocen su clasificación adecuada.

Aunque el aumento de la deducción estándar significa que menos contribuyentes detallan sus deducciones, aquellos que todavía planifican detallar el próximo año deben tener en cuenta estos consejos:

  • Deducir los impuestos estatales y locales, ventas e impuestos a la propiedad. La deducción del contribuyente por ingresos estatales y locales, ventas e impuestos a la propiedad está limitada a una deducción total combinada de $10,000 ($5,000 si casado que presenta por separado). Cualquier impuesto estatal y local pagado por encima de esta cantidad no es deducible.
     
  • Refinanciación de una vivienda. La deducción por intereses hipotecarios se limita a los intereses pagados por un préstamo garantizado por la vivienda principal o secundaria del contribuyente que usó para comprar, construir o mejorar sustancialmente la vivienda principal o secundaria.
     
  • Comprar una casa. Aquellos que compren una casa después del 15 de diciembre de 2017, solo pueden deducir los intereses hipotecarios que pagan por un total de $750,000, o $375,000 si están casados y presentan una declaración por separado, en deuda calificada para una primera y segunda vivienda. Para las hipotecas existentes, si el préstamo se originó en o antes del 15 de diciembre de 2017, los contribuyentes continúan deduciendo intereses de hasta $1 millón en deuda calificada asegurada por primera y segunda vivienda.
     
  • Donar artículos. Deducir dinero. Aquellos artículos en buenas condiciones que no se usan durante mucho tiempo y que se donan a una organización benéfica calificada, pueden calificar para una deducción tributaria. Los contribuyentes deben detallar las deducciones para deducir las contribuciones caritativas (en inglés) y tener comprobantes de todas las donaciones. Use el Asistente Tributario Interactivo para ayudar a determinar si puede deducir sus contribuciones caritativas (en inglés).
     
  • Donar tiempo. Deducir millaje. Conducir un vehículo personal mientras se donan servicios en un viaje patrocinado por una organización benéfica calificada, podría calificar para una exención de impuestos. Los que detallan sus deducciones pueden deducir 14 centavos por milla para el millaje caritativo conducido en 2019.
     
  • Reportar ganancias y reclamar pérdidas de juegos de azar. Los contribuyentes que detallan pueden deducir las pérdidas de juegos de azar hasta la cantidad de ganancias de juegos de azar. Use el Asistente Tributario Interactivo para obtener más información acerca de cómo reportar ganancias y pérdidas de juegos de azar el próximo año.

Los dos últimos consejos son para los contribuyentes que aún no han presentado, pero a quienes se les puede deber un reembolso, y aquellos que pueden necesitar ajustar su retención.

  • Los reembolsos requieren una declaración de impuestos. Aunque puede que los trabajadores no hayan ganado suficiente dinero de un trabajo de verano para tener que presentar una declaración de impuestos, es posible que quieran presentar una declaración a la hora de impuestos. Es esencial presentar una declaración para obtener un reembolso de cualquier impuesto retenido. No hay multa por presentar una declaración tarde para aquellos que reciben reembolsos, sin embargo, por ley, se debe presentar una declaración dentro de tres años para obtener un reembolso. Consulte el Asistente Tributario Interactivo, ¿Necesito presentar una declaración de impuestos? (en inglés).
     
  • Verificar retención. Los recién casados, los trabajadores de verano, los propietarios de viviendas y todos los demás contribuyentes deben tomarse algún tiempo este verano para verificar su retención de impuestos para asegurarse que se les retiene la cantidad correcta de impuestos a medida que lo ganan durante todo el año. La Calculadora de Retención en IRS.gov ayuda a los empleados a estimar sus impuestos, créditos, ajustes y deducciones, y determinar si necesitan ajustar su retención mediante la presentación de un nuevo Formulario W-4 (SP), Certificado de la Retención del Empleado. Los contribuyentes deben recordar que, si es necesario, deben presentar su nuevo W-4 a su empleador, no al IRS.

Además de estos consejos, los contribuyentes pueden obtener consejos útiles al inscribirse en el servicio de correo electrónico de Consejos Tributarios del IRS. Para obtener más información acerca de cualquiera de estos consejos, visite IRS.gov.

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

Fuente: IRS                                       

Use your 2018 return to get 2019 tax withholding right

Posted by Admin Posted on July 15 2019

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Done with taxes this year? Then use your 2018 return to get your 2019 tax withholding right.

It’s very important to have the correct amount of taxes withheld from your paycheck. Use the IRS Withholding Calculator and your 2018 tax return information to adjust your withholdings to ensure you don’t have too little or too much withheld.

Checking and then adjusting tax withholding can help make sure you:

  • don’t owe more tax than you are expecting;
  • don’t get a surprise tax bill, and possibly a penalty, when filing next year; and
  • don’t receive a refund that is much larger or smaller than expected.

It’s important to do this as early in the year as possible, so that if a tax withholding adjustment is needed, there is more time for withholding to happen evenly during the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax.

For 2018, the average refund was around than $2,700. As you do your new calculation, decide if you want to reduce withholding to have a larger paycheck and smaller refund and adjust accordingly. Then provide your employer with the new information on Form W-4, Employee’s Withholding Allowance Certificate. It’s that simple!

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 para contribuyentes que ganan dinero con un pasatiempo

Posted by Admin Posted on July 15 2019

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Muchas personas gozan de pasatiempos que también son una fuente de ingreso. Desde la pintura y la cerámica hasta hacer jabones, estas actividades pueden ser fuentes de diversión y finanzas. Los contribuyentes que ganan dinero de un pasatiempo deben reportar esos ingresos en su declaración de impuestos.

Si alguien tiene un negocio, opera el negocio para obtener ganancias. Por el contrario, las personas participan en un pasatiempo por deporte o recreación, no para recibir una ganancia. Los contribuyentes deben considerar nueve factores (en inglés) al determinar si la actividad es un negocio o un pasatiempo.

  • Si realiza la actividad de manera profesional y mantiene libros y registros completos y precisos.
  • Si el tiempo y el esfuerzo que dedica a la actividad indican que tiene la intención de hacerlo rentable.
  • Si usted depende de los ingresos de la actividad para su sustento.
  • Si sus pérdidas se deben a circunstancias fuera de su control (o son normales en la fase de inicio de su tipo de negocio).
  • Si cambia sus métodos de operación en un intento por mejorar la rentabilidad.
  • Si usted o sus asesores tienen el conocimiento necesario para llevar a cabo la actividad como un negocio exitoso.
  • Si tuvo éxito en obtener ganancias en actividades similares en el pasado.
  • Si la actividad obtiene beneficios en algunos años y cuánto beneficio obtiene.
  • Si puede esperar obtener un beneficio futuro de la apreciación de los activos utilizados en la actividad.

Asegúrese de incluir la determinación en todos los datos y circunstancias de su actividad.

Si un contribuyente recibe ingresos por una actividad que no es para generar ingresos, los gastos que pagan por la actividad son deducciones misceláneas detalladas y ya no pueden deducirse. Los contribuyentes aún deben reportar el ingreso que recibieron en el Anexo 1, Formulario 1040, Línea 21.

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

Fuente: IRS  

Taxpayers can check online to get updates about their tax refund

Posted by Admin Posted on July 15 2019

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Taxpayers who filed an extension and are submitting their 2018 tax return this summer might be waiting for their tax refund. It’s easy for these taxpayers to check on the status of their money. They can just zip over to IRS.gov and use “Where’s My Refund?”

This tool is available on IRS.gov and through the IRS2Go app. Taxpayers can use Where’s My Refund? to start checking the status of their tax return within 24 hours after the IRS receives an e-filed return. For a paper return, it’s four weeks after the taxpayer mailed it.

The tool has a tracker that displays the progress of a tax return through these three stages:

Return received

  • Refund approved
  • Refund sent

All a taxpayer needs to use “Where’s My Refund?” are these three things:

  • Their Social Security number
  • Their tax filing status
  • The exact amount of the refund claimed on their tax return

Taxpayers should remember “Where’s My Refund” is only available on the IRS website or through the IRS2Go app.

“Where’s My Refund?” updates once every 24 hours, usually overnight, so there’s no need to check the status more often.

Taxpayers should only call the IRS tax help hotline on the status of their tax refund if:

  • It has been 21 days or more since the tax return was e-filed
  • It has been six weeks or more since the return was mailed
  • When “Where’s My Refund?” tells the taxpayer to contact the IRS

Taxpayers who owe should pay as much as possible to minimize interest and penalty charges. These taxpayers can visit IRS.gov/payments to explore their payment options.

Taxpayers should also watch out for email or text scams asking for personal information in order to check the status of an IRS refund. This IRS does not contact taxpayers in this way.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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 Get Tax Transcripts and Copies of Tax Returns from the IRS

Posted by Admin Posted on July 15 2019

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Taxpayers should keep copies of their tax returns for at least three years. Those who need a copy of their tax return should check with their software provider or tax preparer. Prior year tax returns are available from IRS for a fee.

For those that need tax transcripts, however, IRS can help. Transcripts are free.

Tax Transcripts

A transcript summarizes return information and includes Adjusted Gross Income (AGI). They are available for the most current tax year after the IRS has processed the return. People can also get them for the past three years.

When applying for home mortgages or college financial aid, transcripts are often necessary. Mortgage companies, however, normally arrange to get one for a homeowner or potential homeowner. For people applying for college financial aid, see IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications on IRS.gov for the latest options.

Tax Return Transcript.  A tax return transcript shows most line items including AGI from an original tax return (Form 1040, 1040A or 1040EZ) as filed, along with any forms and schedules. It doesn’t show changes made after the filing of the original return. This transcript is only available for the current tax year and returns processed during the prior three years. A tax return transcript usually meets the needs of lending institutions offering mortgages and student loans.

Tax Account Transcript.  A tax account transcript shows basic data such as return type, marital status, adjusted gross income, taxable income and all payment types. It also shows changes made after the filing of the original return.

To get a transcript, people can:

Order online. Use the ‘Get Transcript’ tool available on IRS.gov. There is a link to it under the red TOOLS bar on the front page. Those who use it must authenticate their identity using the Secure Access process.

Order by phone. The number to call is 800-908-9946.

Order by mail.  Complete and send either Form 4506-T or Form 4506T-EZ to the IRS to get one by mail. Use Form 4506-T to request other tax records: tax account transcript, record of account, wage and income and verification of non-filing. These forms are available on the Forms & Pubs page on IRS.gov

Those who need an actual copy of a tax return can get one for the current tax year and as far back as six years. The fee per copy is $50. Complete and mail Form 4506 to request a copy of a tax return. Mail the request to the appropriate IRS office listed on the form. People who live in a federally declared disaster area can get a free copy. More disaster relief information is available on IRS.gov.

Plan ahead. Delivery times for online and phone orders typically take five to 10 days from the time the IRS receives the request. You should allow 30 days to receive a transcript ordered by mail and 75 days for copies of your tax return.

Avoid scams. The IRS will never initiate contact using social media or text message. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out. Those who need an actual copy of a tax return can get one for the current tax year and as far back as six years. The fee per copy is $50. Complete and mail Form 4506 to request a copy of a tax return. Mail the request to the appropriate IRS office listed on the form. People who live in a federally declared disaster area can get a free copy. More disaster relief information is available on IRS.gov.

Plan ahead. Delivery times for online and phone orders typically take five to 10 days from the time the IRS receives the request. You should allow 30 days to receive a transcript ordered by mail and 75 days for copies of your tax return.

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

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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

INTERNATIONAL TAX GAP SERIES

Posted by Admin Posted on July 03 2019

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The United States has income tax treaties with a number of foreign countries. Under these treaties, residents of foreign countries may be:

  • Taxed at a reduced rate or
  • Exempt from U.S. income taxes on certain items of income received from sources within the U.S.

Because treaty provisions are generally reciprocal (apply to both treaty countries), a U.S. citizen or resident who receives income from a treaty country may also be taxed at a reduced tax rate by that foreign country.

While tax treaties may reduce U.S. tax for nonresidents and foreign tax for U.S. residents and citizens, each treaty must be reviewed to determine eligibility for these provisions. This article provides some highlights about tax treaties and how to properly apply their provisions.

Saving Clause

Most tax treaties have a saving clause that preserves the right of each country to tax its own citizens and treaty residents as if no tax treaty were in effect. However, the saving clause generally excepts specified income types from its application, which may allow you to claim certain treaty benefits even if you are a U.S. citizen or resident.

Nonresident Aliens

For nonresident aliens, treaties can limit or eliminate U.S. taxes on various types of personal services and other income, such as pensions, interest, dividends, royalties, and capital gains. Many treaties limit the number of years you can claim a treaty exemption for some types of income (e.g., see provisions applicable to students/apprentices/trainees and teachers/professors/researchers). Once you reach this limit, you may no longer claim the treaty exemption. In some cases, if you exceed the limit, the income is taxed retroactively for earlier years. Treaties may also have other requirements to be eligible for benefits. Publication 901, U.S. Tax Treaties, provides a summary of these treaty provisions.

U.S. Citizens and U.S. Treaty Residents

In many cases, U.S. citizens and U.S. treaty residents will not be able to reduce their U.S. tax based on treaty provisions due to the saving clause. However, those who are subject to taxes imposed by a treaty partner are entitled to certain credits, deductions, exemptions and reductions in the rate of taxes paid to that foreign country. These treaty benefits are generally only available to residents of the United States. Foreign taxing authorities sometimes require certification from the United States that an applicant filed an income tax return as a U.S. resident, as part of the proof of entitlement to the treaty benefits. Form 8802, Application for United States Residency Certification, must be filed to obtain this certification.

Disclosing Treaty Benefits Claimed

If you claim treaty benefits that override or modify any provision of the Internal Revenue Code, and by claiming these benefits your tax is or might be reduced, you must attach a fully completed Form 8833, Treaty-Based Return Position Disclosure, to your tax return. There are exceptions to this requirement for certain types of income that are outlined in Publication 519, U.S. Tax Guide for Aliens, under the section on Reporting Treaty Benefits Claimed.

Competent Authority Assistance

If you are a U.S. citizen or U.S. resident for purposes of a treaty, you can request assistance from the U.S. competent authority if you think that the actions of the U.S., the applicable treaty country or both caused or will cause double taxation or taxation otherwise inconsistent with the treaty. You should read any treaty articles, including the mutual agreement procedure article, that apply in your situation. The U.S. competent authority cannot consider requests involving countries with which the U.S. does not have a treaty.  Refer to Competent Authority Agreements and Competent Authority Assistance for information on existing competent authority agreements and how to make a competent authority request.

Obtaining Copies of Tax Treaties

To view the text of a specific tax treaty, go United States Income Tax Treaties - A to Z. You will find the text of each treaty, and in most cases, the Technical Explanation for the treaty. The Technical Explanation provides more detail on the intent of the treaty language.

Tax treaties are updated periodically and amended by protocols.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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  

In 2018 Whistleblowers were paid over 312 million dollars.

Posted by Admin Posted on July 03 2019

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The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.

Who can get an award?

The IRS may pay awards to people who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer.

The IRS is looking for solid information, not an “educated guess” or unsupported speculation. They are also looking for a significant Federal tax issue - this is not a program for resolving personal problems or disputes about a business relationship.

What are the rules for getting an award?

The law provides for two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court. These rules are found at Internal Revenue Code IRC Section 7623(b) - Whistleblower Rules.

The IRS also has an award program for other whistleblowers - generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less that $200,000. The awards through this program are less, with a maximum award of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in Tax Court. The rules for these cases are found at Internal Revenue Code IRC Section 7623(a) - Informant Claims Program, and some of the rules are different from those that apply to cases involving more than $2 million.

If you have any questions regarding accounting, domestic taxation, essential business accounting, 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  

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