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Taxpayers should be aware of myths about tax refunds

Posted by Admin Posted on July 07 2020

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Now that many taxpayers have filed their federal tax returns electronically and the IRS is back to processing paper tax returns sent by mail, they're eager for details about their refund. When it comes to refunds, there are several common myths.

Getting a refund this year means there's no need to adjust withholding for 2020

To help avoid a surprise next year, taxpayers should make changes now to prepare for next year. One way to do this is to adjust their tax withholding with their employer. This is easy to do using the Tax Withholding Estimator. This tool can help taxpayers determine if their employer is withholding the right amount. This is especially important for anyone who got an unexpected result from filing their tax return this year. This could have happened because the taxpayer's employer withheld too much or too little tax from the employee's paycheck in 2019.

Calling the IRS or a tax professional will provide a better refund date

Many people think talking to the IRS or their tax professional is the best way to find out when they will get their refund. The best way to check the status of a refund is online through the Where's My Refund? tool or the IRS2Go mobile app.

Taxpayers can call the automated refund hotline at 800-829-1954. This hotline has the same information as Where's My Refund? and IRS telephone assistors. There is no need to call the IRS unless Where's My Refund? says to do so.

Ordering a tax transcript is a secret way to get a refund date

Doing so will not help taxpayers find out when they will get their refund. Where's My Refund? tells the taxpayer their tax return has been received and if the IRS has approved or sent the refund.

Where's My Refund? must be wrong because there's no deposit date yet

Updates to Where's My Refund? ‎on both IRS.gov and the IRS2Go mobile app are made once a day. These updates are usually made overnight. Even though the IRS issues most refunds in less than 21 days, it's possible a refund may take longer. If the IRS needs more information to process a tax return, the agency will contact the taxpayer by mail. Taxpayers should also consider the time it takes for the banks to post the refund to the taxpayer's account. People waiting for a refund in the mail should plan for the time it takes a check to arrive.

Where's My Refund? must be wrong because a refund amount is less than expected

There are several factors that could cause a tax refund to be larger or smaller than expected. Situations that could decrease a refund include:

  • The taxpayer made math errors or mistakes
  • The taxpayer owes federal taxes for a prior year
  • The taxpayer owes state taxes, child support, student loans or other delinquent federal non-tax obligations
  • The IRS holds a portion of the refund while it reviews an item claimed on the return

The IRS will mail the taxpayer a letter of explanation if these adjustments are made. Some taxpayers may also receive a letter from the Department of Treasury's Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations.

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

Gig economy tips taxpayers should remember

Posted by Admin Posted on July 06 2020

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The gig economy, also called sharing or access economy, is activity where taxpayers earn income providing on-demand work, services or goods. Often, it’s through a digital platform like an app or website. While there are many types of sharing economy businesses, ride-sharing and home rentals are two of the most popular.

Here are some things taxpayers should remember:

  • Income from these sources is taxable, regardless of whether an individual receives information returns. This is true even if the work is full-time, part-time or if an individual is paid in cash.
  • Taxpayers may also be required to make quarterly estimated income tax payments and pay their share of Social Security, Medicare or Medicaid taxes.

While providing gig economy services, it is important that the taxpayer is correctly classified.

  • This means the business or the taxpayer must determine whether the individual providing the services is an employee or independent contractor.
  • Taxpayers can use the worker classification page on IRS.gov to see how they are classified.
  • Independent contractors may be able to deduct business expenses, depending on tax limits and rules. It is important for taxpayers to keep records of their business expenses.

Since income from the gig economy is taxable, it’s important that taxpayers remember to pay the right amount of taxes throughout the year to avoid owing when they file.

  • An employer typically withholds income taxes from their employees’ pay to help cover income taxes their employees owe.
  • Gig economy workers who are not considered employees have two ways to cover their income taxes:
    • Submit a new From W-4 to their employer to have more income taxes withheld from their paycheck, if they have another job as an employee.
    • Make quarterly estimated tax payments to help pay their income taxes throughout the year, including self-employment tax.

The Gig Economy Tax Center on IRS.gov answers questions and helps gig economy taxpayers understand their tax responsibilities.

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 extiende fecha límite del 15 de julio y otros plazos para víctimas de tornados en partes del sur; provee otro alivio

Posted by Admin Posted on July 06 2020

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WASHINGTON — Víctimas de los tornados, tormentas severas e inundaciones que ocurrieron en partes de Mississippi, Tennessee y Carolina del Sur ahora tendrán hasta el 15 de octubre de 2020 para presentar varias declaraciones de impuestos individuales y comerciales y efectuar pagos de impuestos, anunció hoy el Servicio de Impuestos Internos.

El IRS ofrece este alivio a cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA) como elegible para asistencia individual. Actualmente, esto incluye los condados de Clarke, Covington, Grenada, Jasper, Jefferson Davis, Jones, Lawrence, Panola y Walthall en Mississippi, los condados de Bradley y Hamilton en Tennessee y los condados de Aiken, Barnwell, Berkeley, Colleton, Hampton, Marlboro, Oconee, Orangeburg y Pickens en Carolina del Sur.

Los contribuyentes en las localidades que se agreguen más tarde al área del desastre recibirán automáticamente la misma ayuda de presentación y pago. La lista actual de localidades elegibles siempre está disponible en la página de ayuda en caso de desastres en IRS.gov.

El alivio tributario pospone varios plazos de presentación y pago de impuestos que comenzaron a partir del 12 de abril. Como resultado, las personas y empresas afectadas tendrán hasta el 15 de octubre de 2020 para presentar las declaraciones y pagar los impuestos que debieron originalmente durante este período. Esto incluye las declaraciones individuales y comerciales del 2019 que vencen el 15 de julio debido a COVID-19. Entre otras cosas, esto también significa que los contribuyentes afectados tendrán hasta el 15 de octubre para hacer contribuciones a las cuentas IRA de 2019.

La fecha límite del 15 de octubre también se aplica a los pagos de impuestos estimados de los primeros trimestres de 2020 que vencen el 15 de julio, y el pago de impuestos estimados del tercer trimestre que usualmente vence el 15 de septiembre. También se aplica a las declaraciones de impuestos trimestrales de nómina y los impuestos por uso y consumo que usualmente vencen el 30 de abril y el 31 de julio.

Además, las multas sobre los depósitos de impuestos sobre la nómina y los impuestos por uso y consumo que vencen a partir del 12 de abril y antes del 27 de abril se anularán siempre y cuando los depósitos se hayan efectuado para el 27 de abril.

La página de ayuda por desastre del IRS tiene detalles acerca de otras declaraciones, pagos y acciones relacionadas con impuestos que califican para el tiempo adicional.

El IRS proporciona automáticamente la presentación y el alivio de multas a cualquier contribuyente con una dirección de registro del IRS ubicada en el área del desastre. Por lo tanto, los contribuyentes no necesitan comunicarse con la agencia para obtener este alivio. Sin embargo, si un contribuyente afectado recibe un aviso de multa por presentación o pago tardío del IRS que tiene una fecha de vencimiento de presentación, pago o depósito original o extendida dentro del período de aplazamiento, el contribuyente debe llamar al número que aparece en el aviso para que le anulen la multa.

Además, el IRS trabajará con cualquier contribuyente que viva fuera del área del desastre, pero cuyos archivos necesarios para cumplir con una fecha límite que ocurra durante el período de aplazamiento se encuentren en el área afectada. Esto también incluye a los trabajadores que asisten a las actividades de ayuda que están afiliados a un gobierno reconocido u organización filantrópica.

Los contribuyentes que califican para alivio que viven fuera del área del desastre deben comunicarse con el IRS al 866-562-5227, una vez se reanuden las operaciones normales. Para información acerca de los servicios disponibles del IRS, visite la página de Operaciones y servicios del IRS en irs.gov/coronavirus.

Las personas y empresas en un área de desastre declarada federalmente que sufrieron pérdidas relacionadas con el desastre no reembolsadas o sin seguro pueden optar por reclamarlas en la declaración del año en que ocurrió la pérdida (en este caso, la declaración de 2020 que normalmente se presenta el próximo año) o la declaración para el año anterior Esto significa que los contribuyentes pueden, si lo desean, reclamar estas pérdidas en la declaración de 2019 que están completando esta temporada de impuestos.

Asegúrese de escribir el número de declaración de FEMA en cualquier declaración que reclame una pérdida. Los números son 4536 para Mississippi, 4541 para Tennessee y 4542 para Carolina del Sur. Vea la Publicación 547 (SP) para más detalles.

El alivio tributario es parte de una respuesta federal coordinada al daño causado por estas tormentas y se basa en evaluaciones locales de daños de FEMA. Para obtener información acerca de la recuperación ante desastres, visite disasterassistance.gov/es.

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

-Consejos a cerca de la economía compartida que los contribuyentes deben recordar-

Posted by Admin Posted on July 06 2020

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La economía compartida, también llamada economía disponible por encargo o de acceso, es una actividad en la que los contribuyentes obtienen ingresos al proporcionar trabajo, servicios o bienes a pedido. A menudo, es a través de una plataforma digital como una aplicación o sitio web. Mientras que hay muchos tipos de negocios de economía compartida, los viajes compartidos y el alquiler de propiedades son dos de los más populares.

Aquí hay algunas cosas que los contribuyentes deben recordar:

  • Los ingresos de estas fuentes están sujetos a impuestos, independientemente de si un individuo recibe declaraciones de información. Esto es cierto incluso si el trabajo es a tiempo completo, a tiempo parcial o si a un individuo se le paga en efectivo.
  • También se puede exigir a los contribuyentes que hagan pagos trimestrales de impuestos estimados y paguen su parte de los impuestos del Seguro Social, Medicare o Medicaid.

Al proporcionar servicios de economía compartida, es importante que el contribuyente se clasifique correctamente.

  • Esto significa que la empresa o el contribuyente deben determinar si la persona que brinda los servicios es un empleado o un contratista independiente.
  • Los contribuyentes pueden usar la página de clasificación de los trabajadores  en IRS.gov para ver cómo están clasificados.
  • Los contratistas independientes pueden deducir los gastos comerciales, según los límites y las normas tributarias. Es importante que los contribuyentes mantengan archivos de sus gastos comerciales.

Dado que los ingresos de la economía compartida están sujetos a impuestos, es importante que los contribuyentes recuerden pagar la cantidad correcta de impuestos durante todo el año para evitar adeudarlos cuando presenten sus declaraciones.

  • Un empleador generalmente retiene los impuestos tributarios del pago de sus empleados para ayudar a cubrir los impuestos que sus empleados deben.
  •  Los trabajadores de la economía compartida que no se consideran empleados tienen dos maneras de cubrir sus impuestos tributarios:
    • Envíe un nuevo Formulario W-4 a su empleador para que se le retengan más impuestos de su cheque de paga, si tiene otro trabajo como empleado.
    • Haga pagos trimestrales de impuestos estimados para ayudar a pagar sus impuestos durante todo el año, incluido el impuesto sobre el trabajo por cuenta propia.

El Centro de ayuda tributaria para la economía compartida en IRS.gov tiene respuestas a preguntas y ayuda a los contribuyentes de la economía compartida a comprender sus responsabilidades tributarias.

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 

-Keep Economic Impact Payment notice with other tax records-

Posted by Admin Posted on July 06 2020

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People who receive an Economic Impact Payment this year should keep Notice 1444, Your Economic Impact Payment, with their tax records. This notice provides information about the amount of their payment, how the payment was made and how to report any payment that wasn't received.

For security reasons, the IRS mails this notice to each recipient's last known address within 15 days after the payment goes out. It's especially important for people to keep this notice if they think their payment amount is wrong. When they file their 2020 tax return, they can refer to Notice 1444 and claim additional credits, if they are eligible for them.

Taxpayers should keep this notice filed with all their other important tax records. These include, W-2s from employers,1099s from banks and other payers, other income documents and virtual currency transaction records.

All taxpayers should keep a copy of their past tax returns and supporting documents for at least three years. Key information from their prior year return may be required to file next year. Life changes like employment or marital status and financial gains or losses can affect a tax refund or the amount of taxes a person may owe.

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        

Spread the word & help millions of qualified homeless and low-income families receive their Economic Impact Payment

Posted by Admin Posted on June 22 2020

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Many Americans who qualify for an Economic Impact Payment (EIP) are not aware of, and may potentially miss out on, this economic assistance under the CARES Act. While many taxpayers do not need to take action in order to receive any EIP to which they are entitled, there are other taxpayers who will need to take some action in order to receive an EIP. Thus, the IRS needs your help to spread the word. Join over 100,000 other partners nationwide in efforts to reach those in your community who may be low-income, experiencing homeless or who may have Limited English Proficiency (LEP).

Visit IRS.gov for tools and information, including translated materials, on this outreach initiative. See how you can help share this valuable information with fellow Americans at risk of missing out on this economic benefit.

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: TAS        

-IT WILL HAPPEN IN THE SUMMER

Posted by Admin Posted on June 22 2020

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Later this summer, for the first-time taxpayers will be able to file their Form 1040-X, Amended U.S Individual Income Tax Return electronically.

Making this form electronically fileable has been a long-time goal for the IRS. It will greatly benefit the tax professional community and taxpayers.

The new electronic option will allow the IRS to receive amended returns faster while minimizing errors normally associated with manually completing the form. It will also provide the IRS with more complete and accurate data to help support customer service representatives answer taxpayer questions.

When the electronic filing option becomes available, taxpayers will only be able to amend tax year 2019 Forms 1040 and 1040-SR returns electronically. In general, taxpayers will still have the option to submit a paper version of the Form 1040-X and should follow the instructions for preparing and submitting the paper form.

Whether an amended return is filed electronically or manually, taxpayers can still use the Where's My Amended Return? online tool to check the status of their amended 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 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

-PAGO DE IMPACTO ECONÓMICO PUEDE LLEGAR EN TARJETA DE DÉBITO PREPAGADA

Posted by Admin Posted on June 22 2020

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Algunas personas pueden recibir su pago de impacto económico por corre o en una tarjeta de débito prepagada en lugar de un cheque. Las personas pueden recibir una tarjeta de débito incluso si la herramienta Obtener mi pago muestra que reciben un cheque. Hay una sección especial de tarjetas de débito prepagadas en IRS.gov.

Estas son algunas de las preguntas comunes que las personas pueden tener a cerca de estas tarjetas.

¿El IRS envió tarjetas de débito prepagadas?

Si. Las tarjetas de débito prepagadas se conocen como la Tarjeta de pago de impacto económico (en inglés) y fueron preparadas por la Oficina del Servicio Fiscal, parte del Departamento del Tesoro. Revise su correo cuidadosamente. Estas tarjetas llegan en un sobre sencillo de "Servicios para titulares de tarjetas de Money Network". El nombre de la Visa aparecerá en el frente de la tarjeta. El reverso de la tarjeta tiene el nombre del banco emisor, Meta Bank®, N.A. La información incluida con la tarjeta explica que la tarjeta es la Tarjeta de pago de impacto económico del destinatario.

¿Alguien puede transferir dinero de su tarjeta de débito a su cuenta bancaria?

Si. El límite de transferencias ACH a una cuenta bancaria es de $2,500 por transacción. Las personas pueden transferir fácilmente el dinero de su tarjeta a una cuentabancariaexistenteenlíneaenEIPCard.com (en inglés). Los titulares de tarjetas también pueden transferir dinero si usan la aplicación móvil Money Network, que se puede descargar como una aplicación en un teléfono inteligente. Los titulares de tarjetas necesitarán la ruta y el número de su cuenta bancaria.

¿Qué hace alguien si pierde o destruye su tarjeta de débito prepagada?

Las personas que hayan perdido o destruido su Tarjeta EIP pueden solicitar un reemplazo gratis a través del Servicio al Cliente de Meta Bank®. La  tarifa estándar de $7.50 no se aplicará para la primera reemisión de cualquier Tarjeta EIP. Cualquier tarifa inicial cobrada a un cliente desde una fecha anterior se devolverá. Las personas no necesitan saber su número de tarjeta para solicitar un reemplazo. También pueden solicitar un reemplazo a través del 800-240-8100 y luego elegir la opción 2 del menú principal.

El IRS enviará una carta por correo acerca del pago de impacto económico a la dirección registrada del individuo dentro de los 15 días posteriores a la realización del pago. Tenga cuidado con los sitios web y los intentos de redes sociales que solicitan dinero o información personal y los esquemas vinculados a los pagos de impacto económico.

El IRS alienta a las personas a compartir esta información con familiares y amigos.

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                   

An extension to file is not an extension to pay taxes

Posted by Admin Posted on June 22 2020

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For most taxpayers the filing and payment deadline was postponed July 15. Those who need more time to file beyond the postponed date, can request an extension to file. Taxpayers must request an extension to file by July 15. This gives them until October 15 to file their tax return. An extension to file is not an extension to pay. Taxes must be paid by July 15.

How to request an extension to file

To get an extension to file, taxpayers must do one of the following:

  • File Form 4868 through their tax professional, tax software or using Free File on IRS.gov.
  • Submit an electronic payment with Direct Pay, Electronic Federal Tax Payment System or by debit, credit card or digital wallet and select Form 4868 or extension as the payment type.

An automatic extension of time to file will process when taxpayers pay all or part of their taxes electronically by the Wednesday, July 15 due date.

Although the tax filing deadline has been postponed to July 15, 2020, the IRS continues processing electronic tax returns, issuing direct deposit refunds and accepting electronic payments.

The agency is now is back to processing paper tax returns sent by mail. However, taxpayers who mailed a paper tax return will likely experience a longer wait time. Those who have already mailed a paper tax return but, it hasn’t yet been processed, should not file a second tax return or write the IRS to check the status of their tax return or Economic Impact Payment.

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

-WITH A DIVORCE, WHAT ARE THE TAX IMPLICATIONS?-

Posted by Admin Posted on June 12 2020

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Upon completion of a divorce, individual tax returns will be filed. There are a few areas that may result in tax consequences. The following are the most common:

  • Child Support
    It is not taxable to the recipient and is not deductible by the payer. If it is specially designated as child support in a divorce agreement or lessened by the occurrence of a contingency relative to the child, meaning a child reaches a specified age, it is considered as a payment.
  • Alimony
    It is taxable to the recipient and deductible by the payers. It is known as a payment in accordance with a divorce agreement other than child support or when allocated in the decree as something other than alimony. In a separation agreement, similar treatment is in accordance with separate maintenance payments. Payments may not end upon death of the recipient and may not be front-loaded.
  • Property Settlements
    When in accordance with the divorce or separation, they are not taxable. In the event of transfers of assets amongst spouses, they do not become taxable income, gains, loses, or deductions. The recipient spouse gets the cost basis of the property. Your spouse may provide you with an equal share of the property based on a fair market value, but be careful with the lower basis. In the end, it can produce a taxable gain at the asset's sale.

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

-PROTECTING YOURSELF FROM OPPORTUNISTIC FRAUD-

Posted by Admin Posted on June 11 2020

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The novel coronavirus (COVID-19) crisis has spurred much confusion and unprecedented economic challenges. It has also created ample opportunities for dishonest individuals and criminal organizations to prey on the anxieties of many Americans.

As the year rolls along, fraud schemes related to the crisis will continue as well, potentially becoming even more sophisticated. Here are some protective actions you can take.

Watch out for phony charities

When a catastrophe like COVID-19 strikes, the charitably minded want to donate cash and other assets to help relieve the suffering. Before donating anything, beware that opportunistic scammers may set up fake charitable organizations to exploit your generosity.

Fake charities often use names that are similar to legitimate organizations. So, before contributing, do your homework and verify the validity of any recipient. Remember, if you’re scammed, not only will you lose your money or assets, but those who would benefit from your charitable action will also lose out.

Don’t get hooked by phishers

In a “phishing” scheme, victims are enticed to respond to a deceptive email or other online communication. In COVID-19-related phishing scams, the perpetrator may impersonate a representative from a health agency, such as the World Health Organization (WHO) or the Centers for Disease Control and Prevention (CDC). They may ask for personal information, such as your Social Security or bank account number, or instruct you to click on a link to a survey or website.

If you receive a suspicious email, don’t respond or click on any links. The scammer might use ill-gotten data to gain access to your financial accounts or open new accounts in your name. In some cases, clicking a link might download malware to your computer. For updates on the COVID-19 crisis, go directly to the official websites of the WHO or CDC.

The IRS reports that its Criminal Investigation Division has seen a wave of new and evolving phishing schemes against taxpayers — and among the primary targets are retirees.

Shop carefully

In many parts of the United States, and indeed around the world, certain consumer goods have become scarce. Examples have included hand sanitizer, antibacterial wipes, masks and toilet paper. Scammers are exploiting these shortages by posing as retailers or direct-to-consumer suppliers to obtain buyers’ personal information.

Con artists may, for instance, claim to have the goods that you need and ask for your credit card number to complete a transaction. Then they use the card number to run up charges while you never receive anything in return.

Buy from only known legitimate businesses. If a supplier offers a deal out of the blue that seems too good to be true, it probably is. Also watch out for price gouging on limited items. If an item is selling online for many times more than the usual price, you probably want to avoid buying it.

Hang up on robocalls

You may have noticed an increase in “robocalls” — automated phone calls offering phony services or demanding sensitive information — since the COVID-19 crisis began. For instance, callers may offer COVID-19-related items at reduced rates. Then they’ll ask for your credit card number to “secure” your purchase.

Reputable companies, charities and government agencies (such as the IRS) won’t try to contact you this way. If you receive an unsolicited call from a phone number that’s blocked or that you don’t recognize, hang up or ignore it.

In addition, don’t buy into special offers for items such as COVID-19 treatments, vaccinations or home test kits. You’ll likely end up paying for something that at best doesn’t exist and at worst could harm you.

Tarnish their gold

For fraudsters, this year’s worldwide crisis is a golden opportunity. Don’t let them take advantage of you or your loved ones.

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 EMPLOYERS CAN GET SOME FINANCIAL RELIEF WITH THE RETENTION TAX CREDIT-

Posted by Admin Posted on June 11 2020

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To help reduce layoffs during the coronavirus (COVID-19) pandemic, the Coronavirus Aid, Relief and Economic Security (CARES) Act created a new federal income tax credit for employers that keep workers on their payrolls. The credit equals 50% of eligible employee wages paid by an eligible employer in a 2020 calendar quarter. It's subject to an overall wage cap of $10,000 per eligible employee. Here are answers to some FAQs about the retention credit.

What employers are eligible?

Eligible employer status for the retention credit is determined on a 2020 calendar quarter basis. The credit is available to employers, including nonprofits, whose operations have been fully or partially suspended during a 2020 calendar quarter as a result of an order from an appropriate governmental authority that limits commerce, travel or group meetings due to COVID-19.

The retention credit can also be claimed by employers that have experienced a greater-than-50% decline in gross receipts for a 2020 calendar quarter compared to the corresponding 2019 calendar quarter. However, the credit is disallowed for quarters following the first calendar 2020 quarter during which gross receipts exceed 80% of gross receipts for the corresponding 2019 calendar quarter.

To illustrate: Suppose a company’s 2020 gross receipts are as follows compared to 2019:

  • First quarter: 86%
  • Second quarter: 43%
  • Third quarter: 92%

The company had a greater-than-50% decline in gross receipts for the second quarter of 2020. So, it’s an eligible employer for purposes of the retention credit for the second and third quarters of 2020. For the fourth quarter of 2020, it’s ineligible because its gross receipts for the third quarter of 2020 exceeded 80% of gross receipts for the third quarter of 2019.

What wages are eligible?

The retention credit is available to cover eligible wages paid from March 13, 2020, through December 31, 2020. For an eligible employer that had an average of 100 or fewer full-time employees in 2019, all employee wages are eligible for the credit (subject to the overall $10,000 per-employee wage cap), regardless of whether employees are furloughed due to COVID-19.

For an employer that had more than 100 full-time employees in 2019, only wages of employees who are furloughed or given reduced hours due to the employer's closure or reduced gross receipts are eligible for the retention credit (subject to the overall $10,000 per-employee wage cap, including qualified health plan expenses allocable to those wages).

The amount of wages eligible for the credit is capped at a cumulative total of $10,000 for each eligible employee. The $10,000 cap includes allocable health plan expenses. For example, a company pays an employee $8,000 in eligible wages in the second quarter of 2020 and another $8,000 in the third quarter of 2020. The credit for wages paid to the employee in the second quarter is $4,000 (50% x $8,000). The credit for wages paid to the employee in the third quarter is limited to $1,000 (50% x $2,000) due to the $10,000 wage cap. Any additional wages paid to the employee are ineligible for the credit due to the $10,000 cap.

What other rules and restrictions apply?

The retention credit is not allowed for:

  • Emergency sick leave wages or emergency family leave wages that small employers (generally those with fewer than 500 employees) are required to pay under the Families First Coronavirus Response Act (FFCRA), because they’re covered by federal payroll tax credits granted by the FFCRA,
  • Wages taken into account for purposes of claiming the pre-existing Work Opportunity Tax Credit, and
  • Wages taken into account for purposes of claiming the pre-existing employer credit for paid family and medical leave.

In addition, the retention credit isn't available to small employers that receive a potentially forgivable Small Business Administration (SBA) guaranteed Small Business Interruption Loan under the CARES Act’s Paycheck Protection Program.

How is the credit claimed?

Technically, an eligible employer's allowable retention credit for a calendar quarter is offset against the employer's liability for the Social Security tax component of federal payroll taxes. That component equals 6.2% of the first $137,700 of an employee's 2020 wages.

But the credit is "refundable." That means an employer can collect the full amount of the credit even if it exceeds its federal payroll tax liability.

The allowable credit can be used to offset all of an employer's federal payroll tax deposit liability, apparently including federal income tax, Social Security tax and Medicare tax withheld from employee paychecks. If an employer's tax deposit liability isn't enough to absorb the credit, the employer can apply for an advance payment of the credit from the IRS.

Can you benefit?

If your business has suffered financially during the COVID-19 pandemic, the CARES Act’s 50% employee retention credit might help you keep workers on the payroll during the crisis. Keep in mind that additional guidance could be released on the credit or more legislation could be signed into law extending or expanding the credit. We can apprise you of any updates, help you determine whether you’re eligible and explore other tax-saving and financial assistance opportunities that may be available to you during this challenging time.

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     

-NEW BREAK TEMPORARILY MAKES RETIREMENT PLAN WITHDRAWALS LESS TAXING-

Posted by Admin Posted on June 11 2020

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A key provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is intended to help alleviate some of the economic hardship many Americans are experiencing as a result of the novel coronavirus (COVID-19) pandemic. It allows tax-favored treatment for distributions from retirement accounts in certain situations.

Penalty waiver and more

Under the CARES Act, IRA owners who are adversely affected by the COVID-19 pandemic are eligible to take tax-favored “coronavirus-related” distributions (CVDs) of up to $100,000 from their IRAs. If you’re under age 59½, the early withdrawal penalty that normally would apply is waived. Any eligible IRA owner can recontribute (repay) a CVD back into their IRA within three years of the withdrawal date and treat the withdrawal and later recontribution as a tax-free rollover. There are no limitations on what you can use CVD funds for during that three-year period.

The CARES Act also may allow you to take tax-favored CVDs from your employer's qualified retirement plan, such as a 401(k) or profit-sharing plan, if the plan allows it. If allowed, the tax rules for CVDs taken from qualified plans are similar to those for CVDs taken from IRAs. As of this writing, a lot of details still need to be figured out about how CVDs taken from qualified plans will work. Contact the appropriate person with your employer for more information.

7 basic rules

There are seven basic rules for taking CVDs from IRAs:

1. You can take one or more CVDs up to the $100,000 limit.

2. CVDs can come from different IRAs.

3. The three-year recontribution period for each CVD begins on the day after you receive it.

4. You can make your recontributions in a lump sum or through multiple recontributions.

5. You can recontribute to one or several IRAs, and they don't have to be the same accounts you took the CVDs from.

6. As long as you recontribute the entire CVD amount within the three-year window, the whole transaction or series of transactions are treated as tax-free IRA rollovers.

7. If you're under 59½, the 10% penalty tax that usually applies to early IRA withdrawals is waived for CVDs, even if you don’t recontribute.

If your spouse owns one or more IRAs in his or her own name, he or she may be eligible for the same distribution privilege.

Who’s eligible

CVDs can be taken from January 1, 2020, through December 30, 2020, by an eligible individual. That means an individual:

  • Who's diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention,
  • Whose spouse or dependent (generally a qualifying child or relative who receives more than half of his or her support from you) is diagnosed with COVID-19 by such a test,
  • Who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off or having work hours reduced due to COVID-19,
  • Who's unable to work because of lack of childcare due to COVID-19 and experiences adverse financial consequences as a result,
  • Who owns or operates a business that has closed or has had operating hours reduced due to COVID-19 and has experienced adverse financial consequences as a result, or
  • Who has experienced adverse financial consequences due to other COVID-19-related factors.

As of this writing, IRS guidance on how to interpret the last two factors is needed. Check in with us for the latest developments.

When taxes are due

You'll be taxed on any CVD amount that you don't recontribute within the three-year window. But you won't have to worry about owing the 10% early withdrawal penalty if you're under 59½.

You can choose to spread the taxable amount equally over three years, apparently starting with 2020. But here it gets tricky, because the three-year window won't close until sometime in 2023. Until then, it won't be clear that you failed to take advantage of the tax-free CVD rollover deal. So, you may have to amend a prior-year return to report some additional taxable income from the CVD. As of this writing, the IRS is expected to issue guidance to clarify this issue. Again, check in with us for the latest information.

You also have the option of simply reporting the taxable income from the CVD on your 2020 individual income tax return Form 1040. Again, you won't owe the 10% early withdrawal penalty if you're under 59½.

Getting through the crisis

CVDs can be a helpful, flexible tax-favored financial tool for eligible taxpayers during the pandemic. But it's just one of several financial relief measures available under the CARES Act that include tax relief, and other relief legislation may be forthcoming. We can help you take advantage of relief measures that will help you get through the COVID-19 crisis.

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 IS INCLUDED IN THE INITIAL COSTS OF LEASING A CAR?-

Posted by Admin Posted on June 11 2020

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Learn what the total initial costs will be when determining if you want to lease or buy. You will use this total amount to compare to the cost of buying.

Initial costs are the amount you will need to come up with for the down payment when you lease a car. The security deposit, the first and last lease payments, the "capitalized cost reductions," the sales taxes, title fees, license fees, and insurance are included. Usually the initial costs amount to less than the down payment that is necessary to purchase a car. During the bargaining with the dealer, all initial costs are open for negotiation.

The Lessor must disclose all up-front, continuing, and ending costs in a standard, understandable format according to the Federal Consumer Leasing Act.

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

-CAN YOU QUALIFY FOR THE PAYROLL TAX CREDIT?-

Posted by Admin Posted on June 11 2020

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For many businesses, retaining employees has been difficult, if not impossible. If your company has been able to keep all or some of its workers, you may qualify for the payroll tax credit created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, known as the Employee Retention Credit.

Assessing your qualifications

The Employee Retention Credit provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees. The credit is available to employers whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings during the novel coronavirus (COVID-19) crisis.

The credit is also available to employers that have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis. When such an employer’s gross receipts exceed 80% of the comparable quarter in 2019, the employer no longer qualifies for the credit beginning with the next quarter.

The credit is unavailable to employers benefitting from certain Small Business Administration loan programs or to self-employed individuals.

Examining wages paid

For employers that had an average number of full-time employees in 2019 of 100 or fewer, all employee wages are eligible, regardless of whether an employee is furloughed or has experienced a reduction in hours.

For employers with more than 100 employees in 2019, only wages paid to employees who are furloughed or face reduced hours because of the employer’s closure or reduced gross receipts are eligible for the credit. No credit is available for wages paid to an employee for any period for which the employer is allowed a Work Opportunity Tax Credit with respect to the employee.

In the context of the credit, the term “wages” includes health benefits and is capped at the first $10,000 in wages paid by the employer to an eligible employee. Wages don’t include amounts considered for required paid sick leave or required paid family leave under the Families First Coronavirus Response Act. In addition, wages applicable to this credit aren’t taken into account for the employer credit toward paid family and medical leave.

Claiming advance payments and refunds

The IRS can advance payments to eligible employers. If the amount of the credit for any calendar quarter exceeds applicable payroll taxes, the employer may be able to claim a refund of the excess on its federal employment tax return.

In anticipation of receiving the credits, employers can fund qualified wages by 1) accessing federal employment taxes, including withheld taxes, that are required to be deposited with the IRS or 2) requesting an advance of the credit from the IRS on Form 7200, “Advance Payment of Employer Credits Due to COVID-19.” The IRS may waive applicable penalties for employers who don’t deposit applicable payroll taxes in anticipation of receiving the credit.

Obtaining relief

The credit applies to wages paid after March 12, 2020, and before Jan. 1, 2021. Contact our firm for help determining whether you qualify and, if so, how to claim this tax break.

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     

-WHEN RETIREMENT PLANS OR IRAS ARE DIVIDED IN A DIVORCE, WHAT HAPPENS?-

Posted by Admin Posted on June 11 2020

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If in accordance with the qualified domestic relations order or other order of the court in the case of an IRA, these plans are separated as non-taxable. However, this is the case only if the assets stay in the retirement account or IRA. Once the funds are allocated, they will be taxed to the recipient. The payer does not get the benefit of a deduction and the recipient does not have taxable income when divided.

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 NEGOTIATE FOR A NEW CAR?-

Posted by Admin Posted on June 11 2020

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Keep in mind that you are not just looking for a car. You also have to select a dealer with whom you will continue a long-term relationship with, as you usually have to service your car at the dealership. If you aren't comfortable with the dealership, go somewhere else.

A good time to try for a good bargain on a car is the last Saturday of September, October, or December.

Before you start looking for a car, learn about the financing options. You can be prepared when the dealer starts to discuss financing if you are aware of what the banks are charging.

Some points you will want to highlight during the negotiations are:

  • You are aware of the exact model and options you want
  • You are shopping around and will get quotes from other dealerships
  • You will not be talking about financing or trade-ins until the dealer has given an offer and make sure not to mention a trade-in until the price has been negotiated
  • You are fully aware of the invoice cost of the car

Lastly, go to other dealerships even if you think you have a great price.

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 SHOULD I BE ON THE LOOKOUT FOR WHEN I AM PURCHASING LIFE INSURANCE?-

Posted by Admin Posted on June 11 2020

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First of all, beware that many insurance salespeople work on a commission basis, and may want to persuade you to purchase the policy that brings them the largest commission, rather than getting you the policy that makes the most sense for you.

Most of all, be sure that the company you are buying from will be in existence when you need them. Make sure that you check the insurer's rating before you consider doing business with them.

Always review the costs of any recommended policy. The commissions will be stated, and you can see exactly where the money that you contribute will go.

Ask the insurance agent to explain the different policies and why the one you agree on is the best for you considering your circumstances.

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 TAKE ANY PARTICULAR STEPS WITH REGARD TO THE ASSETS OF THE DECEASED?-

Posted by Admin Posted on June 11 2020

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To learn how to handle the following assets of the deceased, speak with your financial advisor.

General rules are as follows:

  • Automobiles. Find out if the title of the car of the deceased needs to be modified by checking with the State DMV.
  • Insurance Policies. The beneficiaries of policies held by the deceased's spouse may need to be modified. It might be smart to lessen the amount of life insurance coverage if the spouse doesn't have any dependents. Revision of home and auto insurance may also need to be done.
  • Bank Accounts. The title of a joint bank account will automatically pass to the surviving spouse. Advise the bank to change the ownership records. If the name of the deceased was the only name on the bank account, the asset will go through probate unless it is a trust account.
  • Safe Deposit Box. A court order is necessary, in most states, to open a safe deposit box that is only in the deceased's name.
  • Stocks and Bonds. Verify with the broker of the deceased to change title of stocks and bonds.
  • Credit Cards. If the credit cards are only in the deceased's name, they should be cancelled and the estate should pay outstanding payments. If the cards are in both names, the surviving spouse should inform the credit card companies of the death and ask for cards only in the survivor's name to be reissued.

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 SHOULD CREDIT CARD ACCOUNTS BE DEALT WITH DURING A DIVORCE?-

Posted by Admin Posted on June 03 2020

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As soon as you know you are going to be getting a divorce, immediately cancel all joint accounts.

Regardless of who accumulated the bill, creditors can legally try to collect payment from either party on the joint credit card or other credit account. You will be responsible for payment as long as your name appears on the joint accounts.

The agreement that is reached during the divorce may state who must pay the bills. From the creditor's point of view, both your spouse and you are responsible as long as the joint account stays open. The creditor will attempt to receive payment from who they think are most likely to pay while reporting late payments to the credit bureaus in both names. Due to the irresponsibility of the co-signer, your credit history could be harmed.

You may be required to pay the remaining balance in full upon closure of the account. If this is the case, ask the creditor to distribute the outstanding balance to separate accounts.

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

-HERE’S HOW YOU CAN SUSPEND IRS INSTALLMENT AGREEMENT PAYMENTS

Posted by Admin Posted on June 03 2020

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The IRS People First Initiative, announced on March 25, gives taxpayers the option to suspend installment agreement payments due through July 15:

Existing Installment Agreements – For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Debit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.

But a lot of IRS sites are closed or at low capacity, so how can you suspend payments without calling the IRS?

How to Suspend Payments

  • Regular Installment Agreements (IAs) (where you send payments directly to the IRS): You can choose to simply not make payments through July 15. There is no need to inform the IRS. The IRS will not let the agreement go into default.

For other types of installment agreements, shown below, the IRS will continue to debit payments from banks and employers during the suspension period. These installment agreements will not be defaulted for missing payments, at least through July 15.

However, if you need to suspend these types of installment payments, due to financial reasons, you need to take the actions listed below:

  • Direct Debit Installment Agreements (DDIAs) (where payments are automatically taken from a designated bank account):
     
    • Contact your bank directly, share the IRS People First Initiative information, and ask them to temporarily stop deductions. Banks are required to comply with customer requests to stop recurring payments within a specified timeframe.
  • Payroll Deduction Installment Agreements (PDIAs) (where payments are taken from your paycheck):
     
    • Contact your employer, share the IRS People First Initiative information, and ask the employer to not deduct or send payments from their pay to the IRS through July 15.

Re-start Payments Before July 15

Please note that if payments are stopped, in order to avoid possible default of the agreement once the suspension period expires on July 15, 2020, taxpayers must resume payments as of that date.

For DDIAs and PDIAs, taxpayers must inform their bank or their employer, respectively, to allow the debits to resume at least two weeks before their next payment is due.

Before Suspending Payments

However, before you make the decision to suspend payments, please understand that, by law, interest will continue to accrue on any unpaid balances. So, if you are in a position where you can continue these payments without financial hardship, then you should consider continuing the payments to reduce the interest charges.

Taxpayer Advocate Service Assistance

Know that TAS is open to virtually serve taxpayers who find themselves in hardship situations or dealing with IRS tax problems they’ve been unable to resolve directly with the IRS. So, if you cannot stop payments for DDIAs or PDIAs, after making contacts as instructed above, go to our Contact Us page and call the local number listed for your state or area.

Please understand though, that TAS cannot currently help you get any Economic Impact Payments before the IRS releases them.

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: TAS       

-HOW TO REQUEST LEVIES AND LIENS RELEASES-

Posted by Admin Posted on June 03 2020

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Some taxpayers may need some additional relief during the COVID-19 pandemic from existing federal tax liens and IRS levies on bank accounts, wages or property. IRS describes available relief in the People First Initiative. Taxpayer Advocate Service (TAS) would like to provide some simple instructions for taxpayers to follow, especially in situations causing economic hardship.

Levy Releases

A levy will not be automatically released. The IRS considers a taxpayer’s request to release a levy on a case by case basis if the levy is causing an economic hardship. “Economic hardship” means the levy prevents the taxpayer from meeting basic, reasonable living expenses. Please note the IRS may ask for additional financial information to determine if a levy is causing an economic hardship before deciding to release the levy. To request relief:

  • If you are working with a revenue officer, contact the revenue officer directly.
  • If you are not working with a revenue officer, you must call the number provided on the levy notice.

Unable to reach the IRS by phone for levy release request?

If you are unable to reach an IRS representative by phone, fax your request to (855) 796-4524. The fax should include your name, address and social security numbers (for both spouses, if you filed jointly). Also, include the name, address and fax number of the employer or bank where the levy is being processed.

Note: This fax number is only used to address emergency levy release requests. Due to current limited staffing, the IRS will not respond to other issues sent to this fax line.

Lien Certificates

The IRS is processing all electronically submitted lien certificate applications (including lien releases, discharges of property from the federal tax lien, withdrawals of the notice of federal tax lien and subordinations of the federal tax lien) normally and assigning them within 10 days:

  • Currently, the IRS requests all taxpayers use the E-Fax line for their ACR site (844-201-8382) for submission.

Note: Due to Coronavirus, IRS is NOT processing lien certificate applications mailed to the Advisory Consolidated Receipts (ACR) site in Florence, Kentucky.

Publication 4235, Collection Advisory Group Numbers and Addresses (PDF), has additional information on the process for submitting applications for lien certificates and on related topics.

For more information on current IRS operations, see the IRS Operations During COVID-19: Mission-critical functions continue page and the IRS Coronavirus Tax Relief and Economic Impact Payments page.

Taxpayer Advocate Service Help

TAS is open to virtually serve taxpayers who find themselves in hardship situations or dealing with IRS tax problems they’ve been unable to resolve directly with the IRS. If you cannot get a lien or levy released, after making contacts as instructed above, go to our Contact Us page and call the local number listed for your state or area.

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: TAS   

-IS IT POSSIBLE TO FINANCIALLY PREPARE FOR DIVORCE?-

Posted by Admin Posted on June 03 2020

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

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

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

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

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

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

1.   Your residence(s)

2.   The value of any brokerage accounts

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

4.   The current balance in all bank accounts

5.   Your autos

6.   The value of investments, including any IRAs

  • Locate copies of the last two or three years' tax returns. These will be beneficial later.
  • Know the exact quantity of salary and miscellaneous income brought home by your spouse and you.
  • Obtain all papers regarding insurance, life, health, pension, and other retirement benefits.
  • Make a list of debts that are owed both separately and jointly, including mortgage, credit card debt, auto loans and other liabilities.

If you have any questions regarding accounting, domestic taxation, 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

-DURING A DIVORCE, WHAT ARE THE LEGAL ISSUES THAT MUST BE HANDLED?-

Posted by Admin Posted on June 03 2020

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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 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

-AFTER MARRIAGE, WHAT ARE THE TAX IMPLICATIONS?-

Posted by Admin Posted on June 03 2020

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

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

If you have any questions regarding 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

-INNOCENT SPOUSE RULES: PROTECTION UNDER SOME CIRCUMSTANCES-

Posted by Admin Posted on May 26 2020

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Must one spouse pay the tax resulting from a fabrication or omission by another spouse on a jointly filed tax return? It depends. If the spouse qualifies, he or she may be able to avoid personal tax liability under the “innocent spouse” rules.

Joint filing status

Generally, married taxpayers benefit overall by filing a joint tax return on the federal level. This is particularly the case when one spouse earns significantly more than the other. Filing jointly may also help the couple maximize certain income tax deductions and credits.

But joint filing status comes with a catch. Each spouse is “jointly and severally” responsible for any tax, interest and penalties attributable to the return. And this liability continues to apply even if the couple gets a divorce or one spouse dies. In other words, the IRS may try to collect the full amount due from one spouse, even if all the income reported on the joint return was earned by the other spouse.

Basic rules

However, the tax law provides tax relief for an “innocent spouse.” Under these rules, one spouse may not be liable for any unpaid tax and penalties, despite having signed the joint return.

To determine eligibility for relief, the IRS imposes a set of common requirements. The spouses must have filed a joint return that has an understatement of tax, and that understatement must be attributable to one spouse’s erroneous items. For this purpose, “erroneous items” are defined as any deduction, credit or tax basis incorrectly stated on the return, as well as any income not reported.

From there, the other (“innocent”) spouse must establish that, at the time the joint return was signed, he or she didn’t know — or have reason to know — there was an understatement of tax. Finally, to qualify, the IRS needs to find that it would be unfair to hold one spouse liable for the understatement after considering all the facts and circumstances.

Additional notes

For many years, innocent spouse relief had to be requested within two years after the IRS first began its collection activity against a taxpayer. But, in 2011, the IRS announced that it would no longer apply the two-year limit on collection activities.

In addition, by law, when one spouse applies for innocent spouse relief, the IRS must contact the other spouse or former spouse. There are no exceptions even for victims of spousal abuse or domestic violence.

Help available

Historically, courts haven’t been particularly generous about upholding claims under the innocent spouse rules. State laws can also complicate matters. If you’re wondering whether you’d qualify for relief, please contact us for help.

Sidebar: What does the IRS consider?

The IRS considers “all facts and circumstances” in determining whether it would be inequitable to hold an “innocent” spouse liable for taxes due on a jointly filed tax return. One factor that may increase the likelihood of relief is that the taxes owed are clearly attributable to one spouse or an ex-spouse who filled out the errant return.

If one spouse was deserted during the marriage, or suffered abuse, it may also improve the chances that innocent spouse relief will be granted. In some cases, the IRS may examine the couple’s situation to determine whether the spouse applying for relief knew about the erroneous items.

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: Three new credits are available to many businesses hit by COVID-19

Posted by Admin Posted on May 21 2020

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WASHINGTON — The Internal Revenue Service reminds employers affected by COVID-19 about three important new credits available to them.

Employee Retention Credit:

The employee retention credit is designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

The credit is available to all employers regardless of size, including tax-exempt organizations. There are only two exceptions: State and local governments and their instrumentalities and small businesses who take small business loans.

Qualifying employers must fall into one of two categories:

1.    The employer's business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.

2.    The employer's gross receipts are below 50% of the comparable quarter in 2019. Once the employer's gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.

Employers will calculate these measures each calendar quarter.

Paid Sick Leave Credit and Family Leave Credit:

The paid sick leave credit is designed to allow business to get a credit for an employee who is unable to work (including telework) because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis. Those employees are entitled to paid sick leave for up to 10 days (up to 80 hours) at the employee's regular rate of pay up to $511 per day and $5,110 in total.

The employer can also receive the credit for employees who are unable to work due to caring for someone with Coronavirus or caring for a child because the child's school or place of care is closed, or the paid childcare provider is unavailable due to the Coronavirus. Those employees are entitled to paid sick leave for up to two weeks (up to 80 hours) at 2/3 the employee's regular rate of pay or, up to $200 per day and $2,000 in total. 

Employees are also entitled to paid family and medical leave equal to 2/3 of the employee's regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted towards the family leave credit.

Employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees' wages by the amount of the credit.

Eligible employers are entitled to immediately receive a credit in the full amount of the required sick leave and family leave, plus related health plan expenses and the employer's share of Medicare tax on the leave, for the period of April 1, 2020, through Dec. 31, 2020. The refundable credit is applied against certain employment taxes on wages paid to all employees.

How will employers receive the credit?

Employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees' wages by the amount of the credit.

Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941 beginning with the second quarter. If the employer's employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Eligible employers can also request an advance of the Employee Retention Credit by submitting Form 7200.

The IRS has also posted Employee Retention Credit FAQs and Paid Family Leave and Sick Leave FAQs that will help answer questions.

Updates on the implementation of the Employee Retention Credit and other information can be found on the Coronavirus page of 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        

IRS warns of scams related to natural disasters

Posted by Admin Posted on May 21 2020

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WASHINGTON ― The Internal Revenue Service is reminding taxpayers that criminals and scammers try to take advantage of the generosity of taxpayers who want to help victims of major disasters.

Fraudulent schemes normally start with unsolicited contact by telephone, social media, e-mail or in-person using a variety of tactics.

  • Some impersonate charities to get money or private information from well-intentioned taxpayers.
  • Bogus websites use names similar to legitimate charities to trick people to send money or provide personal financial information.
  • They even claim to be working for or on behalf of the IRS to help victims file casualty loss claims and get tax refunds.
  • Others operate bogus charities and solicit money or financial information by telephone or email.

Help for disaster victims

Comprehensive information on disaster-related tax issues, including provisions for tax relief, can be found on the disaster relief page on IRS.gov. In the case of a federally declared disaster, affected taxpayers may also call the IRS Special Services Help Line, 866-562-5227, with disaster-related tax questions. Details on available relief can be found on the disaster relief page on IRS.gov.

Donate to real charities

To help taxpayers donate to legitimate charities, the IRS website, IRS.gov, has a search feature, Tax Exempt Organization Search, that helps users find or verify qualified charities. Donations to these charities may be tax-deductible.

  • Contribute by check or credit card. Never give or send cash.
  • Don’t give out personal financial information — such as Social Security numbers or credit card and bank account numbers and passwords — to anyone who solicits a contribution.

Taxpayers suspecting fraud by email should visit IRS.gov and search for the keywords “Report Phishing.” More information about tax scams and schemes may be found at IRS.gov using the keywords “scams and schemes.”

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

-WHY THE ECONOMIC IMPACT PAYMENT AMOUNT COULD BE DIFFERENT THAN ANTICIPATED

Posted by Admin Posted on May 21 2020

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WASHINGTON — The IRS and Treasury have successfully delivered nearly 130 million Economic Impact Payments to Americans in less than a month, and more are on the way. Some Americans may have received a payment amount different than what they expected. Payment amounts vary based on income, filing status and family size.

See below for some common scenarios that may explain why you received a different payment amount than expected:

You have not filed a 2019 tax return, or the IRS has not finished processing your 2019 return

Payments are automatic for eligible people who filed a tax return for 2018 or 2019. Typically, the IRS uses information from the 2019 tax return to calculate the Economic Impact Payment. Instead, the IRS will use the 2018 return if the taxpayer has not yet filed for 2019. If a taxpayer has already filed for 2019, the agency will still use the 2018 return if the IRS has not finished processing the 2019 return. Remember, the IRS accepting a tax return electronically is different than completing processing; any issues with the 2019 return mean the IRS would've used the 2018 filing.

If the IRS used the 2018 return, various life changes in 2019 would not be reflected in the payment. These may include higher or lower income or birth or adoption of a child.

In many cases, however, these taxpayers may be able to claim an additional amount on the 2020 tax return they file next year. This could include up to an additional $500 for each qualifying child not reflected in their Economic Impact Payment.

Claimed dependents are not eligible for an additional $500 payment

Only children eligible for the Child Tax Credit qualify for the additional payment of up to $500 per child. To claim the Child Tax Credit, the taxpayer generally must be related to the child, live with them more than half the year and provide at least half of their support. Besides their own children, adopted children and foster children, eligible children can include the taxpayer's younger siblings, grandchildren, nieces and nephews if they can be claimed as dependents. In addition, any qualifying child must be a U.S. citizen, permanent resident or other qualifying resident alien. The child must also be under the age of 17 at the end of the year for the tax return on which the IRS bases the payment determination.

A qualifying child must have a valid Social Security number (SSN) or an Adoption Taxpayer Identification Number (ATIN). A child with an Individual Taxpayer Identification Number (ITIN) is not eligible for an additional payment.

Parents who are not married to each other and do not file a joint return cannot both claim their qualifying child as a dependent. The parent who claimed their child on their 2019 return may have received an additional Economic Impact Payment for their qualifying child. When the parent who did not receive an additional payment files their 2020 tax return next year, they may be able to claim up to an additional $500 per-child amount on that return if they qualify to claim the child as their qualifying child for 2020.

Dependents are college students

Pursuant to the CARES Act, dependent college students do not qualify for an EIP, and even though their parents may claim them as dependents, they normally do not qualify for the additional $500 payment. For example, under the law, a 20-year-old full-time college student claimed as a dependent on their mother's 2019 federal income tax return is not eligible for a $1,200 Economic Impact Payment. In addition, the student's mother will not receive an additional $500 Economic Impact Payment for the student because they do not qualify as a child younger than 17. This scenario could also apply if a parent's 2019 tax return hasn't been processed yet by the IRS before the payments were calculated, and a college student was claimed on a 2018 tax return.

However, if the student cannot be claimed as a dependent by their mother or anyone else for 2020, that student may be eligible to claim a $1,200 credit on their 2020 tax return next year.

Claimed dependents are parents or relatives, age 17 or older

If a dependent is 17 or older, they do not qualify for the additional $500. If a taxpayer claimed a parent or any other relative age 17 or older on their tax return, that dependent will not receive a $1,200 payment. In addition, the taxpayer will not receive an additional $500 payment because the parent or other relative is not a qualifying child under age 17.

However, if the parent or other relative cannot be claimed as a dependent on the taxpayer's or anyone else's return for 2020, the parent or relative may be eligible to individually claim a $1,200 credit on their 2020 tax return filed next year.

Past-due child support was deducted from the payment

The Economic Impact Payment is offset only by past-due child support. The Bureau of the Fiscal Service will send the taxpayer a notice if an offset occurs.

For taxpayers who are married filing jointly and filed an injured spouse claim with their 2019 tax return (or 2018 tax return if they haven't filed the 2019 tax return), half of the total payment will be sent to each spouse. Only the payment of the spouse who owes past-due child support should be offset.

The IRS is aware that a portion of the payment sent to a spouse who filed an injured spouse claim with his or her 2019 tax return (or 2018 tax return if no 2019 tax return has been filed) may have been offset by the injured spouse's past-due child support. The IRS is working with the Bureau of Fiscal Service and the U.S. Department of Health and Human Services, Office of Child Support Enforcement, to resolve this issue as quickly as possible. If you filed an injured spouse claim with your return and are impacted by this issue, you do not need to take any action. The injured spouse will receive their unpaid half of the total payment when the issue is resolved. We apologize for the inconvenience this may have caused.

Garnishments by creditors reduced the payment amount

Federal tax refunds, including the Economic Impact Payment, are not protected from garnishment by creditors by federal law once the proceeds are deposited into a taxpayer's bank account.

What if the amount of my Economic Impact Payment is incorrect?

Everyone should review the eligibility requirements for their family to make sure they meet the criteria.

In many instances, eligible taxpayers who received a smaller-than-expected Economic Impact Payment (EIP) may qualify to receive an additional amount early next year when they file their 2020 federal income tax return. EIPs are technically an advance payment of a new temporary tax credit that eligible taxpayers can claim on their 2020 return. Everyone should keep for their records the letter they receive by mail within a few weeks after their payment is issued.

When taxpayers file their return next year, they can claim additional credits on their 2020 tax return if they are eligible for them. The IRS will provide further details on IRS.gov on the action they may need to take.

The EIP will not reduce a taxpayer's refund or increase the amount they owe when they file a tax return early next year. It is also not taxable and it should not be included in income on a 2020 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 EMPLOYERS CAN GET SOME FINANCIAL RELIEF WITH THE RETENTION TAX CREDIT

Posted by Admin Posted on May 21 2020

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To help reduce layoffs during the coronavirus (COVID-19) pandemic, the Coronavirus Aid, Relief and Economic Security (CARES) Act created a new federal income tax credit for employers that keep workers on their payrolls. The credit equals 50% of eligible employee wages paid by an eligible employer in a 2020 calendar quarter. It's subject to an overall wage cap of $10,000 per eligible employee. Here are answers to some FAQs about the retention credit.

What employers are eligible?

Eligible employer status for the retention credit is determined on a 2020 calendar quarter basis. The credit is available to employers, including nonprofits, whose operations have been fully or partially suspended during a 2020 calendar quarter as a result of an order from an appropriate governmental authority that limits commerce, travel or group meetings due to COVID-19.

The retention credit can also be claimed by employers that have experienced a greater-than-50% decline in gross receipts for a 2020 calendar quarter compared to the corresponding 2019 calendar quarter. However, the credit is disallowed for quarters following the first calendar 2020 quarter during which gross receipts exceed 80% of gross receipts for the corresponding 2019 calendar quarter.

To illustrate: Suppose a company’s 2020 gross receipts are as follows compared to 2019:

  • First quarter: 86%
  • Second quarter: 43%
  • Third quarter: 92%

The company had a greater-than-50% decline in gross receipts for the second quarter of 2020. So, it’s an eligible employer for purposes of the retention credit for the second and third quarters of 2020. For the fourth quarter of 2020, it’s ineligible because its gross receipts for the third quarter of 2020 exceeded 80% of gross receipts for the third quarter of 2019.

What wages are eligible?

The retention credit is available to cover eligible wages paid from March 13, 2020, through December 31, 2020. For an eligible employer that had an average of 100 or fewer full-time employees in 2019, all employee wages are eligible for the credit (subject to the overall $10,000 per-employee wage cap), regardless of whether employees are furloughed due to COVID-19.

For an employer that had more than 100 full-time employees in 2019, only wages of employees who are furloughed or given reduced hours due to the employer's closure or reduced gross receipts are eligible for the retention credit (subject to the overall $10,000 per-employee wage cap, including qualified health plan expenses allocable to those wages).

The amount of wages eligible for the credit is capped at a cumulative total of $10,000 for each eligible employee. The $10,000 cap includes allocable health plan expenses. For example, a company pays an employee $8,000 in eligible wages in the second quarter of 2020 and another $8,000 in the third quarter of 2020. The credit for wages paid to the employee in the second quarter is $4,000 (50% x $8,000). The credit for wages paid to the employee in the third quarter is limited to $1,000 (50% x $2,000) due to the $10,000 wage cap. Any additional wages paid to the employee are ineligible for the credit due to the $10,000 cap.

What other rules and restrictions apply?

The retention credit is not allowed for:

  • Emergency sick leave wages or emergency family leave wages that small employers (generally those with fewer than 500 employees) are required to pay under the Families First Coronavirus Response Act (FFCRA), because they’re covered by federal payroll tax credits granted by the FFCRA,
  • Wages taken into account for purposes of claiming the pre-existing Work Opportunity Tax Credit, and
  • Wages taken into account for purposes of claiming the pre-existing employer credit for paid family and medical leave.

In addition, the retention credit isn't available to small employers that receive a potentially forgivable Small Business Administration (SBA) guaranteed Small Business Interruption Loan under the CARES Act’s Paycheck Protection Program.

How is the credit claimed?

Technically, an eligible employer's allowable retention credit for a calendar quarter is offset against the employer's liability for the Social Security tax component of federal payroll taxes. That component equals 6.2% of the first $137,700 of an employee's 2020 wages.

But the credit is "refundable." That means an employer can collect the full amount of the credit even if it exceeds its federal payroll tax liability.

The allowable credit can be used to offset all of an employer's federal payroll tax deposit liability, apparently including federal income tax, Social Security tax and Medicare tax withheld from employee paychecks. If an employer's tax deposit liability isn't enough to absorb the credit, the employer can apply for an advance payment of the credit from the IRS.

Can you benefit?

If your business has suffered financially during the COVID-19 pandemic, the CARES Act’s 50% employee retention credit might help you keep workers on the payroll during the crisis. Keep in mind that additional guidance could be released on the credit or more legislation could be signed into law extending or expanding the credit. We can apprise you of any updates, help you determine whether you’re eligible and explore other tax-saving and financial assistance opportunities that may be available to you during this challenging time.

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 SHOULD BE ON THE LOOKOUT FOR NEW VERSION OF SSN SCAM

Posted by Admin Posted on May 21 2020

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Taxpayers should be on the lookout for new variations of tax-related scams. In the latest twist on a scam related to Social Security numbers, scammers claim to be able to suspend or cancel the victim’s SSN. It’s yet another attempt by con artists to frighten people into returning ‘robocall’ voicemails.

Scammers may mention overdue taxes in addition to threatening to cancel the person’s SSN. If taxpayers receive a call threatening to suspend their SSN for an unpaid tax bill, they should just hang up.

Make no mistake…it’s a scam.

Taxpayers should not give out sensitive information over the phone unless they are positive they know the caller is legitimate. When in doubt –hang up. Here are some telltale signs of this scam. The IRS and its authorized private collection agencies will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, iTunes gift card or wire transfer. The IRS does not use these methods for tax payments.
  • Ask a taxpayer to make a payment to a person or organization other than the U.S. Treasury.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demand taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

Taxpayers who don’t owe taxes and have no reason to think they do should:

Taxpayers who owe tax or think they do should:

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         

-NEW BREAK TEMPORARILY MAKES RETIREMENT PLAN WITHDRAWALS LESS TAXING

Posted by Admin Posted on May 21 2020

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A key provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is intended to help alleviate some of the economic hardship many Americans are experiencing as a result of the novel coronavirus (COVID-19) pandemic. It allows tax-favored treatment for distributions from retirement accounts in certain situations.

Penalty waiver and more

Under the CARES Act, IRA owners who are adversely affected by the COVID-19 pandemic are eligible to take tax-favored “coronavirus-related” distributions (CVDs) of up to $100,000 from their IRAs. If you’re under age 59½, the early withdrawal penalty that normally would apply is waived. Any eligible IRA owner can recontribute (repay) a CVD back into their IRA within three years of the withdrawal date and treat the withdrawal and later recontribution as a tax-free rollover. There are no limitations on what you can use CVD funds for during that three-year period.

The CARES Act also may allow you to take tax-favored CVDs from your employer's qualified retirement plan, such as a 401(k) or profit-sharing plan, if the plan allows it. If allowed, the tax rules for CVDs taken from qualified plans are similar to those for CVDs taken from IRAs. As of this writing, a lot of details still need to be figured out about how CVDs taken from qualified plans will work. Contact the appropriate person with your employer for more information.

7 basic rules

There are seven basic rules for taking CVDs from IRAs:

1. You can take one or more CVDs up to the $100,000 limit.

2. CVDs can come from different IRAs.

3. The three-year recontribution period for each CVD begins on the day after you receive it.

4. You can make your recontributions in a lump sum or through multiple recontributions.

5. You can recontribute to one or several IRAs, and they don't have to be the same accounts you took the CVDs from.

6. As long as you recontribute the entire CVD amount within the three-year window, the whole transaction or series of transactions are treated as tax-free IRA rollovers.

7. If you're under 59½, the 10% penalty tax that usually applies to early IRA withdrawals is waived for CVDs, even if you don’t recontribute.

If your spouse owns one or more IRAs in his or her own name, he or she may be eligible for the same distribution privilege.

Who’s eligible

CVDs can be taken from January 1, 2020, through December 30, 2020, by an eligible individual. That means an individual:

  • Who's diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention,
  • Whose spouse or dependent (generally a qualifying child or relative who receives more than half of his or her support from you) is diagnosed with COVID-19 by such a test,
  • Who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off or having work hours reduced due to COVID-19,
  • Who's unable to work because of lack of childcare due to COVID-19 and experiences adverse financial consequences as a result,
  • Who owns or operates a business that has closed or has had operating hours reduced due to COVID-19 and has experienced adverse financial consequences as a result, or
  • Who has experienced adverse financial consequences due to other COVID-19-related factors.

As of this writing, IRS guidance on how to interpret the last two factors is needed. Check in with us for the latest developments.

When taxes are due

You'll be taxed on any CVD amount that you don't recontribute within the three-year window. But you won't have to worry about owing the 10% early withdrawal penalty if you're under 59½.

You can choose to spread the taxable amount equally over three years, apparently starting with 2020. But here it gets tricky, because the three-year window won't close until sometime in 2023. Until then, it won't be clear that you failed to take advantage of the tax-free CVD rollover deal. So, you may have to amend a prior-year return to report some additional taxable income from the CVD. As of this writing, the IRS is expected to issue guidance to clarify this issue. Again, check in with us for the latest information.

You also have the option of simply reporting the taxable income from the CVD on your 2020 individual income tax return Form 1040. Again, you won't owe the 10% early withdrawal penalty if you're under 59½.

Getting through the crisis

CVDs can be a helpful, flexible tax-favored financial tool for eligible taxpayers during the pandemic. But it's just one of several financial relief measures available under the CARES Act that include tax relief, and other relief legislation may be forthcoming. We can help you take advantage of relief measures that will help you get through the COVID-19 crisis.

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    

NEW EMPLOYEE RETENTION CREDIT HELPS EMPLOYERS KEEP EMPLOYEES ON PAYROLL

Posted by Admin Posted on May 14 2020

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The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) encourages businesses to keep employees on their payroll by providing them an Employee Retention Credit. It also helps to make sure workers aren't forced to choose between their paychecks and the public health measures needed to combat the coronavirus.

Eligible employers can claim this credit for wages paid after March 12, 2020, and before January 1, 2021.

Eligible employers

The credit is available to all employers that have experienced an economic hardship due to COVID-19. This includes tax-exempt organizations. Only two exceptions apply:

1.    Federal, state and local governments and their instrumentalities, and

2.    Small businesses that receive small business loans under the Paycheck Protection Program.

For purposes of this credit, employers experiencing an economic hardship include those with suspended operations due to a government order related to COVID-19 or that have experienced a significant decline in gross receipts.

An employer may have to fully or partially suspend operations because a governmental order limits commerce, travel, or group meetings due to COVID-19 in a manner that prevents the employer from operating at normal capacity.

A significant decline in gross receipts begins in the first calendar quarter in 2020 in which an employer's gross receipts are less than 50% of its gross receipts for the same quarter in 2019. The decline ends the first calendar quarter in 2020 after the quarter in which the employer's gross receipts are greater than 80% of its gross receipts for the same quarter in 2019.

The employer calculates these measures each calendar quarter.

Amount of credit

The tax credit is 50% of up to $10,000 in qualified wages paid to an employee. The employer's maximum credit for qualified wages paid to any employee is $5,000. Qualified wages include the cost of employer-provided health care.

Example. Eligible employer pays Employee B $8,000 in qualified wages in Q2 2020 and $8,000 in qualified wages in Q3 2020. The credit available to the employer for the qualified wages paid to Employee B is equal to $4,000 in Q2 and $1,000 in Q3 due to the overall limit of 50% of up to $10,000 of qualified wages per employee for all calendar quarters.

Qualified wages

The wages that qualify for the credit vary based on the average number of the employer's full-time employees in 2019. If the employer had 100 or fewer employees on average in 2019, the credit is based on wages paid to all employees, regardless if they worked or not. If the employer had more than 100 employees on average in 2019, then the credit is allowed only for wages paid to employees for time they did not work. In each case, the wages that qualify are wages paid for a calendar quarter in which the employer experiences an economic hardship.

The amount of qualified wages for which an eligible employer may claim the Employee Retention Credit doesn't include the amount of qualified sick and family leave wages for which the employer received tax credits under the Families First Coronavirus Response Act (FFCRA). This means that the employer can't use the same wages to determine the amount of the Employee Retention Credit.

How to claim the credit

Beginning with the second calendar quarter of 2020, to claim the credit, employers should report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns, usually Form 941, Employer's Quarterly Federal Tax Return. They can receive the benefit of the credit even before filing by reducing their federal employment tax deposits by the amount of the credit. Then they will account for the reduction in deposits due to the Employee Retention Credit on the Form 941. The IRS recently posted Frequently Asked Questions about the ability both to reduce deposits for the credit and to defer the deposit of all of the employer's share of social security tax due before January 1, 2021 under a separate provision in the CARES Act (PDF).

If employers do not have enough federal employment taxes to cover the amount of the credit, after they have deferred deposits of employer social security taxes under the CARES Act as discussed in the frequently asked questions, they may request an advance payment of the credit from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. They may fax their completed forms to 855-248-0552.

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

NEW BREAK TEMPORARILY MAKES RETIREMENT PLAN WITHDRAWALS LESS TAXING

Posted by Admin Posted on May 14 2020

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NEW BREAK TEMPORARILY MAKES RETIREMENT PLAN WITHDRAWALS LESS TAXING

A key provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is intended to help alleviate some of the economic hardship many Americans are experiencing as a result of the novel coronavirus (COVID-19) pandemic. It allows tax-favored treatment for distributions from retirement accounts in certain situations.

Penalty waiver and more

Under the CARES Act, IRA owners who are adversely affected by the COVID-19 pandemic are eligible to take tax-favored “coronavirus-related” distributions (CVDs) of up to $100,000 from their IRAs. If you’re under age 59½, the early withdrawal penalty that normally would apply is waived. Any eligible IRA owner can recontribute (repay) a CVD back into their IRA within three years of the withdrawal date and treat the withdrawal and later recontribution as a tax-free rollover. There are no limitations on what you can use CVD funds for during that three-year period.

The CARES Act also may allow you to take tax-favored CVDs from your employer's qualified retirement plan, such as a 401(k) or profit-sharing plan, if the plan allows it. If allowed, the tax rules for CVDs taken from qualified plans are similar to those for CVDs taken from IRAs. As of this writing, a lot of details still need to be figured out about how CVDs taken from qualified plans will work. Contact the appropriate person with your employer for more information.

7 basic rules

There are seven basic rules for taking CVDs from IRAs:

1. You can take one or more CVDs up to the $100,000 limit.

2. CVDs can come from different IRAs.

3. The three-year recontribution period for each CVD begins on the day after you receive it.

4. You can make your recontributions in a lump sum or through multiple recontributions.

5. You can recontribute to one or several IRAs, and they don't have to be the same accounts you took the CVDs from.

6. As long as you recontribute the entire CVD amount within the three-year window, the whole transaction or series of transactions are treated as tax-free IRA rollovers.

7. If you're under 59½, the 10% penalty tax that usually applies to early IRA withdrawals is waived for CVDs, even if you don’t recontribute.

If your spouse owns one or more IRAs in his or her own name, he or she may be eligible for the same distribution privilege.

Who’s eligible

CVDs can be taken from January 1, 2020, through December 30, 2020, by an eligible individual. That means an individual:

  • Who's diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention,
  • Whose spouse or dependent (generally a qualifying child or relative who receives more than half of his or her support from you) is diagnosed with COVID-19 by such a test,
  • Who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off or having work hours reduced due to COVID-19,
  • Who's unable to work because of lack of childcare due to COVID-19 and experiences adverse financial consequences as a result,
  • Who owns or operates a business that has closed or has had operating hours reduced due to COVID-19 and has experienced adverse financial consequences as a result, or
  • Who has experienced adverse financial consequences due to other COVID-19-related factors.

As of this writing, IRS guidance on how to interpret the last two factors is needed. Check in with us for the latest developments.

When taxes are due

You'll be taxed on any CVD amount that you don't recontribute within the three-year window. But you won't have to worry about owing the 10% early withdrawal penalty if you're under 59½.

You can choose to spread the taxable amount equally over three years, apparently starting with 2020. But here it gets tricky, because the three-year window won't close until sometime in 2023. Until then, it won't be clear that you failed to take advantage of the tax-free CVD rollover deal. So, you may have to amend a prior-year return to report some additional taxable income from the CVD. As of this writing, the IRS is expected to issue guidance to clarify this issue. Again, check in with us for the latest information.

You also have the option of simply reporting the taxable income from the CVD on your 2020 individual income tax return Form 1040. Again, you won't owe the 10% early withdrawal penalty if you're under 59½.

Getting through the crisis

CVDs can be a helpful, flexible tax-favored financial tool for eligible taxpayers during the pandemic. But it's just one of several financial relief measures available under the CARES Act that include tax relief, and other relief legislation may be forthcoming. We can help you take advantage of relief measures that will help you get through the COVID-19 crisis.

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

CONSUMER ALERTS ON TAX SCAMS

Posted by Admin Posted on May 14 2020

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Note that the IRS will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.

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

NEW EMPLOYER TAX CREDITS

Posted by Admin Posted on May 14 2020

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NEW EMPLOYER TAX CREDITS

Many businesses that have been severely impacted by coronavirus (COVID-19) will qualify for two new employer tax credits – the Credit for Sick and Family Leave and the Employee Retention Credit. 

Sick and Family Leave

Credit for Sick and Family Leave

An employee who is unable to work (including telework) because of coronavirus quarantine or self-quarantine or has coronavirus symptoms and is seeking a medical diagnosis, is entitled to paid sick leave for up to ten days (up to 80 hours) at the employee’s regular rate of pay, or, if higher, the Federal minimum wage or any applicable State or local minimum wage, up to $511 per day, but no more than $5,110 in total.

Caring for someone with Coronavirus

An employee who is unable to work due to caring for someone with coronavirus, or caring for a child because the child’s school or place of care is closed, or the paid child care provider is unavailable due to the coronavirus, is entitled to paid sick leave for up to two weeks (up to 80 hours) at two-thirds the employee’s regular rate of pay or, if higher, the Federal minimum wage or any applicable State or local minimum wage, up to $200 per day, but no more than $2,000 in total.

Care for children due to daycare or school closure

An employee who is unable to work because of a need to care for a child whose school or place of care is closed or whose child care provider is unavailable due to the coronavirus, is also entitled to paid family and medical leave equal to two-thirds of the employee’s regular pay, up to $200 per day and $10,000 in total. Up to ten weeks of qualifying leave can be counted towards the family leave credit. 

Credit for eligible employers

Eligible employers are entitled to receive a credit in the full amount of the required sick leave and family leave, plus related health plan expenses and the employer’s share of Medicare tax on the leave, for the period of April 1, 2020, through December 31, 2020.  The refundable credit is applied against certain employment taxes on wages paid to all employees. Eligible employers can reduce federal employment tax deposits in anticipation of the credit.  They can also request an advance of the paid sick and family leave credits for any amounts not covered by the reduction in deposits. The advanced payments will be issued by paper check to employers.

Employee Retention Credit

Eligible employers can claim the employee retention credit, a refundable tax credit equal to 50 percent of up to $10,000 in qualified wages (including health plan expenses), paid after March 12, 2020 and before January 1, 2021.  Eligible employers are those businesses with operations that have been partially or fully suspended due to governmental orders due to COVID-19, or businesses that have a significant decline in gross receipts compared to 2019.

The refundable credit is capped at $5,000 per employee and applies against certain employment taxes on wages paid to all employees.  Eligible employers can reduce federal employment tax deposits in anticipation of the credit.  They can also request an advance of the employee retention credit for any amounts not covered by the reduction in deposits. The advanced payments will be issued by paper check to employers.

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 PEOPLE REALLY WANT TO KNOW ABOUT ECONOMIC IMPACT PAYMENTS

Posted by Admin Posted on May 14 2020

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No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer's refund or increase the amount they owe when they file their 2020 tax return next year. A payment also will not affect income for purposes of determining eligibility for federal government assistance or benefit programs.

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

IS MORE INSURANCE NECESSARY FOR MARRIED COUPLES?-

Posted by Admin Posted on May 07 2020

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

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

  • Single parents or families with young children or other dependents. The younger your children, the more insurance is necessary. Insurance should be in proportion to the amount earned. If both spouses are working, they should both be insured. If both earners cannot afford to be insured, the primary wage earner should be the first to be insured and the secondary will follow. To fill the insurance gap, a less expensive term policy may be used. Insurance should be bought to cover the absence of services such as childcare, bookkeeping, housekeeping, which are provided by the spouse that works within the home. The insurance that covers the non-wage earner is secondary to the insurance that covers the wage earner's life, if funds are scarce.
  • Adults that have no children or other dependents. You will need less insurance than people in the previous situation if your spouse can live comfortably without income. However, some form of life insurance is still necessary. You will want at least enough to cover burial expenses, to pay off any debts you may have acquired, and to provide an easy transition for the surviving spouse. You may want to buy more insurance if you think your spouse would go through financial hardship without your income or if your savings aren't adequate. This depends on your salary level as well as the amount of your spouse's, the amount of savings you have and the amount of debt incurred.
  • Single adults without dependents. Unless you would like to use insurance for the purposes of estate planning, you will only need insurance to cover expenses for burial and debts.
  • Children. Typically, children only need life insurance to cover burial expenses and medical debts. An insurance policy could also be used as a long-term savings instrument, in some instances.

If you have any questions regarding accounting, domestic taxation, 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 DOES AN AUTO LEASE FUNCTION?-

Posted by Admin Posted on May 07 2020

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Lease arrangements come in two different types: open-end or "finance" and closed-end or "walk-away." This is how they work:

Open-End: The Risk of Depreciated Value Falls on You
At the end of the lease, the customer accepts the risk that the car will have a particular value or "estimate residual value" at the end of the lease. Due to this, the monthly payment is lower.

At the end of the lease and your return of the car, it will be appraised. If the appraised value of the car is equal to at least the estimated residual value stated in the agreement, it will not be necessary to pay anything. With certain contracts, it is possible to receive a refund if the appraised value is lower than the residual value, although, you might have to pay part or all of the difference.

Closed-End: The Risk of Depreciated Value Falls onto the Dealer
At the end of the closed-end lease, the car is returned to the dealership and you simply walk away. It must be returned with only normal wear and tear, and with less than the mileage limit that is stated in the lease. The monthly payment is higher than an open-end lease because the dealer bears the risk that the car's value will decrease by the end of the lease.

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

ARE SURVIVING FAMILY MEMBERS ENTITLED TO SOCIAL SECURITY BENEFITS?-

Posted by Admin Posted on May 07 2020

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If the deceased has paid Social Security for a minimum of ten years, he/she is covered. Contact your local Social Security office or call 800-772-1213 to find out if the deceased was eligible. There are two types of available benefits, if eligible:

One-time death benefit - A death benefit is paid by Social Security towards burial expenses. To apply the payment to your funeral bill, simply complete the form necessary at your local Social Security office or ask the funeral director to complete the application. This is only available to eligible spouses or a child that is entitled to the benefits of the survivor.

Benefits of a survivor for a spouse or children - The spouse will be eligible for benefits if he/she is 60 years old or older. The benefit amount collected before the age of 65 will be less than that due at the age of 65 or older. Widows who are disabled are eligible for benefits at age 50. If the deceased's spouse cares for dependent children under the age of 16 or for disabled children, they may qualify for benefits before age 60. The deceased's children who are disabled or younger than 18 may also qualify for the benefits.

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 SHOULD I ASK ABOUT THE CAR LEASE?

Posted by Admin Posted on Apr 29 2020

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Here are a few questions that should be answered before you sign a car lease:

  • What types of leases are obtainable and what are their differences? (Two were explained previously, but dealers may have variations.)
  • What will the initial costs of leasing be?
  • What will the continuing costs of leasing be?
  • Will my initial cost or continuing costs decrease due to a trade-in?
  • Can I exceed the specific mileage in my lease?
  • If I take an early termination or a purchase option, how will my mileage allowance be enforced?
  • If I fall behind in my payments or want to stop leasing, can I sublease?
  • If I want to terminate my lease before the agreement is up, what happens?
  • Do I have options at the end of my lease?
  • What can I expect to pay at the end of the lease?

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 SHOULD UNMARRIED COUPLES PROTECT THEIR ESTATE AND FINANCIAL HOLDINGS?-

Posted by Admin Posted on Apr 29 2020

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

  • Draft wills. The chances of the intentions being followed through with after a death are greater if both partners make wills. Without wills, the probability of the unmarried surviving partner having no rights is more likely.
  • Think about owning property together. This is a way to guarantee that property will pass to the other joint owner at the time of the other's death due to the right of survivorship.
  • Make a durable power of attorney. This will permit the partner to sign papers and checks and take care of other financial issues on his/her behalf should one become incapacitated.
  • Make a health care proxy. Also known as a medical power of attorney, this permits the partner to talk on your behalf to make medical decisions, should you become injured.
  • Have a living will. This lets your wishes regarding artificial feeding and other measures to prolong your life be known.

If you have any questions regarding accounting, domestic taxation, 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

WHO NEEDS TO BE NOTIFIED IF A SPOUSE CHANGES THEIR NAME AFTER MARRIAGE?

Posted by Admin Posted on Apr 29 2020

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All organizations that you had correspondence with while using your unmarried name should be notified. You can begin with the following list:

  • The Social Security Administration
  • Department of Motor Vehicles
  • Post Office
  • Investment and bank accounts
  • Employer
  • Voter's registration office
  • School alumni offices
  • Credit cards and loans
  • Club memberships
  • Retirement accounts
  • Subscriptions
  • Passport office
  • Insurance agents

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

COVID-19 relief: Overview of the CARES Act-

Posted by Admin Posted on Apr 27 2020

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The CARES Act rolls back several revenue-generating provisions of the Tax Cuts and Jobs Act (TCJA). This will help free up cash for some individuals and businesses during the COVID-19 crisis.

The new law temporarily scales back TCJA deduction limitations on:

  • Net operating losses (NOLs),
  • Business tax losses sustained by individuals,
  • Business interest expense, and
  • Certain itemized charitable deductions by individuals and charitable deductions for corporations.

The new law also accelerates the recovery of credits for prior-year corporate alternative minimum tax (AMT) liability.

Significant for the hard-hit restaurant and retail sectors, the CARES Act also fixes a TCJA drafting error for real estate qualified improvement property (QIP). Congress originally intended to permanently install a 15-year depreciation period for QIP, making it eligible for first-year bonus depreciation in tax years after the TCJA took effect. Unfortunately, due to a drafting glitch, QIP wasn’t added to the list of property with a 15-year depreciation period — instead, it was left subject to a 39-year depreciation period. The CARES Act retroactively corrects this mistake and allows you to choose between first-year bonus depreciation and 15-year depreciation for QIP expenditures.

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 PROVIDES GUIDANCE UNDER THE CARES ACT TO TAXPAYERS WITH NET OPERATING LOSSES

Posted by Admin Posted on Apr 21 2020

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WASHINGTON — The Internal Revenue Service today issued guidance providing tax relief under the CARES Act for taxpayers with net operating losses. Recently the IRS issued tax relief for partnerships filing amended returns.

COVID Relief for taxpayers claiming NOLs

Revenue Procedure 2020-24 (PDF) provides guidance to taxpayers with net operating losses that are carried back under the CARES Act by providing procedures for:

  • waiving the carryback period in the case of a net operating loss arising in a taxable year beginning after Dec. 31, 2017, and before Jan. 1, 2021,
  • disregarding certain amounts of foreign income subject to transition tax that would normally have been included as income during the five-year carryback period, and
  • waiving a carryback period, reducing a carryback period, or revoking an election to waive a carryback period for a taxable year that began before Jan. 1, 2018, and ended after Dec. 31, 2017.

Six month extension of time for filing NOL forms

In Notice 2020-26 (PDF), the IRS grants a six-month extension of time to file Form 1045 or Form 1139, as applicable, with respect to the carryback of a net operating loss that arose in any taxable year that began during calendar year 2018 and that ended on or before June 30, 2019.  Individuals, trusts, and estates would file Form 1045 (PDF), and corporations would file Form 1139 (PDF).

COVID relief for partnerships with NOLs

On April 8, 2020, the IRS issued Revenue Procedure 2020-23 (PDF), allowing eligible partnerships to file amended partnership returns using a Form 1065, U.S. Return of Partnership Income, by checking the “Amended Return” box and issuing amended Schedules K-1, Partner’s Share of Income, Deductions, Credits, to each of its partners. Partnerships filing these amended returns should write “FILED PURSUANT TO REV PROC 2020-23” at the top of the amended 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

-COVID-19 relief: Overview of the CARES Act

Posted by Admin Posted on Apr 21 2020

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This $349 billion loan program — administered by the Small Business Administration (SBA) — is intended to help U.S. employers keep workers on their payrolls. To potentially qualify, you must have fewer than 500 full- or part-time employees. PPP loans can be as large as $10 million. But most organizations will receive smaller amounts — generally a maximum of 2.5 times their average monthly payroll costs.

If you receive a loan through the program, proceeds may be used only for paying certain expenses, generally:

  • Payroll (including benefits),
  • Mortgage interest,
  • Rent, and
  • Utilities.

Perhaps the most reassuring aspect of PPP loans is that they can be forgiven — so long as you follow the rules. And many rules and limits apply. Because of the limited funds available, if you could qualify, you should apply as soon as possible.

The CARES Act expands business access to capital in additional ways. Many of the other loan programs are also being administered by the Small Business Administration (SBA).

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

-TREASURY, IRS LAUNCH NEW TOOL TO HELP NON-FILERS REGISTER FOR ECONOMIC IMPACT PAYMENTS-

Posted by Admin Posted on Apr 21 2020

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WASHINGTON — To help millions of people, the Treasury Department and the Internal Revenue Service today launched a new web tool allowing quick registration for Economic Impact Payments for those who don’t normally file a tax return.

The non-filer tool, developed in partnership between the IRS and the Free File Alliance, provides a free and easy option designed for people who don't have a return filing obligation, including those with too little income to file. The feature is available only on IRS.gov, and users should look for Non-filers: Enter Payment Info Here to take them directly to the tool.

"People who don't have a return filing obligation can use this tool to give us basic information so they can receive their Economic Impact Payments as soon as possible," said IRS Commissioner Chuck Rettig. "The IRS and Free File Alliance have been working around the clock to deliver this new tool to help people."

The IRS reminds taxpayers that Economic Impact Payments will be distributed automatically to most people starting next week. Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also go in the near future to those people receiving Social Security retirement, survivors, disability (SDDI), or survivor benefits and Railroad Retirement benefits.

How do I use the Non-Filers: Enter Payment Info tool?

For those who don't normally file a tax return, the process is simple and only takes a few minutes to complete. First, visit IRS.gov, and look for "Non-Filers: Enter Payment Info Here." Then provide basic information including Social Security number, name, address, and dependents. The IRS will use this information to confirm eligibility and calculate and send an Economic Impact Payment. Using the tool to get your payment will not result in any taxes being owed. Entering bank or financial account information will allow the IRS to deposit your payment directly in your account. Otherwise, your payment will be mailed to you.

"Non-Filers: Enter Payment Info" is secure, and the information entered will be safe. The tool is based on Free File Fillable Forms, part of the Free File Alliance's offerings of free products on IRS.gov.

Who should use the Non-Filers tool?

This new tool is designed for people who did not file a tax return for 2018 or 2019 and who don't receive Social Security retirement, disability (SSDI), or survivor benefits or Railroad Retirement benefits. Others who should consider the Non-Filers tool as an option, include:

Lower income: Among those who could use Non-Filers: Enter Payment Info tool are those who haven't filed a 2018 or 2019 return because they are under the normal income limits for filing a tax return. This may include single filers who made under $12,200 and married couples making less than $24,400 in 2019.

Veterans beneficiaries and Supplemental Security Income (SSI) recipients: The IRS continues to explore ways to see if Economic Impact Payments can be made automatically to SSI recipients and those who receive veterans disability compensation, pension or survivor benefits from the Department of Veterans Affairs and who did not file a tax return for the 2018 or 2019 tax years. People in these groups can either use Non-Filers: Enter Payment Info option now or wait as the IRS continues to review automatic payment options to simplify delivery for these groups.

Social Security, SSDI and Railroad Retirement beneficiaries with qualifying dependents: These groups will automatically receive $1,200 Economic Impact Payments. People in this group who have qualifying children under age 17 may use Non-Filers: Enter Payment Info to claim the $500 payment per child.

Students and others: If someone else claimed you on their tax return, you will not be eligible for the Economic Impact Payment or using the Non-Filer tool.

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 ISSUES WARNING ABOUT CORONAVIRUS-RELATED SCAMS; WATCH OUT FOR SCHEMES TIED TO ECONOMIC IMPACT PAYMENTS

Posted by Admin Posted on Apr 21 2020

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WASHINGTON — The Internal Revenue Service today urged taxpayers to be on the lookout for a surge of calls and email phishing attempts about the Coronavirus, or COVID-19. These contacts can lead to tax-related fraud and identity theft.

"We urge people to take extra care during this period. The IRS isn't going to call you asking to verify or provide your financial information so you can get an economic impact payment or your refund faster," said IRS Commissioner Chuck Rettig. "That also applies to surprise emails that appear to be coming from the IRS. Remember, don't open them or click on attachments or links. Go to IRS.gov for the most up-to-date information."

Taxpayers should watch not only for emails but text messages, websites and social media attempts that request money or personal information.

"History has shown that criminals take every opportunity to perpetrate a fraud on unsuspecting victims, especially when a group of people is vulnerable or in a state of need," said IRS Criminal Investigation Chief Don Fort. "While you are waiting to hear about your economic impact payment, criminals are working hard to trick you into getting their hands on it. The IRS Criminal Investigation Division is working hard to find these scammers and shut them down, but in the meantime, we ask people to remain vigilant."

Don't fall prey to Coronavirus tricks; retirees among potential targets

The IRS and its Criminal Investigation Division have seen a wave of new and evolving phishing schemes against taxpayers. In most cases, the IRS will deposit economic impact payments into the direct deposit account taxpayers previously provided on tax returns. Those taxpayers who have previously filed but not provided direct deposit information to the IRS will be able to provide their banking information online to a newly designed secure portal on IRS.gov in mid-April. If the IRS does not have a taxpayer's direct deposit information, a check will be mailed to the address on file. Taxpayers should not provide their direct deposit or other banking information for others to input on their behalf into the secure portal.

The IRS also reminds retirees who don't normally have a requirement to file a tax return that no action on their part is needed to receive their $1,200 economic impact payment. Seniors should be especially careful during this period. The IRS reminds retirees – including recipients of Forms SSA-1099 and RRB-1099 − that no one from the agency will be reaching out to them by phone, email, mail or in person asking for any kind of information to complete their economic impact payment, also sometimes referred to as rebates or stimulus payments. The IRS is sending these $1,200 payments automatically to retirees – no additional action or information is needed on their part to receive this.

The IRS reminds taxpayers that scammers may:

  • Emphasize the words "Stimulus Check" or "Stimulus Payment." The official term is economic impact payment.
  • Ask the taxpayer to sign over their economic impact payment check to them.
  • Ask by phone, email, text or social media for verification of personal and/or banking information saying that the information is needed to receive or speed up their economic impact payment.
  • Suggest that they can get a tax refund or economic impact payment faster by working on the taxpayer's behalf. This scam could be conducted by social media or even in person.
  • Mail the taxpayer a bogus check, perhaps in an odd amount, then tell the taxpayer to call a number or verify information online in order to cash it.

Reporting Coronavirus-related or other phishing attempts

Those who receive unsolicited emails, text messages or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), should forward it to phishing@irs.gov.

Taxpayers are encouraged not to engage potential scammers online or on the phone. Learn more about reporting suspected scams by going to the Report Phishing and Online Scams page on IRS.gov.

Official IRS information about the COVID-19 pandemic and economic impact payments can be found on the Coronavirus Tax Relief page on IRS.gov. The page is updated quickly when new information is available.

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  

-COVID-19 relief: Overview of the CARES Act-

Posted by Admin Posted on Apr 21 2020

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The CARES Act creates a new payroll tax credit for employers that pay wages when:

  • Their operations are partially or fully suspended because of certain government orders related to the COVID-19 pandemic, or
  • Their gross receipts have declined by more than 50% compared to the same quarter in the prior year.

Eligible employers may claim a 50% refundable payroll tax credit on wages paid (including health insurance benefits) of up to $10,000 that are paid or incurred from March 13, 2020, through December 31, 2020.

For employers who had an average number of full-time employees in 2019 of 100 or fewer, all employee wages are eligible, regardless of whether the employee is furloughed. For employers who had a larger average number of full-time employees in 2019, only the wages of employees who are furloughed or face reduced hours as a result of their employers’ closure or reduced gross receipts are eligible for the credit.

Be aware that additional rules and restrictions 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: Thomson Reuters

COVID-19 relief: Overview of the CARES Act

Posted by Admin Posted on Apr 16 2020

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The CARES Act provides one-time direct Economic Impact Payments of up to $1,200 for single filers or heads of households; married couples filing jointly can receive up to $2,400. An additional payment of up to $500 is available for each qualifying child under age 17.

Economic Impact Payments are subject to phaseout thresholds based on adjusted gross income (AGI). The phaseouts begin at $75,000 for singles, $112,500 for heads of household and $150,000 for married couples.

The payments are phased out by $5 for every $100 of AGI above the thresholds. For example, the payment for a married couple with no children is completely phased out when AGI exceeds $198,000. The payment for a head of household with one child is completely phased out when AGI exceeds $146,500. And, for a single filer, it’s completely phased out when AGI exceeds $99,000.

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

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 Esse