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Negocios Deben Presentar Formulario 8300 Electrónicamente para Reportar Pagos en Efectivo Más de $10,000

Posted by Admin Posted on Mar 15 2024

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Las empresas que presentan 10 o más declaraciones informativas deben presentar electrónicamente el Formulario 8300, Informe de Pagos en Efectivo de más de $10,000 (en inglés) en lugar de presentar una declaración en papel. Para aquellos con menos declaraciones informativas, la presentación electrónica del Formulario 8300 es opcional.

Para presentar electrónicamente el Formulario 8300, una empresa debe establecer una cuenta con el Sistema de Presentación Electrónica BSA (en inglés) de la Red de Ejecución de Delitos Financieros.

Exenciones y dispensas

Si la presentación electrónica causaría dificultades indebidas, una empresa puede solicitar una exención presentando el Formulario 8508, Solicitud de Exención de la Presentación Electrónica de Declaraciones Informativas (en inglés). Si el IRS otorga una exención de la presentación electrónica de cualquier declaración informativa, esa exención se aplica automáticamente a todos los Formularios 8300 por el resto del año calendario. Una empresa no puede solicitar una exención de la presentación electrónica solo del Formulario 8300. Si se otorga una exención, la empresa debe incluir la palabra "exención" en la parte superior central de cada Formulario 8300 al presentar una declaración en papel.

Si el uso de la tecnología de presentación electrónica entra en conflicto con las creencias religiosas de un declarante, están automáticamente exentos de la presentación electrónica. El declarante debe incluir las palabras "exención religiosa" en la parte superior de cada Formulario 8300 al presentar la declaración en papel.

La presentación electrónica es gratuita y conveniente

El sistema de presentación electrónica es una forma más conveniente y rentable de cumplir con la fecha límite de presentación de 15 días después de una transacción. Las empresas reciben un correo electrónico de confirmación cuando el IRS recibe el formulario, y pueden presentar sus informes por lotes. Esto es especialmente útil si las empresas deben presentar muchos formularios.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

Businesses: Electronically File Form 8300 to Report Cash Payments Over $10,000

Posted by Admin Posted on Mar 15 2024

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Businesses that file 10 or more information returns must e-file Form 8300, Report of Cash Payments Over $10,000, instead of filing a paper return. For those with fewer information returns, e-filing Form 8300 is optional.

To electronically file Form 8300, a business must set up an account with the Financial Crimes Enforcement Network's BSA E-Filing System.

Waivers and exemptions

If electronic filing would cause undue hardship, a business can request a waiver by submitting Form 8508, Application for a Waiver from Electronic Filing of Information Returns. If the IRS grants a waiver from e-filing any information return, that waiver automatically applies to all Forms 8300 for the rest of the calendar year. A business may not request a waiver from filing electronically only Form 8300. If a waiver is given, the business must include the word "waiver" on the center top of each Form 8300 when submitting a paper filed return.

If using the e-file technology conflicts with a filer's religious beliefs, they’re automatically exempt from electronic filing. The filer must include the words "religious exemption" on the top of each Form 8300 when submitting the paper return.

Electronic filing is free and convenient

The e-filing system is a more convenient and cost-effective way to meet the reporting deadline of 15 days after a transaction. Businesses get a confirmation email when the IRS receives the form, and they can batch e-file their reports. This especially helps if businesses must file many forms.

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 +1-305-274-5811

Source : IRS      

Auto Dealers Must Register with the IRS to Receive Advance Payments of the Clean Vehicle Tax Credit

Posted by Admin Posted on Mar 15 2024

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To submit time-of-sale reports and receive advance payments of the Clean Vehicle Tax Credit, auto dealers and sellers must register their business with IRS Energy Credits Online. Dealers and sellers must use this tool to submit all time-of-sale reports for vehicles placed in service in 2024 and future years.

How to register

To register or access a previously registered business, dealers and sellers can go to IRS Energy Credits Online. The step-by-step instructions guide them through the process to register, submit time-of-sale reports and enter advance payment information. It may take 15 days or longer for the registration to process.

Once registered, dealers and sellers must use this tool to enter time-of-sale reports and provide the buyer certain required information.

What happens after registration

When a dealer successfully submits a time-of-sale report, the vehicle is eligible for the credit. A submission is successful when the dealer receives a copy of the report and a confirmation of acceptance by IRS Energy Credits Online. Buyers should use the copy of the report when they file their annual federal tax return.

Find out more about the Clean Vehicle Credits at IRS.gov/cleanvehicle.

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 +1-305-274-5811

Source : IRS      

Seven Warnings of Incorrect Employee Retention Credit Claims

Posted by Admin Posted on Mar 15 2024

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Some unscrupulous promoters have marketed misleading information about Employee Retention Credit eligibility rules to well-intentioned businesses. The IRS is highlighting seven suspicious signs and urging business to seek a trusted tax professional to resolve an incorrect claim while they still can without penalties or interest.

There’s a deadline of March 22, 2024, for the ERC Voluntary Disclosure Program, which lets businesses who filed a claim in error and received a payment repay just 80% of the claim. Taxpayers who filed an incorrect claim that hasn’t been processed, or who have an ERC check they haven’t cashed or deposited, should quickly pursue the claim withdrawal process.

Seven suspicious signs an ERC claim could be incorrect

  • Too many quarters being claimed. Some promoters urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon. Employers should carefully review their eligibility for each quarter.
     
  • Government orders that don’t qualify. Some promoters told employers they can claim the ERC if any government order was in place in their area, even if their operations weren’t affected or if they chose to suspend their business operations voluntarily. This is false. Some promoters also suggested that an employer qualifies based on communications from the Occupational Safety and Health Administration. This is generally not true. Employers should review the frequently asked questions about ERC – Qualifying Government Orders for more information and helpful examples for these topics.
     
  • Too many employees and wrong calculations. Employers should be cautious about claiming the ERC for all wages paid to every employee on their payroll. Employers need to meet certain rules for wages to be considered qualified wages, depending on the tax period. Employers should review all calculations to avoid overclaiming the credit. They should not use the same credit amount across multiple tax periods for each employee. For details on credit amounts, see the ERC 2020 vs 2021 Comparison Chart.
     
  • Business citing supply chain issues. A supply chain disruption by itself doesn’t qualify an employer for ERC. An employer needs to ensure that their supplier’s government order meets the requirements. Employers should carefully review the rules on supply chain issues and examples in the 2023 legal memo on supply chain disruptions.
     
  • Business claiming ERC for too much of a tax period. It's possible, but uncommon, for an employer to qualify for ERC for the entire calendar quarter if their business operations were fully or partially suspended due to a government order during a portion of a calendar quarter. A business in this situation can claim ERC only for wages paid during the suspension period, not the whole quarter. Businesses should check their claim for overstated qualifying wages and should keep payroll records that support their claim.
     
  • Business didn’t pay wages or didn’t exist during eligibility period. Employers can only claim ERC for tax periods when they paid wages to employees. Records available to the IRS show some businesses that claimed ERC didn’t have any employees or they claimed ERC for tax periods before the business existed.
     
  • Promoter says there’s nothing to lose. Businesses should be on high alert with any ERC promoter who urged them to claim ERC because they “have nothing to lose.” Businesses that incorrectly claim the ERC risk repayment, penalties, interest, audit and other expenses.

The IRS has an interactive ERC Eligibility Checklist that tax professionals and taxpayers can use to check potential eligibility for ERC. It’s also available as a printable guide.

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 +1-305-274-5811

Source : IRS      

What Taxpayers Should Do if they Received a Form 1099-K in 2024

Posted by Admin Posted on Mar 06 2024

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If a taxpayer sold goods or services in 2023 and received payments through certain payment apps or online marketplaces or accepted payment cards, they could have received a third party reporting document Form 1099-K, Payment Card and Third Party Network Transactions.

Following feedback from taxpayers, tax professionals and payment processors, and to reduce taxpayer confusion, the IRS announced Notice 2023-74, which delayed the new federal law $600 reporting threshold for tax year 2023 on Form 1099-K, Payment Card and Third Party Network Transactions. The previous reporting thresholds remained in place for 2023, which are more than $20,000 in payments and over 200 transactions. Taxpayers could have still received forms below the threshold.

It’s important to know that regardless of if a taxpayer received a Form 1099-K or not, they must report their income. This includes payments they receive in cash, property, goods, digital assets or foreign sources or assets.

The Form 1099-K should not report personal payments like gifts and reimbursements.

What to do when filing taxes

It’s important to understand why an individual received a Form 1099-K. Taxpayers can then use it with their other tax records when it’s time to file their return. The form provides the gross amount of payment card/third party network transactions and may include a combination of different kinds of total payments received.

It's important to note, just because a payment is reported on a Form 1099-K does not mean it’s taxable.

Taxpayers should review the form or forms, determine if the amount is correct, and determine any deductible expenses associated with the payment they may be able to claim when they file their taxes.

Selling personal items at a loss

If an individual sold items at a loss, which means they paid more for the items than for what they sold them, there is not a tax liability. They’ll be able to zero out the payment on their tax return by reporting both the payment and an offsetting adjustment on a Schedule 1 (Form 1040). This will ensure if they received these forms, they don't have to pay taxes they don't owe.

Selling personal items at a gain

If an individual sold items at a gain, which means they paid less than for what they sold it, they will have to report that gain as income, and it's taxable.

See IRS.gov What to do with Form 1099-K for specific instruction on how to report personal item sales.

What to do with a Form 1099-K received in error

People may get a Form 1099-K when they shouldn't have if it:

  • Reports personal payments from family or friends like gifts or reimbursements.
  • Doesn't belong to them.
  • Duplicates a Form 1099-K or other information reporting form they already received.

If this happens:

  • Contact the issuer immediately – see "Filer" on the top left corner of Form 1099-K to find out the name and contact information of the issuer.
  • Ask for a corrected Form 1099-K that shows a zero amount.
  • Keep a copy of the original form and all correspondence with the issuer for your records.
  • Don't wait to file taxes. File even if a corrected Form 1099-K is unavailable.

What to do with an incorrect Form 1099-K

If the payee Taxpayer Identification Number (TIN) or gross payment amount is incorrect taxpayers should request a corrected form from the issuer.

  • See "Filer" on the top left corner of Form 1099-K to find the name and contact information of the issuer. If a taxpayer doesn't recognize the issuer, they should contact the Payment Settlement Entity (PSE) identified on the bottom left corner of the form above their account number.
  • Keep a copy of the corrected Form 1099-K with other tax records, along with any correspondence from the issuer or PSE.
  • Don't contact the IRS. The IRS can't correct a Form 1099-K from an issuer.

Don't wait to file taxes. To file a tax return, take these steps:

  • If the Payee Taxpayer Identification Number (TIN) is incorrect report payments from the Form 1099-K and any sources of income on the appropriate tax return you normally file.
  • If the gross payment amount is incorrect report the amount from your incorrect Form 1099-K on Schedule 1 (Form 1040), Additional Income and Adjustments to Income

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 +1-305-274-5811

Source : IRS      

Sec. 179 Expensing and Bonus Depreciation: Beware of Pitfalls

Posted by Admin Posted on Mar 06 2024

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If eligible, you can elect to use Section 179 expensing or bonus depreciation to deduct a large portion of the cost (and in some cases the full cost) of eligible property in the year it’s placed in service. Alternatively, you may follow regular depreciation rules and spread deductions over several years or decades, depending on how the asset is classified under the tax code.

While taking current deductions can significantly lower your company’s taxable income, it isn’t always the smartest move.

Sec. 179 and bonus depreciation 101

Section 179 expensing may allow you to currently deduct the full cost of purchasing eligible new or used assets, such as equipment, furniture, off-the-shelf computer software, and qualified improvement property (QIP). An annual expensing limit applies ($1.16 million for 2023 and $1.22 million for 2024), which begins to phase out dollar for dollar when asset acquisitions for the year exceed the applicable threshold ($2.89 million for 2023 and $3.05 million for 2024). You can claim the election only to offset net income, not to reduce it below zero to create a net operating loss.

First-year bonus depreciation is available for qualified assets, which include new tangible property with a recovery period of 20 years or less (such as office furniture and equipment), off-the-shelf computer software and water utility property. Under the TCJA, through 2026, the definition has been expanded to include used property and qualified film, television and live theatrical productions. In addition, QIP is now eligible for bonus depreciation. For 2023, bonus depreciation was 80%. It drops to 60% for 2024, to 40% for 2025 and to 20% for 2026. After that, it will be eliminated, unless Congress acts to extend it.

When to consider forgoing these breaks

Here are two examples when it may be preferable to forgo Sec. 179 expensing and bonus depreciation:

1. You’re planning to sell QIP. If you claim Sec. 179 expense or bonus depreciation on QIP and sell the building soon, this current write-off may be a tax trap. That’s because your gain on the sale up to the amount of Sec. 179 or bonus depreciation deductions you’ve claimed will be treated as “recaptured” depreciation that’s taxable at ordinary-income tax rates, up to 37%. But if you deduct the cost of QIP under regular depreciation rules (generally, over 15 years) and sell the building, any long-term gain attributable to the deductions will be taxable at a top rate of 25%.

2. You’re eligible for the qualified business income (QBI) deduction. This deduction allows eligible business owners to deduct up to 20% of their QBI from certain pass-through entities, such as partnerships, limited liability companies and sole proprietorships. The deduction can’t exceed 20% of an owner’s taxable income, excluding net capital gains. (Other restrictions apply.)

Claiming Sec. 179 or bonus depreciation deductions reduces your taxable income, which may deprive you of an opportunity to maximize the QBI deduction. Because the QBI deduction is scheduled to expire after 2025, taking full advantage of it while you can generally will make sense.

Timing is everything

Keep in mind that only the timing of deductions is affected by the strategy you choose. You’ll still have an opportunity to write off the full cost of eligible assets if you forgo Sec. 179 expensing and bonus depreciation; it will just be over a longer time period. Your tax advisor can analyze your company’s overall tax benefit picture and help you determine the optimal strategy.

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 +1-305-274-5811

Source : Thomson Reuters     

¿Qué Debe Hacer si Recibe un Formulario 1099-K en 2024?

Posted by Admin Posted on Mar 06 2024

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Si un contribuyente vendió bienes o servicios en 2023 y recibió pagos a través de ciertas aplicaciones de pago o mercados en línea o tarjetas de pago aceptadas, podría haber recibido un documento de declaración de terceros Formulario 1099-K, Transacciones con tarjetas de pago y redes de terceros (en inglés).

Tras comentarios de contribuyentes, profesionales de impuestos y procesadores de pagos, y para reducir la confusión de los contribuyentes, el IRS anunció el Aviso 2023-74, que retrasó el nuevo umbral de declaración de $600 de la ley federal para el año tributario 2023 en el Formulario 1099-K, Transacciones con tarjetas de pago y redes de terceros (en inglés). Los umbrales de informes anteriores se mantuvieron vigentes para 2023, que son más de $20,000 en pagos y más de 200 transacciones. Los contribuyentes aún podrían haber recibido formularios por debajo del umbral.

Es importante saber que, independientemente de que si un contribuyente recibió un Formulario 1099-K o no, debe declarar sus ingresos. Esto incluye los pagos que reciben en efectivo, propiedades, bienes, activos digitales o fuentes o activos extranjeros.

El Formulario 1099-K no debe reportar pagos personales como regalos y reembolsos.

Qué hacer al declarar impuestos

Es importante entender por qué una persona recibió un Formulario 1099-K. Los contribuyentes pueden usarlo con sus otros registros de impuestos cuando llegue el momento de presentar su declaración. El formulario proporciona el monto bruto de las transacciones con tarjeta de pago/red de terceros y puede incluir una combinación de diferentes tipos de pagos totales recibidos.

Es importante tener en cuenta que el hecho de que un pago se informe en un Formulario 1099-K no significa que esté sujeto a impuestos.

Los contribuyentes deben revisar el formulario o formularios, determinar si la cantidad es correcta y determinar cualquier gasto deducible asociado con el pago que puedan reclamar cuando presenten sus impuestos.

Artículos personales vendidos con una pérdida

Si una persona vendió artículos con pérdidas, lo que significa que pagó más por los artículos que por lo que los vendió, no hay una obligación tributaria. Podrán poner a cero el pago en su declaración de impuestos declarando tanto el pago como un ajuste de compensación en el Anexo 1 (Formulario 1040 (SP). Esto asegurará que, si recibieron estos formularios, no tengan que pagar impuestos que no deben.

Artículos personales vendidos con una ganancia

Si una persona vendió artículos con una ganancia, lo que significa que pagó menos de lo que los vendió, tendrá que declarar esa ganancia como ingreso y está sujeta a impuestos.

Vea IRS.gov Qué debe hacer con el Formulario 1099-K para obtener instrucciones específicas acerca de cómo declarar las ventas de artículos personales.

Qué hacer con un Formulario 1099-K recibido por error

Las personas pueden recibir un Formulario 1099-K cuando no deberían haberlo recibido si:

  • Declaran pagos personales de familiares o amigos como regalos o reembolsos
  • No les pertenece.
  • Duplica un Formulario 1099-K u otro formulario de reporte de información que ya recibieron.

Si esto ocurre:

  • Comuníquese con el emisor inmediatamente – consulte el "Emisor" en la esquina superior izquierda del Formulario 1099-K para averiguar el nombre y la información de contacto del emisor.
  • Solicite un Formulario 1099-K corregido que muestre una cantidad cero.
  • Conserve una copia del formulario original y toda la correspondencia con el emisor para sus registros.
  • No espere a presentar sus impuestos. Presente incluso si no puede obtener un Formulario 1099-K corregido.

Si el Formulario 1099-K tiene la información incorrecta

Si el número de identificación del contribuyente (TIN) del beneficiario o la cantidad del pago bruto son incorrectos los contribuyentes deben solicitar un formulario corregido al emisor.

  • Consulte el "Emisor" en la esquina superior izquierda del Formulario 1099-K para encontrar el nombre y la información de contacto del emisor. Si no reconoce al emisor, comuníquese con la Entidad de liquidación de pagos (PSE) identificada en la esquina inferior izquierda del formulario, encima de su número de cuenta.
  • Conserve una copia del Formulario 1099-K corregido con sus registros, junto con cualquier correspondencia que tenga con el emisor o la PSE.
  • No se comunique con el IRS. No podemos corregir su Formulario 1099-K.

    No espere a presentar sus impuestos. Para presentar su declaración de impuestos, siga estos pasos:

  • Si el número de identificación del contribuyente (TIN) del beneficiario es incorrecto, declare los pagos del Formulario 1099-K y cualquier fuente de ingresos en la declaración de impuestos correspondiente que normalmente presenta.
  • Si la cantidad del pago bruto es incorrecto. Declare la cantidad de su Formulario 1099-K incorrecto en el Anexo 1 (Formulario 1040), Ingreso Adicional y Ajustes al Ingreso
  • Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

    Fuente : IRS     

Posted by Admin Posted on Mar 06 2024

Appraisals Aren’t Just for Businesses

Posted by Admin Posted on Mar 06 2024

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Whether you’re in the process of making a retirement or estate plan or you intend to donate property to charity, you’ll need to know the value of your assets. For many hard-to-value items, such as closely held business interests, real estate, art and collectibles, an appraisal may be necessary.

Retirement and estate planning

To enjoy a comfortable retirement, you’ll need to calculate the income that can support your lifestyle when you’re no longer working. This means understanding the value of the assets you own. Once you have this information, you may decide to move your retirement date up or back.

Knowing the value of your assets is also necessary to assess whether you’ll potentially be subject to gift and estate taxes. It also allows you to identify strategies for minimizing or eliminating those taxes. In addition, without appraisals of hard-to-value assets, it’s nearly impossible to divide your overall property equally among your children (if that’s your wish).

Appraisals may also be necessary to avoid running afoul of tax basis consistency rules. The rules are intended to prevent heirs from arguing that estate property was undervalued, which would raise their basis for income tax purposes. According to these rules, the income tax basis of inherited property equals the property’s fair market value as finally determined for estate tax purposes. Appraisals can help ensure that your heirs receive the basis they deserve.

Gifts and charitable giving

The IRS has an unlimited amount of time to challenge the value of gifts for gift and estate tax purposes, unless they’re “adequately disclosed,” which generally binds the IRS to a three-year statute of limitations. A qualified professional appraisal with a timely filed gift tax return is the best way to disclose the value of a gift of a hard-to-value asset.

Charitable gifts of property valued at more than $5,000 (other than publicly traded securities) must be substantiated with a qualified appraisal by a qualified appraiser. This means that the appraiser meets certain education and experience requirements.

Know what you have

Without appraisals of your hard-to-value assets, it’s difficult to develop a realistic financial plan, to create an estate plan that will achieve your desired results and to avoid unwelcome tax liabilities. Asset values can fluctuate dramatically over time, so make sure you get updated appraisals periodically.

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 +1-305-274-5811

Source : Thomson Reuters    

IRS Shares 7 Warning Signs Employee Retention Credit Claims may be Incorrect; Urges Businesses to Revisit Eligibility, Resolve Issues Now Before March 22

Posted by Admin Posted on Feb 29 2024

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With a key March deadline quickly approaching, the Internal Revenue Service is highlighting special warning signs that an Employee Retention Credit (ERC) claim may be questionable to help small businesses that may need to resolve incorrect claims.

The agency alerted businesses about seven suspicious warning signs that could signal future IRS problems involving ERC claims. The indicators, built on feedback from the tax professional community and IRS compliance personnel, center on misinformation some unscrupulous ERC promoters used. Many of these groups urged taxpayers to ignore advice from trusted tax professionals and claim the pandemic-era credit even though they may not qualify.

“IRS compliance activity continues increasing involving Employee Retention Credit claims, and those claiming this pandemic-era credit need to quickly review their situation to avoid future problems,” said IRS Commissioner Danny Werfel. “Many businesses were wildly misled about the qualifications, and the IRS is taking a special step to highlight common problems being seen about these claims. The IRS urges ERC claimants to get with a trusted tax professional and review their qualifications before time runs out on IRS disclosure and withdrawal programs. The ‘suspicious seven’ signs released are clear red flags that ERC claimants should carefully review.”

The alert comes as a March 22, 2024, deadline approaches for the ERC Voluntary Disclosure Program for anyone that filed a claim in error and received a payment; the disclosure program allows businesses to repay just 80% of the claim. Taxpayers who filed a claim previously that hasn’t been processed should also review the guidelines and quickly pursue the claim withdrawal process if they now see their claim is ineligible.

The IRS took steps on the ERC program after the well-intentioned pandemic-era program came under aggressive, misleading marketing that oversimplified or misrepresented eligibility rules. Promoters pushed more applicants into the program, frequently by taking a percentage of the payout. The IRS wants businesses to know about these warning signs, revisit their claim if there are questions and act quickly before the special disclosure and withdrawal programs end. Resolving an incorrect claim through the IRS’s special programs will avoid penalties and interest.

“We’ve heard from the tax pro community and others that sharing more warning signs can help point well-intentioned people in the right direction,” Werfel said. “Many of these taxpayers were misled by overzealous and unscrupulous promoters taking advantage of honest taxpayers. The most beneficial time to resolve any incorrect claims is now before this special window closes.”

The ERC, sometimes called the Employee Retention Tax Credit or ERTC, is complex, and the IRS urged claimants to talk to a reputable tax professional for help with an ERC claim. Taxpayers should avoid working with anyone who doesn’t ask for details or business records, such as payroll records.

7 suspicious signs an ERC claim could be incorrect

Here are some of the common red flags being seen on ERC claims that the IRS is focusing on:

  • Too many quarters being claimed. Some promoters have urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon, and this could be a sign of an incorrect claim. Employers should carefully review their eligibility for each quarter.
  • Government orders that don’t qualify. Some promoters have told employers they can claim the ERC if any government order was in place in their area, even if their operations weren’t affected or if they chose to suspend their business operations voluntarily. This is false. To claim the ERC under government order rules:
     
    • Government orders must have been in effect and the employer’s operations must have been fully or partially suspended by the government order during the period for which they’re claiming the credit.
    • The government order must be due to the COVID-19 pandemic.
    • The order must be a government order, not guidance, a recommendation or a statement.

      Some promoters suggest that an employer qualifies based on communications from the Occupational Safety and Health Administration (OSHA). This is generally not true. See the ERC FAQ about OSHA communications and the 2023 legal memo on OSHA communications for details and examples.

      The frequently asked questions about ERC – Qualifying Government Orders section of IRS.gov has helpful examples. Employers should make sure they have documentation of the government order related to COVID-19 and how and when it suspended their operations. Employers should avoid a promoter that supplies a generic narrative about a government order.

       
  • Too many employees and wrong calculations. Employers should be cautious about claiming the ERC for all wages paid to every employee on their payroll. The law changed throughout 2020 and 2021. There are dollar limits and varying credit amounts, and employers need to meet certain rules for wages to be considered qualified wages, depending on the tax period. The IRS urges employers to carefully review all calculations and to avoid overclaiming the credit, which can happen if an employer erroneously uses the same credit amount across multiple tax periods for each employee. For details about credit amounts, see the Employee Retention Credit - 2020 vs 2021 Comparison Chart.
  • Business citing supply chain issues. Qualifying for ERC based on a supply chain disruption is very uncommon. A supply chain disruption by itself doesn’t qualify an employer for ERC. An employer needs to ensure that their supplier’s government order meets the requirements. Employers should carefully review the rules on supply chain issues and examples in the 2023 legal memo on supply chain disruptions.
     
  • Business claiming ERC for too much of a tax period. It's possible, but uncommon, for an employer to qualify for ERC for the entire calendar quarter if their business operations were fully or partially suspended due to a government order during a portion of a calendar quarter. A business in this situation can claim ERC only for wages paid during the suspension period, not the whole quarter. Businesses should check their claim for overstated qualifying wages and should keep payroll records that support their claim.
     
  • Business didn’t pay wages or didn’t exist during eligibility period. Employers can only claim ERC for tax periods when they paid wages to employees. Some taxpayers claimed the ERC but records available to the IRS show they didn’t have any employees. Others have claimed ERC for tax periods before they even had an employer identification number with the IRS, meaning the business didn’t exist during the eligibility period. The IRS has started disallowing these claims, and more work continues in this area as well as other aspects of ERC.
     
  • Promoter says there’s nothing to lose. Businesses should be on high alert with any ERC promoter who urged them to claim ERC because they “have nothing to lose.” Businesses that incorrectly claim the ERC risk repayment requirements, penalties, interest, audit and potential expenses of hiring someone to help resolve the incorrect claim, amend previous returns or represent them in an audit.
  • Resolving incorrect ERC claims

    Businesses that are not eligible for ERC but have received it – as a check that’s been cashed or deposited, or in the form of a credit applied to a tax period – may be able to participate in the IRS’s ERC Voluntary Disclosure Program. The special program runs through March 22, 2024, and allows eligible participants to repay their incorrect ERC, minus 20%.

    If a taxpayer’s ERC is incorrect and is paid after Dec. 21, 2023, they aren’t eligible for the ERC VDP. They should not cash or deposit their check. They can withdraw the claim, return the check and avoid penalties and interest.

    The withdrawal option lets certain employers withdraw their ERC submission and avoid future repayment, interest and penalties. Businesses can use this option if they haven’t received the payment, or they've received a check but haven’t deposited or cashed it. If a taxpayer’s withdrawal request is accepted, the IRS will treat the claim as though it was never filed.

    Resources and tools to learn more about ERC eligibility

    The IRS’s frequently asked questions on ERC include links to additional resources and some helpful examples. The IRS also has an interactive ERC Eligibility Checklist that tax professionals and taxpayers can use to check potential eligibility for ERC. It’s also available as a guide.

    Eligibility highlights

    The ERC is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before Jan. 1, 2022. Eligibility and credit amounts vary depending on when the business impacts occurred. The ERC is not available to individuals.

  • For 2020 and the first two calendar quarters of 2021, an employer may qualify if their trade or business operations were fully or partially suspended due to a government order related to COVID-19 or they experienced the required decline in gross receipts.
  • For the third quarter of 2021, an employer may qualify if their trade or business operations were fully or partially suspended due to a government order related to COVID-19, they experienced the required decline in gross receipts, or they were considered a recovery startup business.
  • For the fourth quarter of 2021, only recovery startup businesses are eligible.
  • 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 +1-305-274-5811

    Source : IRS     

           

Tax Credits and Deductions for Individuals

Posted by Admin Posted on Feb 29 2024

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Tax credits and deductions change the amount of a person's tax bill or refund. People should understand which credits and deductions they can claim and the records they need to show their eligibility.

Tax credits

A tax credit reduces the income tax bill dollar-for-dollar that a taxpayer owes based on their tax return.

Some tax credits, such as the Earned Income Tax Credit, are refundable. If a person's tax bill is less than the amount of a refundable credit, they can get the difference back in their refund.

To claim a tax credit, people should:

  • Keep records to show their eligibility for the tax credits they claim.
  • Check now to see if they qualify to claim any credits next year on their tax return.

Deductions

Deductions can reduce the amount of a taxpayer's income before they calculate the tax they owe.

Most people take the standard deduction. The standard deduction changes each year for inflation. The amount of the standard deduction depends on a taxpayer's filing status, age and whether they're blind and whether the taxpayer is claimed as a dependent by someone else.

Some people must itemize their deductions, and some people may choose to do so because it reduces their taxable income more than the standard deduction. Generally, if a taxpayer's itemized deductions are larger than their standard deduction, it makes sense for them to itemize.

Interactive Tax Assistant

Find help with tax questions based on specific circumstances with the Interactive Tax Assistant. It can help a person decide if they're eligible for many popular tax credits and deductions.

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 +1-305-274-5811

Source : IRS      

Interest Rates Remain the Same for the Second Quarter of 2024

Posted by Admin Posted on Feb 29 2024

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The Internal Revenue Service announces interest rates will remain the same for the calendar quarter beginning April 1, 2024.

For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily. Here’s a complete list of the new rates:

  • 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
  • 5.5% for the portion of a corporate overpayment exceeding $10,000.
  • 8% for underpayments (taxes owed but not fully paid).
  • 10% for large corporate underpayments.

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

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

The interest rates announced today are computed from the federal short-term rate determined during January 2024. See the revenue ruling for 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 +1-305-274-5811

Source : IRS      

IRS Announces 2023 Form 1099-K Reporting Threshold Delay for Third Party Platform Payments; Plans for a $5,000 Threshold in 2024 to Phase in Implementation

Posted by Admin Posted on Feb 29 2024

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Following feedback from taxpayers, tax professionals, and payment processors and to reduce taxpayer confusion, the Internal Revenue Service delayed the new $600 Form 1099-K reporting threshold requirement for third party payment organizations for tax year 2023 and is planning a threshold of $5,000 for 2024 to phase in the new law.

Third party payment organizations include many popular payment apps and online marketplaces.

The agency is making 2023 another transition year to implement the new requirements under the American Rescue Plan that changed the Form 1099-K reporting threshold for payments taxpayers get selling goods or providing a service over $600. The previous reporting thresholds will remain in place for 2023.

What this means

This means that for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements.

This phased-in approach will allow the agency to review its operational processes to better address taxpayer and stakeholder concerns.

Taxpayers should be aware that while the reporting threshold remains over $20,000 and 200 transactions for 2023, companies could still issue the form for any amount.

It's important to note that the higher threshold does not affect the actual tax law to report income on your tax return. All income, no matter the amount, is taxable unless it's excluded by law whether a Form 1099-K is sent or not.

Who gets the form

The Form 1099-K could be sent to anyone who's using payment apps or online marketplaces to accept payments for selling goods or providing services. This includes people with side hustles, small businesses, crafters and other sole proprietors.

However, it could also include casual sellers who sold personal stuff like clothing, furniture and other household items that they paid more than they sold it for. Selling items at a loss is not actually taxable income but would have generated many Forms 1099-K for many people with the $600 threshold.

This complexity contributed to the IRS decision to delay the additional year to provide the agency time to update its operations to make it easier for taxpayers to report the amounts on their forms.

What to do

The IRS Understanding your Form 1099-K webpage provides resources for taxpayers who receive a 1099-K, including what to do with a Form 1099-K and what to do if you get a Form 1099-K in error.

Taxpayers who receive a Form 1099-K should review the forms, determine if the amount is correct, and determine any deductible expenses associated with the payment they may be able to claim when they file their taxes.

The payment on a Form 1099-K may be reported in different places on your tax return depending on what kind of payment it is. For example, someone who is getting paid as a ride share driver could report it on a Schedule C.

People who sold personal items must determine if the amounts on their forms were losses or gains. If taxpayers are unsure of the original price, they can learn more on how to figure out the items worth and how to establish basis.

Selling personal items at a loss

If taxpayers sold at a loss, which means they paid more for the items than they sold them for, they'll be able to zero out the payment on their tax return by reporting both the payment and an offsetting adjustment on a Form 1040, Schedule 1. This will ensure people who unnecessarily get these forms don't have to pay taxes they don't owe.

Specifically:

If you sold personal items at a loss, you have 2 options to report the loss:

Report on Schedule 1 (Form 1040)

You can report and then zero out the Form 1099-K gross payment amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income.

Example: You receive a Form 1099-K that includes the sale of your car online for $21,000, which is less than you paid for it.

On Schedule 1 (Form 1040):

  • Enter the Form 1099-K gross payment amount (Box 1a) on Part I – Line 8z – Other Income: "Form 1099-K Personal Item Sold at a Loss, $21,000"
  • Offset the Form 1099-K gross payment amount (Box 1a) on Part II – Line 24z – Other Adjustments: "Form 1099-K Personal Item Sold at a Loss $21,000"

These 2 entries result in a $0 net effect on your adjusted gross income (AGI).

Report on Form 8949

You can also report the loss on Form 8949, Sales and Other Dispositions of Capital Assets, which carries to Schedule D, Capital Gains and Losses.

Selling personal items at a gain

If they were sold at a gain, which means they paid less than they sold it for, they will have to report that gain as income, and it's taxable.

If you receive a Form 1099-K for a personal item sold at a gain, report it on both:

What should not be reported

Reporting is not required for personal transactions such as birthday or holiday gifts, sharing the cost of a car ride or meal, or paying a family member or another for a household bill. These payments are not taxable and should not be reported on Form 1099-K.

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 +1-305-274-5811

Source : IRS     

The Taxpayer Bill of Rights Protects All Taxpayers Year-Round

Posted by Admin Posted on Feb 22 2024

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The Taxpayer Bill of Rights is the 10 rights all taxpayers have any time they interact with the IRS. These rights cover a wide range of topics and issues, and they explain what taxpayers can expect if they need to work with the IRS on a tax matter. This includes when a taxpayer files a return, pays taxes, responds to a letter or notice, goes through an audit or appeals an IRS decision.

Taxpayer Bill of Rights

Taxpayers have a right to:

  • Be Informed – The right to know what to do to comply with the tax laws.
     
  • Quality Service – The right to receive prompt, courteous and professional assistance when working with the IRS.
     
  • Pay No More than the Correct Amount of Tax – 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.
     
  • Challenge the IRS's Position and Be Heard – The right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions.
     
  • Appeal an IRS Decision in an Independent Forum – The right to a fair and impartial administrative appeal of most IRS decisions.
     
  • Finality – The right to know when the IRS has finished an audit.
     
  • Privacy – The right to expect that any IRS inquiry, examination or enforcement action will comply with the law and be no more intrusive than necessary.
     
  • Confidentiality – The right to expect that any information taxpayers provide to the IRS will not be disclosed unless authorized by the taxpayer or by law.
     
  • Retain Representation – The right to retain an authorized representative of the taxpayer's choice to represent them when working with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.
     
  • A Fair and Just Tax System – The right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay or ability to provide information timely.

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 +1-305-274-5811

Source : IRS     

PLAN TAS TAX TIP: Don’t Forget to take Minimum Withdrawals from your Retirement Accounts Before December 31

Posted by Admin Posted on Feb 22 2024

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Required Minimum Distribution

Taxpayers generally have to start taking withdrawals from their Individual Retirement Account (IRA), Simplified Employee Pension (SEP) IRA, Savings Incentive Match Plan for Employees (SIMPLE) IRA, or retirement plan account when reaching age 72 (73 if you reach age 72 after Dec. 31, 2022). These withdrawals, called required minimum distributions (RMDs), are the minimum amounts you must withdraw from your account each year.

The first RMD must be taken by April 1 of the year after you turn 72 (or 73 if you reach the age 72 after Dec. 31, 2022). After the first RMD, subsequent withdrawals generally must be taken by December 31 of each calendar year. For example, if you reached age 72 in 2022, you should have taken your first RMD (for 2022) by April 1, 2023, and then you would have to also take a second RMD (for 2023) by Dec. 31, 2023, to avoid the 50 percent excise tax for distributions that are less than RMD amount (excess accumulations). Note that the excise tax is reduced to 25 percent for tax years beginning in 2023 and after. There is an additional reduction to 10 percent for taxpayers meeting additional requirements. See IRS Publication 590-B for more information.

 

If you are not sure whether your distributions meet the RMD requirements, you may want to consult with your tax advisor or a tax professional.

Note: Roth IRAs do not require withdrawals until after the death of the owner. However, beneficiaries of the Roth IRA are subject to the RMD rules

 

The IRS covers the rules, including ages, deadlines, and requirements by plan on https://www.irs.gov/. See the resources listed below for more information.

 

General Information About Retirement Plans

It is never too soon to start planning for retirement. There are many different types of tax-advantaged retirement plans to consider. Some of the most common retirement plans include IRAs, Roth IRAs, 401(k) plans and other employer-sponsored plans, and government employee retirement plans.

According to the IRS, there are several benefits of setting up a retirement plan:

 

  • Contributions can reduce current taxable income.
  • Contributions and investment gains are not taxed until distributed.
  • Many contributions are easy to make through payroll deductions.
  • Interest accrues over time, which allows small, regular contributions to grow to significant retirement savings.
  • Retirement assets can be carried from one employer to another.
  • The saver’s credit may be available to some employees.
  • Saving now can improve financial security in retirement.

Visit IRS.gov to get a full list of the Types of Retirement Plans to consider and resources to Help With Choosing a Retirement Plan.

Limits for 401(k) plans and other qualified retirement plans

There are limitations on the dollar amount people can contribute to their qualified retirement plans each year. The Internal Revenue Code requires the Secretary of the Treasury to annually adjust these limits for cost-of-living increases.

The IRS has announced that the 2024 contributions limit for 401(k) plans has increased to $23,000, up from $22,500 for 2023. The contribution limit on IRAs in 2024 will increase to $7,000, up from $6,500 in 2023.

Get more details about these increases and the increases for other pensions by reading the IRS’s news release on IRS.gov and IRS technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024 in Notice 2023-75.

 

Additionally, get more information about all the rules, age requirements, deadlines, calculations, contributions, and other details you need to plan out your golden years by visiting https://www.irs.gov/retirement-plans.

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 +1-305-274-5811

Source : TAS     

October 2023 Update – The IRS has resumed sending CP501, CP503, and CP504 collection notices in limited circumstances.

Posted by Admin Posted on Feb 22 2024

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The IRS has resumed sending out some automated collection notices to taxpayers with outstanding balances due. For nearly two years more than a dozen automated collection letters and notices associated with the filing of a tax return or payment of tax have been on pause. The decision was made by the IRS to suspend sending these notices until it was able to eliminate the sizable backlog of processing paper tax returns and correspondence that built up during the pandemic. 

 

Recently the IRS, after catching up from the backlog, has started sending out the following collection notices in limited circumstances: 

 

  • Notice CP501, 1st Notice – Balance Due 
  • Notice CP503, 2nd Notice – Balance Due 
  • Notice CP504, Final Notice – Balance Due 

 

For individual taxpayers with balances due for tax periods ending December 31, 2022, or later, the next scheduled collection notice in the IRS’s automated stream is or will soon be in the mail. 

 

For business taxpayers a Notice CP504 is in the mail for delinquent balances due for tax periods ending August 31, 2023 or later, and for quarterly tax return (Form 941, Employer’s Quarterly Federal Tax Return) periods ending September 30, 2023, or later.   

 

It is important for taxpayers to understand that even though they were not receiving regular notices about their balances due (during the time the IRS stopped sending notices) interest and penalties (as applicable) continued to accrue. 

 

The IRS will likely resume sending collection notices on older delinquent tax periods in the near future. If you have outstanding tax balances – don’t wait. Start considering alternatives to resolve your tax debt now. Several options are available to help you pay your taxes including payment plans, Offers in Compromise, and a Not Collectible Status for those unable to pay. To proactively address unfiled returns and unpaid taxes, you can create or access your online account at IRS.gov. 

 

For help, see information about notices as well as the Taxpayer Roadmap to find out where you are in the Collection process. You can also follow the Taxpayer Advocate Service’s social media accounts and subscribe to the National Taxpayer Advocate’s blog for important tax news updates and insights. 

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 +1-305-274-5811

Source : TAS      

Report Address Changes to Ensure you Receive IRS Correspondence and your Refund

Posted by Admin Posted on Feb 22 2024

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Have you moved since you filed your 2022 tax return? If so, make sure you update your address with the IRS now.

 

The IRS expects to issue all refunds for individual returns that do not have errors (or other issues that would delay processing) by direct deposit and paper checks. But if you have not received your 2022 tax refund by the end of December, you will need to update your address in order to receive it timely. That’s not the only reason you should keep your address up-to-date.

2022 Refunds to be issued by paper check in 2023

For 2022 refunds that cannot be issued in 2023 because the tax return is being corrected, reviewed, or awaiting correspondence from a taxpayer, the method of paying the refund will be changed from direct deposit to a paper check per the IRS’s normal processes in 2023.

It is critical for everyone who has had a change of address since filing a tax return in 2022 to update their address immediately, to ensure any refund is not sent to the wrong address.

Correct addresses are needed to receive IRS correspondence

It’s also important, especially if there are items on your tax return that need to be clarified, for you to receive the notifications and requests for information that the IRS mails. You may need to take reply quickly; missing correspondence from the IRS could impact your tax account. This applies to both individual taxpayers and businesses, including businesses that may have recently closed.

 

How to update your address with the IRS

Visit the IRS Change of Address page for options to update your address. TAS does not recommend waiting to update your address on your 2023 return as it may not be processed in time to affect receipt of IRS correspondence or refunds already in process for the 2022 tax year.

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 +1-305-274-5811

Source : TAS      

IRS: Take Care when Choosing a Tax Return Professional

Posted by Admin Posted on Feb 13 2024

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The Internal Revenue Service reminds taxpayers that carefully choosing a tax professional to prepare a tax return is vital to ensuring that their personal and financial information is safe and secure and treated with care.

Most tax return preparers provide honest, high-quality service. But some may cause harm through fraud, identity theft and other scams.

It is important for taxpayers to understand who they’re choosing and what important questions to ask when hiring an individual or firm to prepare their tax return.

Another reason to choose a tax preparer carefully is because taxpayers are ultimately legally responsible for all the information on their income tax return, regardless of who prepares it.

The IRS has put together a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help individuals find a tax pro that meets high standards. There is also a special page on IRS.gov for Choosing a Tax Professional that can help guide taxpayers in making a good choice, including selecting someone affiliated with a recognized national tax association. There are different kinds of tax professionals, and a taxpayer’s needs will help determine which kind of preparer is best for them.

Red flags to watch out for

There are warning signs that can help steer taxpayers away from unscrupulous tax return preparers. For instance, not signing a tax return is a red flag that a paid preparer is likely not to be trusted. They may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund.

These unscrupulous “ghost” preparers often print the return and have the taxpayer sign and mail it to the IRS. For electronically filed returns, a ghost preparer will prepare the tax return but refuse to digitally sign it as the paid preparer. Taxpayers should avoid this type of unethical preparer.

In addition, taxpayers should always choose a tax professional with a valid Preparer Tax Identification Number. By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid PTIN. Paid preparers must sign and include their PTIN on any tax return they prepare.

Other tips

Here are a few other tips to consider when choosing a tax return preparer:

  • Look for a preparer who’s available year-round. If questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over.
  • Review the preparer’s history. Check the Better Business Bureau website for information about the preparer. Look for disciplinary actions and the license status for credentialed preparers. For CPAs, check the State Board of Accountancy’s website, and for attorneys check with the State Bar Association. For enrolled agents go to IRS.gov and search for “verify enrolled agent status” or check the IRS Directory of Federal Tax Return Preparers.
  • Ask about service fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts. Be wary of tax return preparers who claim they can get larger refunds than their competitors.
  • Find an authorized IRS e-file provider. They are qualified to prepare, transmit and process e-filed returns. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit
  • Provide records and receipts. Good preparers ask to see these documents. They’ll also ask questions to determine the client’s total income, deductions, tax credits and other items. Do not hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is against IRS e-file rules.
  • Understand the preparer’s credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent taxpayers in limited situations if they prepared and signed the tax return.
  • Never sign a blank or incomplete return. Taxpayers are responsible for filing a complete and correct tax return.
  • Review the tax return before signing it. Be sure to ask questions if something is not clear or appears inaccurate. Any refund should go directly to the taxpayer – not into the preparer’s bank account. Review the routing and bank account number on the completed return and make sure it’s accurate.

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

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 +1-305-274-5811

Source :   IRS      

Here’s Who Needs to File a Tax Return in 2024

Posted by Admin Posted on Feb 13 2024

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Most U.S. citizens and permanent residents who work in the United States need to file a tax return if they make more than a certain amount for the year.

The IRS has a variety of information available on IRS.gov to help taxpayers, including a special free help page. Here are some specific details to help people if they need to file a tax return.

Factors that affect whether someone needs to file a tax return

Here are some of the things that affect whether someone must file a tax return.

Gross income. Gross income means all income a person received in the form of money, goods, property and services that aren't exempt from tax. This includes any income from sources outside the United States or from the sale of a main home, even if you can exclude part or all of it.

Required filing threshold. People need to see if their gross income is over the required filing threshold. Filing statuses have different income thresholds, so individuals may need to consider their potential filing status as well.

There are five filing statuses:

  • Single
  • Head of household
  • Married filing jointly
  • Married filing separate
  • Qualifying surviving spouse

Find details on tax filing requirements with Publication 501, Dependents, Standard Deduction, and Filing Information.

Self-employment status. Self-employed individuals must file an annual return and pay estimated tax quarterly if they had net earnings from self-employment of $400 or more.

Status as a dependent. A person claimed as a dependent may still have to file a return. It depends on their gross income, including:

  • Earned income. This includes salaries, wages, tips, professional fees and other amounts received as pay for work performed.
  • Unearned income. This is investment-type income and includes interest, dividends and capital gains, rents, royalties, etc. Distributions of interest, dividends, capital gains and other unearned income from a trust are also unearned income to a beneficiary of the trust.

A parent or guardian must file a tax return for dependents who need to file but aren't able to file for themselves.

Potential benefits when people file a tax return

Get money back. In some cases, people may get money back when they file a tax return. For example, if their employer withheld taxes from their paycheck, the person may be due a refund.

Avoid interest and penalties. People can avoid interest and penalties by filing an accurate tax return on time and paying any tax they owe before the deadline. They should file on time or request an extension to avoid some penalties. If they owe a tax debt and can't pay all or part of it, the IRS can help.

Build Social Security benefits. Reporting income on a tax return is important for self-employed people because this information is used to calculate their Social Security benefit. Unreported income can lead to an incorrect calculation.

Get an accurate picture of income. When people report all their income, they give lenders an accurate financial picture to determine the loan amounts and rates they may receive.

Get peace of mind. When people file an accurate tax return and pay their taxes on time, they know that they're doing the right thing to follow the law.

Some people should consider filing even if they aren't required

People may want to file even if they make less than the filing threshold because they may get money back. This could apply to them if they:

  • Have had federal income tax withheld from their pay
  • Made estimated tax payments
  • Qualify to claim tax credits such as:
    • Earned Income Tax Credit
    • Child Tax Credit
    • American Opportunity Tax Credit
    • Credit for Federal Tax on Fuels
    • Premium Tax Credit
    • Health Coverage Tax Credit
    • Credits for Sick and Family Leave
    • Child and Dependent Care Credit

The Interactive Tax Assistant can help people determine if they need to file

The Interactive Tax Assistant is an online tool that provides answers to common tax law questions based on an individual's specific circumstances. Based on a user’s input, it can determine if they should file a tax return. It can also help them understand:

  • Their filing status
  • If they can claim a dependent
  • If the type of income they have is taxable
  • If they're eligible to claim a credit
  • If they can deduct expenses

The information is anonymous and only used to help answer the person's question. The tool will not share, store or use information in any other way, and it can’t identify the individual using it. The system discards the information the user provides when they exit a topic.

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 +1-305-274-5811

Source : IRS      

Tax year 2023 filing thresholds by filing status

Filing status

Age at the end of 2023

A person must file a return if their gross income was at least:

Single

Under 65

$13,850

Single

65 or older

$15,700

Head of household

Under 65

$20,800

Head of household

65 or older

$22,650

Married filing jointly

Under 65 (both spouses)

$27,700

Married filing jointly

65 or older (one spouse)

$29,200

Married filing jointly

65 or older (both spouses)

$30,700

Married filing separately

Any age

$5

Qualifying surviving spouse

Under 65

$27,700

Qualifying surviving spouse

65 or older

$29,200

 

 

 

 

Quien Debe Presentar una Declaración de Impuestos en 2024

Posted by Admin Posted on Feb 13 2024

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La mayoría de los ciudadanos estadounidenses (en inglés) y residentes permanentes (en inglés) que trabajan en los Estados Unidos deben presentar una declaración de impuestos si ganan más de una cierta cantidad durante el año.

Factores que afectan si alguien necesita presentar una declaración de impuestos

Estos son algunos elementos que afectan si se requiere que una persona presente una declaración de impuestos.

Ingresos brutos. El ingreso bruto significa todos los ingresos que un individuo recibió en forma de dinero, bienes, propiedades y servicios que no están exentos de impuestos. Esto incluye cualquier ingreso de fuentes fuera de los Estados Unidos o de la venta de una casa principal, incluso si un contribuyente puede excluir parte o la totalidad.

Umbral de presentación requerido. Los contribuyentes tendrán que ver si sus ingresos brutos están por encima del umbral de presentación requerido. Los estados de presentación (en inglés) tienen diferentes umbrales de ingresos, por lo que los contribuyentes también pueden necesitar considerar su posible estado civil.

Hay cinco estados civiles:

  • Soltero
  • Cabeza de familia
  • Casado que presenta una declaración conjunta
  • Casado que presenta una declaración por separado
  • Cónyuge sobreviviente calificado

Encuentre detalles acerca de los requisitos de declaración de impuestos con la Publicación 501, Personas dependientes, deducción estándar e información sobre la presentación (en inglés).

Umbrales de presentación del año tributario 2023 por estado civil

Estado civil

Edad del contribuyente al final de 2023

Un contribuyente debe presentar una declaración de impuestos si su ingreso fue al menos

 

soltero

menos de 65 años de edad

$13,850

soltero

65 años de edad o más

$15,700

cabeza de familia

menos de 65 años de edad

$20,800

cabeza de familia

65 años de edad o más

$22,650

casado que presenta una declaración conjunta

menos de 65 años de edad (ambos cónyuges)

$27,700

casado que presenta una declaración conjunta

65 años de edad o más (un cónyuge)

$29,200

casado que presenta una declaración conjunta

65 años de edad o más (ambos cónyuges)

$30,700

casado que presenta una declaración por separado

cualquier edad

$5

cónyuge sobreviviente calificado

menos de 65 años de edad

$27,700

cónyuge sobreviviente calificado

65 años de edad o más

$29,200

Estado de trabajo por cuenta propia. Los individuos que trabajan por cuenta propia deben presentar una declaración anual y pagar impuestos estimados trimestralmente si tuvieron ganancias netas de $400 o más.

Estado como dependiente. Una persona que es reclamada como dependiente aún puede tener que presentar una declaración. Depende de sus ingresos brutos, incluyendo:

  • Ingresos del trabajo. Esto incluye sueldos, salarios, propinas, honorarios profesionales y otras cantidades recibidas como pago por trabajo realizado.
  • Ingresos no ganados. Esto es ingresos de tipo inversión e incluye intereses, dividendos y ganancias de capital, alquileres, regalías, etc. Las distribuciones de intereses, dividendos, ganancias de capital y otros ingresos no ganados de un fideicomiso también son ingresos no ganados para un beneficiario del fideicomiso.

Un padre o tutor debe presentar una declaración de impuestos para los dependientes que deben presentar, pero no pueden presentar por sí mismos.

Beneficios potenciales cuando los contribuyentes presentan una declaración de impuestos:

Se le devuelve dinero. En algunos casos, es posible que se le devuelva dinero cuando presenta una declaración de impuestos. Por ejemplo, si un empleador retuvo impuestos de su cheque de pago, es posible que se le adeude un reembolso.

Evite intereses y multas. Las personas pueden evitar intereses y multas presentando una declaración de impuestos precisa a tiempo y pagando cualquier impuesto que adeudan antes de la fecha límite. Deben presentar la declaración a tiempo o solicitar una extensión para evitar algunas multas. Si tienen una deuda tributaria y no pueden pagar la totalidad o parte de ella, el IRS puede ayudar.

Aumente sus beneficios del Seguro Social. Reclamar los ingresos del trabajo por cuenta propia en su declaración de impuestos garantiza que se incluyan en el cálculo de sus beneficios. Los ingresos no declarados pueden dar lugar a un cálculo incorrecto.

Obtenga un panorama preciso de sus ingresos. Cuando los contribuyentes informan con precisión todos sus ingresos, les dan a los prestamistas una imagen financiera precisa para determinar los montos y las tasas de préstamos que el contribuyente debería tener derecho a recibir.

Hacer lo correcto. Cuando los contribuyentes presentan una declaración de impuestos precisa y pagan sus impuestos a tiempo, sabrán que están haciendo lo correcto para cumplir con la ley.

Algunos contribuyentes deberían considerar la presentación, incluso si no son requeridos.

Es posible que las personas quieran presentar una declaración incluso si ganan menos que el umbral de presentación porque pueden recibir dinero. Esto podría aplicarse a ellos si:

  • Han tenido impuesto federal retenido de su pago
  • Hicieron pagos de impuestos estimados
  • Califican para reclamar créditos tributarios como:
    • Crédito tributario por ingreso del trabajo
    • Crédito tributario por hijos
    • Crédito tributario de la oportunidad americana
    • Crédito por impuestos federales sobre combustibles
    • Crédito tributario para primas
    • Crédito tributario para cobertura de salud
    • Créditos por licencia por enfermedad y familiar
    • Crédito por cuidado de hijos y dependientes

      El Asistente Tributario Interactivo puede ayudar a las personas a determinar si necesitan presentar una declaración

      El Asistente Tributario Interactivo es una herramienta que proporciona respuestas a muchas preguntas comunes de la ley tributaria basadas en las circunstancias específicas de un individuo. Según los datos que usted proporcione, puede determinar si debe presentar una declaración de impuestos. También puede ayudarle a entender:

    • Estado civil para efectos de la declaración
    • Si puede reclamar un dependiente
    • Si el tipo de ingreso que tienen está sujeto a impuestos
    • Si son elegibles para reclamar un crédito
    • Si puede deducir gastos
    • La información del usuario es anónima y solo permite al asistente responder a las preguntas del contribuyente. La herramienta no compartirá, almacenará o usará información de ninguna otra manera, ni puede identificar a la persona que la usa. El sistema descarta la información que el usuario proporciona cuando sale de un tema.

      Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

      Fuente: IRS     

Traveling for Business in 2024? What’s Deductible?

Posted by Admin Posted on Feb 13 2024

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If you and your employees will be traveling for business this year, there are many factors to keep in mind. Under the tax law, certain requirements for out-of-town business travel within the United States must be met before you can claim a deduction. The rules apply if the business conducted reasonably requires an overnight stay.

Note: Under the Tax Cuts and Jobs Act, employees can’t deduct their unreimbursed travel expenses through 2025 on their own tax returns. That’s because unreimbursed employee business expenses are “miscellaneous itemized deductions” that aren’t deductible through 2025. Self-employed individuals can continue to deduct business expenses, including away-from-home travel expenses.

Rules that come into play

The actual costs of travel (for example, plane fare and cabs to the airport) are generally deductible for out-of-town business trips. You’re also allowed to deduct the cost of lodging. And a percentage of your meals is deductible even if the meals aren’t connected to a business conversation or other business function. For 2024, the law allows a 50% deduction for business meals.

No deduction is allowed for meal or lodging expenses that are “lavish or extravagant,” a term that generally means “unreasonable.” Also, personal entertainment costs on trips aren’t deductible, but business-related costs such as those for dry cleaning, phone calls and computer rentals can be written off.

Mixing business with pleasure

Some allocations may be required if the trip is a combined business/pleasure trip; for example, if you fly to a location for four days of business meetings and stay on for an additional three days of vacation. Only the costs of meals, lodging and so on incurred during the business days are deductible, not those incurred for the personal vacation days.

On the other hand, with respect to the cost of the travel itself (for example, plane fare), if the trip is primarily for business purposes, the travel cost can be deducted in its entirety and no allocation is required. Conversely, if the trip is primarily personal, none of the travel costs are deductible. An important factor in determining if the trip is primarily business or personal is the amount of time spent on each (though this isn’t the sole factor).

Suppose a trip isn’t for the actual conduct of business but is for the purpose of attending a convention or seminar. The IRS may check the nature of the meetings carefully to make sure they aren’t vacations in disguise, so retain all material helpful in establishing the business or professional nature of this travel.

Also, personal expenses you incur at home related to the trip aren’t deductible. This might include costs such as boarding a pet while you’re away.

Is your spouse joining you?

The rules for deducting the costs of a spouse who accompanies you on a business trip are very restrictive. No deduction is allowed unless the spouse is an employee of yours or of your company. If that isn’t the case, then even if there’s a bona fide business purpose for having your spouse make the trip, you probably won’t be able to fully deduct his or her travel costs (though you can deduct some costs).

Specifically, the restrictions apply only to additional costs incurred by having your non-employee spouse travel with you. For example, the expense of a hotel room or for traveling by car would likely be fully deductible since the cost to rent the room or to travel alone or with another person would be the same, even in a rented car.

Before you hit the road

Contact the office with any questions you may have about travel deductions to help you stay in the right lane.

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 +1-305-274-5811

Source : Thomson Reuters      

IRS Reminder to Disaster Victims with Extensions: File 2022 Returns by Feb. 15; All or Parts of 8 States and 2 Territories Affected

Posted by Admin Posted on Feb 02 2024

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The Internal Revenue Service reminds disaster-area taxpayers who received extensions to file their 2022 returns that these returns are due on Feb. 15, 2024.

Eligible taxpayers were those affected by various disasters that occurred between Aug. 8 and Oct. 9, 2023. This included Hurricane Idalia, Hurricane Lee, Tropical Storm Bolaven, the wildfires in Hawaii, the seawater intrusion in Louisiana and storms and flooding in Illinois. For extension filers, payments on these returns were not eligible for the additional time because they were originally due last spring before any of these disasters occurred.

Locations that qualify for the Feb. 15 filing deadline:

  • Forty-nine counties in Florida.
  • Thirty-two counties In Georgia.
  • All of Guam.
  • Maui and Hawaii counties in Hawaii.
  • Cook County in Illinois.  
  • Five parishes in Louisiana.
  • All 16 counties in Maine.
  • All 14 counties in Massachusetts.
  • Six islands in the Northern Mariana Islands.
  • All 46 counties in South Carolina.

The IRS normally provides relief, including postponing various tax filing and payment deadlines, for any area designated by the Federal Emergency Management Agency (FEMA). As long as their address of record is in a disaster-area locality, individual and business taxpayers automatically get the extra time, without having to ask for it. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers who assisted with relief activities who are affiliated with a recognized government or philanthropic organization.

Besides those who received extensions to file their 2022 returns, there are other returns, payments and time-sensitive tax-related actions that also qualify for the Feb. 15 deadline. For details, see the IRS disaster relief page, especially the disaster relief announcements for each state and territory.

The tax relief is part of a coordinated federal response to the damage caused by these disasters and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov

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 +1-305-274-5811

Source : IRS      

Recordatorio del IRS para Víctimas de Desastres con Extensiones: Presente Declaraciones de 2022 antes del 15 de febrero; Ocho Estados y Dos Territorios Afectados

Posted by Admin Posted on Feb 02 2024

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El Servicio de Impuestos Internos les recuerda a los contribuyentes ubicados en áreas de desastre declaradas por el gobierno federal que recibieron extensiones para presentar sus declaraciones de 2022, que estas declaraciones vencen el 15 de febrero de 2024.

Los contribuyentes elegibles fueron aquellos afectados por varios desastres que ocurrieron entre el 8 de agosto y el 9 de octubre de 2023. Esto incluyó los huracanes Idalia y Lee, la tormenta tropical Bolaven, los incendios forestales en Hawái, la intrusión de agua de mar en Luisiana y las tormentas e inundaciones en Illinois. Para quienes declaran impuestos con una extensión, los pagos de estas declaraciones no eran elegibles para el tiempo adicional porque originalmente debían pagarse la primavera pasada antes de que ocurriera cualquiera de estos desastres.

Ubicaciones que califican para la fecha límite de presentación del 15 de febrero:

  • 49 condados en Florida
  • 32 condados en Georgia
  • Todo Guam
  • Condados de Maui y Hawái en Hawái
  • Condado de Cook en Illinois
  • 5 parroquias en Luisiana
  • Los 16 condados de Maine
  • Los 14 condados de Massachusetts
  • 6 islas en las Islas Marianas del Norte
  • Los 46 condados de Carolina del Sur

Normalmente, el IRS brinda alivio, incluido el aplazamiento de varios plazos de presentación y pago de impuestos, para cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA). Siempre que su dirección registrada esté en una localidad del área del desastre, los contribuyentes individuales y comerciales obtienen automáticamente el tiempo adicional, sin tener que solicitarlo. La lista actual de localidades elegibles siempre está disponible en la página de alivio en situaciones de desastre en IRS.gov.

Además, el IRS trabajará con cualquier contribuyente que viva fuera del área del desastre, pero cuya documentación necesaria para cumplir con una fecha límite que ocurra durante el período de aplazamiento se encuentre en el área afectada. Los contribuyentes que califiquen para recibir ayuda y que vivan fuera del área del desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudaron con actividades de ayuda y que están afiliados a un gobierno reconocido o a una organización filantrópica.

Además de aquellos que recibieron prórrogas para presentar sus declaraciones de 2022, hay otras declaraciones, pagos y acciones relacionadas con impuestos urgentes que también califican para la fecha límite del 15 de febrero. Para obtener más detalles, consulte la página de ayuda en casos de desastre del IRS, especialmente los anuncios de ayuda en casos de desastre para cada estado y territorio.

El alivio tributario es parte de una respuesta federal coordinada a los daños causados ​​por estos desastres y se basa en evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de recuperación ante desastres, visite desastreassistance.gov

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

Things to Remember When Filing 2023 Tax Returns

Posted by Admin Posted on Feb 02 2024

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The Internal Revenue Service offers a checklist to help taxpayers as they prepare to file their 2023 tax returns during filing season.

These six easy tips will help make tax preparation smoother in 2024. Much of this information is also available on a special IRS.gov free help page:

1. Gather all necessary tax paperwork and records for accuracy to avoid missing a deduction or credit. Taxpayers should have all their important and necessary documents before preparing their return. This will help file a complete and accurate tax return. Errors and omissions slow down tax processing, including refund times.

Before beginning, taxpayers should have:

  • Social Security numbers for everyone listed on the tax return.
  • Bank account and routing numbers.
  • Various tax forms such as W-2s, 1099s, 1098s and other income documents or records of digital asset transactions.
  • Form 1095-A, Health Insurance Marketplace statement.
  • Any IRS letters citing an amount received for a certain tax deduction or credit.

2. Remember to report all types of income on the tax return. This is important to avoid receiving a notice or a bill from the IRS. Don’t forget to include income from:

  • Goods created and sold on online platforms.
  • Investment income.
  • Part-time or seasonal work.
  • Self-employment or other business activities.
  • Services provided through mobile apps.

3. Filing electronically with direct deposit is the fastest way to receive a refund. Avoid paper returns. Tax software helps individuals avoid mistakes by doing the math. It guides people through each section of their tax return using a question and answer format.

For those waiting on their 2022 tax return to be processed, here's a special tip to ensure their 2023 tax return is accepted by the IRS for processing. Make sure to enter $0 (zero dollars) for last year's adjusted gross income (AGI) on the 2023 tax return. Everyone else should enter their prior year's AGI from last year's return.

4. Free resources are available to help eligible taxpayers file online. Free help may also be available to qualified taxpayers. IRS Free File provides a free online alternative to filing a paper tax return. IRS Free File is available to any individual or family who earned $79,000 or less in 2023.

With IRS Free File, leading tax software providers make their online products available for free as part of a 21-year partnership with the IRS. This year, there are eight products in English and one in Spanish. Taxpayers must access these products through the IRS website.

People who make over $79,000 can use the IRS' Free File Fillable Forms. These are the electronic version of IRS paper forms. This product is best for people who are comfortable preparing their own taxes.

Qualified taxpayers can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.

5. Consider which filing option to use; each one has its own benefits. Taxpayers should decide based on their personal situation and comfort level with tax preparation.

  • Personally file taxes.
  • Use online filing services.
  • Hire a tax professional. Choose a tax professional carefully. Most tax return preparers are professional, honest and provide excellent service to their clients. However, dishonest tax return preparers who file false income tax returns do exist. The IRS has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications and more on choosing a tax pro on IRS.gov.

6. Don’t wait on hold when calling the IRS. Use online resources at IRS.gov to get answers to tax questions, check a refund status or pay taxes. There’s no wait time or appointment needed — online tools and resources are available 24 hours a day. The IRS’ Interactive Tax Assistant tool and Let us help you resources are especially helpful.

Stay updated

Additionally, the IRS suggests taxpayers stay up to date on important tax information online by:

  • Following the IRS’ official social media accounts and email subscription lists to stay current on the latest tax topics and alerts.
  • Downloading the IRS2Go mobile app, watching IRS YouTube videos or following the IRS on X, Facebook, LinkedIn and Instagram for the latest updates on tax changes, scam alerts, initiatives, products and services.

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 +1-305-274-5811

Source : IRS      

Puntos para Recordar al Presentar Declaraciones de Impuestos de 2023

Posted by Admin Posted on Feb 02 2024

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El Servicio de Impuestos Internos ofreció hoy una lista de verificación para ayudar a los contribuyentes mientras se preparan para presentar sus declaraciones de impuestos de 2023 durante la temporada de impuestos.

Estos seis consejos sencillos ayudarán a que la preparación de impuestos sea más fácil en 2024. Gran parte de esta información también está disponible en la página especial de ayuda gratuita de IRS.gov:

1.    Reúna toda la documentación tributaria necesaria para verificar su exactitud y evitar perder una deducción o crédito (en inglés). Los contribuyentes deben tener todos sus documentos importantes y necesarios antes de preparar su declaración. Esto ayudará a presentar una declaración de impuestos completa y precisa. Los errores y omisiones retrasan el procesamiento de impuestos, incluidos los tiempos de reembolso.

Antes de comenzar, los contribuyentes deben tener:

  • Números de Seguro Social de todas las personas que figuran en la declaración de impuestos.
  • Números de cuenta bancaria y de ruta.
  • Varios formularios de impuestos, como W-2, 1099, 1098 y otros documentos de ingresos o registros de transacciones de activos digitales
  • Formulario 1095-A, Declaración del mercado de seguros médicos.
  • Cualquier carta del IRS que cite una cantidad recibida por una determinada deducción o crédito tributario.

2. Recuerde reportar todo tipo de ingresos en la declaración de impuestos. Esto es importante para evitar recibir un aviso o una factura del IRS. No olvide incluir los ingresos de:

  • Bienes creados y vendidos en plataformas en línea.
  • Ingresos de inversión.
  • Trabajo a tiempo parcial o estacional.
  • Trabajo por cuenta propia u otras actividades empresariales.
  • Servicios prestados a través de aplicaciones móviles.

3. Presentar electrónicamente con depósito directo es la manera más rápida de recibir un reembolso. Evite las declaraciones en papel. El software de impuestos ayuda a las personas a evitar errores al realizar los cálculos. Guía a las personas a través de cada sección de su declaración de impuestos a través de un formato de preguntas y respuestas.

Para aquellos que esperan que se procese su declaración de impuestos de 2022, aquí hay un consejo especial para asegurarse de que el IRS acepte su declaración de impuestos de 2023 para ser procesada. Asegúrese de ingresar $0 (cero dólares) para el ingreso bruto ajustado (AGI) del año pasado en la declaración de impuestos de 2023. Todos los demás deben ingresar su ingreso bruto ajustado del año anterior de la declaración del año pasado.

4. Hay recursos gratuitos disponibles para ayudar a los contribuyentes elegibles a presentar su declaración en línea. La ayuda gratuita también puede estar disponible para los contribuyentes calificados. Free File del IRS ofrece una alternativa gratuita en línea a la presentación de una declaración de impuestos en papel. Free File del IRS está disponible para cualquier persona o familia que haya ganado $79,000 o menos en 2023.

Con Free File del IRS, los principales proveedores de software tributario hacen que sus productos en línea estén disponibles de forma gratuita como parte de una asociación de 21 años con el IRS. Este año, hay ocho productos en inglés y uno en español. Los contribuyentes deben acceder a estos productos (en inglés) a través del sitio web del IRS.

Las personas que ganan más de $79,000 pueden usar los Formularios Interactivos de Free File del IRS. Estos son la versión electrónica de los formularios impresos del IRS. Este producto es mejor para las personas que se sienten cómodas preparando sus propios impuestos.

Los contribuyentes calificados también pueden encontrar ayuda personalizada gratuita para la preparación de impuestos en todo el país a través de los programas de Ayuda Voluntaria a los Contribuyentes (VITA) y Asesoramiento Tributario para Personas de Edad Avanzada (TCE).

5. Considere qué opción de presentación usar; cada una tiene sus propios beneficios. Los contribuyentes deben decidir en función de su situación personal y su nivel de comodidad con la preparación de impuestos.

  • Presentar personalmente los impuestos.
  • Usar los servicios de presentación en línea.
  • Contratar a un profesional de impuestos. Elija un profesional de impuestos con cuidado. La mayoría de los preparadores de declaraciones de impuestos son profesionales, honestos y brindan un excelente servicio a sus clientes. Sin embargo, existen preparadores de declaraciones de impuestos deshonestos que presentan declaraciones de impuestos falsas. El IRS tiene un Directorio de preparadores de declaraciones de impuestos federales con credenciales y calificaciones seleccionadas (en inglés) y más sobre cómo elegir un profesional de impuestos en IRS.gov.

    6. No espere cuando llame al IRS. Use los recursos en línea en IRS.gov para obtener respuestas a preguntas sobre impuestos (en inglés), verificar el estado de un reembolso(en inglés) o pagar impuestos. No se necesita tiempo de espera ni cita previa: las herramientas y los recursos en línea están disponibles las 24 horas del día. La herramienta del Asistente Tributario Interactivo del IRS y los recursos de Permítanos ayudarle son especialmente útiles.

    Estén atentos

    Además, el IRS sugiere que los contribuyentes se mantengan actualizados sobre información tributaria importante en línea:

  • Siga las cuentas oficiales de medios sociales del IRS y suscripciones a noticias electrónicas del IRS para mantenerse actualizado sobre los últimos temas y alertas de impuestos.
  • Descargar la aplicación móvil IRS2Go, ver videos de YouTube del IRS o seguir al IRS en X, Facebook, LinkedIn e Instagram para obtener las últimas actualizaciones de cambios tributarios, alertas de estafas, iniciativas, productos y servicios.
  • Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

    Fuente : IRS    

Taxpayers Should Continue to Report All Cryptocurrency, Digital Asset Income

Posted by Admin Posted on Feb 01 2024

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The Internal Revenue Service reminds taxpayers that they must again answer a digital asset question and report all digital asset related income when they file their 2023 federal income tax return, as they did for their 2022 federal tax returns.

The question appears at the top of Forms 1040, Individual Income Tax Return; 1040-SR, U.S. Tax Return for Seniors; and 1040-NR, U.S. Nonresident Alien Income Tax Return, and was revised this year to update wording. The question was also added to these additional forms: Forms 1041, U.S. Income Tax Return for Estates and Trusts; 1065, U.S. Return of Partnership Income; 1120, U.S. Corporation Income Tax Return; and 1120-S, U.S. Income Tax Return for an S Corporation.

Depending on the form, the digital assets question asks this basic question, with appropriate variations tailored for corporate, partnership or estate and trust taxpayers:

At any time during 2023, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?

What is a digital asset?

A digital asset is a digital representation of value that is recorded on a cryptographically secured, distributed ledger or any similar technology. Common digital assets include:

  • Convertible virtual currency and cryptocurrency.
  • Stablecoins.
  • Non-fungible tokens (NFTs).

Everyone must answer the question

Everyone who files Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, 1120 and 1120S must check one box answering either "Yes" or "No" to the digital asset question. The question must be answered by all taxpayers, not just by those who engaged in a transaction involving digital assets in 2023.

When to check "Yes"

Normally, a taxpayer must check the "Yes" box if they:

  • Received digital assets as payment for property or services provided;
  • Received digital assets resulting from a reward or award;
  • Received new digital assets resulting from mining, staking and similar activities;
  • Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two);
  • Disposed of digital assets in exchange for property or services;
  • Disposed of a digital asset in exchange or trade for another digital asset;
  • Sold a digital asset; or
  • Otherwise disposed of any other financial interest in a digital asset.

How to report digital asset income

In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. For example, an investor who held a digital asset as a capital asset and sold, exchanged or transferred it during 2023 must use Form 8949, Sales and other Dispositions of Capital Assets, to figure their capital gain or loss on the transaction and then report it on Schedule D (Form 1040), Capital Gains and Losses. A taxpayer who disposed of any digital asset by gift may be required to file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

If an employee was paid with digital assets, they must report the value of assets received as wages. Similarly, if they worked as an independent contractor and were paid with digital assets, they must report that income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Schedule C is also used by anyone who sold, exchanged or transferred digital assets to customers in connection with a trade or business.

When to check "No"

Normally, a taxpayer who merely owned digital assets during 2023 can check the "No" box as long as they did not engage in any transactions involving digital assets during the year. They can also check the "No" box if their activities were limited to one or more of the following:

  • Holding digital assets in a wallet or account;
  • Transferring digital assets from one wallet or account they own or control to another wallet or account they own or control; or
  • Purchasing digital assets using U.S. or other real currency, including through electronic platforms.

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 +1-305-274-5811

Source : IRS      

Filing Deadline and Payment Options

Posted by Admin Posted on Jan 31 2024

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If you're trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies from the IRS Forms page under Tax Tools on our website. If you find you need more time to finish your return, you can get a six-month extension of time to file using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. And if you have trouble paying your tax bill, the IRS has several payment options available.

The extension will give you extra time to get the paperwork to the IRS, but it does not extend the time you have to pay any tax due. You have to make an accurate estimate of any tax due when you request an extension. You can also send a payment for the expected balance due, but this is not required to get the extension. However, you will owe interest on any amounts not paid by the April 15 deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.

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 +1-305-274-5811

Source : Thomson Reuters      

Tips and Taxes

Posted by Admin Posted on Jan 31 2024

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Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income, advises the IRS.

As taxable income, these tips are subject to federal income, Social Security and Medicare taxes, and may be subject to state income tax as well.

You must keep a running daily log of all your tip income and tips paid out. This includes cash that you receive directly from customers, tips from credit card charges from customers that your employer pays you, the value of any non-cash tips such as tickets or passes that you receive, and the amount of tips you paid out to other employees through tip pools or tip splitting and the names of those employees.

You can use IRS Publication 1244, Employee's Daily Record of Tips and Report of Tips to Employer, to record your tip income. For a free copy of Publication 1244, call the IRS toll free at 1-800-TAX-FORM (1-800-829-3676).

If you receive $20 or more in tips in any one month, you should report all your tips to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes and to report the correct amount of your earnings to the Social Security Administration (which will affect your benefits when you retire or if you become disabled, or your family's benefits if you die).  Contact us so your wages are properly reported!

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 +1-305-274-5811

Source : Thomson Reuters      

Is Disability Income Taxable?

Posted by Admin Posted on Jan 31 2024

Is Disability Income Taxable?Is Disability Income Taxable?https://secure.emochila.com/swserve/siteAssets/site9268/files/Disability_Income_taxable_or_not_taxable_wall-751342_750x356.jpg

 

If you may be eligible for disability income should you become disabled, it’s important to know whether that income will be taxable. As is often the case with tax questions, the answer is “it depends.”

Key factor

The key factor is who paid it. If your employer will directly pay the disability income to you, it will be taxable to you as ordinary salary and wages would be. Taxable benefits are also subject to federal income tax withholding, though, depending on the disability plan, disability benefits sometimes aren’t subject to Social Security tax.

Frequently, the payments aren’t made by an employer but by an insurer under a policy providing disability coverage or under an arrangement having the effect of accident or health insurance. In such cases, the tax treatment depends on who paid for the coverage. If your employer paid for it, the disability income will be taxed to you, as if paid directly to you by the employer. But if you paid for the policy, the payments you receive under it won’t be taxable.

Even if your employer arranges for the coverage (in other words, it’s a policy made available to you at work), the benefits won’t be taxed to you as long as you paid the premiums. For these purposes, if the premiums were paid by your employer but the amount paid was included as part of your taxable income from work, the premiums will also be treated as paid by you and the benefits won’t be taxable.

Two examples

For simplicity, let’s say your salary is $1,000 a week ($52,000 a year). Under a disability insurance arrangement made available to you by your employer, $10 a week ($520 for the year) is paid on your behalf by your employer to an insurance company. You include $52,520 in income as your wages for the year: the $52,000 paid to you plus the $520 in disability insurance premiums. In this case, the insurance is treated as paid for by you. If you become disabled and receive benefits, they won’t be taxable income to you.

Now, let’s look at an example with the same facts as above, except that the amount paid for the insurance coverage qualifies as excludable under the rules for employer-provided health and accident plans. In this case, you include only $52,000 in income as your wages for the year because the insurance is treated as paid for by your employer. So, if you become disabled and receive benefits, they will be taxable income to you.

Note: There are special rules in the case of a permanent loss (or loss of the use) of a part or function of the body, or a permanent disfigurement.

How much coverage is needed?

In deciding how much disability coverage you need to protect yourself and your family, take tax treatment into consideration. If you’re buying the policy, you need to replace only your after-tax, “take-home” income because your benefits won’t be taxed. On the other hand, if your employer pays for the benefit, you’ll lose a percentage to taxes.

If your current coverage is insufficient, you may wish to supplement an employer benefit with a policy you take out personally.

Any questions?

This discussion doesn’t cover the tax treatment of Social Security disability benefits, which may be taxed under different rules. Contact us to discuss this further or if you have questions about regular disability income.

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 +1-305-274-5811

Source : Thomson Reuters      

Filing Season Has Begun, Employer Wage Statement Deadline Nears

Posted by Admin Posted on Jan 31 2024

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With the start of filing season the Internal Revenue Service reminds employers of the Jan. 31 deadline to file Forms W-2 and other wage statements with the Social Security Administration (SSA).

Filing these documents timely prevents late-filing penalties for employers, helps employees file their income tax returns and prevents tax fraud.

Employers must file copies of their 2023 Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the SSA by Jan. 31, whether filing electronically or by paper forms.

Employers must also provide copies B, C and 2 of Form W-2 to their employees by Jan. 31. For more information on filing Form W-2, see General Instructions for Forms W-2 and W-3.

The Jan. 31 deadline also applies to Forms 1099-NEC filed with the IRS to report non-employee compensation to independent contractors. Employers and payers can review the Instructions for Forms 1099-MISC and 1099-NEC for details and other due dates.

Employer Identification Numbers

Employers need to make sure the employer identification number (EIN) on their wage and tax statements (Forms W-2, W-3, etc.) and their payroll tax returns (Forms 941, 943, 944, etc.) match the EIN the IRS assigned to their business.

Do not use a Social Security number (SSN) or Individual Taxpayer Identification number (ITIN) on forms that ask for an EIN, and never truncate EINs or SSNs on any forms.

Extensions

Employers may request a 30-day extension to file Forms W-2 with SSA by submitting Form 8809, Application for Extension of Time to File Information Returns, by Jan. 31. Additionally, extensions of time to furnish Forms W-2 to employees must also occur by Jan. 31.

For detailed information and instructions on how to file an extension of time to furnish Forms W-2 to employees or to request a 30-day extension with the SSA, see Form 8809 and General Instructions for Forms W-2 and W-3.

Electronic filing

Beginning Jan. 1, 2024, the electronic filing threshold for information returns reduced from 250 to 10 for filing season 2024. Filers need to combine all information return types they file to determine if they meet the 10-return threshold and if the requirement to file electronically applies to them.

The IRS offers a free e-file service for the Form 1099 series, the Information Returns Intake System (IRIS) Taxpayer Portal. IRIS is a web-based platform that is accurate, convenient, easy to use, secure and doesn't require any additional software. Learn more about e-filing information returns with IRIS and its features.

For help with filing information returns electronically, review Publication 1220, Specification for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G and the Filing Information Returns Electronically (FIRE) webpage.

E-filing is the most secure and accurate method to file returns, and saves taxpayers time and prevents delays in processing 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 +1-305-274-5811

Source : IRS     

Qualified Charitable Distributions Allow Eligible IRA Owners Up to $100,000 in Tax-Free Gifts to Charity

Posted by Admin Posted on Jan 24 2024

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The Internal Revenue Service reminds individual retirement arrangement (IRA) owners age 70½ or over that they can transfer up to $100,000 to charity tax-free each year.

These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to easily give to charity before the end of the year. And, for those who are at least 73 years old, QCDs count toward the IRA owner's required minimum distribution (RMD) for the year.

How to set up a QCD

Any IRA owner who wishes to make a QCD for 2023 should contact their IRA trustee soon so the trustee will have time to complete the transaction before the end of the year.

Normally, distributions from a traditional IRA are taxable when received. With a QCD, however, these distributions become tax-free as long as they're paid directly from the IRA to an eligible charitable organization.

QCDs must be made directly by the trustee of the IRA to the charity. An IRA distribution, such as an electronic payment made directly to the IRA owner, does not count as a QCD. Likewise, a check made payable to the IRA owner is not a QCD.

Each year, an IRA owner age 70½ or over when the distribution is made can exclude from gross income up to $100,000 of these QCDs. For a married couple, if both spouses are age 70½ or over when the distributions are made and both have IRAs, each spouse can exclude up to $100,000 for a total of up to $200,000 per year.

The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. Transferred amounts are not taxable, and no deduction is available for the transfer.

Report correctly

A 2023 QCD must be reported on the 2023 federal income tax return, normally filed during the 2024 tax filing season.

In early 2024, the IRA owner will receive Form 1099-R from their IRA trustee that shows any IRA distributions made during calendar year 2023, including both regular distributions and QCDs. The total distribution is shown in Box 1 on that form. There is no special code for a QCD.

Like other IRA distributions, QCDs are reported on Line 4 of Form 1040 or Form 1040-SR. If part or all of an IRA distribution is a QCD, enter the total amount of the IRA distribution on Line 4a. This is the amount shown in Box 1 on Form 1099-R.

Then, if the full amount of the distribution is a QCD, enter 0 on Line 4b. If only part of it is a QCD, the remaining taxable portion is normally entered on Line 4b.

Either way, be sure to enter "QCD" next to Line 4b. Further details will be in the instructions to the 2023 Form 1040.

Get a receipt

QCDs are not deductible as charitable contributions on Schedule A. But, as with deductible contributions, the donor must get a written acknowledgement of their contribution from the charitable organization before filing their return.

In general, the acknowledgement must state the date and amount of the contribution and indicate whether the donor received anything of value in return. For details, see the Acknowledgement section in Publication 526, Charitable Contributions.

For more information about IRA distributions and QCDs, see Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

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 +1-305-274-5811.

Source : IRS      

Saver’s Credit Can Help Low- and Moderate-Income Taxpayers to Save More in 2024

Posted by Admin Posted on Jan 24 2024

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The Internal Revenue Service reminds low- and moderate-income taxpayers that they can save for retirement now and possibly earn a special tax credit in 2024 and years ahead.

The Retirement Savings Contributions Credit, also known as the Saver's Credit, helps offset part of the first $2,000 workers voluntarily contribute to Individual Retirement Arrangements (IRAs), 401(k) plans and similar workplace retirement programs. The credit also helps any eligible person with a disability who is the designated beneficiary of an Achieving a Better Life Experience (ABLE) account and makes a contribution to that account. For more information about ABLE accounts, see Publication 907, Tax Highlights for Persons With Disabilities.

The maximum Saver's Credit is $1,000 ($2,000 for married couples). The credit can increase a taxpayer's refund or reduce the tax owed but is affected by other deductions and credits. Distributions from a retirement plan or ABLE account reduce the contribution amount used to figure the credit.

Contribution deadlines

Individuals with IRAs have until April 15, 2024 - the due date for filing their 2023 return - to set up a new IRA or add money to an existing IRA for 2023. Both Roth and traditional IRAs qualify.

Individuals with workplace retirement plans still have time to make qualifying retirement contributions and get the Saver's Credit on their 2023 tax return. Elective deferrals (contributions) to workplace retirement plans must be made by December 31 to a:

  • 401(k) plan.
  • 403(b) plan for employees of public schools and certain tax-exempt organizations.
  • Governmental 457 plan for state or local government employees.
  • Thrift Savings Plan (TSP) for federal employees.

See the instructions to Form 8880, Credit for Qualified Retirement Savings Contributions, for a list of qualifying workplace retirement plans and additional details.

Eligibility

To be eligible, taxpayers must be 18 years of age and older, not claimed as a dependent and not a full-time student. The Saver's Credit has income limits based on a taxpayer's adjusted gross income and their marital or filing status.

2023 income limits are:

  • Married couples filing jointly with adjusted gross incomes up to $73,000.
  • Heads of household with adjusted gross incomes up to $54,750.
  • Married individuals filing separately and singles with adjusted gross incomes up to $36,500.

Taxpayers can use the Interactive Tax Assistant tool for the Saver's Credit to determine their eligibility.

Visit the Saver's Credit page on IRS.gov to learn about rules, contribution rates and credit limits.

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 +1-305-274-5811

Source : IRS      

Employers Should Certify Employees Before Claiming the Work Opportunity Tax Credit

Posted by Admin Posted on Jan 24 2024

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Employers who hire people from certain groups can reduce the tax they owe when they claim the Work Opportunity Tax Credit on their federal tax return. This credit encourages employers to hire workers certified as members of any of ten groups facing barriers to employment. When hiring, employers may want to take a moment to review eligibility requirements for the Work Opportunity Tax Credit.

Pre-screening and certification requirement

To claim the credit, an employer must first get certification that an individual is a member of one of the specified groups. They do so by submitting IRS Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to their state workforce agency within 28 days after the eligible worker begins work. Employers should not submit this form to the IRS. They should contact their state workforce agency with any questions about the processing of Form 8850.

Figuring and claiming the credit

Eligible employers claim the Work Opportunity Tax Credit on their federal income tax return. It is generally based on wages paid to eligible workers during the first year of employment. After the employer receives Form 8850 certification, they figure the credit on Form 5884, Work Opportunity Credit, and then claim the credit on Form 3800, General Business Credit.

Special rule for tax-exempt organizations

A special rule allows tax-exempt organizations to claim the credit only for hiring qualified veterans who began work for the organization before 2026. After the employer receives the Form 8850 certification, these organizations claim the credit against payroll taxes on Form 5884-C, Work Opportunity Credit for Qualified Tax Exempt Organizations.

Credit limitations

For a taxable business, the credit value is limited to the business' income tax liability.

For qualified tax-exempt organizations, the credit is limited to the amount of employer Social Security tax owed on wages paid to qualifying employees.

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 +1-305-274-5811

Source : IRS      

Crédito del Ahorrador Puede Resultar en Mayores Ahorros para Trabajadores de Recursos Bajos y Moderados en 2024

Posted by Admin Posted on Jan 24 2024

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El Servicio de Impuestos Internos les recuerda a los trabajadores de recursos bajos y moderados que pueden ahorrar para su retiro desde ahora y posiblemente recibir un crédito tributario especial en 2024 y años siguientes.

El de contribuciones de ahorro para la jubilación, también conocido como el Crédito del ahorrador, ayuda a compensar parte de los primeros $2,000 que los trabajadores aportan por cuenta propia para sus Arreglos individuales de ahorro para la jubilación (IRA, por sus siglas en inglés), planes de retiro conforme a la sección 401(k) y programas de retiro similares patrocinados por un empleador. El crédito también ayuda a cualquier persona elegible con una discapacidad que es un beneficiario designado de una cuenta Experiencia de Vida Mejorada (ABLE, por sus siglas en inglés) a contribuir a esa cuenta. Para más información acerca de las cuentas ABLE, consulte la Publicación 907, Puntos destacados de impuestos para personas con discapacidades (en inglés) disponible en IRS.gov.

El crédito máximo del crédito del ahorrador es de $1,000 ($2,000 para parejas casadas). El crédito puede aumentar el reembolso o reducir la cantidad de impuestos adeudados, pero pudiera ser afectado por otras deducciones y créditos. Las distribuciones de un plan de retiro o cuenta ABLE puede reducir el monto de la contribución usada para determinar el crédito.

Fechas límites de contribución

Los contribuyentes con cuentas IRA tienen hasta el 15 de abril de 2024 – la fecha límite para presentar su declaración de 2023 – para establecer un nuevo arreglo de IRA y agregar dinero a un arreglo IRS existente para 2023. Los arreglos de IRA tradicional y Roth son elegibles.

Las personas que participan en planes de retiro patrocinados por un empleador aún tienen tiempo para hacer aportaciones y obtener el Crédito del ahorrador en su declaración de impuestos de 2023. Las elecciones de aplazamiento (aportaciones) deben realizarse para el 31 de diciembre hacia un:

  • Plan conforme a la sección 401(k).
  • Plan conforme a la sección 403(b) para empleados de escuelas públicas y ciertas organizaciones exentas a impuestos.
  • Plan gubernamental 457 para empleados estatales y de gobiernos locales.
  • Plan de ahorro para la jubilación para empleados del gobierno federal (conocido como el Thrift Savings Plan).

Consulte las instrucciones del Formulario 8880, Crédito para contribuciones calificadas de ahorros para el retiro (en inglés) para obtener una lista de planes de retiro en el lugar del trabajo elegibles y detalles adicionales.

Elegibilidad

Para ser elegible, el contribuyente debe tener 18 años o mayor, no ser reclamado como dependiente en la declaración de otra persona y no ser un estudiante de tiempo completo. El crédito del ahorrador tiene límites de ingresos a base del ingreso bruto ajustado del contribuyente y el estado civil tributario.

Los límites de ingresos para 2023 son:

  • Personas casadas que presentan en conjunto con ingresos de hasta $73,000
  • Jefes de familia con ingresos de hasta $54,750.
  • Personas casadas que presentan por separado y solteros con ingresos de hasta $36,500.

Los contribuyentes pueden usar el Asistente tributario interactivo para el Crédito del ahorrador (en inglés) para determinar su elegibilidad.

Visite la página del Crédito del ahorrador en IRS.gov para conocer las reglas, las tasas de contribuciones y los límites del crédito.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

IRS: Tennessee Taxpayers Impacted by Storms and Tornadoes Qualify for Tax Relief; Various Deadlines Postponed to June 17

Posted by Admin Posted on Jan 17 2024

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The Internal Revenue Service has provided tax relief for individuals and businesses in parts of Tennessee affected by severe storms and tornadoes that began on Dec. 9.

These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, this includes Davidson, Dickson, Montgomery and Sumner counties. Individuals and households that reside or have a business in these counties qualify for tax relief.

The same relief will be available to any other Tennessee localities added later to the disaster area. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Filing and payment relief

The tax relief postpones various tax filing and payment deadlines that occurred from Dec. 9, 2023, through June 17, 2024 (postponement period). As a result, affected individuals and businesses will have until June 17, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the June 17, 2024, deadline will now apply to:

  • Individual income tax returns and payments normally due on April 15, 2024. The IRS urges anyone who needs an additional tax-filing extension, beyond June 17, for their 2023 federal income tax return to request it electronically by April 15. Though a disaster-area taxpayer qualifies to request an extension between April 15 and June 17, a request filed during this period can only be submitted on paper. Whether requested electronically or on paper, the taxpayer will then have until Oct. 15, 2024, to file, though payments are still due on June 17. Visit IRS.gov/Extensions for details.
  • 2023 contributions to IRAs and health savings accounts for eligible taxpayers.
  • Quarterly estimated income tax payments normally due on Jan. 16 and April 15, 2024.
  • Quarterly payroll and excise tax returns normally due on Jan. 31 and April 30, 2024.
  • Calendar-year partnership and S corporation returns normally due on March 15, 2024.
  • Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
  • Calendar-year tax-exempt organization returns normally due on May 15, 2024.

In addition, penalties for failing to make payroll and excise tax deposits due on or after Dec. 9, 2023, and before Dec. 26, 2023, will be abated as long as the deposits are made by Dec. 26, 2023.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional tax relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. For individual taxpayers, this means Oct. 15, 2024. Be sure to write the FEMA declaration number – 4751-DR − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov

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 +1-305-274-5811

Source : IRS      

IRS Reminder: Jan. 31 Filing Deadline for Employers to File Wage Statements, Independent Contractor Forms

Posted by Admin Posted on Jan 17 2024

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With tax season rapidly approaching, the IRS reminds employers that Jan. 31 is the deadline for submitting wage statements and forms for independent contractors with the government.

Employers must 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.

The Jan. 31 deadline also applies to Forms 1099-MISC, Miscellaneous Income, and Forms 1099-NEC, Nonemployee Compensation, that are filed with the IRS to report non-employee compensation to independent contractors. Various other due dates related to Form 1099-MISC, Form 1099-K and Form 1099-NEC, including dates due to the IRS, can be found on the forms' instructions.

The IRS offers a free electronic filing service for the Form 1099 series using the Information Returns Intake System (IRIS). Filers can also use this online portal to prepare payee copies for distribution, file corrections and request automatic extensions.

New filing requirements

New electronic filing requirements affect Forms W-2 that are required to be filed in 2024. Businesses that file 10 forms or more must file W-2s and certain information returns electronically. See New electronic filing requirements for Forms W-2 for more information.

E-filing is the quickest, most accurate and convenient way to file forms. For more information on e-filing Forms W-2, employers can refer to Employer W-2 Filing Instructions & Information on the Social Security Administration's website.

Key points to remember

  • Extensions to file are not automatically granted. Employers may request a 30-day extension to file Forms W-2 by submitting Form 8809, Application for Extension of Time to File Information Returns, by Jan. 31.
  • Filing Form 8809 does not extend the due date for furnishing wage statements to employees. A separate extension must be filed by Jan. 31. See Extension of time to furnish Forms W-2 to employees for more information.
  • Filing by the deadline helps the IRS to fight fraud by making it easier to verify income. Employers can help support that process and avoid penalties by filing the forms on time and without errors.
  • Penalties may be assessed for failure to file correctly and on time. For more information visit the IRS' Information Return Penalties page.
  • Form 1099-K $600 reporting threshold delayed. This means that for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : IRS      

5 Tips for Early Preparation

Posted by Admin Posted on Jan 17 2024

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

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

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

If you have any questions regarding 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 +1-305-274-5811

Source: Thomson Reuters      

Filing an Extension

Posted by Admin Posted on Jan 16 2024

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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 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 +1-305-274-5811

Source : Thomson Reuters      

Tax Season Rapidly Approaching: Get Ready Now to File 2023 Federal Income Tax Return in Early 2024

Posted by Admin Posted on Jan 10 2024

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With the nation's tax season rapidly approaching, the Internal Revenue Service reminds taxpayers there are important steps they can take now to help "get ready" to file their 2023 federal tax return.

This is the first in a series of special IRS "Get Ready" reminders to help taxpayers prepare for the upcoming tax filing season in early 2024. A little advance work now can help people have the paperwork and information ready to file their tax returns quickly and accurately. As part of this education effort, the IRS has a special page outlining items taxpayers can look into now to get ready to file their 2023 tax returns.

Get helpful information to file through IRS Online Account

Taxpayers can create or access their Online Account at IRS.gov/account. New users should have their photo identification ready.

With an Online Account taxpayers can access a variety of helpful information to help them during the 2024 filing season, including:

  • View key data from the most recently filed tax return, including adjusted gross income.
  • Get account transcripts.
  • Sign power of attorney and tax information authorizations.
  • Receive notices electronically.
  • Get email notifications for new account information or activity.
  • Make and view payments.
  • View, create or change payment plans.
  • See the amount owed by year.

Gather, organize and update tax records

Organizing tax records makes it easier to prepare a complete and accurate tax return. It helps avoid errors that can slow down refunds and may also help find overlooked deductions or tax credits.

Most income is taxable, including unemployment compensation, refund interest and income from the gig economy and digital assets. Taxpayers should gather Forms W-2, Wage and Tax Statement, Forms 1099-MISC, Miscellaneous Income, and other income documents before filing their return.

Don't forget to notify the IRS of an address change and be sure to notify the Social Security Administration of any legal name changes as soon as possible.

Be sure paychecks have enough tax withheld; time running out to make 2023 changes

The Tax Withholding Estimator is a tool on IRS.gov that can help taxpayers determine the right amount of tax to have withheld from their paychecks. This tool can be helpful if an earlier tax return resulted in tax owed or a large refund. And for those that have life changes or events such as getting married or divorced or welcoming a child, or for those taking on a second job or managing self-employment income, it can help calculate estimated tax payments. To change federal tax withholding, taxpayers will need to update their withholding with their employer, either online or by submitting a new Form W-4, Employee's Withholding Allowance Certificate.

But to make adjustments in time to affect 2023 tax withholding, taxpayers need to act quickly. Only a few pay periods remain in the year, and payroll systems need time to make withholding changes.

Speed refunds with direct deposit

Direct deposit is the fastest and safest way to get a tax refund. Taxpayers can make direct deposits to bank accounts, banking apps and reloadable debit cards, but will need to provide the routing and account information associated with the account. If the routing and account number cannot be located, taxpayers should contact their bank, financial institution or app provider.

Taxpayers requesting a paper check are much more likely to report an issue getting their refund because of non-receipt, forgery, theft or checks returned for a bad address, compared to taxpayers using direct deposit.

Need a bank account? Taxpayers without a bank account can learn how to open an account at an FDIC-Insured bank or with a credit union through the National Credit Union Locator tool. Veterans can use the Veterans Benefits Banking Program to find participating banks and credit unions that offer free accounts.

Volunteer to help eligible taxpayers file their tax returns

The IRS and its community partners are looking for people around the country interested in becoming IRS-certified volunteers. Join the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs and help eligible taxpayers with free tax preparation. Visit IRS.gov/volunteers to learn more and sign up. After signing up, volunteers will receive more information about attending a virtual orientation.

Bookmark IRS.gov resources and online tools

Everyone should make IRS.gov their first stop. Here they'll find online tools to help get them the information they need. The tools are easy-to-use and available 24 hours a day. Millions of people use them to help file and pay taxes, track their refunds, find information about their accounts and get answers to tax questions.

Tips for choosing a tax pro

Tax professionals play an essential role for taxpayers and the nation's tax system. There are many types of tax return preparers, including certified public accountants, enrolled agents, attorneys and many others who don't have a professional credential. Preparers should be skilled in tax preparation and accurately filing income tax returns. Taxpayers trust them with their most personal information.

Most tax return preparers provide outstanding and professional tax service. However, choosing the wrong tax return preparer hurts taxpayers financially every year. Be sure to check tips for choosing a tax preparer and how to avoid unethical "ghost" return preparers.

People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

 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 +1-305-274-5811

Source : IRS      

Interest Rates Remain the Same for the First Quarter of 2024

Posted by Admin Posted on Jan 10 2024

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The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning Jan. 1, 2024.

For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily. Here is a complete list of the new rates:

  • 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
  • 5.5% for the portion of a corporate overpayment exceeding $10,000.
  • 8% for underpayments (taxes owed but not fully paid).
  • 10% for large corporate underpayments. 

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

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

The interest rates announced today are computed from the federal short-term rate determined during Oct. 2023. See the revenue ruling for details.

Revenue Ruling 2023-22 announcing the rates of interest will appear in Internal Revenue Bulletin 2023-49, dated Dec. 4, 2023.

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 +1-305-274-5811.17 SW 88th ST, Mi1773

Source : IRS  

Know the Different Types of Authorizations for Third-Party Representatives

Posted by Admin Posted on Jan 10 2024

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Taxpayers can authorize a third-party representative to work with the IRS on their behalf. Sometimes this person is an unpaid family member or friend, and sometimes this is a tax professional hired by the taxpayer. Different types of representatives need different authorizations before they can represent the taxpayer to the IRS.

Taxpayers who want to have a third party represent them must formally grant them permission to do so.

Here are different types of third-party authorizations:

  • Power of Attorney – Allows someone to represent a taxpayer in tax matters before the IRS. With this authorization, the representative must be an individual authorized to practice before the IRS.
  • Tax Information Authorization – Appoints a person to review or receive a taxpayer's confidential tax information for the type of tax for a specified period.
  • Third Party Designee – Designates a person on the taxpayer's tax form to discuss that specific tax return and tax year with the IRS.
  • Oral Disclosure – Authorizes the IRS to disclose the taxpayer's tax info to a person the taxpayer brings into a phone call or meeting with the IRS about a specific tax issue. 

Revoking a third-party authorization

A taxpayer can choose to revoke any authorization at any time.

Third-Party Designees and Oral Disclosures expire automatically. An Oral Disclosure Authorization may expire at the end of the conversation but can also be granted for longer if the taxpayer wants IRS to have a continuing conversation with the designated third party until the tax matter is resolved. A Third-Party Designee authorization ends one year from the due date of the relevant tax return.

Power of Attorney and Tax Information Authorization stay in effect until the taxpayer revokes the authorization or the representative withdraws it. There are two ways for a taxpayer to revoke either of these authorizations:

1.    Authorize a new representative. If a taxpayer authorizes a new representative for the same tax matters and periods/years, the new authorization will automatically revoke the prior authorization unless the taxpayer chooses to retain the prior representative by checking the box to retain and attaching prior copies of any authorization they want to remain in effect.

2.    Send a revocation to the IRS. Taxpayers can follow the revocation instructions in Form 2848, Power of Attorney and Declaration of Representative for Power of Attorney. For Tax Information Authorizations, they should follow the revocation instructions for Form 8821, Tax Information Authorization.

Even with an authorized third party representing them, taxpayers are ultimately responsible for meeting their tax obligations.

Low-income representation

Low-Income Taxpayer Clinics are independent from the Internal Revenue Service and the Taxpayer Advocate Service. LITCs represent individuals with income below a certain level who need to resolve tax problems with the IRS. These clinics can represent taxpayers in audits, appeals and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages. Services are free or may cost a small fee.

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 +1-305-274-5811.

Source : IRS     

IRS Reminds Extension Filers to Have All their Info Before Visiting a Tax Professional

Posted by Admin Posted on Jan 10 2024

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The deadline is around the corner for taxpayers with an extension to file. It's important for taxpayers to gather all their records and get copies of any missing documents before they sit down to prepare their return, and taxpayers who use a professional tax preparer should make sure they have all their information ready before their appointment. This helps them file a complete and accurate tax return.

Here's the information taxpayers may need. Not all information applies to all taxpayers.

  • Social Security numbers of everyone listed on the tax return. 
  • Bank account and routing numbers for direct deposit or information to make a tax payment.
  • Forms W-2 from employer(s).
  • Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan.
  • Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy.
  • Form 1099-INT for interest received.
  • Other income documents and records of virtual currency transactions.
  • Form 1095-A, Health Insurance Marketplace Statement.
  • Information to support claiming other credits or deductions such as receipts for child or dependent care, college expenses or donations.

Missing documents: What taxpayers should do

To request a missing W-2 or Form 1099, taxpayers should contact the employer, payer or issuing agency. This also applies for taxpayers who received an incorrect W-2 or Form 1099.

If they still can't get the forms, taxpayers can complete Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. If a taxpayer doesn't receive the missing or correct form in time to file their tax return, they can estimate the wages or payments made to them and any taxes withheld. They can use Form 4852 to report this information on their federal 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 +1-305-274-5811.

Source : IRS      

Treasury, IRS Issue Guidance on Sustainable Aviation Fuel Credit

Posted by Admin Posted on Dec 21 2023

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The Treasury Department and Internal Revenue Service have issued Notice 2024-06 for the new Sustainable Aviation Fuel (SAF) credit created by the Inflation Reduction Act of 2022.

The SAF credit applies to a qualified fuel mixture containing sustainable aviation fuel for certain sales or uses in calendar years 2023 and 2024.

The SAF credit is $1.25 for each gallon of sustainable aviation fuel in a qualified mixture. To qualify for the credit, the sustainable aviation fuel must have a minimum reduction of 50% in lifecycle greenhouse gas emissions. Additionally, there is a supplemental credit of one cent for each percent that the reduction exceeds 50%, for a maximum increase of $0.50.

The IRA provides two methods to determine the lifecycle greenhouse gas emissions reduction percentage (emissions reduction percentage) that can be used to qualify for and calculate the credit. These are the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) method and any similar method that meets certain requirements of the Clean Air Act (CAA). Additionally, the IRA requires certain aspects of each method to be certified by an unrelated party.

This notice provides additional safe harbors using the Environmental Protection Agency's Renewable Fuel Standard (RFS) program and related guidance. The RFS program uses a methodology similar to CORSIA and meets the requirements of the CAA, and the safe harbors in this notice can be used to calculate the emissions reduction percentage and for the corresponding unrelated party certification for the SAF credit.

Further, this notice explains that the current Greenhouse gases, Regulated Emissions, and Energy use in Transportation (GREET) model of the Argonne National Laboratory and other GREET-based models do not currently satisfy the applicable statutory requirements for the SAF credit.

Finally, this notice announces that the Department of Energy is collaborating with other federal agencies to develop a modified version of the GREET model that would satisfy the statutory requirements for the SAF credit. The agencies developing this modified GREET model currently anticipate its release in early 2024.

Previously, the IRS issued Notice 2023-06, which explains the requirements for the fuel to be eligible for the SAF credit, including safe harbors for the CORSIA method and the corresponding unrelated party certification, and explained which parties must be registered for the different activities in the process.

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 +1-305-274-5811

Source : IRS      

IRS Reminds Taxpayers, Jan. 16 Due Date for Final 2023 Quarterly Estimated Tax Payments

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service reminded taxpayers who didn't pay enough tax in 2023 to make a fourth quarter tax payment on or before Jan. 16 to avoid a possible penalty or tax bill when filing in 2024.

Taxes are normally paid throughout the year by withholding tax from paychecks, by making quarterly estimated tax payments to the IRS or by a combination of both. This is done because taxpayers need to pay most of their tax during the year as income is earned or received.

Who needs to make a payment?

Taxpayers who earn income not subject to tax withholding such as self-employed people or independent contractors should pay their taxes quarterly to the IRS.

In addition, people who owed tax when they filed their current year tax return often find themselves in the same situation again when they file the next year. Taxpayers in this situation normally include:

  • Those who itemized in the past but are now taking the standard deduction,
  • Two wage-earner households,
  • Employees with non-wage sources of income such as dividends,
  • Those with complex tax situations and/or
  • Those who failed to increase their tax withholding.

What income is taxable?

The IRS reminds taxpayers that most income is taxable, whether it's unemployment income, refund interest or income from the gig economy and digital assets. When estimating quarterly tax payments, taxpayers should include all forms of earned income, including from part-time work, side jobs or the sale of goods.

Also, various financial transactions, especially late in the year, can often have an unexpected tax impact. Examples include year-end and holiday bonuses, lottery winnings, stock dividends, capital gain distributions from mutual funds, stocks, bonds, virtual currency, real estate or other property sold at a profit.

Delay in requirement for Forms 1099-K

After feedback from taxpayers, tax professionals and payment processors the IRS announced that calendar year 2023 will be treated as another transition year for the reduced reporting threshold of $600. For calendar year 2023, third-party settlement organizations that issue Forms 1099-K are only required to report transactions where gross payments exceed $20,000 and there are more than 200 transactions. The IRS also issued a fact sheet to help people who may receive Forms 1099-K.

How to make an estimated tax payment

The fastest and easiest way to make an estimated tax payment is to do so electronically. Taxpayers have options when paying electronically from their bank account.

  • Pay using IRS Direct Pay. This option allows taxpayers to schedule a payment in advance of the Jan. 16 deadline.
  • Pay using IRS Online Account. This option allows taxpayers to view their payment history, pending or recent payments and other tax information.
  • Pay using Electronic Filing Tax Payment System, or EFTPS . EFTPS is a free system which offers selections such as scheduling payments a year in advance, paying estimated tax payments and tracking and changing scheduled payments.
  • Taxpayers also have the option to pay with their debit or credit card. The card processors, not the IRS, charge a fee for the service.

Using these or other electronic payment options ensures that a payment gets credited promptly. More information on other payment options is available at IRS.gov/payments.

Use the Tax Withholding Estimator to keep track

The Tax Withholding Estimator, available on IRS.gov, can often help taxpayers determine if they need to make an estimated tax payment. It also helps them calculate the correct amount of tax to withhold throughout the year based on their complete set of tax facts and circumstances.

Alternatively, taxpayers can use the worksheet included with Form 1040-ES, Estimated Tax for Individuals, or read through Publication 505, Tax Withholding and Estimated Tax, available on IRS.gov.

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 +1-305-274-5811

Source : IRS      

Red Flags for Employee Retention Credit Claims; IRS Reminds Businesses to Watch Out for Warning Signs of Aggressive Promotion that can Mislead People into Making Improper ERC Claims

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service continues to warn businesses to watch out for aggressive marketing by nefarious actors involving the Employee Retention Credit (ERC) and urged people to watch out for red flags that can signal trouble.

The credit, also called the Employee Retention Tax Credit or ERTC, is a legitimate pandemic-era tax credit but as time passes the credit has been increasingly the target of aggressive marketing to businesses that may not qualify for the credit.

Although promoters advertise that ERC submissions are "risk free," there are actually huge risks facing businesses as the IRS increases its audit and criminal investigation work. Hundreds of criminal cases are being worked, and thousands of ERC claims have been referred for audit.

The IRS reminds anyone who improperly claims the ERC that they must pay it back, possibly with penalties and interest. A business or tax-exempt group could find itself in a much worse cash position if it has to pay back the credit than if the credit was never claimed in the first place. This underscores the importance of taxpayers taking precautionary steps and avoiding being pushed by a promoter, including instances where a promoter can collect contingency fees as much as 25%.

Properly claiming the ERC

There are very specific eligibility requirements for claiming the ERC. Employers can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020, and Dec. 31, 2021. However, to be eligible, employers must have:

  • Sustained a full or partial suspension of operations due to orders from an appropriate governmental authority limiting commerce, travel or group meetings because of COVID-19 during 2020 or the first three quarters of 2021,
  • Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
  • Qualified as a recovery startup business for the third or fourth quarters of 2021.

Warning signs of aggressive ERC marketing

The IRS sees wildly aggressive suggestions from marketers urging businesses to submit the claim because there is nothing to lose. In reality, those improperly receiving the credit could have to repay the credit – along with substantial interest and penalties.

Warning signs to avoid include:

  • Unsolicited calls or advertisements mentioning an "easy application process."
  • Statements that the promoter or company can determine ERC eligibility within minutes.
  • Large upfront fees to claim the credit.
  • Fees based on a percentage of the refund amount of Employee Retention Credit claimed. This is a similar warning sign for average taxpayers, who should always avoid a tax preparer basing their fee on the size of the refund.
  • Preparers seeking anonymity by refusing to sign the ERC return being filed by the business as well as supplying their identifying information and a tax identification number. Similar to "ghost preparers," this limits the risk to just the taxpayer claiming the credit.
  • Aggressive claims from the promoter that the business receiving the solicitation qualifies before any discussion of the group's tax situation. In reality, the Employee Retention Credit is a complex credit that requires careful review before applying.

Unscrupulous promoters may lie about eligibility requirements, including refusing to provide detailed documents supporting their computations of the ERC. In addition, those using these companies could be at risk of someone using the credit as a ploy to steal the taxpayer's identity or take a cut of the taxpayer's improperly claimed credit.

How the promoters lure victims

The IRS continues to see a variety of ways that promoters can lure businesses, tax-exempt groups and others into applying for the credit.

  • Aggressive marketing. This can be seen in countless places, including radio, television, social media, online as well as phone calls and text messages.
  • Direct mailing. Some ERC mills are sending out fake letters to taxpayers from the non-existent groups like the "Department of Employee Retention Credit." These letters can be made to look like official IRS correspondence or an official government mailing with language urging immediate action. Some solicitations even make it look like it's coming from the bank the business uses.
  • Leaving out key details. Third-party promoters of the ERC often don't accurately explain eligibility requirements or how the credit is computed, and they do not share their workpapers with the businesses claiming the credit. They may make broad arguments suggesting that all employers are eligible without evaluating an employer's individual circumstances.
    • For example, only recovery startup businesses are eligible for the ERC in the fourth quarter of 2021, but promoters fail to explain this limit.
    • Also, the promoters may not inform taxpayers that they need to reduce wage deductions claimed on their business' federal income tax return by the amount of the Employee Retention Credit. This causes a domino effect of tax problems for the business.
  • Paycheck Protection Program participation. In addition, many of these promoters don't tell employers that they can't claim the ERC on wages that were reported as payroll costs to obtain Paycheck Protection Program loan forgiveness.
  • Mistaken supply chain arguments. Contrary to advice given by unscrupulous preparers, IRS legal guidance in July makes clear that supply chain disruptions do not qualify an employer for the credit unless they are due to a government order. Employers that experienced supply chain disruptions qualify for ERC only if they had to suspend their business operations because their suppliers were unable to provide critical goods or materials due to a government order that caused the supplier to suspend its operations.

How businesses and others can protect themselves

The IRS reminds businesses, tax-exempt groups and others being approached by these promoters that there are simple steps that can be taken to protect themselves from making an improper Employee Retention Credit.

  • Work with a trusted tax professional. Eligible employers who need help claiming the credit should work with a trusted tax professional; the IRS urges people not to rely on the advice of those soliciting these credits. Promoters who are marketing this ultimately have a vested interest in making money; in many cases they are not looking out for the best interests of those applying.
  • Request a detailed worksheet explaining ERC eligibility and the computations used to determine the ERC amount.
  • Don't apply unless you believe you are legitimately qualified for this credit. Details about the credit are available on IRS.gov, and again a trusted tax professional – not someone promoting the credit – can provide critical professional advice on the ERC.

To report ERC abuse, submit Form 14242, Report Suspected Abusive Tax Promotions or Preparers

People should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers, and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

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 +1-305-274-5811.

Source: IRS      

IRS Reminds Those Aged 73 and Older to Make Required Withdrawals from IRAs and Retirement Plans by Dec. 31; Notes Changes in the Law for 2023

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service reminds people born before 1951 of the year-end deadlines to take required minimum distributions (RMDs) from funds held in individual retirement arrangements (IRAs) and other retirement plans, and noted new requirements under the law beginning in 2023.

Required minimum distributions, or RMDs, are amounts that many retirement plan and IRA account owners must withdraw each year. RMDs are taxable income and may be subject to penalties if not timely taken. For individuals born before 1951, RMDs from IRAs and retirement plans should, for the most part, already have begun and are required for 2023.

New for 2023: The Secure 2.0 Act raised the age that account owners must begin taking RMDs. For 2023, the age at which account owners must start taking required minimum distributions goes up from age 72 to age 73, so individuals born in 1951 must receive their first required minimum distribution by April 1, 2025.

See Retirement plan and IRA required minimum distributions FAQs for more detailed information regarding the new provisions in the law.

IRAs: The RMD rules require individuals to take withdrawals from their IRAs (including SIMPLE IRAs and SEP IRAs) every year once they reach age 72 (73 if the account owner reaches age 72 in 2023 or later), even if they're still employed.

Owners of Roth IRAs are not required to take withdrawals during their lifetime. However, after the death of the account owner, beneficiaries of a Roth IRA are subject to the RMD rules.

Retirement plans: The RMD rules also apply to employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans. Participants in employer-sponsored retirement plans can delay taking their RMDs until they retire, unless they are a 5% owner of the business sponsoring the plan.

Designated Roth accounts in a 401(k) or 403(b) plan are subject to the RMD rules for 2023. Beginning in 2024, designated Roth accounts will not be subject to the RMD rules while the account owner is still alive.

The RMD comparison chart highlights several of the basic RMD rules that apply to IRAs and defined contribution plans.

RMD calculations and tax on missed distributions

An IRA trustee or plan administrator must either report the amount of the RMD to the IRA owner or offer to calculate it. An IRA owner or trustee must calculate the RMD separately for each IRA owned, but the owner can make withdrawals from the account(s) of their choice as long as the total equals or exceeds the total annual requirement. Although the IRA trustee or plan administrator may calculate the RMD, the account owner is ultimately responsible for taking the correct RMD amount.

If an account owner fails to withdraw the full amount of the RMD by the due date, the owner is subject to an excise tax equal to 25% of the amount not withdrawn for 2023 and later years. The SECURE 2.0 Act dropped the excise tax rate from 50% for distributions required for 2023 and reduces the tax rate to 10% if the error is corrected within two years. The account owner should file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return for the year in which the full amount of the RMD was required but not taken.

The IRS has worksheets to calculate the RMD and payout periods.

Inherited IRAs

An RMD may be required for an IRA, retirement plan account or Roth IRA inherited from the original owner. The factors that affect the distribution requirements for inherited retirement plan accounts and IRAs include:

  • Whether the account owner died after 2019 (the SECURE Act made changes to the RMDs for beneficiaries if the death of the account holder occurred after 2019).
  • The relationship of the beneficiary to the account owner and certain characteristics of the beneficiary (spouse, minor child, disabled or chronically ill individual, entity other than an individual).
  • Whether the original account owner passed away before or after their required beginning date (the date the original account owner was required to begin taking RMDs).

IRS Notice 2023-54 provides that certain non-spouse beneficiaries subject to the 10-year distribution rule will not fail the RMD requirements because they didn't make distributions in 2023.

Retirement topics - beneficiary and Required minimum distributions for IRA beneficiaries have information on taking RMDs from an inherited IRA or retirement account and reporting taxable distributions as part of gross income. Publication 559, Survivors, Executors and Administrators, can help those in charge of the estate complete and file federal income tax returns and explains their responsibility to pay any taxes due on behalf of the person who has died.

2020 coronavirus-related distribution

Distribution requirements were waived for 2020 due to the coronavirus pandemic. An account owner or beneficiary who received an RMD in 2020 had the option of returning it to their IRA or other qualified plan to avoid paying taxes on that distribution. A 2020 RMD that qualified as a coronavirus-related distribution could be repaid over a three-year period or have the taxes due on the distribution spread over three years.

A 2020 withdrawal from an inherited IRA could not be repaid to the inherited IRA but may be spread over three years for income inclusion. For more information see Coronavirus relief for retirement plans and IRAs.

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 +1-305-274-5811

Source : IRS      

Beware of Fake Charities; Check Before Donating

Posted by Admin Posted on Dec 21 2023

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With the tragic crises and natural disasters happening around the globe, many are responding to the call to give what they can to help. The Internal Revenue Service warned taxpayers to be wary of criminals soliciting donations and falsely posing as legitimate charities. When fake charities scam unsuspecting donors, the proceeds don’t go to those who need the help and those contributing to these fake charities can’t deduct their donations on their tax return.

"We all want to help innocent victims and their families," said IRS Commissioner Danny Werfel. "Knowing we're trying to aid those who are suffering, criminals crawl out of the woodwork to prey on those most vulnerable – people who simply want to help. Especially during these challenging times, don't feel pressured to immediately give to a charity you've never heard of. Check out the charity first and confirm it is authentic."

Those who wish to make donations should use the Tax-Exempt Organization Search (TEOS) tool on IRS.gov to help find or verify qualified, legitimate charities.

With the TEOS, people can:

  • Verify the legitimacy of a charity
  • Check its eligibility to receive tax-deductible charitable contributions
  • Search for information about an organization's tax-exempt status and filings

In addition, the IRS urges anyone encountering a fake or suspicious charity to see the FBI's resources on Charity and Disaster Fraud.

Fake charities

Criminals commonly set up bogus charities to take advantage of the public's generosity during international crises or natural disasters. Typically, they seek money and personal information, which can be used to further exploit victims through identity theft.

Fake charity promoters may use emails, fake websites, or alter or "spoof" their caller ID to make it look like a real charity is calling to solicit donations. Criminals often target seniors and groups with limited English proficiency.

Here are some tips to protect against fake charity scams:

  • Verify first. Scammers frequently use names that sound like well-known charities to confuse people. Potential donors should ask the fundraiser for the charity's exact name, website and mailing address so they can independently confirm the information. Use TEOS to verify if an organization is a legitimate tax-exempt charity.
  • Don't give in to pressure. Scammers often pressure people into making an immediate payment. In contrast, legitimate charities are happy to get a donation at any time. Donors should not feel rushed.
  • Don't give more than needed. Scammers are on the hunt for both money and personal information. Taxpayers should treat personal information like cash and not hand it out to just anyone.
  • Be wary about how a donation is requested. Never work with charities that ask for donations by giving numbers from a gift card or by wiring money. That's a scam. It's safest to pay by credit card or check — and only after verifying the charity is real.

Taxpayers who give money or goods to a charity can claim a deduction if they itemize deductions, but these donations only count if they go to a qualified tax-exempt organization recognized by the IRS.

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 +1-305-274-5811.

Source: IRS      

IRS Aconseja a Personas de 73 años y Mayores que Comiencen a Retirar Fondos de Cuentas IRA y Planes de Jubilación para el 31 de Diciembre; Resalta Cambios en Ley para 2023

Posted by Admin Posted on Dec 21 2023

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El Servicio de Impuestos Internos les aconsejó a quienes nacieron antes de 1951 de los plazos de fin de año para retirar distribuciones mínimas requeridas (en inglés), o RMD, por sus siglas en inglés, de los fondos de sus arreglos individuales de jubilación (IRA, por sus siglas en inglés) y otros planes de jubilación.

Las distribuciones mínimas requeridas (en inglés) son montos que muchos propietarios de planes de jubilación y cuentas IRA deben retirar anualmente. Las RMD son ingresos sujetos a impuestos y pueden estar sujetas a multas si no se toman a tiempo. Para las personas que nacieron antes de 1951, las RMD de las cuentas IRA y planes de jubilación deben, en la mayor parte, ya haber comenzado y es un requisito para 2023.

Nuevo para 2023: La Ley SECURE 2.0 aumentó la edad para que los dueños de las cuentas puedan empezar a tomar RMD. Para 2023, la edad aumento de 72 a 73 años, de manera que las personas nacidas en 1951 deben recibir su primera distribución mínima requerida para el 1ro de abril de 2025.

Consulte la página Preguntas frecuentes sobre distribuciones mínimas requeridas de planes de jubilación y cuentas IRA (en inglés) para información detallada adicional acerca de las nuevas provisiones de la ley.

IRAs: Las reglas de las RMD requieren que los propietarios de cuentas IRA (incluyendo cuentas SIMPLE IRA y SEP) comiencen a recibir distribuciones a los 72 años (73 si el titular llega a cumplir 72 en 2023 o después) incluso si todavía están trabajando.

No se les requiere a propietarios de cuentas IRA Roth recibir distribuciones durante el tiempo que estén vivos. Sin embargo, después de que fallezca el titular, los beneficiarios de la cuenta IRA Roth están sujetos a las reglas de RMD.

Planes de jubilación: Las reglas de las RMD también aplican para los planes de jubilación patrocinados por un empleador, incluyendo los planes de distribución de utilidades, planes 401(k), 403(b) y 457(b). Participantes de los planes de jubilación patrocinados por un empleador pueden demorar recibir sus RMD hasta que se jubilen, a menos que sean dueños del 5 por ciento del negocio que patrocine el plan.

Las cuentas designadas Roth en un plan 401(k) o 403(b) están sujetas a las reglas de RMD para 2023. A partir de 2024, las cuentas designadas Roth no estarán sujetas a las reglas de RMD mientras el propietario de la cuenta esté vivo.

El gráfico de comparación de RMD (en inglés) destaca algunas de las reglas básicas de las RMD que se aplican a las cuentas IRA y los planes de contribución definida

Cálculos de RMD e impuestos sobre distribuciones no realizadas

Un fideicomisario de IRA, o administrador del plan, debe informar el monto de la RMD al propietario de la IRA u ofrecer calcularlo. El propietario de una IRA, o fideicomisario, debe calcular la RMD por separado para cada IRA que posea, pero el propietario puede hacer retiros de la cuenta de su preferencia mientras el monto sea equivalente o exceda el requisito del monto anual. Aunque el fideicomisario de IRA o el administrador del plan puede calcular la RMD, el propietario de la cuenta últimamente es responsable de retirar la cantidad correcta de la RMD.

Si el propietario de una cuenta no retira el monto entero de la RMD para el plazo, el propietario está sujeto a un impuesto sobre consumo equivalente a un 25 por ciento del monto no retirado para el 2023 y años siguientes. La Ley SECURE 2.0 redujo la tasa del impuesto por consumo del 50 por ciento para las distribuciones requeridas para el 2023 y reduce la tasa de impuesto al 10 por ciento si el error se corrige dentro de dos años. El propietario de la cuenta debe presentar el Formulario 5329, Impuestos adicionales sobre planes calificados (incluidos los arreglos de ahorros para la jubilación) y otras cuentas con beneficios tributarios (en inglés) junto con su declaración de impuestos federales para el año en el que el monto completo de la RMD fue requerido, pero no retirado.

El IRS tiene hojas de cálculo (en inglés) para calcular la RMD y los períodos de pago.

Cuentas IRA heredadas

Es posible que se requiera una RMD para una IRA, una cuenta de plan de jubilación o una cuenta IRA Roth heredada del propietario original. Los factores que afectan los requisitos de distribución para cuentas de planes de jubilación y de IRA heredadas incluyen:

  • Si el propietario de la cuenta murió después de 2019 (La Ley SECURE hizo cambios a las RMD para los beneficiarios si la muerte del propietario de la cuenta ocurrió después de 2019).
  • La relación del beneficiario con el propietario de la cuenta y ciertas características del beneficiario (cónyuge, hijo menor de edad, persona discapacitada o con enfermedad crónica, entidad que no sea una persona).
  • Si el propietario original de la cuenta falleció antes o después de la fecha de comienzo requerida (la fecha en la que el propietario original de la cuenta se le requirió comenzar a retirar las RMD).

El Aviso 2023-54 (en inglés) del IRS provee que ciertos beneficiarios no cónyuges sujetos a la regla de distribución de 10 años no dejarán de cumplir con los requisitos de las RMD porque no hicieron distribuciones en 2023.

En Temas de jubilación - Beneficiario (en inglés) y Distribuciones mínimas requeridas para beneficiarios de cuentas IRA (en inglés) existe información acerca de cómo tomar RMD de una cuenta de jubilación o IRA heredada y declarar distribuciones sujetas a impuestos como parte del ingreso bruto. La Publicación 559, Sobrevivientes, Albaceas y Administradores (en inglés), puede ayudar a los encargados del patrimonio a completar y presentar declaraciones de impuestos federales y explica su responsabilidad de pagar los impuestos adeudados en nombre de la persona fallecida.

Distribución relacionada con el coronavirus 2020

Debido a la pandemia del coronavirus, se eximieron las RMD de 2020. El titular de una cuenta o el beneficiario que recibió una RMD en 2020 tenía la opción de devolverla a su IRA u otro plan elegible para evitar pagar impuestos sobre esa distribución. Una RMD de 2020 calificada como una distribución relacionada con el coronavirus puede reembolsarse en un período de tres años o hacer que los impuestos adeudados sobre la distribución se distribuyan en tres años.

Un retiro de 2020 de una cuenta IRA heredada no se puede reembolsar a la cuenta IRA heredada, pero se puede repartir en tres años para la inclusión de ingresos. Para obtener más información, consulte la página Alivio tributario por coronavirus para planes de jubilación y planes personales de ahorro para la jubilación (IRAs).

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

IRS HELPS Taxpayers by Providing Penalty Relief on Nearly 5 Million 2020 and 2021 Tax Returns; Restart of Collection Notices in 2024 Marks End of Pandemic-Related Pause

Posted by Admin Posted on Dec 21 2023

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In a major step to help people who owe back taxes, the Internal Revenue Service has announced new penalty relief for approximately 4.7 million individuals, businesses and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic.

The IRS will be providing about $1 billion in penalty relief. Most of those receiving the penalty relief make under $400,000 a year.

Due to the unprecedented effects of the COVID-19 pandemic, the IRS temporarily suspended the mailing of automated reminders to pay overdue tax bills starting in February 2022. These reminders would have normally been issued as a follow up after the initial notice. Although these reminder notices were suspended, the failure-to-pay penalty continues to accrue for taxpayers who did not fully pay their bills in response to the initial balance due notice.

Given this unusual situation, the IRS is taking several steps in advance of resuming normal collection notices for tax years 2020 and 2021 to help taxpayers with unpaid tax bills, including some people who have not received a notice from the IRS in more than a year.

To help taxpayers as the normal processes resume, the IRS will be issuing a special reminder letter starting next month. The letter will alert the taxpayer of their liability, easy ways to pay and the amount of penalty relief, if applied. The IRS urges taxpayers who are unable to pay their full balance due to visit IRS.gov/payments to make arrangements to resolve their bill.

The IRS is also taking steps to waive the failure-to-pay penalties for eligible taxpayers affected by this situation for tax years 2020 and 2021. The IRS estimates 5 million tax returns -- filed by 4.7 million individuals, businesses, trusts, estates and tax-exempt organizations -- are eligible for the penalty relief. This represents $1 billion in savings to taxpayers, or about $206 per return.

As a first step, the IRS has adjusted eligible individual accounts and will follow with adjustments to business accounts in late December to early January, and then trusts, estates and tax-exempt organizations in late February to early March 2024. Nearly 70 percent of the individual taxpayers receiving penalty relief have income under $100,000 per year.

The IRS is releasing Notice 2024-7, which explains how the agency is providing failure-to-pay penalty relief to eligible taxpayers affected by the COVID-19 pandemic to help them meet their federal tax obligations.

"As the IRS has been preparing to return to normal collection mailings, we have been concerned about taxpayers who haven't heard from us in a while suddenly getting a larger tax bill. The IRS should be looking out for taxpayers, and this penalty relief is a common-sense approach to help people in this situation," said IRS Commissioner Danny Werfel. "We are taking other steps to help taxpayers with past-due bills, and we have options to help people struggling to pay."

This penalty relief is automatic. Eligible taxpayers don't need to take any action to get it. Eligible taxpayers who already paid their full balance will benefit from the relief, too; if a taxpayer already paid failure-to-pay penalties related to their 2020 and 2021 tax years, the IRS will issue a refund or credit the payment toward another outstanding tax liability.

The penalty relief only applies to eligible taxpayers with assessed tax under $100,000. Eligible taxpayers include individuals, businesses, trusts, estates and tax-exempt organizations that filed certain Forms 1040, 1120, 1041 and 990-T income tax returns for tax years 2020 or 2021, with an assessed tax of less than $100,000, and that were in the IRS collection notice process -- or were issued an initial balance due notice between Feb. 5, 2022, and Dec. 7, 2023. The IRS notes the $100,000 limit applies separately to each return and each entity. The failure-to-pay penalty will resume on April 1, 2024, for taxpayers eligible for relief.

Taxpayers who are not eligible for this automatic relief also have options. They may use existing penalty relief procedures, such as applying for relief under the reasonable cause criteria or the First-Time Abate program. Visit IRS.gov/penaltyrelief for details.

If the automatic relief results in a refund or credit, individual and business taxpayers will be able to see it by viewing their tax transcript. The IRS will send the first round of refunds starting now through January 2024. If a taxpayer does not receive a refund, a special reminder notice may be sent with their updated balance beginning in early 2024. Taxpayers with questions on penalty relief can contact the IRS after March 31, 2024.

Help for taxpayers needing assistance

The IRS reminds taxpayers that there are a number of payment options and online tools that can help taxpayers with unpaid tax debts, whether it's a new tax bill or a long-standing tax debt for an unfiled return.

"The IRS wants to help taxpayers and provide them easy options to deal with unpaid tax bills and avoid additional interest and penalties," said Werfel. "People receiving these notices should remember that there are frequently overlooked options that can help them set up an automatic payment plan or catch up with their tax filings. Making additional improvements in the collection area will be an important focus for the IRS going forward as we continue and accelerate our transformation work."

Following funding from the Inflation Reduction Act, it's now easier for taxpayers to get assistance with tax bills with new self-help tools, like the IRS Document Upload Tool, improved phone service with callback features and the addition of bots that can answer simple questions, set up or modify a payment plan and request a transcript. The IRS also encourages taxpayers to get an IRS Online Account, where they can see information about an unpaid tax bill or apply for an online payment plan.

Resumption of collection notices begins in 2024

In January, the IRS will begin sending automated collection notices and letters to individuals with tax debts prior to tax year 2022, and businesses, tax exempt organizations, trusts and estates with tax debts prior to 2023, with exceptions for those with existing debt in multiple years. These notices and letters were previously paused due to the pandemic and high inventories at the IRS but will gradually resume during the next several months. Current tax year 2022 individual and third quarter 2023 business taxpayers began receiving automated collection notices this fall as the IRS took steps to return to business as usual.

The pause in collection mailings affected only follow-up reminder mailings. The IRS did not suspend the mailing of the first, or initial, balance due notices for taxpayers such as the CP14 and CP161 notices.

The pause meant that some taxpayers who have long-standing tax debt have not received a formal letter or notice from the IRS in more than a year while some of this older collection work has been paused. To help the taxpayers in this category as the normal processes resume, the IRS will be issuing a special reminder letter to them starting next month.

This reminder letter will alert the taxpayer of the liability and will direct them to contact the IRS or make alternative arrangements to resolve the bill. Tax professionals and taxpayers will see these reminder letters in the form of letter LT38, Reminder, Notice Resumption.

This letter will remind taxpayers about their tax liability, giving them an opportunity to address the tax issue before the next round of letters are issued. After receiving the reminder mailing, these taxpayers with long-standing unresolved tax issues will receive the next notice, informing them of a more serious step in the tax collection process.

The IRS urges taxpayers to carefully read any letter or notice they receive before calling the IRS. There are also important resources available to get help for tax debt on IRS.gov.

The IRS will issue these balance due notices and letters in gradual stages next year to ensure taxpayers who have questions or need help are able to reach an IRS assistor. This will also provide additional time for tax professionals assisting taxpayers.

Here's what taxpayers should know about possible penalties and interest

Taxpayers who owe tax and don't file on time may be charged a failure-to-file penalty. This penalty is usually 5 percent of the tax owed for each month or part of a month that the tax return is late, up to 25 percent.

The failure-to-pay penalty applies if a taxpayer doesn't pay the taxes they report on their tax return by the due date or if the taxpayer doesn't pay the amount required to be shown on their return within 21 calendar days of receiving a notice demanding payment (or 10 business days if the amount is greater than $100,000).

The IRS is required by law to charge interest when a tax balance is not paid on time. Interest cannot be reduced due to reasonable cause. Interest is based on the amount of tax owed for each day it's not paid in full. The interest is compounded daily, so it is assessed on the previous day's balance plus the interest. Interest rates are determined every three months and can vary based on type of tax; for example, individual or business tax liabilities. More information is available on the interest page of IRS.gov.

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 +1-305-274-5811

Source : IRS      

IRS Ayuda a Contribuyentes Brindándoles Alivio de Multas en casi 5 Millones de Declaraciones de Impuestos de 2020 y 2021; Reinicio de Aviso de Cobro en 2024 Marca Fin de Pausa Relacionada con la Pandemia

Posted by Admin Posted on Dec 21 2023

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En un paso importante para ayudar a las personas que deben impuestos atrasados, el Servicio de Impuestos Internos anuncia un nuevo alivio de multas para aproximadamente 4.7 millones de personas, empresas y organizaciones exentas de impuestos a las que no se les enviaron avisos de recordatorio de cobro automatizados durante la pandemia.

El IRS proporcionará alrededor de mil millones de dólares en alivio de multas. La mayoría de los que reciben el alivio de la multa ganan menos de $400,000 al año.

Debido a los efectos sin precedentes de la pandemia de COVID-19, el IRS suspendió temporalmente el envío de recordatorios automáticos para pagar facturas de impuestos vencidas a partir de febrero de 2022. Estos recordatorios normalmente se habrían emitido como seguimiento después del aviso inicial. Aunque estos avisos recordatorios fueron suspendidos, la multa por falta de pago continúa acumulándose para los contribuyentes que no pagaron sus facturas en su totalidad en respuesta al aviso inicial de saldo adeudado.

Dada esta situación inusual, el IRS está tomando varias medidas antes de reanudar los avisos de cobro normales para los años tributarios 2020 y 2021 para ayudar a los contribuyentes con facturas de impuestos pendientes, incluidas algunas personas que no han recibido un aviso del IRS en más de un año.

Para ayudar a los contribuyentes a medida que se reanudan los procesos normales, el IRS emitirá un recordatorio especial a partir del próximo mes. La carta alertará al contribuyente sobre su responsabilidad, las maneras fáciles de pagar y el monto de su responsabilidad de pago, si se aplica. El IRS insta a los contribuyentes que no pueden pagar el saldo total adeudado a visitar IRS.gov/pagos para hacer arreglos para resolver su factura.

El IRS también está tomando medidas para eliminar las multas por falta de pago para los contribuyentes elegibles afectados por esta situación para los años tributarios 2020 y 2021. El IRS estima que 5 millones de declaraciones de impuestos, presentadas por 4.7 millones de personas, empresas, fideicomisos, patrimonios y organizaciones exentas de impuestos, son elegibles para el alivio de la multa. Esto representa mil millones de dólares en ahorros para los contribuyentes, o alrededor de $206 por declaración.

Como primer paso, el IRS ha ajustado las cuentas individuales elegibles y seguirá con ajustes a las cuentas comerciales desde finales de diciembre hasta principios de enero, y luego a los fideicomisos, patrimonios y organizaciones exentas de impuestos desde finales de febrero hasta principios de marzo de 2024. Casi el 70 por ciento de los contribuyentes individuales que reciben alivio de multas tienen ingresos inferiores a $100,000 por año.

El IRS está publicando el Aviso 2024-7 (en inglés) que explica cómo la agencia está brindando alivio de multas por falta de pago a los contribuyentes elegibles afectados por la pandemia de COVID-19 para ayudarlos a cumplir con sus obligaciones tributarias federales.

"Mientras el IRS se prepara para regresar a los envíos postales de cobro normales, nos preocupa que los contribuyentes que no han tenido noticias nuestras durante un tiempo reciban de repente una factura alta de impuestos. El IRS debería estar atento a los contribuyentes, y esta reducción de multas es un enfoque de sentido común para ayudar a las personas en esta situación", dijo el comisionado del IRS, Danny Werfel. "Estamos tomando otras medidas para ayudar a los contribuyentes con facturas vencidas y tenemos opciones para ayudar a las personas que tienen dificultades para pagar".

Esta exención de multas es automática. Los contribuyentes elegibles no necesitan realizar ninguna acción para obtenerla. Los contribuyentes elegibles que ya pagaron su saldo total también se beneficiarán del alivio; si un contribuyente ya pagó multas por falta de pago relacionadas con sus años tributarios 2020 y 2021, el IRS emitirá un reembolso o acreditará el pago para otra obligación tributaria pendiente.

El alivio de la multa solo se aplica a los contribuyentes elegibles con impuestos evaluados por debajo de $100,000. Los contribuyentes elegibles incluyen individuos, empresas, fideicomisos, sucesiones y organizaciones exentas de impuestos, y sucesiones que presentaron ciertas declaraciones de impuestos de las series 1040, 1120, 1041 y 990-T para los años tributarios 2020 o 2021, con un impuesto evaluado de menos de $100,000, y que estaban en el proceso de aviso de cobro del IRS, o recibieron un aviso de saldo inicial adeudado entre el 5 de febrero de 2022 y el 7 de diciembre de 2023. El IRS señala que el límite de $100,000 se aplica por separado a cada declaración y cada entidad. La multa por falta de pago se reanudará el 1ro de abril de 2024 para los contribuyentes elegibles para recibir alivio.

Los contribuyentes que no son elegibles para este alivio automático también tienen opciones. Pueden usar los procedimientos existentes de alivio de multas, como solicitar alivio bajo los criterios de causa razonable o el programa de reducción de multa impuesta por primera vez. Visite IRS.gov/aliviodemulta para obtener más detalles.

Si el alivio automático resulta en un reembolso o crédito, los contribuyentes individuales y comerciales podrán verlo consultando su registro tributario. El IRS enviará la primera ronda de reembolsos desde ahora hasta enero de 2024. Si un contribuyente no recibe un reembolso, se puede enviar un recordatorio especial con su saldo actualizado a partir de principios de 2024. Los contribuyentes que tengan preguntas acerca del alivio de multas pueden comunicarse con el IRS después del 31 de marzo de 2024.

Ayuda para los contribuyentes que necesitan asistencia

El IRS les recuerda a los contribuyentes que existen varias opciones de pago y herramientas en línea que pueden ayudar a los contribuyentes con deudas tributarias pendientes, ya sea una nueva factura de impuestos o una deuda tributaria de larga duración por una declaración no presentada.

"El IRS quiere ayudar a los contribuyentes y brindarles opciones fáciles para lidiar con las facturas de impuestos pendientes y evitar intereses y multas adicionales", dijo Werfel. "Las personas que reciben estos avisos deben recordar que con frecuencia se pasan por alto opciones que pueden ayudarlos a establecer un plan de pago automático o ponerse al día con sus declaraciones de impuestos. Realizar mejoras adicionales en el área de recaudación será un enfoque importante para el IRS en el futuro a medida que continuamos y aceleramos nuestro trabajo de transformación".

Gracias a la financiación de la Ley de Reducción de la Inflación, ahora es más fácil para los contribuyentes obtener asistencia con las facturas de impuestos con nuevas herramientas de autoayuda, la herramienta de carga de documentos (en inglés) del IRS, un servicio telefónico mejorado con funciones de devolución de llamadas y la adición de robots que pueden responder preguntas sencillas, configurar crear o modificar un plan de pago y solicitar una transcripción. El IRS también alienta a los contribuyentes a obtener una cuenta en línea del IRS, donde pueden ver información sobre una factura de impuestos pendiente o solicitar un plan de pago en línea.

La reanudación de los avisos de cobro comienza en 2024

En enero, el IRS comenzará a enviar cartas y avisos de cobro automatizados a personas con deudas tributarias anteriores al año tributario 2022, y a empresas, organizaciones exentas de impuestos, fideicomisos y patrimonios con deudas tributarias anteriores a 2023, con excepciones para aquellos con deudas existentes en varios años. Estos avisos y cartas se suspendieron anteriormente debido a la pandemia y los altos inventarios en el IRS, pero se reanudarán gradualmente durante los próximos meses. Los contribuyentes individuales del año tributario actual 2022 y las empresas del tercer trimestre de 2023 comenzaron a recibir avisos de cobro automatizados este otoño a medida que el IRS tomó medidas para volver a la normalidad.

La pausa en los avisos de cobro afectó únicamente a los envíos de recordatorios de seguimiento. El IRS no suspendió el envío por correo de los primeros avisos de saldo adeudado a los contribuyentes, como los avisos CP14 y CP161.

La pausa significó que algunos contribuyentes que tienen deudas tributarias de larga duración no han recibido una carta o notificación formal del IRS en más de un año, mientras que parte de este trabajo de recaudación más antiguo se ha detenido. Para ayudar a los contribuyentes en esta categoría a medida que se reanudan los procesos normales, el IRS les enviará una carta especial de recordatorio a partir del próximo mes.

Este recordatorio alertará al contribuyente sobre su responsabilidad y le indicará que se comunique con el IRS o haga arreglos alternativos para resolver la factura. Los profesionales de impuestos y los contribuyentes verán estos recordatorios en forma de carta LT38, Recordatorio, reanudación de aviso.

Esta carta recordará a los contribuyentes su obligación tributaria, brindándoles la oportunidad de abordar el asunto tributario antes de que se emita la siguiente ronda de cartas. Después de recibir el recordatorio por correo, estos contribuyentes con problemas tributarios no resueltos desde hace mucho tiempo recibirán el siguiente aviso, informándoles de un paso más serio en el proceso de recaudación de impuestos.

El IRS insta a los contribuyentes a leer detenidamente cualquier carta o aviso que reciban antes de llamar al IRS. También hay recursos importantes disponibles para obtener ayuda con la deuda tributaria (en inglés) en IRS.gov.

El IRS emitirá estos avisos y cartas de saldo adeudado en etapas graduales el próximo año para garantizar que los contribuyentes que tengan preguntas o necesiten ayuda puedan comunicarse con un asistente del IRS. Esto también proporcionará tiempo adicional para que los profesionales de impuestos ayuden a los contribuyentes.

Esto es lo que los contribuyentes deben saber acerca de posibles multas e intereses

A los contribuyentes que adeudan impuestos y no presentan la declaración a tiempo se les puede cobrar una multa por no presentar la declaración. Esta multa suele ser del 5 por ciento del impuesto adeudado por cada mes o parte de un mes de retraso en la declaración de impuestos, hasta un 25 por ciento.

La multa por falta de pago se aplica si un contribuyente no paga los impuestos que declara en su declaración de impuestos antes de la fecha de vencimiento o si el contribuyente no paga el monto requerido que debe mostrarse en su declaración dentro de los 21 días calendario posteriores a la recepción de un aviso exigiendo el pago (o 10 días laborables si el monto es mayor a $100,000).

El IRS está obligado por ley a cobrar intereses cuando un saldo de impuestos no se paga a tiempo. Los intereses no pueden reducirse por causa razonable. El interés se basa en el monto del impuesto adeudado por cada día que no se paga en su totalidad. El interés se capitaliza diariamente, por lo que se calcula sobre el saldo del día anterior más el interés. Las tasas de interés se determinan cada tres meses y pueden variar según el tipo de impuesto; por ejemplo, obligaciones tributarias individuales o comerciales. Hay más información disponible en la página de intereses de IRS.gov.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de las transacciones inmobiliarias o los estados financieros en los EE. UU., llámenos al +1-305-274-5811

Fuente : IRS      

IRS Extends Relief to Farmers and Ranchers in 49 States, Other Areas Impacted by Drought; More Time to Replace Livestock

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service reminded eligible farmers and ranchers forced to sell livestock due to drought may have an extended period of time in which to replace the livestock and defer tax on any gains from the forced sales.

The IRS posted Notice 2023-67 listing the applicable areas, a county or other jurisdiction, designated as eligible for federal assistance on IRS.gov. This includes 49 states, the District of Columbia, two U.S. Territories and two independent nations in a Compact of Free Association with the United States.

The relief generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes. Sales of other livestock, such as those raised for slaughter or held for sporting purposes, or poultry, are not eligible.

The sales must be solely due to drought, causing an area to be designated as eligible for federal assistance. Livestock generally must be replaced within a four-year period, instead of the usual two-year period. The IRS is authorized to further extend this replacement period if the drought continues.

The one-year extension, announced in the notice, gives eligible farmers and ranchers until the end of their first tax year after the first drought-free year to replace the sold livestock. Details, including an example of how this provision works, can be found in Notice 2006-82, available on IRS.gov.

The IRS provides this extension to eligible farmers and ranchers that qualified for the four-year replacement period, if the applicable region is listed as suffering exceptional, extreme or severe drought conditions during any week between Sept. 1, 2022, and Aug. 31, 2023. This determination is made by the National Drought Mitigation Center.

As a result, eligible farmers and ranchers whose drought-sale replacement period was scheduled to expire on Dec. 31, 2023, in most cases, now have until the end of their next tax year to replace the sold livestock. Because the normal drought-sale replacement period is four years, this extension impacts drought sales that occurred during 2019. The replacement periods for some drought sales before 2019 are also affected due to previous drought-related extensions affecting some of these localities.

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 +1-305-274-5811.

Source : IRS      

Contribuyentes Impactados por huracán Lee en Maine y Massachusetts son Elegibles para alivio tributario; varios plazos se extienden hasta el 15 de febrero

Posted by Admin Posted on Dec 21 2023

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El Servicio de Impuestos Internos anunció alivio tributario para las personas y empresas afectadas por el Lee en cualquier parte de Maine y Massachusetts. Estos contribuyentes ahora tienen hasta el 15 de febrero de 2024 para presentar varias declaraciones de impuestos federales individuales y comerciales y realizar pagos de impuestos.

El IRS está ofreciendo alivio a cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA, por sus siglas en inglés). Todos los 16 condados de Maine y todos los 14 condados en Massachusetts son elegibles. Las personas y hogares que residen o tienen un negocio en estos condados son elegibles para alivio tributario. La lista actual de localidades elegibles siempre está disponible en la página de Alivio en situaciones de desastre en IRS.gov.

Alivio de presentación y pago

El alivio tributario pospone varios plazos de presentación y pago de impuestos que ocurrieron a partir del 15 de septiembre de 2023, hasta el 15 de febrero de 2024 (periodo de extensión). Como resultado, las personas y empresas afectadas tendrán hasta el 15 de febrero de 2024 para presentar declaraciones y pagar los impuestos que originalmente adeudaban durante este período.

Esto significa, por ejemplo, que el plazo del 15 de febrero de 2024 ahora aplica a:

  • Individuos que tenían una extensión válida para presentar su declaración de 2022 que vencía el 16 de octubre de 2023. Sin embargo, el IRS señaló que debido a que los pagos de impuestos relacionados con estas declaraciones de 2022 vencían el 18 de abril de 2023, esos pagos no elegibles para este alivio. Esto brinda más tiempo para declarar, no para pagar.
  • Pagos trimestrales de impuestos estimados que normalmente vencen el 15 de septiembre de 2023 y el 16 de enero de 2024.
  • Las declaraciones trimestrales de impuestos sobre la nómina y el consumo que normalmente vencen el 31 de octubre de 2023 y el 31 de enero de 2024.
  • Asociaciones de año calendario y corporaciones S cuyas extensiones de 2022 vencen el 15 de septiembre de 2023.
  • Corporaciones de año calendario cuyas extensiones de 2022 vencen el 16 de octubre de 2023.
  • Organizaciones exentas de impuestos de año calendario cuyas prórrogas vencen el 15 de noviembre de 2023.

Además, las multas por no realizar depósitos de impuestos sobre la nómina y el consumo adeudados a partir del 15 de septiembre de 2023 y antes del 2 de octubre de 2023 se reducirán siempre que los depósitos se realicen antes del 2 de octubre de 2023.

La página de Ayuda y alivio por emergencia en casos de desastre para las personas y los negocios tiene detalles acerca de otras declaraciones, pagos y acciones relacionadas con impuestos que son elegibles para el tiempo adicional.

El IRS proporciona automáticamente la presentación y el alivio de multas a cualquier contribuyente con una dirección registrada con el IRS ubicada en el área del desastre. Por lo tanto, los contribuyentes no necesitan comunicarse con la agencia para obtener este alivio.

Es posible que un contribuyente afectado no tenga una dirección ubicada en el área del desastre registrada con el IRS, por ejemplo, porque se mudó al área del desastre después de presentar su declaración. En este tipo de circunstancias únicas, el contribuyente afectado podría recibir un aviso de multa por presentación tardía o pago atrasado del IRS por el período de aplazamiento. El contribuyente debe llamar al número que figura en el aviso para que se elimine la multa.

Adicionalmente, 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. Contribuyentes elegibles para el alivio que viven fuera del área de desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudan en las actividades de socorro que están afiliados a un gobierno reconocido como una organización filantrópica.

Alivio tributario adicional

Las personas y empresas en un área de desastre declarada por el gobierno federal que sufrieron pérdidas relacionadas con el desastre no aseguradas o no reembolsadas pueden optar por reclamarlas en la declaración del año en que ocurrió la pérdida (en este caso, la declaración de 2023 que normalmente se presenta el próximo año), o la declaración del año anterior (2022). Los contribuyentes tienen tiempo adicional, hasta seis meses después de la fecha de vencimiento de la declaración de impuestos federales del contribuyente para el año del desastre (sin tener en cuenta cualquier extensión del tiempo para presentar) para hacer la elección. Deben asegurarse de escribir el número de declaración de FEMA – 3598-EM para Maine o 3599-EM para Massachusetts − en cualquier declaración que reclama una pérdida. Consulte la Publicación 547 (SP), Hechos Fortuitos, Desastres y Robos para detalles.

Los pagos calificados de ayuda en casos de desastre generalmente se excluyen del ingreso bruto. En general, esto significa que los contribuyentes afectados pueden excluir de sus ingresos brutos las cantidades recibidas de una agencia gubernamental para gastos personales, familiares, de manutención o funerarios razonables y necesarios, así como para la reparación o rehabilitación de su vivienda, o para la reparación o reposición de su contenido. Ver la Publicación 525 (en inglés) para detalles. 

Los pagos calificados de ayuda en casos de desastre generalmente se excluyen del ingreso bruto. En general, esto significa que los contribuyentes afectados pueden excluir de sus ingresos brutos las cantidades recibidas de una agencia gubernamental para gastos personales, familiares, de manutención o funerarios razonables y necesarios, así como para la reparación o rehabilitación de su vivienda, o para la reparación o reposición de su contenido. Ver la Publicación 525 (en inglés) para detalles.

Es posible que haya alivio adicional disponible para los contribuyentes afectados que participen en un plan de jubilación o un acuerdo de jubilación individual (IRA). Por ejemplo, un contribuyente puede ser elegible para recibir una distribución especial por desastre que no estaría sujeta al impuesto adicional de distribución anticipada del 10% y le permite al contribuyente distribuir los ingresos en tres años. Los contribuyentes también pueden ser elegibles para realizar un retiro por dificultades económicas. Cada plan o IRA tiene reglas y pautas específicas que deben seguir sus participantes.

El IRS puede brindar ayuda adicional en casos de desastre en el futuro.

El alivio tributario es parte de una respuesta federal coordinada a causa de los daños por estas tormentas y se basa en las evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de la recuperación ante desastres, visite DisasterAssistance.gov

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

Taxpayers Impacted by Hurricane Lee in Maine and Massachusetts qualify for tax relief

Posted by Admin Posted on Dec 21 2023

https://secure.emochila.com/swserve/siteAssets/site9268/files/Tax_payments_for_storm_Lee_man-5799574_750x356.jpgThe Internal Revenue Service announced tax relief for individuals and businesses affected by Hurricane Lee anywhere in Maine and Massachusetts. These taxpayers now have until Feb. 15, 2024, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). All 16 counties in Maine and all 14 counties in Massachusetts qualify. Individuals and households that reside or have a business in these counties qualify for tax relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Filing and Payment Relief

The tax relief postpones various tax filing and payment deadlines that occurred from Sept. 15, 2023, through Feb. 15, 2024 (postponement period). As a result, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the Feb. 15, 2024, deadline will now apply to:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. So, this is more time to file not to pay.
  • Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
  • Calendar-year partnerships and S corporations whose 2022 extensions run out on Sept. 15, 2023.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
  • Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.

In addition, penalties for the failure to make payroll and excise tax deposits due on or after Sept. 15, 2023, and before Oct. 2, 2023, will be abated as long as the deposits are made by Oct. 2, 2023.

The IRS disaster assistance and emergency relief for individuals and businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional Tax Relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. Be sure to write the FEMA declaration number – 3598-EM for Maine or 3599-EM for Massachusetts − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by this storm and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov

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 +1-305-274-5811.

Source: IRS      

Taxpayers Impacted by Seawater Intrusion in Parts of Louisiana Qualify for Tax Relief: Various Deadlines Postponed to Feb.15

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service announced tax relief for individuals and businesses affected by seawater intrusion in parts of Louisiana. These taxpayers now have until Feb. 15, 2024, to file various federal individual and business tax returns and make tax payments.

Following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), individuals and households affected by the seawater intrusion that reside or have a business in Jefferson, Orleans, Plaquemines and St. Bernard parishes qualify for tax relief. The current list of eligible localities is always available and updated on the disaster relief page on IRS.gov.

Filing and payment relief

The tax relief postpones various tax filing and payment deadlines that occurred from Sept. 20, 2023, through Feb. 15, 2024 (postponement period). As a result, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the Feb. 15, 2024, deadline will now apply to:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. So, this is more time to file, not to pay.
  • Quarterly estimated income tax payments normally due on Jan. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
  • Calendar-year, tax-exempt organizations whose extensions run out on Nov. 15, 2023.

In addition, penalties for the failure to make payroll and excise tax deposits due on or after Sept. 20, 2023, and before Oct. 5, 2023, will be abated as long as the deposits are made by Oct. 5, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional tax relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. Be sure to write the FEMA declaration number – 3600-EM − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts,  for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by this disaster and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov

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 +1-305-274-5811.

Source : IRS      

Do You Run a Business from Home?

Posted by Admin Posted on Dec 14 2023

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The pandemic changed the landscape of work for a lot of people, including the numerous business owners who began running their businesses from their homes. Many are still working from their home offices, whether full-time or on a hybrid basis. If you’re self-employed and run your business from home, or perform certain functions there, you might be able to claim deductions for home office expenses against your business income.

How to qualify

In general, self-employed taxpayers qualify for home office deductions if part of their home is used “regularly and exclusively” as the principal place of business.

If your home isn’t your principal place of business, you may still be able to deduct home office expenses if:

1. You physically meet with patients, clients or customers on your premises, or

2. You use a storage area in your home (or a separate free-standing structure, such as a garage) exclusively and regularly for business.

Keep in mind the requirement that the space be used exclusively for business. For example, if your home office is also a guest bedroom, you can’t deduct the entire space as a home office expense. But if you use the desk area of the room exclusively for business, you can deduct that portion of the room, as long as you otherwise qualify.

Expenses you can deduct

Many eligible taxpayers deduct actual expenses when they claim home office deductions. Deductible home office expenses may include:

  • Direct expenses, such as the cost of painting and carpeting a room used exclusively for business,
  • A proportionate share of indirect expenses, including mortgage interest, rent, property taxes, utilities, repairs and insurance, and
  • Depreciation.

But keeping track of actual expenses can take time, and it requires organized recordkeeping.

The simpler method

Fortunately, there’s a simplified method: You can deduct $5 for each square foot of home office space, up to $1,500.

The cap can make the simplified method less valuable for larger home office spaces. Even for small spaces, taxpayers may qualify for bigger deductions using the actual expense method. So tracking your actual expenses can be worth it.

When claiming home office deductions, you’re not stuck with a particular method. For instance, you might have chosen the actual expense method when you filed your 2022 return, but then use the simplified method when you file your 2023 return next year, and the following year switch back to the actual expense method. The choice is yours.

More considerations

The amount of your deductions is subject to limitations based on the income attributable to your use of the office. Other rules and limitations may apply. But eligible home office expenses that can’t be deducted because of these limitations can be carried forward and may be able to be deducted in later years.

Also be aware that, if you sell a home on which you claimed home office deductions, there may be tax implications. Contact us for more information.

A valuable deduction

You might be wondering why only business owners and the self-employed have been addressed here. Unfortunately, the Tax Cuts and Jobs Act suspended home office deductions from 2018 through 2025 for employees, even if you’re currently working from home because your employer doesn’t provide office space.

But the home office deduction can be valuable to those who’re eligible for it. We can help you determine if you’re eligible and the best method for claiming the deduction in your situation.

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 +1-305-274-5811

Source : Thompson Reuters      

El IRS Insta a las Personas Elegibles que No Tienen un Requisito de Presentación de 2020 y 2021 a Reclamar el Crédito de Reembolso Antes de que se Acabe el Tiempo

Posted by Admin Posted on Dec 14 2023

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El Servicio de Impuestos Internos alienta a aquellos que puedan tener derecho al Crédito de recuperación de reembolso a presentar una declaración de impuestos y reclamar su dinero antes de que sea demasiado tarde.

La gran mayoría de las personas elegibles para los Pagos de impacto económico relacionados con el alivio tributario por coronavirus ya los han recibido o reclamado a través del Crédito de recuperación de reembolso. Las fechas límite para presentar una declaración y reclamar los créditos de 2020 y 2021 son el 17 de mayo de 2024 y el 15 de abril de 2025, respectivamente.

El Crédito de recuperación de reembolso es un crédito reembolsable para aquellos que no recibieron uno o más pagos de impacto económico. Los Pagos de impacto económico, también conocidos como pagos de estímulo, se emitieron en 2020 y 2021. El IRS estima que algunas personas y familias aún son elegibles para los pagos. Sin embargo, los contribuyentes primero deben presentar una declaración de impuestos para hacer su reclamo, incluso si tenían pocos o ningún ingreso de un trabajo, negocio u otra fuente.

¿Quién es elegible?

Por lo general, para reclamar el Crédito de recuperación de reembolso de 2020, una persona debe:

  • Haber sido ciudadano estadounidense o extranjero residente de EE. UU. en 2020.
  • No haber sido dependiente de otro contribuyente para el año 2020.
  • Tener un número de Seguro Social emitido antes de la fecha de vencimiento de la declaración de impuestos que sea válido para trabajar en los Estados Unidos.

Por lo general, para reclamar el Crédito de recuperación de reembolso de 2021, una persona debe:

  • Haber sido ciudadano estadounidense o extranjero residente de EE. UU. en 2021.
  • No haber sido dependiente de otro contribuyente para el año 2021.
  • Tener un número de Seguro Social emitido antes de la fecha de vencimiento de la declaración de impuestos, reclamar a un dependiente que tenga un número de Seguro Social emitido antes de la fecha de vencimiento de la declaración de impuestos, o reclamar a un dependiente con un Número de Identificación del Contribuyente de Adopción.

El Crédito de recuperación de reembolso de 2020 se puede reclamar para alguien que falleció en 2020. El Crédito de recuperación de reembolso de 2020 y 2021 se pueden reclamar para alguien que falleció en 2021 o después.

Plazos de presentación si aún no ha presentado una declaración de impuestos

Para reclamar:

  • Crédito de recuperación de reembolso de 2020, presente una declaración de impuestos antes del 17 de mayo de 2024.
  • Crédito de recuperación de reembolso de 2021, presente una declaración de impuestos antes del 15 de abril de 2025.

Obtén ayuda gratuita

Los contribuyentes calificados también pueden encontrar ayuda personalizada gratuita para la preparación de impuestos en todo el país a través de los programas de Ayuda Voluntaria a los Contribuyentes del Impuesto sobre el Ingreso y el Programa de Asesoramiento Tributario para los Ancianos. Utilice la herramienta de localización VITA (en inglés) o llame al 800-906-9887 para localizar el sitio más cercano.

Esto es parte de un esfuerzo continuo del IRS para alentar a las personas que normalmente no están obligadas a presentar una declaración a investigar los posibles beneficios disponibles para ellos bajo la ley tributaria. Cada año, las personas pueden no presentar una declaración de impuestos, incluso cuando pueden tener derecho a créditos tributarios y un reembolso. El IRS recuerda a los contribuyentes que no hay multa por reclamar un reembolso en una declaración de impuestos presentada después de su fecha de vencimiento. La forma más rápida y fácil de obtener un reembolso es elegir el depósito directo.

Las personas también pueden usar Su cuenta en línea del IRS para ver si recibieron algún pago de impacto económico y los montos totales.

Cualquier Crédito de recuperación de reembolso recibido no se puede contar como ingreso al determinar la capacidad de alguien para ser elegible para beneficios federales como Seguridad de Ingreso Suplementario (SSI), Programa de Asistencia Nutricional Suplementaria (SNAP), Asistencia Temporal para Familias Necesitadas (TANF) y el Programa Especial de Nutrición Suplementaria para Mujeres, Bebés y Niños (WIC). Reclamar el crédito tampoco tiene ningún efecto sobre el estatus migratorio de una persona o su capacidad para obtener una tarjeta verde o beneficios de inmigración.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

Treasury and IRS Issue Proposed Regulations Defining Energy Property

Posted by Admin Posted on Dec 14 2023

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The Department of the Treasury and the Internal Revenue Service today issued proposed regulations updating rules for the investment tax credit under section 48 (ITC) that have been unchanged since 1987. The proposed rules update the types of energy properties eligible for the section 48 ITC, reflecting changes in the energy industry, technological advances, and updates from the Inflation Reduction Act of 2022 (IRA).

Energy industry participants will appreciate that the proposed regulations provide definitions of energy properties for which the ITC was available before the IRA. These include, but are not limited to, solar process heat, fiber-optic solar property, combined heat and power system property, qualified fuel cell property, and qualified microturbine property.

These proposed regulations also address technologies that were added to the ITC as energy property by the IRA, including electrochromic glass, energy storage technology, microgrid controllers, and biogas property. Importantly, the IRA added new provisions to the ITC to allow smaller projects to include the cost of certain types of interconnection property in their credit amount.

Additionally, the proposed regulations provide general rules for the ITC including the application of the "80/20" Rule to retrofitted energy property, dual use property, and issues related to multiple owners of an energy property.

Additional information about guidance issued under the IRA is available at Inflation Reduction Act of 2022.

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 +1-305-274-5811

Source : IRS     

Treasury, IRS Propose Regulations Implementing Disallowance of Deductions for Certain Conservation Easement Contributions by Parterships, S Corporations

Posted by Admin Posted on Dec 14 2023

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The Department of the Treasury and the Internal Revenue Service issued proposed regulations that provide guidance under a new section of the law that disallows deductions for certain charitable conservation contributions by partnerships and other pass-through entities. Syndicated conservation easements have been included in the IRS' annual list of Dirty Dozen tax schemes for many years.

The SECURE 2.0 Act of 2022 added new subsections to the part of the tax law that provides rules for deductions for charitable contributions under Internal Revenue Code section 170.

"The IRS is focusing its new compliance efforts on those who evade taxes through complex partnership structures and overvalued conservation easement contributions. The regulations issued today will stem the tide of certain syndicated conservation easements that are nothing more than retail tax shelters, while protecting the integrity of legitimate conservation easements and helping law-abiding taxpayers more easily meet their obligations," said IRS Commissioner Danny Werfel.

Generally, these regulations affect partnerships and S corporations that make conservation contributions and upper-tier partnerships, upper-tier S corporations, partners and S corporation shareholders that are allocated a portion of these contributions. The regulations provide definitions, explanations, computational guidance and examples of the new law, which disallows deductions if the amount of the contribution is more than two and a half times the sum of each partner's or shareholder's relevant basis in the partnership or S corporation.

The proposed regulations also provide guidance on the statutory exceptions to the new disallowance rule, particularly the exception for family partnerships and S corporations and the exception for contributions made outside a three-year holding period. The proposed regulations also provide updates concerning substantiation and reporting rules for certain charitable contributions.

The commitment to making sure that partnerships, other pass-through entities and their owners comply with the tax law is a significant part of the agency's strategic plan.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : IRS      

Individual Retirement Accounts Can Be Important Tools in Retirement Planning

Posted by Admin Posted on Dec 07 2023

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It is never too early to begin planning for retirement. Individual retirement accounts provide tax incentives for people to make investments that can provide financial security when they retire. These accounts can be with a bank or other financial institution, a life insurance company, mutual fund or stockbroker.

A traditional IRA is the most common type of individual retirement account. IRAs let earnings grow tax deferred. Individuals pay taxes on investment gains only when they make withdrawals. Depositors may be able to claim a deduction on their individual federal income tax return for the amount they contributed to an IRA.

What to consider before investing in a traditional IRA

  • A traditional IRA is a tax-advantaged personal savings plan where contributions may be tax deductible.
  • Generally, the money in a traditional IRA isn't taxed until it's withdrawn.
  • There are annual limits to contributions depending on the person's age and the type of IRA.
  • When planning when to withdraw money from an IRA, taxpayers should know that:
    • They may face a 10% penalty and a tax bill if they withdraw money before age 59½ unless they qualify for an exception.
    • Usually, they must start taking withdrawals from their IRA when they reach age 73 (age 72 if they turned 72 in 2022). For tax years 2019 and earlier, that age was 70½.
    • Special distribution rules apply for IRA beneficiaries.

Differences between a Roth and a traditional IRA

A Roth IRA is another tax-advantaged personal savings plan with many of the same rules as a traditional IRA, but there are exceptions:

  • A taxpayer can't deduct contributions to a Roth IRA.
  • Qualified distributions are tax free.
  • Roth IRAs don't require withdrawals until after the death of the owner.

Other types of IRAs

  • Simplified Employee Pension – A SEP IRA is set up by an employer. The employer makes contributions directly to an IRA set up for each employee.
  • Savings Incentive Match Plan for Employees – A SIMPLE IRA allows the employer and employees to contribute to an IRA set up for each employee. It is suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
  • Payroll Deduction IRA – Employees set up a traditional or a Roth IRA with a financial institution and authorize a payroll deduction agreement with their employer.
  • Rollover IRA – The IRA owner receives a payment from their retirement plan and deposits it into an IRA within 60 days.

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 +1-305-274-5811.

Source : IRS      

Tip to Help Taxpayers Make Sure their Donations Go to Legitimate Charities

Posted by Admin Posted on Dec 07 2023

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When disaster strikes, Americans can always be counted on to help. That help comes in countless ways, but often the easiest way to help is by donating money to charities.

Sadly, criminals are just as likely to answer the call after a disaster or emergency as the millions of people who open their wallets. Scammers solicit donations to fake charities and can pose as employees of legitimate charities or federal agencies to dupe disaster victims trying to get disaster relief.

Although some legitimate charities do contact people out of the blue, people should always be suspicious of unsolicited contact.

Taxpayers donating money should keep a few things in mind:

  • Use the IRS Tax Exempt Organization Search tool to find or verify qualified charities. Donations to these real charities may be tax deductible.
  • Research a charity before sending a donation to confirm that the charity is real and to know whether the donation is tax deductible.
  • Always get a receipt and keep a record of the donation.
  • Review bank and credit card statements closely to make sure donation amounts are accurate.

Keep scammers' tricks in mind:

  • Legitimate charities do not ask for gift cards, cash, or wire transfers.
  • Scammers may claim to work for the IRS or another government agency.
  • Thieves may pose as a representative of a legitimate charity to ask for money or private information from well-intentioned taxpayers.
  • Scammers can change their caller ID to make it appear they are a legitimate organization calling from a legitimate phone number.
  • Scammers make vague and sentimental claims but give no specifics about how your donation will be used.
  • Scammers set up bogus websites using names that sound like real charities.
  • Bogus organizations often claim a donation is tax deductible when it's not.

Disaster victims should know:

Disaster victims can call the IRS disaster assistance line at 866-562-5227. IRS representatives will answer questions about tax relief or disaster-related tax issues.

Donating to a charity is a great way to help others after a disaster or emergency. If taxpayers suspect a scam or fraud, they can report it to The Federal Trade Commission

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 +1-305-274-5811

Source : IRS      

IRS Provide Tax Inflation Adjustments for Tax Year 2024

Posted by Admin Posted on Dec 07 2023

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The Internal Revenue Service announced the annual inflation adjustments for more than 60 tax provisions for tax year 2024, including the tax rate schedules and other tax changes. Revenue Procedure 2023-34 provides detailed information about these annual adjustments.

New for 2024

 

Starting in calendar year 2023, the Inflation Reduction Act reinstates the Hazardous Substance Superfund financing rate for crude oil received at U.S. refineries, and petroleum products that entered into the United States for consumption, use, or warehousing. The tax rate is the sum of the Hazardous Substance Superfund rate and the Oil Spill Liability Trust Fund financing rate. For calendar years beginning in 2024, the Hazardous Substance Superfund financing rate is adjusted for inflation. For calendar year 2024 crude oil or petroleum products entered after

Dec. 31, 2016, will have a tax rate of $0.26 cents a barrel.

Highlights of changes in Revenue Procedure 2023-34:

The tax year 2024 adjustments described below generally apply to income tax returns filed in 2025. The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:

  • The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.
     
  • Marginal rates: For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).

The other rates are:

35% for incomes over $243,725 ($487,450 for married couples filing jointly)
32% for incomes over $191,950 ($383,900 for married couples filing jointly)
24% for incomes over $100,525 ($201,050 for married couples filing jointly)
22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)

The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
 

  • The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700). For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).
     
  • The tax year 2024 maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, an increase of from $7,430 for tax year 2023. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
     
  • For tax year 2024, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $315, an increase of $15 from the limit for 2023.
     
  • For the taxable years beginning in 2024, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,200. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $640, an increase of $30 from taxable years beginning in 2023.
     
  • For tax year 2024, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,800, an increase of $150 from tax year 2023, but not more than $4,150, an increase of $200 from tax year 2023. For self-only coverage, the maximum out-of-pocket expense amount is $5,550, an increase of $250 from 2023. For tax year 2024, for family coverage, the annual deductible is not less than $5,550, an increase of $200 from tax year 2023; however, the deductible cannot be more than $8,350, an increase of $450 versus the limit for tax year 2023. For family coverage, the out-of-pocket expense limit is $10,200 for tax year 2024, an increase of $550 from tax year 2023.
     
  • For tax year 2024, the foreign earned income exclusion is $126,500, increased from $120,000 for tax year 2023.
     
  • Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.
     
  • The annual exclusion for gifts increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.
           
  • The maximum credit allowed for adoptions for tax year 2024 is the amount of qualified adoption expenses up to $16,810, increased from $15,950 for 2023.
  • Items unaffected by indexing:

    By statute, certain items that were indexed for inflation in the past are currently not adjusted.

  • The personal exemption for tax year 2024 remains at 0, as it was for 2023. This elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
     
  • For 2024, as in 2023, 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
     
  • The modified adjusted gross income amount used by taxpayers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after Dec. 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint 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 +1-305-274-5811.17 SW 88th ST, Mi1773

      

    Source : IRS 

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IRS Supports International Efforts to Fight Fraud during Charity Fraud Awareness Week

Posted by Admin Posted on Dec 07 2023

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On Giving Tuesday and as part of Charity Fraud Awareness Week, the Internal Revenue Service highlighted its continued support of international efforts to fight fraud and charity scams.

The IRS supports this effort as part of its ongoing commitment to fight fraud against charities, businesses and individuals. It's estimated that charitable organizations lose 5% of their revenue each year to fraud, according to the Fraud Advisory Panel, a UK-based organization that leads the effort in organizing Charity Fraud Awareness Week, which runs from Nov. 27-Dec. 1.

Charities, regulators, agencies, law enforcement and other not-for-profit stakeholders around the world work together to raise awareness about fraud and cybercrime that affect charities. During this week of awareness, supporters actively discuss fraud and cybercrime, share best practices and offer helpful resources.

"We thank the Fraud Advisory Panel for the important work that goes into Charity Fraud Awareness Week and for reminding donors to remain vigilant," said IRS Director of Exempt Organizations and Government Entities Robert Malone. "Unfortunately, charity scammers look for opportunities to take advantage of situations, such as natural disasters, when exempt organizations are making an effort to help. Donors and charitable organizations alike should remain vigilant to protect their assets from fraudsters. I urge donors to verify a charity's tax-exempt status at Tax Exempt Organization Search before donating goods, services or money."

Be aware of fake charities

In addition to cybercrime targeting charities, criminals also create fake charities. To learn more about how scammers use fake charities, read the IRS' Dirty Dozen tax scams for 2023. Taxpayers should verify legitimate and qualified charities using the Tax Exempt Organization Search tool. Donors should never feel pressured to give immediately.

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 +1-305-274-5811.

Source : IRS     

IRS Launches New Initiatives Using Inflation Reduction Act Funding to Ensure Large Corporations Pay Taxes Owed; Continues to Improve Service and Modernize Technology with Launch of Business Tax Account

Posted by Admin Posted on Dec 01 2023

IRS Launches New Initiatives Using Inflation Reduction Act Funding to Ensure Large Corporations Pay Taxes Owed; Continues to Improve Service and Modernize Technology with Launch of Business Tax Account

Following a dramatically improved 2023 filing season thanks to Inflation Reduction Act (IRA) investments, the Internal Revenue Service has targeted IRA resources on strengthening enforcement, with announcements on new initiatives to pursue high-income, high-wealth individuals who do not pay overdue tax bills and complex partnerships.

The IRS announced new initiatives to ensure large corporations pay taxes owed. As these initiatives to improve compliance among high-income individuals, complex partnerships and large corporations ramp up, the IRS is continuing its work to improve customer service and modernize core technology infrastructure, most notably with the launch of business tax account.

Ensuring large corporations and high-income, high-wealth individual taxpayers pay taxes owed

The IRS is working to ensure large corporate and high-income individual filers pay the taxes they owe. Prior to the Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with the increasingly complicated set of tools that the wealthiest taxpayers use to hide their income and evade paying their share. The IRS is now taking swift and aggressive action to close this gap.

  • Large foreign-owned corporations transfer pricing initiative: The IRS is increasing compliance efforts on the U.S. subsidiaries of foreign companies that distribute goods in the U.S. and do not pay their fair share of tax on the profit they earn of their U.S. activity. These foreign companies report losses or exceedingly low margins year after year through the improper use of transfer pricing to avoid reporting an appropriate amount of U.S. profits. To crack down on this strategy, the IRS is sending compliance alerts to approximately 150 subsidiaries of large foreign corporations to reiterate their U.S. tax obligations and incentivize self-correction.
  • Expansion of the Large Corporate Compliance program: The IRS' Large Business & International Division's (LB&I) Large Corporate Compliance (LCC) program focuses on noncompliance by using data analytics to identify large corporate taxpayers for audit. LCC includes the largest and most complex corporate taxpayers with average assets of more than $24 billion and average taxable income of approximately $526 million per year. As new accountants come on board in early 2024, LB&I is expanding the program by starting an additional 60 audits of the largest corporate taxpayers selected using a combination of artificial intelligence and subject matter expertise in areas such as cross-border issues and corporate planning and transactions.
  • Cracking down on abuse of repealed corporate tax break: Following the 2017 repeal of a provision of the code that provided a deduction for producing goods in the U.S., the IRS received hundreds of claims collectively seeking more than $6 billion in refunds, with a significant portion of filers claiming the deduction for the first time. The IRS launched a campaign to address noncompliance and review high-risk claims in this area. IRS efforts have been incredibly successful in ensuring revenue is collected. The efforts have recently been supported by a significant win in the Tenth Circuit Court of Appeals, which sided with the Tax Court and IRS in denying a refund claim based on a $1.8 billion deduction. This will have far-reaching benefits to the IRS' ongoing efforts in this space.
  • Prioritization of high-income cases: The IRS has been ramping up efforts to pursue high-income, high-wealth individuals who have either not filed their taxes or failed to pay recognized tax debt. These efforts are concentrated among taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt. Building off earlier successes that collected $38 million from more than 175 high-income earners, dozens of revenue officers are focusing on these high-end collection cases in the coming fiscal year. As announced in September, the IRS has begun contacting about 1,600 new taxpayers in this category that owe hundreds of millions of dollars in taxes.

·       The IRS has now collected $122 million dollars in 100 of these already assigned 1,600 cases. Examples of cases closed since the Inflation Reduction Act passed follow:

·        

o   An individual last month was ordered to pay more than $15 million in restitution. The individual falsified millions of dollars of personal expenses as deductible business expenses and financed construction of a 51,000-square-foot mansion, including expenses of interior and exterior construction costs; an outdoor pool and pool house; and tennis, basketball and bocce courts. The individual falsified millions of dollars of expenses for luxury vehicles, artwork, country club memberships and homes for his children.
 

o   An individual last week pled guilty to filing false tax returns and skimming more than $670,000 from his business. The individual spent $110,000 on personal expenses and $502,000 on gambling.
 

o   An individual was sentenced to 54 months in federal prison for fraudulently obtaining $5 million in COVID relief loans for sham businesses. The individual then spent the money on himself, purchasing Ferrari, Bentley and Lamborghini cars.

Improving taxpayer service

The IRS is focused on helping taxpayers get it right the first time — claiming the credits and deductions for which they're eligible and avoiding back-and-forth with the agency when errors arise. To help taxpayers get it right, the IRS is working toward taxpayers being able to seamlessly interact with the agency in the ways that work best for them on the phone, in-person and online.

The IRS is expanding in-person service and meeting taxpayers where they are, particularly those in underserved and rural communities. The IRS is continuing to expand Taxpayer Assistance Centers across the country while also starting a special series of events to help taxpayers living in areas far from the agency's in-person offices.

  • Community Assistance Visits: In these new Community Assistance Visits, the IRS will set up a temporary Taxpayer Assistance Center to give taxpayers from hard-to-reach areas an opportunity to meet face-to-face with IRS customer service representatives. The IRS has conducted seven events in Paris, Texas; Alpena, Michigan; Hastings, Nebraska; Twin Falls, Idaho; Juneau, Alaska; Lihue, Hawaii; and Baker City, Oregon. Many of the taxpayers served at these events had exhausted all other options for IRS services. The feedback from IRS employees, taxpayers and the host sites have all been very positive. Currently, two additional locations have been identified to host Community Assistance Visits in Ciales, Puerto Rico and Gallup, New Mexico.

  

Opening Taxpayer Assistance Centers: Currently, the IRS has opened or reopened the following 50 Taxpayer Assistance Centers since the passage of the Inflation Reduction Act, including eight additional centers since the first anniversary of the law's enactment:

Taxpayer Assistance Center

Date opened/reopened 

Waco, Texas

Oct. 10, 2023

Missoula, Montana

Oct. 2, 2023

Martinsburg, West Virginia

Oct. 2, 2023

Monroe, Louisiana

Sept. 25, 2023

York, Pennsylvania

Sept. 18, 2023

Topeka, Kansas

Sept. 5, 2023

Utica, New York

Aug. 28, 2023

Fayetteville, Arkansas

Aug. 14, 2023

Hickory, North Carolina

Aug. 7, 2023

Rome, Georgia

Aug. 7, 2023

Plantation, Florida

Aug. 3, 2023

Panama City, Florida

July 31, 2023

Cranberry Township, Pennsylvania

July 31, 2023

Peoria, Illinois

July 24, 2023

Huntington, West Virginia

July 5, 2023

Lincoln, Nebraska

May 23, 2023

La Vale, Maryland

May 15, 2023

Altoona, Pennsylvania

May 8, 2023

Fredericksburg, Virginia

May 1, 2023

Parkersburg, West Virginia

May 1, 2023

Bend, Oregon

April 17, 2023

Greenville, Mississippi

April 10, 2023

Trenton, New Jersey

April 10, 2023

Bellingham, Washington

April 3, 2023

Augusta, Maine

March 30, 2023

Jackson, Tennessee

March 28, 2023

Joplin, Missouri

March 28, 2023

Colorado Springs, Colorado

March 27, 2023

Glendale, Arizona

March 27, 2023

Cranberry Township, Pennsylvania

March 22, 2023

La Crosse, Wisconsin

March 20, 2023

Charlottesville, Virginia

March 17, 2023

Queensbury, New York

March 9, 2023

Santa Fe, New Mexico

Feb. 27, 2023

Longview, Texas

Jan. 17, 2023

Overland Park, Kansas

Jan. 17, 2023

West Nyack, New York

Jan. 5, 2023

Binghamton, New York

Jan. 3, 2023

Casper, Wyoming

Jan. 3, 2023

Fort Myers, Florida

Dec. 19, 2022

Grand Junction, Colorado

Dec. 19, 2022

Rockford, Illinois

Dec. 12, 2022

Hagerstown, Maryland

Dec. 1, 2022

DASE (Guaynabo), Puerto Rico

Nov. 28, 2022

Johnson City, Tennessee

Nov. 28, 2022

Prestonsburg, Kentucky

Nov. 28, 2022

Vienna, Virginia

Nov. 28, 2022

Greensboro, North Carolina

Nov. 22, 2022

Bloomington, Illinois

Nov. 21, 2022

Ponce, Puerto Rico,

Nov. 14, 2022

  • Taxpayer Assistance Center hiring update: As of September 23, the IRS has hired 745 employees to staff Taxpayer Assistance Centers. This represents a 31% net increase in Taxpayer Assistance Center staffing compared to fiscal year 2022, and IRS continues to hire to replace departing staff. Taxpayer Assistance Centers have served about 235,000 more taxpayers in fiscal year 2023 than fiscal year 2022, an 18% increase.

Taxpayers deserve the same functionality in their online accounts that they experience with their bank or other financial institutions. As detailed in the Strategic Operating Plan, in the next five years, taxpayers will be able to securely file all documents and respond to all notices online and securely access and download their data and account history. The IRS has hit or has in-progress several milestones toward this goal, including the launch of business tax account, the expansion of its Document Upload Tool to accept responses to nearly all notices and letters, and the launch of digital mobile-adaptive forms.

  • Business tax account: IRS launched the first phase of business tax account that over time will allow business taxpayers to check their tax payment history, make payments, view notices, authorize powers of attorney and conduct other business with the IRS. This initial phase allows unincorporated sole proprietors who have an active Employer Identification Number to set up a business tax account, where they can view their business profile and manage authorized users. Future improvements will allow taxpayers to use their business tax accounts to view letters or notices, request tax transcripts, add third parties for power of attorney or tax information authorizations, schedule or cancel tax payments and store bank account information.
  • Respond to notices online: Taxpayers are now able to respond to notices online. Until filing season 2023, when taxpayers received notices for things like document verification, they had to respond through the mail. During filing season 2023, taxpayers were able to respond to 10 of the most common notices for credits like the Earned Income and Health Insurance Tax Credits online, saving them time and money. As of September 29, the IRS has received more than 32,000 responses to notices via the online tool.
  • Enable taxpayers to submit mobile-friendly forms: The IRS is enabling taxpayers to submit mobile-friendly forms with the launch of the first three forms. These forms are adaptive for mobile device screen and can be submitted electronically when completed. This is also an important milestone toward the IRS goal of meeting taxpayers where they are and allowing them to interact with the IRS in the ways that work best for them. An estimated 15% of Americans rely solely on mobile phones for their internet access — they do not have broadband at home — so it is important to make forms available in mobile-friendly formats. The first three forms launched at the end of September.
     
    • Form 15109, Request for Tax Deferment. Taxpayers can provide information related to their entry and exit from service in combat ones, contingency operations or hazardous duty stations.
       
    • Form 14039, Identity Theft Affidavit. Taxpayers can provide information related to the fraudulent use of their and/or dependent identity.
       
    • Form 14242, Reporting Abusive Tax Promotions and/or Preparers. Taxpayers use this form to provide detail information about tax schemes.
       
    • A fourth form, Form 13909, Tax-Exempt Organization Complaint, will launch later this fall. At least 20 of the most-used tax forms will launch in early 2024.

In addition, the IRS continues to expand the functionality of several online platforms:

  • Individual account: The IRS continues to deploy enhanced capabilities for individual accounts, following the May launch of virtual assistance and live chat. Taxpayers can now validate their bank accounts and save multiple accounts, eliminating the need to re-enter bank account information every time they make a payment. This feature launched at the end of September.
  • Tax professional account: The IRS continues to provide enhanced capabilities for tax professionals' online accounts, helping practitioners manage their active client authorizations on file with the Centralized Authorization File (CAF) database, which stores the information on individuals authorized to act on a taxpayer's behalf. Other enhancements put into place in September 2023 allow tax professionals to view their client's tax information, including balance due amounts. Tax Pro Account users can now also withdraw from their active authorizations online in real time.

Modernizing Technology

On the technology side, the IRS is modernizing decades-old technology to drive the agency's efforts to provide world class customer service and protect taxpayers' data.

  • Enable taxpayers to submit mobile-friendly forms: The IRS is enabling taxpayers to submit mobile-friendly forms with the launch of the first three forms. These forms are adaptive for mobile device screen and can be submitted electronically when completed. This is also an important milestone toward the IRS goal of meeting taxpayers where they are and allowing them to interact with the IRS in the ways that work best for them. An estimated 15% of Americans rely solely on mobile phones for their internet access — they do not have broadband at home — so it is important to make forms available in mobile-friendly formats. The first three forms launched at the end of September.
     
    • Form 15109, Request for Tax Deferment. Taxpayers can provide information related to their entry and exit from service in combat ones, contingency operations or hazardous duty stations.
       
    • Form 14039, Identity Theft Affidavit. Taxpayers can provide information related to the fraudulent use of their and/or dependent identity.
       
    • Form 14242, Reporting Abusive Tax Promotions and/or Preparers. Taxpayers use this form to provide detail information about tax schemes.
       
    • A fourth form, Form 13909, Tax-Exempt Organization Complaint, will launch later this fall. At least 20 of the most-used tax forms will launch in early 2024.

In addition, the IRS continues to expand the functionality of several online platforms:

  • Individual account: The IRS continues to deploy enhanced capabilities for individual accounts, following the May launch of virtual assistance and live chat. Taxpayers can now validate their bank accounts and save multiple accounts, eliminating the need to re-enter bank account information every time they make a payment. This feature launched at the end of September.
  • Tax professional account: The IRS continues to provide enhanced capabilities for tax professionals' online accounts, helping practitioners manage their active client authorizations on file with the Centralized Authorization File (CAF) database, which stores the information on individuals authorized to act on a taxpayer's behalf. Other enhancements put into place in September 2023 allow tax professionals to view their client's tax information, including balance due amounts. Tax Pro Account users can now also withdraw from their active authorizations online in real time.

Modernizing Technology

On the technology side, the IRS is modernizing decades-old technology to drive the agency's efforts to provide world class customer service and protect taxpayers' data.

  • Enable taxpayers to submit mobile-friendly forms: The IRS is enabling taxpayers to submit mobile-friendly forms with the launch of the first three forms. These forms are adaptive for mobile device screen and can be submitted electronically when completed. This is also an important milestone toward the IRS goal of meeting taxpayers where they are and allowing them to interact with the IRS in the ways that work best for them. An estimated 15% of Americans rely solely on mobile phones for their internet access — they do not have broadband at home — so it is important to make forms available in mobile-friendly formats. The first three forms launched at the end of September.
     
    • Form 15109, Request for Tax Deferment. Taxpayers can provide information related to their entry and exit from service in combat ones, contingency operations or hazardous duty stations.
       
    • Form 14039, Identity Theft Affidavit. Taxpayers can provide information related to the fraudulent use of their and/or dependent identity.
       
    • Form 14242, Reporting Abusive Tax Promotions and/or Preparers. Taxpayers use this form to provide detail information about tax schemes.
       
    • A fourth form, Form 13909, Tax-Exempt Organization Complaint, will launch later this fall. At least 20 of the most-used tax forms will launch in early 2024.

In addition, the IRS continues to expand the functionality of several online platforms:

  • Individual account: The IRS continues to deploy enhanced capabilities for individual accounts, following the May launch of virtual assistance and live chat. Taxpayers can now validate their bank accounts and save multiple accounts, eliminating the need to re-enter bank account information every time they make a payment. This feature launched at the end of September.
  • Tax professional account: The IRS continues to provide enhanced capabilities for tax professionals' online accounts, helping practitioners manage their active client authorizations on file with the Centralized Authorization File (CAF) database, which stores the information on individuals authorized to act on a taxpayer's behalf. Other enhancements put into place in September 2023 allow tax professionals to view their client's tax information, including balance due amounts. Tax Pro Account users can now also withdraw from their active authorizations online in real time.

 

Modernizing Technology

On the technology side, the IRS is modernizing decades-old technology to drive the agency's efforts to provide world class customer service and protect taxpayers' data.

  • Digitalization: The IRS also continues to make significant progress scanning and e-filing paper returns.
     
    • As of October, the IRS had scanned more than 1 million forms during the 2023 calendar year — more than 480,000 Forms 940, 579,000 Forms 941 and more than 90,000 Forms 1040. Digitization has far-reaching implications for improving IRS service. Digitizing paper returns will eliminate errors that result from manually inputting data from paper returns, which will speed up processing, reduce storage costs and allow IRS to focus more resources on customer service. Once paper returns are digitized, extracting the data will enable IRS customer service employees to answer taxpayer questions and resolve issues more quickly and accurately. Customer service employees do not currently have easy access to the information from paper returns and other correspondence submitted by mail. Digitization and data extraction will give them access to that information they need to better serve 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 +1-305-274-5811.

Source : IRS      

 

Reminder: Educational Assistance Programs Can Help Workers’ Student Loans

Posted by Admin Posted on Nov 29 2023

Employers that offer educational assistance programs can also use those programs to help pay their employees' student loans.

Though educational assistance programs have been available for many years, the option to use them to pay student loans is available only for payments made after March 27, 2020. Under current law, this option will be available until Dec. 31, 2025.

Traditionally, educational assistance programs have been used to pay for books, equipment, supplies, fees, tuition and other education expenses for the employee. These programs can now also be used to pay principal and interest on an employee's qualified education loans. Payments made directly to the lender, as well as those made to the employee, qualify. By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.

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 +1-305-274-5811.

Source: IRS      

Recordatorio: Programas de Asistencia Educativa Pueden Ayudar a Pagar Préstamos Estudiantiles de Trabajadores

Posted by Admin Posted on Nov 29 2023

Recordatorio: Programas de Asistencia Educativa Pueden Ayudar a Pagar Préstamos Estudiantiles de Trabajadores

Los empleadores que ofrecen programas de asistencia educativa también pueden usar esos programas para ayudar a pagar los préstamos estudiantiles de sus empleados.

Aunque los programas de asistencia educativa han estado disponibles durante muchos años, la opción de usarlos para pagar préstamos estudiantiles está disponible solo para pagos realizados después del 27 de marzo de 2020. Según la ley actual, esta opción estará disponible hasta el 31 de diciembre de 2025.

Tradicionalmente, los programas de asistencia educativa se han usado para pagar libros, equipos, materiales, cuotas, matrícula y otros gastos educativos del empleado. Estos programas ahora también se pueden usar para pagar el capital y los intereses de los préstamos educativos calificados de un empleado. Los pagos realizados directamente al prestamista, así como los realizados al empleado, califican. Por ley, los beneficios libres de impuestos bajo un programa de asistencia educativa están limitados a $5,250 por empleado por año. Normalmente, la asistencia proporcionada por encima de ese nivel está sujeta a impuestos como salario.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente: IRS     

The Deductibility of Medical Expenses

Posted by Admin Posted on Nov 29 2023

The Deductibility of Medical ExpensesThe Deductibility of Medical Expenses

 

Individual taxpayers may be able to claim medical expense deductions on their tax returns. However, the rules can be challenging, and qualifying can be difficult.

5 key points

Here are five points to keep in mind:

1. You must itemize to claim the deduction and have a lot of expenses. The medical expense deduction can be claimed only to the extent your unreimbursed costs exceed 7.5% of your adjusted gross income. If your total itemized deductions in 2023 will exceed your standard deduction, moving or “bunching” nonurgent medical procedures and other controllable expenses into this year may allow you to exceed the 7.5% floor and benefit from the deduction.

2. Health insurance premiums may help. These can total thousands of dollars a year. You may be able deduct the portion of the premiums that you pay for employer-provided health coverage, but only if they aren’t taken out of your paycheck pre-tax. Long-term care insurance premiums are also included as medical expenses, subject to limits based on age.

3. Transportation counts. The cost of getting to and from medical appointments counts as a medical expense. This includes taxis, public transportation or using your own vehicle. Vehicle costs can be calculated at 22 cents a mile for miles driven in 2023, plus tolls and parking. Alternatively, you can deduct certain actual costs (such as for gas and oil) that directly relate to your medical transportation.

4. Controllable costs are key. These include the costs of glasses, hearing aids, dental work, mental health counseling and other ongoing expenses in connection with medical needs. Purely cosmetic expenses generally aren’t eligible. Prescription drugs (including insulin) qualify, but over-the-counter medications and supplements such as aspirin and vitamins don’t. The services of therapists and nurses can qualify if they relate to medical conditions.

5. Don’t overlook smoking-cessation and weight-loss programs. Amounts paid for participating in smoking-cessation programs and for prescribed drugs designed to alleviate nicotine withdrawal are deductible. However, nonprescription nicotine gum and patches aren’t. A weight-loss program is deductible if undertaken as treatment for a disease diagnosed by a physician. Deductible expenses include fees paid to join a program and attend periodic meetings. The cost of diet food isn’t deductible.

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 +1-305-274-5811.

Source : Thomson Reuters      

IRS Issues Guidance on State Tax Payments

Posted by Admin Posted on Nov 07 2023

IRS Issues Guidance on State Tax Payments

The IRS provided guidance on the federal tax status of refunds of state or local taxes and certain other payments made by state or local governments to individuals. The IRS previously provided guidance on state payments made in 2022 in news release IR-2023-23, IRS issues guidance on state tax payments to help taxpayers.

The guidance is being issued as part of the IRS's efforts to provide additional certainty to states and their residents regarding the federal income tax consequences of state payments made to taxpayers.

In 2022, a number of states implemented programs to provide payments to certain individuals residing in their states. Many of these programs were related, directly or indirectly, to the various consequences of the Coronavirus Disease 2019 (COVID-19) pandemic, and the programs varied in terms of the types of payments, payment amounts and eligibility criteria. IRS issues guidance on state tax payments to help taxpayers addressed the federal tax treatment of these 2022 payments.

Notice 2023-56 describes certain types of state payments to individuals and the federal tax treatment of those payments. This updates the previous guidance, which only described the taxability of payments made during 2022. Today's notice also requests comments regarding the application of the rules described in this notice, as well as specific aspects of state payment programs or additional situations on which federal income tax guidance would be helpful.

Most taxpayers receiving state tax refunds do not have to include the state tax refund in income for federal tax purposes. As a general rule, taxpayers who choose the standard deduction on their federal income tax returns do not owe federal income tax on state tax refunds.

The vast majority of taxpayers claim the standard deduction. For instance, in tax year 2021, 90% of individuals claimed the standard deduction instead of itemizing their deductions.

Taxpayers who itemize their deductions on their federal income tax returns and receive a state tax refund must include the refund in income only if they deducted the state tax paid. Because of the $10,000 limit on itemized deductions for state income and property taxes, some itemizers are not able to deduct all of the state taxes they paid and do not need to include a refund in income.

Spillover payments under 2022 programs covered by IRS issues guidance on state tax payments to help taxpayers

Some of the 2022 programs included in IRS issues guidance on state tax payments to help taxpayers provided for certain state payments under the program to be made in early 2023. To the extent that the news release provided that taxpayers can exclude the state payment received in 2022 from federal income, this treatment also applies in 2023. This means taxpayers who did not get a payment under the program during 2022 may exclude from federal income a state payment provided under the 2022 program but actually received in 2023.

State general welfare programs

Payments made by states under legislatively provided social benefit programs for the promotion of the general welfare are not included as income on an individual recipient's federal income tax return.

To qualify for the general welfare exclusion, state payments must be paid from a governmental fund, be for the promotion of general welfare (that is, based on the need of the individual or family receiving such payments), and not represent compensation for services.

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 +1-305-274-5811.

Source: IRS      

Educator Expense Deduction Helps Teachers Cut Classroom Costs

Posted by Admin Posted on Nov 06 2023

Educator Expense Deduction Helps Teachers Cut Classroom Costs

Teachers often buy classroom supplies with their own money. The Educator Expense Deduction helps them get some of that money back. Eligible teachers and administrators can deduct part of the cost of technology, supplies and training from their taxes. They can claim this deduction only for expenses that weren't reimbursed by their employer, a grant or other sources.

Who is an eligible educator

The taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal or aide. They must also work at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

Things to know about this deduction

Educators can deduct up to $300 of trade or business expenses that weren't reimbursed. If two married educators are filing a joint return, the limit rises to $600. These taxpayers can't deduct more than $300 each.

Qualified expenses are amounts the taxpayer paid themselves during the tax year.

Here are some of the expenses an educator can deduct

  • Professional development course fees.
  • Books and supplies.
  • COVID-19 protective items to stop the spread of the disease in the classroom.
  • Computer equipment, including related software and services.
  • Other equipment and materials used in the classroom.

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 +1-305-274-5811.

Source: IRS      

IRS: Constructores de Viviendas Nuevas con Eficiencia Energética Calificada Podrían Ser Elegibles para Crédito Tributario Expandido bajo Sección 45L

Posted by Admin Posted on Nov 06 2023

IRS: Constructores de Viviendas Nuevas con Eficiencia Energética Calificada Podrían Ser Elegibles para Crédito Tributario Expandido bajo Sección 45L

El Servicio de Impuestos Internos les recuerda a los contratistas elegibles que construyen o reconstruyen sustancialmente viviendas calificadas como viviendas de eficiencia energética, que podrían calificar para un crédito tributario de hasta $5,000 por vivienda.

El monto del crédito depende de los requisitos de elegibilidad tal como el tipo de vivienda, la eficiencia energética de la vivienda y la fecha en que alguien compra o renta. Este importante crédito se amplió como parte de la Ley de Reducción de la Inflación de 2022.

Elegibilidad para constructores y viviendas

Para calificar, los contratistas elegibles deben construir o reconstruir sustancialmente una vivienda con eficiencia energética calificada. También deben ser propietarios de la vivienda y tener una base en ella durante la construcción, y deben venderla o rentarla a una persona para usarla como residencia.

Las viviendas también deben ser categorías específicas de viviendas unifamiliares (incluidas las prefabricadas) o viviendas multifamiliares bajo los programas conocido como Energy Star. Además, deben estar ubicadas en los Estados Unidos y cumplir con los requisitos de ahorro de energía aplicables según el tipo de vivienda y la fecha de venta.

Requisitos y cantidad del crédito para 2023 y años posteriores

Para viviendas adquiridas entre 2023 y 2032, el monto del crédito oscila entre $500 y $5,000 según los estándares que se cumplan, que incluyen:

  • Requisitos del programa Energy Star
  • Requisitos del programa de vivienda lista para el consumo de cero energía
  • Requisitos salariales vigentes

Requisitos y montos del crédito antes de 2023

Para viviendas adquiridas antes de 2023, el monto del crédito es de $1,000 o $2,000, dependiendo de los estándares cumplidos, que incluyen:

  • Certificar que la casa tiene un nivel anual de consumo de energía de calefacción y refrigeración que es al menos un 50% (o un 30% para ciertas casas prefabricadas) menor que el de una casa comparable que cumple con ciertos estándares de energía, con mejoras en los componentes de la envolvente del edificio que representan al 1/5 (o 1/3 para ciertas casas prefabricadas) de la reducción
  • Cumplir con ciertas reglas federales de casas prefabricadas
  • Cumplir con ciertos requisitos de Energy Star

Cómo reclamar el crédito correctamente

Los contratistas elegibles deben cumplir con todos los requisitos bajo la Sección 45 L del Código de Impuestos Internos (IRS, por sus siglas en inglés) antes de reclamar el crédito. Puede encontrar directrices de cómo interpretar la Sección 45L en el Aviso 2008-35 (en inglés) (y el Aviso 2008-36 (en inglés) para viviendas fabricadas).

Use el  Formulario 8908, Crédito por la construcción de nuevas viviendas con eficiencia energética (en inglés), para reclamar el crédito bajo la Sección 45L. 

El IRS alienta a los contratistas elegibles a que tengan un buen mantenimiento de registros de todos los documentos requeridos para respaldar un reclamo por el Crédito de la Sección 45L.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

Tax Basics for Setting Up a Business

Posted by Admin Posted on Nov 06 2023

Tax Basics for Setting Up a Business

Starting a new business can seem overwhelming for new entrepreneurs or even seasoned professionals. The IRS has resources to help new business owners understand the tax responsibilities of running a business.

Here are a few things any entrepreneur needs to do when starting their business.

Choose a business structure

The form of business determines which income tax return a business needs to file. The most common business structures are:

  • Sole proprietorship: An unincorporated business owned by an individual. There's no distinction between the taxpayer and their business.
  • Partnership: An unincorporated business with ownership shared between two or more members.
  • Corporation: Also known as a C corporation. It's a separate entity owned by shareholders.
  • S Corporation: A corporation that elects to pass corporate income, losses, deductions and credits through to the shareholders.
  • Limited Liability Company: A business structure allowed by state statute. If a single-member LLC does not elect to be treated as a corporation, the LLC is a "disregarded entity," and the LLC's activities should be reflected on its owner's federal tax return as a sole proprietorship.

Choose a tax year

A tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:

  • Calendar year: 12 consecutive months beginning January 1 and ending December 31.
  • Fiscal year: 12 consecutive months ending on the last day of any month except December.

If an individual files their first tax return using the calendar tax year and later begins business as a sole proprietor, becomes a partner in a partnership, or becomes a shareholder in an S corporation, they must continue to use a calendar tax year unless they get IRS approval to change it or meet one of the exceptions listed in the instructions to Form 1128, Application To Adopt, Change, or Retain a Tax Year.

Apply for an Employer Identification Number

An EIN is also called a Federal Tax Identification Number. It's used to identify a business. Most businesses need one of these numbers, but some don't. For example, a sole proprietor without employees who doesn't file any excise or pension plan tax returns doesn't need an EIN. The EIN checklist on IRS.gov can help business owners know if they need an EIN.

It's important for a business with an EIN to keep the business mailing address, location and responsible party up to date. EIN holders should report changes in the responsible party to the IRS within 60 days.

Have all employees complete these forms:

  •  I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services
  •  W-4, Employee's Withholding Certificate

Pay business taxes

The form of business determines what taxes should be paid and how to pay them.

Visit the state's website

Prospective business owners should visit their state's website for info about state tax requirements.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : IRS      

Keeping Vital Records Safe Can Make Disaster Recovery Easier

Posted by Admin Posted on Nov 06 2023

Keeping Vital Records Safe Can Make Disaster Recovery Easier

Natural disasters can strike without warning. Sometimes even the most diligent taxpayers are left without the important personal and financial records they need. People may need documentation for tax purposes, federal or state assistance programs or insurance claims.

Here are some steps that can help them reconstruct their important records.

Tax records

  • Taxpayers can get free federal tax return transcripts immediately using Get Transcript on IRS.gov.
  • They can also order transcripts by calling 800-908-9946 and following the prompts.
  • People who use a tax professional to file taxes should keep their contact information in a safe place.

Financial statements

Financial statements from credit card companies or banks are usually available online. People can also contact their bank to get paper copies of statements.

Property records

  • Homeowners may be able to contact the title company, escrow company or bank that handled the purchase of their home or other property to get documents related to their home.
  • Many property records are available online from tax assessors or other government agencies. Check local government websites for information.
  • Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
  • For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
  • Insurance companies often keep records related to property maintained in a home. Taxpayers should keep their property insurance contacts handy.
  • Car owners can research the current fair-market value of most vehicles via resources available online and at most libraries. These include Kelley's Blue Book, the National Automobile Dealers Association and Edmunds.

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 +1-305-274-5811.

Source : IRS      

Taxpayers Impacted by the Terrorist Attacks in Israel Qualify for Tax Relief: Oct. 16 Deadline, Other Dates Postponed to Oct. 7, 2024

Posted by Admin Posted on Oct 19 2023

Taxpayers Impacted by the Terrorist Attacks in Israel Qualify for Tax Relief:  Oct. 16 Deadline, Other Dates Postponed to Oct. 7, 2024

The Internal Revenue Service announced tax relief for individuals and businesses affected by the terrorist attacks in the State of Israel. These taxpayers now have until Oct. 7, 2024, to file various federal returns, make tax payments and perform other time-sensitive tax-related actions.

IRS provided relief to certain taxpayers who, due to the terrorist attacks, may be unable to meet a tax-filing or tax-payment obligation, or may be unable to perform other time-sensitive tax-related actions. The IRS will continue to monitor events and may provide additional relief.

Filing and Payment Relief

This notice postpones various tax filing and payment deadlines that occurred or will occur during the period from Oct. 7, 2023, through Oct. 7, 2024 (postponement period). As a result, affected individuals and businesses will have until Oct. 7, 2024, to file returns and pay any taxes that were originally due during this period. Among other things, this includes:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. So, these individuals filing on extension have more time to file, but not to pay.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023. Similarly, these corporations have more time to file, but not to pay.
  • 2023 individual and business returns and payments normally due on March 15 and April 15, 2024. So, these individuals and businesses have both more time to file and more time to pay.
  • Quarterly estimated income tax payments normally due on Jan. 16, April 15, June 17 and Sept. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, April 30 and July 31, 2024.
  • Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.
  • Retirement plan contributions and rollovers.

In addition, the penalty for failure to make payroll and excise tax deposits due on or after Oct. 7, 2023 and before Nov. 6, 2023, will be abated as long as the deposits are made by Nov. 6, 2023.

Who Qualifies for Relief?

  • Any individual whose principal residence or business entity or sole proprietor whose principal place of business is in Israel, the West Bank or Gaza (the covered area).
  • Any individual, business or sole proprietor, or estate or trust whose books, records or tax preparer is located in the covered area.
  • Anyone killed, injured, or taken hostage due to the terrorist attacks.
  • Any individual affiliated with a recognized government or philanthropic organization and who is assisting in the covered area, such as a relief worker.

The IRS automatically identifies taxpayers whose principal residence or principal place of business is located in the covered area based on previously filed returns and applies relief. Other eligible taxpayers can obtain this relief by calling the IRS disaster hotline at 866-562-5227. Alternatively, international callers may call 267-941-1000.

If an affected taxpayer receives a late filing or late payment penalty notice from the IRS for the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

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 +1-305-274-5811.

Source : IRS      

For California Storm Victims, IRS Postpones Tax-Filing and Tax-Payment Deadline to Nov. 16

Posted by Admin Posted on Oct 19 2023

For California Storm Victims, IRS Postpones Tax-Filing and Tax-Payment Deadline to Nov. 16

The Internal Revenue Service further postponed tax deadlines for most California taxpayers to Nov. 16, 2023. In the wake of last winter's natural disasters, the normal spring due dates had previously been postponed to Oct. 16.

As a result, most individuals and businesses in California will now have until Nov. 16 to file their 2022 returns and pay any tax due. Fifty-five of California's 58 counties—all except Lassen, Modoc and Shasta counties—qualify. IRS relief is based on three different FEMA disaster declarations covering severe winter storms, flooding, landslides, and mudslides over a period of several months.

The IRS normally provides relief, including postponing various tax filing and payment deadlines, for any area designated by the Federal Emergency Management Agency (FEMA). As long as their address of record is in a disaster-area locality, individual and business taxpayers automatically get the extra time, without having to ask for it. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

What returns and payments qualify for the Nov. 16 deadline?

Eligible returns and payments include:

  • 2022 individual income tax returns and payments normally due on April 18.
  • For eligible taxpayers, 2022 contributions to IRAs and health savings accounts.
  • Quarterly estimated tax payments normally due on April 18, June 15 and Sept. 15.
  • Calendar-year 2022 partnership and S corporation returns normally due on March 15.
  • Calendar-year 2022 corporate and fiduciary income tax returns and payments normally due on April 18.
  • Quarterly payroll and excise tax returns normally due on May 1, July 31 and Oct. 31.
  • Calendar-year 2022 returns filed by tax-exempt organizations normally due on May 15.

Other returns, payments and time-sensitive tax-related actions also qualify for the extra time. See the IRS disaster relief page for details.

Do taxpayers need to do anything to benefit from this relief?

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional tax relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The tax relief is part of a coordinated federal response to the damage caused by these disasters and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov

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 +1-305-274-5811.

Source : IRS      

Treasury and IRS Issue Proposed Regulations on Prevailing Wage and Apprenticeship Requirements for Increased Energy Credit or Deduction Amounts

Posted by Admin Posted on Oct 18 2023

Treasury and IRS Issue Proposed Regulations on Prevailing Wage and Apprenticeship Requirements for Increased Energy Credit or Deduction Amounts

The Treasury Department and Internal Revenue Service issued proposed regulations related to the increased tax credit or deduction amounts for clean energy facilities and projects if taxpayers satisfy certain prevailing wage and registered apprenticeship (PWA) requirements.

Generally, these new proposed rules provide guidance on the PWA requirements, enacted as part of the Inflation Reduction Act, for certain green energy facilities or projects.

The Inflation Reduction Act provides increased credit or deduction amounts that generally apply for taxpayers who satisfy certain PWA requirements regarding the construction, installation, alteration or repair of a qualified facility, qualified property, qualified project, qualified equipment or for certain energy facilities.

Under the tax law, the increased credit or deduction amount is generally equal to the base amount multiplied by five if the taxpayer satisfies the PWA requirements. There are certain limited exceptions where a taxpayer may be eligible for an increased credit amount without satisfying the PWA requirements.

The proposed regulations would provide guidance to taxpayers intending to claim the increased credit or deduction amounts and those intending to transfer increased credit amounts. Additionally, the proposed regulations would provide guidance for taxpayers that initially fail to satisfy the PWA requirements but seek to cure the failure by complying with certain correction and penalty procedures. Finally, the proposed regulations would provide rules concerning specific PWA recordkeeping and reporting requirements.

Also, the IRS released frequently asked questions and Publication 5855 which is an overview of the prevailing wage and apprenticeship requirements and the applicable credits.

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 +1-305-274-5811.

Source: IRS     

Conocer Cómo los Estafadores se Hacen Pasar por el IRS Puede Ayudar a los Contribuyentes a Protegerse

Posted by Admin Posted on Oct 18 2023

Conocer Cómo los Estafadores se Hacen Pasar por el IRS Puede Ayudar a los Contribuyentes a Protegerse

Los ladrones siempre buscan nuevas maneras para estafar a los contribuyentes desprevenidos. Los estafadores se hacen pasar por el IRS por teléfono o correo electrónico, en persona, por correo o servicio de entrega, y le cuestan a la gente su tiempo y dinero. Al mantenerse alerta contra estafas, los contribuyentes pueden protegerse.

Los estafadores pueden hacerse pasar por el IRS por correo; los contribuyentes deben conocer los hechos

Una de las estafas más recientes implica que el correo llegue en un sobre de cartón de un servicio de entrega o del Servicio Postal de los Estados Unidos (USPS). La carta adjunta incluye el encabezado del IRS y la redacción de que el aviso es "en relación con su reembolso no reclamado". La información de contacto no pertenece al IRS, pero el correo parece oficial. Esta estafa busca información personal confidencial de los contribuyentes, incluidas las fotos de la licencia de conducir, que los ladrones de identidad pueden usar para robar el reembolso del contribuyente y otra información financiera confidencial.

Ahora es más fácil detectar cuando se trata de un estafador en la puerta y no el IRS

Los estafadores también pueden aparecer en la puerta haciéndose pasar por agentes del IRS y crear confusión, no solo para los contribuyentes, sino también para las agencias locales de cumplimiento de la ley. A medida que esta estafa se ha desarrollado, ha aumentado la confusión de los contribuyentes acerca de las visitas domiciliarias de los funcionarios de cobros de impuestos del IRS.

Para ayudar a combatir estas estafas, el IRS anunció recientemente que pondrá fin a la mayoría de las visitas no anunciadas a los contribuyentes por parte de los funcionarios de cobros de impuestos de la agencia. En lugar de las visitas no anunciadas, los funcionarios de cobros de impuestos se comunicarán con los contribuyentes a través de una carta de cita, conocida como Carta 725-B, y programarán una reunión de seguimiento. Esto ayudará a los contribuyentes a sentirse más preparados cuando sea el momento de reunirse.

Los contribuyentes que reciben una solicitud del IRS por correo o por teléfono siempre pueden comunicarse con el servicio al cliente del IRS para autenticarla.

Los estafadores también pueden comunicarse con los contribuyentes electrónicamente

Los contribuyentes deben estar atentos a una ola de estafas tributarias durante el verano, ya que los ladrones de identidad continúan enviando correos electrónicos y mensajes de texto prometiendo reembolsos de impuestos u ofertas para ayudar a "arreglar" los problemas tributarios. Pueden hacerse pasar por el IRS o profesionales de impuestos, instando al contribuyente a hacer clic en enlaces fraudulentos para que los ladrones de identidad puedan robar información personal valiosa.

Los contribuyentes deben recordar: el IRS nunca inicia el contacto con respecto a una factura o reembolso de impuestos por correo electrónico, mensaje de texto o redes sociales.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

Treasury and IRS Issue Proposed Regulations Identifying Certain Monetized Installment Sales as Listed Transaction

Posted by Admin Posted on Oct 18 2023

Treasury and IRS Issue Proposed Regulations Identifying Certain Monetized Installment Sales as Listed Transaction

The Department of the Treasury and the Internal Revenue Service issued proposed regulations identifying certain monetized installment sale transactions and substantially similar transactions as listed transactions – abusive tax transactions that must be reported to the IRS.

Material advisors and certain participants in these listed transactions are required to file disclosures with the IRS and are subject to penalties for failure to disclose these transactions.

The IRS listed monetized installment sales this year as part of the agency's Dirty Dozen list of common tax scams and schemes.

Monetized installment sale transactions generally include the following elements:

  • A seller of appreciated property, or a person acting on the seller's behalf, identifies a buyer who is willing to purchase the property in exchange for cash or other property. 
     
  • The seller enters into an agreement to sell the property to an intermediary in exchange for an installment obligation, which provides for interest payments from the intermediary to the seller. 
     
  • The seller then purportedly transfers the property to the intermediary, although the intermediary never actually takes title or takes title to the property only briefly before transferring title to the buyer in exchange for the buyer's cash or other property. 
     
  • The seller also obtains a loan with an agreement that provides for interest payments from the seller to the lender that equal the amount of interest that the intermediary pays the seller under the installment obligation. 
     
  • Both the installment agreement and the loan provide for interest due over the same periods, with principal due in a balloon payment at or near the end of the term of the installment agreement and loan. 
     
  • The sales proceeds received by the intermediary from the buyer, reduced by certain fees, are provided to the lender to fund the loan to the seller or transferred to an escrow account of which the lender is a beneficiary. 
     
  • The lender agrees to repay these amounts to the intermediary over the course of the term of the installment obligation.
     
  • The seller then treats the sale as an installment sale under section 453 on a federal income tax return for the year of the purported sale and defers recognition of gain until the year in which the seller receives the principal balloon payment.

Written comments regarding the proposed regulations must be submitted by Sept. 3, 2023. A public hearing has been scheduled for Oct. 12, 2023.

Report tax fraud

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405

Fax: 877-477-9135

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 +1-305-274-5811.

Source : IRS      

Everyone has the Right to Finality when Working with the IRS

Posted by Admin Posted on Oct 18 2023

Everyone has the Right to Finality when Working with the IRS

By law, all taxpayers have the right to finality of tax matters. For example, taxpayers have the right to know when the IRS has finished an audit. This is one of ten basic rights — known collectively as the Taxpayer Bill of Rights.

Here's what taxpayers should know about their right to finality:

  • Taxpayers have the right to know:
    • The maximum amount of time they have to challenge the IRS's position.
    • The maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. 
    • When the IRS has finished an audit.
       
  • The IRS generally has three years from the date taxpayers file their returns to assess any additional tax for that tax year.
     
  • There are some limited exceptions to the three-year rule, including when taxpayers fail to file returns for specific years or file false or fraudulent returns. In these cases, the IRS can assess tax for that tax year at any time.
     
  • The IRS generally has 10 years from the assessment date to collect unpaid taxes. The IRS can't extend this 10-year period unless the taxpayer agrees to extend the period as part of an installment agreement to pay tax debt or a court judgment allows the IRS to collect unpaid tax after the 10-year period.
     
  • There are circumstances when the 10-year collection period may be suspended. This can happen when the IRS can't collect unpaid tax due to the taxpayer's bankruptcy or there's an ongoing collection due process proceeding involving the taxpayer.
     
  • A statutory notice of deficiency is a letter proposing additional tax the taxpayer owes. This notice must include the deadline for filing a petition with the tax court to challenge the amount proposed.
     
  • Generally, a taxpayer can be subject to only one audit per tax year. The IRS may reopen an audit for a previous tax year if the agency finds it necessary. This could happen, for example, if a taxpayer files a fraudulent 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 +1-305-274-5811.

Source : IRS      

Knowing How Scammers Pose as the IRS Can Help Taxpayers Protect Themselves

Posted by Admin Posted on Oct 18 2023

Knowing How Scammers Pose as the IRS Can Help Taxpayers Protect Themselves

Crooks are always looking for new ways to scam unsuspecting taxpayers. Scammers impersonate the IRS by phone or email, in person, or by mail or delivery service – and cost people their time and money. By staying vigilant against schemes and scams, taxpayers can protect themselves.

Scammers can pose as the IRS by mail – taxpayers should know the facts

One of the newest and more devious schemes involves mail coming in a cardboard envelope from either a delivery service or the United States Postal Service (USPS). The enclosed letter includes the IRS masthead and wording that the notice is "in relation to your unclaimed refund." The contact information does not belong to the IRS, but the mailing looks official. This scheme seeks sensitive personal information from taxpayers – including driver's license photos – that can be used by identity thieves to steal the taxpayer's refund and other sensitive financial information.

It's now easier to spot when it's a scammer at the door and not the IRS

Scam artists may also appear at the door posing as IRS agents, creating confusion for not just the taxpayers but also local law enforcement agencies. As this scam has grown, taxpayer confusion about home visits by IRS revenue officers has increased.

To help combat these scams, the IRS recently announced that it is ending most unannounced visits to taxpayers by agency revenue officers. In place of the unannounced visits, revenue officers will instead contact taxpayers through an appointment letter, known as a 725-B Letter, and schedule a follow-up meeting. This will help taxpayers feel more prepared when it is time to meet.

Taxpayers who receive a request from IRS in the mail or by phone can always contact IRS customer service to authenticate it.

Scammers may also contact taxpayers electronically

Taxpayers should be on the lookout for a summer surge of tax scams as identity thieves continue sending email and text messages promising tax refunds or offers to help "fix" tax problems. They may pose as the IRS or tax professionals, urging the taxpayer to click fraudulent links so the identity thieves can steal valuable personal information.

Taxpayers should remember: the IRS never initiates contact regarding a bill or tax refund by email, text or social media.

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 +1-305-274-5811.

Source : IRS      

IRS: Builders of Qualified New Energy Efficient Homes Might Qualify for an Expanded Tax Credit under Section 45L

Posted by Admin Posted on Oct 18 2023

IRS: Builders of Qualified New Energy Efficient Homes Might Qualify for an Expanded Tax Credit under Section 45L

The Internal Revenue Service reminds eligible contractors who build or substantially reconstruct qualified new energy efficient homes that they might qualify for a tax credit up to $5,000 per home.

The actual amount of the credit depends on eligibility requirements such as the type of home, the home's energy efficiency and the date when someone buys or leases the home. This important credit was expanded as part of the Inflation Reduction Act of 2022.

Eligibility for builders and homes

To qualify, eligible contractors must construct or substantially reconstruct a qualified new energy efficient home. They also must own the home and have a basis in it during the construction, and they must sell or lease the home to a person for use as a residence.

The homes must also be specified categories of single-family (including manufactured) or multifamily homes under Energy Star programs, be located in the United States, and meet applicable energy saving requirements based on home type and acquisition date.

Requirements and credit amounts for 2023 and after

For homes acquired in 2023 through 2032, the credit amount ranges from $500 to $5,000, depending on the standards met, which include:

  • Energy Star program requirements
  • Zero energy ready home program requirements
  • Prevailing wage requirements

Requirements and credit amounts before 2023

For homes acquired before 2023, the credit amount is $1,000 or $2,000, depending on the standards met, which include:

  • Certifying that the home has an annual level of heating and cooling energy consumption that is at least 50% (or 30% for certain manufactured homes) less than that of a comparable home that meets certain energy standards, with building envelope component improvements accounting for at least 1/5 (or 1/3 for certain manufactured homes) of the reduction
  • Meeting certain federal manufactured home rules
  • Meeting certain Energy Star requirements

Properly claiming the credit

Eligible contractors must meet all requirements under Internal Revenue Code Section 45L prior to claiming the credit. Guidance interpreting Section 45L may be found in Notice 2008-35 (and Notice 2008-36, for manufactured homes).

Use Form 8908, Energy Efficient Home Credit, to claim the Section 45L credit. 

The IRS encourages eligible contractors to practice good recordkeeping of all documents required to support a claim for the Section 45L credit.

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 +1-305-274-5811.

Source : IRS     

Taxes – What to Do

Posted by Admin Posted on Oct 17 2023

Taxes – What to Do

Being Self- Employed, What Sort of Deductions Can I Take?

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

If I Have a Large Capital Gain this Year, What Can I Do?

If you have a large capital gain this year from an investment, it may be advisable to hold onto the investment until next year to put the gain into next year's taxes. You may also want to sell off any investments that you have that are losing value at the moment to claim your losses.

What Investments Can I Make to Help Defer Taxes?

The interest gained from state and local bonds is usually exempt from federal income taxes. These investments generally pay back at a lower interest rate than commercial bonds of similar quality.

Since Treasury Bonds are similarly exempt from state and local income tax, they can be a particularly good investment for those who are in high tax brackets and live in high-income-tax states.

What Retirement Plans are Available to Aid in the Deferral of Taxes?

 

You have the ability to invest some of the money that you would have paid in taxes to add to your retirement fund. Many employers will offer the opportunity to defer a portion of your earnings and contribute them directly to your retirement account. Some of them may even match a portion of your savings. If this is the case, it is always advisable to save at least the amount that your employer will match. This will give you an automatic 100% gain on your money.

If you are self-employed, look into getting a Keogh, SIMPLE or a SEP IRA.

What other ways can I defer this year's income?

 

If you own your business you may want to postpone sending certain invoices to ensure that you will receive payment in the following tax year. This can help greatly if some of this income would push you into a higher tax bracket. You may want to accelerate paying for expenses to cover your taxes in the current year.

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 +1-305-274-5811.

Source : Thomson Reuters      

Check Withholding to Avoid a Tax Surprise

Posted by Admin Posted on Oct 17 2023

Check Withholding to Avoid a Tax Surprise

Whether or not you owed taxes or received a refund last year, check your tax withholding to avoid not having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. This is even more important due to the recent changes to the tax law for 2018 and beyond. On the other end, if you had a large refund you lost out on having the money in your pocket throughout the year. Changing jobs, getting married or divorced, buying a home or having children can all result in changes in your tax calculations.

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811.

Source : Thomson Reuters      

Conozca las Señales de Alerta de Estafas del Crédito por Retención de Empleados

Posted by Admin Posted on Oct 17 2023

Conozca las Señales de Alerta de Estafas del Crédito por Retención de Empleados

Los negocios y las organizaciones exentas de impuestos deben estar atentas a las señales reveladoras de afirmaciones engañosas relacionadas con el Crédito por retención de empleados (ERC). Los estafadores y los promotores sin escrúpulos continúan publicando anuncios publicitarios agresivos, solicitudes por correo directo y promociones en línea para obtener el crédito. Muchos de estos anuncios tergiversan y exageran enormemente quién puede calificar para el ERC, que a veces también se denomina ERTC o Crédito tributario por retención de empleados.

Cualquiera que reclame indebidamente el ERC tendrá que devolverlo, posiblemente con multas e intereses. El IRS no quiere que eso suceda. Los empleadores deben saber qué es el crédito y quién califica y estar atentos a las señales de advertencia de una estafa. Y deben confiar en el consejo de un profesional de impuestos de confianza, no en mercadeo agresivo o propuestas no solicitadas.

Acerca del ERC

El ERC es un crédito tributario reembolsable de la era de COVID, diseñado para empleadores que siguieron pagando a empleados mientras estaban cerrados debido a orden gubernamental relacionada con COVID-19, o que tuvieron una disminución requerida en los ingresos brutos durante los períodos de elegibilidad. El crédito solo puede ser reclamado por empresas elegibles y organizaciones exentas de impuestos que tuvieron empleados durante un tiempo específico.

Cualquier persona que esté considerando reclamar el ERC debe revisar cuidadosamente los requisitos de elegibilidad específicos en la página Crédito por retención de empleados. Los empleadores elegibles que necesitan ayuda para reclamar el crédito deben trabajar con un profesional de impuestos de confianza.

Las señales de alerta de una estafa de ERC incluyen:

  • Llamadas o anuncios no solicitados que mencionan un "proceso de solicitud fácil".
  • Declaraciones de que el promotor o la empresa pueden determinar la elegibilidad del ERC en cuestión de minutos o antes de cualquier discusión sobre la situación tributaria del empleador. El Crédito por retención de empleados es un crédito complejo que requiere una revisión cuidadosa antes de aplicar.
  • Altos cargos por adelantado para reclamar el crédito.
  • Tarifas a base de un porcentaje del monto del reembolso del ERC reclamado.
  • Promotores que dicen a las empresas que reclamen el ERC porque no tienen nada que perder. Quienes reciban el crédito indebidamente podrían tener que devolverlo, junto con intereses y multas considerables.
  • Promotores que le dicen a los negocios que ignoren los consejos de su profesional de impuestos de confianza.

Estos promotores pueden mentir sobre los requisitos de elegibilidad. Además, cualquier persona que use los servicios de este promotor podría correr el riesgo de que alguien intente robar su identidad o usar su información para tomar una parte del crédito reclamado indebidamente.

Cómo los promotores atraen a las víctimas

El IRS continúa viendo una variedad de maneras en que los promotores pueden atraer a empresas, grupos sin fines de lucro y otros para que soliciten el crédito.

  • Mercadeo agresivo. Los anuncios de ERC aparecen en casi todas partes, incluso en la radio, la televisión y en línea, así como en llamadas telefónicas y mensajes de texto.
  • Correo directo. Algunos promotores de ERC están enviando cartas a los contribuyentes de grupos inexistentes como el "Department of Employee Retention Credit" ("Departamento de Crédito por retención de empleados"). Los estafadores crearán estas cartas para que parezcan correspondencia oficial del IRS o un correo oficial del gobierno con un lenguaje que insta a la acción inmediata.
  • Omitir detalles clave. Los promotores externos del ERC a menudo no explican con precisión los requisitos de elegibilidad o cómo calcular el crédito. Pueden presentar argumentos amplios que sugieran que todos los empleadores son elegibles sin evaluar las circunstancias individuales de un empleador. Además, muchos promotores no les dicen a los empleadores que no pueden reclamar el ERC sobre los salarios que informaron como costos de nómina si recibieron el alivio del préstamo del Programa de Protección de Cheques de Pago.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente: IRS     

A Possible Tax Quirk of Being a Business Partner

Posted by Admin Posted on Oct 17 2023

A Possible Tax Quirk of Being a Business Partner

If you’re a partner in a business, you may have encountered a situation that gave you pause. In any given year, you may have been taxed on more partnership income than was distributed to you. The cause of this quirk of taxation lies in the way partnerships and partners are taxed.

Partnership taxation up close

Unlike regular corporations, partnerships aren’t subject to income tax. Instead, each partner is taxed on the earnings of the partnership, even if the earnings aren’t distributed. Similarly, if a partnership has a loss, the loss is passed through to the partners. (However, various rules may prevent partners from currently using their shares of the partnership’s loss to offset other income.)

While a partnership isn’t subject to income tax, it’s treated as a separate entity for purposes of determining its income, gains, losses, deductions and credits. This makes it possible to pass through to partners their share of these items.

A partnership must file an information return, which is IRS Form 1065, “U.S. Return of Partnership Income.” On this form, the partnership separately identifies income, deductions, credits and other items. This is so partners can properly treat items that are subject to limits or other rules that could affect their treatment at the partner level. Examples of items that may require special treatment include capital gains and losses, interest expense on investment debts, and charitable contributions.

Each partner gets a Schedule K-1 showing his or her share of partnership items for the year just ended.

Basis and distribution rules ensure that partners aren’t taxed twice. A partner’s initial basis in his or her partnership interest (which varies depending on how the interest was acquired) is increased by his or her share of partnership taxable income. When that income is paid out to partners in cash, they aren’t taxed on the cash if they have sufficient basis. Instead, partners reduce their basis by the distribution amount. If a cash distribution exceeds a partner’s basis, then the excess is taxed to the partner as a gain.

Questions?

While the pass-through taxation of partnerships offers many advantages, it also has some quirks that can be confusing. Contact us with whatever questions you may have.

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 +1-305-274-5811.

Source: Thomson Reuters     

New School Year Reminder to Educators; Maximum Educator Expense Education is $300 in 2023

Posted by Admin Posted on Oct 17 2023

New School Year Reminder to Educators; Maximum Educator Expense Education is $300 in 2023

As the new school year begins, the Internal Revenue Service reminds teachers and other educators that they'll be able to deduct up to $300 of out-of-pocket classroom expenses for 2023 when they file their federal income tax return next year.

This is the same limit that applied in 2022, the first year this provision became subject to inflation adjustment. Before that, the limit was $250. The limit will rise in $50 increments in future years based on inflation adjustments.

This means that an eligible educator can deduct up to $300 of qualifying expenses paid during the year. If they're married and file a joint return with another eligible educator, the limit rises to $600. But in this situation, not more than $300 for each spouse.

Who qualifies?

Educators can claim this deduction, even if they take the standard deduction. Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal or aide who worked in a school for at least 900 hours during the school year. Both public and private school educators qualify.

What's deductible?Educators can deduct the unreimbursed cost of:

 

Books, supplies and other materials used in the classroom.

  • Equipment, including computer equipment, software and services.
  • COVID-19 protective items to stop the spread of the disease in the classroom. This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the Centers for Disease Control and Prevention.
  • Professional development courses related to the curriculum they teach or the students they teach. But the IRS cautions that, for these expenses, it may be more beneficial to claim another educational tax benefit, especially the lifetime learning credit. For details, see Publication 970, Tax Benefits for Education, particularly Chapter 3.

Qualified expenses don't include the cost of home schooling or for nonathletic supplies for courses in health or physical education. As with all deductions and credits, the IRS reminds educators to keep good records, including receipts, cancelled checks and other documentation.

For 2022 tax returns being filed now: Don't forget to claim educator expenses

For those who received a tax filing extension, qualify for a disaster extension, or for any other reason are still working on their 2022 return, the IRS reminds educators that the rules for claiming the deduction are the same as they are for 2023. For those who obtained an extension, the filing deadline is Oct. 16, 2023. But taxpayers can avoid processing delays by filing before that date.

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 +1-305-274-5811.

Source : IRS      

Tax Considerations for People Who Are Separating or Divorcing

Posted by Admin Posted on Oct 17 2023

Tax Considerations for People Who Are Separating or Divorcing

Update tax withholding

When a taxpayer divorces or separates, they usually need to update their proper tax withholding by filing with their employer a new Form W-4, Employee's Withholding Certificate. If they receive alimony, they may have to make estimated tax payments. Taxpayers can figure out if they're withholding the correct amount with the Tax Withholding Estimator on IRS.gov.

Tax treatment of alimony and separate maintenance

  • Amounts paid to a spouse or a former spouse under a divorce decree, a separate maintenance decree or a written separation agreement may be alimony or separate maintenance for federal tax purposes.
  • Certain alimony or separate maintenance payments are deductible by the payer spouse, and the recipient spouse must include it in income.

Rules related to dependent children and support

Generally, the parent with custody of a child can claim that child on their tax return. If parents split custody fifty-fifty and aren't filing a joint return, they'll have to decide which parent claims the child. If the parents can't agree, taxpayers should refer to the tie-breaker rules in Publication 504, Divorced or Separated Individuals. Child support payments aren't deductible by the payer and aren't taxable to the payee.

Not all payments under a divorce or separation instrument – including a divorce decree, a separate maintenance decree or a written separation agreement – are alimony or separate maintenance. Alimony and separate maintenance doesn't include:

  • Child support
  • Noncash property settlements – whether in a lump-sum or installments
  • Payments that are your spouse's part of community property income
  • Payments to keep up the payer's property
  • Use of the payer's property
  • Voluntary payments

Child support is never deductible and isn't considered income. Additionally, if a divorce or separation instrument provides for alimony and child support and the payer spouse pays less than the total required, the payments apply to child support first. Only the remaining amount is considered alimony.

Report property transfers, if needed

Usually, if a taxpayer transfers property to their spouse or former spouse because of a divorce, there's no recognized gain or loss on the transfer. People may have to report the transaction on a gift 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 +1-305-274-5811.

Source: IRS

Avoid Bad Apples when Choosing a Preparer

Posted by Admin Posted on Sept 25 2023

Avoid Bad Apples when Choosing a Preparer

The Oct. 16, 2023, extension filing deadline is coming up, and many taxpayers who requested an extension are now choosing a tax return preparer. Most tax return preparers provide honest, quality service, but there are some bad apples out there – from unethical preparers to outright scammers. When hiring an individual or firm to prepare a tax return, taxpayers need to understand how to choose a tax preparer wisely and what questions to ask.

Things to consider when choosing a tax return preparer

  • Ensure the preparer signs and includes their PTIN. By law, anyone who is paid to prepare or help prepare federal tax returns must have a valid Preparer Tax Identification Number. Paid preparers must sign and include their PTIN on any tax return they prepare. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. Taxpayers should avoid these unethical tax return preparers.
  • Make sure the preparer is available year-round. If questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over.
  • Review the preparer's history. Taxpayers can check with the Better Business Bureau for information about the preparer, any disciplinary actions, and the license status for credentialed preparers. Other resources include: the State Board of Accountancy's website for CPAs; the State Bar Association for attorneys; and the IRS Directory of Federal Tax Return Preparers for enrolled agents, or verify an enrolled agent's status online.
  • Ask about service fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts. Be wary of tax return preparers who claim they can get larger refunds than their competitors.
  • Ensure their preparer offers IRS e-file. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit. 
  • Understand the preparer's credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification. Tax return preparers who participate in the Annual Filing Season Program may represent taxpayers in limited situations if they prepared and signed the tax return.

Once a taxpayer has selected a tax preparer, they should stay vigilant

  • Good preparers ask to see records and receipts. They'll also ask questions to determine the client's total income, deductions, tax credits and other items. Taxpayers should avoid a tax return preparer who e-files using pay stubs instead of W-2s. This is against IRS rules.
  • Taxpayers should review the tax return before signing it and ask questions if something is unclear or inaccurate.
  • Any refund should go directly to the taxpayer – not into the preparer's bank account. Taxpayers should check the routing and bank account number on the completed return and make sure they're accurate.
  • Taxpayers are responsible for filing a complete and correct tax return. They should never sign a blank or incomplete return and never hire a tax return preparer who asks them to do so.

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

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 +1-305-274-5811.

Source: IRS      

IRS: Contribuyentes en Carolina del Sur Impactados por Idalia para Alivio Tributario; Fecha Limite del 16 de octubre y Otras se Extienden hasta el 15 de febrero

Posted by Admin Posted on Sept 25 2023

IRS: Contribuyentes en Carolina del Sur Impactados por Idalia para Alivio Tributario; Fecha Limite del 16 de octubre y Otras se Extienden hasta el 15 de febrero

El Servicio de Impuestos Internos anunció alivio tributario para las personas y empresas afectadas por Idalia en cualquier parte de Carolina del Sur. Estos contribuyentes ahora tienen hasta el 15 de febrero de 2024 para presentar varias declaraciones de impuestos federales individuales y comerciales, y realizar pagos de impuestos. Esto es similar al alivio proveído en varias partes de la Florida.

El IRS está ofreciendo alivio a cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA). Todos los 46 condados de Carolina del Sur califican. Las personas y hogares que residen o tienen un negocio en estos condados son elegibles para alivio tributario. La lista actual de localidades elegibles siempre está disponible en la página de Alivio en situaciones de desastre en IRS.gov.

Alivio de presentación y pago

El alivio tributario pospone varios plazos de presentación y pago de impuestos que ocurrieron a partir del 29 de agosto 2023, hasta el 15 de febrero de 2024 (periodo de extensión). Como resultado, las personas y empresas afectadas tendrán hasta el 15 de febrero de 2024 para presentar declaraciones y pagar los impuestos que originalmente adeudaban durante este período.

Esto significa, por ejemplo, que el plazo del 15 de febrero de 2024 ahora aplica a:

  • Individuos que tenían una extensión válida para presentar su declaración de 2022 que vencía el 16 de octubre de 2023. Sin embargo, el IRS señaló que debido a que los pagos de impuestos relacionados con estas declaraciones de 2022 vencían el 18 de abril de 2023, esos pagos no elegibles para este alivio.
  • Pagos trimestrales de impuestos estimados que normalmente vencen el 15 de septiembre de 2023 y el 16 de enero de 2024.
  • Las declaraciones trimestrales de impuestos sobre la nómina y el consumo que normalmente vencen el 31 de octubre de 2023 y el 31 de enero de 2024.
  • Asociaciones de año calendario y corporaciones S cuyas extensiones de 2022 vencen el 15 de septiembre de 2023.
  • Corporaciones de año calendario cuyas extensiones de 2022 vencen el 16 de octubre de 2023.
  • Organizaciones exentas de impuestos de año calendario cuyas prórrogas vencen el 15 de noviembre de 2023.

Además, las multas por no realizar depósitos de impuestos sobre la nómina y el consumo adeudados a partir del 29 de agosto de 2023 y antes del 13 de septiembre de 2023 se reducirán siempre que los depósitos se realicen antes del 13 de septiembre de 2023.

La página de Ayuda y alivio por emergencia en casos de desastre para las personas y los negocios tiene detalles acerca de otras declaraciones, pagos y acciones relacionadas con impuestos que son elegibles para el tiempo adicional.

El IRS proporciona automáticamente la presentación y el alivio de multas a cualquier contribuyente con una dirección registrada con el IRS ubicada en el área del desastre. Por lo tanto, los contribuyentes no necesitan comunicarse con la agencia para obtener este alivio.

Es posible que un contribuyente afectado no tenga una dirección ubicada en el área del desastre registrada con el IRS, por ejemplo, porque se mudó al área del desastre después de presentar su declaración. En este tipo de circunstancias únicas, el contribuyente afectado podría recibir un aviso de multa por presentación tardía o pago atrasado del IRS por el período de aplazamiento. El contribuyente debe llamar al número que figura en el aviso para que se elimine 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. Contribuyentes elegibles para el alivio que viven fuera del área de desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudan en las actividades de socorro que están afiliados a un gobierno reconocido como una organización filantrópica.

Alivio tributario adicional

Las personas y empresas en un área de desastre declarada por el gobierno federal que sufrieron pérdidas relacionadas con el desastre no aseguradas o no reembolsadas pueden optar por reclamarlas en la declaración del año en que ocurrió la pérdida (en este caso, la declaración de 2023 que normalmente se presenta el próximo año), o la declaración del año anterior (2022). Los contribuyentes tienen tiempo adicional, hasta seis meses después de la fecha de vencimiento de la declaración de impuestos federales del contribuyente para el año del desastre (sin tener en cuenta cualquier extensión del tiempo para presentar) para hacer la elección. Deben asegurarse de escribir el número de declaración de FEMA – DR-3597-EM − en cualquier declaración que reclama una pérdida. Consulte la Publicación 547 (SP), Hechos Fortuitos, Desastres y Robos para detalles.

Los pagos calificados de ayuda en casos de desastre generalmente se excluyen del ingreso bruto. En general, esto significa que los contribuyentes afectados pueden excluir de sus ingresos brutos las cantidades recibidas de una agencia gubernamental para gastos personales, familiares, de manutención o funerarios razonables y necesarios, así como para la reparación o rehabilitación de su vivienda, o para la reparación o reposición de su contenido. Ver la Publicación 525 (en inglés) para detalles.

Es posible que haya alivio adicional disponible para los contribuyentes afectados que participen en un plan de jubilación o un acuerdo de jubilación individual (IRA). Por ejemplo, un contribuyente puede ser elegible para recibir una distribución especial por desastre que no estaría sujeta al impuesto adicional de distribución anticipada del 10% y le permite al contribuyente distribuir los ingresos en tres años. Los contribuyentes también pueden ser elegibles para realizar un retiro por dificultades económicas. Cada plan o IRA tiene reglas y pautas específicas que deben seguir sus participantes.

El IRS puede brindar ayuda adicional en casos de desastre en el futuro.

El alivio tributario es parte de una respuesta federal coordinada a causa de los daños por estas tormentas y se basa en las evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de la recuperación ante desastres, visite DisasterAssistance.gov

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.

Fuente: IRS    

IRS Reminder to Storm Victims in 3 States: File and Pay by Oct. 16; Most of California, Parts of Alabama and Georgia Affected

Posted by Admin Posted on Sept 22 2023

IRS Reminder to Storm Victims in 3 States: File and Pay by Oct. 16; Most of California, Parts of Alabama and Georgia Affected

The Internal Revenue Service reminded individuals and businesses in most of California and parts of Alabama and Georgia that their 2022 federal income tax returns and tax payments are due on Monday, Oct. 16, 2023. The normal due date of April 18 was postponed for many residents of these states in the wake of natural disasters earlier this year.

The IRS normally provides relief, including postponing various tax filing and payment deadlines, for any area designated by the Federal Emergency Management Agency (FEMA). As long as their address of record is in a disaster-area locality, individual and business taxpayers automatically get the extra time, without having to ask for it.

What areas qualify for the Oct. 16 deadline?

  • Thirteen counties in Alabama due to severe storms, straight-line winds and tornadoes starting on Jan. 12. The disaster area includes Autauga, Barbour, Chambers, Conecuh, Coosa, Dallas, Elmore, Greene, Hale, Mobile, Morgan, Sumter and Tallapoosa counties.
  • Fifty-five of California's 58 counties - all except Lassen, Modoc and Shasta counties. IRS relief is based on three different FEMA disaster declarations covering various jurisdictions and event time frames.
  • Nine counties in Georgia due to severe storms, straight-line winds and tornadoes beginning on Jan. 12. The disaster area includes Butts, Crisp, Henry, Jasper, Meriwether, Newton, Pike, Spalding and Troup counties.

The current list of eligible localities is always available on the disaster relief page on IRS.gov.

What returns and payments qualify for the Oct. 16 deadline?

Eligible returns and payments include:

  • 2022 individual income tax returns and payments normally due on April 18.
  • For eligible taxpayers, 2022 contributions to IRAs and health savings accounts.
  • Quarterly estimated tax payments normally due on April 18, June 15 and Sept. 15.
  • Calendar-year 2022 partnership and S corporation returns normally due on March 15.
  • Calendar-year 2022 corporate and fiduciary income tax returns and payments normally due on April 18.
  • Quarterly payroll and excise tax returns normally due on May 1 and July 31.
  • Calendar-year 2022 returns filed by tax-exempt organizations normally due on May 15.

Other returns, payments and time-sensitive tax-related actions also qualify for the extra time. See the IRS disaster relief page for details.

For those planning ahead, is relief available for Hurricane Idalia and the Hawaii wildfires?

Yes, but primarily for individuals and businesses who already requested extensions to file their 2022 returns. In general, these taxpayers now have until Feb. 15, 2024, to file. As a reminder, this is more time to file, not to pay. Details vary but currently, relief is available to:

  • Forty-nine counties in Florida.
  • Twenty-eight counties in Georgia.
  • All 46 counties in South Carolina.
  • Maui and Hawaii counties in Hawaii.

Other relief

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting with relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed in early 2024), or the return for the prior year (that is, the 2022 return normally filed in 2023). See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these disasters and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov

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 +1-305-274-5811.

Source: IRS     

 

Important Reminders for October Extension Filers Extension of Time to File

Posted by Admin Posted on Sept 22 2023

Important Reminders for October Extension Filers Extension of Time to File

Most taxpayers who requested an extension of time to file for their 2022 federal income tax return will have until Monday, October 16, 2023, to file. 
 

Although October 16 is the last day for most people to file, some taxpayers may have more time. These taxpayers include: 

 

  • Those serving in or in support of the Armed Forces in an area designated as a combat zone or contingency operation. They typically have at least 180 days after they leave the combat zone to file returns and pay any taxes due. For more information, see IRS Publication 3, Armed Forces’ Tax Guide. 

 

  • If you’re a citizen or resident alien working abroad, refer to Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad for details. 

 

  • Taxpayers in federally declared disaster areas who already had valid extensions. For more details, see the disaster relief page on IRS.gov.
     

Here are some key reminders for extension filers. 

Tax Filing Information 

Nearly everyone can e-file their tax return for free through IRS Free File. The program is available on IRS.gov now through October 16. E-filing is easy, safe, and the most accurate way for people to file their tax returns. The TAS website has additional information on Free File options and additional information on options for filing a tax return.
Filing when a refund is due: 

Taxpayers who are able should use direct deposit to get their tax refund electronically deposited into their financial account. If you are filing a paper return, check the Where to File Tax Returns webpage or the Form instructions to determine the correct address for where to mail it. 

 

Paying a tax balance:

 

Taxpayers who cannot pay in their balance in full should pay as much as possible when filing and evaluate payment options to resolve any remaining balance and avoid or reduce any further potential penalties and interest.  

 

If you did not already make a payment, the best way to pay is online from a checking or savings account with IRS Direct Pay, by debit or credit card (this option has an associated fee), or by Electronic Funds Withdrawal when you e-file. The TAS website has additional Get Help information on many topics related to paying taxes. 

Taxpayers can always check their account balance, view payments made, view prior tax accounts, or view and apply for payment options online. For more information about online accounts, see our TAS Tax Tip: Create an Online Account to view your balances, make payments, get transcripts, and more and the IRS’s Frequently Asked Questions About Online Account. 

 

Missed Tax Filing Deadline

 

What should taxpayers do about a missed filing deadline? Anyone who did not file or request an extension by this year’s deadline, or misses the October 16 extension date, should file and pay as soon as possible. (See the ‘Filing’ section above for more filing related information.) This will stop additional interest and penalties from accruing.  

See the Filing Past Due Tax Returns page on IRS.gov for more information. The TAS website has additional information on the consequences of not filing. 

 

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : TAS     

Se Acerca la Fecha Límite de Presentación para Quienes Solicitaron Prorrogas: Evite los Preparadores de Impuestos sin Escrúpulos

Posted by Admin Posted on Sept 13 2023

Se Acerca la Fecha Límite de Presentación para Quienes Solicitaron Prorrogas: Evite los Preparadores de Impuestos sin Escrúpulos

Se acerca la fecha límite de presentación del 16 de octubre de 2023, y muchos contribuyentes que solicitaron una prórroga ahora están considerando contratar los servicios de un preparador de declaraciones de impuestos. La mayoría de los preparadores de declaraciones de impuestos proveen un servicio honesto y de calidad, pero hay algunos sin escrúpulos por ahí, desde preparadores poco éticos hasta estafadores absolutos. Al contratar a una persona o empresa para preparar una declaración de impuestos, los contribuyentes deben entender cómo elegir cuidadosamente a un preparador de impuestos y qué preguntas hacer.

Algunas recomendaciones al escoger un preparador de declaraciones de impuestos:

  • Asegúrese de que el preparador firme e incluya su número de identificación de preparador de impuestos. Por ley, cualquier persona a la que se le pague para preparar o ayudar a preparar declaraciones de impuestos federales debe tener un Número de Identificación de Preparador de Impuestos válido. Los preparadores deben firmar las declaraciones e incluir su PTIN en cualquier declaración de impuestos que preparen. No firmar una declaración es una señal de alerta de que el preparador puede estar buscando obtener una ganancia rápida prometiendo un gran reembolso o cobrando tarifas basadas en el tamaño del reembolso. Los contribuyentes deben evitar estos preparadores de declaraciones de impuestos poco éticos.
  • Asegúrese de que su preparador esté disponible todo el año. Si surgen preguntas sobre una declaración de impuestos, es posible que los contribuyentes deban comunicarse con el preparador después de que termine la temporada de impuestos.
  • Revise el historial del preparador. Los contribuyentes pueden consultar con la Agencia de mejores negocios (BBB, por sus siglas en inglés) (en inglés) para obtener información sobre el preparador, cualquier acción disciplinaria y el estado de la licencia para los preparadores acreditados. Otros recursos incluyen: el sitio web de la Junta Estatal de Contabilidad para CPA; el Colegio de Abogados del Estado; y el Directorio de Preparadores de Impuestos Federales del IRS (en inglés) para agentes inscritos, o verifique el estado de un agente inscrito (en inglés) en línea.
  • Preguntar acerca de cuotas. Los Contribuyentes deben evitar usar preparadores de impuestos que basan sus cuotas en un porcentaje del reembolso o que ofrecen depositar el monto total o parcial de su reembolso a sus propias cuentas financieras. Deben tener cuidado con preparadores de impuestos que dicen que pueden obtener un reembolso mayor que sus competidores.
  • Preguntar si su preparador planifica usar la presentación electrónica. El IRS emite la mayoría de los reembolsos en menos de 21 días para los contribuyentes que presentan electrónicamente y eligen el depósito directo.
  • Entender las credenciales y calificaciones del preparador. Los abogados, contadores públicos y agentes inscritos pueden representar a cualquier cliente ante el IRS en cualquier situación. El Directorio de preparadores de declaraciones de impuestos federales y calificaciones selectas del IRS (en inglés) puede ayudar a identificar a muchos preparadores por tipo de credencial o calificación. Los preparadores de impuestos que participan en el Programa anual de temporada de impuestos (en inglés) pueden representar a los contribuyentes en situaciones limitadas si prepararon y firmaron la declaración de impuestos.

Una vez que un contribuyente ha seleccionado un preparador de impuestos, no debe bajar la guardia

  • Los buenos preparadores piden ver los registros y recibos. También harán preguntas para determinar los ingresos totales del cliente, deducciones, créditos tributarios y otros artículos. Los contribuyentes deben evitar a un preparador de declaraciones de impuestos que presente electrónicamente usando talones de pago en lugar de un Formulario W-2. Esto va en contra de las reglas del IRS.
  • Los contribuyentes deben revisar la declaración de impuestos antes de firmarla y hacer preguntas si algo no está claro o incorrecto.
  • Cualquier reembolso debe ir directamente al contribuyente, no a la cuenta bancaria del preparador. Los contribuyentes deben verificar la ruta y el número de cuenta bancaria en la declaración completa y asegurarse de que sean precisos.
  • Los contribuyentes son responsables de presentar una declaración de impuestos completa y correcta. Nunca deben firmar una declaración en blanco o incompleta y nunca contratar a un preparador de declaraciones de impuestos que les pida que lo hagan.

Los contribuyentes pueden reportar la mala conducta del preparador al IRS usando el Formulario 14157 (SP), Queja contra el Preparador de Declaraciones de Impuestos. Si un contribuyente sospecha que un preparador de declaraciones de impuestos presentó o cambió su declaración de impuestos sin su consentimiento, debe presentar el Formulario 14157-A, Declaración jurada de fraude o conducta indebida del preparador de declaraciones de impuestos (en inglés)

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente: IRS     

Are Scholarships Taxable?

Posted by Admin Posted on Sept 12 2023

Are Scholarships Taxable?

If your child has been awarded a scholarship, that’s cause for celebration. For some students, a scholarship means the difference between going to the college of their choice and starting at community college, or even not going at all. But be aware that scholarships may bring tax consequences.

Generally, but not always

Scholarships (and fellowships) are generally tax-free for students at elementary, middle and high schools, as well as those attending college, graduate school or accredited vocational schools. It doesn’t matter if the scholarship makes a direct payment to the individual or reduces tuition.

However, subject to limited exceptions, a scholarship isn’t tax-free if the payments are linked to services that the student performs as a condition for receiving the award, even if the services are required of all degree candidates. Therefore, a stipend a student receives for required teaching, research or other services is taxable, even if the student uses the money for tuition or related expenses.

What if you, or a family member, is fortunate enough to be an employee of an educational institution that provides reduced or free tuition to employees and their families? Such a reduction in tuition isn’t included in the employee’s income or subject to tax.

Returns and recordkeeping

If a scholarship is tax-free and the student has no other income, the award doesn’t have to be reported on a tax return. However, any portion of an award that’s taxable as payment for services is treated as wages. Estimated tax payments may have to be made if the payor doesn’t withhold enough tax.

The student should receive a Form W-2, “Wage and Tax Statement,” showing the amount of these wages and the amount of tax withheld. But any portion of the award that’s taxable must be reported even if no Form W-2 is received.

Basic rules

These are just a few of the basic rules. Other rules and limitations may apply. For example, if your child’s scholarship is taxable, it may limit other higher education tax benefits to which you or your child are entitled. As we approach the new school year, best wishes for your child’s success. Please contact us if you wish to discuss this or any other tax matter.

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 +1-305-274-5811.

Source: Thomson Reuters      

Family Business Must Beware of Fraud

Posted by Admin Posted on Sept 12 2023

Family Business Must Beware of Fraud

Family businesses make up a huge percentage of companies in the United States and produce much of the country’s gross domestic product. Often defined as companies that are majority owned by a single family with two or more family members involved in their management, family businesses can be a significant source of wealth. However, they may also potentially face higher fraud risks.

Major obstacles involved

Why might family businesses be more vulnerable to fraud than other companies? For one thing, prevention efforts can be hampered by loyalty and affection. One of the biggest obstacles to fraud prevention is simply acknowledging that someone in the family could be capable of initiating or overlooking unethical or illegal activities.

But like any other business, family enterprises should include internal controls that make fraud difficult to perpetrate. It may be awkward to exercise authority over members of one’s own family, but someone needs to take charge if or when issues arise. Sometimes family businesses need to hit the reset button and reestablish a hierarchy and process of authority while moving forward with the enterprise.

Advantage of independent advice

Of course, the person in charge potentially could be the one defrauding the company. That’s why independent auditors and legal advisors are critical. Your family business should look outside its immediate circles of relatives and friends and retain professional advisors who can be objective when assessing the company. Audited financial statements from independent accountants protect the business and its stakeholders.

If your company is large enough to have a board of directors, it should include at least one outsider who’s strong enough to tell you things you may not want to hear. In some extreme cases, members of all-family boards have been known to work together to bilk their companies. This becomes much more difficult when collusion requires the assistance of an outsider.

Punishing the perpetrator

Another factor that makes preventing fraud in family businesses hard is how they tend to handle fraud incidents. Even when legal action is an option, families rarely can bring themselves to pursue action against one of their own. Sometimes families choose to save the fraudster from public scandal or punishment rather than maintain ethical professional standards. Many fraud perpetrators know that.

If you discover a family member is committing fraud, consult with a trusted attorney or accountant. An advisor may want to explain to the perpetrator the illegality and possible consequences of the fraudulent actions. If such interventions don’t work, however, you and other family members may have no choice but to seek prosecution.

Avoid blind trust

There are plenty of advantages to working with family members, but you also need to watch for pitfalls. To maintain high ethical standards and prevent fraud, rely on professional advisors and nonfamily officers to provide perspective and objective advice. Contact us for help with internal controls.

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 +1-305-274-5811.

Source : Thomson Reuteurs   

IRS: South Carolina Taxpayers Impacted by Idalia Qualify for Tax Relief; Oct. 16 Deadline, Other Dates Postponed to Feb. 15

Posted by Admin Posted on Sept 12 2023

IRS: South Carolina Taxpayers Impacted by Idalia Qualify for Tax Relief; Oct. 16 Deadline, Other Dates Postponed to Feb. 15

The Internal Revenue Service announced tax relief for individuals and businesses affected by Idalia, anywhere in South Carolina. These taxpayers now have until Feb. 15, 2024, to file various federal individual and business tax returns and make tax payments. This is similar to relief already being provided in most of Florida.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). All 46 counties in South Carolina qualify. Individuals and households that reside or have a business in these counties qualify for tax relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Filing and payment relief

The tax relief postpones various tax filing and payment deadlines that occurred from Aug. 29, 2023, through Feb. 15, 2024 (postponement period). As a result, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the Feb. 15, 2024, deadline will now apply to:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief.
  • Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
  • Calendar-year partnerships and S corporations whose 2022 extensions run out on Sept. 15, 2023.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
  • Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.

In addition, penalties for the failure to make payroll and excise tax deposits due on or after Aug. 29, 2023, and before Sept. 13, 2023, will be abated as long as the deposits are made by Sept. 13, 2023.

The IRS disaster assistance and emergency relief for individuals and businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional tax relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. Be sure to write the FEMA declaration number – DR-3597-EM − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by this storm and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov

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 +1-305-274-5811.

Source: IRS      

Determining the Right Time to Transfer Wealth to Your Heirs

Posted by Admin Posted on Sept 12 2023

Determining the Right Time to Transfer Wealth to Your Heirs

To gift or not to gift? It’s a deceptively complex question. The temporary doubling of the gift and estate tax exemption (to an inflation-adjusted $12.92 million in 2023) is viewed by many as a “use it or lose it” proposition. In other words, if you have a large estate, you should make gifts now to take advantage of the high exemption before it sunsets at the end of 2025 (or sooner if lawmakers decide to reduce it earlier).

But giving away wealth now isn’t right for everyone. Depending on your circumstances, there may be tax advantages to keeping assets in your estate.

Lifetime gifts vs. bequests at death

The primary advantage of making lifetime gifts is that, by removing assets from your estate, you shield future appreciation from estate taxes. But there’s a tradeoff: The recipient receives a “carryover” tax basis, meaning that the recipient assumes your basis in the asset. If a gifted asset has a low basis relative to its fair market value (FMV), then a sale will trigger capital gains tax on the difference.

An asset transferred at death, however, receives a “stepped-up” basis equal to its date-of-death FMV. That means the recipient can sell it with little or no capital gains tax liability. So, the question becomes, which strategy has the lower tax cost: transferring an asset by gift (now) or by bequest (later)?

The answer depends on several factors, including the asset’s basis-to-FMV ratio, the likelihood that its value will continue appreciating, your current or potential future exposure to gift and estate taxes, and the recipient’s time horizon (how long you expect the recipient to hold the asset after receiving it).

3 examples

Let’s looks at some examples. To keep things simple, we’ll always assume that you and your heirs are subject to tax on capital gains at a rate of 23.8% (the top capital gains rate of 20% plus the 3.8% rate on net investment income) and that the gift and estate tax rate is 40% of amounts in excess of the applicable exemption.

Example #1. You have $8 million in publicly traded securities with a $3 million basis and $3 million in other assets. You haven’t used any of your exemption amount. If you give the securities to your son, who sells them immediately for $8 million, he’ll owe $1.19 million in capital gains taxes [23.8% × ($8 million - $3 million)].

Suppose, instead, that you hold the securities for life, that the inflation-adjusted exemption in the year you die is $14 million, that the securities’ value has grown to $11 million, and that your other assets have grown to $4 million. If your son inherits the securities, he’ll receive a stepped-up basis of $11 million and can sell them tax-free. Your estate will be subject to estate taxes of $400,000 [40% × ($15 million - $14 million exemption)]. In this scenario, holding the securities is the better strategy from a tax perspective.

Example #2. Same facts as in the first example, except that your son plans to hold the securities for life rather than sell them. In this scenario, gifting the securities now is the better strategy because, by holding them, your son avoids capital gains taxes and there’s no estate tax because the future appreciation on the securities is removed from your estate.

Example #3. Again, the same facts as in the first example, except that when you die the exemption has dropped to $8 million, so your estate is subject to estate taxes of $2.8 million [40% × ($15 million - $8 million exemption)]. In this scenario, gifting the securities now results in a substantially lower tax bill, even if your son sells them immediately.

These three examples are highly simplified to illustrate the decision-making process. In the real world, many other factors may affect the overall economics, including an asset’s income-earning potential, the applicability of state income and estate taxes, and potential changes in capital gains and gift and estate tax rates.

Dealing with uncertainty

Determining whether to hold or gift assets is challenging because the best course of action may depend on future events. Work with your tax and estate planning advisors to monitor legislative developments and adjust your estate plan accordingly. And consider tools for building flexibility into your plan to soften the blow of future tax changes.

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 +1-305-274-5811.

Source: Thomson Reuters     

Taxpayers See Wave of Summer Email, Text Scams; IRS Urges Extra Caution with Flood of Schemes Involving Economic Impact Payments, Employee Retention Credits, Tax Refunds

Posted by Admin Posted on Sept 12 2023

Taxpayers See Wave of Summer Email, Text Scams; IRS Urges Extra Caution with Flood of Schemes Involving Economic Impact Payments, Employee Retention Credits, Tax Refunds

The Internal Revenue Service warned taxpayers to be on the lookout for a summer surge of tax scams as identity thieves continue pounding out a barrage of email and text messages promising tax refunds or offers to help 'fix' tax problems.

The latest email schemes touch on a variety of topics, but many center around promises about a third round of Economic Impact Payments. The IRS is seeing hundreds of complaints daily pouring into phishing@irs.gov about this scam, which has an embedded URL link that takes people to phishing website to steal sensitive taxpayer information.

The IRS is also receiving reports of emails urging people to "Claim your tax refund online," and text messages that the person's tax return was "banned" by the IRS. These scams are riddled with spelling errors and awkward phrasing, but they consistently try to entice people to click on a link.

"The IRS is seeing a wave of these summer scams relentlessly pounding taxpayers," said IRS Commissioner Danny Werfel. "People are being flooded with these email and text messages, but we want them to avoid getting swept up in these terrible scams. Taxpayers should be wary; remember, don't click on links from questionable sources."

As part of the Security Summit effort, the IRS has been working in partnership with state tax administrators, tax professionals and the nation's tax industry to warn people about identity theft risks, including the ongoing push by scammers to trick people into sharing personal information through email, texts and phone calls. The Security Summit is currently in the middle of a special summer news release series aimed increasing awareness among tax professionals on ways to protect themselves – and their clients – against identity theft.

At the same time, the IRS and Security Summit continue to warn taxpayers against the most recent wave of activity involving tax scammers. Here are some highlights:

The Economic Impact Payment scheme

This is currently the highest volume email scheme the IRS is seeing. Emails messages are hitting inboxes with titles like: "Third Round of Economic Impact Payments Status Available." The IRS routinely sees hundreds of taxpayers forwarding these messages each day; the IRS has seen thousands of these emails reported since the July 4 holiday period.

The third round of Economic Impact Payments occurred in 2021, more than two years ago. And this particular scheme, which plays off this real-world tax event, has been around since then. But while the stimulus payments ended long ago, the related scheme has evolved and changed as scam artists look for new ways to adjust their message to trick people.

Taxpayers shouldn't be fooled by this message for many reasons. For example, these emails are routinely riddled with spelling errors and factual inaccuracies, like this example:

"Dear Tax Payer, We hope this message finds you well. We are writing to inform you abount an important matter regarding your recent tax return filing. Our record indicate that we have received your tax return for the fiscal inconsistencies or missing information that require your attention and clarification. You will receive a tax refund of $976.00 , We will process this amount once you have submitted the document we need for the steps to claim your tax refund.

Sender : INTERNAL REVENUE SERVICE"

Like many scams, this email urges people to click on a link so they can complete their "application." Instead, it takes the taxpayer to a website where identity thieves will try to harvest valuable personal information.

The misleading "You may be eligible for the ERC" claim

The IRS has observed a significant increase in false Employee Retention Credit (ERC) claims. The ERC, sometimes also called the Employee Retention Tax Credit or ERTC, is a pandemic-related credit for which only select employers qualify.

Scam promoters are luring people to improperly claim the ERC with "offers" online, in social media, on the radio, or through unsolicited phone calls, emails and even mailings that look like official government letters but have fake agency names and usually urge immediate action. These unscrupulous promoters make false claims about their company's legitimacy and often don't discuss some key eligibility factors, limitations and income tax implications that affect an employer's tax return. It's important to watch for warning signs such as promoters who say they can quickly determine someone's eligibility without details, and those who charge up-front fees or a fee based on a percentage of the ERC claimed.

Anyone who improperly claims the ERC must pay it back, possibly with penalties and interest.

Eligible employers who need help claiming the ERC should work with a trusted tax professional. False ERC claims were so widespread this year that the IRS added them to its annual Dirty Dozen list of tax scams. Details about eligibility, how to properly claim the credit, and how to report promoters are available at Employee Retention Credit.

The "Claim your tax refund online" scheme

Identity thieves know that the concept of free or overlooked money is tempting for people. So the IRS routinely sees email and text schemes playing off tax refunds and suggesting people have somehow missed getting their tax refund.

A variation hitting inboxes in recent weeks has a blue headline proclaiming people should "Claim your tax refund online."

Again, there are telltale warning signs, including misspellings and urging people to click a link for help to "claim tax refund." Here's one example:

"We cheked an error in the calculation of your tax from the last payment, amounting to $ 927,22. In order for us to return the excess payment, you need to create a E-Refund after which the funds will be credited to your specified bank. Please click below to claim your tax refund. If we are unable to complete within 3 days, all pending will be cancelled."

The "Help You Fix-It" text scheme

In another text scam seen in recent weeks, identity thieves come up with a name on a text message that tries to sound official, like "govirs-accnnt2023." They then send a variety of messages that say there's a problem with a person's tax return but, not to worry, the anonymous sender of the text message can help resolve the problem if they click on a link.

Like others, there are many red flags on these text messages, including misspellings and factual inaccuracies:

"MSG … IRS: Your federal return was ban-by the IRS. Don't worry, we'll help you fix it. Click this link."

The "Delivery Service" scam at your door

Earlier this month, the IRS warned taxpayers to be on the lookout for a new scam mailing that tries to mislead people into believing they are owed a refund. The new scheme involves a mailing that arrives in a cardboard envelope from a delivery service. The enclosed letter includes the IRS masthead and wording that the notice is "in relation to your unclaimed refund."

Receive a scam message?

People that receive these scams by email should send the email to phishing@irs.gov. People can forward the message, but IRS cybersecurity experts prefer to see the full email header to help them identify the scheme.

If people are victims after clicking and entering their information, they should report the email to phishing@irs.gov – but they should also file a complaint with Treasury Inspector General for Tax Administration and visit IdentityTheft.gov and Identity Theft Central.

More important reminders about scams

The IRS and Security Summit partners regularly warn people about common scams, including the annual IRS Dirty Dozen list.

Taxpayers and tax professionals should be alert to fake communications from scammers posing as legitimate organizations in the tax and financial community, including the IRS and the states. These messages can arrive in the form of an unsolicited text or email to lure unsuspecting victims to provide valuable personal and financial information that can lead to identity theft, including phishing and smishing.

The IRS never initiates contact with taxpayers by email, text or social media regarding a bill or tax refund.

As a reminder: Never click on any unsolicited communication claiming to be the IRS as it may surreptitiously load malware. It may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.

Individuals should never respond to tax-related phishing or smishing or click on the URL link. Instead, the scams should be reported by sending the email or a copy of the text/SMS as an attachment to phishing@irs.gov.

Taxpayers can also report scams to the Treasury Inspector General for Tax Administration or the Internet Crime Complaint Center. The Report Phishing and Online Scams page at IRS.gov provides complete details. The Federal Communications Commission's Smartphone Security Checker is a useful tool against mobile security threats.

The IRS also warns taxpayers to be wary of messages that appear to be from friends or family but that are possibly stolen or compromised email or text accounts from someone they know. This remains a popular way to target individuals and tax preparers for a variety of scams. Individuals should verify the identity of the sender by using another communication method; for instance, calling a number they independently know to be accurate, not the number provided in the email or text.

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 +1-305-274-5811.

Source : IRS      

Contribuyentes Ven Ola de Estafas por Correo Electrónico y Mensajes de Texto Durante el Verano; IRS Insta a Tener Precaución Ante Gran Cantidad de Estafas Relacionadas con Pagos de Impacto Económico, Crédito por Retención de Empleados y Rembolsos

Posted by Admin Posted on Sept 12 2023

Contribuyentes Ven Ola de Estafas por Correo Electrónico y Mensajes de Texto Durante el Verano; IRS Insta a Tener Precaución Ante Gran Cantidad de Estafas Relacionadas con Pagos de Impacto Económico, Crédito por Retención de Empleados y Rembolsos

El Servicio de Impuestos Internos les advirtió hoy a los contribuyentes que estén atentos a una oleada de estafas tributarias durante el verano, ya que los ladrones de identidad siguen enviando una gran cantidad de mensajes de correo electrónico y de texto a través de los cuales prometen reembolsos u ofertas para ayudar a "solucionar" problemas tributarios.

Las estafas por correo electrónico más recientes tocan una variedad de temas, pero muchas se centran en promesas acerca de una tercera ronda de Pagos de impacto económico. El IRS está recibiendo cientos de quejas diarias en phishing@irs.gov acerca de esta estafa, que tiene un enlace URL incluido que lleva a la gente a un sitio web de phishing para robar información confidencial de los contribuyentes.

El IRS también está recibiendo informes de correos electrónicos que instan a la gente a "Reclamar su reembolso de impuestos en línea", y mensajes de texto que dicen que la declaración de impuestos de la persona fue "rechazada" por el IRS. Estas estafas están llenas de errores ortográficos y frases raras, pero constantemente intentan que la gente pulse un enlace.

"El IRS está viendo una ola de estas estafas veraniegas que atacan continuamente a los contribuyentes," dijo el Comisionado del IRS Danny Werfel. "La gente está siendo inundada con estos correos electrónicos y mensajes de texto, pero queremos que eviten caer en estas terribles estafas. Los contribuyentes deben ser cautelosos; recuerden, no pulsen en enlaces de fuentes dudosas."

Como parte del esfuerzo de la Cumbre de Seguridad, el IRS ha estado trabajando en asociación con administradores de impuestos estatales, profesionales de impuestos y la industria de impuestos de la nación para advertir a la gente acerca de los riesgos del robo de identidad, que incluye el continuo empuje de los estafadores para engañar a la gente a compartir información personal a través de correo electrónico, textos y llamadas telefónicas. La Cumbre de Seguridad se encuentra actualmente en medio de una serie especial de comunicados de prensa de verano destinados a aumentar la concienciación entre los profesionales de impuestos acerca de las maneras para protegerse a sí mismos - y a sus clientes - contra el robo de identidad.

Al mismo tiempo, el IRS y la Cumbre de Seguridad continúan advirtiendo a los contribuyentes contra la más reciente ola de actividad de los estafadores tributarios. Aquí están algunos puntos destacados:

Estafa de Pago de impacto económico

Esta es actualmente la estafa de correo electrónico de mayor volumen que el IRS está viendo. Los mensajes de correo electrónico llegan a los buzones con títulos como: " Estatus disponible de la tercera ronda de Pagos de impacto económico". El IRS rutinariamente ve cientos de contribuyentes que reenvían estos mensajes cada día; el IRS ha visto miles de estos correos electrónicos reportados desde el día feriado del 4 de julio.

La tercera ronda de Pagos de impacto económico se produjo en 2021, hace más de dos años. Y esta estafa en particular, que se basa en este evento tributario real, ha existido desde entonces. Pero mientras que los pagos de estímulo terminaron hace mucho tiempo, la estafa relacionada ha evolucionado y cambiado a medida que los estafadores buscan nuevas maneras de ajustar su mensaje para engañar a la gente.

Los contribuyentes no deben dejarse engañar por este mensaje por muchas razones. Por ejemplo, estos correos suelen estar llenos de errores ortográficos y errores de hechos reales, como en este ejemplo en inglés:

"Dear Tax Payer, We hope this message finds you well. We are writing to inform you abount an important matter regarding your recent tax return filing. Our record indicate that we have received your tax return for the fiscal inconsistencies or missing information that require your attention and clarification. You will receive a tax refund of $976.00 , We will process this amount once you have submitted the document we need for the steps to claim your tax refund.

Sender : INTERNAL REVENUE SERVICE"

 

Al igual que muchas estafas, este correo electrónico insta a la gente a hacer clic en un enlace para que puedan completar su "solicitud." En lugar de eso, lleva al contribuyente a un sitio web en el que los ladrones de identidad intentarán recopilar valiosa información personal.

El reclamo incorrecto de "Usted puede ser elegible para el ERC"

El IRS ha observado un aumento significativo de solicitudes falsas del ERC. El ERC, a veces también llamado Crédito Tributario por Retención de Empleados (ERTC), es un crédito relacionado con la pandemia del cual solo ciertos empleadores pueden ser elegibles.

Los promotores de estafas continúan atrayendo a la gente a reclamar indebidamente el Crédito por retención de empleados (ERC) con "ofertas" en línea, en los medios sociales, en la radio, o a través de llamadas telefónicas, correos electrónicos no solicitados e incluso correos postales que parecen cartas oficiales del gobierno, pero tienen nombres falsos de agencias y por lo general instan a una acción inmediata. Estos promotores sin escrúpulos hacen promesas falsas sobre la legitimidad de su empresa y a menudo no hablan de algunos factores clave de elegibilidad, limitaciones e implicaciones tributarias que afectan a la declaración de impuestos de un empleador. Es importante estar atento a las señales de alerta, como los promotores que dicen que pueden determinar rápidamente la elegibilidad de alguien sin detalles, y los que cobran honorarios por adelantado o una tarifa a base de un porcentaje del ERC reclamado.

Cualquiera que reclame indebidamente el ERC debe devolverlo, posiblemente con multas e intereses.

Los empresarios elegibles que necesiten ayuda para reclamar el ERC deben trabajar con un profesional de impuestos de confianza. Este año, han sido tantas las reclamaciones indebidas del ERC que el IRS la incluyo en su lista anual de estafas tributarias, la Docena Sucia. Los detalles acerca de la elegibilidad, cómo reclamar correctamente el crédito y cómo denunciar a los promotores están disponibles en Crédito por retención de empleados.

La estafa de "Reclame su reembolso de impuestos en línea"

Los ladrones de identidad saben que el concepto de dinero gratis o pasado por alto es tentador para la gente. Por eso, el IRS ve a menudo mensajes de correo electrónico y de texto que juegan con la idea de que la gente no ha recibido su reembolso de impuestos.

Una variante que está llegando a los correos electrónicos en las últimas semanas tiene un titular azul que proclama que la gente debe "Reclamar su reembolso de impuestos en línea".

Una vez más, hay señales de alerta que delatan, como errores de ortografía e instar a la gente a hacer clic en un enlace para obtener ayuda para "reclamar el reembolso de impuestos." He aquí un ejemplo en inglés:

"We cheked an error in the calculation of your tax from the last payment, amounting to $ 927,22. In order for us to return the excess payment, you need to create a E-Refund after which the funds will be credited to your specified bank. Please click below to claim your tax refund. If we are unable to complete within 3 days, all pending will be cancelled."

La estafa del mensaje de texto "Ayuda para arreglarlo"

En otra estafa de mensajes de texto vista en las últimas semanas, los ladrones se inventan un nombre en un mensaje de texto que intenta sonar oficial, como "govirs-accnnt2023". Después, envían una serie de mensajes que dicen que hay un problema con la declaración de una persona, pero, que no hay que preocuparse, el remitente anónimo del mensaje de texto puede ayudar a resolver el problema si se hace clic en un enlace.

Al igual que otros, hay muchas señales de alarma en estos mensajes de texto, como errores de ortografía e información incorrecta:

"MSG … IRS: You federal return was ban-by the IRS. Don't worry, we'll help you fix it. Click this link."

La estafa del "servicio de entrega" a domicilio

A principios de este mes, el IRS advirtió a los contribuyentes que estuvieran atentos a un nuevo correo fraudulento que intenta engañar a la gente haciéndoles creer que se les debe un reembolso. La estafa consiste en un correo que llega en un sobre de cartón de un servicio de entrega. La carta adjunta incluye el encabezado del IRS y el mensaje de que el aviso es "con relación a su reembolso no reclamado".

Las personas que reciban estas estafas por correo electrónico deben enviar el mensaje a phishing@irs.gov. La gente puede reenviar el mensaje, pero los expertos en ciberseguridad del IRS prefieren ver el encabezado completo del correo electrónico para ayudarles a identificar la estafa.

Si las personas son víctimas después de haber pulsado e ingresado su información, deben informar del correo electrónico a phishing@irs.gov, pero también deben presentar una queja ante el Inspector General del Tesoro para la Administración Tributaria y visitar RobodeIdentidad.gov y Centro informativo sobre el robo de identidad.

Recordatorios importantes adicionales acerca de estafas

El IRS y los socios de la Cumbre de Seguridad advierten regularmente a la gente acerca de estafas comunes, que incluye la lista anual de la Docena Sucia del IRS.

Los contribuyentes y los profesionales de impuestos deben estar en alerta ante comunicaciones falsas de estafadores que se hacen pasar por organizaciones legítimas de la comunidad tributaria y financiera, incluyendo el IRS y los estados. Estos mensajes pueden llegar a través de un texto o correo electrónico no solicitado para atraer a víctimas desprevenidas para que proporcionen información personal y financiera valiosa que puede conducir al robo de identidad, incluyendo phishing y smishing.

El IRS nunca inicia contacto con los contribuyentes por correo electrónico, texto o medios sociales en relación con una factura o reembolso de impuestos. Como recordatorio: Nunca pulse en ninguna comunicación no solicitada que afirme ser del IRS, ya que puede cargar malware de forma encubierta. También puede ser una manera de que hackers malintencionados carguen un ransomware que impida al usuario legítimo acceder a su sistema y a sus archivos.

Las personas nunca deben responder a phishing o smishing relacionado con impuestos ni oprimir el enlace URL. En cambio, las estafas deben denunciarse enviando el correo o una copia del texto/SMS a phishing@irs.gov.

Los contribuyentes también pueden denunciar las estafas al Inspector General del Tesoro para la Administración Tributaria (en inglés) o al Centro de Denuncias de Delitos por Internet (en inglés). La página Reporte práctica fraudulenta de pesca de información en IRS.gov proporciona detalles completos. El Verificador de Seguridad de Teléfonos Inteligentes (en inglés) de la Comisión Federal de Comunicaciones es una herramienta útil contra las amenazas a la seguridad móvil.

El IRS también advierte a los contribuyentes que tengan cuidado con los mensajes que parecen ser de amigos o familiares pero que posiblemente son cuentas de correo electrónico o de texto robadas o comprometidas de alguien que conocen. Esta sigue siendo una manera popular de atacar a personas y preparadores de impuestos para una variedad de estafas. Las personas deben verificar la identidad del remitente a través de otro método de comunicación; por ejemplo, llamando a un número que sepan de manera independiente que es correcto, no al número proporcionado en el correo electrónico o mensaje de texto.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente: IRS      

Certain Energy Credits under the Inflation Reduction Act are Elective Pay Eligible

Posted by Admin Posted on Sept 12 2023

Certain Energy Credits under the Inflation Reduction Act are Elective Pay Eligible

Elective pay allows applicable entities, including tax-exempt and governmental entities that would otherwise be unable to claim certain credits because they do not owe federal income tax, to benefit from some clean energy tax credits. By choosing this election, the amount of the credit is treated as a payment of tax and any overpayment will result in a refund.

Applicable entity eligibility

Applicable entities can use elective pay. Applicable entities include:

  • Tax-exempt organizations such as public charities, private foundations, social welfare organizations, labor organizations, business leagues and others
  • States and political subdivisions such as local governments or Indian tribal governments
  • U.S. territories and their political subdivisions
  • Agencies and instrumentalities of state, local, tribal and U.S. territorial governments
  • Alaska Native corporations
  • The Tennessee Valley Authority
  • Rural electric cooperatives

How to receive the elective payment

For an eligible entity to receive an elective payment, they need to take the following steps:

  1. Identify the project or activity they are pursuing and satisfy all requirements for the applicable credit.
  2. Determine the correct tax year, which determines the due date of the tax return.
  3. Complete the pre-filing registration process with the IRS. More information about this process will be available later in 2023. 

After the pre-filing registration process is complete and the requirements for the applicable credit have been satisfied, the eligible entity can claim and receive an elective payment by choosing the election on their annual tax return along with any form required to claim the relevant tax credit.

Applicable entities need their own Employee Identification Number (EIN) or Tax Identification Number (TIN) to complete the pre-filing registration process. Applicable entities that don't otherwise have a filing requirement cannot use or borrow the EIN of a related entity.

Eligible credits:

  • Production Tax Credit for Electricity from Renewables
  • Clean Electricity Production Tax Credit
  • Investment Tax Credit for Energy Property
  • Clean Electricity Investment Tax Credit
  • Low-Income Communities Bonus Credit
  • Credit for Carbon Oxide Sequestration
  • Zero-Emission Nuclear Power Production Credit
  • Advanced Energy Project Credit
  • Advanced Manufacturing Production Credit
  • Credit for Qualified Commercial Clean Vehicles
  • Alternative Fuel Vehicle Refueling Property Credit
  • Clean Hydrogen Production Tax Credit
  • Clean Fuel Production Credit

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 +1-305-274-5811.

Source : IRS      

Learn the Warning Signs of Employee Retention Credit Scams

Posted by Admin Posted on Sept 12 2023

Learn the Warning Signs of Employee Retention Credit Scams

Businesses and tax-exempt organizations should watch out for telltale signs of misleading claims involving the Employee Retention Credit. Scammers and unscrupulous promoters continue to run aggressive broadcast advertising, direct mail solicitations and online promotions for the credit. Many of these ads wildly misrepresent and exaggerate who can qualify for the ERC, which is sometimes also called ERTC or the Employee Retention Tax Credit.

Anyone who improperly claims the ERC will have to pay it back, possibly with penalties and interest. The IRS doesn't want that to happen. Employers should know what the credit is and who qualifies and be on the lookout for the warning signs of a scam. And they should rely on the advice of a trusted tax professional, not aggressive marketing or unsolicited proposals.

About the ERC

The ERC is a refundable COVID-era tax credit designed for employers that kept paying employees while shut down because of a COVID-19 related government order or that had a requisite decline in gross receipts during the eligibility periods. The credit can be claimed only by eligible businesses and tax-exempt organizations that had employees during specific time periods.

Anyone considering claiming the ERC should carefully review the specific eligibility requirements at IRS.gov/erc. Eligible employers who need help claiming the credit should work with a trusted tax professional.

Warning signs of an ERC scam include:

  • Unsolicited calls or advertisements mentioning an “easy application process.”
  • Statements that the promoter or company can determine ERC eligibility within minutes or before any discussion of the employer's tax situation. The Employee Retention Credit is a complex credit that requires careful review before applying.
  • Large upfront fees to claim the credit.
  • Fees based on a percentage of the refund amount of ERC claimed.
  • Promoters telling businesses to claim the ERC because they have nothing to lose. Those who improperly receive the credit could have to repay it – along with substantial interest and penalties.
  • Promoters telling businesses to ignore the advice of their trusted tax professional.

These promoters may lie about eligibility requirements. In addition, anyone using these promoter's services could be at risk of someone trying to steal their identity or use their information to take a cut of the improperly claimed credit.

How the promoters lure victims

The IRS continues to see a variety of ways that promoters can lure businesses, non-profit groups and others into applying for the credit.

  • Aggressive marketing. ERC ads are appearing almost everywhere, including radio, television and online as well as phone calls and text messages.
  • Direct mailing. Some ERC promoters are sending letters to taxpayers from non-existent groups like the "Department of Employee Retention Credit." Scammers will create these letters to look like official IRS correspondence or an official government mailing with language urging immediate action.
  • Leaving out key details. Third-party promoters of the ERC often don't accurately explain eligibility requirements or how to calculate the credit. They may make broad arguments suggesting that all employers are eligible without evaluating an employer's individual circumstances. In addition, many promoters don't tell employers that they can't claim the ERC on wages that they reported as payroll costs if they received Paycheck Protection Program loan forgiveness.

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 +1-305-274-5811.

Source : IRS      

Storing Tax Records: How long is Long Enough?

Posted by Admin Posted on Sept 12 2023

Storing Tax Records: How long is Long Enough?

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

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

Business Records To Keep...

Personal Records To Keep...

1 Year

1 Year

3 Years

3 Years

6 Years

6 Years

Forever

Forever

Special Circumstances

Business Documents To Keep For One Year

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

Business Documents To Keep For Three Years

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

Business Documents To Keep For Six Years

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

Business Records To Keep Forever

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

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

Personal Documents To Keep For One Year

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

 

Personal Documents To Keep For Three Years

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

Personal Documents To Keep For Six Years

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

Personal Records To Keep Forever

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

Special Circumstances

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

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : Thomson Reuters      

What to Do if You Receive Notification Your Tax Return is Being Examined or Audited 2023

Posted by Admin Posted on Sept 07 2023

What to Do if You Receive Notification Your Tax Return is Being Examined or Audited 2023

If the IRS selects your tax return for audit (also called examination), it doesn’t automatically mean something is wrong. 

The IRS performs audits by mail or in person. The notice you receive will have specific information about why your return is being examined, what documents if any they need from you, and how you should proceed. 

Once the IRS completes the examination, it may accept your return as filed or propose changes. These changes may affect the amount of tax you owe or the amount of your refund. 

Got an IRS notice saying they are auditing your tax return?

If you are unable to understand the notice, you can use our Did you get a notice from the IRS? section on our Home page that allows you to enter the notice or letter number to find out more about it, what action you may need to take, and where in the IRS process it falls. Or you can go to our Taxpayer Roadmap directly to see where your tax return is within the IRS process, how the return got there, and what’s next. Once in the Roadmap, you can still look up a specific notice if it isn’t already listed to find out what to do next. 

Type of audit/examination and what to do for each type8

The IRS notice should confirm whether the audit is being conducted by correspondence (by mail) or in person. The actions you need to take will depend on how the audit is being conducted. 

  • For correspondence audits, see our Audits by Mail Get Help page for a summary of how the process works and what actions you should take. 
  • For in person audits, see our Audits in Person Get Help page for a summary of how the process works and what actions you should take. 

You can also visit the IRS Audits page for more information about why your return may have been selected and more details on how far back IRS can go to examine a return, how long it may take, and more. You can also read Publication 3468, IRS Examination Process

Sometimes IRS offers alternative methods to reply or submit documentation

When you review the IRS notice, there may be special circumstances in which the IRS may offer digital alternatives for submitting documentation or working with the IRS examiner. See our NTA Blog: Lifecycle of a Tax Return: Correspondence Audits: Increased Communication Alternatives Are in Progress for more information on two available alternatives. The IRS article, Accelerating Digital Communications to Solve Pandemic Challenges and Improve the Taxpayer Experience, also discusses digital options. 

However, taxpayers must be invited to participate in these digital options, Secure Messaging and the Document Upload Tool (DUT). So, again, review your notice carefully to see if one or both of these options are available in your case and for information on how to use them. 

What if you find out the IRS already closed their initial audit?

If you receive a tax bill for an additional tax amount the IRS assessed (added to your account) or a change in a credit you claimed and you disagree with the subsequent amount the IRS says you owe, see our Audit Reconsideration Get Help page for next steps you can take. 

You may request audit reconsideration if you: 

  • Did not respond to or appear for your original audit, 
  • Moved and did not receive correspondence from the IRS, 
  • Have additional information to present that you did not provide during your original audit, or 
  • Disagree with the assessment from the audit. 

You can also see Publication 3598, What You Should Know About the Audit Reconsideration Process, for more details on what you need to do to resolve the issue. 

What can I do if I need further help dealing with the IRS audit process?

If you need or want assistance in dealing with an IRS audit or reconsideration, you have the right to representation. This means you can hire an attorney, certified public accountant (CPA), or enrolled agent to represent you before the IRS. Know that: 

  • Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. 
  • Taxpayers who are heading to an interview with the IRS may select someone to represent them. Taxpayers who retain representation don’t have to attend with their representative unless the IRS formally summons them to appear. 
  • In most situations, the IRS must suspend an interview if a taxpayer requests to consult with a representative, such as an attorney, certified public accountant, or enrolled agent. 
  • Any attorney, CPA, enrolled agent, enrolled actuary, or other person permitted to represent a taxpayer before the IRS, who’s not disbarred or suspended from practice before the IRS, will need to submit a signed written Power of Attorney to represent a taxpayer before the IRS before the IRS can discuss your case with them. 

We recommend that you learn about the credentials and qualifications of tax representatives before choosing one. You can also use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help you find tax professionals in your area who currently hold professional credentials recognized by the IRS. 

You may be eligible for free representation (or representation for a nominal fee) through a Low Income Taxpayer Clinic. To qualify for assistance from an LITC, generally a taxpayer’s income must be below a certain threshold (the income ceilings for the 2022 calendar year can be found on the page link above), and the amount in dispute with the IRS is usually less than $50,000. Each clinic will determine if you meet the income ceilings and other criteria before it agrees to represent you. See Publication 4134, Low Income Taxpayer Clinic List, to find a LITC near you or by calling the IRS toll-free at 800-829-3676. 

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 +1-305-274-5811.

Source : TAS      

The IRS Alerts Taxpayers of Suspected Identity Theft by Letter

Posted by Admin Posted on Sept 07 2023

The IRS Alerts Taxpayers of Suspected Identity Theft by Letter

Scammers sometimes use stolen Social Security numbers to file fraudulent tax returns and collect refunds. To prevent this, the IRS scans every tax return for signs of fraud. If the system finds a suspicious tax return, the IRS reviews the return and sends a letter to the taxpayer letting them know about the potential ID theft. The IRS won't process the suspicious tax return until the taxpayer responds to the letter.

The IRS may send these identify fraud letters to taxpayers:

Taxpayers should follow the steps in the letter

The identity theft letter will tell the taxpayer the steps they need to take. Taxpayers should follow those steps to resolve the matter with the IRS.

Victims of identity theft can find more resources on reporting and recovering from ID theft with the Federal Trade Commission: IdentityTheft.gov.

If the taxpayer received an IRS identity theft letter, they don't need to file an identity theft affidavit

If taxpayers need to give the IRS a heads up that they're a victim of identity theft or that they think they may be a victim, they can file Form 14039, Identity Theft Affidavit. If a taxpayer has already received an IRS letter about identity theft, they don't need to file an affidavit.

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 +1-305-274-5811.

Source : IRS     

Tax-to-Dos for Newlyweds to Keep in Mind

Posted by Admin Posted on Sept 07 2023

Tax-to-Dos for Newlyweds to Keep in Mind

Anyone saying "I do" this summer should review a few tax-related items after the wedding. Big life changes, including a change in marital status, often have tax implications. Here are a few things couples should think about after they tie the knot.

Name and address changes

People who change their name after marriage should report it to the Social Security Administration as soon as possible. The name on a person's tax return must match what is on file at the SSA. If it doesn't, it could delay any tax refund. To update information, taxpayers should file Form SS-5, Application for a Social Security Card. The form is available on SSA.gov, by calling 800-772-1213 or at a local SSA office.

If marriage means a change of address, the IRS and U.S. Postal Service need to know. To do that, people should send the IRS Form 8822, Change of Address. Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or by visiting their local post office.

Double-check withholding

After getting married, couples should consider changing their withholding. Newly married couples must give their employers a new Form W-4, Employee's Withholding Allowance within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the additional Medicare tax. They can use the Tax Withholding Estimator on IRS.gov to help complete a new Form W-4. Taxpayers should review Publication 505, Tax Withholding and Estimated Tax for more information.

Filing status

Married people can choose to file their federal income taxes jointly or separately each year. For most couples, filing jointly makes the most sense, but each couple should review their own situation. If a couple is married as of December 31, the law says they're married for the whole year for tax purposes.

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 +1-305-274-5811.

Source : IRS      

Tax Tips for New Parents

Posted by Admin Posted on Sept 07 2023

Tax Tips for New Parents

Kids are expensive. Whether someone just brought a bundle of joy home from the hospital, adopted a teen from foster care, or is raising their grandchild. There are several tax breaks that can help.

Check eligibility for these tax credits and deductions

  • Child Tax Credit
    Taxpayers who claim at least one child as their dependent on their tax return may be eligible for the Child Tax Credit. For help figuring out if a child qualifies for this credit, taxpayers can check Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?

     
  • Child and Dependent Care Credit
    If taxpayers paid someone to take care of their children or another member of their household while they work, they may qualify for the Child and Dependent Care Credit regardless of their income. Taxpayers who pay for daycare expenses may be eligible to claim up to 35% of their daycare expenses with certain limits.

     
  • Adoption Tax Credit
    This credit lets families who are in the adoption process during the tax-year claim eligible adoption expenses for each eligible child. Taxpayers can apply the credit to international, domestic, private and public foster care adoptions.

     
  • Earned Income Tax Credit
    The Earned Income Tax Credit helps low- to moderate-income families get a tax break. If they qualify, taxpayers can use the credit to reduce the taxes they owe – and maybe increase their tax refund.

     
  • Credit for Other Dependents
    Taxpayers with dependents who don't qualify for the Child Tax Credit may be able to claim the Credit for Other Dependents. Taxpayers can use the Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents tool on IRS.gov to help determine if they are eligible to claim the credit. They can claim this credit in addition to the Child and Dependent Care Credit and the Earned Income Credit.

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 +1-305-274-5811.

Source: Thomson Reuters      

IRS: Hawaii Wildfire Victims Qualify for Tax Relief; Oct. 16 Deadline, Other Dates Postponed to Feb. 15

Posted by Admin Posted on Sept 07 2023

IRS: Hawaii Wildfire Victims Qualify for Tax Relief; Oct. 16 Deadline, Other Dates Postponed to Feb. 15

The Internal Revenue Service announced expansive tax relief for Hawaii wildfire victims in Maui and Hawaii counties. These taxpayers now have until Feb. 15, 2024, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). This means that individuals and households that reside or have a business in these counties qualify for tax relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Filing and Payment Relief

The tax relief postpones various tax filing and payment deadlines that occurred from Aug. 8, 2023, through Feb. 15, 2024 (postponement period). As a result, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the Feb. 15, 2024, deadline will now apply to:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief.
  • Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
  • Calendar-year partnerships and S corporations whose 2022 extensions run out on Sept. 15, 2023.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
  • Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.

In addition, penalties for the failure to make payroll and excise tax deposits due on or after August 8, 2023, and before September 7, 2023, will be abated as long as the deposits are made by Sept. 7, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional Tax Relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. Be sure to write the FEMA declaration number – DR-4724-HI − on any return claiming a loss. See Publication 547 for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525 for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by these wildfires and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

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 +1-305-274-5811.

Source : IRS      

I Need Help Resolving a Tax Amount Owed or Finding the Right Payment Option?

Posted by Admin Posted on Sept 07 2023

I Need Help Resolving a Tax Amount Owed or Finding the Right Payment Option?

Is the amount due on the tax bill accurate?

  • Can pay the full amount now or can pay it within 120 days
  • Need to make monthly payments
  • Want to apply for an Offer in Compromise that may allow you to pay less than the full amount you owe
  • Can’t make any sort of payment now

You can also visit IRS’s Payments page for payment options.

If the amount owed is only due to penalties and interest, see our TAS Tax Tips: Why Do I Owe a Penalty and Interest and What Can I Do About It? for steps to follow.

If you have a balance due, don’t delay in trying to resolve it. Sometimes, the timing of your actions is very important and you don’t want to miss a deadline and lose certain taxpayer rights.

This Get Help page can guide you through the steps to take if:

  • Someone has stolen your identity
  • Your IRS account doesn’t show all payments you made to the IRS
  • You need to make a change to a tax return you’ve already filed
  • You filed a tax return with your spouse and all or part of your refund was applied to a debt only your spouse owes
  • You owe tax because your spouse didn’t report deductions or didn’t include income on your joint tax return
  • The person who prepared your tax return changed your tax return information without your permission

If the IRS sent you a notice about something being incorrect on your 2021 return, see our TAS Tax Tip: What if I receive an IRS notice that says something is wrong with my 2022 tax return? or our Issues & Errors Get Help topic pages. Also check the IRS’s Help for taxpayers and tax professionals: Special filing season alerts page for special alerts related to current year tax return processing issues.

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 +1-305-274-5811.

Source : TAS     

IRS: Those Impacted by Idalia Qualify for Tax Relief; Oct. 16 Deadline, Other Dates Postponed to Feb. 15

Posted by Admin Posted on Sept 07 2023

IRS: Those Impacted by Idalia Qualify for Tax Relief; Oct. 16 Deadline, Other Dates Postponed to Feb. 15

The Internal Revenue Service announced tax relief for individuals and businesses affected by Idalia in parts of Florida. These taxpayers now have until Feb. 15, 2024, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, 46 of Florida's 67 counties qualify. Individuals and households that reside or have a business in these counties qualify for tax relief, but any area added later to the disaster area will also qualify. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Filing and Payment Relief

The tax relief postpones various tax filing and payment deadlines that occurred from Aug. 27, 2023, through Feb. 15, 2024, (postponement period). As a result, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the Feb. 15, 2024, deadline will now apply to:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief.
  • Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
  • Calendar-year partnerships and S corporations whose 2022 extensions run out on Sept. 15, 2023.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
  • Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.

In addition, penalties for the failure to make payroll and excise tax deposits due on or after Aug. 27, 2023, and before Sept. 11, 2023, will be abated as long as the deposits are made by Sept. 11, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional Tax Relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. Be sure to write the FEMA declaration number – DR-3596-EM − on any return claiming a loss.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by this storm and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

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 +1-305-274-5811.

Source: IRS      

IRS: Aquellos Impactados por Idalia Califican para Alivio Tributario; Fecha Límite del 16 de octubre y Otras se Extienden hasta el 15 de febrero

Posted by Admin Posted on Sept 07 2023

IRS: Aquellos Impactados por Idalia Califican para Alivio Tributario; Fecha Límite del 16 de octubre y Otras se Extienden hasta el 15 de febrero

El Servicio de Impuestos Internos anunció alivio tributario para las personas y empresas afectadas por Idalia en partes de Florida. Estos contribuyentes ahora tienen hasta el 15 de febrero de 2024 para presentar varias declaraciones de impuestos federales individuales y comerciales, y realizar pagos de impuestos.

El IRS está ofreciendo alivio a cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA, por sus siglas en inglés). Actualmente, 46 de los 67 condados de Florida califican. Las personas y hogares que residen o tienen un negocio en estos condados son elegibles para alivio tributario, pero otras áreas que se añadan más adelante también pueden ser elegibles para el mismo alivio. La lista actual de localidades elegibles siempre está disponible en la página de Alivio en situaciones de desastre en IRS.gov.

Alivio de presentación y pago

El alivio tributario pospone varios plazos de presentación y pago de impuestos que ocurrieron a partir del 27 de agosto 2023, hasta el 15 de febrero de 2024 (periodo de extensión). Como resultado, las personas y empresas afectadas tendrán hasta el 15 de febrero de 2024 para presentar declaraciones y pagar los impuestos que originalmente adeudaban durante este período.

Esto significa, por ejemplo, que el plazo del 15 de febrero de 2024 ahora aplica a:

  • Individuos que tenían una extensión válida para presentar su declaración de 2022 que vencía el 16 de octubre de 2023. Sin embargo, el IRS señaló que debido a que los pagos de impuestos relacionados con estas declaraciones de 2022 vencían el 18 de abril de 2023, esos pagos no elegibles para este alivio.
  • Pagos trimestrales de impuestos estimados que normalmente vencen el 15 de septiembre de 2023 y el 16 de enero de 2024.
  • Las declaraciones trimestrales de impuestos sobre la nómina y el consumo que normalmente vencen el 31 de octubre de 2023 y el 31 de enero de 2024.
  • Asociaciones de año calendario y corporaciones S cuyas extensiones de 2022 vencen el 15 de septiembre de 2023.
  • Corporaciones de año calendario cuyas extensiones de 2022 vencen el 16 de octubre de 2023.
  • Organizaciones exentas de impuestos de año calendario cuyas prórrogas vencen el 15 de noviembre de 2023.

Además, las multas por no realizar depósitos de impuestos sobre la nómina y el consumo adeudados a partir del 27 de agosto de 2023 y antes del 11 de septiembre de 2023 se reducirán siempre que los depósitos se realicen antes del 11 de septiembre de 2023.

La página de Ayuda y alivio por emergencia en casos de desastre para las personas y los negocios tiene detalles acerca de otras declaraciones, pagos y acciones relacionadas con impuestos que son elegibles para el tiempo adicional.

El IRS proporciona automáticamente la presentación y el alivio de multas a cualquier contribuyente con una dirección registrada con el IRS ubicada en el área del desastre. Por lo tanto, los contribuyentes no necesitan comunicarse con la agencia para obtener este alivio.

Es posible que un contribuyente afectado no tenga una dirección ubicada en el área del desastre registrada con el IRS, por ejemplo, porque se mudó al área del desastre después de presentar su declaración. En este tipo de circunstancias únicas, el contribuyente afectado podría recibir un aviso de multa por presentación tardía o pago atrasado del IRS por el período de aplazamiento. El contribuyente debe llamar al número que figura en el aviso para que se elimine 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. Contribuyentes elegibles para el alivio que viven fuera del área de desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudan en las actividades de socorro que están afiliados a un gobierno reconocido como una organización filantrópica.

Alivio tributario adicional

Las personas y empresas en un área de desastre declarada por el gobierno federal que sufrieron pérdidas relacionadas con el desastre no aseguradas o no reembolsadas pueden optar por reclamarlas en la declaración del año en que ocurrió la pérdida (en este caso, la declaración de 2023 que normalmente se presenta el próximo año), o la declaración del año anterior (2022). Los contribuyentes tienen tiempo adicional, hasta seis meses después de la fecha de vencimiento de la declaración de impuestos federales del contribuyente para el año del desastre (sin tener en cuenta cualquier extensión del tiempo para presentar) para hacer la elección. Deben asegurarse de escribir el número de declaración de FEMA – DR-3596-EM − en cualquier declaración que reclama una pérdida.

Los pagos calificados de ayuda en casos de desastre generalmente se excluyen del ingreso bruto. En general, esto significa que los contribuyentes afectados pueden excluir de sus ingresos brutos las cantidades recibidas de una agencia gubernamental para gastos personales, familiares, de manutención o funerarios razonables y necesarios, así como para la reparación o rehabilitación de su vivienda, o para la reparación o reposición de su contenido.

Es posible que haya alivio adicional disponible para los contribuyentes afectados que participen en un plan de jubilación o un acuerdo de jubilación individual (IRA). Por ejemplo, un contribuyente puede ser elegible para recibir una distribución especial por desastre que no estaría sujeta al impuesto adicional de distribución anticipada del 10% y le permite al contribuyente distribuir los ingresos en tres años. Los contribuyentes también pueden ser elegibles para realizar un retiro por dificultades económicas. Cada plan o IRA tiene reglas y pautas específicas que deben seguir sus participantes.

El IRS puede brindar ayuda adicional en casos de desastre en el futuro.

El alivio tributario es parte de una respuesta federal coordinada a causa de los daños por estas tormentas y se basa en las evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de la recuperación ante desastres, visite DisasterAssistance.gov.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente: IRS     

Cómo Denunciar las Estafas Tributarias

Posted by Admin Posted on Aug 31 2023

Cómo Denunciar las Estafas Tributarias

Cómo Denunciar las Estafas Tributarias

Estafas de Phishing

El phishing es una estafa típicamente realizada a través del correo electrónico no solicitado y/o sitios web en los que se presentan como sitios legítimos y engañan a las víctimas incautas a proporcionar información personal y financiera.

Denuncie ante phishing@irs.gov todos los correos electrónicos no solicitados que afirman ser del IRS o de una función vinculada con el IRS. Si usted ha experimentado alguna pérdida de dinero debido a un incidente relacionado con el IRS, por favor denúncielo ante el Inspector General para la Administración del Tesoro (TIGTA) (en inglés) y presente una queja ante la Comisión Federal de Comercio (FTC) a través de su Asistente de Quejas (en inglés), para hacer la información disponible para los investigadores.

Promotores de estafas tributarias abusivas o Preparadores de declaraciones fraudulentas

Las estafas tributarias abusivas comunes incluyen los planes contra las leyes tributarias, los negocios basados en la casa, los fideicomisos y los del extranjero.

Para denunciar los promotores de estos tipos de planes de estafas o de cualquier otro tipo que usted tenga conocimiento, pero que no se incluyeron en la lista anterior, por favor envíe un Formulario de denunciaPDF debidamente completado, junto con cualquier material promocional, al Centro Principal de Desarrollo:

Por correo:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

Transacciones abusivas que involucran un plan de ahorros para la jubilación

La línea de teléfono directa para las transacciones abusivas ofrece a las personas una manera de compartir información (de forma anónima, si se prefiere) sobre los refugios tributarios abusivos y los asuntos emergentes que pueden ser abusivos en los planes de ahorros para la jubilación.

Averigüe qué transacciones enumeradas han sido determinadas por el IRS ser transacciones de evasión de impuestos y cómo denunciarlas (en inglés).

Transacciones abusivas que involucran una organización exenta de impuestos

Las organizaciones exentas de impuestos son, a veces, utilizadas por las entidades con fines de lucro como  las partes firmantes de favor en las transacciones abusivas de evasión de impuestos.

Visite la página sobre las Transacciones Abusivas de Evasión de Impuestos de las Organizaciones Exentas  (en inglés), para obtener información sobre cómo denunciar estas estafas (en inglés) utilizando el Formulario 13909, Formulario (referido) de queja de las organizaciones exentas (en inglés)PDF.

Refugios tributarios y transacciones abusivos

El IRS mantiene una línea de teléfono directa sobre los refugios tributarios abusivos (en inglés) que las personas pueden utilizar para proporcionar información (de forma anónima, si se prefiere) sobre los refugios tributarios abusivos. La Oficina de Análisis de los Refugios Tributarios está principalmente interesada en las transacciones potencialmente abusivas que pueden ser empleadas por muchos contribuyentes y podrían plantear un riesgo de cumplimiento significativo para el IRS.

¿Cómo se denuncian las sospechas de actividad de fraude tributario?

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS      

Ciertos Créditos de Energía son Elegibles para Pago Electivo Bajo Lay de Reducción de la Inflación

Posted by Admin Posted on Aug 31 2023

Ciertos Créditos de Energía son Elegibles para Pago Electivo Bajo Lay de Reducción de la Inflación

SABE UD. QUE PUEDE BENEFICIARSE DE UN CRÉDITO DE ENERGÍA?

Ciertos Créditos de Energía son Elegibles para Pago Electivo Bajo Lay de Reducción de la Inflación

Pago electivo permite que entidades elegibles, incluidas las entidades gubernamentales y exentas de impuestos que generalmente no podían reclamar los créditos tributarios porque no adeudan impuestos federales sobre el ingreso, se beneficien de algunos créditos tributarios de energía limpia. Al elegir esta opción, la cantidad del crédito se trata como un pago de impuestos y cualquier pago en exceso resultará en un reembolso.

Elegibilidad de la entidad

Las entidades aplicables pueden usar el pago electivo. Las entidades aplicables incluyen (en inglés):

  • Organizaciones exentas de impuestos como organizaciones benéficas públicas, organizaciones benéficas privadas, organizaciones de bienestar social, organizaciones laborales, ligas comerciales y otras
  • Estados y subdivisiones políticas como gobiernos locales o gobierno tribales indígenas
  • Territorios de EE. UU. y sus subdivisiones políticas
  • Agencias e instrumentos de gobierno estatales, locales, tribales y territoriales de EE. UU.
  • Corporaciones de nativos de Alaska
  • La Autoridad del Valle de Tennessee
  • Cooperativas eléctricas rurales

Cómo recibir el pago electivo

Para que una entidad eligible reciba un pago electivo debe seguir los siguientes pasos:

1.    Identificar el proyecto o actividad que desarrollan y cumplir con todos los requisitos para el crédito aplicable.

2.    Determinar el año tributario correcto que determina la fecha límite de la declaración de impuestos.

3.    Completar la inscripción antes de la presentación de impuestos con el IRS. Información adicional acerca de este proceso estará disponible más adelante en 2023.

Una vez que se complete el proceso de inscripción antes de la presentación y se cumplen con los requisitos para el crédito aplicable, la entidad eligible puede reclamar y recibir un pago electivo marcando la elección en su declaración anual de impuestos junto con cualquier formulario requerido para reclamar el crédito tributario correspondiente.

Las entidades aplicables necesitan su propio EIN o TIN para completar el proceso de inscripción previa a la presentación. Las entidades aplicables que de otro modo no tienen el requisito de presentar impuestos no pueden usar ni tomar prestado el EIN de una entidad relacionada.

Créditos elegibles:

  • Crédito tributario por la producción de electricidad de fuentes renovables
  • Crédito tributario por producción de energía limpia
  • Crédito tributario de inversión por propiedad energética 
  • Crédito tributario por inversión en electricidad limpia
  • Crédito de bonificación para comunidades de bajos ingresos
  • Crédito por captura de óxido de carbono
  • Crédito de producción de energía nuclear de cero emisiones
  • Crédito de proyecto de energía avanzada
  • Crédito de producción de manufactura avanzada
  • Crédito para vehículos limpios comerciales calificados
  • Crédito de propiedad para el reabastecimiento de combustible alternativo
  • Crédito tributario para la producción de hidrogeno limpio
  • Crédito de producción de combustible limpio

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente: IRS     

Tax Planning Doesn’t Stop After a Taxpayer Files a Tax Return

Posted by Admin Posted on Aug 20 2023

Tax Planning Doesn’t Stop After a Taxpayer Files a Tax Return

Organize tax records. Create a system that keeps all important information together. Taxpayers can use a software program for electronic recordkeeping or store paper documents in clearly labeled folders. They should add tax records to their files as they receive them. Organized records will make tax return preparation easier and may help taxpayers discover overlooked deductions or credits.

Identify filing status. A taxpayer's filing status is used to determine their filing requirements, standard deduction, eligibility for certain credits and the correct amount of tax they should pay. If more than one filing status applies to a taxpayer, they can get help choosing the best one for their tax situation with Interactive Tax Assistant, What Is My Filing Status. Changes in family life — marriage, divorce, birth and death — may affect a person's tax situation, including filing status and eligibility for certain tax credits and deductions.

Understand adjusted gross income (AGI). AGI and tax rate are important factors in figuring taxes. AGI is the taxpayer's income from all sources minus any adjustments and deductions. Generally, the higher a taxpayer's AGI, the higher their tax rate and the more tax they pay. Tax planning can include making changes during the year that lower a taxpayer's AGI.

Check withholding. Since federal taxes operate on a pay-as-you-go basis, taxpayers need to pay most of their tax as they earn income. Taxpayers should check that they're withholding enough from their pay to cover their taxes owed especially if their personal or financial situations change during the year. To check withholding, taxpayers can use the IRS Withholding Estimator. If they want to change their tax withholding, taxpayers should provide their employer with an updated Form W-4. Changing withholding and having more withheld may lower their AGI and affect their tax bill or expected refund.

Make address and name changes. Notify the United States Postal Service, employers and the IRS of any address change. To officially change a mailing address with the IRS, taxpayers must compete Form 8822, Change of Address, and mail it to the correct address for their area. For detailed instructions, see page 2 of the form. Report any name change to the Social Security Administration. Making these changes as soon as possible will help make filing their tax return easier.

Save for retirement. Saving for retirement can also lower a taxpayer's AGI. Contributing money to a retirement plan at work and to a traditional IRA also reduces taxable income.

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 +1-305-274-5811.

Source : IRS  

IRS Alerta a Empresas, Grupos Exentos de Impuestos sobre Señales de Advertencia de Estafas Engañosas del Crédito de Retención de Empleados; Pasos Simples para Evitar Presentar Reclamos Indebidos

Posted by Admin Posted on Aug 20 2023

IRS Alerta a Empresas, Grupos Exentos de Impuestos sobre Señales de Advertencia de Estafas Engañosas del Crédito de Retención de Empleados; Pasos Simples para Evitar Presentar Reclamos Indebidos

En respuesta al continuo mercadeo agresivo relacionado al Crédito de Retención de Empleados, el Servicio de Impuestos Internos renovó una advertencia para que las empresas estén en alerta de señales reveladoras acerca de las declaraciones erróneas relacionadas al crédito.

El IRS y los profesionales de impuestos continúan viendo una gran cantidad de publicidad agresiva en la televisión, por correo directo y promociones en línea relacionados al Crédito de Retención de Empleados. Aunque el crédito sí es real, promotores agresivos están extremadamente malinterpretando y exagerando quién es elegible para reclamar este crédito.

El IRS se está enfocando más en el trabajo relacionado a auditorias e investigaciones criminales que tengan que ver con estos reclamos. Empresas, organizaciones exentas a impuestos y otros que estén considerando reclamar este crédito deben revisar cuidadosamente los requisitos oficiales para este programa limitado antes de hacerlo. Aquellos que reclamen este crédito indebidamente se enfrentan a acción de seguimiento del IRS.

"El mercadeo agresivo del Crédito de Retención de Empleados sigue engañando a empresas inocentes y a otros", comentó el Comisionado del IRS Danny Werfel. "Promotores agresivos presentan declaraciones erróneas acerca de este crédito. Ellos pueden recibir tarifas enormes y dejar a quienes reclaman el crédito en riesgo a que se le nieguen su reclamo o a enfrentar situaciones en donde tengan que reembolsar el crédito".

El Crédito de Retención de Empleados (ERC, por sus siglas en inglés), también conocido como el Crédito tributario de retención de empleados o ERTC, es un crédito tributario legítimo. Muchas empresas reclamaron legítimamente el crédito durante la pandemia. El IRS ha añadido personal para manejar los reclamos del ERC, que es un proceso que requiere mucho tiempo ya que implica declaraciones de impuestos enmendadas.

"Este bombardeo de mercadeo por promotores significa que el IRS está recibiendo muchos reclamos inválidos, lo que también requiere de más tiempo y esfuerzo de nuestro personal para poder trabajar en los reclamos legítimos del Crédito de Retención de Empleados", dijo Werfel. "El IRS comprende la importancia de estos créditos y apreciamos la pacencia de las empresas y profesionales de impuestos en lo que seguimos trabajando arduamente para procesar reclamos válidos lo más rápido posible mientras nos protegemos del fraude".

El IRS ha emitido avisos acerca de estafas agresivas del ERC desde el año pasado y este tema se incluyó en la lista de estafas tributarias Docena sucia que personas deben de evitar.

Esta es una prioridad continua en muchas maneras y el IRS sigue incrementando el desempeño en el área de cumplimiento relacionado al ERC. El IRS ha capacitado a auditores para que analicen los reclamos de ERC de mayor riesgo y la división de Investigaciones criminales del IRS está trabajando en identificar el fraude y a los promotores de reclamos fraudulentos.

El IRS le recuerda a cualquiera que reclame indebidamente el ERC que debe de reembolsar la cantidad recibida, posiblemente con multas e interés. Una empresa o grupo exento a impuestos pueden encontrarse en una peor posición económica si tiene que reembolsar el crédito que si nunca lo reclama en primer lugar. Así que es importante que evite caer en una estafa.

Cuando es reclamado adecuadamente, el ERC es un crédito tributario reembolsable diseñado para empresas que continuaron pagando a empleados mientras cerraron debido a la pandemia COVID-19 o tuvieron disminuciones significativas en los ingresos brutos durante los períodos de elegibilidad. El crédito no está disponible para individuos.

Señales de advertencia acerca del mercadeo agresivo de ERC

Hay consejos importantes que las personas deben tener en cuenta acerca del Crédito de Retención de Empleados. Las señales de aviso incluyen:

  • Llamadas no solicitadas de promotores que mencionan un "proceso de solicitud sencillo".
  • Declaraciones que dicen que el promotor o compañía pueden determinar la elegibilidad de ERC en solo minutos.
  • Tarifas enormes de antemano para poder reclamar el crédito
  • Tarifas basadas en un porcentaje de la cantidad del reembolso del Crédito de Retención de Empleados que fue reclamado. Esto es un aviso similar para contribuyentes regulares, quienes también deben evitar a preparadores de impuestos que basan sus tarifas en la cantidad del reembolso.
  • Declaraciones agresivas de un promotor que afirman que la empresa que recibe la solicitación es elegible antes de discutir la situación tributaria del grupo. En realidad, el Crédito de Retención de Empleados es un crédito complejo que requiere un análisis detallado antes de solicitarlo.
  • El IRS también observa sugerencias extremadamente agresivas de comerciantes que urgen a empresas a reclamar ya que no tienen nada que perder. En realidad, aquellos que reciban el crédito indebidamente pueden tener que reembolsarlo – al igual de pagar interés y multas significativas.

Estos promotores pueden mentir sobre los requisitos de elegibilidad. Además, aquellos que usan los servicios de estas compañías pueden correr el riesgo de que alguien use el crédito como una manera de robar la identidad del contribuyente o de quedarse con una porción del crédito que fue reclamado indebidamente.

Cómo los promotores atraen a sus víctimas

El IRS sigue observando varias maneras que promotores atraen a empresas, grupos exentos a impuestos y a otros para que reclamen el crédito.

  • Mercadeo agresivo. Esto se puede ver en un sinnúmero de lugares, incluyendo la radio, televisión y en línea al igual que llamadas y mensajes de texto.
  • Correo directo. Algunos terceros que promueven el ERC envían cartas falsas a contribuyentes de parte de grupos falsos como el "Departamento del Crédito de Retención de Empleados". Estas cartas pueden parecerse a una carta oficial del IRS o correo oficial del gobierno con lenguaje urgiendo acción inmediata.
  • Omitir detalles claves. Promotores terceros del ERC usualmente no explican adecuadamente los requisitos de elegibilidad o cómo se calcula el crédito. Hacen argumentos generales sugiriendo que todos los empleadores son elegibles sin evaluar las circunstancias individuales de un empleador.
  • Por ejemplo, solo las empresas en inicio de recuperación son elegibles para el ERC en el cuarto trimestre de 2021, pero los promotores no explican este límite. 
  • Como mencionado, puede que los promotores no informen a los contribuyentes que tienen que reducir las deducciones de salario reclamadas en su declaración de impuestos comercial por la cantidad del Crédito de Retención de Empleados. Esto causa un efecto dominó de problemas tributarios para la empresa.
  • Participación en el Programa de protección de pago. Además, muchos de estos promotores no les dicen a los empleadores que no pueden reclamar el ERC para salarios que fueron reportados como costos de nómina si fueron obtenidos como parte del alivio de préstamos del Programa de protección de pago.

Cómo se pueden proteger las empresas y otros

El IRS les recuerda a empresas, a grupos exentos a impuestos y otros que son el enfoque de estos promotores que existen pasos sencillos que pueden tomar para protegerse de reclamar indebidamente el Crédito de Retención de Empleados.

  • Trabajen con un profesional de impuestos de confianza. Empleadores elegibles que necesiten ayuda al reclamar el crédito deben trabajar con un profesional de impuestos de confianza; el IRS urge a personas que no dependan del consejo de aquellos que solicitan estos créditos. Promotores que hacen mercadeo sobre este tema tienen como fin hacer dinero y en muchos casos no ven por el interés de aquellos que lo reclaman.
  • No reclamen a menos que crean que tienen elegibilidad legitima para poder reclamar este crédito. Detalles sobre el crédito están disponibles en IRS.gov y, como mencionado, un profesional de impuestos de confianza – no alguien promoviendo el crédito – puede proveer consejo profesional clave acerca de ERC.
  • Para reportar abuso relacionado al ERC, envíe por fax o correo postal el Formulario 14242 (SP), Informar Sospechas de Promociones Tributarias o
    Preparadores de Impuestos Abusivos
    PDF junto con cualquier material de apoyo al Centro de desarrollo de información en la Oficina de investigaciones de promotores.

Dirección:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

Cómo reclamar adecuadamente el crédito ERC

Hay requisitos de elegibilidad muy específicos para poder reclamar el ERC. Hay partes técnicas que requieren análisis. Pueden reclamar el ERC en una declaración de impuestos comercial original o enmendada para salarios elegibles pagados del 13 de marzo de 2020 al 31 de diciembre de 2021. Sin embargo, los empleadores tuvieron que haber:

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

Mid-Year Tax Checkup 2023

Posted by Admin Posted on Aug 20 2023

Mid-Year Tax Checkup 2023

Summertime is the perfect time for a mid-year tax checkup. A tax checkup will help you avoid being surprised with a potentially large tax bill and may help uncover ways you can save throughout the rest of the year. It is also a good time to account for any life changes that may affect your overall tax liability.

Get organized

 

  • Collect and keep your records and receipts. Record keeping can help you identify sources of income, track deductible expenses, and make preparing a complete and accurate tax return easier.
  • Notify the IRS if your address changes and notify the Social Security Administration of a legal name change.
  • Create and/or sign into your individual IRS online account to view your federal tax records, manage communication preferences, make payments and more.

 

Perform a paycheck check-up

 

Pay close attention to your paystubs to help prevent end-of year surprises. Make sure the earnings are correct and that you have the proper amount of tax withheld. As time passes, life events like marriage, divorce, having a child, buying a home, or a change in income may affect your taxes. The IRS’s Tax Withholding Estimator will help you assess your income tax, credits, adjustments, and deductions, and determine whether you need to change your tax withholding. If a change is recommended, the estimator will provide instructions to update your withholding with your employer either online or by submitting a new Form W-4, Employee’s Withholding Allowance Certificate.

 

Remember, most income is taxable. This includes the following sources and more:

 

 

Consider making estimated tax payments

 

If you receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits, or pension and annuity income, you should make quarterly estimated tax payments. Log in to your online account to make a payment online or go to IRS.gov/payments.

 

Review your retirement contributions

 

Review contributions to your retirement plan, such as 401(k) and Individual Retirement Accounts (IRAs). If you want to maximize your contributions, run the numbers to see how much you need to save from your remaining paychecks this year. Increasing pre-tax retirement contributions reduces your taxable income for the year you contribute.

 

Report changes that may affect your health insurance Marketplace premiums

 

If you have health insurance through your state’s health insurance marketplace established under the Affordable Care Act, it is important to report changes that may affect your premiums.

Changes in circumstances to report to the Marketplace include:

 

  • Changes in household income (including lump sum distributions from Social Security, retirement accounts, etc.);
  • Birth or adoption;
  • Marriage or divorce;
  • Moving to a different address;
  • Gaining or losing eligibility for other health care coverage; or
  • Other changes affecting income and your family.

If you want to see how a change of circumstance might affect your Premium Tax Credit (PTC), you can use the PTC Change Estimator. Remember to contact your Marketplace to report a change of circumstances.

 

Plan your health flexible spending arrangements

 

Check the balance of your flexible spending arrangement (FSA). FSAs allow you to put some of your pre-tax income toward qualifying medical, dental, and vision expenses, along with other health-related products and services. In 2023, workers can contribute up to $3,050.

While there are some provisions that may let your roll over some money into the next year, most FSAs are “use-or-lose.” Start thinking now about how you might use remaining funds in the second half of the year to ensure you don’t lose the money you contributed to your FSA account.

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 +1-305-274-5811.

Source : TAS 

Tax Considerations When Selling a Home

Posted by Admin Posted on Aug 20 2023

Tax Considerations When Selling a Home

Many people move during the summer. Taxpayers who are selling their home may qualify to exclude all or part of any gain from the sale from their income when filing their tax return.

Ownership and use

To claim the exclusion, the taxpayer must meet ownership and use tests. During the five-year period ending on the date of the sale, the homeowner must have owned the home and lived in it as their main home for at least two years.

Gains

Taxpayers who sell their main home for a capital gain may be able to exclude up to $250,000 of that gain from their income. Taxpayers who file a joint return with their spouse may be able to exclude up to $500,000. Homeowners excluding all the gain do not need to report the sale on their tax return unless a Form 1099-S was issued.

Losses

Some taxpayers experience a loss when their main home sells for less than what they paid for it. This loss is not deductible.

Multiple homes

Taxpayers who own more than one home can exclude the gain only on the sale of their main home. They must pay taxes on the gain from selling any other home.

Reported sale

Taxpayers who don't qualify to exclude all of the taxable gain from their income must report the gain from the sale of their home when they file their tax return. Anyone who chooses not to claim the exclusion must report the taxable gain on their tax return. Taxpayers who receive Form 1099-S, Proceeds from Real Estate Transactions, must report the sale on their tax return even if they have no taxable gain.

Mortgage debt

Generally, taxpayers must report forgiven or canceled debt as income on their tax return. This includes people who had a mortgage workout, foreclosure or other canceled mortgage debt on their home. Taxpayers who had debt discharged, in whole or in part on a qualified principal residence can't exclude that debt from income unless it was discharged before January 1, 2026, or a written agreement for the debt forgiveness was in place before January 1, 2026.

Possible exceptions

There are exceptions to these rules for some individuals, including persons with a disability, certain members of the military or intelligence community and Peace Corps workers.

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 +1-305-274-5811.

Source : IRS 

What if I Receive an IRS Notice that Says Something is Wrong with my 2022 Tax Return?

Posted by Admin Posted on Aug 20 2023

What if I Receive an IRS Notice that Says Something is Wrong with my 2022 Tax Return?

It is the IRS’s responsibility to make sure your tax return is as accurate as it can be while it is processed and verified. These verification checks can include anything from finding and fixing basic mathematical errors to checking for required attachments, like schedules that support a credit or deduction you are claiming. The IRS also checks to confirm the amounts shown on your return match what banks, employers, third parties, and other government agencies have reported. In some cases, these checks may identify a credit that if you if you are eligible, could result in a bigger refund. 

What should I do if I get correspondence regarding my tax ret

Open it, read it, and keep it in a safe place (in case you need it later). IRS correspondence always tells you why the IRS is writing, what topic it is about, and either what you need to do in response and by when, or it will tell you that you don’t need to reply at all. 

Letters and notices aren’t always easy to understand. So, here are three resources we recommend you use if you want more help understanding that particular notice or letter: 

Note: To find the correspondence number look in either the top or bottom right-hand corner. They will generally be preceded by the letters CP or LTR. 

Do I need to reply? 

Whether you need to reply or not will depend on the issue. 

If you agree with the information or change listed, sometimes there is no need to reply. Other times, even if you do agree, you may need to provide specific information to resolve the issue, particularly if you need to verify your identity or if a schedule is missing. In most tax return processing situations, you generally have 60 days to reply, but be sure to go by the date specified in your letter. 

If you disagree, the letter should outline how to dispute the issue, including what action(s) is needed and a date to complete the action by, as well information about your Taxpayer Rights

Whether you agree or not, if it requires a reply – do not delay! You must reply by the date required or you may lose certain resolution options or may also have to pay in full before the IRS will consider your position. See more on this below. 

When to respond 

If your notice or letter requires a response by a specific date, there are many reasons you’ll want to comply. Here are just a few: 

  • minimize additional interest and penalty charges; 
  • prevent further action from being taken on the account or against you; and 
  • preserve your appeal rights if you don’t agree. 

If you need more time to respond than indicated, contact the IRS using the contact information provided. 

How and where to reply 

The correspondence should tell you exactly where to send your response, whether it’s to a mailing address or fax number. Follow the instructions. 

What if I want to talk to someone? 

Each notice or letter should include contact information. The telephone number is usually found in the upper right-hand corner. 

If a specific employee is working your case, it will show a specific phone number for that employee or the department manager. Otherwise, it will show the IRS toll-free number (800-829-1040). 

The IRS encourages taxpayers to make use of the IRS.gov website and its online resources, like Tax Law Questions to get questions answered and find resources to resolve problems. 

The best days to call the IRS are Wednesdays, Thursdays, and Fridays. The IRS advises that wait times are the longest on Mondays and Tuesdays, and close to the April filing deadline. 

Have a copy of your tax return and the correspondence available when you call. 

Wait – I still need help 

You can generally resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional

If you 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 +1-305-274-5811.

Source : TAS     

Charitable Contributions

Posted by Admin Posted on July 21 2023

Charitable Contributions

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

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

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

Organizations can tell you if they are qualified and if donations to them are deductible. IRS.gov has a Tax Exempt Organization Search online tool to help you see if an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified. Alternatively, contact us for more information!

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811.

Source: Thomson Reuters  

What Employees Need to Know about Income Tax Withholding

Posted by Admin Posted on July 21 2023

What Employees Need to Know about Income Tax Withholding

Whether someone is entering the workforce for the first time or changing jobs, filling out new hire paperwork can feel overwhelming. One of the forms employees must complete is a W-4, Employee's Withholding Certificate. This form tells employers how much money to withhold from the employee's pay for federal income tax.

It's important for employees to know the correct amount of tax to withhold so they don't owe too much money when filing their tax return or have too much money withheld from their paychecks.

Get tax withholding right

Federal income tax is a pay-as-you-go tax. Taxpayers pay the tax through their employers as they earn or receive income during the year. Employers take out – or withhold – income tax from employee paychecks and pay it to the IRS in the taxpayer's name.

If an employee doesn't have enough tax withheld, they may face an unexpected tax bill and a possible penalty when they file a tax return next year. If they overpay or have too much tax withheld during the year, the employee will likely get a tax refund when they file their tax return. Adjusting the tax withheld up front may mean a bigger paycheck throughout the year.

Form W-4, Employee's Withholding Certificate

New employees must complete Form W-4 so that their employer can withhold the correct amount of federal income tax from their pay. Employees should read the instructions carefully. The employer will base the amount of withholding on the information the employee provides on their W-4 and how much the employee earns.

People can also submit a new W-4 when their personal or financial situation changes and they want to update their withholding.

Taxpayers can use the Tax Withholding Estimator

If a taxpayer isn't sure how much tax they should have withheld, they can use the Tax Withholding Estimator tool on IRS.gov to:

  • Estimate their federal income tax withholding.
  • See how their refund, take-home pay or tax due is affected by their withholding amount.

Not all workers are employees

Workers are classified as either contractors or employees according to certain rules. Workers who are independent contractors need to pay their taxes directly to the IRS. Depending on how much they earn, they may need to pay estimated tax on a quarterly basis.

Keep tax forms in a safe place

Form W-2, Wage and Tax Statement, is a taxpayer's record of the income they received throughout the year and the amount of money withheld for federal, state, local and other taxes. Employers typically send these out in late January each year. Taxpayers should keep all the tax documents they receive and store them in a safe place so they are available for filing an accurate 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 +1-305-274-5811.

 

Source: IRS   

Is it a Good Time for a Roth Conversion?

Posted by Admin Posted on July 21 2023

Is it a Good Time for a Roth Conversion?

The volatility in the stock market may have caused the value of your retirement account to decrease. But if you have a traditional IRA invested in stocks, a decline may provide a valuable opportunity by allowing you to convert your traditional IRA to a Roth IRA at a lower tax cost.

Traditional vs. Roth

Here are some key differences between these two types of accounts:

Traditional IRA. Contributions to a traditional IRA may be deductible, depending on your modified adjusted gross income (MAGI) and whether you (or your spouse) participate in a qualified retirement plan, such as a 401(k). Funds in the account grow tax-deferred.

However, you generally must pay income tax on withdrawals. You’ll also face a penalty if you withdraw funds before age 59½, unless you qualify for an exception. And you may face an even larger penalty if you don’t take your required minimum distributions (RMDs) after you reach age 73 (up from 72 for 2022 and going up to age 75 if you don’t reach age 73 before Jan. 1, 2033).

Roth IRA. Roth IRA contributions aren’t deductible. But withdrawals (including earnings) are tax-free as long as you are age 59½ or older and the account has been open at least five years. Plus, you’re allowed to withdraw contributions at any time tax- and penalty-free. In addition, you won’t be subject to RMDs.

If you won’t need the money for retirement, you can let the entire Roth IRA balance continue to grow tax-free for the benefit of your heirs. Beneficiaries generally will be required to take distributions, but the distributions will be tax free. (There could be estate tax consequences at your death if you have a very large estate.)

However, the ability to contribute to a Roth IRA is subject to limits based on your MAGI. Fortunately, no matter how high your income, you’re eligible to convert a traditional IRA to a Roth. But you’ll have to pay income tax on the amount converted.

Conversion considerations

If you’ve been considering a Roth conversion and your traditional IRA has lost value, converting now instead of waiting could minimize your tax hit. You’ll also avoid tax on future appreciation if the value of your account goes back up.

Before converting, take time to think through the details. Here are two key issues to consider:

1. Money to pay the tax bill. If you don’t have the cash on hand to cover the taxes owed on the conversion, you may have to dip into your retirement funds, eroding your nest egg. The more money you convert and the higher your tax bracket, the bigger the tax hit.

2. When you plan to retire. Typically, you wouldn’t convert a traditional IRA to a Roth IRA if you expect to retire soon and will start drawing down on the account right away. Usually, the goal is to allow the funds to grow and compound over time without any tax erosion.

Stretch out the tax bill

If the idea of paying the tax bite related to converting from a traditional IRA to a Roth IRA is daunting or simply unaffordable, consider a gradual conversion. It’s not an all-or-nothing process, so you can stretch out the tax bill over time, depending on how long you expect to wait to retire.

Suppose you have $100,000 in a traditional IRA. You could, for example, convert that in five steps: $20,000 per year for five years. We can estimate what the tax bite will be at varying steps.

Right for you?

There are also other issues that need to be considered before executing a Roth IRA conversion. If this sounds like something you’re interested in, contact us to discuss whether a conversion is right 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 +1-305-274-5811.

Source :Thomson Reuters 

Interest Rates Remain the Same for the Third Quarter of 2023

Posted by Admin Posted on July 21 2023

Interest Rates Remain the Same for the Third Quarter of 2023

The Internal Revenue Service announced that interest rates will remain the same for the calendar quarter beginning July 1, 2023.

For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily. Here is a complete list of the new rates:

  • 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
  • 4.5% for the portion of a corporate overpayment exceeding $10,000.
  • 7% for underpayments (taxes owed but not fully paid).
  • 9% for large corporate underpayments. 

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

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

The interest rates are computed from the federal short-term rate determined during April 2023. See the revenue ruling for details.

Revenue Ruling 2023-11PDF announcing the rates of interest, will appear in Internal Revenue Bulletin 2023-23, dated June 5, 2023.

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 +1-305-274-5811.

Source : IRS   

National Small Business Week advice from the IRS: Plan now to take advantage of new and existing tax benefits, prepare for reporting changes

Posted by Admin Posted on July 13 2023

National Small Business Week advice from the IRS: Plan now to take advantage of new and existing tax benefits, prepare for reporting changes

Expanded Clean Energy Credits, Helping Workers Pay Off Student Loans, 1099-K Rules and More

The Internal Revenue Service  urged business taxpayers to begin planning now to take advantage of tax-saving opportunities and get ready for reporting changes that take effect in 2023.

During National Small Business Week, April 30 to May 6, the IRS is joining the Small Business Administration and others in both the public and private sector to celebrate the hard work, ingenuity and dedication of America’s small businesses and their contributions to the economy.

With next year’s filing deadline nearly a year away, entrepreneurs still have time to identify possible tax benefits, take action to qualify for them and then claim them when they file in 2024. They also have time to plan for reporting changes and even claim overlooked tax benefits from the recent past.

Cutting energy costs for small businesses

The Inflation Reduction Act (IRA), enacted last summer, includes provisions that can save small business owners money on energy costs. For example:

  • Small businesses can receive a tax credit covering 30% of the cost of switching over to low-cost solar power, lowering operating costs and protecting against volatile energy prices. 
  • Small business building owners can receive a tax credit up to $5 per square foot to support energy efficiency improvements that deliver lower utility bills.
  • Through the Clean Commercial Vehicle Credit, small businesses that use vehicles such as trucks and vans can benefit from tax credits up to 30% of purchase costs for clean commercial vehicles, like electric and fuel cell models that meet applicable requirements. There is no limit on the number of Clean Commercial Vehicle credits a business can claim.

These credits are nonrefundable, so businesses can't get back more on the credit than they owe in taxes.

Employee Retention Credit: Claim it if eligible but avoid ERC scams   

Eligible employers who overlooked the Employee Retention Credit (ERC) when they filed payroll tax returns for 2020 and 2021 can still claim it by filing an amended federal payroll tax return.

At the same time, the IRS has warned businesses not to fall victim to one of the many ERC-related scams being promoted online, in social media, on the radio and even phone calls and emails. Anyone who improperly claims the ERC has to pay it back, possibly with penalties and interest, so it’s important to avoid getting scammed. 

Among other things, scammers misrepresent many features of the ERC and in some cases are merely using the credit as a ploy to steal the taxpayer’s identity or take a cut of the taxpayer’s improperly claimed credit. Eligible employers who need help claiming the credit should work with a trusted tax professional, not one of these scammers. ERC scams are so widespread this year that the IRS added them to its annual Dirty Dozen list of tax scams.

The ERC is designed to help employers who kept paying their employees while shut down during the pandemic or who suffered a significant decline in gross receipts during the eligibility period. The ERC is a payroll tax credit, not an income tax credit, and it was available only during 2020 and 2021.

Most eligible employers who overlooked the credit can still claim it by filing Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, available on IRS.gov. Form 941-X filers and businesses that file other types of returns can visit IRS.gov/ERC for details, forms and instructions.

Educational assistance programs can be used to pay student loans

Employers who have educational assistance programs can use them to help pay student loan obligations for their employees. 

Though educational assistance programs have been available for many years, the option to use them to pay student loans has been available only for payments made after March 27, 2020, and, under current law, will continue to be available until Dec. 31, 2025.

Traditionally, educational assistance programs have been used to pay for books, equipment, supplies, fees, tuition and other education expenses for the employee. These programs can now also be used to pay principal and interest on an employee’s qualified education loans. Payments made directly to the lender, as well as those made to the employee, qualify.

By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.

Employers who don’t have an educational assistance program may want to consider setting one up. In a tight labor market, worthwhile fringe benefits such as educational assistance programs can help employers attract and retain good workers.

These programs must be in writing and cannot discriminate in favor of highly compensated employees. For information on other requirements, see Publication 15-B, Employer’s Tax Guide to Fringe Benefits. For details on what qualifies as a student loan, see Chapter 10 in Publication 970, Tax Benefits for Education

More people will receive 1099-Ks

Starting in 2023, businesses and other taxpayers who receive more than $600 in income from third-party settlement organizations, including popular payment apps, may receive Forms 1099-K, Payment Card and Third Party Network Transactions. Typically, they’ll receive these reporting forms during January 2024.

The $600 reporting threshold is lower than it’s been in the past. For that reason, some people and businesses may receive a Form 1099-K that didn’t receive one in previous years.

There are no changes to what counts as income or how tax is calculated. For business taxpayers, most income is taxable, even if it’s not reported to them on a 1099 or another form issued by a third party.
The 1099-K reports various business transactions, including income from: 

  • A business the taxpayer owns.
  • Self-employment. 
  • Activities in the gig economy.
  • The sale of personal items and assets.

Good recordkeeping is key. For more information, visit the Understanding Your Form 1099-K page on IRS.gov.

Other tax benefits

From business start-up expenses and the home office deduction to the qualified business income deduction and the health-insurance deduction for self-employed individuals, there are a variety of tax benefits that may be available to entrepreneurs and other business owners. 

For details on these and other tax benefits see Publication 535, Business Expenses. Details on another major expense for most businesses, depreciation of buildings, equipment and other assets can be found in Publication 946, How to Depreciate Property.

Yet another worthwhile resource for any small business is the agency’s Publication 334, Tax Guide for Small Business. All these publications are available on IRS.gov. 

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 +1-305-274-5811.

Source : IRS     

IRS, Security Partners Warn Taxpayers of New Scam; Unusual Delivery Service Mailing Tries to Trick People into Sending Photos, bank Account Information

Posted by Admin Posted on July 13 2023

IRS, Security Partners Warn Taxpayers of New Scam; Unusual Delivery Service Mailing Tries to Trick People into Sending Photos, bank Account Information

The Internal Revenue Service warned taxpayers to be on the lookout for a new scam mailing that tries to mislead people into believing they are owed a refund.

The new scheme involves a mailing coming in a cardboard envelope from a delivery service. The enclosed letter includes the IRS masthead and wording that the notice is "in relation to your unclaimed refund."

Like many scams, the letter includes contact information and a phone number that do not belong to the IRS. But it also seeks a variety of sensitive personal information from taxpayers – including detailed pictures of driver's licenses – that can be used to by identity thieves to try obtaining a tax refund and other sensitive financial information.

"This is just the latest in the long string of attempts by identity thieves posing as the IRS in hopes of tricking people into providing valuable personal information to steal identities and money, including tax refunds," said IRS Commissioner Danny Werfel. "These scams can come in through email, text or even in special mailings. People should be careful to watch out for red flags that clearly mark these as IRS scams."

The Security Summit – a coalition between the IRS, state tax administrators and the nation's tax industry – continue to warn people to protect their personal information to protect against tax-related identity theft as well as scams like this.

In this new scam, there are many warning signs that can be seen in many similar schemes via email or by text. An unusual feature of this scam is that it tries tricking people to email or phone very detailed personal information in hopes of stealing valuable information.

The letter tells the recipients they need to provide "Filing Information" for their refund. This includes some awkwardly worded requests like this:

"A Clear Phone of Your Driver's License That Clearly Displays All Four (4) Angles, Taken in a Place with Good Lighting."

The letter proceeds for more sensitive information including cellphone number, bank routing information, Social Security number and bank account type, followed by a poorly worded warning:

"You'll Need to Get This to Get Your Refunds After Filing. These Must Be Given to a Filing Agent Who Will Help You Submit Your Unclaimed Property Claim. Once You Send All The Information Please Try to Be Checking Your Email for Response From The Agents Thanks"

This letter contains a variety of warning signs, including odd punctuation and a mixture of fonts as well as inaccuracies.

For example, the letter says the deadline for filing tax refunds is Oct. 17; the deadline for people on extension for their 2022 tax returns is actually Oct.16, and those owed refunds from last year have time beyond that. And the IRS handles tax refunds, not "unclaimed property."

Important reminders about scams

The IRS and Security Summit partners regularly warn people about common scams, including the annual IRS Dirty Dozen list.

Taxpayers and tax professionals should be alert to fake communications posing as legitimate organizations in the tax and financial community, including the IRS and states. These messages can arrive in the form of an unsolicited text or email to lure unsuspecting victims to provide valuable personal and financial information that can lead to identity theft, including phishing and smishing.

The IRS never initiates contact with taxpayers by email, text or social media regarding a bill or tax refund.

As a reminder: Never click on any unsolicited communication claiming to be the IRS as it may surreptitiously load malware. It may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.

Individuals should never respond to tax-related phishing or smishing or click on the URL link. Instead, the scams should be reported by sending the email or a copy of the text/SMS as an attachment to phishing@irs.gov. The report should include the caller ID (email or phone number), date, time and time zone, and the number that received the message.

Taxpayers can also report scams to the Treasury Inspector General for Tax Administration or the Internet Crime Complaint Center. The Report Phishing and Online Scams page at IRS.gov provides complete details. The Federal Communications Commission's Smartphone Security Checker is a useful tool against mobile security threats.

The IRS also warns taxpayers to be wary of messages that appear to be from friends or family but that are possibly stolen or compromised email or text accounts from someone they know. This remains a popular way to target individuals and tax preparers for a variety of scams. Individuals should verify the identity of the sender by using another communication method; for instance, calling a number they independently know to be accurate, not the number provided in the email or text.

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 +1-305-274-5811.

Source : IRS  

The Tax Obligations if Your Business Closes its Doors

Posted by Admin Posted on July 13 2023

The Tax Obligations if Your Business Closes its Doors

Sadly, many businesses have been forced to shut down recently due to economic challenges. If this is your situation, we can help you meet the various tax responsibilities that go with closing a business.

Tax returns

Of course, a business must file a final income tax return and some other related forms for the year it closes its doors. The type of return to be filed depends on the type of business you have. Here’s a rundown of the basic requirements:

Sole proprietorships. Your tax preparer will need to file the usual Schedule C, “Profit or Loss from Business,” with your individual return (Form 1040) for the year you close the business. You may also need to report self-employment tax.

Partnerships. A partnership must file Form 1065, “U.S. Return of Partnership Income,” for the year it closes. The “final return” box must be checked, and the same must be done on Schedule K-1, “Partner’s Share of Income, Deductions, Credits, etc.”

All corporations. Form 966, “Corporate Dissolution or Liquidation,” must be filed if you adopt a resolution or plan to dissolve a corporation or liquidate any of its stock.

C corporations. Form 1120, “U.S. Corporate Income Tax Return,” must be filed for the year you close, with the “final return” box checked.

S corporations. Form 1120-S, “U.S. Income Tax Return for an S Corporation,” must be filed for the year of closing. The “final return” box must be checked on this form as well as on Schedule K-1.

All businesses. Other forms may need to be filed to report sales of business property and asset acquisitions if you sell your business.

Employees and contract workers

If you have employees, you must pay them final wages and compensation owed, make final federal tax deposits and report employment taxes. Failure to withhold or deposit employee income tax, Social Security tax and Medicare tax can result in full personal liability for what’s known as the “Trust Fund Recovery Penalty.”

If you’ve paid any contractors at least $600 during the calendar year in which you close your business, you must report those payments on Form 1099-NEC, “Nonemployee Compensation.”

Other tax issues

If your business has a retirement plan for employees, you’ll want to terminate the plan and distribute benefits to participants. There are detailed notices, funding, timing and filing requirements that must be met by a terminating plan. There are also complex requirements related to Flexible Spending Accounts, Health Savings Accounts and other programs for your employees.

We can assist you with many other complicated tax issues related to closing your business, including debt cancellation, use of net operating losses, freeing up any remaining passive activity losses, depreciation recapture and possible bankruptcy issues.

We can also advise you on the length of time you need to keep business records. In addition, you’ll need to cancel your Employer Identification Number and close your IRS business account.

If your business is unable to pay all the taxes it owes, we can explain the available payment options. Contact us to discuss these issues and get answers to any questions.

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 +1-305-274-5811.

Source : Thomson Reuters     

IRS, Socios de la Cumbre de Seguridad Advierten a los Contribuyentes sobre una Nueva Estafa; Correo Inusual del Servicio de Entrega Intenta Engañar a las Personas para que Envíen Fotos, de Cuentas Bancarias

Posted by Admin Posted on July 13 2023

IRS, Socios de la Cumbre de Seguridad Advierten a los Contribuyentes sobre una Nueva Estafa; Correo Inusual del Servicio de Entrega Intenta Engañar a las Personas para que Envíen Fotos, de Cuentas Bancarias

El Servicio de Impuestos Internos advirtió a los contribuyentes que estén atentos a un nuevo correo fraudulento que intenta engañar a las personas haciéndoles creer que se les debe un reembolso.

El nuevo esquema implica un correo que llega en un sobre de cartón de un servicio de entrega. La carta adjunta incluye el encabezado del IRS y la redacción de que el aviso es "en relación con su reembolso no reclamado".

Como muchas estafas, la carta incluye información de contacto y un número de teléfono que no pertenece al IRS. Pero también busca una variedad de información personal confidencial de los contribuyentes, incluyendo imágenes detalladas de licencias de conducir, que los ladrones de identidad pueden usar para intentar obtener un reembolso de impuestos y otra información financiera confidencial.

"Esta es unas de las últimas series largas de intentos de ladrones de identidad que se hacen pasar por el IRS con la esperanza de engañar a las personas para que proporcionen información personal valiosa para robar identidades y dinero, incluyendo los reembolsos de impuestos", dijo el comisionado del IRS, Danny Werfel. "Estas estafas pueden llegar por correo electrónico, mensajes de texto o incluso en correos especiales. Las personas deben tener cuidado y estar atentos a señales de alerta que las marcan claramente como estafas del IRS".

La Cumbre de Seguridad, una coalición entre el IRS, los administradores de impuestos estatales y la industria tributaria de la nación, continúa advirtiendo a las personas que protejan su información personal para protegerse contra el robo de identidad relacionado con los impuestos y estafas como esta.

En esta nueva estafa, hay muchas señales de advertencia que se pueden ver en muchos esquemas similares por correo electrónico o por mensaje de texto. Una característica inusual de esta estafa es que intenta engañar a las personas para que envíen por correo electrónico o por teléfono información personal muy detallada con la esperanza de robar información valiosa.

La carta les dice a los destinatarios que deben proporcionar "Información de presentación" para su reembolso. Esto incluye algunas solicitudes redactadas con torpeza como esta:

"A Clear Picture of Your Driver's License That Clearly Displays All Four (4) Angles, Taken in a Place with Good Lighting." (Una imagen clara de su licencia de conducir que muestra claramente los cuatro (4) ángulos, tomado en un lugar con buena iluminación.)

La carta continúa con información más confidencial, incluyendo el número de teléfono celular, la información de ruta bancaria, el número de Seguro Social y el tipo de cuenta bancaria, seguida de una advertencia mal redactada:

"You'll Need to Get This to Get Your Refunds After Filing. These Must Be Given to a Filing Agent Who Will Help You Submit Your Unclaimed Property Claim. Once You Send All The Information Please Try to Be Checking Your Email for Response From The Agents Thanks" (Necesitará obtener esto para obtener sus reembolsos después de la presentación. Estos deben entregarse a un agente de presentación que lo ayudará a presentar su reclamo de propiedad no reclamada. Una vez que envíe toda la información, intente revisar su correo electrónico para obtener una respuesta de los agentes gracias)

Esta carta contiene una variedad de señales de advertencia, que incluyen puntuación extraña y una combinación de fuentes e inexactitudes.

Por ejemplo, la carta dice que la fecha límite para presentar los reembolsos de impuestos es el 17 de octubre; la fecha límite para las personas en la extensión de sus declaraciones de impuestos de 2022 es en realidad el 16 de octubre, y aquellos con reembolsos adeudados del año pasado tienen tiempo más allá de eso. Y el IRS maneja los reembolsos de impuestos, no la "propiedad no reclamada".

Recordatorios importantes sobre estafas

Los socios del IRS y la Cumbre de Seguridad advierten regularmente a las personas sobre estafas comunes que incluye la lista anual Docena Sucia del IRS.

Los contribuyentes y profesionales de impuestos deben estar alertas a las comunicaciones falsas que se hacen pasar por organizaciones legítimas en la comunidad tributaria y financiera, incluyendo el IRS y los estados. Estos mensajes pueden llegar en forma de un mensaje de texto o correo electrónico no solicitado para atraer a las víctimas desprevenidas para que proporcionen información personal y financiera valiosa que puede conducir al robo de identidad, incluyendo el phishing y el smishing.

El IRS nunca inicia el contacto con los contribuyentes por correo electrónico, mensaje de texto o redes sociales con respecto a una factura o reembolso de impuestos.

Como recordatorio: nunca haga clic a ninguna comunicación no solicitada que afirme ser del IRS, ya que puede cargar malware de forma encubierta. También puede ser una forma en que los piratas informáticos malintencionados carguen ransomware que impide que el usuario legítimo acceda a su sistema y archivos.

Las personas nunca deben responder al phishing o smishing relacionado con los impuestos ni hacer clic al enlace URL. En su lugar, las estafas deben denunciarse enviando el correo electrónico o una copia del texto/SMS como archivo adjunto a phishing@irs.gov. El informe debe incluir el identificador de llamadas (correo electrónico o número de teléfono), fecha, hora y zona horaria, y el número que recibió el mensaje.

Los contribuyentes también pueden denunciar estafas al Inspector general del Tesoro para la administración tributaria (en inglés) o al Centro de quejas de delitos en Internet (en inglés). La página Reporte práctica fraudulenta de pesca de información en IRS.gov proporciona detalles completos. El Comprobador de seguridad de teléfonos inteligentes (en inglés) de la Comisión Federal de Comunicaciones es una herramienta útil contra las amenazas de seguridad móvil.

El IRS también advierte a los contribuyentes que tengan cuidado con los mensajes que parecen ser de amigos o familiares, pero que posiblemente sean cuentas de correo electrónico o de texto robadas o comprometidas de alguien que conocen. Esta sigue siendo una forma popular de dirigirse a individuos y preparadores de impuestos para una variedad de estafas. Las personas deben verificar la identidad del remitente usando otro método de comunicación; por ejemplo, llamando a un número que ellos mismos saben que es correcto, no al número provisto en el correo electrónico o mensaje de texto.

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 +1-305-274-5811.

Source : IRS  

Tax Benefits to Help Offset the Cost of Making Businesses Accessible to People with Disabilities

Posted by Admin Posted on July 06 2023

Tax Benefits to Help Offset the Cost of Making Businesses Accessible to People with Disabilities

When employers hire people with disabilities or make their business accessible to employees and customers with disabilities, they may be eligible for certain tax benefits. These tax benefits encourage employers to hire qualified people with disabilities and off-set some of the costs of providing accommodations.

Disabled Access Credit

The Disabled Access Credit is a non-refundable credit for small businesses that have expenses for providing access to people with disabilities. An eligible small business is one that earned $1 million or less or had no more than 30 full-time employees in the previous year. Small businesses claim the 50% credit for eligible access expenditures by filing Form 8826, Disabled Access Credit. The business can claim the credit each year they have access expenditures. For details on access expenditures, see Form 8826.

Barrier removal tax deduction

The architectural barrier removal tax deduction encourages businesses of any size to remove architectural and transportation barriers that helps people with disabilities and the elderly get around more easily. Businesses may claim a deduction of up to $15,000 a year for qualified expenses on items that normally must be capitalized. Businesses claim this deduction by listing it as a separate expense on their income tax return. The tax return must be filed on time.

Businesses may use the Disabled Access Credit and the architectural tax deduction together in the same tax year if the expenses meet the requirements of both benefits.

Work Opportunity Tax Credit

The Work Opportunity Tax Credit is available to employers for hiring individuals who have consistently faced significant barriers to employment. This includes people with disabilities and veterans.

The maximum amount of tax credit for employees who worked 400 or more hours of service is:

  • $2,400 or 40% of up to $6,000 of first year wages for qualifying individuals.
  • $9,600 or 40% of up to $24,000 of first year wages for certain qualified veterans.

A 25% rate applies to wages for individuals who work at least 120 hours but less than 400 hours for the employer.

To claim the credit, an employer must first get certification that an individual is eligible. Employers do this by submitting IRS Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to their state workforce agency within 28 days after the eligible worker begins work. Employers should not submit this form to the IRS. They should contact their state workforce agency with questions about Form 8850.

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 +1-305-274-5811.

Source : IRS 

The Work Opportunity Tax Credit Helps Businesses that Hire from Eligible Groups

Posted by Admin Posted on July 06 2023

The Work Opportunity Tax Credit Helps Businesses that Hire from Eligible Groups

Finding work can be a hard for anybody and certain groups face even bigger challenges. The Work Opportunity Tax Credit is extended through the end of 2025 to help employers that hire workers certified as members of these groups that face barriers to employment:

  • People who receive:
    • Long-term family assistance
    • Long-term unemployment
    • Supplemental Nutrition Assistance Program benefits
    • Supplemental Security Income
    • Temporary Assistance for Needy Families
  • Formerly incarcerated individuals
  • Qualified unemployed veterans, including disabled veterans
  • Designated community residents living in Empowerment Zones or Rural Renewal Counties
  • People referred to vocational rehabilitation programs
  • Summer youth employees living in Empowerment Zones

Certification requirement

To claim the credit, an employer must first get certification that an individual is eligible. To do this, the employer submits IRS Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to their state workforce agency within 28 days after the eligible worker begins work. Employers should not submit this form to the IRS. They should contact their state workforce agency with questions about processing Form 8850.

Figuring and claiming the credit

Eligible businesses claim the Work Opportunity Tax Credit on their federal income tax return. It's generally based on wages paid to eligible workers during the first year of employment. After the employer receives the Form 8850 certification from the state workforce agency, they can:

Special rule for tax-exempt organizations

A special rule allows tax-exempt organizations to claim the credit only for hiring qualified veterans who began work for the organization before 2026. After the employer receives the Form 8850 certification from the state workforce agency, these organizations claim the credit against payroll taxes on Form 5884-C, Work Opportunity Credit for Qualified Tax Exempt Organizations. IRS recommends that qualified tax-exempt employers don't reduce their required deposits as they wait for the tax credit.

 

Limitations on the credits

For a taxable business, the credit is limited to the business' income tax liability. Unused credit is subject to the normal carry-back and carry forward rules. For qualified tax-exempt organizations, the credit is limited to the amount of the employer's share of Social Security tax it owes on wages it paid to qualifying employees.

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 +1-305-274-5811.

Source : IRS   

Hobby or business: here’s what to know about that side hustle

Posted by Admin Posted on July 06 2023

Hobby or business: here’s what to know about that side hustle

Sometimes the line between having a hobby and running a business can be confusing, but knowing the difference is important because hobbies and businesses are treated differently when it's time to file a tax return. The biggest difference between the two is that businesses operate to make a profit while hobbies are for pleasure or recreation.

Whether someone is having fun with a hobby or running a business, if they accept more than $600 for goods and services using online marketplaces or payment apps, they could receive a Form 1099-K. Profits from the sale of goods, including personal items, and services is taxable income that must be reported on tax returns.

There are a few other things people should consider when deciding whether their project is a hobby or business. No single thing is the deciding factor. Taxpayers should review all of the factors to make a good decision.

How taxpayers can decide if it's a hobby or business

These questions can help taxpayers decide whether they have a hobby or business:

  • Do they carry out the activity in a businesslike manner and keep complete and accurate books and records?
     
  • Does the time and effort they put into the activity show they intend to make a profit?
     
  • Does the activity make a profit in some years – if so, how much profit does it make?
     
  • Can they expect to make a future profit from the appreciation of the assets used in the activity?
     
  • Do they depend on income from the activity for their livelihood?
     
  • Are any losses due to circumstances beyond their control or are the losses normal for the startup phase of their type of business?
     
  • Do they change their methods of operation to improve profitability?
     
  • Do the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business?

Whether taxpayers have a hobby or run a business, good record keeping is always key when it's time to file taxes.

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 +1-305-274-5811.

Source : IRS      

IRS Alerts Businesses, Tax-Exempt Groups of Warning Signs for Misleading Employee Retention Scams; Simple Steps Can Avoid Improperly Filing Claims

Posted by Admin Posted on July 06 2023

IRS Alerts Businesses, Tax-Exempt Groups of Warning Signs for Misleading Employee Retention Scams; Simple Steps Can Avoid Improperly Filing Claims

The IRS and tax professionals continue to see a barrage of aggressive broadcast advertising, direct mail solicitations and online promotions involving the Employee Retention Credit. While the credit is real, aggressive promoters are wildly misrepresenting and exaggerating who can qualify for the credits.

The IRS has stepped up audit and criminal investigation work involving these claims. Businesses, tax-exempt organizations and others considering applying for this credit need to carefully review the official requirements for this limited program before applying. Those who improperly claim the credit face follow-up action from the IRS.

"The aggressive marketing of the Employee Retention Credit continues preying on innocent businesses and others," said IRS Commissioner Danny Werfel. "Aggressive promoters present wildly misleading claims about this credit. They can pocket handsome fees while leaving those claiming the credit at risk of having the claims denied or facing scenarios where they need to repay the credit."

The Employee Retention Credit (ERC), also sometimes called the Employee Retention Tax Credit or ERTC, is a legitimate tax credit. Many businesses legitimately apply for the pandemic-era credit. The IRS has added staff to handle ERC claims, which are time-consuming to process because they involve amended tax returns.

"This continual barrage of marketing by advertisers means many invalid claims are coming into the IRS, which also means it takes our hard-working employees longer to get to the legitimate Employee Retention Credits," Werfel said. "The IRS understands the importance of these credits, and we appreciate the patience of businesses and tax professionals as we continue to work hard to get valid claims processed as quickly as possible while also protecting against fraud."

The IRS has been issuing warnings about aggressive ERC scams since last year, and it made the agency's list this year of the Dirty Dozen tax scams that people should watch out for.

This is an ongoing priority area in many ways, and the IRS continues to increase compliance work involving ERC. The IRS has trained auditors examining ERC claims posing the greatest risk, and the IRS Criminal Investigation division is working to identify fraud and promoters of fraudulent claims.

The IRS reminds anyone who improperly claims the ERC that they must pay it back, possibly with penalties and interest. A business or tax-exempt group could find itself in a much worse cash position if it has to pay back the credit than if the credit was never claimed in the first place. So, it's important to avoid getting scammed.

When properly claimed, the ERC is a refundable tax credit designed for businesses that continued paying employees while shut down due to the COVID-19 pandemic or that had a significant decline in gross receipts during the eligibility periods. The credit is not available to individuals.

Warning signs of aggressive ERC marketing

There are important tips that people should be wary of involving the Employee Retention Credit. Warning signs to watch out for include:

  • Unsolicited calls or advertisements mentioning an "easy application process."
  • Statements that the promoter or company can determine ERC eligibility within minutes.
  • Large upfront fees to claim the credit.
  • Fees based on a percentage of the refund amount of Employee Retention Credit claimed. This is a similar warning sign for average taxpayers, who should always avoid a tax preparer basing their fee on the size of the refund.
  • Aggressive claims from the promoter that the business receiving the solicitation qualifies before any discussion of the group's tax situation. In reality, the Employee Retention Credit is a complex credit that requires careful review before applying.
  • The IRS also sees wildly aggressive suggestions from marketers urging businesses to submit the claim because there is nothing to lose. In reality, those improperly receiving the credit could have to repay the credit – along with substantial interest and penalties.

These promoters may lie about eligibility requirements. In addition, those using these companies could be at risk of someone using the credit as a ploy to steal the taxpayer's identity or take a cut of the taxpayer's improperly claimed credit.

How the promoters lure victims

The IRS continues to see a variety of ways that promoters can lure businesses, tax-exempt groups and others into applying for the credit.

  • Aggressive marketing. This can be seen in countless places, including radio, television and online as well as phone calls and text messages.
  • Direct mailing. Some ERC mills are sending out fake letters to taxpayers from the non-existent groups like the "Department of Employee Retention Credit." These letters can be made to look like official IRS correspondence or an official government mailing with language urging immediate action.
  • Leaving out key details. Third-party promoters of the ERC often don't accurately explain eligibility requirements or how the credit is computed. They may make broad arguments suggesting that all employers are eligible without evaluating an employer's individual circumstances.
    • For example, only recovery startup businesses are eligible for the ERC in the fourth quarter of 2021, but promoters fail to explain this limit.
    • Again, the promoters may not inform taxpayers that they need to reduce wage deductions claimed on their business' federal income tax return by the amount of the Employee Retention Credit. This causes a domino effect of tax problems for the business.
  • Payroll Protection Program participation. In addition, many of these promoters don't tell employers that they can't claim the ERC on wages that were reported as payroll costs if they obtained Paycheck Protection Program loan forgiveness.

How businesses and others can protect themselves

The IRS reminded businesses, tax-exempt groups and others being approached by these promoters that there are simple steps that can be taken to protect themselves from making an improper Employee Retention Credit.

  • Work with a trusted tax professional. Eligible employers who need help claiming the credit should work with a trusted tax professional; the IRS urges people not to rely on the advice of those soliciting these credits. Promoters who are marketing this ultimately have a vested interest in making money; in many cases they are not looking out for the best interests of those applying.
  • Don't apply unless you believe you are legitimately qualified for this credit. Details about the credit are available on IRS.gov, and again a trusted tax professional – not someone promoting the credit – can provide critical professional advice on the ERC.
  • To report ERC abuse, submit Form 14242, Report Suspected Abusive Tax Promotions or Preparers. People should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF, and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

Properly claiming the ERC

There are very specific eligibility requirements for claiming the ERC. These are technical areas that require review. They can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020, and Dec. 31, 2021. However, to be eligible, employers must have:

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 +1-305-274-5811.

Source : IRS     

Presentar una Declaración de Impuestos Federal Final para Alguien que Falleció

Posted by Admin Posted on June 29 2023

Presentar una Declaración de Impuestos Federal Final para Alguien que Falleció

Después de que alguien con un requisito de presentación fallece, su cónyuge o representante sobreviviente debe presentar la declaración de impuestos final de la persona fallecida. En la declaración de impuestos final, el cónyuge sobreviviente o representante debe anotar que la persona falleció. El IRS no necesita una copia del certificado de defunción u otra prueba de defunción.

Por lo general, el representante que presenta la declaración de impuestos final se nombra en el testamento de la persona o es designado por un tribunal. A veces, cuando no hay un cónyuge sobreviviente o un representante designado, un representante personal presentará la declaración final y adjuntará el Formulario 1310, Información sobre una persona que reclama el reembolso debido a un contribuyente fallecido (en inglés).

Qué debe saber acerca de la presentación final de la declaración de impuestos

Generalmente, la declaración final de la declaración de impuestos de una persona fallecida se prepara y presenta de la misma manera que si la persona estuviera viva.

  • La declaración debe informar todos los ingresos hasta la fecha del fallecimiento y reclamar todos los créditos y deducciones elegibles.
  • Si la persona fallecida no presentó declaraciones de impuestos para los años anteriores a su muerte, es posible que su cónyuge o representante sobreviviente tenga que presentar declaraciones del año anterior.
  • El IRS considera que el cónyuge sobreviviente estuvo casado durante el año completo en que falleció su cónyuge si no se vuelve a casar durante ese año.
  • El cónyuge sobreviviente es elegible para usar el estado civil "casado que presenta una declaración conjunta" o "casado que presenta una declaración por separado".
  • Los mismos plazos tributarios se aplican a las declaraciones finales. Si, por ejemplo, la persona fallecida murió en 2022, su declaración final vence el 18 de abril de 2023, a menos que el cónyuge sobreviviente o representante tenga una prórroga para presentar.
  • Al realizar la presentación electrónica, el cónyuge sobreviviente o representante debe seguir las instrucciones proporcionadas por el software de impuestos para los requisitos correctos de firma y anotación.
  • Para las declaraciones en papel, el declarante debe escribir "deceased" (fallecido), el nombre de la persona y la fecha de fallecimiento en la parte superior.

Quién debe firmar la declaración de impuestos

La persona que debe firmar la declaración es:

  • Todo representante designado deberá firmar la declaración. Si es una declaración conjunta, el cónyuge sobreviviente también debe firmarla.
  • Si no hay un representante designado, el cónyuge sobreviviente que presenta una declaración conjunta debe firmar la declaración y escribir en el área de la firma, "presentación como cónyuge sobreviviente".
  • Si no hay representante designado ni cónyuge sobreviviente, la persona a cargo de la propiedad de la persona fallecida debe presentar y firmar la declaración como "personal representative" (representante personal).

Incluir otros documentos con la declaración final de impuestos

Los representantes designados por el tribunal deben adjuntar una copia del documento judicial que muestre su nombramiento. Los representantes que no sean designados por el tribunal deben incluir el Formulario 1310, Información sobre una persona que reclama el reembolso debido a un contribuyente fallecido (en inglés) para reclamar cualquier reembolso. Los cónyuges sobrevivientes y los representantes designados por el tribunal no necesitan completar este formulario.

Si se deben impuestos, el contribuyente debe enviar el pago con la declaración o visitar la página Realice un pago de impuestos de IRS.gov para conocer otras opciones de pago. Si no pueden pagar el monto adeudado de inmediato, pueden calificar para un plan de pago o un acuerdo de pago a plazos.

Viudo o viuda elegible

Los cónyuges sobrevivientes con hijos dependientes pueden presentar una solicitud como cónyuge sobreviviente elegible durante dos años después de la muerte de su cónyuge. Este estado civil para efectos de la declaración les permite usar tasas de impuestos conjuntas y la cantidad de deducción estándar más alta si no detallan las deducciones.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente: IRS 

Reminder: Proposed Regulations Related to the New Clean Vehicle Critical Mineral and Battery Components Go into Effect April 18

Posted by Admin Posted on June 29 2023

Reminder: Proposed Regulations Related to the New Clean Vehicle Critical Mineral and Battery Components Go into Effect April 18

The Internal Revenue Service published proposed regulations in the Federal Register related to certain requirements that must be met for critical mineral and battery components for the new clean vehicle credit.

The critical mineral and battery component requirements apply to vehicles placed in service on or after April 18, 2023, the day after the Notice of Proposed Rulemaking is published in the Federal Register.

New clean vehicles placed in service on or after April 18, 2023, are subject to the critical mineral and battery component requirements even if the vehicle was ordered or purchased before April 18, 2023.

The Inflation Reduction Act (IRA) allows a maximum credit of $7,500 per vehicle, consisting of $3,750 in the case of a vehicle that meets certain requirements relating to critical minerals and $3,750 in the case of a vehicle that meets certain requirements relating to battery components.

To check if a specific make and model meets the critical mineral and battery components, visit Fuel Economy.gov.

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 +1-305-274-5811.

Source : IRS      

3 Things to Know After Filing Your Tax Return

Posted by Admin Posted on June 29 2023

3 Things to Know After Filing Your Tax Return

Most people feel a sense of relief after filing their income tax returns each year. But even if you’ve successfully filed your 2022 return with the IRS, there may still be some issues to bear in mind. Here are three important things to know:

1. You can check on your refund. The IRS has an online tool that can tell you the status of your refund. Go to irs.gov and click on “Get Your Refund Status.” You’ll need your Social Security number, filing status and the exact refund amount.

2. You can file an amended return if you forgot to report something. In general, you can file an amended tax return and claim a refund within three years after the date you filed your original return or within two years of the date you paid the tax, whichever is later. So, if you file your 2022 tax return on April 18, 2023 (the due date for 2022 returns), you’d typically have until April 18, 2026, to file an amended return.

However, there are a few situations when you have longer to file an amended return. For example, the statute of limitations for bad debts is longer than the usual three-year time limit for most items on your tax return. In general, you can amend your tax return to claim a bad debt for seven years from the due date of the tax return for the year that the debt became worthless.

3. You can throw out some tax records. You should keep tax records related to your return for as long as the IRS can audit your return or assess additional taxes. The statute of limitations is generally three years after you file your return.

That means you can probably dispose of most tax-related records for the 2019 tax year and earlier years. (If you filed an extension for your 2019 return, hold on to your records until at least three years from when you filed the extended return.)

However, the statute of limitations extends to six years for taxpayers who understate their gross income by more than 25%.

You’ll need to hang on to certain tax-related records longer. For example, keep actual tax returns indefinitely so you can prove to the IRS that you filed legitimately. (There’s no statute of limitations for an audit if you didn’t file a return or you filed a fraudulent one.)

Keep records associated with a retirement account until you’ve depleted the account and reported the last withdrawal on your tax return, plus three (or six) years. And retain records related to real estate or investments for as long as you own the asset so you can prove your tax basis, plus at least three years after you sell it and report the sale on your tax return. (You may want to keep these records for six years if to be extra safe.)

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 +1-305-274-5811.

Source : Thomson Reuters    

Business Bartering Is Taxable

Posted by Admin Posted on June 29 2023

AVOID TO REPORT THIS TRANSACTION IS DEEMED AS TAX EVASION

Business Bartering Is Taxable

During these times of high inflation, many cash-challenged businesses have bartered for goods and services instead of paying dollars for them. If your company gets involved in such transactions, remember that the fair market value of goods that you receive is taxable income. And if you exchange services with another business, the transaction results in taxable income for both parties.

A couple of examples

Let’s say a computer consultant agrees to exchange services with an advertising agency. Both parties will be taxed on the fair market value of the services received. This is the amount they’d normally charge for the same services. If the parties agree to the value of the services in advance, that will be considered the fair market value unless contrary evidence exists.

In addition, if services are exchanged for property, income is realized. Say a construction company does work for a retail business in exchange for unsold inventory. The contractor will incur income equal to the inventory’s fair market value.

Barter exchanges

Many businesses join barter clubs that facilitate these transactions. Generally, these clubs use a system of “credit units” that are awarded to members who provide goods and services. The credits can be redeemed for goods and services from other members.

Bartering is generally taxable in the year it occurs. If you participate in a barter club, however, you may be taxed on the value of credit units at the time they’re added to your account — even if you don’t redeem them for actual goods and services until a later year.

By January 31 of each year, a barter club will send participants a Form 1099-B, “Proceeds from Broker and Barter Exchange Transactions,” which shows the value of cash, property, services and credits that they received from exchanges during the previous year. The IRS will also receive this information.

If you join a barter club, expect to provide your Social Security number or employer identification number. You’ll also be asked to certify that you aren’t subject to backup withholding. Unless you make this certification, the club will withhold tax from your bartering income.

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 +1-305-274-5811.

Source : IRS      

Filing a Final Federal Tax Return for Someone Who Has Died

Posted by Admin Posted on June 24 2023

Filing a Final Federal Tax Return for Someone Who Has Died

After someone with a filing requirement passes away, their surviving spouse or representative should file the deceased person's final tax return. On the final tax return, the surviving spouse or representative should note that the person has died. The IRS doesn't need a copy of the death certificate or other proof of death.

Usually, the representative filing the final tax return is named in the person's will or appointed by a court. Sometimes when there isn't a surviving spouse or appointed representative, a personal representative will file the final return and attach Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer.

Things to know about filing the final tax return

Generally, the final individual income tax return of a deceased person is prepared and filed the same way as if the person were alive.

  • The return must report all income up to the date of death and claim all eligible credits and deductions.
  • If the deceased person did not file individual income tax returns for the years before their death, their surviving spouse or representative may have to file prior year returns.
  • The IRS considers the surviving spouse married for the full year their spouse died if they don't remarry during that year.
  • The surviving spouse is eligible to use filing status "married filing jointly" or "married filing separately."
  • The same tax deadlines apply for final returns. If, for example, the deceased person died in 2022, their final return is due by April 18, 2023, unless the surviving spouse or representative has an extension to file.
  • When e-filing, the surviving spouse or representative should follow the directions provided by the tax software for the correct signature and notation requirements.
  • For paper returns, the filer should write "deceased," the person's name and the date of death across the top.

Who should sign the tax return

Here's who should sign the tax return:

  • Any appointed representative must sign the return. If it's a joint return, the surviving spouse must also sign it.
  • If there isn't an appointed representative, the surviving spouse filing a joint return should sign the return and write in the signature area, "filing as surviving spouse."
  • If there's no appointed representative and no surviving spouse, the person in charge of the deceased person's property must file and sign the return as "personal representative."

Other documents to include with the final tax return

Court-appointed representatives should attach a copy of the court document showing their appointment. Representatives who aren't court-appointed must include Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer to claim any refund. Surviving spouses and court-appointed representatives don't need to complete this form.

If tax is due, the filer should submit payment with the return or visit the payments page of IRS.gov for other payment options. If they can't pay the amount due immediately, they may qualify for a payment plan or installment agreement.

Qualifying widow or widower

Surviving spouses with dependent children may be able to file as a Qualifying Surviving Spouse for two years after their spouse's death. This filing status allows them to use joint return tax rates and the highest standard deduction amount if they don't itemize deductions.

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 +1-305-274-5811.

Source : IRS   

An Offer in Compromise Can Help Certain Taxpayers Resolve Tax Debt

Posted by Admin Posted on June 24 2023

An Offer in Compromise Can Help Certain Taxpayers Resolve Tax Debt

When a taxpayer can't pay their full tax liability or if paying would cause financial hardship, they may want to consider applying for an Offer in Compromise. This agreement between a taxpayer and the IRS settles a tax debt for less than the full amount owed. The goal is a compromise that's in the best interest of both the taxpayer and the agency. The application fee for an offer in compromise is $205. Low-income taxpayers don't have to pay this fee, and they should check if they meet the definition of low-income in the instructions for Form 656, Offer in Compromise.

When reviewing applications, the IRS considers the taxpayer's unique set of facts and special circumstances affecting their ability to pay including their:

  • Income.
  • Expenses.
  • Asset equity.

The Offer in Compromise Booklet has detailed information

The booklet covers everythingPDF a taxpayer needs to know about submitting an Offer in Compromise including:

  • Eligibility.
  • Costs to apply.
  • Application process.
  • Forms.

The booklet is also available in Spanish. Taxpayers should download and use the latest version of the OIC booklet to avoid processing delays.

Taxpayers can also watch a how-to video series on Offer in Compromise

The IRS has a free how-to video series on Offer in Compromise available in English, Spanish and Simplified Chinese. The playlist has easy-to-find information that taxpayers need to know when they consider and apply for an OIC. Topics in the series include:

  • Overview of the OIC process, forms and pre-qualifier tool.
  • Step-by-step guides for completing Forms 433-A and 433-B OIC. These are collection information statements which are required for both individual and business-related offers.
  • Step-by-step example of how to complete Form 656, Offer in Compromise.
  • Checklist of everything that's needed to submit a valid offer.

Taxpayers can see if they're eligible with the pre-qualifier tool 

Taxpayers can enter their financial information and tax filing status in the tool to calculate a preliminary offer amount. The tool is only a guide. The IRS will make the final decision on whether to accept the taxpayer's application.

Beware of offer in compromise mills

Offers in compromise are an important program to help people who can't pay to settle their federal tax debts. But "offer in compromise mills" can aggressively promote offers in compromise in misleading ways to people who clearly don't meet the qualifications, often costing taxpayers thousands of dollars. Taxpayers can check their eligibility for free using the IRS Offer in Compromise Pre-Qualifier tool.

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 +1-305-274-5811.

Source: IRS 

IRS: Florida Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to Aug. 15

Posted by Admin Posted on June 24 2023

IRS: Florida Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to Aug. 15

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) as a result of tornadoes, severe storms and flooding that occurred from April 12 to 14. This means that individuals and households that reside or have a business in Broward County qualify for tax relief. Other areas added later to the disaster area will also qualify for the same relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on April 12, 2023, and is based on an April 27 FEMA disaster declaration. As a result, affected individuals and businesses will have until Aug. 15, 2023, to file returns and pay any taxes that were originally due during this period.

This means that taxpayers will have until Aug. 15 to file any 2022 individual income tax returns and various business returns that were originally due on April 18. They will also have until Aug. 15 to pay any tax originally due on these returns. Taxpayers will get the extra time, even if they failed to request a tax-filing extension by April 18.

Among other things, this also means that eligible taxpayers will have until Aug. 15 to make 2022 contributions to their IRAs and health savings accounts.

The Aug. 15 deadline also applies to the quarterly estimated tax payments, normally due on April 18 and June 15.

The Aug. 15 deadline also applies to the quarterly payroll and excise tax returns normally due on May 1 and July 31, 2023. In addition, penalties on payroll and excise tax deposits due on or after April 12 and before April 27, will be abated as long as the tax deposits were made by April 27, 2023.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

Affected individual taxpayers who need more time to file, beyond the Aug. 15 deadline, must file their extension requests on paper using Form 4868. That's because e-file options for requesting an extension are not available after April 18.

By filing this form, disaster-area taxpayers will have until Oct. 16 to file, though tax payments are still due by Aug. 15. Visit IRS.gov/extensions for details.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed in early 2024), or the return for the prior year (that is, the 2022 return normally filed in 2023). Be sure to write the FEMA declaration number – 4709-DR − on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

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 +1-305-274-5811.

Source : IRS      

IRS: Early Filers Who Reported Certain State Tax Refunds as Taxable Should Consider Filing Amended Returns

Posted by Admin Posted on June 17 2023

IRS: Early Filers Who Reported Certain State Tax Refunds as Taxable Should Consider Filing Amended Returns

On Feb. 10, 2023, the IRS provided details clarifying the federal tax status involving special payments made to taxpayers by 21 states in 2022. During a review, the IRS determined that in the interest of sound tax administration and other factors, taxpayers in many states did not need to report these payments on their 2022 tax returns. Consequently, the IRS will not challenge the taxability of state payments related to general welfare and disaster relief.

This means people in the following states don't need to report these state payments on their 2022 tax return: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Alaska is in this group as well, but the determination applies only to the special supplemental Energy Relief Payment received.

Taxpayers can see a listing of individual states and the federal tax treatment of their special state refunds or rebates listed on this State Payments chart.

In addition, many people in Georgia, Massachusetts, South Carolina, and Virginia will not include special state 2022 tax refunds as income for federal tax purposes if they meet certain requirements. For these individuals, state payments will not be included for federal tax purposes if the payment is a refund of state taxes paid and the recipient either claimed the standard deduction for tax year 2022 or itemized their tax year 2022 deductions but did not receive a tax benefit.

Taxpayers who filed before Feb. 10 in these areas and meet these requirements should check their tax return to make sure they paid tax on a state refund before filing an amended return. In addition, taxpayers in this situation who used a tax professional can consult with them to determine whether an amended return is necessary.

If an amended return is needed, taxpayers who submitted their original 2022 tax return electronically can also file their amended return electronically and may select direct deposit for any resulting refund. Filing electronically cuts out the mail time and including direct deposit information on an electronically submitted form provides a convenient and secure way to receive refunds faster.

Taxpayers also have the option to submit a paper version of the Form 1040-X, Amended U.S Individual Income Tax Return, and receive a paper check. They should follow the instructions for preparing the paper form, but they should mail it to:

Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0052

Direct deposit is not available on amended returns submitted on paper.

No matter how a taxpayer files the amended return, they can still use the Where's My Amended Return? online tool to check its status.

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 +1-305-274-5811.

Source: IRS   

Treasury and IRS Propose Regulations Identifying Micro-Captive Transactions as Abusive Tax Transactions

Posted by Admin Posted on June 17 2023

Treasury and IRS Propose Regulations Identifying Micro-Captive Transactions as Abusive Tax Transactions

The Treasury Department and Internal Revenue Service issued proposed regulations identifying certain micro-captive transactions as "listed transactions" and certain other micro-captive transactions as "transactions of interest."

Listed transactions are abusive tax transactions that must be reported to the IRS. Transactions of interest are tax transactions that have the potential for tax avoidance or evasion that must also be reported to the IRS.

Tax law generally allows businesses to create "captive" insurance companies to protect against insurance risks and provides that certain small non-life insurance companies can choose to pay tax only on their investment income under Internal Revenue Code section 831(b) ("micro-captives"). In abusive micro-captive structures, promoters, accountants or wealth planners persuade owners of closely held entities to participate in schemes that lack many of the attributes of genuine insurance.

The IRS previously identified certain micro-captive transactions as transactions of interest in Notice 2016-66. Recent court decisions in the Sixth Circuit and the U.S. Tax Court ruled that the IRS lacks authority to identify listed transactions and transactions of interest by notices, such as Notice 2016-66, and must instead identify such transactions by following the notice and public comment procedures that apply to regulations.

Treasury and the IRS disagree with these decisionsPDF that the IRS lacks authority to identify listed transactions by notice and continue to defend listing notices in litigation except in the Sixth Circuit. Treasury and the IRS will, however, no longer take the position that transactions of interest can be identified without complying with notice and public comment procedures. Treasury and the IRS issued the proposed regulations to ensure that these decisions do not disrupt the IRS' ongoing efforts to combat abusive tax shelters throughout the nation.

The IRS has consistently disallowed the tax benefits claimed by taxpayers in abusive micro-captive structures. Some taxpayers have challenged the IRS position disallowing these micro-captive tax benefits in court, but none has been successful. To the contrary, the Tax Court has now sustained the IRS' disallowance of the claimed tax benefits in three different cases.

Treasury and the IRS intend to finalize these proposed regulations after due consideration of public comments in 2023 and intend to issue proposed regulations identifying additional listed transactions in the near future.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811.

Source : IRS  

Thinking About Converting your Home into a Rental Property?

Posted by Admin Posted on June 17 2023

Thinking About Converting your Home into a Rental Property?

In some cases, homeowners move to new residences, but keep their present homes and rent them out. If you’re thinking of doing this, you’re probably aware of the financial risks and rewards. However, you also should know that renting out your home carries potential tax benefits and pitfalls.

Rental real estate rules

If you’re no longer personally using your home at all, you’re generally treated as a regular real estate landlord once you begin renting it out. That means you must report rental income on your tax return, but you’re also entitled to offsetting deductions for the money you spend on utilities, operating expenses, incidental repairs and maintenance (for example, fixing a leak in the roof).

Additionally, you can claim depreciation deductions for the home. You may be able to fully offset rental income with allowable landlord deductions.

Passive activity rules

However, under the passive activity loss (PAL) rules, you may not be able to currently deduct the rent-related deductions that exceed your rental income unless an exception applies. Under the most widely applicable exception, the PAL rules won’t affect your converted property for a tax year in which your adjusted gross income doesn’t exceed $100,000, you actively participate in running the home-rental business, and your losses from all rental real estate activities in which you actively participate don’t exceed $25,000.

You should also be aware that potential tax pitfalls may arise from renting your residence. Unless your rentals are strictly temporary and are made necessary by adverse market conditions, you could forfeit an important tax break for home sellers if you finally sell the home at a profit. In general, you can escape tax on up to $250,000 ($500,000 for married couples filing jointly) of gain on the sale of your principal home. However, this tax-free treatment is conditioned on your having used the residence as your principal residence for at least two of the five years preceding the sale. So, renting your home out for an extended time could jeopardize a big tax break.

What if you don’t rent out your home long enough to jeopardize your principal residence exclusion? The tax break you would have gotten on the sale (the $250,000/$500,000 exclusion) won’t apply to the extent of any depreciation allowable with respect to the rental or business use of the home for periods after May 6, 1997. It also won’t apply to any gain allocable to a period of nonqualified use (any period during which the property isn’t used as the principal residence for you, your spouse or former spouse) after December 31, 2008. A maximum tax rate of 25% will apply to this gain (attributable to recapture of depreciation deductions).

Selling at a loss

Some homeowners who bought at the height of the market may ultimately sell at a loss. In such situations, the loss is available for tax purposes only if the owner can establish that the home was in fact converted permanently into income-producing property. Here, a longer lease period helps an owner.

However, if you’re in this situation, be aware that you may not wind up with much of a loss for tax purposes. That’s because the beginning basis (the cost for tax purposes) when the home is first converted to a rental property is equal to the lesser of actual cost or the property’s fair market value when it’s converted to rental property. So, if a home was bought for $300,000, converted to a rental when it was worth $250,000, and ultimately sold for $225,000, the loss would be only $25,000. Keep in mind that depreciation deductions while it was a rental property also reduce basis.

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 +1-305-274-5811.

Source: Thomson Reuters      

Be Prepared for Taxes on Social Security Benefits

Posted by Admin Posted on June 06 2023

Be Prepared for Taxes on Social Security Benefits

Whether you’ve filed your 2022 tax return or soon will, one thing you don’t want to experience is a surprise. Many older people are caught off guard when they find that some of their Social Security benefits are taxable.

How much might you have to pay? Depending on your other income, between 50% and 85% of your Social Security benefits could be hit with federal income tax. (There could also be state tax.) This doesn’t mean you’ll pay 50% to 85% of your benefits back to the government. It means you may have to include 50% to 85% of them in your income subject to regular tax rates.

Calculate provisional income

To determine how much, if any, of your benefits are taxed, you must calculate your “provisional income.” Doing so involves adding certain amounts (for example, tax-exempt interest from municipal bonds) to the adjusted gross income on your tax return.

If you file jointly, you’ll need to add your spouse’s income, and then further add half of the Social Security benefits that you and your spouse received during the year. The result is your joint provisional income.

If you file a joint tax return and your joint provisional income isn’t above $32,000, none of your Social Security benefits are taxed. If your provisional income is $32,001 to $44,000, you must report up to 50% of your Social Security benefits as income. If your provisional income is more than $44,000, you need to report up to 85% of your Social Security benefits as income on Form 1040.

For single taxpayers, if your provisional income is between $25,001 and $34,000, you must report up to 50% of your Social Security benefits as income. And if your provisional income is more than $34,000, the general rule is that you need to report up to 85% of your Social Security benefits as income.

Sidestep a surprise

If you aren’t paying tax on your Social Security benefits now because your income is below the floor, or you’re paying tax on only 50% of those benefits, an unplanned increase in your income can have a significant tax cost. Not only will you pay tax on the additional income, but you may also have to pay tax on (or on more of) your Social Security benefits and you may get pushed into a higher tax bracket.

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 +1-305-274-5811.

Source: Thomson Reuters       

IRS Issues Renewed Warning on Employee Retention Credit Claims; False Claims Generate Compliance Risk for People and Businesses Credit Improperly

Posted by Admin Posted on June 06 2023

IRS Issues Renewed Warning on Employee Retention Credit Claims; False Claims Generate Compliance Risk for People and Businesses Credit Improperly

The Internal Revenue Service issued a renewed warning urging people to carefully review the Employee Retention Credit (ERC) guidelines before trying to claim the credit as promoters continue pushing ineligible people to file.

The IRS and tax professionals continue to see third parties aggressively promoting these ERC schemes on radio and online. These promoters charge large upfront fees or a fee that is contingent on the amount of the refund. And the promoters may not inform taxpayers that wage deductions claimed on the business' federal income tax return must be reduced by the amount of the credit.

"While this is a legitimate credit that has provided a financial lifeline to millions of businesses, there continue to be promoters who aggressively mislead people and businesses into thinking they can claim these credits," said Acting IRS Commissioner Doug O'Donnell. "Anyone who is considering claiming this credit needs to carefully review the guidelines. If the tax professional they're using raises questions about the accuracy of the Employee Retention Credit claim, people should listen to their advice. The IRS is actively auditing and conducting criminal investigations related to these false claims. People need to think twice before claiming this."

The IRS has been warning about this scheme since last fall, but there continue to be attempts to claim the ERC during the 2023 tax filing season. Tax professionals note they continue to be pressured by people wanting to claim credits improperly. The IRS Office of Professional Responsibility is working on additional guidance for the tax professional community that will be available in the near future.

People and businesses can avoid this scheme, and by not filing improper claims in the first place. If the business filed an income tax return deducting qualified wages before it filed an employment tax return claiming the credit, the business should file an amended income tax return to correct any overstated wage deduction.

Businesses should be cautious of advertised schemes and direct solicitations promising tax savings that are too good to be true. Taxpayers are always responsible for the information reported on their tax returns. Improperly claiming the ERC could result in taxpayers being required to repay the credit along with penalties and interest.

What is the ERC?

The ERC is a refundable tax credit designed for businesses who continued paying employees while shut down due to the COVID-19 pandemic or who had significant declines in gross receipts from March 13, 2020, to Dec. 31, 2021. Eligible taxpayers can claim the ERC on an original or amended employment tax return for a period within those dates.

To be eligible for the ERC, employers must have:

As a reminder, only recovery startup businesses are eligible for the ERC in the fourth quarter of 2021. Additionally, for any quarter, eligible employers cannot claim the ERC on wages that were reported as payroll costs in obtaining PPP loan forgiveness or that were used to claim certain other tax credits.

To report tax-related illegal activities relating to ERC claims, submit by fax or mail a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail: Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

Employers should also report instances of fraud and IRS-related phishing attempts to the IRS at phishing@irs.gov and Treasury Inspector General for Tax Administration at 800-366-4484.

Go to IRS.gov to learn more about eligibility requirements and how to claim the Employee Retention Credit:

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 +1-305-274-5811

Source : IRS           

What Taxpayers Should Do when they Receive Form 1099-K

Posted by Admin Posted on June 06 2023

What Taxpayers Should Do when they Receive Form 1099-K

Form 1099-K, Payment Card and Third Party Network Transactions, is an IRS form that is used to report certain payment transactions.

If taxpayers receive a Form 1099-K, they should use that information with their other tax records to determine their correct tax liability. Taxpayers must report all their income on their tax return unless it's excluded by law, regardless of whether they receive a Form 1099-K.

Taxpayers will receive Form 1099-K for business transactions, including income from:

  • A business the taxpayer owns.
  • Self-employment.
  • Activities in the gig economy.
  • The sale of personal items and assets.

Money received as a gift or for reimbursement does not require a 1099-K. Taxpayers can minimize the chance of an error by asking friends or family members to correctly designate that type of payment as a non-business-related transaction. The taxpayer should also make a note of what the payment was for and who sent it. Good recordkeeping is key.

What to do when a Form 1099-K is incorrect

Some taxpayers may have received a Form 1099-K for the sale of personal items, or Form 1099-K may have been issued in error – such as for transactions between friends and family, or expense sharing.

If the information is incorrect on the Form 1099-K, taxpayers should contact the issuer immediately. The issuing organization's name appears in the upper left corner on the form. Taxpayers should keep a copy of all correspondence with the issuer for their records.

If a taxpayer receives a Form 1099-K in error and the taxpayer cannot obtain a corrected Form 1099-K, the taxpayers should follow the IRS' updated guidance at Understanding Your Form 1099-K.

1099-K reporting threshold for tax year 2023

The American Rescue Plan of 2021 changed the reporting threshold requirement for payment apps, also known as third-party settlement organizations. The IRS announced that the new Form 1099-K reporting threshold will start in tax year 2023.

  • The old threshold was $20,000 and 200 transactions per year. This applies to tax year 2022 and prior years.
  • The new threshold is more than $600. This applies to tax year 2023 and future years.

The threshold change means some people may receive a Form 1099-K who have not received one in the past. There are no changes to what counts as income or how tax is calculated.

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 +1-305-274-5811.

Source: IRS 

Time Running Out to Claim $1.5 Billion in Refunds for Tax Year 2019, Taxpayers Face July 17 Deadline

Posted by Admin Posted on June 06 2023

Time Running Out to Claim $1.5 Billion in Refunds for Tax Year 2019, Taxpayers Face July 17 Deadline

The IRS estimates almost $1.5 billion in refunds remain unclaimed because people haven't filed their 2019 tax returns yet. The average median refund is $893 for this year, and the IRS has done a special state-by-state calculation to show how many people are potentially eligible for these refunds.

"The 2019 tax returns came due during the pandemic, and many people may have overlooked or forgotten about these refunds," said IRS Commissioner Danny Werfel. "We want taxpayers to claim these refunds, but time is running out. People face a July 17 deadline to file their returns. We recommend taxpayers start soon to make sure they don't miss out."

Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don't file within three years, the money becomes the property of the U.S. Treasury.

But for 2019 tax returns, people have more time than usual to file to claim their refunds. Usually, the normal filing deadline to claim old refunds falls around the April tax deadline, which is April 18 this year for 2022 tax returns. But the three-year window for 2019 unfiled returns was postponed to July 17, 2023, due to the COVID-19 pandemic emergency. The IRS issued Notice 2023-21 on Feb. 27, 2023, providing legal guidance on claims made by the postponed deadline.

The IRS estimates the midpoint for the potential unclaimed refunds for 2019 to be $893. That means half of the refunds are more than $893 and half are less.

"With the pandemic taking place when the 2019 tax returns were originally due, people faced extremely unusual situations. People may have simply forgotten about tax refunds with the deadline that year postponed all the way into July," Werfel said. "We frequently see students, part-time workers and others with little income overlook filing a tax return and never realize they may be owed a refund. We encourage people to review their records and start gathering records now, so they don't run the risk of missing the July deadline."

By missing out on filing a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2019. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2019, the credit was worth as much as $6,557. The EITC helps individuals and families whose incomes are below certain thresholds in 2019. Those who are potentially eligible for EITC in 2019 had incomes below:

  • $50,162 ($55,952 if married filing jointly) for those with three or more qualifying children;
  • $46,703 ($52,493 if married filing jointly) for people with two qualifying children;
  • $41,094 ($46,884 if married filing jointly) for those with one qualifying child, and;
  • $15,570 ($21,370 if married filing jointly) for people without qualifying children.

The IRS reminds taxpayers seeking a 2019 tax refund that their checks may be held if they have not filed tax returns for 2020 and 2021. In addition, the refund will be applied to any amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans.

Current and prior year tax forms (such as the tax year 2019 Forms 1040 and 1040-SR) and instructions are available on the Forms, Instructions & Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).

Need to file a 2019 tax return? Several options to get key documents

Although it's been several years since 2019, the IRS reminds taxpayers there are ways they can still gather the information they need to file this tax return. But people should start early to make sure they have enough time to file before the July deadline for 2019 refunds. Here are some options:

  • Request copies of key documents: Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2019, 2020 or 2021 can request copies from their employer, bank or other payers.
  • Use Get Transcript Online at IRS.gov. Taxpayers who are unable to get those missing forms from their employer or other payers can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. For many taxpayers, this is by far the quickest and easiest option.
  • Or request a transcript. Another option is for people to file Form 4506-T with the IRS to request a "wage and income transcript." A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return. But plan ahead – these written requests can take several weeks; people are strongly urged to try the other options first.

Based on tax information currently available, the IRS estimated how many people in each state may be entitled to a tax refund. The actual refund amount will vary based on a household's tax situation.

 

State or District

Estimated Number of Individuals

Median Potential Refund

Total Potential Refunds *

Alabama

23,900

$880

$23,694,700

Alaska

6,000

$917

$6,542,300

Arizona

35,400

$824

$33,911,500

Arkansas

12,800

$864

$12,586,100

California

144,700

$856

$141,780,000

Colorado

30,100

$859

$29,514,000

Connecticut

15,400

$934

$16,198,400

Delaware

5,700

$880

$5,754,900

District of Columbia

4,400

$887

$4,550,100

Florida

89,300

$893

$89,530,400

Georgia

48,000

$826

$46,269,000

Hawaii

8,800

$932

$9,197,700

Idaho

7,600

$758

$6,996,000

Illinois

55,800

$916

$57,591,300

Indiana

31,700

$916

$32,115,100

Iowa

15,300

$926

$15,492,600

Kansas

14,600

$913

$14,753,700

Kentucky

18,600

$906

$18,574,200

Louisiana

22,000

$877

$22,274,800

Maine

6,400

$876

$6,197,300

Maryland

31,400

$897

$32,344,500

Massachusetts

35,700

$966

$38,400,900

Michigan

48,500

$888

$48,582,600

Minnesota

23,200

$848

$22,387,800

Mississippi

12,300

$820

$11,836,700

Missouri

31,800

$880

$31,345,700

Montana

5,200

$854

$5,144,900

Nebraska

7,800

$893

$7,745,600

Nevada

15,800

$869

$15,550,300

New Hampshire

6,900

$974

$7,451,800

New Jersey

40,500

$924

$42,035,900

State or District

Estimated Number of Individuals

Median Potential Refund

 

New Mexico

9,600

$867

$9,522,400

New York

81,600

$945

$86,826,200

North Carolina

45,800

$862

$44,426,600

North Dakota

3,700

$958

$3,997,100

Ohio

51,800

$868

$50,234,900

Oklahoma

21,400

$897

$21,770,000

Oregon

23,700

$801

$22,348,900

Pennsylvania

56,000

$924

$57,572,600

Rhode Island

4,300

$924

$4,468,700

South Carolina

18,200

$809

$17,264,100

South Dakota

3,700

$918

$3,746,700

Tennessee

28,100

$873

$27,623,700

Texas

135,300

$924

$142,235,200

Utah

11,700

$845

$11,198,400

Vermont

3,100

$901

$3,036,600

Virginia

42,200

$869

$42,110,500

Washington

42,400

$934

$44,823,200

West Virginia

6,500

$959

$6,818,900

Wisconsin

21,000

$834

$20,003,100

Wyoming

3,300

$949

$3,534,800

Totals

1,469,000

$893

$1,479,913,400

         

* Excluding credits.

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 +1-305-274-5811.

Source: IRS

IRS Reminds US Taxpayers Living and Working Abroad to File their 2022 Tax Return by June 15

Posted by Admin Posted on June 06 2023

IRS Reminds US Taxpayers Living and Working Abroad to File their 2022 Tax Return by June 15

Qualifying for the June 15 extension

A taxpayer qualifies for the June 15 filing deadline if:

  • Both their tax home and abode are outside the United States or Puerto Rico, or
  • They are serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return.

Qualifying taxpayers should attach a statement to the return indicating which of these two situations applies.

File to claim benefits

Many taxpayers living outside the U.S. qualify for tax benefits, such as the Foreign Earned Income Exclusion and the Foreign Tax Credit, but they are available only if a U.S. return is filed.

In addition, the IRS encourages families to check out expanded tax benefits, such as the Child Tax Credit, Credit for Other Dependents and Credit for Child and Dependent Care Expenses, and claim them if they qualify. Though taxpayers abroad often qualify, the calculation of these credits differs depending upon whether they lived in the U.S. for more than half of 2022. For more information, see the instructions to Schedule 8812, Credits for Qualifying Children and Other Dependents , and the instructions to Form 2441, Child and Dependent Care Expenses.

Reporting required for foreign accounts and assets

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B, Interest and Ordinary Dividends, to their Form 1040 series tax return. Part III of Schedule B asks about the existence of foreign accounts such as bank and securities accounts and usually requires U.S. citizens to report the country in which each account is located.

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

Reporting foreign financial accounts to Treasury

Certain foreign financial accounts, such as bank accounts or brokerage accounts, must be reported by electronically filing Form 114, Report of Foreign Bank and Financial Accounts (FBAR), with the Treasury Department's Financial Crimes Enforcement Network (FinCEN).The FBAR requirement applies to anyone with an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2022.

The IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is available only through the Bank Secrecy Act E-Filing System. The deadline for filing the annual FBAR was April 15, 2023. However, FinCEN grants those who missed the April deadline an automatic extension until Oct. 15, 2023. There's no need to request this extension. See FinCEN's websitePDF for further information.

Report in U.S. dollars

Any income received or deductible expenses paid in foreign currency must be reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must be made in U.S. dollars.

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

Making tax payments

To ensure tax payments are credited promptly, the IRS urges taxpayers to consider the speed and convenience of paying their U.S. tax obligation electronically. The fastest and easiest way to do that is via their IRS Online AccountIRS Direct Pay and the Electronic Federal Tax Payment System (EFTPS). These and other electronic payment options are available at IRS.gov/payments.

Reporting for expatriates

Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents of the U.S. during 2022 must file a dual-status alien tax return and attach Form 8854, Initial and Annual Expatriation Statement. A copy of Form 8854 must also be filed with the IRS by the due date of the tax return (including extensions). See the instructions for this formPDF and Notice 2009-85, Guidance for Expatriates Under Section 877A, for further details.

Extensions beyond June 15

Taxpayers who can't meet the June 15 due date can request an automatic six-month extension by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The IRS encourages anyone needing the additional time to make their request electronically. Several electronic options are available at IRS.gov/extensions.

Businesses that need more time must file Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns.

Extensions for military personnel

Members of the military stationed abroad or in a combat zone during tax filing season may qualify for an additional extension of at least 180 days to file and pay taxes. More information, like who qualifies, can be found by reading Extension of Deadline – Combat Zone Service Q&As.

Spouses of individuals who served in a combat zone or contingency operation are generally entitled to the same deadline extensions with some exceptions. Extension details and more military tax information is available in IRS Publication 3, Armed Forces' Tax Guide.

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 +1-305-274-5811.

Source : IRS 

Taking Tax Advice on Social Media can be Bad News for Taxpayers; Schemes Circulating Involving Tax Forms

Posted by Admin Posted on May 18 2023

Taking Tax Advice on Social Media can be Bad News for Taxpayers; Schemes Circulating Involving Tax Forms

The Internal Revenue Service today continued the Dirty Dozen series with a warning on day seven about trusting tax advice on social media that can lure otherwise honest taxpayers and tax professionals into compromising tax situations.

Social media can circulate inaccurate or misleading tax information, and the IRS has recently seen several examples. These can involve common tax documents like Form W-2 or more obscure ones, like Form 8944 that's aimed at a very limited, specialized group. Both schemes encourage people to submit false, inaccurate information in hopes of getting a refund.

"There are many ways to get good tax information, including from a trusted tax professional, tax software and IRS.gov. But people should be incredibly wary about following advice being shared on social media," said IRS Commissioner Danny Werfel. "The IRS continues to see a lot of inaccurate information that could get well-meaning taxpayers in trouble. People should remember that there is no secret way to fill out a form and simply get a larger refund that they aren't entitled to. Remember, if it sounds too good to be true, it probably is."

Fraudulent form filing and bad advice on social media are part of the 2023 IRS annual Dirty Dozen campaign – a list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal information, data and more.

Working together as the Security Summit, the IRS, state tax agencies and the nation's tax industry have taken numerous steps since 2015 to warn people about common scams and schemes during tax season and beyond, including identity theft schemes. The Security Summit initiative is committed to protecting taxpayers, businesses and the tax system against fraud and identity theft.

Some items on this year's Dirty Dozen list are new, while others are re-emerging. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers and the tax professional community about various scams and schemes.

Trending on social media: Fraudulent form filing and bad advice

Social media can connect people and information from all over the world. Unfortunately, sometimes people provide bad advice that can lure good taxpayers into trouble. The IRS warns taxpayers to be wary of trusting internet advice, whether it's a fraudulent tactic promoted by scammers or it's patently false tax-related scheme trending across popular social media platforms.

The IRS is aware of various filing season hashtags and social media topics leading to inaccurate and potentially fraudulent information. The central theme involves people trying to use legitimate tax forms for the wrong reason. Here are just two of the recent schemes circulating online:

Form 8944 fraud

A recent example of bad advice circulating on social media that could lead to fraudulent form filing involves Form 8944, Preparer e-file Hardship Waiver Request. There are wildly inaccurate suggestions being made about this form. Posts claim that Form 8944 can be used by taxpayers to receive a refund from the IRS, even if the taxpayer has a balance due. This is false information. Form 8944 is for tax professional use only.

While Form 8944 is a legitimate IRS tax form, it's intended for a targeted group of tax return preparers who are requesting a waiver so they can file tax returns on paper instead of electronically. It is not in any way a form the average taxpayer can use to avoid tax bills. Taxpayers who intentionally file forms with false or fraudulent information can face serious consequences, including potentially civil and criminal penalties.

Form W-2 fraud

This scheme, which is circulating on social media, encourages people to use tax software to manually fill out Form W-2, Wage and Tax Statement, and include false income information. In this W-2 scheme, scam artists suggest people make up large income and withholding figures as well as the employer its coming from. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund.

The IRS, along with the Security Summit partners in the tax industry and the states, are actively watching for this scheme. In addition, the IRS works with payroll companies and large employers – as well as the Social Security Administration – to verify W-2 information.

The IRS and Summit partners warn people not to fall for this scam. Taxpayers who knowingly file fraudulent tax returns potentially face significant civil and criminal penalties.

How taxpayers can verify information

Keep in mind: If something sounds too good to be true, it probably is.

  • IRS.gov has a forms repository with legitimate and detailed instructions for taxpayers on how to fill out the forms properly.
  • Use IRS.gov, official IRS social media accounts, or other government sites to fact check information.

Make a difference: Report fraud, scams and schemes

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, CA 92677-3405
Fax: 877-477-9135

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 +1-305-274-5811.

Source : IRS  

Don’t Fall for these Federal Tax Refund Myths

Posted by Admin Posted on May 18 2023

Don’t Fall for these Federal Tax Refund Myths

Once people complete and file their tax return, many of them eagerly await any refund they may be owed. No matter how a taxpayer plans to use their tax refund, knowing fact from fiction can help manage expectations as they wait for their money. This tip dispels some federal tax refund myths that many people believe are fact, but they are pure fiction.

Myth: Calling the IRS, a tax software provider or a tax professional will provide a more accurate refund date

Many people think talking to the IRS or to their tax software provider or 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 through the Where's My Refund? tool or the IRS2Go app.

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

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

Updates to Where's My Refund" ‎and to the IRS2Go mobile app are made once a day, usually overnight. Even though the IRS issues most refunds within 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 extra time.

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

There are several factors that could cause a tax refund to be less than expected. The IRS will mail the taxpayer a letter of explanation if it makes adjustments. 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. Before calling, taxpayers should check the Where's My Refund? tool or wait for the letter to understand why the change occurred. This can help taxpayers know how to respond.

Myth: Getting a refund this year means there's no need to adjust withholding for tax year 2023

To avoid a surprise next year, taxpayers should make changes now. One way to do this is to adjust their tax withholding with their employer. The Tax Withholding Estimator tool can help taxpayers determine if their employer is withholding the right amount.

Taxpayers who experience a life event such as marriage, divorce, or the birth or adoption of a child, or are no longer able to claim a person as a dependent, are encouraged to check their withholding. Taxpayers can use the results from the Tax Withholding Estimator to complete a new Form W-4, Employee's Withholding Certificate, and submit it to their employer as soon as possible. Withholding takes place throughout the year, so it's better to take this step as soon as possible.

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 +1-305-274-5811.

Source: IRS     

Protect Your Business With Meticulous Records

Posted by Admin Posted on May 18 2023

Protect Your Business With Meticulous Records

If you run a business, you know that you need to support expenses with detailed records. To be deductible, every expense on your tax return might have to be defended if your company is subject to an audit. Plus, failing to operate in a businesslike manner, complete with good records, might lead the IRS to deem the activity a hobby rather than a business, in which case your deductions may be limited or disallowed.

While there’s no one right way to keep business records, some types of expenses do require more details. For example, records relating to automobile, travel, meal and home-office costs are subject to special requirements or limitations.

An activity must be engaged in for profit

For a business expense to be deductible, the taxpayer must establish that the primary objective of the activity is making a profit. The expense must also be substantiated and be an “ordinary and necessary” business expense. In one court case (Gaston v. IRS, 2021), a taxpayer claimed deductions that created a loss, which she used to shelter other income from tax.

She engaged in various activities that included acting in the entertainment industry and selling jewelry. The IRS found her activities were more like hobbies than businesses engaged in for profit, and it disallowed her deductions.

The taxpayer did, however, have some success when she took her case to the U.S. Tax Court. The court found that she was engaged in the business of acting for profit during the years at issue, though not all of the claimed expenses were ordinary and necessary business expenses. The court allowed deductions for expenses including headshots, casting agency fees and lessons to enhance the taxpayer’s acting skills. But the court disallowed other deductions because it found insufficient evidence “to firmly establish a connection” between the expenses and the business.

In addition, the court found that that taxpayer didn’t prove that she engaged in her jewelry sales activity for profit. She didn’t operate it in a businesslike manner, spend sufficient time on it or seek out expertise in the jewelry industry. Therefore, all deductions related to that activity were disallowed.

Proper records are required

In another case (Elbasha v. IRS, 2022), a taxpayer worked as a contract emergency room doctor at a medical center. He also started a business to provide emergency room physicians overseas. On Schedule C of his tax return, he deducted expenses related to his home office, travel, driving, continuing education, cost of goods sold and interest. The IRS disallowed most of the deductions.

In court, the doctor used charts to illustrate his expenses but didn’t provide receipts or other substantiation showing the expenses were actually paid. He also failed to account for the portion of expenses attributable to personal activity.

The U.S. Tax Court disallowed the deductions, stating that his charts weren’t enough and didn’t substantiate that the expenses were ordinary and necessary in his business. It noted that “even an otherwise deductible expense may be denied without sufficient substantiation.” The doctor also didn’t qualify to take home office deductions because he didn’t prove it was his principal place of business.

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 +1-305-274-5811.

Source : Thomson Reuter      

Small Business Filing and Recordkeeping Requirements

Posted by Admin Posted on May 18 2023

Small Business Filing and Recordkeeping Requirements

There are about 57 million small businesses and self-employed taxpayers in the United States, including:

  • Corporations and partnerships with assets less than $10 million
  • Sole proprietors
  • Independent contractors
  • Members of a partnership that carries on a trade or business
  • Others in business for themselves, even if the business is part-time
  • Gig workers (i.e., Uber/Lyft drivers, owners of Airbnb rentals, delivery services, etc.)

 

The Taxpayer Advocate Service is sharing the following information with small business taxpayers to:

  • Help you meet their filing requirements
  • Share resources for information and tax return preparation
  • Help you file accurate returns

Small Business Filing Requirements

Generally, the federal tax forms you will need to file vary depending on the type of business:

Business Entity

Type of Tax

Tax Forms

Sole Proprietor

Income Tax

Form 1040/1040SR Schedule C or F

Self-Employment Tax

Form 1040/1040SR Schedule SE

Estimated Tax

Form 1040-ES

Employment Taxes

Forms 940 and 941, 944 or 943

Partnership

Annual return of Income

Form 1065

Employment Taxes

Forms 940 and 941, 944 or 943

Partner in Partnership (Individual)

Income Tax

Form 1040/1040SR Schedule E

Employment Taxes

Form 1040/1040SR Schedule SE

Estimated Tax

Form 1040-ES

Corporation (C or S)

Income Tax – C Corporation

Form 1120

Income Tax – S Corporation

Form 1120-S

Estimated Tax

Form 1120-W (C-Corp Only)

Employment Taxes

Forms 940 and 941, 944 or 943

S Corporation Shareholder

Income Tax

Form 1040/1040SR Schedule E

Estimated Tax

Form 1040-ES

 

Recordkeeping

As a small business, you may have many different types of returns that are due, and many different types of deductions. As a busy small business owner, it’s important to put a user-friendly recordkeeping system in place.

You may need to substantiate income and deductions. Good records can assist you in preparing financial records, keeping track of property and deductions and so much more. Good records can also assist you in knowing exactly where to target funding and reducing expenditures to optimize profit. Your recordkeeping should keep track of:

  • Gross Receipts
  • Inventory, including any merchandise withdrawn from sale for personal use
  • Expenses

 

For more helpful information for small businesses, see Tax Tip: Small business tax highlights, which addresses key components of small business ownership including:

  • The general types of business taxes;
  • The importance of making estimated tax payments if required;
  • Payment options; and
  • Ten Federal Tax Tips to help small business owners:
  1. Know your limitations and know when you need to ask a professional for help
  2. Keep adequate records
  3. Separate your personal and business finances
  4. Correctly classify your business
  5. Manage payroll
  6. Subscribe to e-News for Small Businesses
  7. Research small business tax deductions
  8. Self-employment tax deduction
  9. Make your tax payments timely
  10. For faster processing, file your returns electronically

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 +1-305-274-5811.

Source : TAS     

When an IRS Letter Arrives, Taxpayers Don’t Need to Panic, but they Do Need to Read it

Posted by Admin Posted on May 18 2023

When an IRS Letter Arrives, Taxpayers Don’t Need to Panic, but they Do Need to Read it

Getting a letter from the IRS can make some taxpayers nervous – but there's no need to panic. The IRS sends notices and letters when it needs to ask a question about a taxpayer's tax return, let them know about a change to their account or request a payment.

When an IRS letter or notice arrives in the mail, here's what taxpayers should do:

Read the letter carefully. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes any steps the taxpayer needs to take. A notice may reference changes to a taxpayer's account, taxes owed, a payment request or a specific issue on a tax return. Taking prompt action could minimize additional interest and penalty charges.

Review the information. If a letter is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return and keep it for their records. Typically, a taxpayer will need to act only if they don't agree with the information, if the IRS asked for more information or if they have a balance due.

Take any requested action, including making a payment. The IRS and authorized private debt collection agencies do send letters by mail. Taxpayers can also view digital copies of select IRS notices by logging into their IRS Online Account. The IRS offers several options to help taxpayers who are struggling to pay a tax bill.

Reply only if instructed to do so. Taxpayers don't need to reply to a notice unless specifically told to do so. There is usually no need to call the IRS. If a taxpayer does need to call the IRS, they should use the number in the upper right-hand corner of the notice and have a copy of their tax return and letter.

Let the IRS know of a disputed notice. If a taxpayer doesn't agree with the IRS, they should follow the instructions in the notice to dispute what the notice says. The taxpayer should include information and documents for the IRS to review when considering the dispute.

Keep the letter or notice for their records. Taxpayers should keep notices or letters they receive from the IRS. These include adjustment notices when the IRS takes action on a taxpayer's account. Taxpayers should keep records for three years from the date they filed the tax return.

Watch for scams. The IRS will never contact a taxpayer using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure whether they owe money to the IRS can view their tax account information on IRS.gov.

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 +1-305-274-5811.

Source : Thomson Reuter      

Dirty Dozen: IRS Warns Individual to Stay Clear of Shady Tax Preparers; Offers Tips on Carefully Choosing Tax Professionals

Posted by Admin Posted on May 11 2023

Dirty Dozen: IRS Warns Individual to Stay Clear of Shady Tax Preparers; Offers Tips on Carefully Choosing Tax Professionals

The Internal Revenue Service today continued the Dirty Dozen series by cautioning taxpayers to avoid unscrupulous tax return preparers and provided important tips to find the right tax professional.

People should be careful of shady tax professionals and watch for common warning signs, including charging a fee based on the size of the refund. Some "ghost" tax preparers refuse to sign the tax return or ask people to sign a blank return. These are all common warning signs, and people should always rely on a trusted tax professional, and the IRS offers a variety of resources to help.

"Most tax professionals offer excellent advice and can really help people navigate complex tax issues. But we continue to see instances where taxpayers are "ghosted" by unscrupulous tax preparers with bad advice who quickly disappear," said IRS Commissioner Danny Werfel. "We encourage taxpayers to check out the tools and resources available to them to ensure they find the right tax professional for their needs."

Unscrupulous tax return preparers mark day six of the IRS' annual Dirty Dozen campaign – a list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal information, data and more. Some items on the Dirty Dozen are new, while others are re-emerging. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers and the tax professional community about various scams and schemes.

Working together as the Security Summit, the IRS, state tax agencies and the nation's tax industry, including tax professionals, have taken numerous steps since 2015 to warn people about common scams and schemes during tax season and beyond that can increase the risk of identity theft. The Security Summit initiative is committed to protecting taxpayers, businesses and the tax system from scammers and identity thieves.

Choose carefully: Check credentials of tax return preparers

Taxpayers should choose a tax preparer as carefully as they choose a doctor or lawyer. After all, the tax preparer is entrusted with sensitive personal and financial information. While there are different types of tax preparers with varying levels of credentials and qualifications, there are constants when it comes to finding a preparer:

  • A taxpayer's individual needs will determine which kind of preparer is best for them.
  • Taxpayers are ultimately responsible for all the information on their income tax return, regardless of who prepares the return.
  • Tax professionals are required to have an IRS Preparer Tax Identification Number (PTIN) to prepare federal tax returns.

The IRS offers resources for taxpayers to educate themselves on types of preparers, representation rights, as well as a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This directory can help taxpayers find a return preparer with specific qualifications to fit their needs. The directory is searchable and sortable.

Don't get ghosted: Avoid shady or self-serving tax professionals

Most tax return preparers provide outstanding and professional service. Unfortunately, there are also some unethical tax preparers that should be avoided at all costs.

A major red flag or bad sign is when the tax preparer is unwilling to sign the dotted line. Avoid these "ghost" preparers, who will prepare a tax return but refuse to sign or include their IRS Preparer Tax Identification Number (PTIN) as required by law.

Not signing the return could mean the preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. This leaves the taxpayer vulnerable and on the hook for any misinformation on the return. Taxpayers should never sign a blank or incomplete return.

Shady tax preparers may:

  • Ask for a cash only payment without providing a receipt.
  • Invent false income to try to get their clients more tax credits.
  • Claim fake deductions to boost the size of the refund.
  • Direct refunds into their bank account, not the taxpayer's account.

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

Make a difference: Report fraud, scams and schemes

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, CA 92677-3405
Fax: 877-477-9135

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 +1-305-274-5811.

Source : IRS    

What disclosures should I get from my lender?

Posted by Admin Posted on May 11 2023

What disclosures should I get from my lender?

The lender is obligated by the Truth in Lending Act to provide you with a written statement with a list of all of the costs associated with the loan and the terms of financing. This statement must be delivered to you before the settlement.

If you want to rescind the loan, you may do so within 3 business days of the receipt of the Truth in Lending paperwork, receipt of cancellation notice, or your settlement, whichever was the most recent.

You will want to carefully review the disclosure that you are given before you sign. This disclosure will have all of the pertinent information about your loan, the finance charge, the amount financed, the payment schedule and the APR.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters       

Estimador de Retención de Impuestos del IRS Ayuda a Contribuyentes a Prepararse para Temporada de Impuestos de 2024; Asegúrese de que la Retención este Correcta en sus Cheques de 2023

Posted by Admin Posted on May 11 2023

Estimador de Retención de Impuestos del IRS Ayuda a Contribuyentes a Prepararse para Temporada de Impuestos de 2024; Asegúrese de que la Retención este Correcta en sus Cheques de 2023

El Servicio de Impuestos Internos (IRS) les sugirió a los contribuyentes que hayan presentado o que estén por presentar su declaración de impuestos de 2022, que usen el Estimador de retención de impuestos del IRS para ayudar a actualizar la cantidad de impuestos que se le retenga de su cheque de pago de 2023.

El IRS indica que ahora es un buen momento para usar esta herramienta en línea. El Estimador de retención de impuestos, también disponible en español, puede ayudar a las personas a ajustar cuánto se les retiene y puede poner más dinero en su bolsillo o ayudar a evitar una factura tributaria para 2023.

El Estimador de retención de impuestos ofrece a trabajadores, jubilados y trabajadores por cuenta propia una guía paso por paso para adaptar eficazmente la cantidad de impuestos sobre los ingresos que se deben retener de su salario, pensión y otros ingresos. Es especialmente útil después de que ocurra un cambio en su vida como matrimonio, divorcio, compra de un hogar, el nacimiento o adopción de un niño o un cambio significativo en sus ingresos.

Beneficios de usar el Estimador

Para empleados, la retención es la cantidad de impuestos federales sobre los ingresos que se retienen de su cheque de nómina. Aquellos que trabajan pueden usar los resultados del Estimador de retención de impuestos para determinar si deben llenar un nuevo Formulario W-4 y entregárselo a su empleador. Revisar la retención ayuda a:

  • Asegurar que se retenga la cantidad adecuada para evitar una cuenta o multa durante la temporada de impuestos.
  • Determinar el tener una cantidad menor de impuestos retenidos de su cheque de nómina para recibir más dinero en su cheque y reducir su reembolso en la temporada de impuestos.

¿Qué documentos son necesarios?

Los resultados del Estimador de retención de impuestos son tan precisos como la información ingresada. Para ayudar a estar preparado, el IRS recomienda que los contribuyentes recauden:

  • Sus más recientes comprobantes de pago y, si está casado, los de su cónyuge,
  • Información de otras fuentes de ingreso y
  • Su declaración de impuestos más reciente.

¿Retención o pagos estimados?

Los impuestos se deben pagar mientras se ganen o reciban ingresos en el transcurso del año, ya sea por retención o por pagos de impuestos estimados. Si la cantidad de impuestos sobre los ingresos que se le retiene de un salario o pensión no es suficiente, o si reciben otro tipo de ingreso como interés, dividendos, pensión conyugal, por trabajo por cuenta propia, ganancias de capital o premios y galardones, puede ser que tengan que hacer pagos estimados.

En 2023, los contribuyentes que reciban más de $600 en ingresos de organizaciones de pago de terceros, que incluye aplicaciones de uso popular, pueden recibir un Formulario 1099-K. Pueden usar el Asistente tributario interactivo (en inglés) del IRS para ver si se les requiere hacer pagos de impuestos estimados. Es importante guardar sus archivos.

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 contribuyentes que deben impuestos mínimos alternativos o ciertos otros tipos de impuestos y personas con ganancias de capital de largo plazo o dividendos elegibles.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente:  IRS   

Tax Rates for the 2023 Tax Season

Posted by Admin Posted on May 04 2023

Tax Rates for the 2023 Tax Season

Tax Rates for the 2023 Tax Season

https://www.lbcpa.com/tax-rates

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 +1-305-274-5811.

Source : Thomson Reuters      

IRS Tax Withholding Estimator Helps People Get Ready for the 2024 Filing Season; Make Sure Withholding is Right on 2023 Paychecks

Posted by Admin Posted on May 04 2023

IRS Tax Withholding Estimator Helps People Get Ready for the 2024 Filing Season; Make Sure Withholding is Right on 2023 Paychecks

The Internal Revenue Service suggested taxpayers who filed or are about to file their 2022 tax return use the IRS Tax Withholding Estimator to help update the amount of tax to have taken out of their 2023 pay.

The IRS says now is a good time to use this online tool. The Tax Withholding Estimator, also available in Spanish, can help people adjust how much is withheld and could put more cash in their pocket or help them avoid a tax bill for 2023.

The Tax Withholding Estimator offers workers, retirees and the self-employed a step-by-step guide to effectively tailor the amount of income tax they have withheld from wages, pension and other income. It's especially useful after a major life change such as marriage, divorce, home purchase, the birth or adoption of a child or a big change in income.

Benefits of using the Estimator

For employees, withholding is the amount of federal income tax taken out of their paycheck. Workers can use the results from the Tax Withholding Estimator to determine if they should complete a new Form W-4 and submit it to their employer. For example, checking withholding can:

  • Ensure the right amount of tax is withheld and prevent an unexpected tax bill or penalty at tax time.
  • Determine whether to have less tax withheld from each paycheck, boosting take-home pay and reducing refunds at tax time.

What records are needed?

The Tax Withholding Estimator's results are only as accurate as the information entered. To help prepare, the IRS recommends taxpayers gather:

  • Their most recent pay statements and, if married, statements for their spouse.
  • Information for other sources of income.
  • Their most recent income tax return.

Withholding or estimated payments?

Income taxes must generally be paid as taxpayers earn or receive income throughout the year, through either withholding or estimated tax payments. If the amount of income tax withheld from one's salary or pension is not enough, or if they receive other types of income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, they may need to make estimated tax payments.

In 2023, taxpayers who receive more than $600 in income from third-party settlement organizations, including popular payment apps, may receive Form 1099-Ks. Individual taxpayers can use the IRS online Interactive Tax Assistant to see if they're required to pay estimated taxes. Good recordkeeping is key.

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

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 +1-305-274-5811.

Source : IRS      

IRS Reminds Tax-Exempt Organizations of Annual May Filing Deadline

Posted by Admin Posted on May 04 2023

IRS Reminds Tax-Exempt Organizations of Annual May Filing Deadline

The Internal Revenue Service reminded thousands of tax-exempt organizations of their May 15, 2023, filing deadline.

The annual filing due date for certain returns filed by tax-exempt organizations is normally by the 15th day of the 5th month after the end of an organization's accounting period. Those operating on a calendar-year (CY) basis must file a return by May 15, 2023. Returns due include:

  • Form 990-series annual information returns (Forms 990, 990-EZ, 990-PF)
  • Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ
  • Form 990-T, Exempt Organization Business Income Tax Return (other than certain trusts)
  • Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code

Mandatory electronic filing

Electronic filing provides fast acknowledgement that the IRS has received the return and reduces processing time, making compliance with reporting requirements easier. Note:

  • Organizations filing a Form 990, 990-EZ, 990-PF or 990-T for CY2022 must file their returns electronically.
  • Private foundations filing a Form 4720 for CY 2022 must file the form electronically.
  • Charities and other tax-exempt organizations can file these forms electronically through an IRS Authorized e-File Provider.
  • Organizations eligible to submit Form 990-N must do so electronically and can submit it through Form 990-N (e-Postcard) on IRS.gov.

Common errors

The IRS also reminds organizations to submit complete and accurate returns. If an organization's return is incomplete or the wrong return for the organization, the return will be rejected. Common errors include missing or incomplete schedules.

Extension of time to file

Tax-exempt organizations that need additional time to file beyond the May 15 deadline can request a six-month automatic extension by filing Form 8868, Application for Extension of Time to File an Exempt Organization ReturnPDF. In situations where tax is due, extending the time for filing a return does not extend the time for paying tax. The IRS encourages organizations requesting an extension to electronically file Form 8868.

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 +1-305-274-5811.

Source : IRS

IRS Highlights Information and Free Resource in Recognition of National Business Week

Posted by Admin Posted on May 04 2023

IRS Highlights Information and Free Resource in Recognition of National Business Week

As part of National Small Business Week, April 30 to May 6, the Internal Revenue Service is highlighting tax benefits and resources to help those looking to start a business.

National Small Business Week is an annual effort led by the Small Business Administration to recognize the hard work, ingenuity and dedication of America's small businesses and to celebrate their contributions to the economy. To support the special week, the IRS has a variety of resources available for small business owners to help them understand and meet their tax responsibilities. Next week, the IRS will be highlighting some of these resources, and @IRSnews also plans a special Twitter chat on Thursday.

When choosing to start a business, it's important to consider the following:

Employer Identification Number

Most business owners will need an Employer Identification Number (EIN). It's a permanent number and can be used for most business needs, from opening bank accounts to filing a tax return by mail. Business owners can get their EIN immediately by applying online at IRS.gov at no cost.

Business structure

Taxpayers must decide what form of business entity to establish when starting a business. This helps determine which income tax return form must be filed. The most common business structures are:

  • Sole proprietorship - When an individual owns an unincorporated business by themselves.
  • Partnerships - The relationship between two or more people to do trade or business.
  • Corporations - In forming a corporation, prospective shareholders exchange money, property or both for the corporation's capital stock.
  • S Corporations - Are corporations that elect to pass corporate income, losses, deductions and credits through to their shareholders for federal tax purposes.
  • Limited Liability Company (LLC) – Are allowed by state statute and may be subject to different regulations. The IRS will treat an LLC as either a corporation or a partnership, or as part of the owner's tax return (e.g., sole proprietorship), depending on elections made by the LLC and its number of members.

Understand business taxes

By law, everyone must pay taxes as they earn income. For small business owners and self-employed people, that usually means making quarterly estimated tax payments as their business earns or receives income during the year. The form of business being operated determines what taxes must be paid and how to pay them. The four general types of business taxes are:

  • Income tax - All businesses except partnerships must file an annual income tax return. Partnerships file an information return.
  • Self-employment tax - Is a Social Security and Medicare tax primarily for individuals who work for themselves. Payments contribute to the individual's coverage under the Social Security system.
  • Employment tax - When small businesses have employees, the business has certain employment tax responsibilities that it must pay and forms it must file.
  • Excise tax – Excise taxes are imposed on various goods, services and activities. Such taxes may be imposed on the manufacturer, retailer or consumer, depending on the specific tax.

Good recordkeeping

In addition to helping with tax return preparation, maintaining well-organized records can also help small businesses prepare financial statements, identify sources of income, keep track of deductible expenses and monitor their progress, among other benefits. Taxpayers should plan to maintain their records for at least three years.

Business year options

A "tax year" is an annual accounting period for reporting income and expenses. Small businesses must figure their taxable income based on a tax year and can choose between:

  • Calendar year - 12 consecutive months beginning January 1 and ending December 31.
  • Fiscal year - 12 consecutive months ending on the last day of any month except December. A 52 to 53 week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month.

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 +1-305-274-5811.

Source : IRS   

IRS Advierte a Contribuyentes de Nuevas Estafas en Temporada de Impuestos Relacionadas con Salarios del Formulario W-2; Quienes Presentan Declaraciones Falsas Enfrentan Posibles Sanciones e Investigaciones

Posted by Admin Posted on May 04 2023

IRS Advierte a Contribuyentes de Nuevas Estafas en Temporada de Impuestos Relacionadas con Salarios del Formulario W-2; Quienes Presentan Declaraciones Falsas Enfrentan Posibles Sanciones e Investigaciones

El Servicio de Impuestos Internos emitió una alerta al consumidor para advertir a los contribuyentes acerca de nuevas estafas que instan a las personas a usar la información de salarios en una declaración de impuestos para reclamar créditos falsos con la esperanza de obtener un reembolso mayor.

Un esquema, que circula en las redes sociales, alienta a las personas a usar software de impuestos para completar manualmente el Formulario W-2, Declaración de salarios e impuestos (en inglés), e incluir información falsa de ingresos. En este esquema de W-2, los estafadores sugieren que las personas se inventen grandes cifras de ingresos y retención, así como el empleador del que provienen. Luego, los estafadores instruyen a las personas para que presenten la declaración de impuestos falsa electrónicamente con la esperanza de obtener un reembolso sustancial, a veces hasta cinco cifras, debido a la gran cantidad de retención.

El IRS, junto con los socios de la Cumbre de Seguridad en la industria tributaria y los estados, están observando activamente este y otros esquemas. Además, el IRS trabaja con compañías de nómina y grandes empleadores, así como con la Administración del Seguro Social, para verificar la información del W-2.

Con la Semana Nacional de Protección al Consumidor que comienza el lunes, el IRS y los socios de la Cumbre advierten a las personas que no caigan en estas estafas.

"Estamos viendo señales de que esta estafa está aumentando y nos preocupa que los contribuyentes inocentes puedan correr el riesgo de caer en una trampa que los ponga en riesgo de recibir sanciones financieras y penales", dijo el comisionado interino del IRS, Doug O'Donnell. "Los socios del IRS y de la Cumbre de Seguridad les recuerdan a las personas que no existe una manera secreta de obtener dinero gratis o un gran reembolso. Las personas no deben inventar ingresos y tratar de presentar una declaración de impuestos fraudulenta con la esperanza de obtener un reembolso sustancial".

El IRS también está viendo dos variaciones de este esquema; ambos implican el uso indebido de la información salarial del Formulario W-2 con la esperanza de generar un reembolso mayor:

  • Una variación implica que las personas usen el Formulario 7202, Los Créditos por Licencia por Enfermedad y Licencia Familiar para Ciertas Personas que Trabajan por Cuenta Propia, para reclamar un crédito a base de los ingresos obtenidos como empleado y no como persona que trabaja por cuenta propia. Estos créditos estuvieron disponibles para trabajadores por cuenta propia para 2020 y 2021 durante la pandemia; no están disponibles para las declaraciones de impuestos de 2022.
  • Una variación similar implica que las personas inventen empleados ficticios que trabajan en su hogar y usen el Anexo H (Formulario 1040), Impuestos sobre el empleo doméstico (en inglés), para tratar de reclamar un reembolso a base de salarios falsos familiares y por enfermedad que nunca pagaron. El formulario está diseñado para informar los impuestos sobre el empleo del hogar si un contribuyente contrató a alguien para hacer el trabajo del hogar y esos salarios estaban sujetos a los impuestos del Seguro Social, Medicare o FUTA, o si el empleador retuvo el impuesto federal sobre el ingreso de esos salarios.

El IRS les recuerda a las personas que intentan esto que se enfrentan a una amplia gama de sanciones. Esto puede incluir una multa por declaración frívola de $5,000 (en inglés). Los contribuyentes también corren el riesgo de ser procesados ​​penalmente por presentar una declaración de impuestos falsa.

Para cualquiera que haya participado en uno de estos esquemas, hay varias opciones que recomienda el IRS. Las personas pueden enmendar una declaración anterior o consultar con un profesional de impuestos de confianza.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente: IRS     

How does a reverse mortgage work?

Posted by Admin Posted on Apr 26 2023

How does a reverse mortgage work?

A reverse mortgage is a way for you to take advantage of some of the equity that is currently tied up in your home. A reverse mortgage works in the same manner as a normal one, reversed, and the homeowner is paid monthly versus having to pay. The major difference between this and a home equity loan is that you aren't required to pay anything back to the lender as long as you retain ownership of the home.

The major benefit of a reverse mortgage is that it allows homeowners to take advantage of some of the equity that they have built up in their homes without the burden of having to pay it back in monthly payments. This could be used to supplement income, defray the cost of medical aid, pay for college education, stop a foreclosure, or make it possible to retire.

When the homeowner sells the home or dies, the home must be paid off and, if sold, the remainder of equity is given to its rightful heirs.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters     

Dirty Dozen: IRS Warns of Scammers Offering “Help” to Set Up an Online Account; Creates Identity Theft Risk for Honest Taxpayers

Posted by Admin Posted on Apr 26 2023

Dirty Dozen: IRS Warns of Scammers Offering “Help” to Set Up an Online Account; Creates Identity Theft Risk for Honest Taxpayers

The Internal Revenue Service warned taxpayers to watch out for scammers who try to sell or offer help setting up an Online Account on IRS.gov that puts their tax and financial information at risk of identity theft.

The IRS Online Account provides valuable tax information for people. But this information in the wrong hands can provide important information to help an identity thief try to submit a fraudulent tax return in the person's name in hopes of getting a big refund. People should watch out for these scam artists offering to help set up these accounts because these are identity theft attempts to run off with the taxpayer's personal or financial information.

These third-party online account scams are part of day three of the IRS annual Dirty Dozen campaign.

“Scammers are coming up with new ways all the time to try to steal information from taxpayers,” said IRS Commissioner Danny Werfel. “An Online Account at IRS.gov can help taxpayers view important details about their tax situation. But scammers are trying to convince people they need help setting up an account. In reality, no help is needed. This is just a scam to obtain valuable and sensitive tax information that scammers will use to try stealing a refund. People should be wary and avoid sharing sensitive personal data over the phone, email or social media to avoid getting caught up in these scams.”

The Dirty Dozen is an annual IRS list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal data and more. Some items on the list are new, and some make a return visit. While the list is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers, businesses and tax preparers about scams at large.

As a member of the Security Summit, the IRS, with state tax agencies and the nation's tax industry, have taken numerous steps over the last eight years to warn people to watch out for common scams and schemes each tax season, including tax-related identity theft. Along with the Security Summit initiative, the Dirty Dozen aims to protect taxpayers, businesses and the tax system from identity thieves and various hoaxes designed to steal money and information, including this new Online Account scheme.

IRS Online Account: Steer clear of help from third-party scammers

In this scam targeting individuals, swindlers pose as a "helpful" third party and offer to help create a taxpayer's IRS Online Account at IRS.gov. People should remember they can set these accounts up themselves. But third parties making these offers will try to steal a taxpayer's personal information this way. Taxpayers can and should establish their own Online Account through IRS.gov.

These scammers often ask for the taxpayer's personal information including address, Social Security number or Individual Taxpayer Identification number (ITIN) and photo identification. The criminal then sells this valuable information to other criminals. They can also use the sensitive information to file fraudulent tax returns, obtain loans and open credit accounts.

The IRS urges people to watch out for these "helpful" criminals. The only place individuals should go to create an IRS Online Account is IRS.gov. People should not use third-party assistance, other than the approved IRS authentication process through IRS.gov, to create their own IRS online account.

Help stop fraud and scams

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

 

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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 +1-305-274-5811.

 

Source:  IRS   

Can You Deduct The Costs Of A Spouse On A Business Trip?

Posted by Admin Posted on Apr 26 2023

Can You Deduct The Costs Of A Spouse On A Business Trip?Can You Deduct The Costs Of A Spouse On A Business Trip?

If you own a company and travel for business, you may wonder whether you can deduct all the costs of having your spouse accompany you on trips. It may be possible, but the rules are restrictive. In general, your spouse must be your employee. And even then, strict rules apply. But there is some good news: Bringing your spouse on a business trip generally doesn’t reduce deductions for your own travel costs.

A spouse-employee

If your spouse is your employee and his or her presence on the trip serves a bona fide business purpose, then you can deduct travel costs. But it isn’t enough for your spouse to merely be “helpful” in incidental ways, such as by typing your meeting notes. Your spouse’s presence must serve a necessary business purpose.

In most cases, a spouse’s participation in social functions, for example as a host or hostess, isn’t enough to establish a business purpose. That is, if his or her purpose is to establish general goodwill for customers or associates, this is usually insufficient. Further, if there’s a vacation element to the trip (for example, if your spouse spends time sightseeing), it will be more difficult to establish a business purpose for his or her presence on the trip. On the other hand, a bona fide business purpose exists if your spouse’s presence is necessary to care for a serious medical condition that you have.

If these tests are satisfied in relation to your spouse, the normal deductions for your spouse’s business travel away from home can be claimed. These include the costs of transportation, meals, lodging, and incidentals such as dry cleaning and phone calls.

A nonemployee spouse

Suppose your spouse’s travel doesn’t satisfy these requirements. You may still be able to deduct a substantial portion of the trip’s costs. This is because the rules don’t require you to allocate 50% of your travel costs to your spouse, but only any additional costs you incur for him or her.

For example, in many hotels the cost of a single room isn’t that much lower than the cost of a double. If a single would cost you $150 a night and a double would cost you and your spouse $200, the disallowed portion of the cost allocable to your spouse would only be $50. In other words, you can write off the cost of what you would have paid traveling alone. To prove your deduction, ask the hotel for a room rate schedule showing single rates for the days you’re staying.

If you drive your own car or rent one, the whole cost will be fully deductible even if your spouse is along. Of course, if public transportation is used, and for meals, any separate costs incurred by your spouse won’t be deductible.

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 +1-305-274-5811.

Source: Thomson Reuters      

Missed the April 18 Filing Deadline? File now to Limit Penalties and Interest

Posted by Admin Posted on Apr 26 2023

Missed the April 18 Filing Deadline?  File now to Limit Penalties and Interest

The Internal Revenue Service urged taxpayers who missed Tuesday's April 18 tax-filing deadline to file as soon as possible. Taxpayers who owe and missed the deadline without requesting an extension should file quickly to limit penalties and interest. For struggling taxpayers unable to pay their tax bill, the IRS has several options available to help.

The IRS also reminds taxpayers who owed a refund that they don't receive a penalty for filing late. People shouldn't overlook filing a tax return. Every year, more than 1 million taxpayers overlook a tax refund; the IRS reminds those who didn't file in 2019 that time is running out to get any refund owed to them.

For 2022 tax returns due April 18, 2023, some taxpayers automatically qualify for extra time to file and pay taxes due without penalties and interest, including:

Don't overlook filing; people may miss out on a tax refund

Taxpayers who choose not to file a return because they don't earn enough to meet the filing requirement may miss out on receiving a refund due to potential refundable tax credits. The most common examples of these refundable credits are the Earned Income Tax Credit and Child Tax Credit. Taxpayers often fail to file a tax return and claim a refund for these credits and others for which they may be eligible.

There's no penalty for filing after the April 18 deadline if a refund is due. Taxpayers are encouraged to use electronic filing options including IRS Free File which is available on IRS.gov through Oct.16 to prepare and file 2022 tax returns electronically.

Taxpayers can track their refund using the Where's My Refund? tool on IRS.gov, IRS2Go or by calling the automated refund hotline at 800-829-1954. Taxpayers need the primary Social Security number on the tax return, the filing status and the expected refund amount. The refund status information updates once daily, usually overnight, so there's no need to check more frequently.

File and pay what you can to reduce penalties and interest

Taxpayers should file their tax return and pay any taxes they owe as soon as possible to reduce penalties and interest. An extension to file is not an extension to pay. An extension to file provides an additional six months with a new filing deadline of Oct. 16. Penalties and interest apply to taxes owed after April 18 and interest is charged on tax and penalties until the balance is paid in full.

Filing and paying as much as possible is key because the late-filing penalty and late-payment penalty add up quickly.

Even if a taxpayer can't afford to immediately pay the full amount of taxes owed, they should still file a tax return to reduce possible late-filing penalties. The IRS offers a variety of options for taxpayers who owe the IRS but cannot afford to pay. For more information see the penalties page on IRS.gov.

Taxpayers may qualify for penalty relief if they have filed and paid timely for the past three years and meet other important requirements, including paying or arranging to pay any tax due. For more information, see the first-time penalty abatement page on IRS.gov.

Pay taxes due electronically

Those who owe taxes can pay quickly and securely via their IRS Online AccountIRS Direct Paydebit or credit card or digital wallet, or they can apply online for a payment plan (including an installment agreement).

Taxpayers paying electronically receive immediate confirmation when they submit their payment. With Direct Pay and the Electronic Federal Tax Payment System (EFTPS), taxpayers can receive email notifications about their payments. For more payment options, visit IRS.gov/payments.

Taxpayer Bill of Rights

Taxpayers have fundamental rights under the law that protect them when they interact with the IRS. The Taxpayer Bill of Rights presents these rights in 10 categories. IRS Publication 1, Your Rights as a Taxpayer PDF, highlights these rights and the agency's obligation to protect them.

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 +1-305-274-5811.

Source: IRS     

IRS: Indiana storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to July 31

Posted by Admin Posted on Apr 20 2023

IRS: Indiana storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to July 31

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) as a result of tornadoes, severe storms and straight-line winds that occurred on March 31 and April 1. This means that individuals and households that reside or have a business in Allen, Benton, Clinton, Grant, Howard, Johnson, Lake, Monroe, Morgan, Owen, Sullivan and White counties qualify for tax relief. Other areas added later to the disaster area will also qualify for the same relief. The current list of eligible localities is always available on the Tax Relief in Disaster Situations page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on March 31, 2023. As a result, affected individuals and businesses will have until July 31, 2023, to file returns and pay any taxes that were originally due during this period.

This includes 2022 individual income tax returns and various business returns due on April 18. Among other things, this means that eligible taxpayers will have until July 31 to make 2022 contributions to their IRAs and health savings accounts.

The July 31 deadline also applies to the quarterly estimated tax payments, normally due on April 18 and June 15.

The July 31 deadline also applies to the quarterly payroll and excise tax returns normally due on April 30, 2023. In addition, penalties on payroll and excise tax deposits due on or after March 31 and before April 18, will be abated as long as the tax deposits are made by April 18, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time.

Some affected taxpayers may find that they need more time to file beyond the July 31 deadline. If so, the IRS urges them to request the additional time, electronically, before the original April 18 deadline. Two free and easy ways to do this are through either IRS Free File or IRS Direct Pay, both available only on IRS.gov. Visit IRS.gov/extensions for details.

After April 18 and before July 31, disaster area taxpayers can file their extension requests only on paper.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed in early 2024), or the return for the prior year (that is, the 2022 return normally filed in 2023). Be sure to write the FEMA declaration number – 4704-DR − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

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 +1-305-274-5811.

Source : IRS    

IRS: Tennessee Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to July 31

Posted by Admin Posted on Apr 18 2023

IRS: Tennessee Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to July 31

Tennessee storm victims now have until July 31, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) as a result of tornadoes, severe storms and straight-line winds that occurred starting on March 31. This means that individuals and households that reside or have a business in Cannon, Hardeman, Hardin, Haywood, Lewis, Macon, McNairy, Rutherford, Tipton and Wayne counties qualify for tax relief. Other areas added later to the disaster area will also qualify for the same relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on March 31, 2023. As a result, affected individuals and businesses will have until July 31, 2023, to file returns and pay any taxes that were originally due during this period.

This includes 2022 individual income tax returns and various business returns due on April 18. Among other things, this means that eligible taxpayers will have until July 31 to make 2022 contributions to their IRAs and health savings accounts.

The July 31 deadline also applies to the quarterly estimated tax payments, normally due on April 18 and June 15.

The July 31 deadline also applies to the quarterly payroll and excise tax returns normally due on April 30, 2023. In addition, penalties on payroll and excise tax deposits due on or after March 31 and before April 18, will be abated as long as the tax deposits are made by April 18, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time.

Some affected taxpayers may find that they need more time to file beyond the July 31 deadline. If so, the IRS urges them to request the additional time, electronically, before the original April 18 deadline. Two free and easy ways to do this are through either IRS Free File or IRS Direct Pay, both available only on IRS.gov. Visit IRS.gov/extensions for details.

After April 18 and before July 31, disaster area taxpayers can file their extension requests only on paper.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed in early 2024), or the return for the prior year (that is, the 2022 return normally filed in 2023). Be sure to write the FEMA declaration number – 4701-DR − on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

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 +1-305-274-5811.

Source: IRS 

Being self-employed, what sort of deductions can I take?

Posted by Admin Posted on Apr 13 2023

Being self-employed, what sort of deductions can I take?

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

If I Have a Large Capital Gain This Year, What Can I Do?

If you have a large capital gain this year from an investment, it may be advisable to hold onto the investment until next year to put the gain into next year's taxes. You may also want to sell off any investments that you have that are losing value at the moment to claim your losses.

What Do I Need to Keep for Tax Reasons?

It is a good idea to keep all of your receipts and any other records that you may have of your income and expenses. These will come in very handy if you are audited.

What Retirement Plans Are Available to Aid in the Deferral of Taxes?

You have the ability to invest some of the money that you would have paid in taxes to add to your retirement fund. Many employers will offer the opportunity to defer a portion of your earnings and contribute them directly to your retirement account. Some of them may even match a portion of your savings. If this is the case, it is always advisable to save at least the amount that your employer will match. This will give you an automatic 100% gain on your money.

If you are self-employed, look into getting a Keogh, SIMPLE or a SEP IRA.

What Other Ways Can I Defer this Year's Income?

If you own your business you may want to postpone sending certain invoices to ensure that you will receive payment in the following tax year. This can help greatly if some of this income would push you into a higher tax bracket. You may want to accelerate paying for expenses to cover your taxes in the current year.

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 +1-305-274-5811.

Source: Thomson Reuters   

Are there available tax breaks for my children's education?

Posted by Admin Posted on Apr 13 2023

Are there available tax breaks for my children's education?

There are many different ways to use tax breaks for the higher education of your children. Be aware that you can only receive one type of relief for one item. It is best to consult with a professional to determine which would be the most advantageous.

What is the education tax credit?

You must make a choice between two types of tax education credit.

  • The American Opportunity Tax Credit will work for the first 4 years of college for at least full-time study.
  • The Lifetime Learning Credit applies for as long as the student studies, but the percentage of savings per year decreases drastically.

How can I best use the Coverdell (section 530)?

It is possible to have various 530 accounts for the same student, each opened by different family members or friends. There is no limit to the number of people that can open an account like this for a child.

The account can be transferred to another family member at any time. If the original child decides against going to college or is granted a scholarship, another family member can still utilize the money that has been saved.

What is a qualified tuition program?

The Section 529 is a college savings program available in most states. Money is invested to cover the costs of future education. These investments grow tax free and the distributions may also be tax-free.

What differentiates the Coverdell Section 530 and the Section 529?

  • The Section 529 allows for much larger yearly investments, whereas the Section 530 currently only allows for $2000 annually.
  • The choice of investments in the Section 529 is extremely conservative and limited while the Section 530 allows for many different options.
  • The Section 530 is a nationwide program while the 529 varies from state to state.
  • The Section 530 will let you use its funds for primary and secondary education, while the Section 529 can only be used to pay up to a total of $10,000 of tuition per beneficiary (regardless of the number of contributing plans) each year at an elementary or secondary (k-12) public, private or religious school of the beneficiaries choosing.

Can I take money from my traditional or Roth IRA to fund my child's education?

Yes, you can take distributions from your IRAs for qualifying education expenses without having to pay the 10% additional tax penalty. You may owe income tax on at least part of the amount distributed, but not the additional penalty. The amount of the distribution that is more than the education expense does not qualify for the 10% tax exception.

What tax deductions can be used for college education?

There is a limited deduction allowed for higher education and related expenses. In addition, business expense deductions are allowed, without a dollar limit, for education related to the taxpayer's business, employment included.

Is student loan interest tax deductible?

In certain instances, yes, although deductions need to adhere to a few guidelines. The deduction is also subject to income phaseouts.

  • The deduction ceiling is $2,500.
  • If you are a dependent, you may not claim the interest deduction.
  • You need to be the person liable for the debt and the loan must be purely for education.

Can I deduct for education that helps at the workplace?

If you are receiving this education to maintain or improve skills at your current job, yes, but not if it is to meet the minimum requirements.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: Thomson Reuters      

Organizational and Start Up Costs

Posted by Admin Posted on Apr 13 2023

Organizational and Start Up Costs

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 +1-305-274-5811.

Source: Thomson Reuter      

Dirty Dozen: Watch Out for Third-Party Promoters of False Fuel Tax Credit Claims

Posted by Admin Posted on Apr 13 2023

Dirty Dozen: Watch Out for Third-Party Promoters of False Fuel Tax Credit Claims

As part of this year's Dirty Dozen tax scams, the Internal Revenue Service today warned taxpayers to watch out for promoters pushing improper fuel tax credit claims that taxpayers aren't qualified to receive.

The false fuel credit claims mark another important item on the IRS annual Dirty Dozen list on day four of the annual campaign.

"People should watch out for erroneous fuel tax credit claims and the scammers that promote them," said IRS Commissioner Danny Werfel. "These scammers will often charge a hefty fee for these bogus claims, and participants also face the possibility of identity theft. This is another example that people should always remember: Be wary if a tax deal sounds too good to be true."

The Dirty Dozen is an annual IRS list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal data and more. Some items on the list are new, and some make a return visit. While the list is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers, businesses and tax preparers about scams at large.

As a member of the Security Summit, the IRS, with state tax agencies and the nation's tax industry, have taken numerous steps over the last eight years to warn people to watch out for common scams and schemes each tax season that can contribute to tax-related identity theft. Along with the Security Summit initiative, the Dirty Dozen aims to protect taxpayers, businesses and the tax system from identity thieves and various hoaxes designed to steal money and information.

Beware of third-party promoters for the Fuel Tax Credit

Improper credits continue to be an important area of focus for the IRS. The fuel tax credit is meant for off-highway business and farming use and, as such, is not available to most taxpayers. However, unscrupulous tax return preparers and promoters are enticing taxpayers to inflate their refunds by erroneously claiming the credit. The IRS has seen an increase in the promotion of filing certain refundable credits using Form 4136, Credit for Federal Tax Paid on Fuels.

In this scam, a third party convinces a taxpayer to fraudulently claim the credit with promises of a windfall refund. But the promoters are focused on their own gain, taking advantage of the taxpayer with inflated fees, refund fraud and identity theft.

Taxpayers contemplating participating in any questionable tax scheme such as this should be aware the IRS has increased its compliance efforts related to falsely claiming these credits. IRS processing systems, including new identity theft screening filters, are now stopping a significant number of suspicious fuel tax credit refund claims.

Before taking the bait on a dubious credit claim, taxpayers should seek advice from a legitimate source. Returns filed by individuals and tax preparers who knowingly claim a credit to which they are not entitled may face fines and even be subject to federal criminal prosecution and imprisonment.

Help stop fraud and scams

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

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 +1-305-274-5811.

Source:  IRS     

What do I need to keep for tax reasons?

Posted by Admin Posted on Apr 13 2023

What do I need to keep for tax reasons?

It is a good idea to keep all of your receipts and any other records that you may have of your income and expenses. These will come in very handy if you are audited.

How should I separate and organize these?

It is advantageous to categorize your expenses:

  • Income
  • Exemptions
  • Medical Expenses
  • Taxes
  • Business Expenses
  • Education
  • Travel
  • Auto

How long should I hold onto these documents?

It is recommended that you keep these documents for three to seven years, depending on the document. Check the Retention Guide on this site for additional details.

How long should I keep old tax returns?

If you are audited, it is very likely that the auditor will ask to see the last few tax returns. It is recommended to keep these tax returns forever.

An added benefit of keeping your tax returns is that you can see what you claimed last year, allowing you to adjust for the current year.

What other records should I keep?

If you purchased goods that you plan to sell later, you should keep the receipts to calculate your gain or loss on it correctly.

  • Anything regarding the property you own and any fixes and repairs that you perform.
  • Receipts for any jewelry or other valuable collector's items
  • Records for capital assets, stocks, bonds and such

What recordkeeping system should I have?

If you are an employee of a company, your system needn't be complex - you can keep your records separated in folders.

If you are a business owner, you may want to consider hiring a bookkeeper or accountant. Check the Financial Guide for Business on this website.

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 +1-305-274-5811

Source: Thomson Reuter      

IRS Wraps Up 2023 Dirty Dozen List; Reminds Taxpayers and Tax Pros to be Aware of Scams and Schemes, even after Tax Season

Posted by Admin Posted on Apr 10 2023

IRS Wraps Up 2023 Dirty Dozen List; Reminds Taxpayers and Tax Pros to be Aware of Scams and Schemes, even after Tax Season

Many of these schemes peak during filing season as people prepare their tax returns. In reality, these scams can occur throughout the year as fraudsters look for ways to steal money, personal information, data and more.

To help people watch out for these scams, the IRS and the Security Summit partners are providing an overview recapping this year's Dirty Dozen scams.

"Scammers are coming up with new ways all the time to try to steal information from taxpayers," said IRS Commissioner Danny Werfel. "People should be wary and avoid sharing sensitive personal data over the phone, email or social media to avoid getting caught up in these scams. And people should always remember to be wary if a tax deal sounds too good to be true."

Working together as the Security Summit, the IRS, state tax agencies and the nation's tax industry, including tax professionals, have taken numerous steps since 2015 to warn people about common scams and schemes during tax season and beyond that can increase the risk of identity theft. The Security Summit initiative is committed to protecting taxpayers, businesses and the tax system from scammers and identity thieves.

Some items on this year's list were new and some made a return visit. While the list is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers and the tax professional community about various scams and schemes.

2023 Dirty Dozen summary:

Employee Retention Credit claims

Taxpayers should be aware of aggressive pitches from scammers who promote large refunds related to the Employee Retention Credit (ERC). The warning follows blatant attempts by promoters to con ineligible people to claim the credit. The IRS highlighted these schemes from promoters who have been blasting ads on radio and the internet touting refunds involving Employee Retention Credits. These promotions can be based on inaccurate information related to eligibility for and computation of the credit. Additionally, some of these advertisements exist solely to collect the taxpayer's personally identifiable information in exchange for false promises. The scammers then use the information to conduct identity theft.

Phishing and smishing

Taxpayers and tax professionals should be alert to fake communications from those posing as legitimate organizations in the tax and financial community, including the IRS and the states. These messages arrive in the form of an unsolicited text (smishing) or email (phishing) to lure unsuspecting victims to provide valuable personal and financial information that can lead to identity theft. The IRS initiates most contacts through regular mail and will never initiate contact with taxpayers by email, text or social media regarding a bill or tax refund.

Online account help from third-party scammers

Swindlers pose as a "helpful" third party and offer to help create a taxpayer's IRS Online Account at IRS.gov. In reality, no help is needed. The online account provides taxpayers with valuable tax information. But third parties making these offers will try to steal a taxpayer's personal information this way. Taxpayers can and should establish their own online account through IRS.gov.

False Fuel Tax Credit claims

The fuel tax credit is meant for off-highway business and farming use and, as such, is not available to most taxpayers. However, unscrupulous tax return preparers and promoters are enticing taxpayers to inflate their refunds by erroneously claiming the credit. The IRS has seen an increase in the promotion of filing certain refundable credits using Form 4136, Credit for Federal Tax Paid on Fuels.

Fake charities

Bogus charities are a perennial problem that gets bigger whenever a crisis or natural disaster strikes. Scammers set up these fake organizations to take advantage of the public's generosity. They seek money and personal information, which can be used to further exploit victims through identity theft.

Taxpayers who give money or goods to a charity might be able to claim a deduction on their federal tax return if they itemize deductions, but charitable donations only count if they go to a qualified tax-exempt organization recognized by the IRS.

Unscrupulous tax return preparers

Most tax preparers provide outstanding and professional service. However, people should be careful of shady tax professionals and watch for common warning signs, including charging a fee based on the size of the refund. A major red flag or bad sign is when the tax preparer is unwilling to sign the dotted line. Avoid these "ghost" preparers, who will prepare a tax return but refuse to sign or include their IRS Preparer Tax Identification Number (PTIN) as required by law. Taxpayers should never sign a blank or incomplete return.

Social media: Fraudulent form filing and bad advice

Social media can circulate inaccurate or misleading tax information, and the IRS has recently seen several examples. These can involve common tax documents like Form W-2 or more obscure ones like Form 8944. While Form 8944 is real, it is intended for a very limited, specialized group. Both schemes encourage people to submit false, inaccurate information in hopes of getting a refund. Taxpayers should always remember that if something sounds too good to be true, it probably is.

Spearphishing and cybersecurity for tax professionals

Phishing is a term given to emails or text messages designed to get users to provide personal information. Spearphishing is a tailored phishing attempt to a specific organization or business.

The IRS is warning tax professionals about spearphishing because there is greater potential for harm if the tax preparer has a data breach. A successful spearphishing attack can ultimately steal client data and the tax preparer's identity, allowing the thief to file fraudulent returns.

Offer in Compromise mills

Offers in Compromise are an important program to help people who can't pay to settle their federal tax debts. But "mills" can aggressively promote Offers in Compromise in misleading ways to people who clearly don't meet the qualifications, frequently costing taxpayers thousands of dollars. A taxpayer can check their eligibility for free using the IRS Offer in Compromise Pre-Qualifier tool.

Schemes aimed at high-income filers

  • Charitable Remainder Annuity Trust (CRAT): Charitable Remainder Trusts are irrevocable trusts that let individuals donate assets to charity and draw annual income for life or a specific period. Unfortunately, these trusts are sometimes misused by promoters, advisors and taxpayers to try to eliminate ordinary income and/or capital gain on the sale of the property.
  • Monetized Installment Sales: In these potentially abusive transactions, promoters find taxpayers seeking to defer the recognition of gain upon the sale of appreciated property. They facilitate a purported monetized installment sale for the taxpayer in exchange for a fee.

Bogus tax avoidance strategies

  • Micro-captive insurance arrangements: A micro-captive is an insurance company whose owners elect to be taxed on the captive's investment income only. Abusive micro-captives involve schemes that lack many of the attributes of legitimate insurance. These structures often include implausible risks, failure to match genuine business needs and, in many cases, unnecessary duplication of the taxpayer's commercial coverages.
  • Syndicated conservation easements: A conservation easement is a restriction on the use of real property. Generally, taxpayers may claim a charitable contribution deduction for the fair market value of a conservation easement transferred to a charity if the transfer meets the requirements of Internal Revenue Code 170. In abusive arrangements, which generate high fees for promoters, participants attempt to game the tax system with grossly inflated tax deductions.

Schemes with international elements

  • Offshore accounts and digital assets: The IRS continues to scrutinize attempts to hide assets in offshore accounts and accounts holding digital assets, such as cryptocurrency. The IRS continues to identify individuals who attempt to conceal income in offshore banks, brokerage accounts, digital asset accounts and nominee entities. Asset protection professionals and unscrupulous promoters continue to lure U.S. persons into placing their assets in offshore accounts and structures saying they are out of reach of the IRS. These assertions are not true. The IRS can identify and track anonymous transactions of foreign financial accounts as well as digital assets.
  • Maltese individual retirement arrangements misusing treaty: These arrangements involve U.S. citizens or residents who attempt to avoid U.S. tax by contributing to foreign individual retirement arrangements in Malta (or potentially other host countries). The participants in these transactions typically lack any local connection to the host country. By improperly asserting the foreign arrangement as a "pension fund" for U.S. tax treaty purposes, the U.S. taxpayer misconstrues the relevant treaty provisions and improperly claims an exemption from U.S. income tax on gains and earnings in and distributions from the foreign individual retirement arrangement.
  • Puerto Rican and foreign captive insurance: U.S. business owners of closely held entities participate in a purported insurance arrangement with a Puerto Rican or other foreign corporation in which the U.S. business owner has a financial interest. The U.S. business owner (or a related entity) claims a deduction for amounts paid as premiums for "insurance coverage" provided by a fronting carrier, which reinsures the "coverage" with the Puerto Rican or other foreign corporation. Despite being labeled as insurance, these arrangements lack many of the attributes of legitimate insurance.

Where appropriate, the IRS will challenge the purported tax benefits from these types of transactions and impose penalties. The IRS Criminal Investigation Division is always on the lookout for promoters and participants of these types of schemes. Taxpayers should think twice before including questionable arrangements like this on their tax returns. After all, taxpayers are legally responsible for what's on their return, not a promoter making promises and charging high fees. Taxpayers can help stop these arrangements by relying on reputable tax professionals they know and trust.

Help stop fraud and scams

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

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 +1-305-274-5811.

Source : IRS 

IRS Finaliza Lista de Docena Sucia de 2023; les Recuerda a Contribuyentes y Profesionales de Impuestos que Tengan Cuidado con Estafas, incluso después de la Temporada de Impuestos

Posted by Admin Posted on Apr 10 2023

IRS Finaliza Lista de Docena Sucia de 2023; les Recuerda a Contribuyentes y Profesionales de Impuestos que Tengan Cuidado con Estafas, incluso después de la Temporada de Impuestos

Muchos de estos planes fraudulentos alcanzan su punto máximo durante la temporada de presentación de impuestos cuando las personas preparan sus declaraciones de impuestos.

Trabajando juntos como la Cumbre de Seguridad, el IRS, las agencias tributarias estatales y la industria tributaria de la nación, incluidos los profesionales de impuestos, han tomado numerosas medidas desde 2015 para advertir a las personas de estafas comunes durante la temporada de impuestos y más allá que pueden aumentar el riesgo de robo de identidad. La iniciativa de la Cumbre de Seguridad se compromete a proteger a los contribuyentes, las empresas y el sistema tributario de los estafadores y los ladrones de identidad.

Algunos elementos de la lista eran nuevos y algunos hicieron una visita de regreso. Si bien la lista no es un documento legal o una lista formal de las prioridades de aplicación de la agencia, su objetivo es alertar a los contribuyentes y a la comunidad profesional de impuestos sobre varias estafas.

Resumen de la Docena Sucia de 2023:

Reclamos del Crédito de retención de empleados

Los contribuyentes deben estar al tanto de los estafadores que promueven grandes reembolsos relacionados con el Crédito de retención de empleados (ERC). La advertencia es un resultado de los intentos evidentes de los promotores de engañar a las personas no elegibles para reclamar el crédito. El IRS destacó estas estafas de los promotores que se han estado anunciando en la radio e Internet promocionando reembolsos relacionados con el Crédito de retención de empleados. Estas promociones pueden basarse en información inexacta relacionada con la elegibilidad y el cálculo del crédito. Además, algunos de estos anuncios existen únicamente para recopilar información de identificación personal del contribuyente a cambio de falsas promesas. Los estafadores luego usan la información para llevar a cabo el robo de identidad.

Phishing y smishing

Los contribuyentes y los profesionales de impuestos deben mantenerse en alerta a comunicaciones falsas de quienes se hacen pasar por organizaciones legítimas en la comunidad tributaria y financiera, incluidos el IRS y los estados. Estos mensajes llegan en forma de un mensaje de texto no solicitado (smishing) o correo electrónico (phishing) para atraer a las víctimas desprevenidas para que proporcionen información personal y financiera valiosa que puede conducir al robo de identidad. El IRS inicia la mayoría de los contactos a través del correo regular y nunca iniciará el contacto con los contribuyentes por correo electrónico, mensaje de texto o redes sociales con respecto a una factura o reembolso de impuestos.

Cuenta en línea: ayuda por parte de terceros

Los estafadores se hacen pasar por terceros "útiles" y se ofrecen a ayudar a crear una cuenta en línea del IRS para contribuyentes en IRS.gov. En realidad, no se necesita ayuda. La cuenta en línea proporciona a los contribuyentes valiosa información tributaria. Pero los terceros que hacen estas ofertas intentarán robar la información personal de un contribuyente de esta manera. Los contribuyentes pueden y deben establecer su propia cuenta en línea a través de IRS.gov.

Reclamos falsos del Crédito tributario por combustible

El Crédito tributario por combustible está destinado a negocios fuera de carretera y uso agrícola y, como tal, no está disponible para la mayoría de los contribuyentes. Sin embargo, los preparadores y promotores de declaraciones de impuestos sin escrúpulos están tentando a los contribuyentes a inflar sus reembolsos al reclamar el crédito erróneamente. El IRS ha visto un aumento en la promoción de la presentación de ciertos créditos reembolsables mediante el Formulario 4136, Crédito por impuestos federales pagados sobre combustibles.

Organizaciones benéficas falsas

Las organizaciones benéficas falsas son un problema que aumenta cada vez que ocurre una crisis o un desastre natural. Los estafadores crean estas organizaciones falsas para aprovecharse de la generosidad del público. Buscan dinero e información personal que pueden usarse para explotar aún más a las víctimas mediante el robo de identidad.

Los contribuyentes que dan dinero o bienes a una organización benéfica pueden reclamar una deducción en su declaración de impuestos federal si detallan las deducciones, pero las donaciones caritativas solo cuentan si van a una organización calificada exenta de impuestos reconocida por el IRS.

Preparadores de declaraciones de impuestos sin escrúpulos

La mayoría de los preparadores de impuestos brindan un servicio excepcional y profesional. Sin embargo, las personas deben tener cuidado con los profesionales de impuestos sospechosos y estar atentos a las señales comunes de advertencia, incluido el cobro de una tarifa a base del monto del reembolso. Una de las principales señales de alerta es cuando el preparador de impuestos no está dispuesto a firmar la declaración. Evite a estos preparadores "fantasma", que prepararán una declaración de impuestos, pero se negarán a firmar o incluir su Número de Identificación de Preparador de Impuestos (PTIN) del IRS como lo exige la ley. Los contribuyentes nunca deben firmar una declaración en blanco o incompleta.

Redes sociales; presentación de formularios fraudulentos y malos consejos

Las redes sociales pueden hacer circular información tributaria inexacta o engañosa, y el IRS ha visto recientemente varios ejemplos. Estos pueden incluir documentos tributarios comunes como el Formulario W-2 u otros menos populares como el Formulario 8944. Si bien el Formulario 8944 es real, está destinado a un grupo especializado muy limitado. Ambas estafas alientan a las personas a enviar información falsa e inexacta con la esperanza de obtener un reembolso. Los contribuyentes siempre deben recordar que, si algo suena demasiado bueno para ser verdad, probablemente lo sea.

 

Spearphishing y ciberseguridad para profesionales de impuestos

Phishing es un término que se le da a los correos electrónicos o mensajes de texto diseñados para que los usuarios proporcionen información personal. Spearphishing es un intento de phishing personalizado para una organización o negocio específico.

El IRS advierte a los profesionales de impuestos del spearphishing porque existe un mayor potencial de daño si el preparador de impuestos tiene una filtración de datos. Un ataque exitoso de spearphishing puede, en última instancia, robar los datos del cliente y la identidad del preparador de impuestos, lo que permite que el ladrón presente declaraciones fraudulentas.

Ofrecimientos de transacción fabricados por promotores

Los ofrecimientos de transacción son un programa importante para ayudar a las personas que no pueden pagar a saldar sus deudas de impuestos federales. Pero los promotores pueden promover agresivamente los ofrecimientos de transacción de manera engañosa para las personas que claramente no cumplen con los requisitos, lo que con frecuencia les cuesta a los contribuyentes miles de dólares. Un contribuyente puede verificar su elegibilidad de forma gratuita a través de la herramienta Precalificador de ofrecimiento de transacción del IRS (en inglés).

Estafas dirigidas a contribuyentes de altos ingresos

  • Fideicomisos caritativos de anualidades restantes (CRAT): Los fideicomisos caritativos de anualidades restantes (en inglés) son fideicomisos irrevocables que permiten a las personas donar activos a organizaciones benéficas y obtener ingresos anuales de por vida o durante un período específico. Desafortunadamente, estos fideicomisos a veces son mal usados por promotores, asesores y contribuyentes para tratar de eliminar ingresos ordinarios y/o ganancias de capital en la venta de la propiedad.
  • Ventas a plazos monetizadas: En estas transacciones potencialmente abusivas, los promotores encuentran contribuyentes que buscan diferir el reconocimiento de la ganancia en la venta de la propiedad apreciada. Facilitan una supuesta venta monetizada a plazos para el contribuyente a cambio de una tarifa.

Estrategias falsas de evasión de impuesto

  • Acuerdos abusivos de seguros micro cautivo: El abuso de seguro micro cautivo es una compañía de seguros cuyos propietarios eligen pagar impuestos sobre los ingresos de inversión. Los micro cautivos abusivos involucran estrategias que carecen de muchos de los atributos de los seguros legítimos. Estas estructuras a menudo incluyen riesgos inverosímiles, la falta de coincidencia con las necesidades comerciales genuinas y, en muchos casos, la duplicación innecesaria de las coberturas comerciales del contribuyente.
  • Propiedades de conservación sindicadas: Un acuerdo de propiedad de conservación es una restricción al uso de bienes inmuebles. En general, los contribuyentes pueden reclamar una deducción por contribución caritativa por el valor justo de mercado de una propiedad de conservación transferida a una organización benéfica si la transferencia cumple con los requisitos del Código de Rentas Internas 170. Estos arreglos abusivos generan tarifas altas para los promotores y los participantes intentan engañar al sistema tributario con deducciones de impuestos enormemente infladas.

Estrategias con elementos internacionales

  • Cuentas en el extranjero y activos digitales: El IRS continúa analizando los intentos de ocultar activos en cuentas en el extranjero y cuentas que contienen activos digitales, como criptomonedas. El IRS continúa identificando a personas que intentan ocultar ingresos en bancos en el extranjero, cuentas de corretaje, cuentas de activos digitales y entidades nominales. Los profesionales de la protección de activos y los promotores sin escrúpulos continúan atrayendo a los estadounidenses para que coloquen sus activos en cuentas y estructuras en el extranjero, diciendo que están fuera del alcance del IRS. Estas afirmaciones no son ciertas. El IRS puede identificar y rastrear transacciones anónimas de cuentas financieras extranjeras, así como activos digitales.
  • Uso incorrecto del acuerdo maltés de arreglos de cuentas de retiro individuales. Estos arreglos involucran a ciudadanos o residentes de los EE. UU. que intentan evadir impuestos de EE. UU. contribuyendo a arreglos de pensiones extranjeros en Malta (o potencialmente en otros países anfitriones). Los participantes en estas transacciones normalmente carecen de cualquier conexión local con el país anfitrión. Al afirmar indebidamente el acuerdo extranjero como un "fondo de pensión" a efectos del tratado tributario de los EE. UU., el contribuyente de los EE. UU. malinterpreta las disposiciones pertinentes del tratado y reclama indebidamente una exención del impuesto sobre los ingresos de los EE. UU. sobre ganancias y salarios en, y distribuciones del arreglo de jubilación individual en el extranjero.
  • Seguro cautivo de Puerto Rico y otros en el extranjero: Los dueños de negocios de EE. UU. de entidades estrechamente controladas participan en un supuesto acuerdo de seguro con una corporación puertorriqueña u otra extranjera en la que el dueño del negocio estadounidense tiene un interés financiero. El propietario de la empresa estadounidense (o una entidad relacionada) reclama una deducción por los montos pagados como primas por la "cobertura de seguro" proporcionada por una compañía de fachada, que reasegura la "cobertura" con la corporación puertorriqueña u otra extranjera. A pesar de estar etiquetados como seguros, estos arreglos carecen de muchos de los atributos de los seguros legítimos.

Cuando corresponda, el IRS impugnará los supuestos beneficios tributarios de este tipo de transacciones e impondrá sanciones. La División de Investigación Criminal del IRS siempre está buscando promotores y participantes de estos tipos de fraude. Los contribuyentes deberían pensarlo dos veces antes de incluir arreglos cuestionables como este en sus declaraciones de impuestos. Después de todo, los contribuyentes son legalmente responsables de lo que hay en su declaración, no un promotor que hace promesas y cobra tarifas altas. Los contribuyentes pueden ayudar a detener estos arreglos confiando en profesionales de impuestos acreditados que conocen y en los que confían.

Ayude a detener el fraude y las estafas

Como parte del esfuerzo de concienciación de la Docena Sucia, el IRS alienta a las personas a denunciar individuos que promueven estafas de impuestos y preparadores de declaraciones de impuestos que deliberadamente preparan declaraciones indebidas.

Para denunciar un plan fraudulento o a un preparador de declaraciones de impuestos, las personas deben enviar por correo o fax un Formulario 14242 (SP), Informar Sospechas de Promociones Tributarias o Preparadores de Impuestos AbusivosPDF completo y cualquier material de apoyo al Centro de Desarrollo de Información del IRS en la Oficina de Investigaciones de Promotores.

Dirección postal:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS  

Arkansas Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to July 31

Posted by Admin Posted on Apr 10 2023

Arkansas Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to July 31

Arkansas storm victims now have until July 31, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) as a result of tornadoes and severe storms that occurred on March 31. This means that individuals and households that reside or have a business in Cross, Lonoke and Pulaski counties qualify for tax relief. Other areas added later to the disaster area will also qualify for the same relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on March 31, 2023. As a result, affected individuals and businesses will have until July 31, 2023, to file returns and pay any taxes that were originally due during this period.

This includes 2022 individual income tax returns and various business returns due on April 18. Among other things, this means that eligible taxpayers will have until July 31 to make 2022 contributions to their IRAs and health savings accounts.

The July 31 deadline also applies to the quarterly estimated tax payments, normally due on April 18 and June 15.

The July 31 deadline also applies to the quarterly payroll and excise tax returns normally due on April 30, 2023. In addition, penalties on payroll and excise tax deposits due on or after March 31 and before April 18 will be abated if the tax deposits are made by April 18, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time.

Some affected taxpayers may find that they need more time to file beyond the July 31 deadline. If so, the IRS urges them to request the additional time electronically before the original April 18 deadline. Two free and easy ways to do this are through either IRS Free File or IRS Direct Pay, both available only on IRS.gov. Visit IRS.gov/extensions for details.

After April 18 and before July 31, disaster area taxpayers can file their extension requests only on paper.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline that occurs during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed in early 2024), or the return for the prior year (that is, the 2022 return normally filed in 2023). Be sure to write the FEMA declaration number – 4698-DR – on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

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 +1-305-274-5811.

Source : IRS  

Reporting Foreign Income and Filing a Tax Return when Living Abroad

Posted by Admin Posted on Apr 06 2023

Reporting Foreign Income and Filing a Tax Return when Living Abroad

U.S. citizen and resident aliens living abroad should know their tax obligations. Their worldwide income -- including wages, unearned income and tips -- is subject to U.S. income tax, regardless of where they live or where they earn their income. They also have the same income tax filing requirements as U.S. citizens or resident aliens living in the United States.

An income tax filing requirement applies even if a taxpayer qualifies for tax benefits such as the Foreign Earned Income Exclusion or the Foreign Tax Credit, which reduce or eliminate U.S. tax liability. These tax benefits are available only if an eligible taxpayer files a U.S. income tax return.

Taxpayers living outside of the U.S. and Puerto Rico have an automatic extension to file – but not to pay

A taxpayer has an automatic two-month extension to June 15, 2023, if both their tax home and abode are outside the United States and Puerto Rico. Even with an extension, a taxpayer will have to pay interest on any tax not paid by the regular due date of April 18, 2023.

Those serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return also qualify for the extension to June 15, 2023. Taxpayers should attach a statement to their tax return if one of these two situations applies. More information is in the instructions for Form 1040 and Form 1040-SR, Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad and Publication 519, U.S. Tax Guide for Aliens.

Reporting requirement for foreign accounts and assets

Federal law requires U.S. citizens and resident aliens to report their worldwide income, including income from foreign trusts and foreign bank and other financial accounts.

  • Schedule B (Form 1040), Interest and Ordinary Dividends – In most cases, affected taxpayers attach Schedule B to their federal return to report foreign assets. Part III of Schedule B asks about the existence of foreign accounts such as bank and securities accounts and usually requires U.S. citizens and resident aliens to report the country in which each account is located.
  • Form 8938, Statement of Foreign Financial Assets – Some taxpayers may also need to attach Form 8938 to their return to report specified foreign financial assets if the total value of those assets exceeds certain thresholds. The instructions for this form have the details.

People must also report foreign assets of $10,000 or more to the Treasury Department

U.S. persons with an interest in or signature or other authority over foreign financial accounts where the total value exceeded $10,000 at any time during 2022 must also file a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR) with the Treasury Department.

The form is available only through the BSA E-filing System website.

The deadline for filing the annual Report of Foreign Bank and Financial Accounts (FBAR) is April 18, 2023. U.S. persons who miss the April deadline have an automatic extension until Oct. 16, 2023 (as October 15 is a Sunday), to file the FBAR. FinCEN'sPDF website has the 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 +1-305-274-5811.

Source: IRS    

Mississippi Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to July 31

Posted by Admin Posted on Apr 06 2023

Mississippi Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to July 31

Mississippi storm victims now have until July 31, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) as a result of tornadoes and severe storms that occurred on March 24 and 25. This means that individuals and households that reside or have a business in Carroll, Humphreys, Monroe and Sharkey counties qualify for tax relief. Other areas added later to the disaster area will also qualify for the same relief. The current list of eligible localities is always available on the Tax Relief in Disaster Situations page.

The tax relief postpones various tax filing and payment deadlines that occurred starting on March 24, 2023. As a result, affected individuals and businesses will have until July 31, 2023, to file returns and pay any taxes that were originally due during this period.

This includes 2022 individual income tax returns and various business returns due on April 18. Among other things, this means that eligible taxpayers will have until July 31 to make 2022 contributions to their IRAs and health savings accounts.

The July 31 deadline also applies to the quarterly estimated tax payments, normally due on April 18 and June 15.

The July 31 deadline also applies to the quarterly payroll and excise tax returns normally due on April 30, 2023. In addition, penalties on payroll and excise tax deposits due on or after March 24 and before April 10, will be abated as long as the tax deposits are made by April 10, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time.

Some affected taxpayers may find that they need more time to file beyond the July 31 deadline. If so, the IRS urges them to request the additional time, electronically, before the original April 18 deadline. Two free and easy ways to do this are through either IRS Free File or IRS Direct Pay, both available only on IRS.gov. Visit IRS.gov/extensions for details.

After April 18 and before July 31, disaster area taxpayers can file their extension requests only on paper.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed in early 2024), or the return for the prior year (that is, the 2022 return normally filed in 2023). Be sure to write the FEMA declaration number – 4697-DR − on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov

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 +1-305-274-5811.

Source: IRS  

IRS Warns Taxpayers of New Filing Season Scams Involving Form W-2 Wages; Those Filing Fake Returns Face Potential Penalties and Investigations

Posted by Admin Posted on Apr 06 2023

IRS Warns Taxpayers of New Filing Season Scams Involving Form W-2 Wages; Those Filing Fake Returns Face Potential Penalties and Investigations

The Internal Revenue Service issued a consumer alert to warn taxpayers of new scams that urge people to use wage information on a tax return to claim false credits in hopes of getting a big refund.

One scheme, which is circulating on social media, encourages people to use tax software to manually fill out Form W-2, Wage and Tax Statement, and include false income information. In this W-2 scheme, scam artists suggest people make up large income and withholding figures as well as the employer it is coming from. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund – sometimes as much as five figures – due to the large amount of withholding.

The IRS along with the Security Summit partners in the tax industry and the states, are actively watching for this scheme and others. In addition, the IRS works with payroll companies and large employers – as well as the Social Security Administration – to verify W-2 information.

With National Consumer Protection Week starting Monday, the IRS and Summit partners warn people not to fall for these scams.

"We are seeing signs this scam is increasing, and we worry that innocent taxpayers could be at risk of being tempted into falling into a trap that puts them at risk of financial and criminal penalties," said Acting IRS Commissioner Doug O'Donnell. "The IRS and Security Summit partners remind people there is no secret way to get free money or a big refund. People should not make up income and try to submit a fraudulent tax return in hopes of getting a huge refund."

Two variations of this scheme are also being seen by the IRS; both involve misusing Form W-2 wage information in hopes of generating a larger refund:

  • One variation involves people using Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to claim a credit based on income earned as an employee and not as a self-employed individual. These credits were available for self-employed individuals for 2020 and 2021 during the pandemic; they are not available for 2022 tax returns.
  • A similar variation involves people making up fictional employees employed in their household and using Schedule H (Form 1040), Household Employment Taxes, to try claiming a refund based on false sick and family wages they never paid. The form is designed to report household employment taxes if a taxpayer hired someone to do household work and those wages were subject to Social Security, Medicare or FUTA taxes, or if the employer withheld federal income tax from those wages.

The IRS reminds people who try this that they face a wide range of penalties. This may include a frivolous return penalty of $5,000. Filers also run the risk of criminal prosecution for filing a false tax return.

For anyone who has participated in one of these schemes, there are several options that the IRS recommends. People can amend a previous tax return or consult with a trusted tax professional.

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 +1-305-274-5811.

Source: Thomson Reuter 

Important Details to Understand when the IRS Might Contact a Taxpayer

Posted by Admin Posted on Apr 06 2023

Important Details to Understand when the IRS Might Contact a Taxpayer

The Internal Revenue Service reaches out in multiple ways to educate taxpayers while ensuring it fairly enforces the nation's tax laws. There are important factors to keep in mind about when the IRS may initiate direct contact with a taxpayer.

For people who owe taxes, the IRS provides many different payment options to help taxpayers meet their obligations. Taxpayers can avoid late filing and interest penalties by submitting their tax return and using one of these options to pay what they owe by April 18.

For those struggling to pay in full by the deadline, the IRS offers several different options. For example, most individual taxpayers qualify for a payment plan and can use the IRS' Online Payment Agreement to set up a payment plan (including an installment agreement) to pay off an outstanding balance over time.

People encountering a tax issue, such as an unpaid bill or a question about their taxes, will typically receive multiple letters in the mail from the IRS. People are encouraged to respond to these letters quickly, since interest and penalties can compound quickly.

Most IRS contacts with taxpayers are through regular mail delivered by the United States Postal Service. However, there are limited circumstances when the IRS will come to a home or business as part of a collection investigation, an audit or an ongoing criminal investigation.

IRS in-person visits

IRS employees that may make face-to-face visits outside an IRS office include revenue officers, revenue agents and IRS Criminal Investigation special agents. IRS employees are trained to respect taxpayer rights, and there are some important facts to keep in mind about the different types of visits.

Revenue officers are IRS civil enforcement employees who work to resolve compliance issues such as unfiled returns and/or taxes owed – all situations where the taxpayer typically would have received multiple IRS letters in advance.

These in-person visits may be unscheduled and can be to share information, inform taxpayers of their tax filing and payment obligations and work with taxpayers to resolve their tax issues and bring them into compliance.

They conduct interviews to gather financial information and provide taxpayers with the necessary steps to become and remain compliant with the tax laws.

Revenue agents usually conduct in-person field audits that are normally at the taxpayer's home, place of business or accountant's office where the organization's financial books and records are located. Revenue agents will make contact via mail or phone prior to any visit.

Revenue officers and agents always carry two forms of official credentials with a serial number and their photo. Taxpayers have the right to see each of these credentials and can also request an additional method to verify their identification.

Remember, taxpayers should know they have a tax issue before these visits occur since multiple mailings occur.

More information on identifying legitimate IRS representatives and how to report scams can be found at IRS.gov.

IRS-CI special agents investigate potential criminal violations of the Internal Revenue Code and related financial crimes. IRS-CI's investigative jurisdiction includes tax, money laundering and Bank Secrecy Act laws. IRS-CI special agents always present their law enforcement credentials when conducting investigations.

IRS-CI may visit a taxpayer's home or business unannounced during an investigation. However, they will not demand any sort of payment. Learn more about IRS-CI on IRS.gov.

How to report impersonation scams

If a person doesn't have a previously known tax issue and suspects someone is trying to impersonate an IRS employee, there are a variety of options to report phone, email and other impersonation scams:

  • Report impersonation scams to the Treasury Inspector General for Tax Administration on the TIGTA Report Waste, Fraud and Abuse webpage. Taxpayers can also call 800-366-4484 to report impersonation scams.
  • Protect your community by reporting fraud, scams and bad business practices. Report phone scams to the Federal Trade Commission at Report Fraud FTC.
  • Report an unsolicited email claiming to be from the IRS or an IRS-related system like the Electronic Federal Tax Payment System to the IRS at phishing@irs.gov.
  • For a comprehensive listing of recent tax scams, consumer alerts and how to report them, visit Tax Scams/Consumer Alerts.

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 +1-305-274-5811.

Source : IRS 

IRS: Plazo para Presentar Impuestos del 15 de Mayo se Extiende al 16 de Octubre para Contribuyentes en Areas de Desastre en California, Alabama y Georgia

Posted by Admin Posted on Mar 29 2023

IRS: Plazo para Presentar Impuestos del 15 de Mayo se Extiende al 16 de Octubre para Contribuyentes en Areas de Desastre en California, Alabama y Georgia

Los contribuyentes que residen en áreas de desastre en la mayoría de California y partes de Alabama y Georgia ahora tienen hasta el 16 de octubre de 2023 para presentar varias declaraciones de impuestos federales individuales y comerciales y realizar pagos de impuestos, anunció hoy el Servicio de Impuestos Internos. La fecha límite se había pospuesto anteriormente para el 15 de mayo en estas áreas.

El IRS está ofreciendo alivio a cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA, por sus siglas en inglés) en estos tres estados. Hay cuatro declaraciones elegibles diferentes de FEMA y las fechas de inicio y otros detalles varían para cada uno de estos desastres. La lista actual de localidades elegibles y otros detalles para cada desastre siempre está disponible en la página de Alivio en situaciones de desastre en IRS.gov.

El alivio adicional pospone hasta el 16 de octubre varios plazos para la presentación y pago de impuestos que incluyen aquellos para la mayoría de las declaraciones de impuestos individuales y comerciales de 2022. Esto incluye: las declaraciones de impuestos individuales que vencen el 18 de abril; varias declaraciones de impuestos comerciales que normalmente vencen el 15 de marzo y 18 de abril, y declaraciones de impuestos de organizaciones exentas de impuestos que normalmente vencen el 15 de mayo.

Entre otras cosas, esto significa que contribuyentes elegibles tendrán hasta el 16 de octubre para hacer contribuciones de 2022 a sus cuentas IRA y de arreglos de reembolsos de salud (HSAs).

Además, agricultores que eligieron no hacer pagos de impuestos estimados y normalmente presentan sus declaraciones para el 1ro de marzo ahora tendrán hasta el 16 de octubre de 2023 para presentar su declaración de 2022 y pagar cualquier impuesto adeudado

La fecha límite del 16 de octubre también se aplica al pago de impuestos estimados para el cuarto trimestre de 2022, que vencía originalmente el 17 de enero de 2023. Esto significa que los contribuyentes pueden omitir este pago y, en su lugar, incluirlo con la declaración de impuestos de 2022 que presentan, en o antes del 16 de octubre.

El plazo del 16 de octubre también se aplica a los pagos trimestrales de impuestos sobre los ingresos estimados de 2023 que vencen el 18 de abril, 15 de junio y 15 de septiembre. El plazo también aplica para las declaraciones trimestrales de impuestos sobre la nómina e impuestos especiales que normalmente vencen el 31 de enero, 30 de abril y 31 de julio.

La página de Ayuda y alivio por emergencia en casos de desastre para las personas y los negocios tiene detalles acerca de otras declaraciones, pagos y acciones relacionadas con impuestos que son elegibles para el tiempo adicional. Los contribuyentes en las áreas afectadas no necesitan presentar ningún papeleo de extensión, y no necesitan llamar al IRS para calificar para el tiempo extendido.

El IRS provee automáticamente la presentación y el alivio de multas a cualquier contribuyente con una dirección registrada con el IRS ubicada en el área del desastre. Por lo tanto, los contribuyentes no necesitan comunicarse con la agencia para obtener el alivio. Sin embargo, si un contribuyente afectado recibe un aviso de multa por presentación o pago atrasado del IRS que tiene un plazo de depósito, pago o presentación original o extendida que cae dentro del período de aplazamiento, el contribuyente debe llamar al número que figura en el aviso para solicitar el alivio de 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. Contribuyentes elegibles para el alivio que viven fuera del área de desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudan en las actividades de socorro que están afiliados a un gobierno reconocido como una organización filantrópica.

Las personas y empresas en un área de desastre declarada por el gobierno federal que sufrieron pérdidas relacionadas con el desastre no aseguradas o no reembolsadas pueden optar por reclamarlas en la declaración del año en que ocurrió la pérdida o en la declaración del año anterior. Consulte la Publicación 547 (SP), Hechos Fortuitos, Desastres y Robos para detalles.

El alivio tributario es parte de una respuesta federal coordinada a causa de los daños por estas tormentas y se basa en las evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de la recuperación ante desastres, visite​​​​​ DisasterAssistance.gov

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

IRS: May 15 Tax Deadline Extended to Oct. 16 for Disaster Area Taxpayers in California, Alabama and Georgia

Posted by Admin Posted on Mar 29 2023

IRS: May 15 Tax Deadline Extended to Oct. 16 for Disaster Area Taxpayers in California, Alabama and Georgia

Disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Previously, the deadline had been postponed to May 15 for these areas.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) in these three states. There are four different eligible FEMA declarations, and the start dates and other details vary for each of these disasters. The current list of eligible localities and other details for each disaster are always available on the Tax Relief in Disaster Situations page on IRS.gov.

The additional relief postpones until Oct. 16, various tax filing and payment deadlines, including those for most calendar-year 2022 individual and business returns. This includes: Individual income tax returns, originally due on April 18; Various business returns, normally due on March 15 and April 18; and returns of tax-exempt organizations, normally due on May 15.

Among other things, this means that eligible taxpayers will also have until Oct. 16 to make 2022 contributions to their IRAs and health savings accounts.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until Oct. 16, 2023, to file their 2022 return and pay any tax due.

The Oct. 16 deadline also applies to the estimated tax payment for the fourth quarter of 2022, originally due on Jan. 17, 2023. This means that taxpayers can skip making this payment and instead include it with the 2022 return they file, on or before Oct. 16.

The Oct. 16 deadline also applies to 2023 estimated tax payments, normally due on April 18, June 15 and Sept. 15. It also applies to the quarterly payroll and excise tax returns normally due on Jan. 31, April 30 and July 31.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time. Taxpayers in the affected areas do not need to file any extension paperwork, and they do not need to call the IRS to qualify for the extended time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred or the return for the prior year. See Publication 547, Casualties, Disasters, and Thefts for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

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 +1-305-274-5811.

Source : IRS      

IRA Contributions

Posted by Admin Posted on Mar 29 2023

IRA ContributionsIRA Contributions

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 $6,000, or $7,000 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 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 +1-305-274-5811.

Source : Thomson Reuters    

Dirty Dozen: Watch Out for Scammers Using Email and Text Messages to Try Tricking People during Tax Season

Posted by Admin Posted on Mar 29 2023

Dirty Dozen: Watch Out for Scammers Using Email and Text Messages to Try Tricking People during Tax Season

With the filing deadline quickly approaching, the Internal Revenue Service today urged everyone to remain vigilant against email and text scams aimed at tricking taxpayers about refunds or tax issues.

In day two of the annual Dirty Dozen tax scams campaign, the IRS again includes a warning about phishing and smishing schemes where cybercriminals try to steal a taxpayer's information through scam emails or text messages.

"Email and text scams are relentless, and scammers frequently use tax season as a way of tricking people," said IRS Commissioner Danny Werfel. "With people anxious to receive the latest information about a refund or other tax issue, scammers will regularly pose as the IRS, a state tax agency or others in the tax industry in emails and texts. People should be incredibly wary about unexpected messages like this that can be a trap, especially during filing season."

As a member of the Security Summit, the IRS, with state tax agencies and the nation's tax industry, have taken numerous steps over the last eight years to warn people to watch out for common scams and schemes each tax season that can contribute to identity theft. Along with the Security Summit initiative, the Dirty Dozen aims to protect taxpayers, businesses and the tax system from identity thieves and various hoaxes designed to steal money and information.

The Dirty Dozen is an annual IRS list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal data and more. Some items on the list are new, and some make a return visit. While the list is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers, businesses and tax preparers about scams at large.

Phish or smish: Avoid getting hooked by either

Taxpayers and tax professionals should be alert to fake communications posing as legitimate organizations in the tax and financial community, including the IRS and states. These messages arrive in the form of an unsolicited text or email to lure unsuspecting victims to provide valuable personal and financial information that can lead to identity theft. There are two main types:

  • Phishing is an email sent by fraudsters claiming to come from the IRS or another legitimate organization, including state tax organizations or a financial firm. The email lures the victims into the scam by a variety of ruses such as enticing victims with a phony tax refund or frightening them with false legal/criminal charges for tax fraud.
     
  • Smishing is a text or smartphone SMS message that uses the same technique as phishing. Scammers often use alarming language like, "Your account has now been put on hold," or "Unusual Activity Report" with a bogus "Solutions" link to restore the recipient's account. Unexpected tax refunds are another potential target for scam artists.

The IRS initiates most contacts through regular mail and will never initiate contact with taxpayers by email, text or social media regarding a bill or tax refund.

Never click on any unsolicited communication claiming to be the IRS as it may surreptitiously load malware. It may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.

Individuals should never respond to tax-related phishing or smishing or click on the URL link. Instead, the scams should be reported by sending the email or a copy of the text/SMS as an attachment to phishing@irs.gov. The report should include the caller ID (email or phone number), date, time and time zone, and the number that received the message.

Taxpayers can also report scams to the Treasury Inspector General for Tax Administration or the Internet Crime Complaint Center. The Report Phishing and Online Scams page at IRS.gov provides complete details. The Federal Communications Commission's Smartphone Security Checker is a useful tool against mobile security threats.

The IRS also warns taxpayers to be wary of messages that appear to be from friends or family but that are possibly stolen or compromised email or text accounts from someone they know. This remains a popular way to target individuals and tax preparers for a variety of scams. Individuals should verify the identity of the sender by using another communication method; for instance, calling a number they independently know to be accurate, not the number provided in the email or text.

Help stop fraud and scams

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or PreparersPDF and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

 

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 +1-305-274-5811.

Source: IRS 

Deducting Mortgage Interest

Posted by Admin Posted on Mar 21 2023

Deducting Mortgage Interest

If you own a home, and you itemize your deductions on Schedule A, you can claim a deduction for the interest paid. To be deductible, the interest you pay must be on a loan secured by your main home or a second home (including a second home that is also rented out for part of the year, so long as the personal use requirement is met). The loan can be a first or second mortgage, or a home improvement loan. To be deductible, the loan must be secured by your home and the proceeds must be used to buy, build, or substantially improve your home.

The interest deduction for home acquisition debt (that is, a loan taken out after December 15, 2017 to buy, build, or substantially improve a qualified home) is limited to debt of $750,000 ($375,000 if married filing separately). For home acquisition indebtedness incurred prior to December 16, 2017, the deduction is limited to $1 million ($500,000 if married filing separately)

In addition to the deduction for mortgage interest, points paid on the original purchase of your residence are also generally deductible. For more information about the mortgage interest deduction, see IRS Publication 936.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811.

Source : Thomson Reuters     

Coverdell Savings Accounts

Posted by Admin Posted on Mar 20 2023

 

Coverdell Savings Accounts

A Coverdell Education Savings Account (ESA) is a savings account created as an incentive to help parents and students save for education expenses.

The total contributions for the beneficiary (who is under age 18 or is a special needs beneficiary) of this account in any year cannot be more than $2,000, no matter how many accounts have been established. The beneficiary will not owe tax on the distributions if, for a year, the distributions from an account are not more than a beneficiary's qualified education expenses at an eligible education institution. This benefit applies to higher education expenses as well as to elementary and secondary education expenses.

Generally, any individual (including the beneficiary) can contribute to a Coverdell ESA if the individual's modified adjusted gross (MAGI) income is less than an annual, constantly changing maximum. Usually, MAGI for the purpose of determining your maximum contribution limit is the adjusted gross income (AGI) shown on your tax return increased by the following exclusion from your income: foreign earned income of U.S. citizens or residents living abroad, housing costs of U.S. citizens or residents living abroad, and income from sources within Puerto Rico or American Samoa. Contributions to a Coverdell ESA may be made until the due date of the contributor's return, without extensions.

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 +1-305-274-5811.

Source : Thomson Reuters

Tax Saving Techniques

Posted by Admin Posted on Mar 20 2023

Tax Saving Techniques

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

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

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

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

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

Own a home - most of the cost of this type of investment is financed and the interest (on mortgages up to $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 +1-305-274-5811.

Source : Thomson Reuters

ROTH IRA Contributions

Posted by Admin Posted on Mar 20 2023

ROTH IRA Contributions

Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules:

  1. Income To contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses). Your modified adjusted gross income must be less than:
  • $196,000 — Married Filing Jointly.
  • $10,000 — Married Filing Separately (and you lived with your spouse at any time during the year).
  • $133,000 — Single, Head of Household, or Married Filing Separately (and you did not live with your spouse during the year).
  1. Age There is no age limitation for Roth IRA contributions. Unlike traditional IRAs, you can be any age and still qualify to contribute to a Roth IRA.
  2. Contribution Limits In general, if your only IRA is a Roth IRA, the maximum current year contribution limit is the lesser of your taxable compensation or $6,000 ($7,000 for those age 50 or over). The maximum contribution limit phases out if your modified adjusted gross income is within these limits:
  • $193,000-$203,000 — Married Filing Jointly or Qualifying widow(er)
  • $0-$10,000 — Married Filing Separately (and you lived with your spouse at any time during the year)
  • $122,000-$137,000 — Single, Head of Household, or Married Filing Separately (and you did not live with your spouse)
  1. Contributions to Spousal Roth IRA You can make contributions to a Roth IRA for your spouse provided you meet the income requirements.

* Note - threshold amounts listed above are for tax year 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 +1-305-274-5811

Source : Thomson Reuters 

When considering a loan request, what do banks look for?

Posted by Admin Posted on Mar 10 2023

When considering a loan request, what do banks look for?

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

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

  • Have you invested at least 25% or 50% of savings or personal equity into the business for the loan you are requesting? (Keep in mind that 100% of your business will not be financed by an investor.)
  • Do your work history, your credit report and letters of recommendation show a healthy record of credit worthiness? This is a key factor.
  • Do you have the training and experience necessary to operate a successful business?
  • Do your loan proposal and business plan document your knowledge of and dedication to the success of the business?
  • Is the cash flow of the business sufficient to make the monthly payments on the requested loan?

 

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : Thomson Reuters 

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

Posted by Admin Posted on Mar 10 2023

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

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 about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters      

What costs are associated?

Posted by Admin Posted on Mar 10 2023

What costs are associated?

  • The costs associated with getting a home equity loan are basically the same as a refinance.
  • Appraisal
  • A non-refundable application fee
  • Up front points, which equal one percent of the entire credit limit
  • Closing costs, which are the same as the closing costs you would pay upon purchasing a home
  • Yearly fees and the possibility a transaction fee per draw

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters      

What can I do to raise money for my small business

Posted by Admin Posted on Mar 10 2023

What can I do to raise money for my small business

Although the process is complex and frustrating, raising capital is the most basic of all business activities. When looking for financing, there are various sources to consider. For most new businesses, the main source of capital comes from savings and other forms of personal resources. There are better options available than credit cards that are often used for financing, even a small business loan.

When beginning, entrepreneurs usually look to private sources like friends and family. Generally, the money is loaned at a low interest rate or interest free, which is very beneficial at the beginning.

The most common source of funding, not including personal resources, are credit unions and banks who will provide a loan if it is possible to show that your offer is worthwhile. Other sources are venture capital firms that aid businesses in exchange for partial or equity ownership.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters      

How can you lock in an interest rate?

Posted by Admin Posted on Mar 10 2023

How can you lock in an interest rate?

After choosing a lender, you may be quoted a rate, which may "float" until the actual closing, meaning that it is not guaranteed. With a lock-in you are guaranteed that the interest rate will not change before your closing. You may want to ask for an agreement that ensures that your rate is capped, but allows you to take advantage of a lower rate if the rate lowers before you close.

There is usually a time limit that a lender will put on this guarantee, and if you don't close before that time, they no longer have to honor that lock-in. It is recommended that you stay in close contact with your loan officer during the process to ensure that you are able to close in a timely manner and get the locked-in rate.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : Thomson Reuters     

For business financing, what kind of loans exist?

Posted by Admin Posted on Mar 10 2023

For business financing, what kind of loans exist?

You must know the exact amount of money that you need, what your purpose is and how you will repay it in order to be successful in getting a loan. You must convince the lender in a written proposal that you are a good credit risk.

There are two basic kinds of loans, although terms vary by lender:

Short-term and long-term, maturity periods of up to one year are generally short-term, which include accounts receivable loans, working capital loans and lines of credit.

Maturities greater than a year and less than seven years is a typical long-term loan. Equipment and real estate loans can have maturity up to 25 years. Major business expenses such as purchasing real estate and facilities, durable equipment, construction, vehicles, furniture and fixtures, etc. are a few purposes for long-term loans.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : Thomson Reuters      

Capital Gains and Losses

Posted by Admin Posted on Mar 10 2023

Capital Gains and Losses

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

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

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

Capital gains and losses are reported on Form 8949, Sales and Other Dispositions of Capital Assets, summarized on Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040, Schedule 1. Accounting and planning for the sale and purchase of capital assets is usually a very complicated matter, so please contact us so that you may receive the professional advice you deserve.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : Thomson Reuters     

Can a Home Equity Line of Credit be beneficial?

Posted by Admin Posted on Mar 10 2023

Can a Home Equity Line of Credit be beneficial?

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

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

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

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

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters      

Don’t Get Caught Off Guard! Slam the Scam Day is March 9

Posted by Admin Posted on Mar 04 2023

Don’t Get Caught Off Guard! Slam the Scam Day is March 9

Don’t let scammers catch you unaware of their malicious tricks and schemes. Scammers are counting on you being uninformed of their deceptive tactics so that you will fall prey to their ruses. Don’t let it happen. Join us on National Slam the Scam Day, March 9, 2023, to help raise awareness and prevent scammers from succeeding in their crimes. 

National Slam the Scam Day is an initiative created in 2020 to raise public awareness to combat Social Security-related scams. Last year, it expanded to include other government imposter scams as reported losses from consumers climbed to more than $446 million in 2021. According to the Federal Trade Commission, reported losses for 2022 are nearly $509 million.

SSA OIG partners with other government agencies, non-profit organizations, and the private sector to increase awareness about how to spot government imposter scams and avoid becoming a victim.

Consumer awareness is the most effective method of deterring these crimes, therefore, Slam the Scam Day is held annually as part of the Federal Trade Commission’s National Consumer Protection Week, (NCPW), March 5-11, 2023.

In a government imposter scam, someone claims to be an SSA, or another government employee, and may ask for personal information, demand payment, or make threats. These scams primarily use the telephone, but scammers may also use email, text messages, social media, or U.S. mail.

“Working with our law enforcement and private sector partners to inform consumers about scammers and their deceptive practices remains a priority for my office.  We will continue promoting National Slam the Scam Day to help protect consumers from these predators. Slamming the scam begins with consumers quickly taking a step to hang up the phone, or delete suspicious texts and emails, without responding to the scammers,” said Gail S. Ennis, Inspector General for the Social Security Administration. “That remains the easiest and most effective method to avoid falling prey to these vicious scams.”

“We are dedicated to combatting Social Security scams and fraud,” said Kilolo Kijakazi, Acting Commissioner of Social Security.  “We will continue to use every tool at our disposal to protect the public and their critical benefits.  We urge Americans to remain vigilant, do not give out personal information or money, and report any scam attempts.”

Tips for spotting scams is a critical component because it’s important to keep consumers aware of current trends and past behavior patterns of the scammers.  SSA OIG provides resources on its website and posts tips and warnings on its social media platforms.

SSA OIG urges everyone to be cautious of any contact supposedly from a government agency telling you about a problem you don’t recognize and provides the following tips.

Real government officials will NEVER:

  • threaten arrest or legal action against you unless you immediately send money;
  • promise to increase your benefits or resolve a problem if you pay a fee or move your money into a protected account;
  • require payment with gift cards, prepaid debit cards, wire transfer, Internet currency, or by mailing cash; or
  • try to gain your trust by providing fake “documentation,” false “evidence,” or the name of a real government official.

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 +1-305-274-5811.

Source : SSA

¡Que no lo encuentren desprevenido! El 9 de marzo es el día de «¡Combatir el Fraude!»

Posted by Admin Posted on Mar 04 2023

¡Que no lo encuentren desprevenido! El 9 de marzo es el día de «¡Combatir el Fraude!»

La Administración del Seguro Social y su Oficina del Inspector General siguen comprometidos para crear conciencia y proteger al público

No permita que los estafadores lo encuentren desprevenido con sus trucos maliciosos y engaños. Los estafadores cuentan con que usted no esté informado de sus tácticas engañosas para que caiga víctima de sus fraudes. No lo permita. El 9 de marzo de 2023 únase al «Día Nacional de Combatir el Fraude» para ayudar a crear conciencia y evitar que los estafadores tengan éxito en sus crímenes.

El «Día Nacional de Combatir el Fraude» es una iniciativa creada en el 2020 para aumentar la conciencia pública para combatir las estafas relacionadas con el Seguro Social. El año pasado, se expandió para incluir otras estafas relacionadas con otras agencias del gobierno que reportaron pérdidas de los consumidores de más de $446 millones en 2021. De acuerdo con la Comisión Federal de Comercio (FTC, por sus siglas en inglés), los datos reportados en 2022 son casi $509 millones.

La Oficina del Inspector General (OIG, por sus siglas en inglés) de la Administración del Seguro Social (SSA, por sus siglas en inglés) colabora con otras agencias del gobierno, organizaciones sin fines de lucro y el sector privado para crear conciencia sobre cómo detectar impostores y evitar convertirse en víctima.

Concienciar a los consumidores es la manera más efectiva de impedir estos crímenes, por eso el «Día Nacional de Combatir el Fraude» se lleva a cabo anualmente como parte de la National Consumer Protection Week Semana Nacional de la Protección al Consumidor (solo disponible en inglés, NCPW, por sus siglas en inglés), del 5 al 11 de marzo de 2023, establecida por la Comisión Federal de Comercio. En las estafas de impostores del gobierno, alguien dice ser del Seguro Social o de otra agencia del gobierno, y puede pedir información personal, demandar un pago o amenazarlo. Estas estafas generalmente son por teléfono, pero los estafadores pueden usar también correo electrónico, mensajes de texto, redes sociales o correo postal. Gail S. Ennis, Inspectora General del Seguro Social dijo: «Mi prioridad es trabajar con nuestro personal de orden público y nuestros socios del sector privado para informar a los consumidores sobre los estafadores y sus prácticas engañosas. Continuaremos promoviendo el Día Nacional de Combatir el Fraude para proteger a los consumidores de estos predadores. Combatir el fraude comienza con los consumidores tomando acciones rápidas como colgar el teléfono o borrar mensajes de texto y correos electrónicos sospechosos, sin responder a los estafadores. Ésta es la forma más fácil y eficaz de evitar ser víctima de estas estafas viciosas». Kilolo Kijakazi, la Comisionada Interina del Seguro Social, dijo: «Estamos dedicados a combatir las estafas y el fraude relacionados con el Seguro Social. Continuaremos usando todas las herramientas a nuestra disposición para proteger al público y sus beneficios. Le pedimos a las personas que viven en EE. UU. que estén alertas, y no den su información personal o dinero y reporten cualquier intento de fraude». Los consejos para detectar las estafas son un componente crítico para mantener informados a los consumidores de las tendencias actuales y los modelos anteriores de los estafadores. La Oficina del Inspector General del Seguro Social provee recursos en su sitio de internet y publica consejos y alertas en sus plataformas de las redes sociales. La Oficina del Inspector General del Seguro Social suplica a todos a que sean cuidadosos de cualquier contacto supuestamente de una agencia de gobierno diciéndole sobre un problema que usted no reconoce y brinda los siguientes consejos.

Funcionarios oficiales del gobierno NUNCA:

  • lo amenazarán con arrestarlo o tomar acción legal si usted no manda dinero inmediatamente;
  • le prometerán un aumento de sus beneficios o resolverán un problema si paga un honorario o mueve su dinero a una cuenta protegida;
  • le pedirán que pague con tarjetas de regalo (gift cards), tarjetas de débito prepagadas, transferencias bancarias, criptomonedas o dinero en efectivo a través del correo postal; o
  • tratarán de ganar su confianza enviando «documentación» y «evidencia» falsas o el nombre real de un funcionario del gobierno.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : SSA   

 

Guía de la Temporada de Impuestos: Qué se Debe Considerar al Presentar una Declaración de Impuestos de 2022

Posted by Admin Posted on Feb 24 2023

Guía de la Temporada de Impuestos: Qué se Debe Considerar al Presentar una Declaración de Impuestos de 2022

Aspectos para considerar antes de presentar

Los contribuyentes deben esperar para presentar la declaración hasta que reciban todos los documentos tributarios correspondientes, o corren el riesgo de cometer un error que podría causar demoras.

También deben revisar sus documentos cuidadosamente. Si alguna parte de la información es inexacta o falta, los contribuyentes deben comunicarse con el pagador de inmediato para que la corrija o para asegurarse de que el emisor tenga su dirección postal o de correo electrónico actual.

Crear una cuenta en línea del IRS puede ayudar a los contribuyentes a acceder de manera segura a la información sobre su cuenta de impuestos federales, incluidos pagos, archivos de impuestos y más.

Los archivos de impuestos organizados facilitan la preparación de una declaración de impuestos completa y precisa y pueden ayudar a los contribuyentes a encontrar deducciones o créditos pasados ​​por alto.

Es posible que los contribuyentes con un Número de Identificación Personal del Contribuyente o ITIN deban renovarlo si está vencido y se necesita en una declaración de impuestos federal de EE. UU. Si no renuevan un ITIN vencido, el IRS aún puede aceptar su declaración, pero puede retrasar el procesamiento o los créditos adeudados.

Cambios a créditos y deducciones para el año tributario 2022

A diferencia de 2020 y 2021, no hubo nuevos pagos de estímulo para 2022, por lo que los contribuyentes no deben esperar recibir un pago adicional en su reembolso de impuestos de 2023.

Sin embargo, los contribuyentes aún pueden calificar para la elegibilidad ampliada temporalmente del Crédito tributario de prima, un crédito reembolsable que ayuda a las personas y familias elegibles a cubrir las primas de su seguro médico comprado a través del Mercado de Seguros Médicos. Para recibir este crédito, contribuyentes deben cumplir con ciertos requisitos y presentar una declaración de impuestos con el Formulario 8962, Credito tributario de prima (en inglés).

También las reglas de elegibilidad cambiaron para reclamar el Crédito de vehículo limpio (en inglés) bajo la Ley de Reducción de la Inflación de 2022.

Algunos créditos tributarios regresaron a sus niveles de 2019. Esto significa que contribuyentes tal vez reciban un reembolso significativamente menor que el año tributario anterior.

Los cambios incluyen las cantidades para el Crédito tributario por ingreso del trabajo (EITC), el Crédito tributario por hijos (CTC) y el Crédito por cuidado de hijos y dependientes (en inglés) que regresarán a sus niveles antes de COVID.

  • Para el EITC, contribuyentes eligibles sin hijos que recibieron aproximadamente $1,500 en 2021 ahora recibirán $560 para el año tributario 2022. 
  • Aquellos que recibieron $3,600 por dependiente en 2021 por el CTC recibirán, si son eligibles, $2,000 por dependiente para el año tributario 2022.
  • El Crédito por cuidado de hijos y dependientes regresa a su máximo de $2,100 en 2022 en vez de $8,000 en 2021.

Finalmente, contribuyentes que toman una deducción estándar no pueden tomar una deducción por encima de la línea para donaciones caritativas este año.

Año de transición para reportar el Formulario 1099-K

No hay cambios en la tributación de los ingresos o cómo se calcula el impuesto, incluyendo los ingresos de la venta de bienes personales. Contribuyentes deben informar todos los ingresos en su declaración de impuestos a menos que estén excluidos por ley.

El Formulario 1099-K, Transacciones con tarjeta de pago y red de terceros (en inglés) es una declaración informativa del IRS que se usa para informar determinadas transacciones de pago para mejorar el cumplimiento tributario voluntario. Contribuyentes usan esta declaración informativa junto con sus otros archivos tributarios para determinar correctamente su responsabilidad tributaria. Los Formularios 1099-K debieron ser suministrados por el pagador para el 31 de enero de 2023.

El Plan de Rescate Estadounidense de 2021 modificó el umbral de notificación para las organizaciones de pago de terceros (TPSOs), que incluyen aplicaciones de pagos y TPSOs en línea. El nuevo umbral requiere que se reporten transacciones en exceso de $600 al año, un cambio al umbral anterior de un exceso de $20,000 y de más de 200 transacciones al año. Se les requiere a los TPSOs a reportar los pagos por bienes y servicios.

El 23 de diciembre de 2022, el IRS anunció que el año calendario 2022 servirá como un año de transición para el umbral reducido de reportaje de $600.

Aunque el requisito reducido para reportar el Formulario 1099-K se retrasó para los TPSOs, algunas personas que no hayan recibido un Formulario 1099-K en el pasado tal vez reciban uno. Algunas personas tal vez reciban un Formulario 1099-K por la venta de artículos personales o en situaciones en donde hayan recibido un Formulario 1099-K por error (por transacciones entre amigos y familiares, o por gastos compartidos).

Dinero recibido como un regalo o para reembolsar comidas compartidas o para pagar renta no se debe reportar en un 1099-K. Los pagos deben indicar si fueron por motivos personales para familia o amigos o si fue una transacción de negocios para bienes y servicios.

Si la información en un 1099-K es incorrecta, contribuyentes deben comunicarse con el pagador inmediatamente. El nombre del pagador aparece en la parte superior izquierda del formulario. El contribuyente debe mantener una copia de toda la correspondencia con el pagador para sus registros.

Si recibe un Formulario 1099-K por error y no puede obtener un Formulario 1099-K corregido, consulte la orientación actualizada en Cómo entender su Formulario 1099-K.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS    

Tax Time Guide: Things to Consider when Filing a 2022 Tax Return

Posted by Admin Posted on Feb 24 2023

Tax Time Guide: Things to Consider when Filing a 2022 Tax Return

Things to consider before filing

Taxpayers should wait to file until they receive all their proper tax documents, or they risk making a mistake that could cause delays.

They should also review their documents carefully. If any of the information is inaccurate or missing, taxpayers should contact the payer right away for a correction or to ensure the issuer has their current mailing or email address.

Creating an IRS Online Account can help taxpayers securely access information about their federal tax account, including payments, tax records and more.

Organized tax records make preparing a complete and accurate tax return easier and may help taxpayers find overlooked deductions or credits.

Taxpayers with an Individual Taxpayer Identification Number or ITIN may need to renew it if it's expired and is needed on a U.S. federal tax return. If they don't renew an expiring or expired ITIN, the IRS can still accept their return, but it may delay processing or credits owed.

Changes to credits and deductions for tax year 2022

Unlike 2020 and 2021, there were no new stimulus payments for 2022, so taxpayers should not expect to get an additional payment in their 2023 tax refund.

However, taxpayers may still qualify for temporarily expanded eligibility of the Premium Tax Credit, a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace. To get this credit, taxpayers must meet certain requirements and file a tax return with Form 8962, Premium Tax Credit.

Also, eligibility rules changed to claim a Clean Vehicle Credit under the Inflation Reduction Act of 2022.

Some tax credits return to 2019 levels. This means that taxpayers will likely receive a significantly smaller refund compared with the previous tax year.

Changes include amounts for the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC) and the Child and Dependent Care Credit will revert to pre-COVID levels.

  • For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $560 for the 2022 tax year.
  • Those who got $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 per dependent for the 2022 tax year.
  • The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.

Finally, taxpayers that don't itemize and take the standard deduction cannot deduct their charitable contributions this year.

Transition year for 1099-K reporting

There are no changes to what counts as income or how tax is calculated, including income from the sale of personal assets. Taxpayers must report all their income on their tax return unless it's excluded by law.

Form 1099-K, Payment Card and Third-Party Network Transactions, is an IRS information return used to report certain payment transactions and helps to improve voluntary tax compliance. Taxpayers use this information return with their other tax records to determine their correct tax liability. 2022 Forms 1099-K should have been furnished to the payee by Jan. 31, 2023.

The American Rescue Plan of 2021 changed the reporting threshold for third-party settlement organizations, including payment apps and online settlement organizations. The new threshold requires reporting of transactions in excess of $600 per year; changed from the previous threshold of an excess of $20,000 and an excess of 200 transactions per year. Third-party settlement organizations are required to report payments for goods and services.

On Dec. 23, 2022, the IRS announced that calendar year 2022 will be treated as a transition year for the reduced reporting threshold of $600.

Even though the Form 1099-K reduced reporting requirement for third-party settlement organizations is delayed, some individuals may still receive a Form 1099-K who have not received one in the past. Some individuals may receive a Form 1099-K for the sale of personal items or in situations where they received a Form 1099-K in error (i.e. for transactions between friends and family, or expense sharing).

Money received as a gift or to reimburse shared meals or rent should not be reported on a 1099-K. Payments should indicate whether they are personal to family and friends or a business transaction for goods and services.

If the information is incorrect on the 1099-K, taxpayers should contact the payer immediately. The payer's name appears in the upper left corner on the form. The taxpayer should keep a copy of all correspondence with the payer with their records.

If a Form 1099-K is received in error and a corrected Form 1099-K can't be obtained, follow the IRS' updated guidance at Understanding Your Form 1099-K.

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 +1-305-274-5811.

Source : IRS  

What are the advantages of prepaying a mortgage, and should I if I can?

Posted by Admin Posted on Feb 21 2023

What are the advantages of prepaying a mortgage, and should I if I can?

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 about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters 

Victimas de tormentas en California son elegibles para alivio tributario; fecha límite de 18 de abril y otras fechas se extienden hasta el 15 de mayo

Posted by Admin Posted on Feb 21 2023

Victimas de tormentas en California son elegibles para alivio tributario; fecha límite de 18 de abril y otras fechas se extienden hasta el 15 de mayo

Actualizada el 1/11/23: Esta nota de prensa se actualizó para incluir los condados de Alameda, Contra Costa, Fresno, Kings, Lake, Madera, Mono, San Benito, San Francisco y Tulare.

Las víctimas de las tormentas en California ahora tienen hasta el 15 de mayo de 2023 para presentar varias declaraciones de impuestos federales individuales y comerciales y realizar pagos de impuestos, anunció hoy el Servicio de Impuestos Internos.

El IRS está ofreciendo alivio a cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA, por sus siglas en inglés). Esto significa que las personas y hogares que residen o tienen un negocio en los condados de Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kings, Los Angeles, Lake, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquín, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Ventura, Yolo y Yuba son elegibles para el alivio tributario. Otras áreas que se añadan después también pueden ser elegibles para el mismo alivio. La lista actual de localidades elegibles siempre está disponible en la página de Alivio en situaciones de desastre en IRS.gov.

El alivio tributario pospone varios plazos de presentación y pago de impuestos que ocurrieron a partir del 8 de enero de 2023. Como resultado, las personas y empresas afectadas tendrán hasta el 15 de mayo de 2023 para presentar declaraciones y pagar los impuestos que originalmente adeudaban durante este período.

Esto incluye las declaraciones de impuestos individuales que vencen el 18 de abril al igual que varias declaraciones comerciales de 2022 que normalmente vencen el 15 de marzo y 18 de abril. Entre otras cosas, esto significa que contribuyentes elegibles tendrán hasta el 15 de mayo para hacer contribuciones a sus cuentas IRA y de arreglos de reembolsos de salud (HSAs).

Además, agricultores que eligieron no hacer pagos de impuestos estimados y normalmente presentan sus declaraciones para el 1ro de marzo ahora tendrán hasta el 15 de mayo de 2023 para presentar su declaración de 2022 y pagar cualquier impuesto adeudado. La fecha límite del 15 de mayo de 2023 también se aplica a los pagos trimestrales de impuestos sobre los ingresos estimados que vencen el 17 de enero de 2023 y 18 de abril de 2023. Esto significa que contribuyentes individuales pueden omitir el pago de impuestos estimados del cuarto trimestre, que normalmente vence el 17 de enero de 2023, e incluirlo con la declaración de impuestos de 2022 que presenten en o antes del 15 de mayo.

La fecha límite del 15 de mayo de 2023 también aplica para las declaraciones trimestrales de impuestos sobre la nómina e impuestos especiales que normalmente vencen el 31 de enero y 30 de abril de 2023. Además, las multas por depósitos de impuestos sobre el consumo y la nómina que vencen en o después del 8 de enero de 2023 y antes del 23 de enero de 2023 se reducirán siempre que los depósitos se realicen para el 23 de enero de 2023.

La página de Ayuda y alivio por emergencia en casos de desastre para las personas y los negocios tiene detalles acerca de otras declaraciones, pagos y acciones relacionadas con impuestos que son elegibles para el tiempo adicional.

El IRS proporciona automáticamente la presentación y el alivio de multas a cualquier contribuyente con una dirección registrada con el 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 tardía o pago atrasado del IRS que tiene una fecha de vencimiento de depósito, pago o presentación original o extendida que cae dentro del período de aplazamiento, el contribuyente debe llamar al número que figura en el aviso para solicitar la reducción de multa.

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. Contribuyentes elegibles para el alivio que viven fuera del área de desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudan en las actividades de socorro que están afiliados a un gobierno reconocido como una organización filantrópica.

Las personas y empresas en un área de desastre declarada por el gobierno federal que sufrieron pérdidas relacionadas con el desastre no aseguradas o no reembolsadas pueden optar por reclamarlas en la declaración del año en que ocurrió la pérdida (en este caso, la declaración 2023 que normalmente se presenta el próximo año) o en la declaración del año anterior (2022, que normalmente se presenta en esta temporada de impuestos). Deben asegurarse de escribir el número de declaración de FEMA – 3691-EM − en cualquier declaración reclamando una pérdida. Consulte la Publicación 547 (SP), Hechos Fortuitos, Desastres y Robos para detalles.

El alivio tributario es parte de una respuesta federal coordinada a causa de los daños por estas tormentas y se basa en las evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de la recuperación ante desastres, visite disasterassistance.gov.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.  

Fuente : IRS     

Treasury and IRS provide guidance on energy projects for low-income communities

Posted by Admin Posted on Feb 21 2023

Treasury and IRS provide guidance on energy projects for low-income communities

The Department of the Treasury and the Internal Revenue Service provided guidance to establish a program to provide solar and wind power to certain low-income areas under the Inflation Reduction Act.

Notice 2023-17PDF establishes the Low-Income Communities Bonus Credit Program and provides initial guidance for potential applicants for allocations of calendar year 2023 capacity limitation.

This initial guidance provides the general eligibility requirements, a description of the four statutory facility categories for which an eligible facility may request an allocation, amounts of capacity limitation reserved for each facility category, a general description of the program design and goals, the application review process, and the proposed timeline for opening two 60-day application periods in 2023 based on project categories.

This guidance applies to owners of certain solar and wind facilities placed in service in connection with low-income communities that are eligible for the section 48 energy investment credit.

The Treasury Department and the IRS will issue additional program guidance outlining specific application procedures, applicable definitions, and other information necessary to submit an application.

More information may be found on the Inflation Reduction Act of 2022 page on IRS.gov.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : IRS    

Should I refinance?

Posted by Admin Posted on Feb 20 2023

Should I refinance?

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

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

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

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : Thomson Reuters      

Is any loan interest tax deductible?

Posted by Admin Posted on Feb 20 2023

Is any loan interest tax deductible?

These interests are deductible, some fully, some partially:

  • Education-related interest
  • Business interest
  • Investment interest
  • Mortgage interest

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : Thomson Reuters     

Does borrowing against my securities make sense?

Posted by Admin Posted on Feb 20 2023

Does borrowing against my securities make sense?

This could be a low-cost option for borrowing but there is some risk involved. Deductions are not allowed for the interest unless that loan is used to invest in a business.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters      

Can you stop paying Private Mortgage Insurance (PMI)?

Posted by Admin Posted on Feb 20 2023

Can you stop paying Private Mortgage Insurance (PMI)?

Usually people that make a down payment of less than 20% are required to pay private mortgage insurance by their lender. Once you reach 20% equity, PMI is cancelled, and any money accrued in your escrow account towards it will be credited to you.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source:   Thomson Reuters     

SECURE 2.0 Law Make You More Secure in Retirement

Posted by Admin Posted on Feb 09 2023

SECURE 2.0 Law Make You More Secure in Retirement

A new law was recently signed that will help Americans save more for retirement, though many of the provisions don’t kick in for a few years. The Setting Every Community Up for Retirement Enhancement 2.0 Act (SECURE 2.0) is meant to build on the original SECURE Act of 2019, which made major changes to the required minimum distribution (RMD) rules and other retirement provisions.

Retirement highlights

Here are some of the significant retirement plan changes and when they’ll become effective:

  • The age for beginning RMDs is going up. Employer-sponsored qualified retirement plans, traditional IRAs and individual retirement annuities are subject to RMD rules. They require that benefits start being distributed by a specific beginning date. Under the new law, the age used to determine distributions increases from age 72 to age 73 starting on January 1, 2023. It will then increase to age 75 starting on January 1, 2033.
  • There will be higher “catch-up” contributions for 401(k) participants ages 60 through 63. Currently, participants in certain retirement plans can make additional catch-up contributions if they’re age 50 and older. The limit on catch-up contributions to 401(k) plans is $7,500 for 2023. Secure 2.0 will raise the 401(k) plan catch-up contribution limits to the greater of $10,000 or 150% of the regular catch-up amount for individuals ages 60 through 63. The higher amounts will be indexed for inflation after 2025. This provision will take effect for taxable years beginning after December 31, 2024. (There will also be increased catch-up amounts for SIMPLE plans.)
  • Tax-free rollovers will be allowed from 529 accounts to Roth IRAs. SECURE 2.0 will permit beneficiaries of 529 college savings accounts to make direct trustee-to-trustee rollovers from a 529 account in their names to their Roth IRAs without tax or penalty. Several rules apply. This provision is effective for distributions after December 31, 2023.
  • “Matching” contributions will be permitted for employees with student loan debt. The new law will allow an employer to make matching contributions to 401(k) and certain other retirement plans with respect to “qualified student loan payments.” The result of this provision is that employees who can’t afford to save money for retirement because they’re repaying student loan debt can still receive matching contributions from their employers into retirement plans. Taxpayers can receive these matching contributions even if they are not contributing to their own retirement accounts. This will take effect starting after December 31, 2023.

Nonretirement provisions

There are also some parts of the law that aren’t related to retirement plans, including a change to Achieving a Better Life Experience (ABLE) accounts. Tax-exempt ABLE programs are established by states to assist individuals with disabilities.

Currently, in order to be the beneficiary of an ABLE account, an individual’s disability or blindness must have occurred before age 26. SECURE 2.0 increases this age limit to 46, which will make more people eligible to benefit from an ABLE account. This provision is effective for tax years beginning after December 31, 2025.

Just the beginning

These are only some of the many provisions in SECURE 2.0. Contact us if you have any questions about your situation.

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 +1-305-274-5811.

Source: Thomson Reuters    

Consejos para ayudar a las personas con la temporada de impuestos de 2023

Posted by Admin Posted on Feb 08 2023

COMO EVITAR ERRORES QUE LE PUEDAN CAUSAR CONSECUENCIAS DESAGRADABLES

El IRS recomienda varias cosas que las personas deben tener en cuenta para una experiencia de presentación sin problemas este año:

Tenga la información correcta antes de presentar. El IRS alienta a todos a tener toda la información que necesitan para estar en la mejor posición para presentar una declaración completa y precisa. Organice y recopile los archivos tributarios de 2022, incluidos los números de seguro social, los números de identificación de contribuyentes individuales, los números de identificación de contribuyentes de adopción y los Número de Identificación Personal para la Protección de la Identidad válidos para el año calendario 2023. Tener una declaración de impuestos precisa puede evitar demoras o avisos posteriores del IRS. A veces, esto significa esperar para asegurarse de que las personas hayan contabilizado todos sus ingresos y los documentos relacionados. Esto es especialmente importante para las personas que pueden recibir uno de los diversos Formularios 1099 de bancos u otros pagadores que reportan distribuciones de compensación por desempleodividendospensiones, anualidades o planes de jubilación.

Las personas también deben recordar que la mayoría de los ingresos están sujetos a impuestos, incluidos los ingresos por desempleo, los intereses recibidos o el dinero ganado de la economía informal o los activos digitales. Las personas deben asegurarse de informar el monto correcto en su declaración de impuestos para evitar demoras en el procesamiento.

Visite IRS.gov primero si tiene preguntas. El IRS les recuerda a las personas que primero visiten IRS.gov para preguntas comunes y también para verificar el estado de sus reembolsos. IRS.gov tiene mucha de la misma información que tienen los asistentes telefónicos del IRS.

El IRS anticipa realizar mejoras significativas en el servicio telefónico este año para los contribuyentes y los profesionales de impuestos a medida que se complete más capacitación para los nuevos asistentes telefónicos en las próximas semanas. Sin embargo, el IRS enfatiza que es importante tener en cuenta que los volúmenes de llamadas se mantienen en niveles históricamente altos. El IRS insta a las personas a visitar IRS.gov para obtener la información que necesitan.

"Nuestros volúmenes telefónicos continúan en niveles muy altos", dijo O'Donnell. "Para un acceso más rápido a la información, instamos a las personas a comenzar con IRS.gov. Desde allí, los contribuyentes pueden acceder rápidamente a la variedad de recursos gratuitos disponibles para ayudar a los contribuyentes en cualquier momento, de día o de noche".

Acelere los reembolsos al presentar electrónicamente y escoger el depósito directo. Hay pasos importantes que las personas pueden tomar para ayudar a garantizar que su declaración de impuestos y su reembolso se procesen sin demoras. Lo más importante es presentar electrónicamente con depósito directo. Esta continúa siendo la manera más rápida y fácil de presentar y recibir un reembolso. Para evitar demoras en el procesamiento, las personas deben evitar presentar declaraciones en papel siempre que sea posible.

Para acelerar los reembolsos, el IRS insta a las personas a presentar electrónicamente la información de depósito directo tan pronto como tengan todo lo necesario para presentar una declaración precisa. Las personas pueden usar una cuenta bancaria, una tarjeta de débito prepaga o una aplicación móvil para usar el depósito directo y deberán proporcionar números de ruta y de cuenta. Aprenda cómo abrir una cuenta en un banco asegurado por la FDIC o a través de la herramienta localizador de cooperativas de crédito y ahorro.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.

Fuente : IRS

IRS: Updates to question on digital assets; taxpayers should continue to report all digital asset income

Posted by Admin Posted on Feb 08 2023

DO NOT FORGET TO REPORT ALL YOUR DIGITAL ASSETS INCOMES

The Internal Revenue Service reminds taxpayers that they must again answer a digital asset question and report all digital asset-related income when they file their 2022 federal income tax return, as they did for fiscal year 2021. The term "digital assets" has replaced "virtual currencies," a term used in previous years.

The question, which appears at the top of Forms 1040, Individual Income Tax Return1040-SR, U.S. Tax Return for Seniors; and 1040-NR, U.S. Nonresident Alien Income Tax Return, was revised this year to update terminology.

In addition, the instructions for answering the question were expanded and clarified to help taxpayers answer it correctly. All taxpayers must answer the question regardless of whether they engaged in any transactions involving digital assets.

For the 2022 tax year it asks: "At any time during 2022, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, gift or otherwise dispose of a digital asset (or a financial interest in a digital asset)?"

What is a digital asset?

A digital asset is a digital representation of value which is recorded on a cryptographically secured, distributed ledger. Common digital assets include:

  • Convertible virtual currency and cryptocurrency
  • Stablecoins
  • Non-fungible tokens (NFTs)

Everyone must answer the question.

Everyone who files Form 1040, Form 1040-SR or Form 1040-NR must check one box, answering either "Yes" or "No" to the digital asset question. The question must be answered by all taxpayers, not just those who engaged in a transaction involving digital assets in 2022.

When to check "Yes"

Normally, a taxpayer must check the "Yes" box if they:

  • Received digital assets as payment for property or services provided;
  • Transferred digital assets for free (without receiving any consideration) as a bona fide gift;
  • Received digital assets resulting from a reward or award;
  • Received new digital assets resulting from mining, staking and similar activities;
  • Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two);
  • Disposed of digital assets in exchange for property or services;
  • Disposed of a digital asset in exchange or trade for another digital asset;
  • Sold a digital asset; or
  • Otherwise disposed of any other financial interest in a digital asset.

How to report digital asset income

Besides checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. For example, an investor who held a digital asset as a capital asset and sold, exchanged or transferred it during 2022 must use Form 8949, Sales and other Dispositions of Capital Assets, to figure their capital gain or loss on the transaction and then report it on Schedule D (Form 1040), Capital Gains and Lossesor Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, in the case of gift.

If an employee was paid with digital assets, they must report the value of assets received as wages. Similarly, if they worked as an independent contractor and were paid with digital assets, they must report that income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Schedule C is also used by anyone who sold, exchanged or transferred digital assets to customers in connection with a trade or business.

When to check "No"

Normally, a taxpayer who merely owned digital assets during 2022 can check the "No" box as long as they did not engage in any transactions involving digital assets during the year. They can also check the "No" box if their activities were limited to one or more of the following:

  • Holding digital assets in a wallet or account.
  • Transferring digital assets from one wallet or account they own or control to another wallet or account they own or control; or
  • Purchasing digital assets using U.S. or other real currency, including through electronic platforms such as PayPal and Venmo.

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 +1-305-274-5811.

Source : IRS   

IRS: ACTUALIZACIONES A PREGUNTA ACERCA DE ACTIVOS DIGITALES; CONTRIBUYENTES DEBEN CONTINUAR REPORTANDO INGRESOS DE ACTIVOS DIGITALES

Posted by Admin Posted on Feb 08 2023

¡NO OLVIDE DECLARAR SUS INGRESOS DE ACTIVOS DIGITALES!

El Servicio de Impuestos Internos les recordó hoy a los contribuyentes que deben contestar nuevamente la pregunta acerca de activos digitales y reportar todo ingreso relacionado con activos digitales al presentar la declaración de impuestos federales de 2022, como lo hicieron para el año tributario 2021. El término "activos digitales" reemplazó "monedas virtuales", usado en años previos.

La pregunta que aparece en la parte superior de los Formularios 1040(SP), Declaración de Impuestos de los Estados Unidos Sobre los Ingresos Personales1040-SR(SP), Declaración de impuestos de los EE. UU para personas de 65 años de edad o más y 1040-NR(SP), Declaración de Impuestos sobre los Ingresos de Extranjeros No Residentes de los Estados Unidos, se revisó este año para actualizar la terminología.

Además, se aclararon y ampliaron las instrucciones para responder a la pregunta y ayudar a los contribuyentes a responderla correctamente. Todos los contribuyentes deben responder la pregunta, independientemente de si participaron en transacciones que involucren activos digitales.

La pregunta para el año tributario 2022 es: "¿En cualquier momento durante el año 2022, usted: (a) recibió (como recompensa, premio o pago por propiedad o servicios); o (b) vendió, intercambió, regaló o dispuso de otro modo de un activo digital (o un interés financiero en un activo digital)?"

Qué es un activo digital

Un activo digital es una representación digital de valor que se registra en un libro de contabilidad distribuido con seguridad criptográfica o cualquier tecnología similar. Los activos digitales comunes incluyen:

  • Moneda virtual convertible y criptomoneda
  • Monedas estables
  • Fichas no fungibles (NFT, por sus siglas en inglés)

Todas las personas deben contestar la pregunta

Todos los que presenten el Formulario 1040, Formulario 1040-SR o el Formulario 1040-NR debe marcar una casilla, respondiendo "Sí" o "No" a la pregunta acerca de activos digitales. Todos los contribuyentes deben responder la pregunta, no solo aquellos que participaron en una transacción que involucra activos digitales en 2022.

Cuando marcar "Sí"

Generalmente, un contribuyente debe marcar la casilla, "Sí" cuando:

  • Recibió activos digitales como pago por bienes o servicios prestados.
  • Transfirió activos digitales de forma gratuita (sin proporcionar ninguna contraprestación) como un regalo de buena fe.
  • Recibió activos digitales como resultado de un premio o recompensa.
  • Recibió activos digitales como resultado de actividades de minado o participación y actividades similares; 
  • Recibió activos digitales como resultado de una bifurcación dura; 
  • Eliminó activos digitales a cambio de bienes o servicios;
  • Eliminó un activo digital a cambio o intercambio por otro activo digital;
  • Vendió un activo digital.
  • Cualquier otra disposición de un interés financiero en activos digitales. 

Cómo reportar ingresos de activos digitales

Además de marcar la casilla "Sí", los contribuyentes deben informar todos los ingresos relacionados con sus transacciones de activos digitales. Por ejemplo, un inversionista que poseía un activo digital como activo de capital y lo vendió, intercambió o trasfirió durante 2022 debe usar el Formulario 8949, Ventas y otras disposiciones de ganancias capitales (en inglés) para calcular su ganancia o pérdida de capital en la transacción y luego informarlo en el  Anexo D (Formulario 1040)Ganancias y pérdidas de capital (en inglés) o Formulario 709, Declaración de impuestos sobre donaciones (y transferencias con salto generacional) de los Estados Unidos (en inglés) en el caso de ser un regalo.

Si a un empleado se le pagó con activos digitales, debe informar el valor de los activos recibidos como salarios. De manera similar, si trabajaron como contratistas independientes y se les pagó con activos digitales, deben informar esos ingresos en el Anexo C (Formulario 1040), Ganancia o pérdida de negocio (Empresa por cuenta propia). El Anexo C también lo usa cualquier persona que vendió, intercambió o transfirió activos digitales a clientes en relación con un comercio o negocio.

Cuando marcar "No"

Normalmente, un contribuyente que simplemente poseyó activos digitales durante 2022 puede marcar la casilla "No", siempre y cuando no haya realizado ninguna transacción que involucre activos digitales durante el año. También pueden marcar la casilla "No" si sus actividades se limitaron a una o más de las siguientes;

  • Tener activos digitales en una billetera o cuenta.
  • Transferir activos digitales de una billetera o cuenta a otra billetera o cuenta que tengan.
  • Comprar activos digitales con moneda estadounidense u otra moneda real, incluso a través de plataformas electrónicas como PayPal y Venmo.

Si tiene alguna pregunta sobre contabilidad esencial para negocios,  impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811.

Source : IRS     

QUALIFYING FOR THE HOME OFFICE DEDUCTION

Posted by Admin Posted on Feb 08 2023

Qualifying for the Home Office Deduction

In recent years, many people have pivoted to working from home, and that brings up tax questions. If you’re one of those people, you might wonder, “Can I claim the home office deduction on my 2022 tax return?”

The short answer is only if you’re self-employed. Employees can’t currently claim home office expenses, and even self-employed taxpayers must follow strict rules to claim deductions.

Numerous write-offs

If you qualify, you can deduct the “direct expenses” of a home office. This includes the costs of painting or repairing the home office and depreciation deductions for furniture and fixtures used there. You can also deduct the “indirect” expenses of maintaining the office. This includes the allocable share of utility costs, depreciation and insurance for your home, as well as the allocable share of mortgage interest, real estate taxes and casualty losses.

In addition, if your home office is your “principal place of business,” the eligible costs of traveling between your home office and other work locations are deductible transportation expenses, rather than nondeductible commuting costs.

Tests for deductibility

You can deduct your expenses if you meet any of these three tests:

1. Principal place of business. You are entitled to deductions if you use your home office, exclusively and regularly, as your principal place of business. Your home office is your principal place of business if it satisfies one of two tests. You satisfy the “management or administrative activities test” if you use your home office for administrative or management activities of your business, and you meet certain other requirements. You meet the “relative importance test” if your home office is the most important place where you conduct business, compared with all the other locations where you conduct that business.

2. Meeting place. You’re entitled to home office deductions if you use your home office, exclusively and regularly, to meet or deal with patients, clients or customers. The patients, clients or customers must physically come to the office.

3. Separate structure. You’re entitled to home office deductions for a home office, used exclusively and regularly for business, that’s located in a separate unattached structure on the same property as your home. For example, this could be in an unattached garage, artist’s studio or workshop.

You may also be able to deduct the expenses of certain storage space for storing inventory or product samples. If you’re in the business of selling products at retail or wholesale, and if your home is your sole fixed business location, you can deduct home expenses allocable to space that you use to store inventory or product samples.

Know the limitations.

The amount of home office deductions for self-employed taxpayers is subject to various limitations. Proper planning is key to claiming the maximum deduction for your home office expenses. Contact us if you’d like to discuss your situation.

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 +1-305-274-5811.

Source :Thomson Reuters      

Check tax withholding now to avoid paying future quarterly estimated payments

Posted by Admin Posted on Jan 31 2023

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The Internal Revenue Service reminds taxpayers who earn wages to use the Tax Withholding Estimator now to adjust their 2023 withholding. People's tax situations occasionally change through marriage or divorce, adding a child or having one move out on their own. Checking now and making necessary adjustments early in the year may help them avoid the need for quarterly estimated tax payments.

The Tax Withholding Estimator online tool helps taxpayers see if they may get a refund or need to make a payment directly to the IRS to avoid a tax bill and penalties next year.

Income taxes are pay-as-you-go and are normally paid during the year as income is received through withholding from paychecks, pension payments, Social Security benefits or certain other government payments.

Having a second job or non-wage income from unemployment, self-employment, annuity income, the gig economy or digital assets may require taxpayers make quarterly estimated tax payments to avoid a balance due when they file.

In addition, various financial transactions, especially late in the year, can have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, virtual currency, real estate or other property sold at a profit.

Tax Withholding Estimator

The Tax Withholding Estimator, also available in Spanish, can help wage earners determine if they have too much or too little tax withheld. Taxpayers may use the estimate to change their withholding amount and submit a new Form W-4, Employee's Withholding Certificate, to their employer. The tool offers those who earn wages step-by-step help for tailoring the amount of income tax they should have withheld from their paycheck.

Make a tax payment

The fastest and easiest way to make an estimated tax payment is to do so electronically using IRS Direct Pay or the Treasury Department's Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit Pay Online. If paying by check, be sure to make the check payable to the "United States Treasury."

Other items may affect 2023 taxes

Some unforeseen life events can trigger a need to make withholding adjustments. Here are some tools to help taxpayers know how to make adjustments due to different scenarios:

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    

Your Appeal Rights

Posted by Admin Posted on Jan 31 2023

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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.

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      

Verifique retención de impuestos ahora para evitar pagos trimestrales de impuestos estimados mas adelante

Posted by Admin Posted on Jan 31 2023

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El Servicio de Impuestos Internos les recuerda a los contribuyentes que reciben ingresos que usen el Estimador de Retención de Impuestos en IRS.gov ahora para ajustar sus retenciones de 2023. La situación tributaria de las personas cambia ocasionalmente a través del matrimonio o el divorcio, un hijo nuevo o el hecho de que uno se mude por su cuenta. Verificar ahora y hacer los ajustes necesarios a principios de año puede ayudarlos a evitar la necesidad de pagos de impuestos estimados trimestrales.

La herramienta en línea Estimador de Retención de Impuestos ayuda a los contribuyentes a determinar si van a recibir un reembolso o si tienen la necesidad de hacer un pago directamente al IRS para evitar una factura tributaria y multas el próximo año.

Los impuestos se pagan según se ganan y normalmente se pagan a lo largo del año que el ingreso se recibe mediante la retención del pago, pagos de pensiones, beneficios del Seguro Social y ciertos otros pagos del gobierno.

Tener un segundo trabajo o ingresos no salariales por desempleo, trabajo por cuenta propia, ingresos de anualidades, la economía compartida o activos digitales pudiera requerir que los contribuyentes tengan que hacer pagos trimestrales de impuestos estimados para evitar una factura de impuestos al presentar su declaración de impuestos.

Además, varias transacciones financieras, especialmente a fines de año, a menudo pueden tener un impacto tributario inesperado. Ejemplos incluyen: bonos de fin de año, dividendos de acciones, distribuciones de ganancias de capital de fondos mutuos y acciones, bonos, moneda virtual, bienes raíces u otras propiedades vendidas con un beneficio.

Estimador de Retención de Impuestos

El Estimador de Retención de Impuestos puede ayudar a las personas a determinar si se les retienen demasiados o muy pocos impuestos. Lo contribuyentes pueden usar el estimador para cambiar sus retenciones de impuestos y someter un nuevo Formulario W-4 (SP), Certificado de Retenciones del Empleado a su empleador. La herramienta ofrece a aquellos que ganan ingresos una herramienta fácil de usar de paso a paso para adaptar efectivamente la cantidad de impuestos que deben retener de sus cheques.

Haga un pago de impuestos

La manera más fácil y rápida de hacer un pago de impuestos estimados es electrónicamente a través de Pago Directo o el Sistema de Pago Electrónico de Impuestos Federales (EFTPS, por sus siglas en inglés). Para información acerca de otras opciones de pago, visite Pago Directo. Si paga con cheque, hágalo pagadero al Departamento del Tesoro.

Otras cosas que pueden afectar los impuestos de 2022

Algunos eventos imprevistos de la vida pueden ser razones para hacer ajustes de retención. Aquí hay algunas herramientas para ayudar a los contribuyentes a realizar ajustes debido a varios escenarios:

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     

Is your business at Risk of Retirement Plan Leakage?

Posted by Admin Posted on Jan 31 2023

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Generally, the term “leakage” has negative connotations. So, it’s not surprising that the same is true in the context of retirement planning, where leakage refers to pre-retirement withdrawals from a retirement account. Now, as a business owner who sponsors a qualified retirement plan, you might say, “Well, that’s my participants’ business, not mine.”

However, there are valid reasons to address the issue with employees who participate in your plan.

Why does it matter?

For starters, leakage can lead to higher plan expenses. Fees are often determined on a per-account or per-participant basis. When a plan loses funds to leakage, total assets and individual account sizes shrink, which tends to hurt administrative efficiency and raise costs.

More broadly, if your employees are taking pre-retirement withdrawals, it could indicate they’re facing unusual financial challenges. These issues may have a negative impact on productivity and work quality and leave them unable to retire when they planned to.

What can you do?

The most important thing business owners can do to limit leakage is to remind employees about how pre-retirement withdrawals can diminish their accounts and delay their anticipated retirement dates. While you’re at it, consider providing broader financial education to help workers better manage their money, amass savings, and minimize or avoid the need for early withdrawals.

Some companies offer emergency loans that are repayable through payroll deductions to reduce the use of retirement funds. Others have revised their plan designs to limit the situations under which plan participants can take out hardship withdrawals or loans.

Can you eliminate the problem?

According to a 2021 report by the Joint Committee on Taxation, roughly 22% of net contributions made by people age 50 or younger leaks out of the retirement savings system in a given year. Some percentage of retirement plan leakage will probably always occur, but becoming aware of the problem and taking steps to minimize it are still worthwhile for any business.

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     

TAS shares tips to help taxpayers prepare tax returns without issues that cause return processing errors and refund delays

Posted by Admin Posted on Jan 31 2023

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TAS will launch a Pre-Filing Season Awareness outreach campaign in January.  It is a nationwide effort to help millions of taxpayers who self-prepare federal tax returns to avoid common return processing issues that cause refund delays.

TAS invites taxpayers to attend one of the events in their area. If taxpayers aren’t able to attend an event, there are resources available to them on the TAS website and a list of tips below.

Follow these tips to help prevent common issues.

Use your year-end income statements (e.g., Form W-2/1099), not your pay stub, to verify your income. Your income figures must match what is reported on year-end statements. Employers have until January 31 to send your income statements, and you must wait to receive them before you file.

Double check that your information is correct for yourself and your dependents. Check name spellings, taxpayer identification numbers, dates of birth, addresses, and bank account information.

Check for all credits and deductions for which you may be eligible. Review the tax form instructions to ensure you claim all the deductible items and credits for which you are eligible. Complete any worksheets, schedules or forms to support those items.

Attach all forms and schedules before you submit your return. Don’t forget your income statements and special forms to support credit claims (e.g., Form 8892 or Schedule EITC).

E-file — be aware of tax software that imports prior year data automatically. E-filing a tax return is the most efficient way to file, but make sure you’re using current tax year data to avoid mistakes.

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 

IRS: Victimas de tormentas en Georgia y Alabama califican para alivio tributario: fecha limite del 18 de abril, otras fechas extendidas hasta el 15 de mayo

Posted by Admin Posted on Jan 31 2023

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Las víctimas de la tormenta en partes de Georgia y Alabama ahora tienen hasta el 15 de mayo de 2023 para presentar varias declaraciones de impuestos federales individuales y comerciales y realizar pagos de impuestos, anunció hoy el Servicio de Impuestos Internos.

El IRS está ofreciendo alivio a cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA). Esto significa que las personas y los hogares que residen o tienen un negocio en los condados de Butts, Henry, Jasper, Meriwether, Newton, Spalding y Troup en Georgia, y los condados de Autauga y Dallas en Alabama califican para el alivio tributario. Otras áreas agregadas posteriormente al área de desastre también calificarán para el mismo alivio. La lista actual de localidades elegibles está disponible en la página de Alivio en casos de desastre.

El alivio tributario pospone varios plazos de presentación y pago de impuestos que ocurren a partir del 12 de enero de 2023. Como resultado, las personas y empresas afectadas tendrán hasta el 15 de mayo de 2023 para presentar declaraciones y pagar los impuestos que originalmente debían durante este período.

Esto incluye declaraciones de impuestos individuales de 2022 que vencen el 18 de abril, así como varias declaraciones de negocios de 2022 que normalmente vencen el 15 de marzo y el 18 de abril. Entre otras cosas, esto significa que los contribuyentes elegibles tendrán hasta el 15 de mayo para hacer contribuciones de 2022 a sus cuentas IRA y cuentas de ahorro para la salud.

Además, los agricultores que opten por no realizar pagos de impuestos estimados y normalmente presenten sus declaraciones antes del 1ro de marzo ahora tendrán hasta el 15 de mayo de 2023 para presentar su declaración de 2022 y pagar cualquier impuesto adeudado. La fecha límite del 15 de mayo de 2023 también se aplica a los pagos de impuestos estimados trimestrales, que normalmente vencen el 17 de enero de 2023 y el 18 de abril de 2023. Esto significa que los contribuyentes individuales pueden omitir el pago de impuestos estimados del cuarto trimestre, que normalmente vence el 17 de enero de 2023 y, en su lugar, incluirlo con la declaración de impuestos de 2022 que presenten, el 15 de mayo o antes.

La fecha límite del 15 de mayo también se aplica a las declaraciones de impuestos trimestrales sobre la nómina y los impuestos de uso y consumo que normalmente vencen el 31 de enero y el 30 de abril de 2023. Además, las multas sobre los depósitos de impuestos sobre la nómina y el consumo que vencen a partir del 12 de enero de 2023 y antes del 27 de enero de 2023 se perdonarán siempre que los depósitos de impuestos se realicen antes del 27 de enero de 2023.

La página de Ayuda y alivio por emergencia en casos de desastre para las personas y los negocios tiene detalles acerca de otras declaraciones, pagos y acciones relacionadas con impuestos que califican para el tiempo adicional.

El IRS proporciona automáticamente el alivio para la presentación y de multas a cualquier contribuyente con una dirección registrada 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 tardía o pago atrasado del IRS que tiene una fecha de vencimiento de depósito, pago o presentación original o extendida que cae dentro del período de aplazamiento, el contribuyente debe llamar al número que figura en el aviso para solicitar la cancelación de 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. Los contribuyentes que califican para el alivio que viven fuera del área de desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudan en las actividades de socorro que están afiliados a un gobierno reconocido o a una organización filantrópica.

Las personas y empresas en un área de desastre declarada por el gobierno federal que sufrieron pérdidas relacionadas con el desastre no aseguradas o no reembolsadas pueden optar por reclamarlas en la declaración del año en que ocurrió la pérdida (en este caso, la declaración de 2023 que normalmente se presenta el próximo año) o en la declaración para el año anterior (2022, normalmente se presenta en esta temporada de impuestos). Asegúrese de escribir el número de declaración de FEMA (4684-DR para Alabama o 4685-DR para Georgia) en cualquier declaración que reclame una pérdida. Vea la Publicación 547 para más detalles.

El alivio tributario es parte de una respuesta federal coordinada a los daños causados ​​por estas tormentas y se basa en las evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de la recuperación ante desastres, visite disasterassistance.gov.

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  

Deductible Home Offices

Posted by Admin Posted on Jan 26 2023

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Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

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

Source: Thomson Reuters    

IRS: California Storm Victims Qualify for Tax Relief; April 18 Deadline, Other Dates Extended to May 15

Posted by Admin Posted on Jan 26 2023

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The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). This means that individuals and households that reside or have a business in Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Ventura, Yolo and Yuba counties qualify for tax relief. The current list of eligible localities is always available on the Tax Relief in Disaster Situations page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on January 8, 2023. As a result, affected individuals and businesses will have until May 15, 2023, to file returns and pay any taxes that were originally due during this period.

This includes 2022 individual income tax returns due on April 18, as well as various 2022 business returns normally due on March 15 and April 18. Among other things, this means that eligible taxpayers will have until May 15 to make 2022 contributions to their IRAs and health savings accounts.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 15, 2023, to file their 2022 return and pay any tax due. The May 15, 2023, deadline also applies to the quarterly estimated tax payments, normally due on January 17, 2023, and April 18, 2023. This means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due January 17, 2023, and instead include it with the 2022 return they file, on or before May 15.

The May 15 deadline also applies to the quarterly payroll and excise tax returns normally due on January 31 and April 30, 2023. In addition, penalties on payroll and excise tax deposits due on or after January 8, 2023, and before January 23, 2023, will be abated as long as the tax deposits are made by January 23, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022, normally filed this tax season). Be sure to write the FEMA declaration number – 3691-EM − on any return claiming a loss. See Publication 547 for details.

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    

Refund, Where's my Refund?

Posted by Admin Posted on Jan 26 2023

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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, or you may be able to have your refund electronically deposited directly into your bank account. 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, complete Form 8050, making sure that the routing and account numbers are accurate, and attach it to the corporation's tax return. Note that Form 8050 may only be filed with the original Form 1120 or 1120S, and the corporation is not eligible to receive direct deposit if the receiving financial institution is a foreign bank, or foreign branch of a U.S. bank. Incorrect numbers can cause your refund to be misdirected or delayed. Direct deposit is also available if you electronically file your return.

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 or identification number 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.

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 

Revisar créditos y deducciones tributarios ahora ayuda a los contribuyentes a presentar impuestos exitosamente

Posted by Admin Posted on Jan 26 2023

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Probablemente la mayoría de las personas solo piensan en los créditos y deducciones tributarias cuando completan su declaración de impuestos. Sin embargo, con un poco de planificación anticipada se puede facilitar el proceso de presentación. Al familiarizarse ahora, los contribuyentes pueden comprender claramente qué créditos y deducciones tienen sentido para ellos y los archivos necesarios para demostrar su elegibilidad.

Aquí hay algunos datos acerca de créditos y deducciones que pueden ayudar con la planificación tributaria durante todo el año.

Algunas cosas que debe saber acerca de las deducciones:

  • Las deducciones pueden reducir la cantidad de ingresos de un contribuyente antes de que calculen el impuesto que adeudan.
  • La mayoría de la gente toma la deducción estándar. La deducción estándar se ajusta cada año según la inflación. El monto de la deducción estándar depende del estado civil del contribuyente, la edad, si es ciego y si otra persona lo reclama como dependiente.
  • Algunas personas están obligadas a detallar sus deducciones, y algunas personas pueden optar por hacerlo porque reduce su ingreso tributable más que la deducción estándar.
  • Como regla general, si las deducciones detalladas de un contribuyente son mayores que su deducción estándar, debe detallarlas.

Cosas que debe saber acerca de los créditos tributarios:

  • Los contribuyentes pueden restar créditos tributarios de la cantidad total de impuestos que adeudan.
  • Algunos créditos tributarios, como el Crédito tributario por ingreso del trabajo, son incluso reembolsables, lo que significa que un contribuyente podría obtener un reembolso incluso si no adeuda ningún impuesto.
  • Para reclamar un crédito, los contribuyentes deben llevar archivos que demuestren su elegibilidad para el mismo. Reclamar correctamente los créditos tributarios puede reducir los impuestos adeudados y aumentar los reembolsos.
  • Los contribuyentes pueden verificar ahora si califican para reclamar algún crédito el próximo año en su declaración 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    

Don’t let a tax mistake ruin newlywed bliss

Posted by Admin Posted on Jan 26 2023

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When people get married their tax situation often changes. A taxpayer's marital status as of December 31 determines their tax filing options for the entire year, but that's not all newlyweds need to know.

Here's a tax checklist for newly married couples:

Name and address changes

  • Name – When a name changes through marriage, it's important to report that change to the Social Security Administration. The name on a person's tax return must match what is on file at the SSA. If it doesn't, it could delay any tax refund. To update information, taxpayers should file Form SS-5, Application for a Social Security Card. It is available on SSA.gov, by phone at 800-772-1213 or at a local SSA office.
  • Address – If marriage means a change of address, the IRS and U.S. Postal Service need to know. To do that, people should complete and send the IRS Form 8822, Change of Address. Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or visiting their local post office.

Withholding

Filing status

  • Married people can choose to file their federal income taxes jointly or separately each year. While filing jointly is usually more beneficial, it's best to figure the tax both ways to find out which makes the most sense. Taxpayers should remember, if a couple is married as of December 31, the law says they're married for the whole year for tax purposes.

Scams

  • All taxpayers should be aware of and avoid tax scams. The IRS will never initiate contact using email, phone calls, social media or text messages. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

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

Source: IRS    

6 Key Tax Questions for 2023

Posted by Admin Posted on Jan 26 2023

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Right now, you may be more concerned about your 2022 tax bill than you are about how to handle your personal finances in the new year. However, as you deal with your annual tax filing, it’s a good idea to also familiarize yourself with pertinent amounts that may have changed for 2023.

Not all tax figures are adjusted for inflation. And even if they are, during times of low inflation the changes may be slight. When inflation is higher, as it currently is, the changes are generally more substantial. In addition, some tax amounts can change only with new tax legislation. Here are the answers to six commonly asked questions about 2023 tax-related figures:

1. How much can I contribute to an IRA for 2023? If you’re eligible, you can contribute up to $6,500 for 2023 to a traditional or Roth IRA (up from $6,000 for 2022). If you’re age 50 or older, you can make another $1,000 “catch-up” contribution.

2. I have a 401(k) plan through my job. How much can I contribute to it? For 2023, you can contribute up to $22,500 to a 401(k) or 403(b) plan. You can make an additional $7,500 catch-up contribution if you’re age 50 or older. (These figures for 2022 were $20,500 and $6,500, respectively).

3. I sometimes hire a babysitter and a cleaning person. Do I have to withhold and pay FICA tax on the amounts I pay them? The threshold for when a domestic employer must withhold and pay FICA for babysitters, house cleaners and other domestic employees has increased to $2,600 for 2023 (up from $2,400).

4. How much do I have to earn in 2023 before I can stop paying Social Security tax on my salary? The Social Security tax wage base is $160,200 for 2023, up from $147,000 for 2022. That means that you don’t owe Social Security tax on amounts earned above that. (You must pay Medicare tax on all amounts that you earn.)

5. On my last income tax return, my itemized deductions didn’t exceed my standard deduction. What’s my standard deduction for 2023? If the total amount of your itemized deductions (such as charitable gifts and mortgage interest) is less than your applicable standard deduction amount, itemizing won’t save you taxes. The Tax Cuts and Jobs Act eliminated the tax benefit of itemizing for many people by increasing the standard deduction and reducing or eliminating various itemized deductions. For 2023, the standard deduction amount is $27,700 for married couples filing jointly (up from $25,900 for 2022). For single filers, the amount is $13,850 (up from $12,950), and, for heads of households, it’s $20,800 (up from $19,400).

6. How much can I give to one person without having to file a gift tax return for 2023? The annual gift tax exclusion for 2023 is $17,000 (up from $16,000 in 2022). This amount is adjusted only in $1,000 increments, so it typically increases only every few years.

These are only some of the tax figures that may apply to you. For more information about your tax picture, or if you have questions, don’t hesitate to contact us.

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  

Recordatorio del IRS a empleadores: 31 de enero es el plazo para presentar formularios W-2 y otras declaraciones de salarios

Posted by Admin Posted on Jan 23 2023

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El Servicio de Impuestos Internos les recordó hoy a empleadores y otras empresas que presenten el Formulario W-2 del año tributario 2022 y otras declaraciones de salarios para el 31 de enero de 2023.

Los empleadores deben presentar copias del Formulario W-2, Declaración de salarios e impuestos (en inglés), y el Formulario W-3, Transmisión de declaraciones de salarios e impuestos (en inglés), ante la Administración del Seguro Social (SSA) para el 31 de enero. Puede encontrar información adicional acerca de cómo presentar en IRS.gov bajo el Tema 752, Presentación de Formularios W-2 y W-3.

La fecha límite del 31 de enero también se aplica al Formulario 1099-NEC, Compensación para no empleados (en inglés), presentada ante el IRS para informar la compensación de no empleados a contratistas independientes. Para obtener más información acerca de esta y otras fechas de vencimiento, consulte las instrucciones de los Formularios 1099-MISC y 1099-NEC (en inglés)PDF en IRS.gov.

Presente ahora para evitar multas

Las extensiones automáticas de tiempo para presentar los Formularios W-2 no están disponibles. El IRS solo otorgará extensiones por razones muy específicas. Los detalles se pueden encontrar en las instrucciones del Formulario 8809, Solicitud de extensión de tiempo para presentar declaraciones de información (en inglés).

Para obtener más información, lea las instrucciones de los Formularios 1099-MISC y 1099-NEC (en inglés)PDF y la página de Multas por declaraciones informativas en IRS.gov.

Prepárese

Es importante tener todo preparado para presentar a tiempo. Los empleadores deben verificar o actualizar la información de los empleados, como nombres, direcciones y números de Seguro Social o Números de Identificación Personal del Contribuyente. También deben asegurarse de que la información de la cuenta de su compañía esté actualizada y activa con la Administración del Seguro Social y solicitar los Formularios W-2 en papel si es necesario.

Ayudar con la detección de fraude

La fecha límite de presentación del Formulario W-2 y otras declaraciones de salarios permite que el IRS pueda detectar más fácilmente el fraude de reembolso al verificar los ingresos reportados en las declaraciones de impuestos individuales. Empleadores pueden apoyar este proceso y evitar multas al llenar los formularios a tiempo y sin errores. El IRS recomienda e-file (en inglés) como la manera más rápida, precisa y conveniente de presentar estos formularios. Para más información acerca de cómo presentar electrónicamente los Formularios W-2, los empleadores pueden consultar las Instrucciones e información de presentación W-2 del empleador en el sitio web de la Administración del Seguro Social.

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 reminds employers of January 31 deadline for Form W-2 and other wage statements

Posted by Admin Posted on Jan 23 2023

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The Internal Revenue Service today reminded employers and other businesses to file Tax Year 2022 Form W-2 and other wage statements by January 31, 2023.

Employers must 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 January 31. Additional information on how to file can be found in Topic No. 752, Filing Forms W-2 and W-3.

The January 31 deadline also applies to Forms 1099-NEC, Nonemployee Compensation filed with the IRS to report non-employee compensation to independent contractors. For more information on this and for other due dates, see the Instructions for Forms 1099-MISC and 1099-NECPDF.

File now to avoid penalties

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 in the general instructions on Form 8809, Application for Time to File Information Returns.

For more information, read the instructions for Forms W-2 and W-3 and the Information Return Penalties page at IRS.gov.

Be prepared

It's important to have everything prepared to file on time. Employers should verify or update employee information, like names, addresses and Social Security numbers or Individual Taxpayer Identification Numbers. They should also ensure their company's account information is current and active with the Social Security Administration and order paper Forms W-2 if needed.

Helping with fraud detection

The filing date for Form W-2 and other wage statements allows the IRS to detect refund fraud more easily by verifying income that individuals report on their tax returns. Employers can help support this process and 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. For more information on e-filing Forms W-2, employers can refer to Employer W-2 Filing Instructions & Information on the Social Security Administration's website.

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     

BEGINNING OF THE TAX FILING SEASON WITH IMPROVEMENTS

Posted by Admin Posted on Jan 19 2023

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The Internal Revenue Service today announced Monday, January 23, 2023, as the beginning of the nation's 2023 tax season when the agency will begin accepting and processing 2022 tax year returns.

More than 168 million individual tax returns are expected to be filed, with the vast majority of those coming before the April 18 tax deadline. People have three extra days to file this year due to the calendar.

With the three previous tax seasons dramatically impacted by the pandemic, the IRS has taken additional steps for 2023 to improve service for taxpayers. As part of the August passage of the Inflation Reduction Act, the IRS has hired more than 5,000 new telephone assistors and added more in-person staff to help support taxpayers.

"This filing season is the first to benefit the IRS and our nation's tax system from multi-year funding in the Inflation Reduction Act," said Acting IRS Commissioner Doug O'Donnell. "With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year. We've trained thousands of new employees to answer phones and help people. While much work remains after several difficult years, we expect people to experience improvements this tax season. That's just the start as we work to add new long-term transformation efforts that will make things even smoother in future years. We are very excited to begin to deliver what taxpayers want and our employees know we could do with this funding."

These steps took place as the IRS worked for months to prepare for the 2023 tax season. The January 23 start date for individual tax return filers allows the IRS time to perform annual updates and readiness work that are critical to ensuring IRS systems run smoothly. This is the date IRS systems officially begin accepting tax returns. Many software providers and tax professionals are already accepting tax returns; they will transmit those returns to the IRS when the agency begins accepting tax returns on January 23.

The IRS urges people to have all the information they need before they file a tax return. Filing a complete and accurate tax return can avoid extensive processing and refund delays as well as avoid the possibility of needing to file an amended tax return.

In addition, the IRS encourages people to carefully review their tax situation to make sure they don't overlook important tax credits they may be eligible for, like the Earned Income Tax Credit (EITC). The IRS has set a special day on January 27 to encourage people to make sure they understand the important benefits of the EITC, a credit that can help low- and moderate-income workers and families.

The IRS has a variety of free services available to help people. The IRS's Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs also offer free basic tax return preparation to qualified individuals. People can also get help from trusted tax professionals, commercially available tax software as well as IRS Free File, which provides free electronic filing of tax returns.

April 18 tax filing deadline in 2023

The filing deadline to submit 2022 tax returns or an extension to file and pay tax owed is Tuesday, April 18, 2023, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way as federal holidays. The due date is April 18, instead of April 15, because of the weekend and the District of Columbia's Emancipation Day holiday, which falls on Monday, April 17.

Taxpayers requesting an extension will have until Monday, October 16, 2023, to file.

Tips to help people with the 2023 tax season

The IRS recommends several things for people to keep in mind for a smooth filing experience this year:

Have the right information before filing. The IRS encourages individuals to have all the information they need before filing a complete and accurate return. Organize and gather 2022 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, Adoption Taxpayer Identification Numbers and this year's Identity Protection Personal Identification Numbers valid for calendar year 2023.

Filing an accurate tax return can help taxpayers avoid delays or later IRS notices. Sometimes this means waiting to make sure individuals have accounted for all their income and the related documents. This is especially important for people who may receive one of the various Forms 1099 from banks or other payers reporting unemployment compensationdividendspension, annuity or retirement plan distributions.

People should also remember that most income is taxable, including unemployment income, interest received or money earned from the gig economy or digital assets. Individuals should make sure they report the correct amount on their tax return to avoid processing delays.

Visit IRS.gov first for questions. The IRS reminds people to visit IRS.gov first for common questions and also to check on the status of their refunds. IRS.gov has much of the same information that IRS phone assistors have.

The IRS anticipates making significant improvements to phone service this year for taxpayers and tax professionals as more training for new phone assistors is completed in the weeks ahead. However, the IRS emphasizes it's important to note that call volumes remain at historically high levels. The IRS urges people to visit IRS.gov for the information they need.

"Our phone volumes remain at very high levels," O'Donnell said. "For faster access to information, we urge people to start with IRS.gov. From there, taxpayers can quickly access the variety of free resources available to help taxpayers anytime, day or night."

Speed refunds by filing electronically and choosing direct deposit. There are important steps people can take to help ensure their tax return and refund are processed without delays. The most important is to file electronically with direct deposit. This is still the fastest and easiest way to file and receive a refund. To avoid delays in processing, people should avoid filing paper returns wherever possible.

To speed refunds, the IRS urges people to file electronically with direct deposit information as soon as they have everything needed to file an accurate return. Individuals can use a bank account, prepaid debit card or mobile app to use direct deposit and will need to provide routing and account numbers with their return. Learn how to open an account at an FDIC-insured bank or through the National Credit Union Locator Tool.

IRS Free File available January 13

IRS Free File will open January 13 when participating providers will accept completed returns and hold them until they can be filed electronically with the IRS. Many commercial tax preparation software companies and tax professionals will also be accepting and preparing tax returns before January 23 to submit the returns when the IRS systems open.

The IRS's Free File program, available only at IRS.gov, allows taxpayers who made $73,000 or less in 2022 to file their taxes electronically for free using brand-name software provided by commercial tax filing companies. Free File Fillable forms, a part of this effort, is available to any income level and provides free electronic forms that people fill out and file themselves also at no cost.

Most refunds issued in less than 21 days; EITC refunds for many available starting February 28

The IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically, if they choose direct deposit and there are no issues with their tax return. Taxpayers should check Where's My Refund? on IRS.gov for their personalized refund status.

While the IRS will begin accepting returns January 23, the IRS cannot issue a refund that includes the Earned Income Tax Credit or Additional Child Tax Credit (ACTC) before mid-February. This is due to the 2015 PATH Act law passed by Congress, which provides this additional time to help the IRS stop fraudulent refunds from being issued.

Where's My Refund? should show an updated status by February 18 for most early EITC/ACTC filers. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by February 28 if taxpayers chose direct deposit and there are no other issues with their tax return.

Awaiting processing of previous tax returns? People can still file 2022 returns

Currently, the IRS has processed all paper and electronic individual tax year 2021 returns received prior to November 2022 that didn't require error-correction or further review. The IRS continues to work on remaining tax returns in these categories. This work will not impact tax refund timing for people filing in 2023, but the IRS continues to urge people to make sure they submit an error-free tax return this tax season to avoid delays. Check the IRS Operations page for the latest information about the status of tax returns received in 2022.

IRS.gov, IRS Online Account provide free help

Taxpayers can find online tools at IRS.gov that are easy-to-use and available anytime. Millions of people use them to help file and pay taxes, find information about their accounts, determine eligibility for tax credits and get answers to tax questions.

An IRS Online Account allows individuals to log in securely to access personal tax account information including balance, payments and tax records including adjusted gross income.

There are various types of tax return preparers, including enrolled agents, certified public accountants, attorneys and some who don't have a professional credential. Choosing a Tax Professional offers information to help people select one. The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find local preparers who currently hold professional credentials recognized by the IRS or who hold an Annual Filing Season Program Record of Completion.

The Interactive Tax Assistant provides answers to many tax law questions. For example, it can help people determine if a type of income is taxable, or if they can deduct certain expenses. It also helps people find out if life event changes make them eligible for credits they didn't qualify for in the past and provides answers for general questions, such as determining filing status, if someone can claim dependents or if they have to file a tax return.

Where's My Refund? offers taxpayers the ability to check the status of their refund within 24 hours after the IRS accepts their e-filed tax return. The Where's My Refund? tool updates once every 24 hours, usually overnight.

MilTax is a free tax resource available for the military community, offered through the Department of Defense. It includes tax preparation and electronic filing software, personalized support from tax consultants and current information about filing taxes. It's designed to address the realities of military life – including deployments, combat and training pay, housing and rentals and multi-state filings. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.

Key filing season dates

There are several important dates taxpayers should keep in mind for this year's filing season:

  • January 13: IRS Free File opens
  • January 17: Due date for tax year 2022 fourth quarter estimated tax payment.
  • January 23: IRS begins 2023 tax season and starts accepting and processing individual 2022 tax returns.
  • January 27: Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
  • April 18: National due date to file a 2022 tax return or request an extension and pay tax owed due to the Emancipation Day holiday in Washington, D.C.
  • October 16: Due date to file for those requesting an extension on their 2022 tax returns.

Before filing: Plan ahead

It's never too early to get ready for the tax-filing season. For more tips and resources, check out the Get Ready page on IRS.gov.

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

Source: IRS

IRS establece el 23 de enero como inicio oficial de la temporada de presentación de impuestos de 2023; ayuda adicional disponible para contribuyentes este año

Posted by Admin Posted on Jan 19 2023

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El Servicio de Impuestos Internos anunció que la temporada de impuestos de la nación comenzará el lunes, 23 de enero de 2023, cuando la agencia tributaria comenzará a aceptar y procesar las declaraciones del año tributario 2022.

Se espera que se presenten más de 168 millones de declaraciones de impuestos individuales, y la gran mayoría de ellas se presentarán antes de la fecha límite de impuestos del 18 de abril. Las personas tienen tres días adicionales para presentar este año debido al calendario.

Con las tres temporadas de impuestos anteriores impactadas dramáticamente por la pandemia, el IRS ha tomado medidas adicionales para 2023 para mejorar el servicio para los contribuyentes. Como parte de la aprobación en agosto de la Ley de Reducción de la Inflación, el IRS contrató a más de 5,000 nuevos asistentes telefónicos y agregó más personal en persona para ayudar a los contribuyentes.

"Esta temporada de presentación de impuestos es la primera en beneficiar al IRS y al sistema tributario de nuestra nación con financiamiento plurianual en la Ley de Reducción de la Inflación", dijo Doug O'Donnell, comisionado interino del IRS. "Con estos nuevos recursos adicionales, los contribuyentes y los profesionales de impuestos verán mejoras en muchas áreas de la agencia este año. Hemos capacitado a miles de nuevos empleados para contestar teléfonos y ayudar a las personas. Si bien queda mucho trabajo después de varios años difíciles, esperamos que las personas experimenten mejoras en esta temporada de impuestos. Ese es solo el comienzo a medida que trabajamos para agregar nuevos esfuerzos de transformación a largo plazo que facilitarán aún más las cosas en los próximos años. Estamos muy emocionados de comenzar a brindar lo que los contribuyentes quieren y nuestros empleados saben que podemos hacer con estos fondos".

Estos pasos se dieron mientras el IRS trabajaba durante meses para prepararse para la temporada de impuestos de 2023. La fecha de inicio del 23 de enero para los declarantes de impuestos individuales le da tiempo al IRS para realizar actualizaciones anuales y trabajos de preparación que son fundamentales para garantizar que los sistemas del IRS funcionen sin problemas. Esta es la fecha en que los sistemas del IRS comienzan oficialmente a aceptar declaraciones de impuestos. Muchos proveedores de software y profesionales de impuestos ya están aceptando declaraciones de impuestos; transmitirán esas declaraciones al IRS cuando la agencia comience a aceptar declaraciones de impuestos el 23 de enero.

El IRS insta a las personas a tener toda la información que necesitan antes de presentar una declaración de impuestos. Presentar una declaración de impuestos completa y precisa puede evitar demoras extensas en el procesamiento y el reembolso, así como evitar la posibilidad de tener que presentar una declaración de impuestos enmendada.

Además, el IRS alienta a las personas a revisar cuidadosamente su situación tributaria para asegurarse de no pasar por alto importantes créditos tributarios para los que pueden ser elegibles, como el Crédito tributario por ingreso del trabajo (EITC). El IRS ha establecido un día especial el 27 de enero para alentar a las personas a asegurarse de que comprendan los importantes beneficios del EITC, un crédito que puede ayudar a los trabajadores y familias de ingresos bajos y moderados.

El IRS tiene una variedad de servicios gratuitos disponibles para ayudar a las personas. Los programas Ayuda voluntaria a los contribuyentes y Asesoramiento tributario para personas de edad avanzada del IRS también ofrecen preparación básica gratuita para la declaración de impuestos a personas calificadas. Las personas también pueden obtener ayuda de profesionales de impuestos de confianza, software de impuestos disponible en el mercado, así como Free File del IRS, que proporciona la presentación electrónica gratuita de declaraciones de impuestos.

Fecha límite del 18 de abril en 2023

La fecha límite para presentar declaraciones de impuestos de 2022 es el martes, 18 de abril de 2022 para la mayoría de los contribuyentes. Por ley, los días feriados de Washington, DC impactan las fechas límite de impuestos para todos de la misma manera que los días feriados federales. La fecha de vencimiento es el 18 de abril, en lugar del 15 de abril, debido al fin de semana y al feriado del Día de la Emancipación del Distrito de Columbia, que cae el lunes 17 de abril.

Los contribuyentes que soliciten una extensión tendrán hasta el lunes, 16 de octubre de 2023 para presentar la declaración.

Consejos para ayudar a las personas con la temporada de impuestos de 2023

El IRS recomienda varias cosas que las personas deben tener en cuenta para una experiencia de presentación sin problemas este año:

Tenga la información correcta antes de presentar. El IRS alienta a todos a tener toda la información que necesitan para estar en la mejor posición para presentar una declaración completa y precisa. Organice y recopile los archivos tributarios de 2022, incluidos los números de seguro social, los números de identificación de contribuyentes individuales, los números de identificación de contribuyentes de adopción y los Número de Identificación Personal para la Protección de la Identidad válidos para el año calendario 2023. Tener una declaración de impuestos precisa puede evitar demoras o avisos posteriores del IRS. A veces, esto significa esperar para asegurarse de que las personas hayan contabilizado todos sus ingresos y los documentos relacionados. Esto es especialmente importante para las personas que pueden recibir uno de los diversos Formularios 1099 de bancos u otros pagadores que reportan distribuciones de compensación por desempleodividendospensiones, anualidades o planes de jubilación.

Las personas también deben recordar que la mayoría de los ingresos están sujetos a impuestos, incluidos los ingresos por desempleo, los intereses recibidos o el dinero ganado de la economía informal o los activos digitales. Las personas deben asegurarse de informar el monto correcto en su declaración de impuestos para evitar demoras en el procesamiento.

Visite IRS.gov primero si tiene preguntas. El IRS les recuerda a las personas que primero visiten IRS.gov para preguntas comunes y también para verificar el estado de sus reembolsos. IRS.gov tiene mucha de la misma información que tienen los asistentes telefónicos del IRS.

El IRS anticipa realizar mejoras significativas en el servicio telefónico este año para los contribuyentes y los profesionales de impuestos a medida que se complete más capacitación para los nuevos asistentes telefónicos en las próximas semanas. Sin embargo, el IRS enfatiza que es importante tener en cuenta que los volúmenes de llamadas se mantienen en niveles históricamente altos. El IRS insta a las personas a visitar IRS.gov para obtener la información que necesitan.

"Nuestros volúmenes telefónicos continúan en niveles muy altos", dijo O'Donnell. "Para un acceso más rápido a la información, instamos a las personas a comenzar con IRS.gov. Desde allí, los contribuyentes pueden acceder rápidamente a la variedad de recursos gratuitos disponibles para ayudar a los contribuyentes en cualquier momento, de día o de noche".

Acelere los reembolsos al presentar electrónicamente y escoger el depósito directo. Hay pasos importantes que las personas pueden tomar para ayudar a garantizar que su declaración de impuestos y su reembolso se procesen sin demoras. Lo más importante es presentar electrónicamente con depósito directo. Esta continúa siendo la manera más rápida y fácil de presentar y recibir un reembolso. Para evitar demoras en el procesamiento, las personas deben evitar presentar declaraciones en papel siempre que sea posible.

Para acelerar los reembolsos, el IRS insta a las personas a presentar electrónicamente la información de depósito directo tan pronto como tengan todo lo necesario para presentar una declaración precisa. Las personas pueden usar una cuenta bancaria, una tarjeta de débito prepaga o una aplicación móvil para usar el depósito directo y deberán proporcionar números de ruta y de cuenta. Aprenda cómo abrir una cuenta en un banco asegurado por la FDIC o a través de la herramienta localizador de cooperativas de crédito y ahorro.

Free File del IRS disponible a partir del 13 de enero

Free File del IRS comenzará sus operaciones el 13 de enero cuando los proveedores participantes aceptarán las declaraciones completadas y las retendrán hasta que puedan presentarse electrónicamente ante el IRS. Muchas empresas de software de preparación de impuestos comerciales y profesionales de impuestos también aceptarán y prepararán declaraciones de impuestos antes del 23 de enero para enviarlas cuando se abran los sistemas del IRS.

El programa Free File del IRS, solo disponible en IRS.gov, permite a los contribuyentes que ganaron $73,000 o menos en 2022 presentar sus impuestos electrónicamente de manera gratuita mediante el software proporcionado por empresas comerciales de presentación de impuestos. Los formularios rellenables de Free File están disponibles para cualquier nivel de ingresos y proporcionan formularios electrónicos gratuitos que las personas completan y presentan sin costo alguno.

Mayoría de reembolsos se emiten en menos de 21 días; reembolsos de EITC para muchos disponibles a partir del 28 de febrero

El IRS anticipa que la mayoría de los contribuyentes recibirán su reembolso dentro de los 21 días posteriores a la presentación electrónica, si eligen el depósito directo y no hay problemas con su declaración de impuestos. Los contribuyentes deben consultar ¿Dónde está mi reembolso? en IRS.gov para conocer su estado de reembolso personalizado.

Si bien el IRS comenzará a aceptar declaraciones el 23 de enero, el IRS no puede emitir un reembolso que incluya el Crédito tributario por ingreso del trabajo o el Crédito tributario adicional por hijos (ACTC) antes de mediados de febrero. Esto se debe a la Ley PATH de 2015 aprobada por el Congreso, que proporciona este tiempo adicional para ayudar al IRS a detener la emisión de reembolsos fraudulentos.

¿Dónde está mi reembolso? debe mostrar un estado actualizado antes del 18 de febrero para la mayoría de los primeros solicitantes de EITC/ACTC. El IRS espera que la mayoría de los reembolsos relacionados con EITC/ACTC estén disponibles en las cuentas bancarias de los contribuyentes o en tarjetas de débito antes del 28 de febrero si los contribuyentes eligieron el depósito directo y no hay otros problemas con su declaración de impuestos.

¿Espera el procesamiento de declaraciones de impuestos anteriores? Las personas aún pueden presentar declaraciones de 2022

Actualmente, el IRS ha procesado todas las declaraciones de impuestos individuales del año tributario 2021 en papel y electrónicas recibidas antes de noviembre de 2022 que no requirieron corrección de errores o revisión adicional. El IRS continúa trabajando en las declaraciones de impuestos restantes en estas categorías. Este trabajo no afectará el tiempo de reembolso de impuestos para las personas que presenten su declaración en 2023, pero el IRS continúa instando a las personas a asegurarse de que presenten una declaración de impuestos sin errores en esta temporada de impuestos para evitar demoras. Consulte la página de Operaciones del IRS para obtener la información más reciente acerca del estado del inventario recibido en 2022.

IRS.gov, Cuenta en línea del IRS proporciona ayuda gratuita

Los contribuyentes pueden encontrar herramientas en línea en IRS.gov que son fáciles de usar y están disponibles en cualquier momento. Millones de personas las usan para ayudar a presentar y pagar impuestos, encontrar información de sus cuentas, determinar la elegibilidad para créditos tributarios y obtener respuestas a sus preguntas de impuestos.

Una cuenta en línea del IRS permite a las personas iniciar sesión de manera segura para acceder a la información de la cuenta de impuestos personales, incluidos el saldo, los pagos y los archivos de impuestos, incluido el ingreso bruto ajustado.

Hay varios tipos de preparadores de declaraciones de impuestos, incluidos agentes inscritos, contadores públicos certificados, abogados y algunos que no tienen una credencial profesional. La elección de un profesional de impuestos ofrece información para ayudar a las personas a seleccionar uno. El Directorio de preparadores de declaraciones de impuestos federales con credenciales y calificaciones seleccionadas (en inglés) puede ayudar a los contribuyentes a encontrar preparadores locales que actualmente tengan credenciales profesionales reconocidas por el IRS o que tengan un Archivo de finalización del programa de temporada tributario anual.

El Asistente Tributario Interactivo proporciona respuestas a muchas preguntas de leyes tributarias. Por ejemplo, puede ayudar a las personas a determinar si un tipo de ingreso está sujeto a impuestos o si pueden deducir ciertos gastos. También ayuda a las personas a averiguar si los cambios en los eventos de la vida los hacen elegibles para créditos para los que no calificaron en el pasado y brinda respuestas a preguntas generales, como determinar el estado civil, si alguien puede reclamar dependientes o si tienen que presentar una declaración de impuestos.

¿Dónde está mi reembolso? ofrece a los contribuyentes la capacidad de verificar el estado de su reembolso dentro de las 24 horas posteriores a que el IRS acepte su declaración de impuestos presentada electrónicamente. La herramienta ¿Dónde está mi reembolso? se actualiza una vez cada 24 horas, generalmente durante la noche.

MilTax (en inglés) es un recurso tributario gratuito disponible para la comunidad militar, ofrecido a través del Departamento de la Defensa. Incluye software de preparación de impuestos y presentación electrónica, apoyo personalizado de asesores tributarios e información actualizada acerca de la presentación de impuestos. Está diseñado para abordar las realidades de la vida militar, incluidos los despliegues, pagos por combate y entrenamiento, vivienda y alquileres y presentaciones en varios estados. Los contribuyentes elegibles pueden usar MilTax para presentar electrónicamente (en inglés) una declaración de impuestos federal y hasta tres declaraciones estatales de forma gratuita.

Fechas clave de la temporada de impuestos

Hay varias fechas importantes que los contribuyentes deben tener en cuenta para la temporada de presentación de impuestos de este año.

  • 13 de enero: Free File del IRS comienza operaciones.
  • 17 de enero: Fecha de vencimiento para el pago de impuestos estimados del cuarto trimestre del año tributario 2022.
  • 23 de enero: El IRS comienza la temporada de impuestos de 2022 y comienzan a aceptar y procesar las declaraciones de impuestos individuales de 2022.
  • 27 de enero: Día de Concienciación del Crédito tributario por ingreso del trabajo para crear conciencia acerca de los créditos tributarios valiosos disponibles para muchas personas, incluida la opción de usar los ingresos del año anterior para calificar.
  • 18 de abril: Fecha límite para presentar la declaración de impuestos de 2022 o solicitar una extensión y pagar los impuestos adeudados debido al día feriado del Día de la Emancipación en Washington, DC.
  • 16 de octubre: Fecha límite para presentar para aquellos que solicitan una extensión en sus declaraciones de impuestos de 2022.

Planifique antes de presentar

Nunca es demasiado temprano para prepararse para la temporada de presentación de impuestos que se avecina. Para obtener más consejos y recursos, consulte la página Prepárese en IRS.gov.

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

Revisar créditos y deducciones tributarios ahora ayuda a los contribuyentes a presentar impuestos exitosamente

Posted by Admin Posted on Jan 16 2023

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Probablemente la mayoría de las personas solo piensan en los créditos y deducciones tributarias cuando completan su declaración de impuestos. Sin embargo, con un poco de planificación anticipada se puede facilitar el proceso de presentación. Al familiarizarse ahora, los contribuyentes pueden comprender claramente qué créditos y deducciones tienen sentido para ellos y los archivos necesarios para demostrar su elegibilidad.

Aquí hay algunos datos acerca de créditos y deducciones que pueden ayudar con la planificación tributaria durante todo el año.

Algunas cosas que debe saber acerca de las deducciones:

  • Las deducciones pueden reducir la cantidad de ingresos de un contribuyente antes de que calculen el impuesto que adeudan.
  • La mayoría de la gente toma la deducción estándar. La deducción estándar se ajusta cada año según la inflación. El monto de la deducción estándar depende del estado civil del contribuyente, la edad, si es ciego y si otra persona lo reclama como dependiente.
  • Algunas personas están obligadas a detallar sus deducciones, y algunas personas pueden optar por hacerlo porque reduce su ingreso tributable más que la deducción estándar.
  • Como regla general, si las deducciones detalladas de un contribuyente son mayores que su deducción estándar, debe detallarlas.

Cosas que debe saber acerca de los créditos tributarios:

  • Los contribuyentes pueden restar créditos tributarios de la cantidad total de impuestos que adeudan.
  • Algunos créditos tributarios, como el Crédito tributario por ingreso del trabajo, son incluso reembolsables, lo que significa que un contribuyente podría obtener un reembolso incluso si no adeuda ningún impuesto.
  • Para reclamar un crédito, los contribuyentes deben llevar archivos que demuestren su elegibilidad para el mismo. Reclamar correctamente los créditos tributarios puede reducir los impuestos adeudados y aumentar los reembolsos.
  • Los contribuyentes pueden verificar ahora si califican para reclamar algún crédito el próximo año en su declaración 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   

Filing Deadline and Payment Options

Posted by Admin Posted on Jan 16 2023

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If you're trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies from the IRS Forms page under Tax Tools on our website. If you find you need more time to finish your return, you can get a six-month extension of time to file using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. And if you have trouble paying your tax bill, the IRS has several payment options available.

The extension will give you extra time to get the paperwork to the IRS, but it does not extend the time you have to pay any tax due. You have to make an accurate estimate of any tax due when you request an extension. You can also send a payment for the expected balance due, but this is not required to get the extension. However, you will owe interest on any amounts not paid by the April 15 deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.

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   

5 Tips for Early Preparation

Posted by Admin Posted on Jan 16 2023

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

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

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

If you have any questions regarding accounting, domestic taxation, 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   

Business or Hobby?

Posted by Admin Posted on Jan 16 2023

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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:

  1. You carry on the activity in a business-like manner,
  2. The time and effort you put into the activity indicate you intend to make it profitable,
  3. You depend on income from the activity for your livelihood,
  4. Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business),
  5. You change your methods of operation in an attempt to improve profitability,
  6. You, or your advisors, have the knowledge needed to carry on the activity as a successful business,
  7. You were successful in making a profit in similar activities in the past,
  8. The activity makes a profit in some years, and
  9. 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, 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      

Check Withholding to Avoid a Tax Surprise

Posted by Admin Posted on Jan 16 2023

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Whether or not you owed taxes or received a refund last year, check your tax withholding to avoid not having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. This is even more important due to the recent changes to the tax law for 2018 and beyond. On the other end, if you had a large refund you lost out on having the money in your pocket throughout the year. Changing jobs, getting married or divorced, buying a home or having children can all result in changes in your tax calculations.

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

If you have any questions regarding 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  

Foreign Income

Posted by Admin Posted on Jan 12 2023

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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.

An important point to remember is that citizens living outside the U.S. may be able to exclude up to $102,100 for 2017 and $103,900 for 2018, of their foreign source income if they meet certain requirements. However, the exclusion does not apply to payments made by the U.S. government to its civilian or military employees living outside the U.S. Please contact us if you feel you may have earned foreign income to learn more!

If you have any questions regarding 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  

Tips and Taxes

Posted by Admin Posted on Jan 10 2023

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Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income, advises the IRS.

As taxable income, these tips are subject to federal income, Social Security and Medicare taxes, and may be subject to state income tax as well.

You must keep a running daily log of all your tip income and tips paid out. This includes cash that you receive directly from customers, tips from credit card charges from customers that your employer pays you, the value of any non-cash tips such as tickets or passes that you receive, and the amount of tips you paid out to other employees through tip pools or tip splitting and the names of those employees.

You can use IRS Publication 1244, Employee's Daily Record of Tips and Report of Tips to Employer, to record your tip income. For a free copy of Publication 1244, call the IRS toll free at 1-800-TAX-FORM (1-800-829-3676).

If you receive $20 or more in tips in any one month, you should report all your tips to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes and to report the correct amount of your earnings to the Social Security Administration (which will affect your benefits when you retire or if you become disabled, or your family's benefits if you die).  Contact us so your wages are properly reported!

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      

Earned Income Tax Credit for Certain Workers

Posted by Admin Posted on Jan 10 2023

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Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

The IRS estimates that 25 percent of people who qualify don't claim the credit and at the same time, there are millions of Americans who have claimed the credit in error, many of whom simply don't understand the criteria.

EITC is based on the amount of your earned income and the number of qualifying children in your household. If you have children, they must meet the relationship, age and residency requirements. And, you must file a tax return to claim the credit.

Its easier than ever to find out if you qualify for EITC using the online tool, EITC Assistant. Please contact us for more information!

Are you eligible for any of these tax credits?

Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns, advises the IRS. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Below are some of the credits taxpayers could be eligible to claim:

  • Earned Income Tax Credit This is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the EITC. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. For more information, see IRS Publication 596, Earned Income Credit (EIC).
  • Child Tax Credit This credit is for people who have a qualifying child under age 17. The maximum amount of the credit is $1,400 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see Pub. 972, Child Tax Credit.
  • Child and Dependent Care Credit This is for expenses paid for the care of children under age 13, or for a disabled spouse or dependent, to enable the taxpayer to work. There is a limit to the amount of qualifying expenses. The credit is a percentage of those qualifying expenses. For more information, see Pub. 503, Child and Dependent Care Expenses.
  • Adoption Credit Adoptive parents can take a tax credit of up to $13,570 for 2017 and $13,810 for 2018 for qualifying expenses paid to adopt an eligible child. For more information, see Form 8839, Qualified Adoption Expenses.
  • Credit for the Elderly and Disabled This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are U.S. citizens or residents. There are income limitations. For more information, see Pub.524, Credit for the Elderly or the Disabled.
  • Education Credits There are two credits available, the American Opportunity Credit (formerly called the Hope Credit) and the Lifetime Learning Credit, for people who pay higher education costs. The American Opportunity Credit is for the payment of the first four years of tuition and related expenses for an eligible student for whom the taxpayer claims as a dependent on the tax return. The Lifetime Learning Credit is available for all post-secondary education for an unlimited number of years. A taxpayer cannot claim both credits for the same student in one year. For more information, see Publication 970, Tax Benefits for Education.
  • Retirement Savings Contribution Credit Eligible individuals may be able to claim a credit for a percentage of their qualified retirement savings contributions, such as contributions SIMPLE plan. To be eligible, you must be at least age 18 at the end of the year and not a full-time student or an individual for whom someone else claims a personal exemption. Also, your adjusted gross income (AGI) must be below a certain amount. For more information, see chapter three in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

There are other credits available to eligible taxpayers.  Please contact us so we may analyze your specific situation, and offer advice.

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    

Organizational and Start Up Costs

Posted by Admin Posted on Jan 10 2023

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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 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 Reuter      

Individuals Living or Working in U.S. Territories/Possessions

Posted by Admin Posted on Dec 19 2022

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An individual who has income from American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, Puerto Rico or the U.S. Virgin Islands will usually have to file a tax return with the tax department of one of these territories. In some situations, you may have to determine if you are a resident or a nonresident of the territory. For forms and advice on filing a territory tax return, contact that territory's tax department. The addresses and telephone numbers for the tax departments of the U.S. territories may be found in Publication 570, Tax Guide for Individuals With Income From U.S. Possessions. Additional information about the U.S. territories can be found at State and Local Government on the Net.

If you have income from one of these U.S. territories, you may have to file a U.S. tax return only, a territory tax return only, or both returns. This generally depends on whether you are considered a bona fide resident of one of the U.S. territories. In some cases, you may have to file a U.S. return, but be able to exclude income earned in a territory from U.S. tax. Filing requirements for specific U.S. territories are explained in Publication 570, Tax Guide for Individuals With Income From U.S. Possessions.

Possession Exclusion for Bona Fide Residents  of American Samoa

Currently, the possession exclusion - under Internal Revenue Code (IRC) section 931 - applies only to U.S. citizens or resident aliens who are bona fide residents of American Samoa. If you qualify for this exclusion, you may have to attach Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, to their U.S. federal individual income tax returns.

Individuals in the following U.S. territories are NOT eligible for the possession exclusion: Baker Island, the CNMI, Guam, Howland Islands, Jarvis Island, Johnston Island, Kingman Reef, Midway Islands, Palmyra, Puerto Rico, the U.S. Virgin Islands, and Wake Island.

Please refer to Publication 570, Tax Guide for Individuals With Income From U.S. Possessions, for the exclusions, credits, and deductions which apply to residents of the CNMI, Guam, Puerto Rico, and the U.S. Virgin Islands.

Determining Residency Status in U.S. Territories

IRC 937 establishes the criteria for determining the residency of an individual in American Samoa, the CNMI, Guam, Puerto Rico, and the U.S. Virgin Islands, and for determining whether income is sourced in a U.S. territory. An individual is generally considered a bona fide resident of a U.S. territory if he or she (1) is physically present in the territory for 183 days during the taxable year, (2) does not have a tax home outside the territory during the tax year, and (3) does not have a closer connection to the U.S. or a foreign country. However, U.S. citizens and resident aliens are permitted certain exceptions to the 183-day rule. For a detailed explanation of the U.S. territory residency rules and income sourcing rules, please refer to Publication 570, Tax Guide for Individuals With Income From U.S. Possessions.

IRC 937 also establishes the filing requirement for Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession for individuals who became or ceased to be a bona fide resident of a U.S. Territory. If you are required to file Form 8898 for any tax year and fail to file it, you may be subject to a penalty of $1,000.

Individuals who are required to file Form 8898 generally must do so by the due date (including extensions) for filing Form 1040 or Form 1040-NR. Form 8898 must be filed by itself; do not file it with Form 1040 or Form 1040-NR. Refer to Residents of U.S. Possessions-Form 8898 Bona Fide Residence for more information.

Self-Employment Tax

A U.S. citizen who is self-employed in a U.S. territory must pay self-employment tax on net self-employment earnings of $400 or more. This rule applies whether or not the earnings are excludable from gross income (or whether or not a U.S. income tax return must otherwise be filed).

Your payments of self-employment tax contribute to your coverage under the social security system. Social security coverage provides you with old age, survivor, and disability benefits and hospital insurance.

If you are a resident of American Samoa, the CNMI, Guam, Puerto Rico, or the U.S. Virgin Islands who has net self-employment income and you do not have to file Form 1040 with the United States, use Form 1040-SS, U.S. Self-Employment Tax Return, to figure your self-employment tax.

Note: If you are a resident of Puerto Rico, you can file Form 1040 (PR) instead of Form 1040-SS. Form 1040 (PR) is the Spanish-language equivalent of Form 1040-SS. These forms must be filed with the U.S. Internal Revenue Service at the address shown in the instructions for Form 1040 (PR) and Form 1040-SS.

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         

Recordatorio para dueños de IRAs de 70½ años: distribuciones benéficas calificadas son excelentes opciones para hacer donaciones no tributables a organizaciones benéficas

Posted by Admin Posted on Dec 19 2022

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El Servicio de Impuestos Internos les recordó hoy a los dueños de un arreglo individual de ahorro para la jubilación (IRA, por sus siglas en inglés) de 70½ años o más, su opción de transferir hasta $100,000 a organizaciones benéficas, no sujetas a impuestos, cada año.

Estas transferencias, conocidas como distribuciones benéficas calificadas (QCD, por sus siglas en inglés), ofrecen a los estadounidenses mayores elegibles una excelente manera de donar fácilmente a la caridad antes de fin de año. Además, para aquellos que tienen al menos 72 años, las QCD cuentan para la distribución mínima requerida (RMD) del dueño de un IRA para el año.

Cómo configurar una QCD

El IRS insta a cualquier dueño de un IRA que desee hacer una QCD para 2022 a comunicarse con su fideicomisario de IRA pronto para que el fideicomisario tenga tiempo de completar la transacción antes de fin de año.

Normalmente, las distribuciones de un IRA están sujetas a impuestos cuando se reciben. Pero con una QCD, estas distribuciones no están sujetas a impuestos, siempre y cuando se paguen directamente de un IRA a una organización benéfica elegible.

Las QCD se pueden hacer electrónicamente, directamente a la organización benéfica o mediante cheque, pagaderos a la organización benéfica.

Una distribución de un IRA, como un pago electrónico realizado directamente al dueño de un IRA, no cuenta como una QCD. Del mismo modo, un cheque pagadero al dueño de un IRA no es una QCD.

Cada año, un dueño de un IRA, de 70½ años o más, puede excluir de los ingresos brutos hasta $100,000 de estas QCD. Para una pareja casada, si ambos cónyuges tienen 70½ años o másy si ambos tienen un IRA, cada cónyuge puede excluir hasta $100,000 para un total de hasta $200,000 por año.

La opción QCD está disponible independientemente si un dueño de IRA elegible detalla las deducciones en el Anexo A. Los montos transferidos no están sujetos a impuestos y no hay deducción disponible para la transferencia.

Informar correctamente

Una QCD 2022 debe reportarse en la declaración de impuestos federales de 2022, normalmente presentada durante la temporada de presentación de impuestos de 2023.

A principios de 2023, el dueño de un IRA recibirá el Formulario 1099-R (en inglés) de su fideicomisario de IRA, que muestra cualquier distribución de IRA durante el año calendario 2022, incluidas las distribuciones regulares y las QCD. La distribución total figura en la casilla 1 de ese formulario. No hay un código especial para una QCD.

Al igual que otras distribuciones de IRA, las QCD se muestran en la línea 4 del Formulario 1040 o el Formulario 1040-SR. Si parte o la totalidad de una distribución IRA es una QCD, ingrese el monto total de la distribución IRA en la Línea 4a. Esta es la cantidad que se muestra en la casilla 1 del Formulario 1099-R.

Luego, si el monto total de la distribución es una QCD, ingrese 0 en la línea 4b. Si solo una parte de ella es una QCD, la parte imponible restante normalmente se ingresa en la línea 4b.

De cualquier manera, asegúrese de ingresar "QCD" junto a la línea 4b. Más detalles estarán en las instrucciones finales del Formulario 1040 de 2022.

Obtenga un recibo

Las QCD no son deducibles como contribuciones caritativas en el Anexo A. Pero al igual que con las contribuciones deducibles, el donante debe obtener un acuse de recibo por escrito de su contribución de la organización caritativa, antes de presentar su declaración.

En general, el acuse de recibo debe indicar la fecha y el monto de la contribución e indicar si el donante recibió algo de valor a cambio de su contribución. Para obtener más detalles, consulte la sección de Recibo en la Publicación 526, Donaciones caritativas (en inglés), disponible en IRS.gov.

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    

Tax Treaties

Posted by Admin Posted on Dec 19 2022

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The United States has income tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries may be eligible to be taxed at a reduced rate or exempt from U.S. income taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income.

If the treaty does not cover a particular kind of income, or if there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return. Also see Publication 519, U.S. Tax Guide for Aliens, and Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

Many of the individual states of the United States tax the income of their residents. Some states honor the provisions of U.S. tax treaties and some states do not. Therefore, you should consult the tax authorities of the state in which you live to find out if that state taxes the income of individuals and, if so, whether the tax applies to any of your income, or whether your income tax treaty applies in the state in which you live.

Tax treaties generally reduce the U.S. taxes of residents of foreign countries as determined under the applicable treaties. With certain exceptions, they do not reduce the U.S. taxes of U.S. citizens or U.S. treaty residents. U.S. citizens and U.S. treaty residents are subject to U.S. income tax on their worldwide income.

Treaty provisions generally are reciprocal (apply to both treaty countries). Therefore, a U.S. citizen or U.S. treaty resident who receives income from a treaty country and who is subject to taxes imposed by foreign countries may be entitled to certain credits, deductions, exemptions, and reductions in the rate of taxes of those foreign countries. U.S. citizens residing in a foreign country may also be entitled to benefits under that country's tax treaties with third countries.

Foreign taxing authorities sometimes require certification from the U.S. Government that an applicant filed an income tax return as a U.S. citizen or resident, as part of the proof of entitlement to the treaty benefits. For information on this, refer to Form 8802, Application for United States Residency Certification – Additional Certification Requests. In addition, refer to the discussion at Form 6166 - Certification of U.S. Tax Residency.

Note: You should carefully examine the specific treaty articles that may apply to find if you are entitled to a:

  • tax credit,
  • tax exemption,
  • reduced rate of tax, or
  • other treaty benefit or safeguard.

The Effect of Tax Treaties

Residency for treaty purposes is determined by the applicable treaty.

If you are treated as a resident of a foreign country under a tax treaty, and not treated as a resident of the United States under the treaty (i.e., not a dual resident), you are treated as a nonresident alien in figuring your U.S. income tax. For purposes other than figuring your tax, you will be treated as a U.S. resident. For example, the rules discussed here do not affect your residency time periods to determine if you are a resident alien or nonresident alien during a tax year.

If you are a resident of both the United States and another country under each country's tax laws, you are a dual resident taxpayer. If you are a dual resident taxpayer, you can still claim the benefits under an income tax treaty. The income tax treaty between the two countries must contain a provision that provides for resolution of conflicting claims of residence.

If you are a dual resident taxpayer and you claim treaty benefits as a resident of the other country, you must timely file a return (including extensions) using Form 1040NR, U.S. Nonresident Alien Income Tax Return or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, and compute your tax as a nonresident alien. You must also attach a fully completed Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)

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 if I receive an IRS notice that says something is wrong with my 2021 tax return?

Posted by Admin Posted on Dec 19 2022

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Don’t panic! It is important to remember – not all correspondence from the IRS necessarily contains bad news.

It is the IRS’s responsibility to make sure your tax return is as accurate as it can be while it is processed and verified. These verification checks can include anything from finding and fixing basic mathematical errors to checking for required attachments, like schedules that support a credit or deduction you are claiming. The IRS also checks to confirm the amounts shown on your return match what banks, employers, third parties, and other government agencies have reported. In some cases, these checks may result in identifying a credit you could potentially claim to get a bigger refund, when the IRS determines you may be eligible for it.

The IRS has recently suspended some of its notices, but not all. Most IRS correspondence, if it relates to a question about your current tax return while it is being processed are still being sent, with the exception of the unfiled tax return requests listed in the IRS chart. Here’s what you need to know if you did receive one of these notices prior to the IRS suspension.

What should I do if I get tax return processing type of correspondence?

Open it, read it, and keep it in a safe place (in case you need it later). IRS correspondence always tells you why the IRS is writing, what topic it is about, and either what you need to do in response and by when, or it will tell you that you don’t need to reply at all.

Letters and notices aren’t always easy to understand. So, here are three resources we recommend you use if you want more help understanding that particular notice or letter:

Note: To find the correspondence number look in either the top or bottom right-hand corner. They will generally be preceded by the letters CP or LTR.

Do I need to reply?

Whether you need to reply or not will depend on the issue.

If you agree with the information or change listed, sometimes there is no need to reply. Other times, even if you do agree, you may need to provide specific information to resolve the issue, particularly if you need to verify your identity or if a schedule is missing. In most tax return processing situations, you generally have 60 days to reply, but be sure to go by the date specified in your letter.

If you disagree, the letter should outline how to dispute the issue, including what action(s) is needed and a date to complete the action by, as well information about your Taxpayer Rights.

Whether you agree or not, if it requires a reply – do not delay! You must reply by the date required or you may lose certain resolution options or may also have to pay in full before the IRS will consider your position. See more on this below.

When to respond

If your notice or letter requires a response by a specific date, there are many reasons you’ll want to comply. Here are just a few:

  • minimize additional interest and penalty charges;
  • prevent further action from being taken on the account or against you; and
  • preserve your appeal rights if you don’t agree.

If you need more time to respond than indicated, contact the IRS using the contact information provided.

How and where to reply

The correspondence should tell you exactly where to send your response, whether it’s to a mailing address or fax number. Follow the instructions.

What if I want to talk to someone?

Each notice or letter should include contact information. The telephone number is usually found in the upper right-hand corner.

If a specific employee is working your case, it will show a specific phone number for that employee or the department manager. Otherwise, it will show the IRS toll-free number (800-829-1040).

Be aware COVID-19 continues to cause delays for IRS services, including live phone support and responding to correspondence. The IRS encourages taxpayers to make use of the IRS.gov website and its online resources, like Tax Law Questions to get questions answered and find resources to resolve problems.

Important: You’ll want to check the IRS’s Help for taxpayers and tax professionals: Special filing season alerts page for announcements related to processing 2021 tax returns before you call in case the information you need is located there.

The best days to call the IRS are Wednesdays, Thursdays, and Fridays. The IRS advises that wait times are the longest on Mondays and Tuesdays, and close to the April filing deadline.

Have a copy of your tax return and the correspondence available when you call.

Wait – I still need help

You can generally resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional.

If you can’t afford to hire a tax professional to assist you, you may be eligible for free or low cost representation from an attorney, certified public accountant, or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). In addition, LITCs can help if you speak English as a second language and need help understanding the notice or letter. For more information or to find an LITC near you, see the LITC page or IRS Publication 4134, Low Income Taxpayer Clinic List.

If your IRS problem is causing you financial hardship, see Can TAS help me with my tax issue?.

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     

Selling Your Home

Posted by Admin Posted on Dec 19 2022

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If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years.

To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale. You also must not have excluded gain on another home sold during the two years before the current sale.

If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualify for the exclusion. But both of you would have to meet the use test to claim the $500,000 maximum amount.

To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before the sale. The two years may consist of 24 full months or 730 days. Short absences, such as for a summer vacation, count as periods of use. Longer breaks, such as a one-year sabbatical, do not.

If you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home due to health, a change in place of employment, or certain unforeseen circumstances. Unforeseen circumstances include, for example, divorce or legal separation, natural or man-made disaster resulting in a casualty to your home, or an involuntary conversion of 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   

U.S. Citizens and Resident Aliens Abroad

Posted by Admin Posted on Dec 19 2022

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If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. You are subject to tax on worldwide income from all sources and must report all taxable income and pay taxes according to the Internal Revenue Code.

Many Americans living abroad qualify for special tax benefits, such as the foreign earned income exclusion and foreign tax credit, but they can only get them by filing a U.S. return. For further details, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

U.S. taxpayers who own foreign financial accounts must report those accounts to the U.S. Treasury Department, even if the accounts don't generate any taxable income. Taxpayers should file a Report of Foreign Bank and Financial Accounts (FBAR) electronically by April 18, 2022, using the BSA E-Filing System. For further details see Report of Foreign Bank and Financial Accounts (FBAR).

Taxpayers must also report virtual currency transactions to the IRS on their tax returns; these transactions are taxable by law just like any other property transaction. For more information see Virtual Currencies.

When to File

If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic 2-month extension to file your return without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15. For calendar year 2021 you must pay any tax due by April 18, 2022, or interest will be charged.

If you qualify for the 2-month extension but are unable to file your return by the automatic 2-month extension date, you can request an additional extension to October 15 by filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, before the automatic 2-month extension date. If you are allowed extensions to June 15 and/or October 15, you will owe interest on any unpaid tax amount from the original due date of the return (April 18, 2022, for calendar year 2021).

Where to File

If you are a U.S. citizen or resident alien (including a green card holder) and you live in a foreign country, and you are:

Requesting a refund, or no check or money order enclosed, mail your U.S. tax return to:

Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215
USA

Enclosing a check or money order, mail your U.S. tax return to:

Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201-1303
USA

Electronic Filing (e-file)

Taxpayers with an AGI (Adjusted Gross Income) within a specified threshold can electronically file their tax return for free using Free File. Taxpayers with an AGI greater than the specified threshold can use the Free File Fillable Forms, the e-file by purchasing commercial software, or the Authorized IRS e-file Provider Locator Service. A limited number of companies provide software that can accommodate foreign addresses.

Taxpayer Identification Number

Each taxpayer who files, or is claimed as a dependent on, a U.S. tax return will need a social security number (SSN) or individual taxpayer identification number (ITIN). To obtain an SSN, use form SS-5, Application for a Social Security Card. To get form SS-5, or to find out if you are eligible for a social security card, contact a Social Security office or visit Social Security International Operations. If you, or your spouse, are not eligible for a SSN, you can obtain an ITIN by filing form W-7 along with appropriate documentation.

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 the Inflation Reduction Act Means for You

Posted by Admin Posted on Dec 19 2022

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The Inflation Reduction Act, which includes expanded or extended tax credits and additional funding for the IRS, was signed into law on August 16, 2022.

How could the Inflation Reduction Act impact you when filing your next tax return?

Below is a simplified summary of how the Inflation Reduction Act may affect you.

Health Care

The Inflation Reduction Act includes:

  • Extension of Affordable Care Act (ACA) funding through 2025. This funding, which was due to expire at the end of 2022, will allow consumers to continue to buy insurance with lower premiums through the Health Insurance Marketplace (also referred to as the Marketplace or the Exchange).
  • Extension of the American Rescue Plan Act (ARPA) temporary exception that allows taxpayers with incomes above 400 percent of the Federal Poverty Level to qualify for the Premium Tax Credit.
  •  

Energy Efficient Home Improvement Credit

The Nonbusiness Energy Property Credit was extended through 2032 and renamed the Energy Efficient Home Improvement Credit.

Starting in 2023, the credit will be equal to 30 percent of the costs of all eligible home improvements made during the year. Additionally:

  • The $500 lifetime limit on the total credit amount will be replaced with a $1,200 annual limit.
  • The annual limits for specific types of qualifying improvements will be:
    • $150 for home energy audits;
    • $250 for any exterior door ($500 total for all exterior doors) that meet applicable Energy Star requirements;
    • $600 for exterior windows and skylights that meet Energy Star most efficient certification requirements;
    • $600 for other qualified energy property, including central air conditioners; electric panels and certain related equipment; natural gas, propane, or oil water heaters; oil furnaces; water boilers;
    • $2,000 for heat pump and heat pump water heaters; biomass stoves and boilers. This category of improvement is not limited by the $1,200 annual limit on total credits or the $600 limit on qualified energy property; and
    • Roofing will no longer qualify.

For eligible home improvements using products placed in service after 2024, no credit will be allowed unless the manufacturer of any purchased item creates a product identification number for the product and the taxpayer claiming the credit includes the number on his or her return for that tax year.

Note: For 2022, the prior credit rules apply.

 

Residential Clean Energy Credit

The Residential Energy Efficient Property Credit, now called the Residential Clean Energy Credit, was previously scheduled to expire at the end of 2023 but has been extended through 2034. The Inflation Reduction Act also increased the credit amount, with a phaseout of the applicable percentage.

Amount of Credit:

  • 30 percent for 2023-2032;
  • 26 percent for 2033; and
  • 22 percent for 2034.

The credit no longer applies to biomass furnaces and water heaters, now covered under the Energy Efficient Home Improvement Credit. Starting in 2023, however, the new credit will apply to battery storage technology with a capacity of at least three kilowatt hours.

Clean Vehicle Credits

The Inflation Reduction Act extends the Clean Vehicle Credit until the end of 2032 and creates new credits for previously-owned clean vehicles and qualified commercial clean vehicles.

 

Tax credits include up to:

  • $7,500 for the purchase of new qualified commercial clean vehicles;
  • $40,000 for vehicles over 14,000 pounds; and
  • the lesser of 30 percent of the price of used electric vehicles or $4,000.

Limitations apply based on the manufacturer’s suggested retail price of the vehicle. There are also limitations for the new vehicle credit based on adjusted gross income (AGI) thresholds – for single or married filing separately taxpayers, the limit is $150,000; for taxpayers filing as head of household, the limit is $225,000; and for married filing jointly, or surviving spouse taxpayers, the limit is $300,000. Reduced AGI limitations apply to the used vehicle credit.

Starting in 2024, the Inflation Reduction Act establishes a mechanism that will allow car buyers to transfer the credit to dealers at the point of sale so that it can directly reduce the purchase price.

Taxes and IRS Funding

The Inflation Reduction Act also includes:

  • 15 percent minimum tax on corporations with over $1 billion in revenue;
  • 1 percent excise tax on corporate share buybacks; and
  • About $79 billion of additional funding over ten years for the IRS.

The IRS is preparing a plan showing how it expects to use the additional funding. In a recent letter to all Members of the Senate, IRS Commissioner Charles Rettig stated, “These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans…Other resources will be invested in employees and IT systems that will allow us to better serve all taxpayers, including small businesses and middle-income taxpayers.”

 

More information

The Inflation Reduction Act makes these and several additional changes to the Internal Revenue Code.  While these changes may not impact your individual tax bill, the extended tax credits may save you money at tax 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: TAS    

Car Donations

Posted by Admin Posted on Dec 19 2022

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The IRS reminds taxpayers that specific rules apply for taking a tax deduction for donating cars to charities. If the claimed value of the donated motor vehicle, boat or plane exceeds $500, you can deduct the smaller of the vehicle's FMV on the date of the contribution or the gross proceeds received from the sale of the vehicle.

People who want to take a deduction for the donation of their vehicle on their tax return should take quite a few steps, but here is the most obvious:

Check that the Organization is Qualified.

Taxpayers must make certain that they contribute their car to an eligible organization; otherwise, their donation will not be tax deductible. Taxpayers can search Tax Exempt Organization Search to check that an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified.  Please contact us if you're considering a car donation for your tax return!

If you have any questions regarding accounting, domestic taxation, 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  

Semana nacional de Seguridad Tributaria: Elegir un PIN de Protección de Identidad único agrega seguridad adicional para contribuyentes

Posted by Admin Posted on Dec 19 2022

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Como parte de un esfuerzo más amplio para aumentar la seguridad, el Servicio de Impuestos Internos y los socios de la Cumbre de Seguridad recordaron hoy a los contribuyentes que podrían obtener protección adicional a partir de enero si se unen al programa de Número de identificación personal de protección de identidad (IP PIN, por sus siglas en inglés) de la agencia.

Cualquier persona que tenga un Número de Seguro Social (SSN) o un Número de identificación personal del contribuyente (ITIN, por sus siglas en inglés) y pueda verificar su identidad es elegible para inscribirse en el programa IP PIN. Más de 6.6 millones de contribuyentes ahora se protegen contra el robo de identidad relacionado con los impuestos al participar en el programa IP PIN. El año pasado, el IRS hizo cambios al programa para facilitar la participación de más contribuyentes. La manera más rápida y sencilla de recibir un IP PIN es mediante la herramienta Obtenga un IP PIN, que estará disponible en enero.

El recordatorio de hoy marca el cuarto día de la Semana Nacional de Seguridad Tributaria, que se extiende hasta el 2 de diciembre. La Cumbre de Seguridad patrocina esta celebración anual como parte de un esfuerzo mayor entre el IRS, las agencias tributarias estatales, así como las industrias de software de impuestos y profesionales de impuestos de la nación.

La Cumbre de Seguridad se estableció en 2015 para proteger a los contribuyentes y al sistema tributario de la nación contra el robo de identidad relacionado con los impuestos. Esta colaboración única entre los sectores público y privado ha aumentado las defensas mutuas contra los delincuentes que intentan presentar declaraciones de impuestos fraudulentas y robar reembolsos.

Una de las características críticas del sistema del IRS involucra un IP PIN, que es un número de seis dígitos asignado a los contribuyentes elegibles para ayudar a prevenir el uso indebido de su número de Seguro Social o Número de Identificación Personal del Contribuyente en declaraciones federales de impuestos fraudulentas.

Un IP PIN es conocido únicamente por el contribuyente y el IRS. Inicialmente diseñado para víctimas confirmadas de robo de identidad relacionado con los impuestos, el programa IP PIN se amplió en 2021 para incluir a cualquier contribuyente de todo el país que quiere la protección y seguridad adicional de usar un IP PIN para presentar declaraciones de impuestos al IRS.

"Evitar que alguien presente una declaración de impuestos a nombre de otra persona es la razón principal por la que queremos que las personas tengan este código especial," dijo Doug O'Donnell, Comisionado interino del IRS. "Alentamos a las personas a solicitar el código cuando se abra el sistema en enero. Este paso provee una capa adicional de protección para los contribuyentes y sus declaraciones de impuestos."

Un IP PIN ayuda al IRS a verificar la identidad de un contribuyente y aceptar sus declaraciones federales de impuestos, independientemente de si se presentan electrónicamente o en papel. La herramienta en línea Obtenga un IP PIN en IRS.gov muestra el IP PIN del contribuyente. Cualquier contribuyente participante usará la herramienta en cada año subsiguiente para obtener un nuevo número.

El IRS insta a cualquier solicitante de IP PIN que fue rechazado durante el proceso de autenticación de identidad, a que intente solicitarlo nuevamente en 2023. El proceso de autenticación se ha refinado y mejorado, lo que permite que muchos contribuyentes excluidos en el pasado tengan más posibilidades de aprobar el proceso de autenticación.

  • con fotografía, usan esta información para vendérsela a otros, o presentar declaraciones de impuestos fraudulentas, abrir cuentas de crédito y más.
  • Las víctimas de robo de identidad aún deben completar una declaración jurada de robo de identidad. Cualquier víctima confirmada de robo de identidad relacionada con los impuestos aún debe presentar el Formulario 14039 al IRS si la agencia rechaza su declaración de impuestos presentada electrónicamente debido a una presentación duplicada del SSN. El IRS entonces investigará su caso. Una vez que se elimine la declaración de impuestos fraudulenta de su cuenta, el IRS enviará automáticamente un IP PIN a la víctima confirmada al comienzo del siguiente año calendario. Debido a los riesgos de seguridad, las víctimas confirmadas de robo de identidad no pueden optar por no participar en el programa IP PIN.

Opciones para personas que no pueden pasar el proceso de autenticación en línea

Hay dos opciones disponibles para las personas que no pueden pasar el proceso de autenticación de identidad en línea del IRS. Uno se trata de presentar el Formulario 15227 y el otro requiere una visita a un Centro de Asistencia al Contribuyente (TAC) del IRS. A diferencia de la opción en línea, ambas opciones implican, por razones de seguridad, un retraso en el recibo de un IP PIN.

Formulario 15227: Para la tramitación del año 2023, las personas con un ingreso bruto ajustado de $73,000 o menos y las que presentan una declaración conjunta con un AGI de $146,000 o menos con acceso a un teléfono pueden completar el Formulario 15227PDF y enviarlo por correo o por fax al IRS. Un representante del IRS les llamará entonces para verificar su identidad con una serie de preguntas. Los contribuyentes que elijan esta opción y que pasen el proceso de autentificación de la identidad recibirán, por lo general, su IP PIN en aproximadamente un mes.

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    

What’s Your Taxpayer Filing Status? & Have You Considered A Cost Segregation Study?

Posted by Admin Posted on Dec 19 2022

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What’s Your Taxpayer Filing Status?

For many people, December 31 means a New Year’s Eve celebration. However, from a tax perspective, it’s a key date in determining the filing status you’ll use when filing your tax return for the year. The one you’ll use depends partly on whether you’re married on that date.

The five statuses

When you file your federal tax return, you do so with one of five filing statuses. First, there’s “single” status, which is generally used if you’re unmarried, divorced or legally separated. A second status, “married filing jointly,” is for married couples who file a tax return together. If your spouse passes away, you can usually still file a joint return for that year. A third status, “married filing separately,” is for married couples who choose to file separate returns. In some cases, doing so may result in less tax owed.

“Head of household” is a fourth status. Certain unmarried taxpayers with dependents qualify to use it and potentially pay less tax. Finally, there’s a fifth status: “qualifying widow(er) with a dependent child.” It may be used if your spouse died during one of the previous two years and you have a dependent child. (Other conditions apply.)

Head of household

Let’s focus on head-of-household status because it’s often misunderstood and can be more favorable than filing as a single taxpayer. To qualify, you must “maintain a household” that, for more than half the year, is the principal home of a “qualifying child” or other relative that you can claim as a dependent.

A qualifying child is defined as someone who lives in your home for more than half the year and is your child, stepchild, foster child, sibling, stepsibling or a descendant of any of these. A qualifying child must also be under 19 years old (or a full-time student under age 24) and be unable to provide over half of his or her own support for the year.

Different rules may apply if a child’s parents are divorced. Also, a child isn’t a qualifying child if he or she is married and files jointly or isn’t a U.S. citizen or resident.

For head-of-household filing status, you’re considered to maintain a household if you live in it for the tax year and pay more than half the cost of running it. This includes property taxes, mortgage interest, rent, utilities, property insurance, repairs, upkeep and food consumed in the home. Medical care, clothing, education, life insurance and transportation aren’t included.

Under a special rule, you can qualify as head of household if you maintain a home for a parent even if you don’t live with the parent. To qualify, you must be able to claim the parent as your dependent.

You must generally be unmarried to claim head-of-household status. However, if you’ve lived apart from your spouse for the last six months of the year, you have a qualifying child living with you and you maintain the household, you’re typically considered unmarried. In this case, you may be able to qualify as head of household.

Not always obvious

Filing status may seem obvious, but there can be situations when it warrants careful consideration. If you have questions about yours, contact us.

Have You Considered A Cost Segregation Study?

Because of the economic impact of inflation, many companies may need to conserve cash and not buy much equipment. As a result, you may not be able to claim as many depreciation tax deductions as in the past. However, if your company owns real property, there may be another approach to depreciation to consider: a cost segregation study.

Depreciation basics

Business buildings generally have a 39-year depreciation period (27.5 years for residential rental properties). Typically, companies depreciate a building’s structural components (including walls, windows, HVAC systems, plumbing and wiring) along with the building. Personal property (such as equipment, machinery, furniture and fixtures) is eligible for accelerated depreciation, usually over five or seven years. And land improvements, such as fences, outdoor lighting and parking lots, are depreciable over 15 years.

Often, businesses allocate all or most of their buildings’ acquisition or construction costs to real property, overlooking opportunities to allocate costs to shorter-lived personal property or land improvements. Items that appear to be “part of a building” may in fact be personal property. Examples include removable wall and floor coverings, removable partitions, awnings, canopies, window treatments, signs and decorative lighting.

Pinpointing costs

A cost segregation study combines accounting and engineering techniques to identify building costs that are properly allocable to tangible personal property rather than real property. Although the relative costs and benefits of a cost segregation study will depend on your particular facts and circumstances, it can be a valuable investment.

It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. And, thanks to the Tax Cuts and Jobs Act, the potential benefits of a cost segregation study are even greater than they were years ago because of enhancements to certain depreciation-related tax breaks.

Worth a look

Cost segregation studies have costs all their own, but the potential long-term tax benefits may make it worth your while to undertake the process. Contact our firm for further details.

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         

 

Amended Returns

Posted by Admin Posted on Dec 19 2022

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

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

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

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

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

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

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

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

If you have any questions regarding 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  

Gift Giving

Posted by Admin Posted on Dec 19 2022

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If you gave any one person gifts valued at more than $15,000, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift.

The person who received your gift does not have to report the gift to the IRS or pay either gift or income tax on its value.

You make a gift when you give property, including money, or the use of or income from property, without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift.

There are some exceptions to the tax rules on gifts. The following gifts do not count against the annual limit:

  • Tuition or medical expenses that you pay directly to an educational or medical institution for someone's benefit
  • Gifts to your spouse
  • Gifts to a political organization for its use
  • Gifts to charities

If you are married, both you and your spouse can give separate gifts of up to the annual limit to the same person without making a taxable gift. Please contact us for more!

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

Source: Thomson Reuters     

Deductible Taxes

Posted by Admin Posted on Dec 15 2022

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

1. State and local income taxes, or general sales taxes;
2. Real estate taxes; and
3. Personal property taxes

The Tax Cuts and Jobs Act (TCJA) limit the cumulative amount of the above taxes an individual can deduct in a calendar year to $10,000.

You can deduct estimated taxes paid to state or local governments and prior year's state or local income tax as long as they were paid during the tax year. If deducting sales taxes instead, you may deduct actual expenses or use optional tables provided by the IRS to determine your deduction amount, relieving you of the need to save receipts. Sales taxes paid on motor vehicles and boats may be added to the table amount, but only up to the amount paid at the general sales tax rate. Taxpayers will check a box on Schedule A, Itemized Deductions, to indicate whether their deduction is for income or sales tax.

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

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

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

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    

Plug-In Electric Vehicles (PEVs)

Posted by Admin Posted on Dec 15 2022

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For vehicles acquired after December 31, 2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.

The credit is available only to the original purchaser of a new qualifying vehicle, and the vehicle must be placed in service in the same year the credit is being claimed on the return. If the qualifying vehicle is leased the credit is available only to the leasing company. Also, the vehicle must be used primarily in the United States.

Additional conditions regarding qualified manufacturers and phase out rules may also apply in determining credit eligibility. To find out whether your car qualifies for the Qualified Plug-in Electric Drive Motor Vehicle tax credit, you can go to the IRS.gov website and search for "plug-in vehicles" or contact us for more information.

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

Source: Thomson Reuters   

Semana Nacional de Seguridad Tributaria: “Martes de dar” es buen recordatorio que estafadores podrían crear organizaciones benéficas falsas para engañar a contribuyentes

Posted by Admin Posted on Dec 15 2022

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En el martes de dar o "Giving Tuesday", el Servicio de Impuestos Internos (IRS) y sus Socios de la Cumbre de Seguridad advirtieron a los contribuyentes a tener cuidado con estafadores que usan organizaciones benéficas falsas, no solo durante la temporada de fiestas, si no el año entero.

Para el segundo día de la Semana Nacional de Seguridad Tributaria, el IRS y sus Socios de la Cumbre de Seguridad urgen a las personas a que se aseguren de que su dinero vaya a organizaciones benéficas legitimas. Estar alerta a estafas potenciales no solo protege el dinero de los contribuyentes si no también los datos personales y financieros que pueden usarse para el robo de identidad relacionado con los impuestos.

"Las personas deben tener cuidado con las organizaciones benéficas falsas que crean problemas en múltiples frentes," dijo Doug O'Donnell, Comisionado interino del IRS. "Los donantes bien intencionados no solo pueden perder su dinero y un posible crédito por donación benéfica, si no también podría resultar en el robo de información personal y financiera. Le urgimos a las personas a que actúen responsablemente antes de donar y sigan los consejos para asegurarse de que la organización benéfica es legítima."

Trabajando juntos como la Cumbre de Seguridad, el IRS, las agencias tributarias estatales y la industria de software y de profesionales de impuestos brindan consejos esta semana para ayudar a proteger a los contribuyentes contra el robo de identidad al igual que la información tributaria que los criminales usan para presentar declaraciones de impuestos falsas y obtener reembolsos. Este esfuerzo es parte de la Semana Nacional de Seguridad Tributaria, ahora en su séptimo año.

Los estafadores a menudo se aprovechan de la generosidad de las personas al establecer organizaciones benéficas falsas para engañar a los donantes desprevenidos para que regalen no solo dinero, sino también su información personal confidencial. Pueden usar la temporada festiva y otros eventos oportunos como los desastres recientes para tratar de llegar a las personas y atraerlas a hacer una donación. Las estafas que solicitan donaciones para los esfuerzos de ayuda en casos de desastres son especialmente comunes por teléfono. Sin embargo, los estafadores también usan los correos electrónicos, sitos web y mensajes por redes sociales que parecen provenir de organizaciones benéficas legitimas para engañar a las personas a dar dinero o información personal.

El IRS y sus socios de la Cumbre de Seguridad instan a las personas a asegurarse de que su dinero se destine solo a organizaciones benéficas legitimas. Estar alerta a posibles estafas no solo protegerá el dinero de los contribuyentes, sino que también ayudará a proteger los datos personales y financieros que pueden usarse en el robo de identidad relacionado con los impuestos.

  • No se deje presionar. Los estafadores a menudo usan la técnica de urgencia eminente para presionar a las personas a hacer un pago inmediato. Las organizaciones benéficas legitimas están felices de recibir una donación en cualquier momento, no hay prisa. Se pide a los donantes que se tomen el tiempo de hacer sus propias investigaciones. No olvide que los estafadores pudieran alterar o "falsificar" su identificador de llamadas para hacerse pasar por una organización benéfica legitima.
     
  • Tenga cuidado de cómo solicitan la donación. Los contribuyentes no deben trabajar con organizaciones benéficas que soliciten donativos a través de números de tarjeta de regalo o transferencia de dinero. Eso es una estafa. Es más seguro pagar con tarjeta de crédito o cheque, y sólo después de investigar la organización benéfica.
     
  • No de más de lo necesario. Los estafadores buscan dinero, pero la información personal puede ser igual de valiosa. Los contribuyentes deben tratar la información personal igual que su dinero en efectivo y no entregársela a cualquiera. Nunca proporcione números de Seguro Social, números de tarjetas de crédito o números de PIN. Solo proporcione información financiera limitada cuando esté seguro de que la organización benéfica es legítima. 

Los contribuyentes que dan dinero o bienes a una organización benéfica pueden reclamar una deducción (en inglés) en su declaración de impuestos federal al reducir el monto de su ingreso tributable. Sin embargo, para recibir una deducción, los contribuyentes deben donar a una organización benéfica calificada.

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      

Filing an Extension

Posted by Admin Posted on Dec 15 2022

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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, 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  

Get Ready now to file your 2022 federal income tax return

Posted by Admin Posted on Dec 07 2022

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Steps you can take now to make tax filing easier in 2023

The Internal Revenue Service today encouraged taxpayers to take simple steps before the end of the year to make filing their 2022 federal tax return easier. With a little advance preparation, a preview of tax changes and convenient online tools, taxpayers can approach the upcoming tax season with confidence.

View your account online

Use online account to securely access the latest information available about your federal tax account and see information from your most recently filed tax return.

You can:

  • View your tax owed, payments, and payment plans
  • Make payments and apply for payment plans
  • Access your tax records
  • Sign Power of Attorney authorizations electronically from your tax professional
  • Manage your communication preferences from the IRS

Gather and organize your tax record

Organized tax records make preparing a complete and accurate tax return easier. It helps you avoid errors that lead to processing delays that slow your refund and may also help you find overlooked deductions or credits.

Wait to file until you have your tax records including:

Notify the IRS if your address changes and notify the Social Security Administration of a legal name change.

Remember, most income is taxable. This includes:

Check your Individual Tax Identification Number (ITIN)

An ITIN only needs to be renewed if it has expired and is needed on a U.S. federal tax return. If you do not renew an expiring or expired ITIN, the IRS can still accept your tax return, but it may delay processing it or delay tax credits owed to you, such as the Child Tax Credit and the American Opportunity Tax Credit, which can impact when you get your tax refund.

If your ITIN wasn't included on a U.S. federal tax return at least once for tax years 2019, 2020, and 2021, your ITIN will expire on December 31, 2022.

As a reminder, ITINs with middle digits 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, or 88 have expired. In addition, ITINs with middle digits 90, 91, 92, 94, 95, 96, 97, 98, or 99, IF assigned before 2013, have expired. If you previously submitted a renewal application and it was approved, you do not need to renew again.

The IRS processes requests in the order they were received. Currently, IRS is working ITIN applications received in July 2022. Your patience is appreciated. You will be notified once your ITIN is assigned or if additional information is needed. 

Make sure you’ve withheld enough tax

Consider adjusting your withholding if you owed taxes or received a large refund when you filed. Changing your withholding can help you avoid a tax bill or let you keep more money each payday. Credit amounts may change each year, so visit IRS.gov and use the Interactive Tax Assistant to identify whether you qualify for any tax credits that may call for a withholding adjustment. Life changes – getting married or divorced, welcoming a child, or taking on a second job - may also mean changing withholding.

Use the Tax Withholding Estimator to help you determine the right amount of tax to have withheld from your paycheck. This tool on IRS.gov will help determine if you need to adjust your withholding and submit a new Form W-4 to your employer.

Consider estimated tax payments. If you receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income you should make quarterly estimated tax payments, with the last payment for 2022 due on January 17, 2023.

Log in to your online account to make a payment online or go to IRS.gov/payments.

The fastest way for you to get your tax refund is by filing electronically and choosing direct deposit. Direct deposit gives you access to your refund faster than a paper check. Get your routing and account number by signing into your online banking account or contacting your bank.

Get banked to speed tax refunds with direct deposit

Don't have a bank account? Learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool. If you are a Veteran, see the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks.

Prepaid debit cards or mobile apps may allow direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on your tax return. Check with the mobile app provider or financial institution to confirm which numbers to use. 

Direct deposit also avoids the possibility that a refund check could be lost or stolen or returned to the IRS as undeliverable.  

What’s new and what to consider when you file in 2023

More taxpayers will be receiving Form 1099-K

Change is effective Jan. 1, 2022.  All third-party payment platforms are required to issue Forms 1099-K when payments to merchants for goods and services exceed $600.

What is reported on a 1099-K? If you accepted $600 or more in 2022:

  • by payment cards for good and services, you will receive one Form 1099-K for the total amount of the payments from each payment card.
  • from a third-party payment app, you will receive one Form 1099-K from that organization for the total amount.

When will I get the 1099-K and what should I do with it? 2022 Forms 1099-K must be furnished to the payee by January 31, 2023. Use this information return with your other tax records to determine your correct tax. 

What is not reported on a 1099-K? Money received as a gift or reimbursement of a share of a meal or rent should not be reported on a 1099-K. Payments should indicate whether they are personal to family and friends or a business transaction for goods and services. 

What if the information is wrong? If the information is incorrect on the 1099-K, contact the payer immediately, whose name appears in the upper left corner on the form. Keep a copy of all correspondence with the payer with your records. If you cannot get the form corrected, you may attach an explanation of the error to your tax return and report your income correctly.

The IRS cannot correct inaccurate Forms 1099-K.

2022 changes that may affect your tax refund

Changes in the number of dependents, employment or self-employment income and divorce, among other factors, may affect your tax-filing status and refund for 2023.

No additional stimulus payments.  Unlike 2020 and 2021, there were no new stimulus payments for 2022 so taxpayers should not expect to get an additional payment in their 2023 tax refund.

Some tax credits return to 2019 levels. Several tax credits, including the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC) and the Dependent Care Credit will revert to pre-COVID levels. This means that taxpayers will likely receive a significantly smaller refund compared with the previous tax year. For a comparison, those who got $3,600 per dependent in 2021 for the CTC will get $2,000 for the 2022 tax year. Similarly, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022. And the Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021. Visit Credits and Deductions for more details.

No above-the-line charitable deductions. During COVID, taxpayers were able to take up to a $600 charitable donation tax deduction on their tax returns. However, in 2022, this deduction will return to pre-COVID rules, which will not allow those who take a standard deduction to make an above-the-line deduction for charitable donations.

More people may be eligible for the Premium Tax Credit.
For tax year 2022, taxpayers may qualify for temporarily expanded eligibility for the premium tax credit. Remember that simply meeting the income requirements does not mean you're eligible for the premium tax credit. You must also meet the other eligibility criteria.

The Inflation Reduction Act of 2022 changes the eligibility rules to claim a tax credit for clean vehicles. More details about clean vehicles will be available in coming months.

Avoid refund delays and understand refund timing

Many different factors can affect the timing of your refund after we receive your return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills.

Identity Theft and refund fraud. Some returns may require additional review and may take longer. The IRS, along with its partners in the tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud.

IRS cannot issue EITC and ACTC refunds before mid-February. Refunds for people claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) can't be issued before mid-February. The law requires the IRS to hold the entire refund − even the portion not associated with EITC or ACTC.

Returns requiring manual review. Some returns, filed electronically or on paper, may need manual review delaying the processing if our systems detect a possible error, the return is missing information, or there is suspected identity theft or fraud. Some of these situations require us to correspond with taxpayers, but some do not. This work does require special handling by an IRS employee so, in these instances, it may take the IRS more than the normal 21 days to issue any related refund. In those cases where IRS is able to correct the return without corresponding, the IRS will send an explanation to the taxpayer.

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 Collection Procedures for Past Due Taxes

Posted by Admin Posted on Dec 07 2022

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The U.S. government expects you to pay income taxes to the IRS each year. Most Americans have taxes withheld from their wages, which helps to avoid owing the IRS a large sum at the end of the year. However, self-employed individuals and independent contractors who do not have any (or enough) tax withheld may need to make estimated tax payments instead.

If your taxes are not fully paid when you file your tax return, the IRS will send you a bill for the amount owed. This bill is the beginning of the collection process.

The first IRS notice that you receive will explain the amount you owe, including any taxes, penalties, and interest charges. This notice will also demand full payment of your balance due.

IRS Penalties for Past Due Taxes

There are stiff penalties for not paying your taxes. With monthly late fees and interest charges, the amount you owe can grow exponentially in size, making it even more difficult to pay. The longer your taxes go unpaid, the bigger the consequences – leading all the way to asset seizure and even incarceration.

Here are some of the penalties and fees that apply to past due taxes:

• Interest is compounded daily and accumulates on the owed amount (the interest rate is equal to the Federal short-term rate, plus 3%)
• The late payment penalty is .05% of the owed amount and increases each month the taxes remain unpaid (up to a maximum of 25%)
• The combined penalty for both filing and paying late is 5% of the tax owed (if your return is over 60 days late, the penalty may be up to 100% of the tax owed)

However, if you can provide reasonable cause for not filing or paying on time, you may be able to avoid incurring the late filing/payment penalty.

IRS Collection Enforcement Actions

It is in your best interest to contact the IRS and make arrangements to pay the tax due. If you cannot pay the amount in full, you can request a payment plan (see below). But if you ignore the issue and do nothing, the IRS will take actions to collect your taxes – such as filing a Notice of Federal Tax Lien, serving a Notice of Levy, offsetting your tax refund, or garnishing your wages.

Federal tax lien is a claim against your property that is used to protect the government’s interest in your tax debt. If you fail to fully pay your tax balance within 10 days after the IRS sends you the first notice (of taxes owed and demand for payment), the IRS will file a ‘Notice of Federal Tax Lien’ in the public records. This notifies creditors that the IRS has a claim against all your property, including any property that you acquire after the lien arises.

Federal tax levy is an outright seizure of property or assets. The IRS may levy your wages, bank accounts, or retirement income and apply the funds towards your tax liability. The IRS may also seize your house, car, or boat and sell your property to satisfy your tax debt. If you are owed any tax refunds in the future (Federal or State), the IRS may take these as well.

Furthermore, in some situations, the IRS may decide to launch a criminal investigation or file charges for tax evasion.

Tax Payment Arrangements (If You Cannot Pay in Full)

If you cannot fully pay your tax due, you should still respond to the IRS notice in a timely manner. Pay as much as you can now and explore your other options. If you’re unable to alleviate the debt with a loan or credit card(s), you will need to consider the IRS’ payment arrangements – including an installment agreement, an offer in compromise, or a temporary delay of collection.

An installment agreement allows you to resolve your tax debt by making monthly payments over a period of time, generally up to 72 months. Individuals owing $50,000 or less (and businesses owing $25,000 or less) can apply for an Online Payment Agreement. Otherwise, you must make the request by filing Form 9465 (Installment Agreement Request) and a Collection Information Statement (Form 433-A, Form 433-B, or Form 433-F).

An offer in compromise (OIC) is a settlement offer that you make to the IRS for less than the actual amount owed. Basically, you offer to pay a portion of your taxes now and the IRS agrees to forgive the remaining debt. There are strict eligibility requirements and you must be able to demonstrate that paying the taxes in full will cause you “extraordinary hardship.” If you are able to pay your taxes through an installment agreement, you will not qualify for an offer in compromise.

In some cases, you can request a temporary delay of collection from the IRS. If the IRS determines that you cannot pay any of your tax owed, they may label your account as ‘currently not collectible’ and delay tax collection until your financial situation improves. However, this does not reduce your tax debt in any sense.

NOTE: If you a member of the U.S. Armed Forces, you may be allowed to defer your payment. For more information, see IRS Publication 3 (Armed Forces’ Tax Guide).

Your Rights as a Taxpayer

It is important to understand that you have rights and protections when it comes to the tax collection process. The ‘Taxpayer Bill of Rights’ contains 10 major provisions – including the right to be informed, the right to pay no more than the correct amount of tax, the right to challenge the IRS’ position and be heard, the right to appeal an IRS decision in an independent forum, and the right to retain representation.

If you want to discuss your payment options, you can contact the IRS at 1-800-829-1040 or call the phone number on your notice.

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    

Tax resources for individuals filing a federal income tax return for the first time

Posted by Admin Posted on Dec 07 2022

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Every year brings new people into the workforce. The Taxpayer Advocate Service (TAS) wants to reach individuals filing tax returns for the first time, or for the first time after a gap in filing, to share information to help them meet their federal tax obligations.

Who is a first-time filer?

Many individuals may be filing a federal income tax return for the first time, or for the first time in several years. This includes:

  • Students and recent graduates working for the first time
  • Gig workers who did not previously need to file
  • Adults returning to the workforce after long periods of unemployment
  • New military recruits who may be getting their first paychecks
  • Retirees returning to work to supplement their income
  • People taking on filing responsibilities after a spouse’s death
  • People filing only to claim refundable credits

What are some of the challenges for first-time filers?

People who have never filed, and people who have not filed for several years, have similar needs for information and resources. First-time filers may not have experience with taxes in general. The tax law is complex and changes every year. Obtaining tax help from the IRS continues to be difficult. First-time filers may not have a trusted tax professional to rely on, and they may not be able to afford professional help. Free resources are available, and TAS wants to help you find them.

As a first-time filer, you may need help determining:

  • Make sure each name and SSN or ITIN are listed exactly as printed on the individual’s Social Security card issued by the Social Security Administration or the ITIN notice issued by the IRS.
  • Choose the correct filing status. The Interactive Tax Assistant on IRS.gov can help you choose the correct status, especially if more than one filing status applies. Tax software also helps prevent mistakes with filing status.
  • Double check your math. Calculation errors are some of the most common mistakes. They range from simple addition and subtraction to more complex calculations. Check your calculations, or better yet, use tax return preparation software that does it automatically.
  • Double check your bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for taxpayers to get their money. It’s important to make sure the correct routing transit number and account number are used.
  • Sign your return. An unsigned tax return isn’t valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have executed a valid power of attorney.

Can first-time filers use electronic filing?

Electronic filing, or e-filing, refers to the process of filing one’s tax return electronically, using approved online software. Most first-time filers can use e-file. E-filing is becoming increasingly popular because of its benefits:

  • E-filing has brought about increased flexibility in the filing of tax returns and is a lot more convenient because you can file your tax return from the comfort of your home, at any time.
  • You sign your return digitally when e-filing, preventing the possibility of sending an unsigned return.
  • E-filing saves a huge amount of time and money. When tax returns are e-filed, the data is directly transmitted online from the e-filer’s servers to the tax agency’s servers. You won’t have to print and mail your tax return, or wait for a paper return to be received, opened and input by an IRS employee. Because you’re inputting the data yourself, you can avoid potential input, or transcription, errors.
  • Because transcription errors can be avoided by accurately e-filing, the overall tax return filing process is more accurate.
  • When you e-file, you will receive notifications throughout the filing process. You will receive confirmation that your return was received. Within 24 hours, you will be notified whether your return can be processed or if it must be returned, or rejected, to correct one or more errors. In most cases, you can correct the error and resubmit a rejected return. You can also check the status of your return online after it’s been accepted for processing. Paper filing is much more ambiguous. Although you can file a paper return by certified or registered mail to confirm when the IRS receives it, status updates after that point are limited.

Are there tax credits available to first-time filers?

If you are a first-time filer, you may not be aware of credits that can reduce your tax or increase your refund.

  • Earned Income Tax Credit – This credit is available to taxpayers with low to moderate earned income, with or without a qualifying child.
  • Education Credit – This credit is available to taxpayers who incurred qualified education expenses. Some education credits are refundable.
  • Premium Tax Credit – This credit helps eligible individuals and families afford premiums for health insurance purchased through the Health Insurance Marketplace.
  • Child Tax Credit – This credit is available to individuals with qualifying children. Portions of this credit are available even if the individual did not have income.
  • Recovery Rebate Credit – Even if an individual did not receive stimulus payments (economic impact payments), the individual can potentially claim recovery rebate credits for 2020 and 2021. Individuals do not need income to qualify for this 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     

Beneficios por Incapacidad

Posted by Admin Posted on Dec 01 2022

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Los programas de Seguro por Incapacidad del Seguro Social (SSDI, por sus siglas en inglés) y Seguridad de Ingreso Suplementario (SSI, por sus siglas en inglés) brindan asistencia a las personas que cumplen nuestros requisitos de incapacidad.

Antes de presentar la solicitud, revise los conceptos básicos para asegurarse de que comprende qué esperar durante el proceso de solicitud. Además, recopile la información y los documentos que necesitará para llenar una solicitud.

Conceptos Básicos Sobre los Beneficios Por Incapacidad

El programa de SSDI le paga beneficios a usted y a ciertos miembros de su familia si está «asegurado». Esto significa que trabajó por el tiempo necesario –y que fue suficientemente reciente –y pagó impuestos de Seguro Social sobre sus ganancias. El programa de SSI paga beneficios a adultos y niños que cumplen con nuestros requisitos de lo que es una incapacidad calificada y que tienen ingresos y recursos limitados.

Aunque estos dos programas son diferentes, los requisitos médicos son los mismos. Si usted cumple con los requisitos no médicos, se pagan beneficios mensuales si tiene un padecimiento médico que se espera dure al menos un año o que resulte en muerte.

El Proceso Para una Solicitud Por Incapacidad

Ya sea que presente la solicitud por internet, por teléfono o en persona, el proceso de solicitud de beneficios por incapacidad sigue estos pasos generales:

  • Usted recopila la información y los documentos que necesita para presentar la solicitud. Le recomendamos que imprima y revise la Lista de cotejo para solicitar por internet los beneficios por incapacidad para adultos. Esto le ayudará a recopilar la información y los documentos que necesita para llenar la solicitud.
  • Usted llena y presenta la solicitud.
  • Revisamos su solicitud para asegurarnos de que cumpla con algunos requisitos básicos para los beneficios por incapacidad.
  • Confirmamos si trabajó suficientes años para calificar.
  • Evaluamos las actividades laborales actuales.
  • Procesamos su solicitud y enviamos su caso a la Agencia de Determinación de Incapacidad de su estado.
  • Esta agencia estatal toma la decisión de determinación de incapacidad.

Para informarse mejor sobre quién decide si tiene una incapacidad, lea nuestra publicación Beneficios por incapacidad.

Una vez que haya solicitado

Una vez que recibamos su solicitud, la revisaremos y nos comunicaremos con usted si tenemos preguntas. Es posible que solicitemos documentos adicionales antes de que podamos continuar.

Busque nuestra respuesta

Cuando la agencia estatal tome una decisión sobre su caso, recibirá una carta por correo con nuestra decisión. Si incluyó información sobre otros miembros de la familia cuando presentó la solicitud, le informaremos si es posible que puedan recibir beneficios en su registro.

Verifique el estatus de la solicitud

Puede verificar el estatus de su solicitud por internet usando su cuenta personal my Social Security.

Apelar una decisión

Tiene derecho a apelar cualquier decisión que tomemos sobre si tiene derecho a recibir beneficios. Debe solicitar una apelación por escrito dentro de los 60 días después de recibir nuestra decisión. Hay cuatro niveles de apelación:

  • Reconsideración.
  • Audiencia por un juez de derecho administrativo.
  • Una revisión por el Consejo de Apelaciones.
  • Una revisión por la Corte Federal.

Información que Necesita para Solicitar

Antes de presentar la solicitud, esté preparado para brindar información sobre usted, su padecimiento médico y su trabajo. Le recomendamos que imprima y revise la Lista de cotejo para solicitar por internet los beneficios por incapacidad para adultos. Le ayudará a recopilar la información que necesita para llenar la solicitud.

Información sobre usted

  • Su fecha y lugar de nacimiento y número de Seguro Social
  • El nombre, número de Seguro Social y fecha de nacimiento de su cónyuge actual y cualquier ex cónyuge. También debería saber las fechas y lugares de todos los matrimonios, y fechas de divorcios o fallecimiento de los cónyuges (si es apropiado)
  • Los nombres y fechas de nacimientos de sus niños menores de edad
  • El numero de ruta de transito de su banco u otra institución financiera y el número de cuenta.

Información sobre su Padecimiento Médico

  • El nombre, dirección y número de teléfono de alguien con quien nos podamos comunicar, que sepa de sus padecimientos médicos y que pueda ayudar con su solicitud.
  • Información detallada acerca de sus enfermedades médicas, lesiones o padecimientos:
    • Los nombres, direcciones, números de teléfonos, los números de identificación del paciente y fechas de tratamientos de todos los médicos, hospitales y clínicas.
    • Nombres de los medicamentos, y cantidad o dosis que está tomando y quién se los recetó.
    • Nombres y fechas de los exámenes médicos a las que se sometió y quién las ordenó.

Información sobre su Empleo

  • La cantidad de dinero que ganó el año pasado y este año
  • El nombre y la dirección de su(s) empleador(es) durante este año y el año pasado
  • Las fechas iniciales y finales de cualquier servicio activo en el ejército de los EE.UU. que desempeñó antes de 1968
  • Enumere los tipos de trabajos (hasta 5) en que trabajó en los últimos 15 años antes de comenzar la incapacidad. Incluya las fechas en que trabajó en esos empleos.
  • Información acerca de cualquier compensación a trabajadores, enfermedad pulmonar del minero, y beneficios similares que la persona haya solicitado o intente solicitar.

Estos beneficios pueden:

  • Ser de naturaleza temporaria o permanente.
  • Incluir anualidades o pagos globales que recibió en el pasado.
  • Haber sido pagados por el empleador, la compañía de seguros del empleador, agencias privadas, o el gobierno federal, estatal u otras agencias del gobierno o públicas.
  • Ser referidos como:
    • Compensación a trabajadores.
    • Beneficios de enfermedad pulmonar del minero.
    • Compensación de trabajadores del largo de la costa y del Puerto.
    • Jubilación de servicio civil.
    • Jubilación (incapacidad) de empleados federales.
    • Compensación de empleados federales.
    • Beneficios de seguro por incapacidad estatal o municipal.
    • Beneficios por incapacidad del servicio militar, (incluso pensiones por jubilación del servicio militar basadas en incapacidad, pero no los beneficios de la Administración de Veteranos (VA, siglas en inglés).

Documentos que Necesita Proveer

Junto con la información mencionada anteriormente, es posible que le pidamos que muestre documentos para demostrar que tiene derecho, como:

Aceptamos fotocopias de los formularios W-2, declaraciones de impuestos de trabajo propio y documentos médicos, pero tenemos que ver los documentos originales en la mayoría de los documentos, tal como su acta, certificado o partida de nacimiento. Le devolveremos los documentos.

No se demore en solicitar los beneficios debido a que no tiene todos los documentos. Le ayudaremos a obtenerlos.

Solicite los Beneficios por Internet

Debe solicitar los beneficios por incapacidad tan pronto comience su incapacidad. Siga estos sencillos pasos para solicitar por incapacidad por internet:

  • Para iniciar su solicitud, vaya a nuestra página Solicitar los beneficios* y lea y acepte los Términos de servicio. Haga clic en «Next» (siguiente).
  • En esa página, revise la sección «Getting Ready» (preparándose) para asegurarse de tener la información que necesita para presentar la solicitud.
  • Seleccione «Start A New Application‌» (iniciar una nueva solicitud).
  • Le haremos algunas preguntas sobre quién está llenando la solicitud.
  • Luego iniciará sesión en su cuenta personal my Social Security, o se le pedirá que cree una.
  • Llene la solicitud.

Puede usar la solicitud por internet para solicitar beneficios por incapacidad si:

  • Tiene 18 años o más.
  • Actualmente no recibe beneficios en su propio registro de Seguro Social.
  • No puede trabajar debido a un padecimiento médico que se espera que dure al menos 12 meses o resulte en la muerte.
  • No se le ha negado por incapacidad en los últimos 60 días.

Nota aclaratoria: Si su solicitud fue denegada recientemente, nuestra solicitud de Apelación por Internet es un punto de partida para solicitar una revisión de la determinación que tomamos.

Es posible que pueda solicitar SSI por internet al mismo tiempo que solicita los beneficios de SSDI. Una vez que complete el proceso por internet mencionado anteriormente, un representante del Seguro Social se comunicará con usted si necesitamos información adicional.

Otras Formas de Solicitar

Solicite con su oficina local

Puede hacer la mayor parte de sus trámites con el Seguro Social por internet. Si no puede utilizar estos servicios por internet, su oficina local del Seguro Social puede ayudarle a presentar la solicitud. Puede encontrar el número de teléfono de su oficina local utilizando nuestro Localizador de oficinas (aunque el localizador de la oficina local solo está disponible en inglés, solo necesita ingresar su código postal para encontrar la oficina local más cercana) y buscando en Social Security Office Information (información de la oficina del Seguro Social). El número de teléfono gratuito que aparece en Office (oficina) es su oficina local.

Solicitar por teléfono

Llame al 1-800-772-1213 y oprima 7 para español (TTY 1-800-325-0778) de 8:00 a.m. a 7:00 p.m., de lunes a viernes, para solicitar por teléfono.

Si no vive en los EE. UU. o en uno de sus territorios

Comuníquese con la Unidad de Beneficios Federales de su país de residencia* si vive fuera de los EE. UU. o un territorio de los EE. UU. y desea solicitar los beneficios por jubilación.

Enviando sus documentos por correo

Si nos envía algún documento por correo, debe incluir el número de Seguro Social para que podamos relacionarlo con la solicitud correcta. No escriba nada en los documentos originales. Escriba el número de Seguro Social en una hoja de papel aparte e inclúyalo en el sobre de envío junto con los documentos.

Informacion para Defensores, Abogados y Terceros

Si usted es un defensor, abogado o representante de terceros y está ayudando a alguien a preparar una Solicitud de beneficios del Seguro Social por internet*, hay algunas cosas que debe saber*.

¿Que Necesito Saber sobre el Nombramiento por Adelantado?

Debe tener en cuenta otro tipo de representación conocido como Nombramiento por adelantado.

El Nombramiento por Adelantado permite que los solicitantes y beneficiarios adultos capaces y menores emancipados que están solicitando o reciben beneficios de Seguro Social, Seguridad de Ingreso Suplementario o Beneficios Especiales para Veteranos la opción de elegir hasta tres personas por adelantado para que actúen como su representante de beneficiario, si surge la necesidad.

En el caso de que ya no pueda administrar sus beneficios, usted y su familia tendrán la tranquilidad de saber que alguien de su confianza puede ser nombrado para administrar sus beneficios. Si necesita un representante de beneficiario que lo ayude con la administración de sus beneficios, primero consideraremos a sus nombramientos por adelantado, pero aún debemos evaluarlos por completo y determinar su idoneidad en ese momento.

Puede enviar y actualizar su solicitud de Nombramiento por adelantado cuando solicite beneficios o después de que ya los esté recibiendo. Puede hacerlo a través de su cuenta personal my Social Security*, comunicándose con nosotros por teléfono al 1-800-772-1213 y oprima 7 para español (TTY 1-800-325-0778), o en su oficina local (aunque el localizador de la oficina local solo está disponible en inglés, solo necesita ingresar su código postal para encontrar la oficina local más cercana).

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: SSA    

SOCIAL SECURITY

Posted by Admin Posted on Nov 30 2022

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Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs provide assistance to people who meet our requirements for disability.

Before you apply, please review the basics to make sure you understand what to expect during the application process. Also, gather the information and documents you’ll need to complete an application.

The Basics About Disability Benefits

The SSDI program pays benefits to you and certain family members if you are “insured.” This means that you worked long enough – and recently enough - and paid Social Security taxes on your earnings. The SSI program pays benefits to adults and children who meet our requirements for a qualifying disability and have limited income and resources.

While these two programs are different, the medical requirements are the same. If you meet the nonmedical requirements, monthly benefits are paid if you have a medical condition expected to last at least one year or result in death.

The Disability Application Process

Whether you apply online, by phone, or in person, the disability benefits application process follows these general steps:

  • You gather the information and documents you need to apply. We recommend you print and review the Adult Disability Checklist. It will help you gather the information and documents you need to complete the application.
  • You complete and submit your application.
  • We review your application to make sure you meet our basic requirements for disability benefits.
  • We confirm you worked enough years to qualify.
  • We evaluate any current work activities.
  • We process your application and forward your case to the Disability Determination Services office in your state.
  • This state agency makes the disability determination decision.

Once You've Applied

  • Processing time for disability applications vary depending on the nature of the disability, necessary medical evidence or examinations, and applicable quality reviews.
  • Once we receive your application, we’ll review it and contact you if we have questions. We might request additional documents from you before we can proceed.

 

 

Look For Our Response

  • When the state agency makes a determination on your case, you’ll receive a letter in the mail with our decision. It generally takes three to six months for an initial decision. If you included information about other family members when you applied, we’ll let you know if they may be able to receive benefits on your record.
  • Check The Status
  • You can check the status of your application online using your personal my Social Security account.

Appeal A Decision

You have the right to appeal any decision we make about whether you’re entitled to benefits. You must request an appeal in writing within 60 days after you receive the notice of our decision. There are four levels of appeal:

  • Reconsideration.
  • Hearing by an administrative law judge.
  • Review by the Appeals Council.
  • Federal Court Review.

Information You Need to Apply

Before applying, be ready to provide information about yourself, your medical condition, and your work. We recommend you print and review the Adult Disability Checklist. It will help you gather the information you need to complete the application.

Information About You

  • Your date and place of birth and Social Security number.
  • The name, Social Security number, and date of birth or age of your current spouse and any former spouse. You should also know the dates and places of marriage and dates of divorce or death (if appropriate).
  • Names and dates of birth of children not yet 18 years of age.
  • Your bank or other financial institution's Routing Transit Number and the account number.

Information About Your Medical Condition

  • Name, address, and phone number of someone we can contact who knows about your medical conditions and can help with your application.
  • Detailed information about your medical illnesses, injuries, or conditions:
    • Names, addresses, phone numbers, patient ID numbers, and dates of treatment for all doctors, hospitals, and clinics.
    • Names of medicines, the amount you are taking, and who prescribed them.
    • Names and dates of medical tests you have had and who ordered them.

Information About Your Work:

  • The amount of money earned last year and this year.
  • The name and address of your employer(s) for this year and last year.
  • The beginning and ending dates of any active U.S. military service you had before 1968.
  • A list of the jobs (up to five) that you had in the 15 years before you became unable to work and the dates you worked at those jobs.
  • Information about any workers' compensation, black lung, and similar benefits you filed, or intend to file for. These benefits can:
    • Be temporary or permanent.
    • Include annuities and lump sum payments that you received in the past.
    • Be paid by your employer or your employer's insurance carrier, private agencies, or federal, state, or other government or public agencies.
    • Be referred to as:
      • Workers' Compensation.
      • Black Lung Benefits.
      • Longshore and Harbor Workers' Compensation.
      • Civil Service (Disability) Retirement.
      • Federal Employees' Retirement.
      • Federal Employees' Compensation.
      • State or local government disability insurance benefits.
      • Disability benefits from the military. These include military retirement pensions based on disability but not Veterans' Administration (VA) benefits.

Documents You Need to Provide

Along with the information listed above, we may ask you to provide documents to show that you are eligible, such as:

We accept photocopies of W-2 forms, self-employment tax returns, and medical documents, but we must see the originals of most other documents, such as your birth certificate. We will return them to you.

Do not delay applying for benefits because you do not have all the documents. We will help you get them.

Apply for Benefits Online

You should apply for disability benefits as soon as you develop a disability. Follow these easy steps to apply online for disability:

  • To start your application, go to our Apply for Benefits page, and read and agree to the Terms of Service. Click “Next.”
  • On that page, review the “Getting Ready” section to make sure you have the information you need to apply.
  • Select “Start A New Application.”
  • We will ask a few questions about who is filling out the application.
  • You will then sign in to your personal my Social Security account, or you will be prompted to create one.
  • Complete the application.

You can use the online application to apply for disability benefits if you:

  • Are age 18 or older.
  • Are not currently receiving benefits on your own Social Security record.
  • Are unable to work because of a medical condition that is expected to last at least 12 months or result in death.
  • Have not been denied for disability in the last 60 days.

Note: If your application was recently denied, our Internet Appeal application is a starting point to request a review of the determination we made.

You may be able to file online for SSI at the same time that you file for SSDI benefits. Once you complete the online process described above, a Social Security representative will contact you if we need additional information.

Other Ways You Can Apply

Apply With Your Local Office

You can do most of your business with Social Security online. If you cannot use these online services, your local Social Security office can help you apply. You can find the phone number for your local office by using our Office Locator and looking under Social Security Office Information. The toll-free “Office” number is your local office.

Apply By Phone

Call 1-800-772-1213 (TTY 1-800-325-0778) from 8:00 a.m. to 7:00 p.m., Monday through Friday, to apply by phone.

If You Do Not Live in the U.S. Or One of Its Territories

Contact the Federal Benefits Unit for your country of residence if you live outside the U.S. or a U.S. territory and wish to apply for retirement benefits.

Mailing Your Documents

If you mail any documents to us, you must include the Social Security number so that we can match them with the correct application. Do not write anything on the original documents. Please write the Social Security number on a separate sheet of paper and include it in the mailing envelope along with the documents.

Information for Advocates, Attorneys and Third Parties

If you are an Advocate, Attorney, or Third Party Representative and you are helping someone prepare an online Social Security benefit application, there are some things you should know.

What do I need to know about Advance Designation

You should be aware of another type of representation called Advance Designation.

Advance Designation allows capable adult and emancipated minors who are applying for or receiving Social Security benefits, Supplemental Security Income, or Special Veterans Benefits the option to choose up to three people in advance who could serve as their representative payee, if the need arises.

In the event that you can no longer manage your benefits, you and your family will have peace of mind knowing that someone you trust may be appointed to manage your benefits for you. If you need a representative payee to assist with the management of your benefits, we will first consider your advance designees. We must still fully evaluate them and determine their suitability at that time.

You can submit and update your advance designation request when you apply for benefits or after you are already receiving benefits. You may do so through your personal my Social Security account, contacting us by telephone at 1-800-772-1213 (TTY 1-800-325-0778), or at your local office.

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: SSA     

Ayuda en Español

Posted by Admin Posted on Nov 30 2022

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If you need federal tax information, the IRS provides free Spanish language products and services. Pages on IRS.gov, tax topics, refund information, tax publications and toll-free telephone assistance are all available in the Spanish-language. The Spanish-language page has links to tax information such as forms and publications, warnings about tax scams that victimize taxpayers, information on the Earned Income, child and various other tax credits, and more. Look for a new interactive tool called EITC Assistant to help you learn if you are eligible to receive the Earned Income Tax Credit.

The IRS issues most refunds in less than 21 days, although some require additional time. Visit the IRS website to get the status of your refund. Where’s My Refund? will give you the status of your refund within 24 hours after the IRS has received your e-filed return or 4 weeks after you’ve mailed a paper return. It has the most up to date information about your refund. You should only call the IRS if it has been:

  • 21 days or more since you e-filed
  • 6 weeks or more since you mailed your return, or when
  • "Where’s My Refund" tells you to contact the IRS

For IRS telephone assistance contact numbers, please visit IRS.gov and type in “Telephone Assistance” in the search box

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 Nov 30 2022

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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    

Tax resources for individuals filing a federal income tax return for the first time

Posted by Admin Posted on Nov 21 2022

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Every year brings new people into the workforce. The Taxpayer Advocate Service (TAS) wants to reach individuals filing tax returns for the first time, or for the first time after a gap in filing, to share information to help them meet their federal tax obligations.

Who is a first-time filer?

Many individuals may be filing a federal income tax return for the first time, or for the first time in several years. This includes:

  • Students and recent graduates working for the first time
  • Gig workers who did not previously need to file
  • Adults returning to the workforce after long periods of unemployment
  • New military recruits who may be getting their first paychecks
  • Retirees returning to work to supplement their income
  • People taking on filing responsibilities after a spouse’s death
  • People filing only to claim refundable credits

What are some of the challenges for first-time filers?

People who have never filed, and people who have not filed for several years, have similar needs for information and resources. First-time filers may not have experience with taxes in general. The tax law is complex and changes every year. Obtaining tax help from the IRS continues to be difficult. First-time filers may not have a trusted tax professional to rely on, and they may not be able to afford professional help. Free resources are available, and TAS wants to help you find them.

As a first-time filer, you may need help determining:

  • Make sure each name and SSN or ITIN are listed exactly as printed on the individual’s Social Security card issued by the Social Security Administration or the ITIN notice issued by the IRS.
  • Choose the correct filing status. The Interactive Tax Assistant on IRS.gov can help you choose the correct status, especially if more than one filing status applies. Tax software also helps prevent mistakes with filing status.
  • Double check your math. Calculation errors are some of the most common mistakes. They range from simple addition and subtraction to more complex calculations. Check your calculations, or better yet, use tax return preparation software that does it automatically.
  • Double check your bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for taxpayers to get their money. It’s important to make sure the correct routing transit number and account number are used.
  • Sign your return. An unsigned tax return isn’t valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have executed a valid power of attorney.

Can first-time filers use electronic filing?

Electronic filing, or e-filing, refers to the process of filing one’s tax return electronically, using approved online software. Most first-time filers can use e-file. E-filing is becoming increasingly popular because of its benefits:

  • E-filing has brought about increased flexibility in the filing of tax returns and is a lot more convenient because you can file your tax return from the comfort of your home, at any time.
  • You sign your return digitally when e-filing, preventing the possibility of sending an unsigned return.
  • E-filing saves a huge amount of time and money. When tax returns are e-filed, the data is directly transmitted online from the e-filer’s servers to the tax agency’s servers. You won’t have to print and mail your tax return, or wait for a paper return to be received, opened and input by an IRS employee. Because you’re inputting the data yourself, you can avoid potential input, or transcription, errors.
  • Because transcription errors can be avoided by accurately e-filing, the overall tax return filing process is more accurate.
  • When you e-file, you will receive notifications throughout the filing process. You will receive confirmation that your return was received. Within 24 hours, you will be notified whether your return can be processed or if it must be returned, or rejected, to correct one or more errors. In most cases, you can correct the error and resubmit a rejected return. You can also check the status of your return online after it’s been accepted for processing. Paper filing is much more ambiguous. Although you can file a paper return by certified or registered mail to confirm when the IRS receives it, status updates after that point are limited.

Are there tax credits available to first-time filers?

If you are a first-time filer, you may not be aware of credits that can reduce your tax or increase your refund.

  • Earned Income Tax Credit – This credit is available to taxpayers with low to moderate earned income, with or without a qualifying child.
  • Education Credit – This credit is available to taxpayers who incurred qualified education expenses. Some education credits are refundable.
  • Premium Tax Credit – This credit helps eligible individuals and families afford premiums for health insurance purchased through the Health Insurance Marketplace.
  • Child Tax Credit – This credit is available to individuals with qualifying children. Portions of this credit are available even if the individual did not have income.
  • Recovery Rebate Credit – Even if an individual did not receive stimulus payments (economic impact payments), the individual can potentially claim recovery rebate credits for 2020 and 2021. Individuals do not need income to qualify for this 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     

Under the Taxpayer Bill of Rights, all taxpayers have the right to finality of IRS matters

Posted by Admin Posted on Nov 21 2022

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By law, taxpayers interacting with the IRS have the right to finality. This right comes into play for taxpayers who are going through an audit. These taxpayers have the right to know when the IRS has finished the audit. This is one of ten basic rights — known collectively as the Taxpayer Bill of Rights.

Here's what taxpayers in the process of an audit, should know about their right to finality:

  • Taxpayers have the right to know:
    • The maximum amount of time they have to challenge the IRS's position.
    • The maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. 
    • When the IRS has finished an audit.
       
  • The IRS generally has three years from the date taxpayers file their returns to assess any additional tax for that tax year.
     
  • There are some limited exceptions to the three-year rule, including when taxpayers fail to file returns for specific years or file false or fraudulent returns. In these cases, the IRS has an unlimited amount of time to assess tax for that tax year.
     
  • The IRS generally has 10 years from the assessment date to collect unpaid taxes. This 10-year period cannot be extended, except for taxpayers who enter into installment agreements, or the IRS obtains court judgments.
     
  • There are circumstances when the 10-year collection period may be suspended. This can happen when the IRS cannot collect money due to the taxpayer's bankruptcy or there's an ongoing collection due process proceeding involving the taxpayer.
     
  • A statutory notice of deficiency is a letter proposing additional tax the taxpayer owes. This notice must include the deadline for filing a petition with the tax court to challenge the amount proposed.
     
  • Generally, a taxpayer will only be subject to one audit per tax year. However, the IRS may reopen an audit for a previous tax year, if the IRS finds it necessary. This could happen, for example, if a taxpayer files a fraudulent 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

Not too much, not too little - taxpayers should check if their tax withholding is just right

Posted by Admin Posted on Nov 21 2022

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There are good surprises and there are bad surprises. Generally, a tax-related surprise is probably unwanted. To avoid tax surprises, people should review their tax withholding. There's still time left in 2022 to make changes and see the benefit on their tax return next year. An adjustment made now will help people avoid the surprise of a balance due or a larger-than-expected refund. People who owe taxes when they file may also face a penalty for underpayment, so they should take steps to avoid that.

It's an especially good idea to check withholding when a taxpayer has a big life change. Events like marriage, divorce, a new child, a new home purchase, or changes in tax laws can all be reasons to adjust withholding.

Credit amounts may change each year. Taxpayers can visit IRS.gov and use the Interactive Tax Assistant to identify whether they qualify for any tax credits that may call for a withholding adjustment.

Taxes are pay as you go

Taxes are generally paid throughout the year, whether from salary withholding, quarterly estimated tax payments or a combination of both. About 70% of taxpayers, however, withhold too much every year. This typically results in a refund.

A few other facts about refunds:

  • Proper withholding adjustments help people boost their take home pay rather than overwithholding taxes throughout the year and getting it back as a tax refund.
  • While the IRS issues most refunds in 21 days or less from an error-free electronic tax return, it may take longer for different reasons.
  • It's generally not a good idea to rely on a refund for big purchases.
  • Direct Deposit is the easiest and most convenient way to get a refund. The IRS issues more than 90% of all refunds this way.
  • Paper return processing delays stemming from the pandemic are six months or more. The IRS COVID-19 operations page offers complete details.

Tax Withholding Estimator

The Tax Withholding Estimator can help people determine if they have too much income tax withheld and how to make an adjustment. In other cases, it can help taxpayers see if they should withhold more or make an estimated tax payment to avoid a tax bill when they file their tax return next year.

Other items may affect 2022 taxes

Some unforeseen life events can make withholding adjustments necessary. They include:

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

When to Use a Durable Power of Attorney to Authorize Representation Before the IRS

Posted by Admin Posted on Nov 21 2022

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As the U.S. population ages, taxpayers and their representatives are increasingly confronted with the question of how to appoint a power of attorney (POA) to act on behalf of taxpayers in the event of incompetence or incapacity. When taxpayers are competent, they use a Form 2848, Power of Attorney and Declaration of Representative, for this purpose. However, an incompetent or incapacitated taxpayer is in no position to execute a Form 2848. Likewise, even a preexisting Form 2848 is usually voided if taxpayers become incompetent or incapacitated. In other contexts, individuals typically rely on various types of POA instruments to enable representation, but the IRS often will not recognize these for tax purposes. Thus, in the event of unforeseen circumstances, taxpayers can find themselves without a voice in their own tax matters beyond that of a court-appointed fiduciary.

One way of avoiding this potential pitfall is through creative and well-informed use of a durable power of attorney (DPOA). DPOAs are a common tool in the realm of estate planning and financial and medical decision-making. The key feature of a DPOA is that it remains operative or becomes effective when the principal (the individual who granted the authority) becomes incompetent or unable to act on his or her own behalf.

Tax practitioners rarely rely on DPOAs because, in their usual format, they do not authorize representation before the IRS. For this reason, individuals who have been acting on behalf of someone via a DPOA (often known as “attorneys-in-fact”) may have an unwelcome surprise when it comes to IRS representation.

Based on regulatory requirements, the Form 2848 includes information beyond a typical DPOA, such as:

  • The taxpayer’s Social Security number;
  • Name and mailing address of the appointed representative(s); and
  • A description of the matter or matters for which the representation is authorized that must include, as applicable—
    • Type of tax involved;
    • Federal tax form number involved; and
    • Specific year(s) involved.
  • Note also that any appointed representative would need to meet the practice requirements specified by Circular 230 § 10.2 and 10.7(c).

Without these and certain other specifics, the attorney-in-fact cannot represent a taxpayer before the IRS. However, this does not mean that a DPOA can never furnish this authorization; it can, if it enumerates the appropriate details. In other words, the information doesn’t have to be presented on a Form 2848, but the information from the Form 2848 must be present.

When seeking to represent an incapacitated taxpayer before the IRS, attorneys-in-fact should submit a copy of the detailed DPOA as well as Part II of the Form 2848 (Declaration of Representative). Of course, taxpayers cannot foresee the twists and turns of future audits, with the result that many DPOAs do not include the requisite information.

To accommodate this circumstance, taxpayers can adopt an alternative method, which is to utilize what, for tax purposes, can be thought of as a broad DPOA. Under this approach, the broad DPOA simply states that the attorney-in-fact is authorized to represent the principal in federal tax matters. The IRS will accept the broad DPOA as giving the attorney-in-fact the authority to execute a Form 2848 on behalf of the taxpayer. In this scenario, an attorney-in-fact wishing to initiate representation before the IRS should submit the broad DPOA and also complete Form 2848 with all relevant information.

Conclusion

Not all IRS personnel are aware of these rules and policies surrounding the use of DPOAs to facilitate tax representation. As a result, if any questions or controversies arise in this context, it may be helpful to provide them with this recent guidance from the IRS Office of Professional Responsibility.

As with more common forms of estate planning, such as wills and advance medical directives, a few minutes of care now can save a great deal of complication and difficulty later. Whether opting for a detailed DPOA or broad DPOA, either of these vehicles can ensure tax representation in the event of unforeseen circumstances, thus eliminating unnecessary stress and burden during a difficult time.

Additional Resources

Eligible taxpayers can reach out to Low Income Taxpayer Clinics (LITCs) for assistance. LITCs are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs are a great resource and can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court, including the Tax Court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. LITC services are offered for free or a small fee.

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         

Under the Taxpayer Bill of Rights, all taxpayers have the right to finality of IRS matters

Posted by Admin Posted on Nov 14 2022

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By law, taxpayers interacting with the IRS have the right to finality. This right comes into play for taxpayers who are going through an audit. These taxpayers have the right to know when the IRS has finished the audit. This is one of ten basic rights — known collectively as the Taxpayer Bill of Rights.

 

Here's what taxpayers in the process of an audit, should know about their right to finality:

 

  • Taxpayers have the right to know:
    • The maximum amount of time they have to challenge the IRS's position.
    • The maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. 
    • When the IRS has finished an audit.
       
  • The IRS generally has three years from the date taxpayers file their returns to assess any additional tax for that tax year.
     
  • There are some limited exceptions to the three-year rule, including when taxpayers fail to file returns for specific years or file false or fraudulent returns. In these cases, the IRS has an unlimited amount of time to assess tax for that tax year.
     
  • The IRS generally has 10 years from the assessment date to collect unpaid taxes. This 10-year period cannot be extended, except for taxpayers who enter into installment agreements, or the IRS obtains court judgments.
     
  • There are circumstances when the 10-year collection period may be suspended. This can happen when the IRS cannot collect money due to the taxpayer's bankruptcy or there's an ongoing collection due process proceeding involving the taxpayer.
     
  • A statutory notice of deficiency is a letter proposing additional tax the taxpayer owes. This notice must include the deadline for filing a petition with the tax court to challenge the amount proposed.
     
  • Generally, a taxpayer will only be subject to one audit per tax year. However, the IRS may reopen an audit for a previous tax year, if the IRS finds it necessary. This could happen, for example, if a taxpayer files a fraudulent 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

Storing tax records: How long is long enough?

Posted by Admin Posted on Nov 14 2022

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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?

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

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

Business Records To Keep...

Personal Records To Keep...

1 Year

1 Year

3 Years

3 Years

6 Years

6 Years

Forever

Forever

Special Circumstances

Business Documents To Keep For One Year

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

Business Documents To Keep For Three Years

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

Business Documents To Keep For Six Years

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

Business Records To Keep Forever

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

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

Personal Documents To Keep For One Year

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

Personal Documents To Keep For Three Years

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

Personal Documents To Keep For Six Years

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

Personal Records To Keep Forever

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

Special Circumstances

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

If you have any questions regarding accounting, domestic taxation, 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        

Did IRS adjust your charitable contribution deduction?

Posted by Admin Posted on Nov 14 2022

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The Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted March 27, 2020, permits taxpayers to deduct up to 100 percent of their adjusted gross income (AGI), for qualified contributions made during calendar year 2020. The Consolidated Appropriations Act of 2021 enacted on December 27, 2020, extends these benefits for 2021.

General Information

Taxpayers who file Form 1040 Schedule A, Itemize Deductions, may claim an itemize deduction for cash contributions made to qualifying charitable organizations, subject to certain limits. These limits typically range from 20 to 60 percent of the taxpayer’s AGI and vary by the type of contribution and type of charitable organization.

How do you elect to deduct up to 100 percent of a charitable contribution as an itemized deduction on Form 1040 Schedule A?

If you are filing a paper tax return, you must make the election on Form 1040 or Form 1040SR Schedule A next to line 11. You should include your election amount on the dotted line next to the line 11 or ensure your software makes the election per the instructions on Worksheet Two of Publication 526, Charitable Contributions.

Unless you make the election as described above, the usual percentage limit applies. Keep in mind your other allowed charitable contribution deductions reduce the maximum amount allowed under this election. See Worksheet Two in Publication 526 for more information.

Did you receive an IRS notice?

If you received an IRS notice, most likely a Notice CP12, adjusting your charitable contributions for tax years 2020 or 2021.

Review a copy of your 2020 or 2021 tax return, paper or electronic copy, to see if you made the election on the dotted line next to Line 11 of the Schedule A. You should take the following action:

  • If you did, follow the instructions on the Notice CP12 telling the IRS you made a proper election and provide any supporting documentation as needed.
  • If you didn’t, contact the IRS at the toll-free number listed on the top right corner of your notice or respond by mail to the address on your notice. If you write to the IRS, include a copy of the notice along with your correspondence or documentation. See Did you get a notice from the IRS?

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

Source: TAS       

IRS Collection Procedures for Past Due Taxes

Posted by Admin Posted on Nov 14 2022

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The U.S. government expects you to pay income taxes to the IRS each year. Most Americans have taxes withheld from their wages, which helps to avoid owing the IRS a large sum at the end of the year. However, self-employed individuals and independent contractors who do not have any (or enough) tax withheld may need to make estimated tax payments instead.

If your taxes are not fully paid when you file your tax return, the IRS will send you a bill for the amount owed. This bill is the beginning of the collection process.

The first IRS notice that you receive will explain the amount you owe, including any taxes, penalties, and interest charges. This notice will also demand full payment of your balance due.

IRS Penalties for Past Due Taxes

There are stiff penalties for not paying your taxes. With monthly late fees and interest charges, the amount you owe can grow exponentially in size, making it even more difficult to pay. The longer your taxes go unpaid, the bigger the consequences – leading all the way to asset seizure and even incarceration.

Here are some of the penalties and fees that apply to past due taxes:

• Interest is compounded daily and accumulates on the owed amount (the interest rate is equal to the Federal short-term rate, plus 3%)
• The late payment penalty is .05% of the owed amount and increases each month the taxes remain unpaid (up to a maximum of 25%)
• The combined penalty for both filing and paying late is 5% of the tax owed (if your return is over 60 days late, the penalty may be up to 100% of the tax owed)

However, if you can provide reasonable cause for not filing or paying on time, you may be able to avoid incurring the late filing/payment penalty.

IRS Collection Enforcement Actions

It is in your best interest to contact the IRS and make arrangements to pay the tax due. If you cannot pay the amount in full, you can request a payment plan (see below). But if you ignore the issue and do nothing, the IRS will take actions to collect your taxes – such as filing a Notice of Federal Tax Lien, serving a Notice of Levy, offsetting your tax refund, or garnishing your wages.

Federal tax lien is a claim against your property that is used to protect the government’s interest in your tax debt. If you fail to fully pay your tax balance within 10 days after the IRS sends you the first notice (of taxes owed and demand for payment), the IRS will file a ‘Notice of Federal Tax Lien’ in the public records. This notifies creditors that the IRS has a claim against all your property, including any property that you acquire after the lien arises.

Federal tax levy is an outright seizure of property or assets. The IRS may levy your wages, bank accounts, or retirement income and apply the funds towards your tax liability. The IRS may also seize your house, car, or boat and sell your property to satisfy your tax debt. If you are owed any tax refunds in the future (Federal or State), the IRS may take these as well.

Furthermore, in some situations, the IRS may decide to launch a criminal investigation or file charges for tax evasion.

Tax Payment Arrangements (If You Cannot Pay in Full)

If you cannot fully pay your tax due, you should still respond to the IRS notice in a timely manner. Pay as much as you can now and explore your other options. If you’re unable to alleviate the debt with a loan or credit card(s), you will need to consider the IRS’ payment arrangements – including an installment agreement, an offer in compromise, or a temporary delay of collection.

An installment agreement allows you to resolve your tax debt by making monthly payments over a period of time, generally up to 72 months. Individuals owing $50,000 or less (and businesses owing $25,000 or less) can apply for an Online Payment Agreement. Otherwise, you must make the request by filing Form 9465 (Installment Agreement Request) and a Collection Information Statement (Form 433-A, Form 433-B, or Form 433-F).

An offer in compromise (OIC) is a settlement offer that you make to the IRS for less than the actual amount owed. Basically, you offer to pay a portion of your taxes now and the IRS agrees to forgive the remaining debt. There are strict eligibility requirements and you must be able to demonstrate that paying the taxes in full will cause you “extraordinary hardship.” If you are able to pay your taxes through an installment agreement, you will not qualify for an offer in compromise.

In some cases, you can request a temporary delay of collection from the IRS. If the IRS determines that you cannot pay any of your tax owed, they may label your account as ‘currently not collectible’ and delay tax collection until your financial situation improves. However, this does not reduce your tax debt in any sense.

NOTE: If you a member of the U.S. Armed Forces, you may be allowed to defer your payment. For more information, see IRS Publication 3 (Armed Forces’ Tax Guide).

Your Rights as a Taxpayer

It is important to understand that you have rights and protections when it comes to the tax collection process. The ‘Taxpayer Bill of Rights’ contains 10 major provisions – including the right to be informed, the right to pay no more than the correct amount of tax, the right to challenge the IRS’ position and be heard, the right to appeal an IRS decision in an independent forum, and the right to retain representation.

If you want to discuss your payment options, you can contact the IRS at 1-800-829-1040 or call the phone number on your notice.

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    

Return to Claim Certain Credits Before Time Runs Out to Use IRS Free File Options!

Posted by Admin Posted on Nov 10 2022

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Hurry – time is running out to claim your credits on your 2021 federal income tax return using the IRS’s Free File! The Taxpayer Advocate Service (TAS) wants to educate individuals about claiming the Recovery Rebate Credit, the Child Tax Credit, or the Earned Income Tax Credit, and the upcoming deadline for using IRS Free File. You may be eligible to receive the full amount of these credits, even if you have little or no income, or are not usually required to file a federal income tax return. IRS Free File allows you to electronically prepare and file your federal income tax return for free using software at an IRS partner site or fillable forms.

What are the criteria for these credits?

Recovery Rebate Credit

  • For stimulus payment amounts you did not receive in 2021
  • S. citizen or resident alien
  • Must have Social Security number (SSN) valid for employment
  • Worth up to:
  • $1,400 per eligible adult plus
  • $1,400 per qualifying dependent

Child Tax Credit

  • Up to $3,600 for each qualifying child ages 5 and under at the end of 2021
  • Up to $3,000 for each qualifying child ages 6 through 17 at the end of 2021
  • Each qualifying child must have an SSN valid for employment
  • You may have received up to half of this amount through monthly payments in 2021. You must file a tax return to receive the rest. See Letter 6419 for more information.

Earned Income Tax Credit

  • Helps low and moderate-income workers and families
  • Based on your wages and income from self-employment
  • S. citizen or resident alien
  • Must have an SSN valid for employment
  • Worth up to:
  • $1,502 with no qualifying children
  • $3,618 with 1 qualifying child
  • $5,980 with 2 qualifying children
  • $6,728 with 3+ qualifying children

Earned Income Tax Credit

The fastest and most secure way to receive your refund is by electronically filing your return and having any refund direct deposited. The deadline to use the IRS’s Free File will close at midnight, Eastern Time, on November 17, 2022.

Here are some other tips to help you prepare to file your 2021 federal income tax return:

What you need to gather to file

  • Bank account and routing number for direct deposit of a refund.

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       

Internal Controls Reduce Check Kiting Risk

Posted by Admin Posted on Nov 02 2022

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A check kiting scheme relies on “float” time, which is the period between when a check is deposited and when the bank collects the funds on the check. In recent years, the float time has narrowed, but there’s still opportunity to capitalize on that delay. So it’s important for businesses to put internal controls in place to protect against this fraud risk.

No small matter

Check kiting schemes typically involve two or more banks, though some schemes can involve multiple accounts at one bank if there’s a lag in how the institution processes checks. The perpetrator’s goal is to falsely inflate the balance of a checking account so that written checks that otherwise would bounce, clear.

Check kiting is a federal crime that can lead to up to 30 years in federal prison, plus hefty fines. Even if a bank doesn’t press charges, it may close the account and report the incident to ChexSystems (similar to a credit bureau), making it difficult to open a new business account.

Strategies for grounding the kite

Here are five strategies your organization can implement to keep people from using your company’s accounts for check kiting:

1. Educate employees about bank fraud. Describe the types of transactions that qualify as bank fraud and their red flags. That makes workers aware of suspicious activities and demonstrates management’s commitment to preventing fraud.

2. Rotate key accounting roles. Segregate accounting duties. Rotate tasks among staffers if possible to help uncover ongoing schemes and limit opportunities to steal.

3. Reconcile bank accounts daily. Make sure someone trustworthy, who isn’t involved in issuing payments, reconciles every company bank account.

4. Maintain control of paper checks. Store blank checks in a locked cabinet or safe and periodically inventory the blank check stock. Also limit who’s allowed to order new ones.

5. Go digital. The most effective way to prevent most check fraud is to stop using paper checks altogether. Consider replacing them with ACH payments or another form of electronic payments.

Tighten up

Check kiting is relatively easy to perpetrate, particularly if your company isn’t vigilant about its check stock and bank account activity. For help tightening your internal controls, contact us.

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         

Get Current on Your Federal Taxes

Posted by Admin Posted on Nov 02 2022

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Part of your Mid-Year Tax Checkup should include seeing whether you have any overdue tax returns and making sure you file them as soon as possible.  If you’re not sure whether you are required to file, you can use the IRS’s Interactive Tax Assistant Do I Need to File a Tax Return? to help figure it out.

Even if you don’t have to file because you didn’t earn enough money, you may want to file to avoid missing out on a refund. This could apply if you had federal income tax withheld from your pay, made estimated tax payments for the year, had any of your overpayment from last year applied to this year’s estimated tax, or qualify to claim tax credits such as the Earned Income Tax Credit. The only way to get your refund is to file a tax return.

There is still time to claim your Child Tax Credit.  In addition, if you didn’t qualify for a third economic impact payment or received less than the full amount to which you were entitled, you may be eligible to claim the Recovery Rebate Credit. You must file a 2021 tax return to claim either credit.

Filing past due tax returns is important for reasons other than just the potential of losing out on a credit or refund, including:

  • Protecting your Social Security benefits;
  • Avoiding issues obtaining loans; and
  • Preventing the IRS from filing a substitute return for you. This return might not give you credit for deductions and exemptions you may be entitled to receive (which may result in you owing).

Be aware of the consequences for not filing a tax return when you are required to do so.

Find the records you need

Create and/or sign into your individual IRS online account to view, access and print:

  • Key data from your most recently filed tax return, including your adjusted gross income, as well as transcripts;
  • Information about your Economic Impact Payments and Advance Child Tax Credit payments, including the amount you received; and
  • Digital copies of certain notices from the IRS.

Additional ways to find records specifically related to: 

Wage and Income information – Complete Form 4506-T, Request for Transcript of Tax Return, and check the box on line 8. You can also contact your employer for a copy of your Form W-2, Wage and Tax Statement.

Economic Impact Payments/Recovery Rebate Credit – Review Letter 6475, Your 2021 Economic Impact Payment(s), that the IRS issued to you earlier this year. Spouses filing a joint return for 2021 need to know the payment amounts for both spouses to claim this credit.

Advance Child Tax Credit payments – Review Letter 6419, 2021 Total Advance Child Tax Credit (AdvCTC) Payments, that the IRS issued to you earlier this year.

Earned Income Tax Credit – You can request an account transcript online using Get Transcript. You can use the EITC Assistant to see if you’re eligible, calculate how much money you may qualify for, and find answers to questions about this credit.

Help Preparing your Past-Due Return

Tax form(s) – Get IRS online tax forms and instructions to file your past-due return, or order them by calling 800-TAX-FORM (800-829-3676).

Preparation assistance – If you need return preparation assistance, you may be eligible for assistance from a Low Income Taxpayer Clinic (LITC), or get free tax help from volunteers.

Note: LITCs can prepare returns if the due date for the return has already passed.

How to File 

The IRS encourages you to file electronically through a tax professional, IRS Free File, free tax return preparation sites, or commercial tax return preparation software.

You can also send your return via Mail or private delivery service, but be aware that it may take 6 months or more to process. For service delay details, see Status of Operations. If you must file a paper tax return, consider sending it by certified mail, with a return receipt. This will be your proof of the date you mailed your tax return and when the IRS received it.

Did you file an extension for 2021?

If you requested an extension for 2021, the filing deadline is coming soon. This year, an extension gives you until October 17 to file your return. But you don’t have to wait; file electronically and if you are due a refund, choose direct deposit once you have all your information together.

Note: IRS employees continue working hard to process tax returns and address inventory issues but are urging people to file electronically to avoid processing delays.

Do you need to correct a previously filed return?

If you file your individual tax return and then realize you made a mistake, you can amend your tax return. Usually this involves filing Form 1040-X, Amended U.S. Individual Income Tax Return, to report changes to your income, deductions or credits. You may also be able to make certain changes to your filing status.

Do you owe taxes you can’t pay?

If you owe taxes and your tax return is overdue, you should file your tax return now to avoid further penalties for not filing by the deadline. Again, you should file electronically if at all possible due to the IRS backlog in processing paper returns.  See Status of Operations.

If you can’t pay the full amount, pay what you can now to reduce the amount of penalties and interest that will continue to accrue, and review the IRS payment options, including an offer in compromise. Each option has different requirements and fees, so please review each one carefully. Depending on your economic circumstances, you may qualify to be placed in Currently Not Collectible status.

For more updates from the Taxpayer Advocate Service, visit the news and information center to read the latest tax tips, blogs, alerts and more.

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

Source: TAS      

What the Inflation Reduction Act Means for YouThe Inflation

Posted by Admin Posted on Nov 02 2022

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Reduction Act, which includes expanded or extended tax credits and additional funding for the IRS, was signed into law on August 16, 2022.

How could the Inflation Reduction Act impact you when filing your next tax return?

Below is a simplified summary of how the Inflation Reduction Act may affect you.

Health Care

The Inflation Reduction Act includes:

  • Extension of Affordable Care Act (ACA) funding through 2025. This funding, which was due to expire at the end of 2022, will allow consumers to continue to buy insurance with lower premiums through the Health Insurance Marketplace (also referred to as the Marketplace or the Exchange).
  • Extension of the American Rescue Plan Act (ARPA) temporary exception that allows taxpayers with incomes above 400 percent of the Federal Poverty Level to qualify for the Premium Tax Credit.

Energy Efficient Home Improvement Credit

The Nonbusiness Energy Property Credit was extended through 2032 and renamed the Energy Efficient Home Improvement Credit.

Starting in 2023, the credit will be equal to 30 percent of the costs of all eligible home improvements made during the year. Additionally:

  • The $500 lifetime limit on the total credit amount will be replaced with a $1,200 annual limit.
  • The annual limits for specific types of qualifying improvements will be:
    • $150 for home energy audits;
    • $250 for any exterior door ($500 total for all exterior doors) that meet applicable Energy Star requirements;
    • $600 for exterior windows and skylights that meet Energy Star most efficient certification requirements;
    • $600 for other qualified energy property, including central air conditioners; electric panels and certain related equipment; natural gas, propane, or oil water heaters; oil furnaces; water boilers;
    • $2,000 for heat pump and heat pump water heaters; biomass stoves and boilers. This category of improvement is not limited by the $1,200 annual limit on total credits or the $600 limit on qualified energy property; and
    • Roofing will no longer qualify.

For eligible home improvements using products placed in service after 2024, no credit will be allowed unless the manufacturer of any purchased item creates a product identification number for the product and the taxpayer claiming the credit includes the number on his or her return for that tax year.

Note: For 2022, the prior credit rules apply.

Residential Clean Energy Credit

The Residential Energy Efficient Property Credit, now called the Residential Clean Energy Credit, was previously scheduled to expire at the end of 2023 but has been extended through 2034. The Inflation Reduction Act also increased the credit amount, with a phaseout of the applicable percentage.

Amount of Credit:

  • 30 percent for 2023-2032;
  • 26 percent for 2033; and
  • 22 percent for 2034.

The credit no longer applies to biomass furnaces and water heaters, now covered under the Energy Efficient Home Improvement Credit. Starting in 2023, however, the new credit will apply to battery storage technology with a capacity of at least three kilowatt hours.

Clean Vehicle Credits

The Inflation Reduction Act extends the Clean Vehicle Credit until the end of 2032 and creates new credits for previously-owned clean vehicles and qualified commercial clean vehicles.

Tax credits include up to:

  • $7,500 for the purchase of new qualified commercial clean vehicles;
  • $40,000 for vehicles over 14,000 pounds; and
  • the lesser of 30 percent of the price of used electric vehicles or $4,000.

Limitations apply based on the manufacturer’s suggested retail price of the vehicle. There are also limitations for the new vehicle credit based on adjusted gross income (AGI) thresholds – for single or married filing separately taxpayers, the limit is $150,000; for taxpayers filing as head of household, the limit is $225,000; and for married filing jointly, or surviving spouse taxpayers, the limit is $300,000. Reduced AGI limitations apply to the used vehicle credit.

Starting in 2024, the Inflation Reduction Act establishes a mechanism that will allow car buyers to transfer the credit to dealers at the point of sale so that it can directly reduce the purchase price.

Taxes and IRS Funding

The Inflation Reduction Act also includes:

  • 15 percent minimum tax on corporations with over $1 billion in revenue;
  • 1 percent excise tax on corporate share buybacks; and
  • About $79 billion of additional funding over ten years for the IRS.

The IRS is preparing a plan showing how it expects to use the additional funding. In a recent letter to all Members of the Senate, IRS Commissioner Charles Rettig stated, “These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans…Other resources will be invested in employees and IT systems that will allow us to better serve all taxpayers, including small businesses and middle-income taxpayers.”

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       

Feel like you are not responsible for a debt owed by your spouse or ex-spouse?

Posted by Admin Posted on Nov 02 2022

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If you file jointly and your spouse has a debt (this can be a federal, state income tax, child support, or spousal support debt) the IRS can apply your refund to one of these debts, which is known as an “offset.” The agency can also take a collection action against you for the tax debt you and your spouse owe, such as filing of the Notice of Federal Tax Lien or issuing a levy. However, if you’re not legally responsible for the past due amount you may still be entitled to receive your share of the refund or request relief from joint and several liability, depending on the facts of the situation. “Joint and several liability” means that each taxpayer is legally responsible for the entire debt, even if you’ve divorced after you filed a joint tax return.

If you feel you are not responsible for the debt, there are two ways to request relief:

Injured Spouse Claim: You can request that you be treated as an injured spouse, if you filed a joint tax return and all or part of a refund is taken to pay a debt owed only by your spouse and not you. See the Injured Spouse page for step-by-step instructions for filing this claim and what information is needed. We also have a short video that explains what injured spouse means and when to file a claim.

Innocent Spouse Relief: For instances involving individual earned income or self-employment taxes only, by requesting innocent spouse relief, you can be considered for relief of responsibility from paying tax, interest, and penalties, if your spouse (or former spouse) improperly reported items or omitted items on your tax return.

Note: Household Employment taxes, Individual Shared Responsibility payments, business taxes and trust fund recovery penalty for employment taxes are not eligible for innocent spouse relief.

The three types of innocent spouse relief available are:

Innocent spouse relief: By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse did something wrong on your tax return.

Separation of liability relief: Under this type of relief, you allocate (divide) the understatement of tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse).

Equitable relief: If you do not qualify for innocent spouse relief or separation of liability, you may still be relived of responsibility for tax, interest, and penalties through equitable relief.

Each type of relief has different requirements. Three Types of Relief at a Glance compares the rules for these three types of relief. You may also want to refer to Innocent Spouse Questions & Answers for more information about these types of relief.

If you file an Innocent Spouse claim, but the IRS denies your claim and you still disagree, see Appeal an Innocent Spouse Determination for next steps to take.

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       

Beware of “Wash Sales” When Selling Securities

Posted by Admin Posted on Nov 02 2022

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If you’re planning to sell stock or other securities at a loss to offset gains you realized earlier in the year, beware of the “wash sale” rule. It comes into play when an investor wants to realize a loss on a security for tax purposes while continuing to invest in the security. Under the wash rule, selling securities for a loss and buying back substantially identical securities within 30 days before or after the sale date means the loss can’t be claimed for tax purposes.

The rule

The wash sale rule is designed to prevent taxpayers from benefiting from a loss without actually parting with ownership. Note that the rule applies not only to buying back stock within 30 days after selling it but also to a 30-day period before the sale date to prevent “buying the stock back” before it’s even sold.

Although the loss can’t be claimed on a wash sale, the disallowed amount is added to the cost of the new stock to increase its tax basis. So, the disallowed amount can be claimed when the new stock is finally sold at some point in the future (other than in a wash sale).

An example

Assume you buy 500 shares of XYZ Inc. for $10,000 and sell them on November 1 for $3,000. On November 15, you buy 500 shares of XYZ again for $3,200. Because the shares were “bought back” within 30 days of the sale, the wash sale rule applies. Therefore, you can’t claim a $7,000 loss. Your basis in the new 500 shares is $10,200: the actual cost plus the $7,000 disallowed loss.

If only a portion of the stock sold is repurchased, only that portion of the loss is disallowed. In the example above, if 60% of the shares sold were bought back, you’d be able to claim 40% of the loss on the sale. The remaining loss would be disallowed and added to your cost basis of the repurchased shares.

No surprises

The wash sale rule can deliver a nasty surprise at tax time. Contact us with questions as you’re contemplating year-end tax planning strategies for your investment portfolio.

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      

Year-end Gifts And The Gift Tax Annual Exclusion

Posted by Admin Posted on Nov 02 2022

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With the holidays and year-end approaching, you might be considering making gifts of stock or cash to family members and other loved ones. By using your gift tax annual exclusion, those gifts can reduce the size of your taxable estate. For 2022, the annual exclusion is $16,000. The exclusion will increase to $17,000 for 2023.

How it works

The annual exclusion applies to gifts on a per recipient, per year, basis. Therefore, a taxpayer with three children can transfer a total of $48,000 to them in 2022 free of federal gift taxes and another $51,000 gift-tax-free in 2023.

If these are the only gifts made in the applicable year, there’s no need to file a federal gift tax return. If an annual gift exceeds the exclusion, only the excess amount is a taxable gift, though it may not result in tax liability. (See “More ways to save gift tax,” below.)

However, keep in mind that the exclusion doesn’t carry over from year to year. For example, if you don’t make an annual exclusion gift to someone this year, you can’t add $16,000 to your 2023 annual exclusion and make a $33,000 tax-free gift to that person next year.

Married taxpayers and gift splitting

If you’re married, a gift can be treated as split between you and your spouse, even if only one of you gives the gift. That means, by gift splitting, a married couple can use their two exclusions to give a recipient up to $32,000 in 2022 and $34,000 in 2023. For example, in 2022 a married couple with three married children can transfer a total of $192,000 to their children and the children’s spouses ($32,000 for each of six recipients).

Because more than the exclusion amount is being transferred by a spouse, a gift tax return (or returns) will have to be filed, even if the spouses’ combined exclusion covers the total gift. If gift splitting is involved, both spouses must consent to it and that consent should be indicated on each gift tax return (or returns) that each spouse files.

Speaking of married taxpayers, gifts from one spouse to the other aren’t covered here, because these gifts are free of gift tax under separate marital deduction rules, as long as the recipient spouse is a U.S citizen.

More ways to save gift tax

Gifts that are taxable because they aren’t covered by the annual exclusion may still not result in a tax liability. This is because the lifetime gift and estate tax exemption wipes out the federal gift tax liability on taxable gifts up to a cumulative $12.06 million for 2022 (increasing to $12.92 million for 2023). The amount of the exemption you use during your life reduces or eliminates the exemption available for federal estate tax purposes upon your death.

Gifts made directly to an educational institution to pay tuition or to a health care provider to pay for medical expenses on behalf of someone else do not count towards the exclusion. For example, you can pay $20,000 directly to your grandson’s college for his tuition this year, plus still give him a tax-free direct cash gift of up to $16,000.

Why 2022 gifts make sense

Annual exclusion gifts reduce the taxable value of your estate. While the lifetime gift and estate tax exemption amount is historically high right now, it’s scheduled to fall in 2026 to around $7 or $8 million, depending on inflation. Congress could act to extend today’s higher exemption or could change estate tax law in other ways. Making large tax-free gifts now could help insulate you against any later reduction in the gift and estate tax exemption.

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 

Selling Trade Or Business Property? Know The Tax Effects

Posted by Admin Posted on Nov 02 2022

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Many rules can potentially apply to the sale of business property, but what are the tax consequences? For simplicity, let’s assume that the property you want to sell is depreciable property used in your business and you’ve held it for more than one year.

General rules

Under the Internal Revenue Code, your gains and losses from sales of business property are netted against each other. The net gain or loss qualifies for tax treatment as follows:

1. If the netting process results in a net gain, then long-term capital gain treatment results, subject to “recapture” rules discussed below. This treatment is generally more favorable than ordinary income treatment.

2. If the netting of gains and losses results in a net loss, that loss is fully deductible against ordinary income (so, none of the rules that limit the deductibility of capital losses apply).

Recapture rules

The availability of long-term capital gain treatment for business property net gain is limited by recapture rules. Recapture rules specify that amounts are treated as ordinary income rather than capital gain because of previous ordinary loss or deduction treatment for these amounts (such as depreciation, for example).

There’s a special recapture rule that applies only to business property. Under this rule, to the extent you’ve had a business property net loss within the previous five years, any business property net gain is treated as ordinary income, not as long-term capital gain.

More tax code details

Here are some more details about two types of property:

Section 1245 property. This is all depreciable personal property, tangible or intangible, and certain depreciable real property (usually, real property with specific functions). If you sell this property, you must recapture your gain as ordinary income to the extent of your earlier depreciation deductions on the asset.

Section 1250 property. This type of property generally includes buildings and their structural components. If you sell such property that was placed in service after 1986, none of the long-term capital gain attributable to depreciation deductions will be subject to depreciation recapture. (Additional rules apply for Section 1250 property placed in service in 1986 or earlier.)

However, for most noncorporate taxpayers, the gain attributable to depreciation deductions up to the amount of the business property net gain will be taxed at no higher than 28.8% (as reduced by the business property recapture rule above). That’s 25% plus the 3.8% net investment income tax (NIIT), rather than the maximum 23.8% rate (20% plus the 3.8% NIIT) that generally applies to long-term capital gains of noncorporate taxpayers.

Proceed with caution

As you can see, the tax treatment of the sale of business assets can be complex. And different rules apply based on property type, such as property held for sale to customers, intellectual property, low-income housing, and farming or livestock property. Contact us for help with specific transactions or additional questions.

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 to Use a Durable Power of Attorney to Authorize Representation Before the IRS

Posted by Admin Posted on Nov 02 2022

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As the U.S. population ages, taxpayers and their representatives are increasingly confronted with the question of how to appoint a power of attorney (POA) to act on behalf of taxpayers in the event of incompetence or incapacity. When taxpayers are competent, they use a Form 2848, Power of Attorney and Declaration of Representative, for this purpose. However, an incompetent or incapacitated taxpayer is in no position to execute a Form 2848. Likewise, even a preexisting Form 2848 is usually voided if taxpayers become incompetent or incapacitated. In other contexts, individuals typically rely on various types of POA instruments to enable representation, but the IRS often will not recognize these for tax purposes. Thus, in the event of unforeseen circumstances, taxpayers can find themselves without a voice in their own tax matters beyond that of a court-appointed fiduciary.

One way of avoiding this potential pitfall is through creative and well-informed use of a durable power of attorney (DPOA). DPOAs are a common tool in the realm of estate planning and financial and medical decision-making. The key feature of a DPOA is that it remains operative or becomes effective when the principal (the individual who granted the authority) becomes incompetent or unable to act on his or her own behalf.

Tax practitioners rarely rely on DPOAs because, in their usual format, they do not authorize representation before the IRS. For this reason, individuals who have been acting on behalf of someone via a DPOA (often known as “attorneys-in-fact”) may have an unwelcome surprise when it comes to IRS representation.

Based on regulatory requirements, the Form 2848 includes information beyond a typical DPOA, such as:

  • The taxpayer’s Social Security number;
  • Name and mailing address of the appointed representative(s); and
  • A description of the matter or matters for which the representation is authorized that must include, as applicable
  • Type of tax involved;
  • Federal tax form number involved; and
  • Specific year(s) involved.
  • Note also that any appointed representative would need to meet the practice requirements specified by Circular 230 § 10.2 and 10.7(c).

Without these and certain other specifics, the attorney-in-fact cannot represent a taxpayer before the IRS. However, this does not mean that a DPOA can never furnish this authorization; it can, if it enumerates the appropriate details. In other words, the information doesn’t have to be presented on a Form 2848, but the information from the Form 2848 must be present.

When seeking to represent an incapacitated taxpayer before the IRS, attorneys-in-fact should submit a copy of the detailed DPOA as well as Part II of the Form 2848 (Declaration of Representative). Of course, taxpayers cannot foresee the twists and turns of future audits, with the result that many DPOAs do not include the requisite information.

To accommodate this circumstance, taxpayers can adopt an alternative method, which is to utilize what, for tax purposes, can be thought of as a broad DPOA. Under this approach, the broad DPOA simply states that the attorney-in-fact is authorized to represent the principal in federal tax matters. The IRS will accept the broad DPOA as giving the attorney-in-fact the authority to execute a Form 2848 on behalf of the taxpayer. In this scenario, an attorney-in-fact wishing to initiate representation before the IRS should submit the broad DPOA and also complete Form 2848 with all relevant information.

Conclusion

Not all IRS personnel are aware of these rules and policies surrounding the use of DPOAs to facilitate tax representation. As a result, if any questions or controversies arise in this context, it may be helpful to provide them with this recent guidance from the IRS Office of Professional Responsibility.

As with more common forms of estate planning, such as wills and advance medical directives, a few minutes of care now can save a great deal of complication and difficulty later. Whether opting for a detailed DPOA or broad DPOA, either of these vehicles can ensure tax representation in the event of unforeseen circumstances, thus eliminating unnecessary stress and burden during a difficult 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: TAS      

TAS Tax Tip: Valuable information about child and dependent-related tax benefits

Posted by Admin Posted on Oct 26 2022

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If you have children or other dependents, and qualify to claim them on your tax return, there are a few things you need to know before you file your federal tax return.

General Information

Child and dependent-related tax benefits are some of the most common claimed benefits on federal tax returns each year. If you don’t know which ones you may qualify for, you can use the online interactive tax assistant.

In addition, you should use the IRS child-related tax benefits comparison table to help you with basic eligibility rules applying to:

  • Earned Income Tax Credit (EITC);
  • Child Tax Credit (CTC);
  • Credit for Other Dependents (ODC);
  • Child and Dependent Care Credit (CDCC); and
  • Head of household (HOH) filing status.

Items that Require Action Now

Get a Social Security number (SSN) or a Taxpayer Identification Number (TIN) for all qualifying dependents.

  • If your qualifying child does not have a valid SSN and needs one, get it before you file. Why? Because your child needs an SSN that is valid for employment which has been issued before the due date of your tax return (including extensions) for you to be able to claim EITC or CTC.
  • If you are not able to claim the CTC or EITC because your qualifying child or qualifying relative does not have the required SSN, but has another type of TIN issued on or before the due date of your tax return (including extensions) such as an individual taxpayer identification number (ITIN)Adoption Taxpayer Identification Number (ATIN), or a Not Valid for Employment SSN, you may be able to claim the Credit for Other Dependents, Child and Dependent Care Credit, or Head of Household.
    • If your qualifying dependent has an ITIN that will expire before the end of the year or does not have one assigned yet, you will need to timely file a Form W-7, Application for IRS Individual Taxpayer Identification Number to ensure it is available for when you file.
    • Sometimes an ITIN request can take up to 11 weeks to process. Please make sure you check on irs.gov that any IRS backlogs have not extended these timeframes. Review the rules now and apply right away, so you don’t miss out on this credit or delay any possible refund. ATIN requests generally take 4 to 8 weeks.

No matter which credit(s) you may claim, learn more about what identification is needed for dependents now to avoid problems later.

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

TAS Tax Tip: Paying the IRS

Posted by Admin Posted on Oct 26 2022

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Taxes should be paid as you earn or receive income during the year. The IRS offers a variety of ways for you to do so. Some of the ways to pay include:

  • Tax Withholding – For employees, withholding is the amount of federal income tax withheld from your paycheck. The amount your employer withholds depends on how much you earn and the information you give your employer on Form W-4, Employee’s Withholding Certificate. For help with your withholding, use the IRS’s Tax Withholding Estimator.
  •   Using your online account – Create and/or sign into your   

individual IRS online account to pay and see your payment history. You can also:

  • View the amount you owe, including a breakdown by tax year;
  • View some notices;
  • View 5 years of payment history, including your estimated tax payments (if any);
  • View any pending or scheduled payments;
  • Learn about payment plan options and apply for a new payment plan; and
  • View details of your payment plan (if you have one).
  • Downloading the IRS2Go app on your phone or mobile device – The IRS2Go app can help you find IRS tools and resources faster. You can get easy access to mobile-friendly payment options, and the app is available in both English and Spanish for Android and iOS mobile devices.
  • Paying directly from your bank account – When looking into how to pay individual taxes without any added fees, Direct Pay is one option. With Direct Pay you can make a payment directly from your savings or checking account with no registration required and receive instant confirmation when the payment is made. You can schedule payments up to a year in advance and change or cancel a payment up to two business days before the scheduled payment date.
  • Submitting business payments or scheduling estimated payments with Electronic Federal Tax Payment System – The Electronic Federal Tax Payment System (EFTPS) is a free system for businesses, tax professionals and individuals to make secure federal tax payments. You must be enrolled to use the EFTPS. It can take up to five days to process your enrollment, so plan ahead. Visit EFTPS or call EFTPS Customer Service to request an enrollment form:

With EFTPS, you can schedule payments 24/7, up to a year in advance, and you’ll receive an immediate confirmation upon payment. You can easily change or cancel scheduled payments and view the last 15 months of payment history.

  • By debit card, credit card or digital wallet – This option is available for individuals and businesses. The IRS uses third party payment processors for payments by debit or credit card. You can pay online, over the phone, or using a digital wallet, such as PayPal or Click to Pay. The IRS doesn’t charge a fee for this service, but the payment processors do. Visit the IRS pay your taxes by debit or credit card to choose the payment processor that offers you the best fees for your card type and payment amount. Keep in mind there’s a maximum number of card payments allowed based on your tax type and payment type.

Note: Employers’ federal tax deposits cannot be paid by debit or credit card; see how to pay employment taxes.

  • Other ways you can pay
    • Same-Day Wire — Bank fees may apply.
    • Check or Money Order — Through U.S. mail; with or without your return.
    • Cash — The easiest way to pay is electronically; however, you can pay with cash. Please review the requirements before doing so.
    • Electronic Funds Withdrawal — When e-filing your return, you can schedule your payment for a designated date of withdrawal.

Need more time to pay?

To limit the amount of interest and penalties the IRS may charge you, it’s in your best interest to pay your tax debt as soon as possible.

However, if you currently can’t pay your taxes in full, the IRS offers a number of payment options. Depending on the type of tax you owe, and how much, different options are available, ranging from short term extensions, to installment agreements, to an offer in compromise. Each option has different requirements and fees, so please review each one carefully. Depending on your economic circumstances, you may qualify to be placed in Currently Not Collectible status.

For more updates from the Taxpayer Advocate Service, visit the news and information center to read the latest tax tips, blogs, alerts and more. Our tax tips are also available in Spanish.

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

Taxpayers with an outstanding tax bill should consider an Offer in Compromise

Posted by Admin Posted on Oct 26 2022

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An Offer in Compromise can be an effective way individuals and businesses to settle federal tax debt. This federal program allows taxpayers to enter into an agreement, with the IRS, that settles a tax debt for less than the full amount owed. Sometimes taxpayers are able to settle for significantly less, especially if they have low income and few assets.

This type of agreement is an option when taxpayers can't pay their full tax liabilities or when paying the entire balance owed would cause financial hardship. The goal is a compromise that suits the best interests of both the taxpayer and the IRS.

Individual taxpayers and business owners should review the IRS's Offer in Compromise BookletPDF to learn how these agreements work and decide if it could help them resolve their tax debts.

When reviewing OIC applications, the IRS considers the taxpayer's unique set of facts and any special circumstances affecting the taxpayer's ability to pay, as well as:

  • Income
  • Expenses
  • Asset equity

The booklet covers everything a taxpayer needs to know about submitting an offer in compromise, including:

  • Who is eligible to submit an offer
  • How much it costs to apply
  • How the application process works

The booklet also includes the forms that taxpayers must complete as part of the offer in compromise process. The current application fee is $205. However, taxpayers who meet the definition of a low-income taxpayer don't have to pay this fee.

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

APPLY TO CHAPTER 13 IF THE NUMBERS ARE IN RED

Posted by Admin Posted on Oct 26 2022

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Bankruptcy is a last resort for taxpayers to get out of debts. For individuals, the most common type of bankruptcy is a Chapter 13. This section of the bankruptcy law allows individuals and small business owners in financial difficulty to repay their creditors. Chapter 13 bankruptcy is only available to wage earners, the self-employed and sole proprietor businesses.

Tax obligations while filing Chapter 13 bankruptcy:

  • Taxpayers must file all required tax returns for tax periods ending within four years of their bankruptcy filing.
  • During a bankruptcy taxpayers must continue to file, or get an extension of time to file, all required returns.
  • During a bankruptcy case taxpayers should pay all current taxes as they come due.
  • Failure to file returns and pay current taxes during a bankruptcy may result in a case being dismissed, converted to a liquidating bankruptcy Chapter 7, or the Chapter 13 plan may not be confirmed.

Other things to know:

  • If the IRS is listed as a creditor in their bankruptcy, the IRS will receive electronic notice about their case from the U.S. Bankruptcy Courts. People can check by calling the IRS' Centralized Insolvency Operation at 800-973-0424 and giving them the bankruptcy case number.
  • If one of the reasons a taxpayer is filing bankruptcy is overdue federal tax debts, they may need to increase their withholding or their estimated tax payments. The Tax Withholding Estimator can help people determine the proper withholding. The IRS.gov Estimated Taxes page has more information on estimated taxes. 
  • People can receive tax refunds while in bankruptcy. However, refunds may be subject to delay or used to pay down their tax debts. Taxpayers can see if their refund has been delayed or offset against their tax debts by going to the Where's My Refund? tool or by contacting the Centralized Insolvency Operations Unit. 

Other types of bankruptcy

Partnerships and corporations file bankruptcy under Chapter 7, Liquidation or Chapter 11, Reorganization of the bankruptcy code. Individuals may also file under Chapter 7 or Chapter 11. Other types of bankruptcy include Chapters 9, 12 and 15. Cases under these chapters of the bankruptcy code involve municipalities, family farmers and fisherman, and international cases.

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 

Grandparents and other relatives with eligible dependents can qualify for 2021 Child Tax Credit

Posted by Admin Posted on Oct 20 2022

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WASHINGTON – The Internal Revenue Service reminded families today that some taxpayers who claim at least one child as their dependent on their tax return may not realize they could be eligible to benefit from the Child Tax Credit (CTC).

Eligible taxpayers who received advance Child Tax Credit payments last year should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advance Child Tax Credit payments last year can claim the full credit by filing a 2021 tax return.

The IRS urges grandparents, foster parents or people caring for siblings or other relatives to check their eligibility to receive the 2021 Child Tax Credit. It's important for people who might qualify for this credit to review the eligibility rules to make sure they still qualify. Taxpayers can use the Interactive Tax Assistant to check eligibility. Taxpayers who haven't qualified in the past should also check because they may now be able to claim the credit. To receive it, eligible individuals must file a 2021 federal tax return.

What is the Child Tax Credit expansion?

The Child Tax Credit expansion, which is a part of the American Rescue Plan, increased the amount of money per child families can receive and expanded who can receive the payments.

The American Rescue Plan increased the Child Tax Credit from $2,000 to $3,600 per child for children under the age of six, from $2,000 to $3,000 for children over the age of 6 and raised the age limit from 16 to 17 years old.

The American Rescue Plan Act of 2021 expanded the Child Tax Credit for tax year 2021 only.

Who qualifies for the Child Tax Credit?

Taxpayers can claim the Child Tax Credit for each qualifying child who has a Social Security number that is valid for employment in the United States and issued by the Social Security Administration before the due date of their tax return (including an extension if the extension was requested by the due date).

To be a qualifying child for the 2021 tax year, the dependent generally must:

  • Be under age 18 at the end of the year.
  • Be their son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or a descendant of one of these (for example, a grandchild, niece, or nephew).
  • Provide no more than half of their own financial support during the year.
  • Have lived with the taxpayer for more than half the year.
  • Be properly claimed as their dependent on their tax return.
  • Not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimated tax paid.
  • Have been a U.S. citizen, U.S. national or U.S. resident alien.

What are the eligibility factors?

Individuals qualify for the full amount of the 2021 Child Tax Credit for each qualifying child if they meet all eligibility factors and their annual income is not more than:

  • $150,000 if they're married and filing a joint return, or if they're filing as a qualifying widow or widower.
  • $112,500 if they're filing as a head of household.
  • $75,000 if they're a single filer or are married and filing a separate return.

Parents and guardians with higher incomes may be eligible to claim a partial credit. Claiming these benefits can result in tax refunds for many individuals. Individuals should file electronically and choose direct deposit to avoid delays and receive their refund faster.

Finding free tax return preparation

A limited number of  Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) program sites remain open and available to help eligible taxpayers get their tax returns prepared and filed for free by IRS trained and certified volunteers. Low- and moderate-income taxpayers as well as those age 60 and above can check to see if there is an available site in or near their community by using the VITA/TCE Site Locator.

IRS Free File available until Nov. 17 to help more people receive credits

The IRS Free File program, available only through IRS.gov and offered in partnership the tax software industry's Free File Alliance, offers eligible taxpayers brand-name tax preparation software to use at no cost. The software does all the work of finding deductions, credits and exemptions for which the taxpayer qualifies. It's free for most individual filers who earned $73,000 or less in 2021. Some of the Free File packages also offer free state tax returns to those who qualify. Taxpayers who earned more than $73,000 in 2021 and are comfortable preparing their own taxes can use Free File Fillable Forms. This electronic version of paper IRS tax forms is also used to file tax returns online.

To help more people claim a variety of tax credits and benefits, Free File will remain open for an extra month this year, until November 17, 2022.

The IRS is sending letters to more than 9 million individuals and families who appear to qualify for a variety of key tax benefits but did not claim them by filing a 2021 federal income tax return. Many in this group may be eligible to claim some or all of the 2021 Recovery Rebate Credit, the Child Tax Credit, the Earned Income Tax Credit and other tax credits depending on their personal and family situation. The special reminder letters, which will be arriving in mailboxes over the next few weeks, are being sent to people who appear to qualify for the Child Tax Credit, Recovery Rebate Credit (RRC) or Earned Income Tax Credit (EITC) but haven't yet filed a 2021 return to claim them. The letter, printed in both English and Spanish, provides a brief overview of each of these three credits.

These and other tax benefits were expanded under last year's American Rescue Plan Act and other recent legislation. Even so, the only way to get the valuable benefits is to file a 2021 tax return. Often, individuals and families can get these expanded tax benefits, even if they have little or no income from a job, business or other source. This means that many people who don't normally need to file a tax return should do so this year, even if they haven't been required to file in recent years.

People can file a tax return even if they haven't yet received their letter. The IRS reminds people that there's no penalty for a refund claimed on a tax return filed after the regular April 2022 tax deadline. The fastest and easiest way to get a refund is to file an accurate return electronically and choose direct deposit.

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

TAS Tax Tip: Get Current on Your Federal Tax

Posted by Admin Posted on Oct 20 2022

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Part of your Mid-Year Tax Checkup should include seeing whether you have any overdue tax returns and making sure you file them as soon as possible.  If you’re not sure whether you are required to file, you can use the IRS’s Interactive Tax Assistant Do I Need to File a Tax Return? to help figure it out.

Even if you don’t have to file because you didn’t earn enough money, you may want to file to avoid missing out on a refund. This could apply if you had federal income tax withheld from your pay, made estimated tax payments for the year, had any of your overpayment from last year applied to this year’s estimated tax, or qualify to claim tax credits such as the Earned Income Tax Credit. The only way to get your refund is to file a tax return.

There is still time to claim your Child Tax Credit.  In addition, if you didn’t qualify for a third economic impact payment or received less than the full amount to which you were entitled, you may be eligible to claim the Recovery Rebate Credit. You must file a 2021 tax return to claim either credit.

Filing past due tax returns is important for reasons other than just the potential of losing out on a credit or refund, including:

  • Protecting your Social Security benefits;
  • Avoiding issues obtaining loans; and
  • Preventing the IRS from filing a substitute return for you. This return might not give you credit for deductions and exemptions you may be entitled to receive (which may result in you owing).

Be aware of the consequences for not filing a tax return when you are required to do so.

Find the records you need

Create and/or sign into your individual IRS online account to view, access and print:

  • Key data from your most recently filed tax return, including your adjusted gross income, as well as transcripts;
  • Information about your Economic Impact Payments and Advance Child Tax Credit payments, including the amount you received; and
  • Digital copies of certain notices from the IRS.

Additional ways to find records specifically related to: 

Wage and Income information – Complete Form 4506-T, Request for Transcript of Tax Return, and check the box on line 8. You can also contact your employer for a copy of your Form W-2, Wage and Tax Statement.

Economic Impact Payments/Recovery Rebate Credit – Review Letter 6475, Your 2021 Economic Impact Payment(s), that the IRS issued to you earlier this year. Spouses filing a joint return for 2021 need to know the payment amounts for both spouses to claim this credit.

Advance Child Tax Credit payments – Review Letter 6419, 2021 Total Advance Child Tax Credit (AdvCTC) Payments, that the IRS issued to you earlier this year.

Earned Income Tax Credit – You can request an account transcript online using Get Transcript. You can use the EITC Assistant to see if you’re eligible, calculate how much money you may qualify for, and find answers to questions about this credit.

Help Preparing your Past-Due Return

Tax form(s) – Get IRS online tax forms and instructions to file your past-due return, or order them by calling 800-TAX-FORM (800-829-3676).

Preparation assistance – If you need return preparation assistance, you may be eligible for assistance from a Low Income Taxpayer Clinic (LITC), or get free tax help from volunteers.

Note: LITCs can prepare returns if the due date for the return has already passed.

How to File 

The IRS encourages you to file electronically through a tax professional, IRS Free File, free tax return preparation sites, or commercial tax return preparation software.

You can also send your return via Mail or private delivery service, but be aware that it may take 6 months or more to process. For service delay details, see Status of Operations. If you must file a paper tax return, consider sending it by certified mail, with a return receipt. This will be your proof of the date you mailed your tax return and when the IRS received it.

Did you file an extension for 2021?

If you requested an extension for 2021, the filing deadline is coming soon. This year, an extension gives you until October 17 to file your return. But you don’t have to wait; file electronically and if you are due a refund, choose direct deposit once you have all your information together.

Note: IRS employees continue working hard to process tax returns and address inventory issues but are urging people to file electronically to avoid processing delays.

Do you need to correct a previously filed return?

If you file your individual tax return and then realize you made a mistake, you can amend your tax return. Usually this involves filing Form 1040-X, Amended U.S. Individual Income Tax Return, to report changes to your income, deductions or credits. You may also be able to make certain changes to your filing status.

Do you owe taxes you can’t pay?

If you owe taxes and your tax return is overdue, you should file your tax return now to avoid further penalties for not filing by the deadline. Again, you should file electronically if at all possible due to the IRS backlog in processing paper returns.  See Status of Operations.

If you can’t pay the full amount, pay what you can now to reduce the amount of penalties and interest that will continue to accrue, and review the IRS payment options, including an offer in compromise. Each option has different requirements and fees, so please review each one carefully. Depending on your economic circumstances, you may qualify to be placed in Currently Not Collectible status.

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

IRS reports significant increase in texting scams; warns taxpayers to remain vigilant

Posted by Admin Posted on Oct 20 2022

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WASHINGTON — The Internal Revenue Service today warned taxpayers of a recent increase in IRS-themed texting scams aimed at stealing personal and financial information.

So far in 2022, the IRS has identified and reported thousands of fraudulent domains tied to multiple MMS/SMS/text scams (known as smishing) targeting taxpayers. In recent months, and especially in the last few weeks, IRS-themed smishing has increased exponentially.

Smishing campaigns target mobile phone users, and the scam messages often look like they're coming from the IRS, offering lures like fake COVID relief, tax credits or help setting up an IRS online account. Recipients of these IRS-related scams can report them to phishing@irs.gov.

"This is phishing on an industrial scale so thousands of people can be at risk of receiving these scam messages," said IRS Commissioner Chuck Rettig. "In recent months, the IRS has reported multiple large-scale smishing campaigns that have delivered thousands – and even hundreds of thousands – of IRS-themed messages in hours or a few days, far exceeding previous levels of activity."

With the approach of October's Cybersecurity Awareness Month, the IRS and the Security Summit partners in the states and the nation's tax community remind people and the tax professional community to be on the lookout for phishing scams and other schemes that could put sensitive tax data at risk.

In the latest activity, the scam texts often ask taxpayers to click a link where phishing websites will try to collect their information or potentially send malicious code onto their phones. The IRS does not send emails or text messages asking for personal or financial information or account numbers. These messages should all be red flags for taxpayers.

Beginning in the fall of 2020, the IRS observed an increase in reports of smishing scams requesting taxpayer personal and financial information. These smishing campaigns continued through the pandemic. The IRS has taken numerous steps to warn people of this ongoing threat, including posting a video about how to avoid IRS text message scams.

Taxpayers should continue reporting these scams to phishing@irs.gov. Their reporting allows the IRS to report these scams to the appropriate service providers for action, protecting other taxpayers who might receive a variant of the same scam.

While the IRS works to shut down online fraud, criminals are using ever-evolving tactics to cast a wider net and catch more victims, like using algorithms to automatically generate hundreds or even thousands of fraudulent domains. For example, a recent campaign used just three dozen stolen or bogus email addresses to create over 1,000 fraudulent domains.

"Particularly in these cases, the best offense is a good defense," said Rettig. "Taxpayers and tax pros need to remain constantly vigilant with suspicious IRS-related emails and text messages. And if you get one, sending the IRS important details from the text can help us disrupt the scams and protect others."

Reporting IRS-related smishing

The IRS maintains an inbox, phishing@irs.gov, to process IRS, Treasury and/or tax-related online scams only. Smishing involving other agencies and/or brands should not be reported to phishing@irs.gov.

Reporting IRS-themed texts to the IRS allows security professionals to track and disrupt these scams. Individuals reporting scam texts to the IRS should include both the body of the message and the sender's information in one email or text. Copying the actual text into an email is preferred. However, if necessary, screenshots can be sent. Scam SMS/text messages can also be copied and forwarded to wireless providers via text to 7726 (SPAM), which helps them spot and block similar messages in the future.

The following process will help capture important details for reporting smishing to the IRS:

  • Create a new email to phishing@irs.gov.
  • Copy the caller ID number (or email address).
  • Paste the number (or email address) into the email.
  • Press and hold the SMS/text message and select "copy".
  • Paste the message into the email.
  • If possible, include the exact date, time, time zone and telephone number that received the message.
  • Send the email to phishing@irs.gov.

Additional reporting

In addition to reporting the scam to phishing@irs.gov, if IRS-related, report the message to the Treasury Inspector General for Tax Administration using their IRS Impersonation Scam Reporting form and the Federal Trade Commission (FTC) through their Complaint Assistant to make the information available to investigators.

All incidents, successful and attempted, should also be reported to the Internet Crime Complaint Center.

Any individual entering personal information, or otherwise finding themselves a victim of tax-related scams, can find additional resources at Identity Theft Central on IRS.gov.

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

Source: IRS

Taxpayers should stay on top of taxes all year to avoid a surprise tax bill

Posted by Admin Posted on Oct 20 2022

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The next tax season seems far away, but this is actually the perfect time for taxpayers to review their withholding and estimated tax payments. Because federal taxes are pay-as-you-go, it’s important for taxpayers to withhold enough from their paychecks or pay enough in estimated tax. If they don’t, they risk being charged a penalty.

Adjust tax withholding

For employees, withholding is the amount of federal income tax withheld from their paycheck. The amount of income tax an employer withholds from an employee’s regular pay depends on two things:

  • The amount they earn.
  • The information they give their employer on Form W–4.

All taxpayers should review their federal withholding each year to make sure they're not having too little or too much tax withheld.

Individuals can use the IRS Tax Withholding Estimator to help decide if they should make a change to their withholding. This online tool guides users, step-by-step, through the process of checking their withholding, and provides withholding recommendations to help aim for their desired refund amount when they file next year.

Taxpayers can check with their employer to update their withholding or submit a new Form W-4, Employee's Withholding Certificate.

Make estimated payments

Taxpayers may need to make quarterly estimated tax payments in a few situations:

  • If the amount of income tax withheld from a taxpayer's salary or pension isn’t enough.
  • If they receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards.
  • If they are self-employed.

Estimated tax payments are due from individual taxpayers on April 15, June 15, September 15 and January 17. The fastest and easiest way to make estimated tax payments is using Direct Pay or the Electronic Federal Tax Payment System. Taxpayers can visit IRS.gov for other payment 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

Got a letter or notice from the IRS? Here are the next steps

Posted by Admin Posted on Oct 12 2022

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When the IRS needs to ask a question about a taxpayer's tax return, notify them about a change to their account, or request a payment, the agency often mails a letter or notice to the taxpayer. Getting mail from the IRS is not a cause for panic but, it should not be ignored either.

When an IRS letter or notice arrives in the mail, here's what taxpayers should do:

Read the letter carefully. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do. A notice may reference changes to a taxpayer's account, taxes owed, a payment request or a specific issue on a tax return. Taking timely action could minimize additional interest and penalty charges.

Review the information. If a letter is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return and keep it for their records. Typically, a taxpayer will only need to take action or contact the IRS if they don't agree with the information, if the IRS requested additional information, or if they have a balance due.

Take any requested action, including making a payment. The IRS and authorized private debt collection agencies do send letters by mail. Most of the time, all the taxpayer needs to do is read the letter carefully and take the appropriate action or submit a payment.

Reply only if instructed to do so. Taxpayers don't need to reply to a notice unless specifically told to do so. There is usually no need to call the IRS. If a taxpayer does need to call the IRS, they should use the number in the upper right-hand corner of the notice and have a copy of their tax return and letter.

Let the IRS know of a disputed notice. If a taxpayer doesn't agree with the IRS, they should mail a letter explaining why they dispute the notice. They should send it to the address on the contact stub included with the notice. The taxpayer should include information and documents for the IRS to review when considering the dispute.

Keep the letter or notice for their records. Taxpayers should keep notices or letters they receive from the IRS. These include adjustment notices when an action is taken on the taxpayer's account. Taxpayers should keep records for three years from the date they filed the tax return.

Watch for scams. The IRS will never contact a taxpayer using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure whether they owe money to the IRS can view their tax account information on IRS.gov.

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

Source: IRS                            

Understanding taxes when a family member signs the paycheck

Posted by Admin Posted on Oct 12 2022

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Many people work for a family member, whether it's a child helping out at their parent's shop or spouses running a business together. When someone is employed by a family member, the tax implications depend on the relationship and the type of business. It's important for taxpayers and employers to understand their tax situation.

Married people in business together

  • Generally a qualified joint venture whose only members are a married couple filing a joint return isn't treated as a partnership for federal tax purposes.
  • Someone who works for their spouse is considered an employee if the first spouse makes the business's management decisions and the second spouse is under the direction of the first spouse.
  • The wages for someone who works for their spouse are subject to income tax withholding and Social Security and Medicare taxes, but not to FUTA tax.

Children employed by their parents

If the business is a parent's sole proprietorship or a partnership in which both partners are parents of the child:

  • Wages paid to a child of any age are subject to income tax withholding.
  • Wages paid to a child age 18+ are subject to social security and Medicare taxes.
  • Wages paid to a child age 21+ are subject to Federal Unemployment Tax Act  tax.

If the business is a corporation, estate, or a partnership in which one or no partners are parents of the child:

  • Payments for services of a child are subject to income tax withholding, Social Security taxes, Medicare taxes and FUTA taxes regardless of age.

Parents employed by their child

If the business is a child's sole proprietorship:

  • Payments for services of a parent are subject to income tax withholding, social security taxes and Medicare taxes.
  • Payments for services of a parent are not subject to FUTA tax regardless of the type of services provided.

If the business is a corporation, a partnership, or an estate:

  • The payments for the services of a parent are subject to income tax withholding, Social Security taxes, Medicare taxes and FUTA taxes.

If the parent is performing services for the child, but not for the child's trade or business:

  • Payments for services of a parent are not subject to Social Security and Medicare taxes, unless the services are for domestic services and several other criteria apply.
  • Payments for services of a parent are not subject to FUTA tax regardless of the type of services provided.

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

Every taxpayer has the right to retain representation when working with the IRS

Posted by Admin Posted on Oct 12 2022

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Taxpayers have the right to retain an authorized representative of their choice to represent them when they are dealing with the IRS. They also have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation. This is one of the ten fundamental rights of all taxpayers as outlined in the Taxpayer Bill of Rights.

What the right to retain representation means for taxpayers:

·  Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS.

·  Taxpayers who are heading to an interview with the IRS may select someone to represent them.

·  Taxpayers who retain representation don't have to attend with their representative unless the IRS formally summons them to appear.

·  In most situations, the IRS must suspend an interview if the taxpayer requests to consult with a representative, such as an attorney, certified public accountant or enrolled agent.

·  Any attorney, CPA, enrolled agent, enrolled actuary or other person permitted to represent a taxpayer before the IRS, who's not disbarred or suspended from practice before the IRS, may submit a written power of attorney to represent a taxpayer before the IRS.

·  Taxpayers have the right to seek assistance from an LITC if they can't afford representation. They can find a LITC near them by visiting the Low Income Taxpayer Clinics page or by calling the IRS toll-free at 800-829-3676.

LITCs are independent from the IRS and the Taxpayer Advocate Service These clinics represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee.

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: Hurricane Ian victims in Florida qualify for tax relief; Oct. 17 deadline, other dates extended to Feb. 15

Posted by Admin Posted on Oct 12 2022

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WASHINGTON — Hurricane Ian victims throughout Florida now have until February 15, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). This means that individuals and households that reside or have a business anywhere in the state of Florida qualify for tax relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on September 23, 2022. As a result, affected individuals and businesses will have until February 15, 2023, to file returns and pay any taxes that were originally due during this period.

This means individuals who had a valid extension to file their 2021 return due to run out on October 17, 2022, will now have until February 15, 2023, to file. The IRS noted, however, that because tax payments related to these 2021 returns were due on April 18, 2022, those payments are not eligible for this relief.

The February 15, 2023, deadline also applies to quarterly estimated income tax payments due on January 17, 2023, and the quarterly payroll and excise tax returns normally due on October 31, 2022, and January 31, 2023. Businesses with an original or extended due date also have the additional time including, among others, calendar-year corporations whose 2021 extensions run out on October 17, 2022. Similarly, tax-exempt organizations also have the additional time, including for 2021 calendar-year returns with extensions due to run out on November 15, 2022.

In addition, penalties on payroll and excise tax deposits due on or after September 23, 2022, and before October 10, 2022, will be abated as long as the deposits are made by October 10, 2022.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2022 return normally filed next year), or the return for the prior year (2021). Be sure to write the FEMA declaration number – DR-4673-FL − on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by Hurricane Ian and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.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

Too Much Inventory At Your Business? Trim the Fat!

Posted by Admin Posted on Oct 06 2022

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Businesses need to have inventory on hand. But having excess inventory is expensive, so it’s important to keep it as lean as possible. Here are some ways to trim the fat from your inventory without compromising revenue and customer service.

Accuracy first

Effective inventory management starts with an accurate physical inventory count. This allows you to determine your true cost of goods sold and to identify and remedy discrepancies between your physical count and perpetual inventory records. A CPA can introduce an element of objectivity to the counting process and help minimize errors.

Next, compare your inventory costs to those of other companies in your industry. Trade associations often publish benchmarks for:

  • Gross margin ([revenue - cost of sales] / revenue),
  • Net profit margin (net income / revenue), and
  • Days in inventory (annual revenue / average inventory × 365 days).

Your company should strive to meet or beat industry standards. For a retailer or wholesaler, inventory is simply purchased from the manufacturer. But the inventory account is more complicated for manufacturers and construction firms. It’s a function of raw materials, labor and overhead costs.

The composition of your company’s cost of goods will guide you on where to cut. In a tight labor market, it’s hard to reduce labor costs. But, depending on the goods, it might be possible to renegotiate prices with suppliers.

Don’t forget the carrying costs of inventory, such as storage, insurance, obsolescence and pilferage. You can also improve margins by negotiating a net lease for your warehouse, installing antitheft devices and opting for less expensive insurance coverage.

Product mix

Cutting your days-in-inventory ratio should be done based on individual product margins. Stock more products with high margins and high demand and less of everything else. Whenever possible, return excessive supplies of slow-moving materials or products to your suppliers.

Product mix should be sufficiently broad and in tune with customer needs. Before cutting back on inventory, you might need to negotiate speedier delivery from suppliers or give suppliers access to your perpetual inventory system. These precautionary measures can help prevent lost sales due to lean inventory.

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   

Large Cash Business Transactions Must Be Reported To The IRS

Posted by Admin Posted on Oct 06 2022

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If your business receives large amounts of cash or cash equivalents, you may be required to report these transactions to the IRS. Here are some details.

The requirements

Each person who, while operating a trade or business, receives more than $10,000 in cash in one transaction (or at least two related transactions), must file Form 8300. What constitutes “related transactions?” Related transactions are conducted within a 24-hour period. But transactions that occur in a greater than 24-hour period may also be deemed related if the recipient knows, or has reason to know, that the transactions are connected.

To complete a Form 8300, you’ll need certain information about the person making the payment. This includes a Social Security or taxpayer identification number.

Reasons behind the reporting

Although many cash transactions are legitimate, the IRS explains that “information reported on (Form 8300) can help stop those who evade taxes, profit from the drug trade, engage in terrorist financing and conduct other criminal activities. The government can often trace money from these illegal activities through the payments reported on Form 8300 and other cash reporting forms.”

It’s important to keep a copy of each Form 8300 for five years from the date you file it, according to the IRS.

“Cash” and “cash equivalents” defined

For Form 8300 reporting purposes, cash includes U.S. currency and coins, as well as foreign money. It also includes cash equivalents such as cashier’s checks (sometimes called bank checks), bank drafts, traveler’s checks and money orders. Money orders and cashier’s checks under $10,000, when used in combination with other forms of cash for a single transaction that exceeds $10,000, are defined as cash for Form 8300 reporting purposes.

Note: Under a separate reporting requirement, banks and other financial institutions report cash purchases of cashier’s checks, treasurer’s checks and/or bank checks, bank drafts, traveler’s checks and money orders with a face value of more than $10,000 by filing currency transaction reports.

Options for filing

Businesses required to file reports of large cash transactions on Form 8300 should know that in addition to filing on paper, e-filing is an option. The form is due 15 days after a transaction and there’s no charge for the e-file option. Businesses that file electronically get an automatic acknowledgment of receipt when they file.

The IRS also reminds businesses that they can “batch file” their reports. This is especially helpful to those required to file many forms.

Setting up an electronic account

To file Form 8300 electronically, a business must set up an account with FinCEN’s Bank Secrecy Act E-Filing System. For more information, visit: bsaefiling.fincen.treas.gov or contact us with questions.

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                 

Offset Nursing Home Costs With Possible Tax Breaks

Posted by Admin Posted on Oct 06 2022

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If you have a parent entering a nursing home, taxes are probably the last thing on your mind. But you should know that several tax breaks may be available to help offset some of the costs.

Medical expense deductions

The costs of qualified long-term care (LTC), such as nursing home care, may be deductible as medical expenses to the extent they, along with other qualified expenses, exceed 7.5% of adjusted gross income (AGI). But keep in mind that the medical expense deduction is an itemized deduction. And itemizing deductions saves taxes only if total itemized deductions exceed the applicable standard deduction.

Amounts paid to a nursing home are deductible as medical expenses if a person is staying at the facility principally for medical, rather than custodial care. Also, for those individuals, only the portion of the fee that’s allocable to actual medical care qualifies as a deductible expense.

If the individual is chronically ill, all qualified LTC services are deductible. Qualified LTC services are those required by a chronically ill individual and administered by a licensed health care practitioner. They include diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance or personal-care services.

For your parent to qualify as chronically ill, a physician or other licensed health care practitioner must certify him or her as unable to perform at least two activities of daily living (ADLs) for at least 90 days due to a loss of functional capacity or severe cognitive impairment. ADLs include eating, toileting, transferring, bathing, dressing and continence.

Qualifying as a dependent

If your parent qualifies as your dependent, you can add medical expenses you incur for him or her to your own medical expenses when calculating your deduction. We can help with this determination.

If you aren’t married and you meet the dependency tests for your parent, you may qualify for head-of-household filing status, which has a higher standard deduction and lower tax rates than filing as single. You may be eligible to use this status even if the parent for whom you claim an exemption doesn't live with you.

Selling your parent’s home

In many cases, a move to a nursing home also means selling the parent’s home. Fortunately, up to $250,000 of gain from the sale of a principal residence may be tax-free. To qualify for the $250,000 exclusion, the seller must generally have owned the home for at least two years of the five years before the sale.

Also, the seller must have used the home as a principal residence for at least two of the five years before the sale. However, there’s an exception to the two-of-five-year use test for a seller who becomes physically or mentally unable to care for him- or herself during the five-year period.

LTC insurance

Perhaps your parent is still in good health but is paying for LTC insurance (or you’re paying LTC insurance premiums for yourself). If so, be aware that premiums paid for a qualified LTC insurance contract are deductible as medical expenses (subject to limits) to the extent that they, when combined with other medical expenses, exceed the 7.5%-of-AGI threshold. Such a contract doesn’t provide payment for costs covered by Medicare, is guaranteed renewable and doesn't have a cash surrender value.

The amount of qualified LTC premiums that can be included as medical expenses is based on the age of the insured individual. For 2022 for those 61 to 70 years old, the limit on deductible premiums is $4,510 and for those over 70, the limit is $5,640.

Need more information?

This is just a brief overview of tax breaks that may help offset nursing home and related costs. Contact us if you need more information or 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              

People who still haven’t filed a 2021 tax return should file electronically to avoid these common mistakes

Posted by Admin Posted on Sept 28 2022

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Don't wait until the deadline to electronically file a complete — and accurate — return

Extension filers have until October 17 to file but filing electronically helps reduce processing time and correct errors. Mistakes on a tax return can also lead to longer processing time or cause the return to be rejected.

Filing electronically can help taxpayers avoid many mistakes. Tax software does the math, flags common errors and prompts taxpayers for missing information. It can also help eligible taxpayers claim overlooked credits and deductions.

Another way taxpayers can avoid mistakes is by using a reputable tax preparer, including certified public accountants, enrolled agents or other knowledgeable tax professionals.

Here are some of the most common errors taxpayers should avoid:

·         Missing or inaccurate Social Security numbers. Each SSN on a tax return should appear exactly as printed on the Social Security card.

·         Misspelled names. Likewise, a name listed on a tax return should match the name on that person's Social Security card.

·         Entering information inaccurately. Taxpayers should carefully enter wages, dividends, bank interest, and other income received and reported on an information return. This includes any information needed to calculated credits and deductions. Using tax software should help prevent math errors, but individuals should always review their tax return for accuracy.

·         Incorrect filing status. Some taxpayers choose the wrong filing status. The Interactive Tax Assistant on IRS.gov can help taxpayers choose the correct status, especially if more than one filing status applies. Tax software also helps prevent mistakes with filing status.

·         Math mistakes. Math errors are some of the most common mistakes. They range from simple addition and subtraction errors to more complex calculation mistakes. Taxpayers should always double check their math.

·         Figuring credits or deductions Taxpayers can make mistakes figuring things like their earned income tax creditchild and dependent care creditchild tax credit, and recovery rebate credit. The Interactive Tax Assistant can help determine if a taxpayer is eligible for tax credits or deductions. Tax software will calculate these credits and deductions and include any required forms and schedules. Taxpayers should double check where items appear on the final return before clicking the submit button.

·         Incorrect bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for a taxpayer to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax return.

·         Unsigned forms. An unsigned tax return isn't valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney. Taxpayers can avoid this error by filing their return electronically and digitally signing it before sending it to the IRS. 

Taxpayers who file electronically and choose direct deposit get their refund faster. IRS Free File offers online tax preparation, direct deposit of refunds, and electronic filing —all for free to qualified individuals. Some options are available in Spanish. Many taxpayers also qualify for free tax return preparation from IRS-certified volunteers.

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     

When Is Employer-provided Life Insurance Taxable?

Posted by Admin Posted on Sept 28 2022

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If your employee benefits include group term life insurance paid by your employer, a portion of the premiums paid for the coverage may be taxable. Depending on the amount of coverage you’re provided, some of it may create undesirable income tax consequences for you.

The cost of the first $50,000 of group term life insurance coverage that your employer pays for is excluded from taxable income and doesn’t add anything to your income tax bill. That’s good news. But the employer-paid cost of group term coverage over $50,000 is taxable income to you. That means it will be included in the taxable wages reported on your Form W-2.

Have you reviewed your W-2?

If you think the tax cost of employer-provided group term life insurance may be too high, first you should determine whether this is actually the case. If a specific dollar amount appears in Box 12 of your Form W-2 (with code “C”), that dollar amount represents your employer’s cost to provide you with group-term life insurance coverage of more than $50,000, minus any amount you paid for the coverage. You’re responsible for federal, state and local taxes on the amount that appears in Box 12 and for the associated employee portion of Social Security and Medicare taxes as well.

But keep in mind that the amount in Box 12 is already included as part of your total “Wages, tips and other compensation” in Box 1 of the W-2. It’s the amount in Box 1 that is reported on your tax return.

How is phantom income calculated?

The cost of employer-provided group term life insurance that will be taxable income to you is determined using the IRS Premium Table based on preset factors such as age. Under these determinations, the amount of taxable income attributed to an older employee is often higher than the premium the employee would pay for comparable coverage under an individual term policy.

This tax trap gets worse as employees gets older and as the amount of their compensation increases.

What are your options?

If you decide that the tax cost is too high for the benefit you’re getting in return, you should find out whether your employer has a “carve-out” plan. That’s a plan that allows selected employees to carve out from the group term coverage. If your employer’s plan doesn’t offer a carve-out, ask if they’d be willing to create one.

There are several types of carve-out plans that employers can offer to their employees. For example, the employer can continue to provide $50,000 of group term insurance (since there’s no tax cost for the first $50,000 of coverage). Then, the employer can either provide the employee with an individual policy for the balance of the coverage or give the employee the amount the employer would have spent for the excess coverage as a cash bonus that the employee can use to pay the premiums on an individual policy.

Do you have questions?

You may have questions about this important topic, such as how much your group term life insurance benefit is adding to your income. Contact us for help with this and other questions.

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                       

Know what’s deductible after buying that first home, sweet home

Posted by Admin Posted on Sept 28 2022

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Making the dream of owning a home a reality is a big step for many people. Whether a fixer-upper or dream home, homeownership is a milestone that can come with a learning curve. First-time homeowners should make themselves familiar with authorized deductions, programs that can assist with home ownership and the use of housing allowances that can be beneficial.

When it comes to home ownership, the IRS considers a home to be a house, condominium, cooperative apartment, mobile home, houseboat or house trailer that contains a sleeping space, toilet and cooking facilities.

Most home buyers take out a mortgage loan to buy their home and then make monthly payments to the mortgage holder. This payment may include several costs of owning a home. The only costs the homeowner can deduct are:

Taxpayers must file Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Income Tax Return for Seniors, and itemize their deductions to deduct home ownership expenses. However, taxpayers can't take the standard deduction if they itemize.

Non-deductible payments and expenses

Homeowners can't deduct any of the following items.

  • Insurance, other than mortgage insurance, including fire and comprehensive coverage, and title insurance
  • The amount applied to reduce the principal of the mortgage
  • Wages you pay for domestic help
  • Depreciation
  • The cost of utilities, such as gas, electricity, or water
  • Most settlement or closing costs
  • Forfeited deposits, down payments, or earnest money
  • Internet or Wi-Fi system or service
  • Homeowners' association fees, condominium association fees, or common charges
  • Home repairs

Mortgage interest credit

The mortgage interest credit is meant to help individuals with lower income afford home ownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid.

A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government. An MCC is issued only for a new mortgage for the purchase of a main home. The MCC will show the certificate credit rate the homeowner will use to figure their credit. It will also show the certified indebtedness amount and only the interest on that amount qualifies for the credit.

Homeowners Assistance Fund

The Homeowners Assistance Fund program provides financial assistance to eligible homeowners for paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services, and also displacements of homeowners experiencing financial hardship after January 21, 2020.

Minister's or military housing allowance

Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don't have to reduce their deductions based on the allowance.

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 

Hurricane Fiona victims in Puerto Rico qualify for tax relief; Oct. 17 deadline, other dates extended to Feb. 15

Posted by Admin Posted on Sept 28 2022

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The Internal Revenue Service announced that Hurricane Fiona victims in all 78 Puerto Rican municipalities now have until February 15, 2023, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). This means that individuals and households that reside or have a business anywhere in the Commonwealth of Puerto Rico qualify for tax relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on September 17, 2022. As a result, affected individuals and businesses will have until February 15, 2023, to file returns and pay any taxes that were originally due during this period.

This means individuals who had a valid extension to file their 2021 return due to run out on October 17, 2022, will now have until February 15, 2023, to file. The IRS noted, however, that because tax payments related to these 2021 returns were due on April 18, 2022, those payments are not eligible for this relief.

The February 15, 2023, deadline also applies to quarterly estimated income tax payments due on January 17, 2023, and the quarterly payroll and excise tax returns normally due on October 31, 2022 and January 31, 2023. Businesses with an original or extended due date also have the additional time including, among others, calendar-year corporations whose 2021 extensions run out on October 17, 2022. Similarly, tax-exempt organizations also have the additional time, including for 2021 calendar-year returns with extensions due to run out on November 15, 2022.

In addition, penalties on payroll and excise tax deposits due after September 17, 2022 and before October 3, 2022, will be abated as long as the deposits are made by October 3, 2022.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2022 return normally filed next year), or the return for the prior year (2021). Be sure to write the FEMA declaration number – DR-3583-EM − on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by Hurricane Fiona and is based on local damage assessments by FEMA. For information on disaster recovery, visit Disaster

Assistance.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

Understanding taxpayer rights: Every taxpayer has the right to privacy

Posted by Admin Posted on Sept 19 2022

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The privacy of America's taxpayers is paramount at the IRS. The right to privacy is one of ten rights the Taxpayer Bill of Rights gives all taxpayers.

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary. Taxpayers can also expect that the IRS will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.

Here are a few more details about what a taxpayer's right to privacy means:

  • The IRS cannot seize certain personal items, such as schoolbooks, clothing and undelivered mail.
  • The IRS cannot seize a personal residence without first getting court approval, and the agency must show there is no reasonable alternative for collecting the tax debt.
  • Sometimes, taxpayers submit offers to settle their tax debt that relate only to how much they owe. This is formally known as a Doubt as to Liability Offer in Compromise. Taxpayers who make this offer do not need to submit any financial documentation.
  • During an audit, if the IRS finds no reasonable indication that a taxpayer has unreported income, the agency will not seek intrusive and extraneous information about the taxpayer's lifestyle.
  • A taxpayer can expect that the IRS's collection actions are no more intrusive than necessary. During a collection due process hearing, the Office of Appeals must balance that expectation with the IRS's proposed collection action and the overall need for efficient tax collection.

 

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

2021 tax extension filers, don’t overlook these important tax benefits

Posted by Admin Posted on Sept 19 2022

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WASHINGTON — The Internal Revenue Service reminds taxpayers who've yet to file their 2021 federal income tax return to make sure they take advantage of the deductions and credits for which they're entitled and to file electronically as soon as possible.

"Each year, eligible taxpayers overlook money saving deductions and credits that can help them with the cost of raising a family, daycare, paying for college, saving for retirement or making a donation to charity," said IRS Commissioner Chuck Rettig. "We want to ensure they're aware of all the tax benefits for which they may qualify."

This year, the IRS received about 19 million requests for extensions to file until October 17. Those who qualify can prepare and file their return for free with IRS Free File. Electronically filing and choosing direct deposit can help taxpayers get their refund faster. If they owe, sending the tax return with full payment prevents additional interest and penalties. There's no penalty for failure to file if the taxpayer is due a refund.

Filing tips for taxpayers who haven't filed their 2021 tax return are available on IRS.gov.

Taxpayers should consider the following tax benefits when filing their tax return:

  • Earned Income Tax Credit: Qualified low- to moderate-income workers and families may get a tax break.
     
  • Child Tax Credit: Families can claim this credit, even if they received monthly advance payments during the last half of 2021.
     
  • Child and Dependent Care Credit: Families who pay expenses for the care of a qualifying individual so they can work, or look for work, can get a tax credit worth up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons.
     
  • Recovery Rebate Credit (RRC): Those who missed out on last year's third round of Economic Impact Payments (EIP3), also known as stimulus payments, may be eligible to claim the RRC. This credit can also help eligible people whose EIP3 was less than the full amount, including those who welcomed a child in 2021.
     
  • Deduction for gifts to charity: The majority of taxpayers who take the standard deduction can deduct eligible cash contributions they made to charity during 2021. Married couples filing jointly can deduct up to $600 in cash donations and individual taxpayers can deduct up to $300 in donations. In addition, itemizers who make large cash donations often qualify to deduct the full amount in 2021.
     
  • American Opportunity Tax Credit and the Lifetime Learning Credit: Tax credits for higher education can help offset taxpayers' tuition and other costs by reducing the amount of tax owed on their tax return.
     
  • Retirement Savings Contributions Credit (Saver's Credit): A tax credit is available for making eligible contributions to an individual retirement account or employer-sponsored retirement plan.

Helpful reminders

The IRS urges taxpayers to ensure they have all their year-end statements in hand before filing their 2021 return. Besides W-2s and 1099s, this includes two statements issued by the IRS – Letter 6419, showing their total advance Child Tax Credit payments, and Letter 6475, showing their total EIP3 payments.

Individuals can also use their IRS Online Account to see the total amounts of their third round of Economic Impact Payments or advance Child Tax Credit payments. Married spouses who received joint payments will each need to sign into their own account to retrieve their separate amounts.

Taxpayers can find answers to questions, forms and instructions, and easy-to-use tools online at IRS.gov. They can use these resources to get help when it's needed at home, at work or on the go.

Adjust 2022 withholding now to avoid tax surprises next year

Summer is a great time for taxpayers to check their 2022 withholding to avoid a tax surprise when they file next year. Life events like marriage, divorce, having a child or a change in income can affect taxes. Too little tax withheld can lead to a tax bill or penalty. Too much can mean the taxpayer won't have use of the money until they get their tax refund in 2023.

The IRS Tax Withholding Estimator on IRS.gov helps employees assess their income tax, credits, adjustments and deductions, and determine whether they need to change their withholding. If a change is recommended, the estimator will provide instructions to update their withholding with their employer, either online or by submitting a new Form W-4, Employee's Withholding Allowance Certificate.

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 tax relief: IRS provides broad-based penalty relief for certain 2019 and 2020 returns due to the pandemic; $1.2 billion in penalties being refunded to 1.6 million taxpayers

Posted by Admin Posted on Sept 19 2022

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WASHINGTON — To help struggling taxpayers affected by the COVID-19 pandemic, the Internal Revenue Service today issued Notice 2022-36PDF, which provides penalty relief to most people and businesses who file certain 2019 or 2020 returns late.

The IRS is also taking an additional step to help those who paid these penalties already. Nearly 1.6 million taxpayers will automatically receive more than $1.2 billion in refunds or credits. Many of these payments will be completed by the end of September.

Besides providing relief to both individuals and businesses impacted by the pandemic, this step is designed to allow the IRS to focus its resources on processing backlogged tax returns and taxpayer correspondence to help return to normal operations for the 2023 filing season.

"Throughout the pandemic, the IRS has worked hard to support the nation and provide relief to people in many different ways," said IRS Commissioner Chuck Rettig. "The penalty relief issued today is yet another way the agency is supporting people during this unprecedented time. This penalty relief will be automatic for people or businesses who qualify; there's no need to call."

The relief applies to the failure to file penalty. The penalty is typically assessed at a rate of 5% per month and up to 25% of the unpaid tax when a federal income tax return is filed late. This relief applies to forms in both the Form 1040 and 1120 series, as well as others listed in Notice 2022-36PDF, posted today on IRS.gov.

To qualify for this relief, any eligible income tax return must be filed on or before September 30, 2022.

In addition, the IRS is providing penalty relief to banks, employers and other businesses required to file various information returns, such as those in the 1099 series. To qualify for relief, the notice states that eligible 2019 returns must have been filed by August 1, 2020, and eligible 2020 returns must have been filed by August 1, 2021.

Because both of these deadlines fell on a weekend, a 2019 return will still be considered timely for purposes of relief provided under the notice if it was filed by August 3, 2020, and a 2020 return will be considered timely for purposes of relief provided under the notice if it was filed by August 2, 2021. The notice provides details on the information returns that are eligible for relief.

The notice also provides details on relief for filers of various international information returns, such as those reporting transactions with foreign trusts, receipt of foreign gifts, and ownership interests in foreign corporations. To qualify for this relief, any eligible tax return must be filed on or before September 30, 2022.

Relief is automatic; most of $1.2 billion in refunds delivered to eligible taxpayers by next month

Penalty relief is automatic. This means that eligible taxpayers need not apply for it. If already assessed, penalties will be abated. If already paid, the taxpayer will receive a credit or refund.

As a result, nearly 1.6 million taxpayers who already paid the penalty are receiving refunds totaling more than $1.2 billion. Most eligible taxpayers will receive their refunds by the end of September.

Penalty relief is not available in some situations, such as where a fraudulent return was filed, where the penalties are part of an accepted offer in compromise or a closing agreement, or where the penalties were finally determined by a court. For details, see Notice 2022-36PDF, available on IRS.gov.

This relief is limited to the penalties that the notice specifically states are eligible for relief. Other penalties, such as the failure to pay penalty, are not eligible. But for these ineligible penalties, taxpayers may use existing penalty relief procedures, such as applying for relief under the reasonable cause criteria or the First Time Abate program. Visit IRS.gov/penaltyrelief for details.

"Penalty relief is a complex issue for the IRS to administer," Rettig said. "We've been working on this initiative for months following concerns we've heard from taxpayers, the tax community and others, including Congress. This is another major step to help taxpayers, and we encourage those affected by this to review the guidelines."

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

Taxpayers should be sure to have all their info before going to a tax pro

Posted by Admin Posted on Sept 19 2022

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Taxpayers using a professional tax preparer should make sure they have all their information readily available before their appointment. Collecting their information and getting copies of any missing documents before taxpayers sit down to prepare their return is critical to filing an accurate tax return. Having organized records and information in hand helps prevent filing errors and will likely create a smoother filing experience.

Here's a list of information taxpayers may need. Not all information applies to all taxpayers.

  • Social Security numbers of everyone listed on the tax return. 
  • Bank account and routing numbers for direct deposit or information to make a tax payment.
  • Forms W-2 from employer(s).
  • Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan.
  • Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy.
  • Form 1099-INT for interest received.
  • Other income documents and records of virtual currency transactions.
  • Form 1095-A, Health Insurance Marketplace Statement.
  • Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments.
  • Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit.
  • Information to support claiming other credits or deductions, such as receipts for child or dependent care, college expenses or donations.

Taxpayers can get information about their Economic Impact Payments and advance child tax credit payments through their IRS online account.

Taxpayers who don't have their letters about their Economic Impact Payment to claim missing stimulus payments and advance child tax credit payments to claim their full child tax credit have an online option. They can log in to their IRS online account and get the information from the Tax Records tab.

For taxpayers who are married filing jointly, each spouse will need to have their own Economic Impact Payment and advance child tax credit information.

What taxpayers should do if they're missing other documents

Taxpayers who didn't receive a W-2 or Form 1099 should contact the employer, payer or issuing agency and request the missing documents. This also applies for those who received an incorrect W-2 or Form 1099.

If they still can't get the forms, they can use Form 4852, Substitute for Form W-2, Wage and Tax Statement or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. If a taxpayer doesn't receive the missing or corrected form in time to file their tax return, they can estimate the wages or payments made to them, as well as any taxes withheld. They can use Form 4852 to report this information on their federal tax 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

Aspiring entrepreneurs: learn the basics of setting up a business

Posted by Admin Posted on Sept 19 2022

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New entrepreneurs can start out on the right foot by making sure they understand the tax responsibilities of running a business. The process can seem daunting, but IRS.gov has resources to help new business owners.

Here are a few things new entrepreneurs need to do when starting their business.

Choose a business structure

The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are:

  • Sole proprietorship: An unincorporated business owned by an individual. There's no distinction between the taxpayer and their business.
  • Partnership: An unincorporated business with ownership shared between two or more people.
  • Corporation: Also known as a C corporation. It's a separate entity owned by shareholders.
  • S Corporation: A corporation that elects to pass corporate income, losses, deductions and credits through to the shareholders.
  • Limited Liability Company: A business structure allowed by state statute.

Choose a tax year

tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:

  • Calendar year: 12 consecutive months beginning January 1 and ending December 31.
  • Fiscal year: 12 consecutive months ending on the last day of any month except December.

Apply for an employer identification number

An EIN is also called a federal tax identification number. It's used to identify a business. Most businesses need one of these numbers. It's important for a business with an EIN to keep the business mailing address, location and responsible party up to date. IRS regulations require EIN holders to report changes in the responsible party within 60 days. They do this by completing Form 8822-B, Change of Address or Responsible Party and mailing it to the address on the form.

Have all employees complete these forms

Pay business taxes

The form of business determines what taxes must be paid and how to pay them.

Visit state's website

Prospective business owners should visit their state's website for info about state requirements.

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

Source: IRS

From markers to face masks, classroom supplies may be tax deductible

Posted by Admin Posted on Aug 30 2022

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Teachers go above and beyond for their students, often buying classroom supplies needed to make learning successful. The educator expense deduction allows eligible teachers and administrators to deduct part of the cost of technology, supplies and training from their taxes. They can only claim this deduction for expenses that weren't reimbursed by their employer, a grant or other source.

Who is an eligible educator:

The taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal or aide. They must also work at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

Things to know about this deduction:

Starting on tax returns for 2022, educators can deduct up to $300 of trade or business expenses that weren't reimbursed. If two married educators are filing a joint return, the limit rises to $600. These taxpayers cannot deduct more than $300 each.

For 2021 returns, the limit is $250, or $500 for married educators filing jointly. As teachers prepare for the school year, they should remember to keep receipts after making any purchase to support claiming this deduction.

Qualified expenses are amounts the taxpayer paid themselves during the tax year.

Here are some of the expenses an educator can deduct:

  • Professional development course fees
  • Books and supplies
  • COVID-19 protective items to stop the spread of the disease in the classroom.
  • Computer equipment, including related software and services
  • Other equipment and materials used in the classroom

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 

People without a filing requirement may miss out on a refund if they don’t file a 2021 tax return

Posted by Admin Posted on Aug 30 2022

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Some people may choose not to file a tax return because they didn't earn enough money to be required to file but may miss getting a refund if they don't file. While the filing deadline is October 17, 2022 to file 2021 tax returns, the IRS strongly encourages individuals to consider filing electronically sooner, rather than later, especially if they're due a refund.

In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or can be claimed as a dependent of someone else. The Interactive Tax Assistant can help people determine if they need to file a tax return.

Look at tax withheld or paid. Excess tax withholdings are only returned in the form of a refund when someone files a tax return. This can affect students and part-time workers where the tax withheld from their wages is at a rate that is too high. Seniors and retirees who make estimated tax payments or have money withheld from their retirement fund and Social Security disbursements may also be eligible for a refund.

Individuals who answer yes to any of these questions, may be due a refund and must file a tax return to get their money.

  • Did the taxpayer's employer withhold federal income tax from their pay?
  • Did the taxpayer make estimated tax payments during the tax year?
  • Did they overpay last year on their taxes and have it applied to their 2021 tax?

Here are some valuable credits taxpayers may be able to claim. While most tax credits can be used to reduce the tax owed, there are credits that allow individuals to receive money beyond what they owe.

Recovery rebate credit Individuals who didn't qualify for a third Economic Impact Payment or got less than the full amount, may be eligible to claim the 2021 recovery rebate credit and will need to file a 2021 tax return even if they don't usually file a tax return. The credit will reduce any tax owed for 2021 or be included in the tax refund.

Earned income tax credit A working taxpayer who earned $57,414 or less last year could receive the EITC as a tax refund. For the 2021 tax year, the tax return taxpayers file in 2022, the earned income credit ranges from $1,502 to $6,728 depending on their filing status and how many children they claim on their tax return. Taxpayers who did not file a return for tax year 2020 or 2021 or who did not claim the earned income tax credit on their 2020 or 2021 return because they had no earned income in those years may file an original or amended return to claim the credit using their 2019 earned income if they are otherwise eligible to do so.

Taxpayers can also use their 2019 earned income to figure their 2021 earned income credit if their 2019 earned income is more than their 2021 earned income. They can check eligibility by using the EITC Assistant on IRS.gov, which is available in eight different languages.

Child tax credit or credit for other dependents Taxpayers can claim the child tax credit if they have a qualifying child under the age of 18 and meet other qualifications. Other taxpayers may be eligible for the credit for other dependents. This includes people who have:

  • Dependents who are age 17 or older.
  • Dependents who have individual taxpayer identification numbers.
  • Dependent parents or other qualifying relatives supported by the taxpayer.
  • Dependents living with the taxpayer who aren't related to the taxpayer.

This Interactive Tax Assistant tool on IRS.gov can help people determine if they qualify for these two credits.

Education credits There are two higher education credits that can reduce the amount of tax someone owes on their tax return. One is the American opportunity tax credit and the other is the lifetime learning credit. The taxpayer, their spouse or their dependent must have been a student enrolled at least half time for one academic period to qualify. The taxpayer may qualify for one of these credits even if they don't owe any taxes. Form 8863, Education Credits is used to claim the credit when filing the tax 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

New school year reminder to educators; maximum educator expense deduction rises to $300 in 2022

Posted by Admin Posted on Aug 30 2022

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WASHINGTON — As the new school year begins, the Internal Revenue Service reminds teachers and other educators that they'll be able to deduct up to $300 of out-of-pocket classroom expenses for 2022 when they file their federal income tax return next year.

This is the first time the annual limit has increased since the special educator expense deduction was enacted in 2002. For tax years 2002 through 2021, the limit was $250 per year. The limit will rise in $50 increments in future years based on inflation adjustments.

For 2022, an eligible educator can deduct up to $300 of qualifying expenses. If they're married and file a joint return with another eligible educator, the limit rises to $600. But in this situation, not more than $300 for each spouse.

Who qualifies?

Educators can claim this deduction, even if they take the standard deduction. Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal or aide in a school for at least 900 hours during the school year. Both public and private school educators qualify.

What's deductible?

Educators can deduct the unreimbursed cost of:

  • Books, supplies and other materials used in the classroom.
  • Equipment, including computer equipment, software and services.
  • COVID-19 protective items to stop the spread of the disease in the classroom. This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the Centers for Disease Control and Prevention.
  • Professional development courses related to the curriculum they teach or the students they teach. But the IRS cautions that, for these expenses, it may be more beneficial to claim another educational tax benefit, especially the lifetime learning credit. For details, see Publication 970, Tax Benefits for Education, particularly Chapter 3.

Qualified expenses don't include the cost of home schooling or for nonathletic supplies for courses in health or physical education. As with all deductions and credits, the IRS reminds educators to keep good records, including receipts, cancelled checks and other documentation.

Reminder for 2021 tax returns being filed now: Deduction limit is $250

For those who received a tax filing extension or still need to file a 2021 tax return, the IRS reminds any educator still working on their 2021 return that the deduction limit is $250. If they are married and file a joint return with another eligible educator, the limit rises to $500. But in this situation, not more than $250 for each spouse.

File electronically when ready. Tax-filing software uses a question-and-answer format that makes doing taxes easier. Whether a return is self-prepared or prepared with the assistance of a tax professional or trained community volunteer, the IRS urges everyone to file electronically and choose direct deposit for refunds. For details, visit Electronic Filing Options for Individuals.

In addition, the IRS urges anyone who owes taxes to choose the speed and convenience of paying electronically, such as with IRS Direct Pay, a free service available only on IRS.gov. For information about this and other payment options, visit Pay Online.

Taxpayers who requested more time to file an accurate return have until October 17, 2022. Those who have what they need to file, however, should file as soon as possible to avoid delays in processing their return. Taxpayers are urged to file electronically when they are ready and avoid the last-minute rush to file at the deadline.

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

TAS Tax Tip: Mid-Year Tax Checkup

Posted by Admin Posted on Aug 30 2022

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Summertime is the perfect time for a mid-year tax checkup. A tax checkup will help you avoid being surprised with a potentially large tax bill and may help uncover ways you can save throughout the rest of the year. Keep in mind that big tax breaks were enacted for the 2021 tax year, but most of those tax law changes expired at the end of 2021. As a result, the child tax credit and credit for other dependentschild and dependent care creditEarned Income Tax Credit (EITC) and other popular tax breaks are different for the 2022 tax year than 2021.

Get organized

Collect and keep your records and receipts. Record keeping can help you identify sources of income, track deductible expenses, and make preparing a complete and accurate tax return easier.

Notify the IRS if your address changes and notify the Social Security Administration of a legal name change.

Create and/or sign into your individual IRS online account to view your federal tax records, manage communication preferences, make payments and more.

Perform a paycheck check-up

Pay close attention to your paystubs to help prevent end-of year surprises. Make sure the earnings are correct and that you have the proper amount of tax withheld. As time passes, life events like marriage, divorce, having a child, buying a home, or a change in income may affect your taxes. The IRS’s Tax Withholding Estimator will help you assess your income tax, credits, adjustments, and deductions, and determine whether you need to change your tax withholding. If a change is recommended, the estimator will provide instructions to update your withholding with your employer either online or by submitting a new Form W-4, Employee’s Withholding Allowance Certificate.

Remember, most income is taxable. This includes the following sources and more:

Consider making estimated tax payments

If you receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits, or pension and annuity income, you should make quarterly estimated tax payments. Log in to your online account to make a payment online or go to IRS.gov/payments.

Review your retirement contributions

Review contributions to your retirement plan, such as 401(k) and Individual Retirement Accounts (IRAs). If you want to maximize your contributions, run the numbers to see how much you need to save from your remaining paychecks this year. Increasing pre-tax retirement contributions reduces your taxable income for the year you contribute.

Report changes that may affect your health insurance Marketplace premiums

If you have health insurance through your state’s health insurance marketplace established under the Affordable Care Act, it is important to report changes that may affect your premiums. Changes in circumstances to report to the Marketplace include:

  • Changes in household income (including lump sum distributions from Social Security, retirement accounts, etc.);
  • Birth or adoption;
  • Marriage or divorce;
  • Moving to a different address;
  • Gaining or losing eligibility for other health care coverage; or
  • Other changes affecting income and your family.

If you want to see how a change of circumstance might affect your Premium Tax Credit (PTC), you can use the PTC Change Estimator. Remember to contact your Marketplace to report a change of circumstances.

Plan your health flexible spending arrangements

Check the balance of your flexible spending arrangement (FSA). FSAs allow you to put some of your pre-tax income toward qualifying medical, dental, and vision expenses, along with other health-related products and services. For 2022, workers can contribute up to $2,850.

While there are some provisions that may let your roll over some money into the next year, most FSAs are “use-or-lose.” Start thinking now about how you might use remaining funds in the second half of the year to ensure you don’t lose the money you contributed to your FSA account.

For more updates from the Taxpayer Advocate Service, visit the news and information center to read the latest tax tips, blogs, alerts and more. Also available in Spanish.

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

TAS Tax Tip: What to do if you receive an IRS balance due notice for taxes you have already paid

Posted by Admin Posted on Aug 30 2022

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The IRS issues various balance due notices, including Notice CP14, Notice of Tax Due and Demand for Payment. This information will help you if you receive a CP14 from the IRS despite having already paid your taxes in full.

The CP14 is a balance due notice telling you that you owe money for unpaid taxes. The notice requests that a payment be made within 21 days. If the balance due is not fully paid within 60 days, the IRS can proceed with collection activity.

The first thing to know is don’t panic! Taxpayers typically don’t want to hear from the IRS. Sometimes they don’t even want to open the mail from the IRS and in particular don’t want to see a bill for federal income taxes they already paid. Because of a correspondence backlog at the IRS, many payments have not yet been processed. Until that is done, those taxpayers’ accounts reflect balances due even though the taxes have been paid.

What should I do if I receive a CP14 notice by mistake?

  • Don’t ignore it. Open it, read it, and keep it in a safe place.
  • Verify your taxes were paid. If you have documentation that you have paid the right amount of tax, don’t pay it again.
  • Due to the correspondence backlog, your payment may not have been processed yet, so we recommend that you create an online account to monitor the account for your payment to be applied.
  • Respond to the IRS. You have 60 days from the date of the CP14 notice to respond, so if the payment isn’t applied to your account AT LEAST TEN DAYS PRIOR to the 60-day deadline, have your information ready and either call the number on your notice or submit your information by mail to make sure you are compliant with the terms of the notice.

What should I do if I made a mistake and the CP14 notice is correct?

It’s in your best interest to pay your tax debt as soon as possible to limit the penalties and interest the IRS may charge.

However, if you can’t pay the full amount by the date on the notice, there are several payment options that might work for your situation. Depending on the type and amount of tax you owe, different options are available, ranging from short term extensions, to installment agreements, to an offer in compromise. Each has different requirements and may have a fee.

You must reply by the date required in the notice or you may lose certain appeal rights.

Where to reply

The notice tells you where to call and where to send your payment or response if the notice is incorrect. Follow the instructions.

What if I want to talk with someone?

Each notice or letter from the IRS should include contact information. The telephone number is usually found in the upper right-hand corner. If a specific employee is working your case, it will show a specific phone number for that employee or the department manager. Otherwise, it will show the IRS toll-free number (800-829-1040).

Note: Live phone support often has long wait times or you may have to call more than once. Responses to correspondence may also have long delays. The IRS has expanded voice bot options for faster services that includes assistance for eligible taxpayers in setting up or modifying payment plans.

The best days to call the IRS are Wednesdays, Thursdays, and Fridays. The IRS advises that wait times are the longest on Mondays and Tuesdays.

Have your paperwork (such as cancelled checks, amended return, etc.) ready when you call.

Wait – I still need help

Letters and notices aren’t always easy to understand. Here are three resources we recommend you use if you need more help:

You can generally resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional.

If you can’t afford to hire a tax professional to assist you, you may be eligible for free or low cost representation from an attorney, certified public accountant, or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). LITCs are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee.  For more information or to find an LITC near you, see the LITC page or IRS Publication 4134, Low Income Taxpayer Clinic List.  This publication is also available online at www.irs.gov/forms-pubs or by calling the IRS toll-free at 800-TAX-FORM (800-829-3676).

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

Basic things all businesses should know about excise tax

Posted by Admin Posted on Aug 30 2022

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Excise tax is an indirect tax on specific goods, services and activities. Federal excise tax is usually imposed on the sale of things like fuel, airline tickets, heavy trucks and highway tractors, indoor tanning, tires, tobacco and other goods and services.

Businesses that are subject to excise tax generally must file a Form 720, Quarterly Federal Excise Tax Return to report the tax to the IRS.

This tax is commonly included in the cost of the product. While the end consumer doesn't usually see the excise tax on their receipt, it may be charged at the time of

  • Import
  • Sale by the manufacturer
  • Sale by the retailer
  • Use by the manufacturer or consumer

Many excise taxes go into trust funds for projects related to the taxed product or service, such as highway and airport improvements. Excise taxes are independent of income taxes. Often, the retailer, manufacturer or importer must pay the excise tax to the IRS and file the Form 720.

Some excise taxes are collected by a third party. The third party then sends the tax to the IRS and files the Form 720. For example, the tax on an airline ticket generally is paid by the purchaser and collected by the airline.

When to file

Businesses must file the form for each quarter of the calendar year. Here are the due dates:

  • Quarter 1 – January, February, March: deadline, April 30
  • Quarter 2 – April, May, June: deadline, July 31
  • Quarter 3 – July, August, September: deadline, October 31
  • Quarter 4 – October, November, December: deadline, January 31

If the deadline for filing a tax return falls on a Saturday, Sunday or legal holiday, the due date is the next business day.

How to file

The IRS does accept paper excise tax returns. However, electronic filing is strongly encouraged, when possible. To make this process easier for taxpayers, the contact information for all approved e-file transmitters of excise forms is listed on IRS.gov. Businesses can submit forms online 24 hours a day.

When businesses e-file, they get confirmation that the IRS received their form. Also, e-filing reduces processing time and errors. To electronically file, business taxpayers will have to pay the provider's fee for online submission.

The excise tax forms available for electronic filing are:

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

ABLE accounts can help people with disabilities pay for disability-related expenses

Posted by Admin Posted on Aug 30 2022

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People with disabilities can use an Achieving a Better Life Experience or ABLE account to help pay qualified disability-related expenses. This tax-advantaged savings account doesn't affect their eligibility for government assistance programs.

Here are some key things people should know about these accounts.

Annual contribution limit

  • The 2022 limit is $16,000.
  • Certain employed ABLE account beneficiaries may make an additional contribution up to the lesser of these amounts:
    • The designated beneficiary's compensation for the tax year.
    • The poverty line for a one-person household. For 2022, this amount is $12,880 in the continental U.S., $16,090 in Alaska and $14,820 in Hawaii. 

Saver's credit

  • ABLE account designated beneficiaries may be eligible to claim the saver's credit for a percentage of their contributions. 
  • The beneficiary claims the credit on Form 8880, Credit for Qualified Retirement Savings ContributionsPDF. The saver's credit is a non-refundable credit available to individuals who meet these three requirements:
    • Are at least 18 years old at the close of the taxable year
    • Are not a dependent or a full-time student
    • Meet the income requirements

Rollovers and transfers from section 529 plans

  • Families may roll over funds from a 529 plan to another family member's ABLE account. 
  • The ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder. Rollovers from a section 529 plan count toward the annual contribution limit. For example, the $16,000 annual contribution limit would be met by parents contributing $10,000 to their child's ABLE account and rolling over $6,000 from a 529 plan to the same ABLE account.

Qualified disability expenses

  • States can offer ABLE accounts to help people who become disabled before age 26 or their families pay for disability-related expenses. These expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology and personal support services.
  • Though contributions aren't deductible for federal tax purposes, distributions, including earnings, are tax-free to the beneficiary, if they are used to pay qualified disability expenses. 

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 extension filers – and everyone else – can get tax help fast

Posted by Admin Posted on Aug 30 2022

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For people who haven't filed their 2021 tax return yet, and for everyone looking for tax assistance, IRS.gov has resources to help people file electronically, get personalized tax account info, and find the status of their refund. These online tools are available any time, so taxpayers can use them at their convenience.

Get tax information 24/7

Taxpayers can use IRS.gov to:

  • View the filing page to get information on most federal income tax topics.
  • Access the Interactive Tax Assistant tool for answers to many tax law questions.
  • Sign into their individual IRS online account to view their balance and tax records, make payments, and manage communication preferences.
  • Find information about their tax refunds using the Where's My Refund? tool.

Taxpayers can also download the official IRS mobile app, IRS2Go, to check their refund status, make payments, find free tax preparation assistance, and sign up for helpful tax tips.

File electronically

Taxpayers who requested an extension to October 17 or missed the April 18 deadline can still prepare and file returns electronically for free with IRS Free File, if they qualify. The IRS accepts electronically filed returns 24/7. There's no reason to wait until October 17 if filers have all the information and documentation, they need to file an accurate return today. They can get their refund faster by choosing direct deposit.

If taxpayers need info about their Economic Impact Payments to determine eligibility for the recovery rebate credit or need to reconcile their advance child tax credit payments, they can go to the Tax Records tab in their IRS online account.

Taxpayers who missed the April 18 deadline and owe should file and pay electronically as soon as possible to reduce penalties and interest. Taxpayers can make payments or set up payment plans online.

Find a taxpayer assistance center

The Taxpayer Assistance Center Locator tool has a new look and feel, featuring a dynamic map, a directions button and two tabs for inputting search criteria. It's important to remember that Taxpayer Assistance Centers operate by appointment only. Taxpayers must make an appointment by calling the number for the office they want to visit.

Read information in other languages

Many IRS webpages are now available in Spanish, Vietnamese, Russian, Korean, Haitian Creole and Chinese. Some of the multilingual resources include the Taxpayer Bill of Rightse-file resources and many tax forms and publications.

Access the Alternative Media Center

The online Alternative Media Center has accessible products for use with assistive technology like screen reading software, refreshable Braille displays and screen magnifying software. These products include tax forms, instructions and publications that can be downloaded or viewed online as Section 508 compliant PDFs, HTML, eBraille, text and large print. To request paper copies of tax forms or instructions or publications in Braille or large print, taxpayers can call the tax form telephone number at 800-829-3676. Taxpayers can complete Form 9000, Alternative Media PreferencePDF, to receive their IRS tax notices in Braille, large print, audio or electronic formats.

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

People should donate carefully after a disaster to avoid scams

Posted by Admin Posted on Aug 30 2022

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After an emergency or disaster, people rally to help victims by donating money. Unfortunately, this can give criminals an opportunity to prey on them by soliciting donations for fake charities. Scammers may also pose as federal agencies to dupe disaster victims trying to get disaster relief.

People should always be suspicious of unsolicited contact. Scammers often contact their possible victim by telephone, social media, email or in person.

People donating to charity should make sure their money is going to a reputable organization.

  • Thieves may pose as a representative of a charity to ask for money or private information from well-intentioned taxpayers.
  • Scammers may set up bogus websites using names that sound like real charities. When a taxpayer searches for a charity online, they find the fake website or social media page, instead.
  • Donors can use the Tax Exempt Organization Search to find or verify qualified charities. Donations to these real charities may be tax deductible.
  • Taxpayers should always give by check or credit card to have a record of the donation.
  • Donors shouldn't give out personal financial information to anyone who asks for money. This includes things like Social Security numbers, credit card information, bank account numbers, and passwords.

Disaster victims should know:

  • Scammers may claim to work for the IRS. The thieves say they can help victims file casualty loss claims and get tax refunds.
  • Disaster victims can call the IRS disaster assistance line at 866-562-5227. IRS representatives will answer questions about tax relief or disaster-related tax issues.

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

TAS Tax Tip: Small business tax highlights

Posted by Admin Posted on Aug 29 2022

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The form of business you operate determines what taxes you must pay and how you pay them. There are four general types of business taxes:

  • Income
  • Self-employment
  • Employment
  • Excise

Income Tax

All businesses must file annual income tax returns, except partnerships which file annual information returns. The form you use depends on your business structure; see Publication 583, Starting a Business and Keeping Records, to decide what forms you should file to report your business income. Publication 509, Tax Calendars, explains when to file returns and make tax payments.

Self-Employment Tax

Self-employment (SE) tax is a social security and Medicare tax primarily for individuals who work for themselves. It is like the social security and Medicare taxes withheld from most employees’ wages by their employers. Your SE tax payments contribute to your coverage under the social security system. This coverage provides you with retirement, disability, survivor, and hospital insurance (Medicare) benefits.

You must file Schedule SE, Self-Employment Tax, with your federal income tax return, Form 1040 or Form 1040-SR, and pay SE tax if either of the following applies:

  • Your net self-employment income was $400 or more; or
  • You had church employee income of $108.28 or more.

The instructions for Schedule SE are a good resource to understand who must pay SE Tax.

Self-employed individuals in Puerto Rico use Form 1040-PR to compute self-employment tax.

Note:  Self-employed individuals generally must pay SE tax as well as income tax.

Employment Tax

When you have employees, you have certain employment taxes you must pay and forms you must file. Employment taxes include the following:

  • Social security and Medicare taxes;
  • Federal income tax withholding; and
  • Federal unemployment (FUTA) tax.

You must also withhold Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year.

If you pay wages subject to federal income tax withholding or social security and Medicare taxes, you generally must file Form 941 quarterly; however, some employers use Form 944, Form 1040 (Schedule H), or Form 943 instead of Form 941. Generally you must use Form 940 to report your annual FUTA tax.

For additional information, refer to Employment Taxes for Small Businesses and Publication 15, (Circular E), Employer’s Tax Guide.

Excise Tax

You may be subject to Excise Tax if you do any of the following:

  • Manufacture or sell certain products;
  • Operate certain kinds of businesses;
  • Use various kinds of equipment, facilities, or products; or
  • Receive payment for certain services.

Excise taxes may be imposed on the manufacturer, retailer or consumer, depending on the specific tax.

These are the forms most commonly used to report excise taxes:

Form 720, Quarterly Federal Excise Tax Return, is used to report your liability by IRS Number. and pay the excise taxes listed on the form. If you report a liability on Part I or Part II, you may be eligible to use Schedule C to claim a credit.

Form 2290, Heavy Highway Vehicle Use Tax Return, is used to report federal excise tax on certain trucks, truck tractors, and buses used on public highways. This tax applies to vehicles having a taxable gross weight of 55,000 pounds or more.

Note: The weight declared for registering a vehicle in a state may affect the taxable gross weight used to calculate the tax.

Form 730, Monthly Tax Return for Wagers, is used by taxpayers in the business of accepting wagers, conducting a wagering pool or lottery, or required to be registered and received wagers for on behalf of another person but didn’t report that person’s name and address.

Form 11-C, Occupational Tax and Registration Return for Wagering, is used to register for certain wagering activity with the IRS and to pay the federal occupational tax on wagering.

Form 6627, Environmental Taxes, is used to report the environmental taxes on petroleum and imported petroleum products, and certain chemicals and imported chemical substances. Find the tax rates for 121 taxable substances here.

For additional information, see Publication 510, Excise Taxes.

Estimated Tax

Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. Estimated taxes are used to pay not only income tax, but other taxes such as self-employment tax.

Individuals, including sole proprietors, partners, and S corporation shareholders, generally must make estimated tax payments if they expect to owe at least $1,000 in tax after subtracting withholding and tax credits. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax.

Corporations generally must make estimated tax payments if they expect to owe at least $500 in taxes. Use Form 1120-W, Estimated Tax for Corporations, to figure your corporation’s estimated tax. You must deposit the payments using the Electronic Federal Tax Payment System. For additional information, refer to Publication 542, Corporations.

Note: S corporations must also make estimated tax payments for certain taxes, but instead use the instructions for Form 1120-S, U.S. Income Tax return for an S Corporation, to figure their estimated tax.

If you pay too little or pay late, you may have to pay an estimated tax penalty even if you are due a refund when you file your tax return.  For more information, see Publication 505, Tax Withholding and Estimated Tax.

Payment Options

You generally must deposit certain excise taxes, corporate income tax, and S corporation taxes before you file your return. You must use an electronic funds transfer (EFT) to make all federal tax deposits (FTDs). Generally, an EFT is made using the Electronic Federal Tax Payment System (EFTPS). If you don’t want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or trusted third party to make EFT on your behalf.

For estimated tax purposes, the year is divided into four payment periods. It’s important to remember that the payment periods are not spread evenly throughout the year. In general, estimated payments are due on April 15, June 15, September 15, and January 15 of the following year. You can mail your estimated tax payments with Form 1040-ESpay online, or pay by phone or from your mobile device using the IRS2Go app. Visit IRS.gov/payments to view all payment options.

Ten Federal Tax Tips to Help Small Business Owners

April shouldn’t be the only time you’re thinking about taxes. Keep these tax tips in mind throughout the year so you’re prepared to maximize your deductions and credits.

  1. Know your limitations and know when you need to ask a professional for help: There are many Online Learning and Educational Products available to help you learn about taxes. For example, the IRS Tax Calendar has important tax dates for businesses. However, if you choose to hire a professional, it is important to choose carefully because you are trusting them with your personal information and relying on them to have the knowledge to help you file an accurate tax return. You are responsible for all the information on your tax returns, no matter who prepares them. TAS Tax Tip: Choosing the right tax return preparer for you can help.

Note: ALL tax return preparers MUST sign their name and enter a preparer tax identification number on your tax return. For your protection, please check that they do this before submitting any documents.

  1. Keep adequate records: Accurate recordkeeping throughout the year will save you time and help ensure your tax return is correct. Set up a system for receipts. This can be a paper file, or you can use an app to scan and store them; just make sure you are saving them in some way.
  2. Separate your personal and business finances: Set up a separate bank account and credit card for your business and run only business expenses through those accounts. See Publication 583, Starting a Business and Keeping Records.
  3. Correctly classify your business: Some business structures enjoy more tax advantages than others. It’s important to choose the business structure that best suits your business. If you’re not sure which to choose, a tax attorney or certified public accountant can help.
  4. Manage payroll: You can take an online class to learn how to handle payroll. But if you don’t have the time, desire, or knowledge to manage payroll, hire someone to do it for you. To help make sure the company is reputable, see Outsourcing Payroll and Third Party Payers.
  5. Subscribe to e-News for Small Businesses: The IRS e-News for Small Businesses is a free electronic mail service that offers tax information for small business owners and self-employed individuals, including reminders, tips and special announcements.
  6. Research small business tax deductions: There is a long list of tax deductions for small business owners. See Publication 535, Business Expenses. A tax deduction is an item you can subtract from your gross income to lower the amount of taxes you owe.
  7. Self-employment tax deduction: You can deduct one-half (50 percent) of your SE tax as an adjustment to income on your federal income tax return. For tax years after 2017, you will also need to report the amount on Form 1040 Schedule 1, Part II.
  8. Make your tax payments timely: Anyone who files federal income tax returns and expects to owe more than $1,000 needs to pay estimated tax If you don’t pay enough tax through withholding and estimated tax payments, you may be charged a penalty. You also may be charged a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return.
  9. For faster processing, file your returns electronically: Electronic Filing Options for Business and Self-Employed Taxpayers.

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

Some things to know about crowdfunding and taxes

Posted by Admin Posted on Aug 23 2022

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Crowdfunding is a popular way to raise money online. People often use crowdfunding to fundraise for a business, for charity, or for gifts. It's important to know that money raised through crowdfunding may be taxable.

Some money raised through crowdfunding may be considered a gift.

Under federal tax law, gross income includes all income from any source, unless it's excluded from gross income by law. In most cases, gifts aren't included in the gross income of the person receiving the gift. Here's what people involved in crowdfunding should know:

  • If a crowdfunding organizer is raising money on behalf of others, the money may not be included in the organizer's gross income, as long as the organizer gives the money to the person for whom they organized the crowdfunding campaign.
  • If people donate to a crowdfunding campaign out of generosity and without expecting anything in return, the donations are gifts. Therefore, they will not be included in the gross income of the person for whom the campaign was organized.
  • However, not all contributions to crowdfunding campaigns are gifts and may be taxable.
  • When employers give to crowdfunding campaigns for an employee, those contributions are generally included in the employee's gross income.

Taxpayers may want to consult a trusted tax pro for information and advice regarding how to treat amounts received from crowdfunding campaigns.

People may receive Form 1099-K for money raised through crowdfunding.

The crowdfunding website or its payment processor must file Form 1099-K, Payment Card and Third Party Network Transactions with the IRS if:

  • The amount raised is more than $600
  • Contributors to the crowdfunding campaign receive goods or services for their contributions.

If a Form 1099-K is filed, the crowdfunding organizer or the beneficiary of the fundraiser will receive a copy, depending on who received the funding directly from the crowdfunding website.

Receiving a Form 1099-K doesn't automatically mean the amount shown is taxable. However, if the taxpayer doesn't include the distributions from the form on their tax return, the IRS may contact the recipient for more information. The recipient may need to explain why the crowdfunding distributions weren't reported.

Recordkeeping for money raised through crowdfunding.

People who run crowdfunding campaigns or receive money from one should keep careful records about the campaign and the disposition of funds for at least three years.

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

Source: IRS

What business owners need to do when closing their doors for good

Posted by Admin Posted on Aug 23 2022

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There are a few things business owners need to do before they close their business. Of course, they need to fulfill their federal tax responsibilities. It's also important to notify the IRS of their plans.

Business owners must take these steps when closing a business:

  • File a final tax return and related forms. The type of return to file and related forms depends on the type of business.
  • Take care of employees. Business owners with one or more employees must pay any final wages or compensation, make final federal tax deposits and report employment taxes.
  • Pay taxes owed. Even if the business closes now, tax payments may be due next filing season.
  • Report payments to contract workers. Businesses that pay contractors at least $600 for services including parts and materials during the calendar year in which they go out of business, must report those payments.
  • Cancel EIN and close IRS business account. Business owners should notify the IRS so they can close the IRS business account.
  • Keep business records. How long a business needs to keep records depends on what's recorded in each document.

IRS.gov has information to help guide business owners through the process of shutting down. Small businesses and self-employed taxpayers can find information including:

  • What forms to file
  • How to report revenue received in the final year of business
  • How to report expenses incurred before closure

Business owners can also get helpful information on declaring bankruptcy, selling their business and terminating retirement plans.

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

Worker Classification 101: employee or independent contractor

Posted by Admin Posted on Aug 23 2022

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A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors.

Here's some information to help business owners avoid problems that can result from misclassifying workers.

An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public.

Independent contractor vs. employee

Whether a worker is an independent contractor, or an employee depends on the relationship between the worker and the business. Generally, there are three categories to considerPDF.

  • Behavioral control − Does the company control or have the right to control what the worker does and how the worker does the job?
  • Financial control − Does the business direct or control the financial and business aspects of the worker's job. Are the business aspects of the worker's job controlled by the payer? Things like how the worker is paid, are expenses reimbursed, who provides tools/supplies, etc.
  • Relationship of the parties − Are there written contracts or employee type benefits such as pension plan, insurance, vacation pay? Will the relationship continue and is the work performed a key aspect of the business?

Misclassified worker

Misclassifying workers as independent contractors adversely affects employees because the employer's share of taxes is not paid, and the employee's share is not withheld. If a business misclassified an employee, the business can be held liable for employment taxes for that worker. Generally, an employer must withhold and pay income taxes, Social Security and Medicare taxes, as well as unemployment taxes. Workers who believe they have been improperly classified as independent contractors generally must receive a determination of worker status from the IRS. Then they can use Form 8919, Uncollected Social Security and Medicare Tax on WagesPDF to figure and report their share of uncollected social security and Medicare taxes due on their compensation.

Voluntary Classification Settlement Program

The Voluntary Classification Settlement Program is an optional program that provides businesses with an opportunity to reclassify their workers as employees for future employment tax purposes. This program offers partial relief from federal employment taxes for eligible businesses who agree to prospectively treat their workers as employees. Businesses must meet certain eligibility requirements and apply by filing Form 8952, Application for Voluntary Classification Settlement Program (VCSP), and enter into a closing agreement with the IRS.

Who is self-employed?

Generally, someone is self-employed if any of the following apply to them.

Self-employed individuals, including those who earn money from gig economy work, are generally required to file an tax return and make estimated quarterly tax payments. They also generally must pay self-employment tax which is social security and Medicare tax as well as income tax. These taxpayers may qualify for the home office deduction if they use part of a home for business.

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 

2021 tax extension filers don’t need to wait until October 17

Posted by Admin Posted on Aug 03 2022

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WASHINGTON — The Internal Revenue Service is reminding the estimated 19 million taxpayers who requested an extension to file their 2021 tax return that they don't have to wait until mid-October to file. If a taxpayer has all the necessary information to file an accurate return, they can file electronically at any time before the October deadline and avoid a last-minute rush to file.

Taxpayers who requested more time to file an accurate return have until October 17, 2022. Those who have what they need to file, however, should file as soon as possible to avoid delays in processing their return.

Taxpayers who have questions can get help with most tax issues online or by phone. The IRS.gov website has free and easy to use online tools and resources to help taxpayers get answers 24 hours a day. Voice bots help callers navigate interactive voice responses to simple payment or notice questions, and quickly get responses to Frequently Asked Questions.

The Interactive Tax Assistant is a tool that provides answers to several tax law questions specific to individual circumstances based on input. It can determine if an individual must file a tax return, their filing status, if they can claim a dependent, if an income type is taxable, and their eligibility to claim a credit or deduct certain expenses.

Electronic filing options

The IRS advises individuals who still need to file a 2021 tax return to file electronically and, if due a refund, to choose direct deposit.

Filing electronically is fast, accurate and secure, and when an individual chooses direct deposit, their refund goes directly from the IRS into their bank or financial account getting them their refund in the fastest time possible. If they have a prepaid debit card, they may be able to have their refund applied to the card by providing the account and routing number to the IRS. The IRS processes most e-filed returns and issues direct deposit refunds in less than 21 days.

Eligible individuals can use the IRS Free File program to prepare and file their 2021 federal tax return for free. Taxpayers can choose the brand-name tax preparation software company that is best for them. Some even offer free state tax return preparation. Those who earned more than $73,000 have the option to use IRS Free File Fillable Forms.

MilTax online software is also available for members of the military and certain veterans, regardless of income. This software is offered through the Department of Defense. Eligible taxpayers can use MilTax to prepare and electronically file their federal tax returns and up to three state returns for free.

Volunteer Income Tax Assistance

The IRS's Volunteer Income Tax Assistance (VITA) program offers free basic tax return preparation to people who generally make $58,000 or less and people with disabilities or limited English-speaking taxpayers. While the majority of these sites are only open through the end of the filing season, taxpayers can use the VITA Site Locator tool to see if there's a community-based site staffed by IRS-trained and certified volunteers still open near them.

Tax professionals

There are also various types of tax return preparers who can help, including certified public accountants, enrolled agents, attorneys and others who don't have a professional credential.

Taxpayers should choose a tax preparer wisely. For individuals who want help with their taxes, the IRS online directory can assist in finding a tax professional in their area.

Get current on taxes

The IRS sends correspondence to a taxpayer's last known address, usually the address from their most recently filed tax return. If the taxpayer moves and does not send a change of address to the IRS, they may not receive an IRS notice and could miss the deadline to respond.

There's no penalty for not filing a return if due a refund, but there's also no statute of limitations for assessing and collecting taxes due if no return has been filed.

Interest is charged on any tax not paid by the April due date and will accrue until paid in full. Individual taxpayers are charged the federal short-term interest rate plus 3 percentage points, currently 5% per year, compounded daily. Penalties will accrue for each month tax remains unpaid until maxed out at 25% of the unpaid tax.

Submitting a tax return and paying any amount owed as soon as possible can help taxpayers avoid further interest and penalties.

Taxpayers who owe taxes can review all payment options online. These include paying taxes through an Online Account with IRS Direct Pay or paying by debit card, credit card or digital wallet. The IRS has options for people who can't pay their taxes, including applying for a payment plan on IRS.gov.

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

Source: IRS

TAS Tax Tip: Adjust Your Withholding to Ensure There’s No Surprises on Tax Day

Posted by Admin Posted on Aug 02 2022

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It is a good practice for everyone to do a paycheck check-up every year. Checking your tax withholding amounts can ensure that you aren’t paying too much or too little in federal income tax.

No one likes surprises come tax time. Checking your tax withholding amounts can ensure that you aren’t paying too much (or too little) in federal income tax. Doing a paycheck check-up is a great way to prepare for Tax Day – even if you just filed your taxes.

What does tax withholding mean?

Federal income tax is a pay-as-you-go tax. That means that throughout the year, you pay or have an employer, or the payer of income, withhold a portion of your taxes as you earn or receive income.

Why should I check my tax withholding?

It is a good practice for everyone to do a paycheck check-up every year.

There are essentially two ways to pay your federal income taxes:

  • Withholding from your paycheck, pension, and other government payments such as Social Security; or
  • If you don’t pay your tax through withholding, or don’t pay enough tax that way, making quarterly estimated tax payments.

If you don’t pay enough taxes during the year, you could be subject to estimated tax penalties. Typically, you can avoid a penalty and any applicable interest by paying at least 90 percent of your taxes during the year.

 

Checking and then adjusting tax withholding can help make sure you:

  • Don’t owe more tax than you are expecting;
  • Don’t get a surprise tax bill, and possibly a penalty, when filing next year; or
  • Don’t receive a refund that is much larger or smaller than anticipated.

To avoid a large or unexpected tax bill it is also a good idea to change your withholding when you experience a big life change such as marriage, divorce, birth of a child, getting a new or second job, starting a side business, or receiving any other income that isn’t subject to withholding.

It’s important to do this as early in the year as possible, so that if a tax withholding adjustment is needed, there is more time to make up the difference during the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax.

How do I calculate the correct amount to withhold?

The IRS Withholding Estimator on IRS.gov is a free tool that can help you calculate the right amount of tax to withhold from your paycheck.

The Estimator works for most taxpayers; however, people with more complex tax situations should use the instructions in Publication 505Tax Withholding and Estimated Tax.

This includes taxpayers who owe:

  • Self-employment tax;
  • Alternative minimum tax;
  • Tax on unearned income of dependents;
  • Tax on long-term capital gains or qualified dividends; and
  • Certain other investment- or household employee-related taxes.

For more on using the IRS Withholding Estimator read our TAS Tax Tip: Use Tax Withholding Estimator and Take Action on Your Tax Withholding Now

How do I adjust my withholding, if I need to?

If you think you need to make changes to your withholding amount, the calculator gives you the information you will 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 new W-4 to your employer as soon as possible to make the changes. Some payroll providers allow you to adjust your withholding using an online version of the Form W-4.

What if I don’t have enough taxes withheld?

If after making withholding adjustments, the amount of income tax withheld from your salary or pension is not enough, or if you don’t have any withholdings at all, you may have to make estimated tax payments. This also applies if you receive income such as interest, dividends, alimony, capital gains, prizes and awards, or other sources of income without withholding. You might also need to make estimated tax payments if you are in business for yourself.

Estimated tax payments are due four times each year:

  • January 1 to March 31 – April 15
  • April 1 to May 31 – June 15
  • June 1 to August 31 – September 15
  • September 1 to December 31 – January 15 of the following year

Note: If these due dates fall on a Saturday, Sunday, or legal holiday, the payments are due the next business day.

Your estimated tax payments should correspond to the period that any income is received. If you don’t pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return.

You can use the worksheet in Form 1040-ES to figure your estimated tax. Again, it’s a good idea to do this each year, as early in the year as possible.

If you are unemployed and receive unemployment compensation, you may choose to have a flat ten percent withheld from your unemployment benefits to cover all or part of your tax liability.

  • Complete and provide Form W-4V, Voluntary Withholding Request, or another withholding request form, to the agency paying the benefits – don’t send it to the IRS.

Remember, if you need to increase your withholding, even just adding a few dollars more or making a partial estimated tax payment can make a difference in the amount you may owe on your tax return.  For those who cannot afford to pay taxes through their withholding or estimated tax payments, the IRS has payment options available. Each option has different requirements, and some have fees.

Most options for paying off a tax debt work best if you are proactive. More information is available on our I Can’t Pay My Taxes Get Help Page.

Do I have to report gambling winnings?

Yes, all gambling winnings are taxable and must be reported as income on your tax return. This includes cash winnings and fair market value of prizes such as cars and trips from:

  • Lotteries;
  • Raffles;
  • Horse Races;
  • Casinos; and
  • Fantasy Sports Leagues.

You should receive a Form W-2G, Certain Gambling Winnings, from a payer that shows the amount of your winnings and any taxes taken out. You must report all gambling winnings as “Other Income” on Form 1040 or Form 1040-SR , including winnings that aren’t reported on a Form W-2G. Some gambling winnings may require you to pay estimated tax.

Note: There are different rules for professional gamblers. For more information about withholding gambling winnings see Publication 505, Tax Withholding and Estimated Tax.

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

Hiring Your Minor Children For Summer Jobs

Posted by Admin Posted on Aug 02 2022

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If you’re a business owner and you hire your children this summer, you can obtain tax breaks and other nontax benefits. The kids can gain on-the-job experience, save for college and learn how to manage money. And you may be able to:

  • Shift some of your high-taxed income into tax-free or low-taxed income, and
  • Realize payroll tax savings (depending on the child’s age and how your business is organized).

Plus, you can spend more time with your kids.

A legitimate job

If you hire your child, you get a business tax deduction for employee wage expenses. In turn, the deduction reduces your federal income tax bill, your self-employment tax bill (if applicable) and your state income tax bill (if applicable). However, for your business to deduct the wages as a business expense, the work performed by the child must be legitimate and the child’s pay must be reasonable.

Let’s say you operate as a sole proprietor and you’re in the 37% tax bracket. You hire your 16-year-old daughter to help with office work on a full-time basis during the summer and part-time into the fall. Your daughter earns $10,000 during 2022 and doesn’t have any other earnings.

You save $3,700 (37% of $10,000) in income taxes at no income tax cost to your daughter. She can use her standard deduction of $12,950 for 2022 to completely shelter her earnings.

Your family’s taxes are cut even if your daughter’s earnings exceed her standard deduction. Why? The unsheltered earnings will be taxed to your daughter beginning at a rate of 10%, instead of being taxed at your higher rate.

How payroll taxes might be saved

If your business isn’t incorporated and certain other conditions are met, your child’s wages are exempt from Social Security, Medicare and FUTA taxes. Your child must be under age 18 for this to apply (or under age 21 for the FUTA tax exemption). Contact us for how this works.

Be aware that there’s no FICA or FUTA exemption for employing a child if your business is incorporated or a partnership that includes nonparent partners. And payments for the services of your child are subject to income tax withholding, regardless of age, no matter what type of entity you operate.

Keep accurate records

Hiring your child can be a tax-smart idea. Be sure to keep the same records as you would for other employees to substantiate the hours worked and duties performed (such as timesheets and job descriptions). Issue your child a Form W-2. Contact us with questions about how these rules apply to your situation.

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   

Deducting The Costs Of A Self-managed Portfolio

Posted by Admin Posted on Aug 02 2022

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Do you have significant investment-related expenses, including payment for financial service subscriptions, home office maintenance and clerical support? Under the 2017 Tax Cuts and Jobs Act (TCJA), these expenses aren’t deductible if they’re considered investment expenses to produce income. But they are deductible if they’re considered trade or business expenses.

Changing rules

For years before 2018, production-of-income expenses were deductible as miscellaneous itemized deductions subject to a 2%-of-adjusted-gross-income floor. But the TCJA generally suspended such miscellaneous deductions through 2025.

As a result, only the trade or business expense deduction is currently available for investment-related expenses. If you do a significant amount of trading, you should know which category your investment expenses fall into, because qualifying for trade or business expense treatment is more advantageous now.

A trader vs. an investor

To be able to deduct your investment-related expenses as business expenses, you must be engaged in a trade or business. The U.S. Supreme Court held many years ago that individual taxpayers aren’t engaged in a trade or business merely because they manage their own securities investments, regardless of the amount or the extent of the work required.

However, if you can show that your investment activities rise to the level of carrying on a trade or business, you may be considered a trader, who is engaged in a trade or business, rather than an investor, who isn’t. As a trader, you’re entitled to deduct your investment-related expenses as business expenses.

A trader is also entitled to deduct home office expenses if the home office is used exclusively on a regular basis as the trader’s principal place of business. An investor, on the other hand, isn’t entitled to home office deductions because the investment activities aren’t a trade or business.

A two-part test

Since the Supreme Court decision, there has been extensive litigation on the issue of whether a taxpayer is a trader or investor. The U.S. Tax Court has developed a two-part test, both parts of which must be satisfied for a taxpayer to be considered a trader:

1. The taxpayer’s trading is substantial (in other words, sporadic trading isn’t considered a trade or business), and

2. The taxpayer seeks to profit from short-term market swings, rather than from long-term holding of investments.

A taxpayer’s investment activities may be regular, extensive and continuous. But that itself isn’t sufficient for determining that the taxpayer is a trader. To be considered a trader (and therefore entitled to deduct investment-related business expenses) you must show that you buy and sell securities with reasonable frequency with the goal of making a profit on a short-term basis.

In one U.S. Tax Court case, a taxpayer made more than 1,000 trades a year with trading activities averaging about $16 million annually. Even so, the individual was deemed to be an investor rather than a trader, because the holding periods for stocks sold averaged about one year.

Passing the test

Again, to pass the trader test, both parts one and two must be satisfied. Contact us if you have questions or would like to figure out whether you’re an investor or a trader for tax purposes.

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             

TAS Tax Tip: How to handle a notification of tax-related identity theft

Posted by Admin Posted on Aug 02 2022

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Did you get a notification from IRS or the Social Security Administration (SSA) advising you that you might be a victim of tax-related identity (ID) theft? If yes, it is important to visit our Identity Theft Get Help page and follow the steps there, as well as in the correspondence you received.

How will you know if you are a victim of tax-related ID theft?

You may find out you’re a victim of tax-related ID theft when you try to file your tax return or start getting IRS notices about your tax account.

The most common indicators are:

  • You try to file your tax return electronically, but the IRS rejects your return because it has already received another return using your Social Security Number (SSN) or ITIN;
  • You receive an IRS notice showing you received wages from somewhere you never worked;
  • You receive an IRS letter indicating one or more tax returns have been filed using your SSN or ITIN that you did not file.

Or you may receive a notice from the SSA stating benefits will be reduced or stopped based on IRS records indicating you received wages or other income from an employer for whom you did not work.

There are several steps you may need to take. The right ones for you are based on what’s happening with your tax account.

TAS’s Identity Theft Get Help page will walk you through the steps you need to take for each of the common indicators above and others too.

The IRS Taxpayer Protection Program identifies potential ID theft tax returns as a precautionary measure to protect you. If you receive a Letter 4883C, 5071C,  5747C6330C or 6331C, respond as soon as possible, following the instructions in the letter. Be aware that not all letters have the same options for verifying your identity, so it is important to follow the instructions given.

Protecting your tax account in future years

When the IRS determines you’re the rightful owner of the SSN (or ITIN) and confirms tax-related ID theft occurred, IRS will assign you an IRS Identity Protection PIN (IP PIN), a six-digit number that prevents someone else from filing a tax return using your information. The IRS assigns you a new IP PIN every year. This is an extra layer of security; a valid IP PIN must be entered on electronic and paper tax returns to avoid rejections or delays.

Anyone who can to verify their identity may now voluntarily opt into the IP PIN program as a proactive way to protect against tax-related ID theft. Even though you may not have a filing requirement, an IP PIN still protects your account. You can also see our NTA Blog: Identity Protection PIN Can Protect You From Tax-Related Identity Theft or IRS’s FAQs about the Identity Protection Personal Identification Number (IP PIN) for more information about this special program.

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 businesses need to know about reporting nonemployee compensation and backup withholding to the IRS

Posted by Admin Posted on Aug 02 2022

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When a business hires an independent contractor, the employer is generally not responsible for withholding income taxes, Social Security, or Medicare taxes from their compensation. However, by law, business taxpayers who pay nonemployee compensation of $600 or more must report these payments to the IRS. They do this using Form 1099-NEC, Nonemployee Compensation.

Generally, payers must file Form 1099-NEC by January 31. There is no automatic 30-day extension to file Form 1099-NEC. However, an extension to file may be available under certain hardship conditions.

Nonemployee compensation reportable on Form 1099-NEC is subject to backup withholding if a payee has not provided a Taxpayer Identification Number to the payer or the IRS notifies the payer that the payee provided a TIN that does not match their name in IRS records.

A TIN can be one of the following numbers:

  • Social Security
  • Employer identification
  • Individual taxpayer identification
  • Adoption taxpayer identification

What is backup withholding?

Backup withholding can apply to most kinds of payments reported on Forms 1099 and W-2G. The person or business paying the taxpayer doesn't generally withhold taxes from certain payments; however, there are situations when the payer is required to withhold a certain percentage of tax to make sure the IRS receives the tax due on this income. The payer's requirement to withhold taxes from payments not otherwise subject to withholding is known as backup withholding. The current backup withholding tax rate is 24%.

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.

Surce: IRS

OFFER IN COMPROMISE

Posted by Admin Posted on Aug 02 2022

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An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability or doing so creates a financial hardship. We consider your unique set of facts and circumstances:

  • Ability to pay
  • Income
  • Expenses
  • Asset equity

We generally approve an offer in compromise when the amount you offer represents the most we can expect to collect within a reasonable period of time. Explore all other payment options before you submit an offer in compromise. The Offer in Compromise program is not for everyone. If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.

Who Is Eligible

Confirm you're eligible and prepare a preliminary proposal with the Offer in Compromise Pre-Qualifier Tool.

You're eligible to apply for an Offer in Compromise if you:

  • Filed all required tax returns and made all required estimated payments
  • Aren't in an open bankruptcy proceeding
  • Have a valid extension for a current year return (if applying for the current year)
  • Are an employer and made tax deposits for the current and past 2 quarters before you apply

If You Apply and Are Not Eligible

If you apply for an Offer in Compromise and we can’t process your offer, we'll:

  • Return your application and offer application fee
  • Apply any offer payment you included to your balance due

Submit Your Application

Find forms to submit an application and step-by-step instructions in Form 656-B, Offer in Compromise BookletPDF.

Complete an application package:

  • Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms
  • Form 656(s) – you must submit individual and business tax debt (Corporation/ LLC/ Partnership) on separate Forms 656
  • $205 application fee (non-refundable)
  • Initial payment (non-refundable) for each Form 656.

Select a Payment Option

Your initial payment varies based on your offer and the payment option you choose:

  • Lump Sum Cash: Submit an initial payment of 20% of the total offer amount with your application. If we accept your offer, you'll receive written confirmation. You must pay any remaining balance due on the offer in five or fewer payments.
  • Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If IRS accepts your offer, continue to pay monthly until it is paid in full.

If You Meet the Low Income Certification Guidelines

You don't have to:

  • Send the application fee or the initial payment
  • Make monthly installments while we review your offer.

For details, see Form 656-B, Offer in Compromise BookletPDF.

Understand the Process

While IRS evaluates your offer:

  • Your non-refundable payments and fees are applied to the tax liability (you may designate payments to a specific tax year and tax debt)
  • IRS may file a Notice of Federal Tax Lien
  • IRS suspends other collection activities
  • Your legal assessment and collection period is extended
  • You make all required payments per your offer
  • You don't have to make payments on an existing installment agreement
  • Your offer is automatically accepted if the IRS doesn't not make a determination within two years of the IRS receipt date (This does not include any Appeal period.)

If Your Offer Is Accepted

  • You must meet all the Offer Terms listed in Section 7 of Form 656, including filing all required tax returns and making all payments
  • IRS doesn't release federal tax liens until your offer terms are satisfied
  • Certain offer information is available for public review by requesting a copy of a public inspection file.

If Your Offer Is Rejected

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

A Tax Break For Educators Gets An Update

Posted by Admin Posted on Aug 02 2022

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Teachers who are setting up their classrooms for a new school year often pay for some of their classroom supplies out-of-pocket. They can recoup some of that cost by taking advantage of a special tax break for educators. This deduction gained new importance after the 2017 passage of the Tax Cuts and Jobs Act (TCJA). For 2022, the deduction amount has increased for the first time since it was enacted.

The old-school way

Before 2018, employees who had unreimbursed out-of-pocket expenses could potentially deduct them if they were ordinary and necessary to the “business” of being an employee. A teacher’s out-of-pocket classroom expenses could qualify. Those expenses were claimed as a miscellaneous deduction, subject to a 2% of adjusted gross income (AGI) floor. That meant that only taxpayers who itemized deductions could enjoy a tax benefit, and then only to the extent that their deductions exceeded the 2% floor.

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 unreimbursed out-of-pocket classroom costs using the educator expense deduction.

The new-school way

Back in 2002, Congress created the above-the-line educator expense deduction. An above-the-line deduction is one that’s subtracted from your gross income to determine your AGI. It can be claimed even by taxpayers who don’t itemize deductions. This is especially significant because, under the TCJA, the standard deduction has nearly doubled, which means that fewer taxpayers now itemize deductions.

For 2022, qualifying elementary and secondary school teachers and other eligible educators (such as counselors and principals) can deduct up to $300 of qualified expenses. This is up from $250 for 2021. Two married educators who file a joint tax return can deduct up to $600 of unreimbursed expenses, limited to $300 each.

Qualified expenses include amounts paid or incurred during the tax year for books, supplies, computer equipment, related software, services, and other equipment and materials used in classrooms. The cost of certain professional development courses may be deductible. Also, protective items to prevent the spread of COVID-19 such as hand sanitizers, disinfectant and other items recommended by the Centers for Disease Control for this purpose are also deductible. However, homeschooling supplies and nonathletic supplies for health or physical education courses aren’t deductible.

More details

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

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 Start-up Costs Of A New Business Affect Your Tax Return

Posted by Admin Posted on Aug 02 2022

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Despite the COVID-19 pandemic, there has been a large increase in the number of new businesses being launched. The latest data available from the U.S. Census Bureau shows that, for the period of June 2020 through June 2021, business applications were up 18.6%. The Bureau measures this by the number of businesses applying for an employer identification number.

Entrepreneurs often don’t know that many of the expenses incurred by start-ups can’t be currently deducted. You should be aware that the way you handle some of your initial expenses can make a large difference in your federal tax bill.

How to treat expenses for tax purposes

If you’re starting or planning to launch a new business, keep these three rules in mind:

1. Start-up costs include those incurred or paid while creating an active trade or business. The costs of investigating the creation of a new business or the acquisition of one are also considered start-up costs.

2. Under the tax code, taxpayers can make a special election to deduct up to $5,000 of business start-up and $5,000 of organizational costs in the year the business begins. As you know, $5,000 doesn’t go very far these days! And the $5,000 deduction is reduced dollar-for-dollar by the amount by which your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized over 180 months on a straight-line basis.

3. No deductions or amortization deductions are allowed until the year when “active conduct” of your new business begins. Generally, that means the year when the business has all the pieces in place to start earning revenue. To determine if a taxpayer meets this test, the IRS and courts generally ask questions such as: Did the taxpayer undertake the activity intending to earn a profit? Was the taxpayer regularly and actively involved? Did the activity commence?

Be sure to keep detailed records and receipts for these costs, so that nothing falls through the cracks.

Eligible expenses

In general, “start-up” expenses that qualify for the special election are those you make to:

  • Investigate the creation or acquisition of a business,
  • Create a business, or
  • Engage in a for-profit activity in anticipation of that activity becoming an active business.

An expense also must be one that would be deductible if it were incurred after a business began. One example is money you spend analyzing potential markets for a new product or service.

To be eligible as an “organization expense” under the special election, an expense must be related to establishing a corporation or partnership. Examples of organization expenses include legal and accounting fees for services related to organizing a new business and filing fees paid to the state of incorporation.

Plan now

If you have start-up expenses that you’d like to deduct this year, you need to decide whether to take the election described above. Recordkeeping is critical. Contact us about your start-up plans. We can help with the tax and other aspects of your new business.

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             

You’re Never Too Old to File a Return – Taxes and the Elderly

Posted by Admin Posted on Aug 02 2022

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Taxpayers who are winding down full-time work may think that they can also wind down their tax return filing requirements. However, taxpayers are never too old to have a filing requirement. Although age is a consideration, filing requirements are determined by a variety of factors such as filing status, the type and amount of income received, and yes, even age. For 2021, single taxpayers are required to file a tax return if their gross income is $12,550 or more; however, single taxpayers 65 or older are not required to file unless their gross income is $14,250 or more.

Social Security and Railroad Retirement benefits

Many elderly taxpayers receive Social Security or Railroad Retirement benefits, both of which are based on prior earnings. The taxability of these benefits is not determined by age, but rather by filing status and the type and amount of other income received. TAS research shows that 98.4 percent of the 2020 tax returns filed by taxpayers 65 or older reported other income in addition to Social Security and Railroad Retirement benefits.

Even though Social Security and Railroad Retirement benefits are based on a taxpayer’s earned income, these benefits are not considered income for such refundable credits as the Earned Income Tax Credit (EITC). For tax year 2020, about four percent of the returns filed by taxpayers 65 and older reflected at least one exemption for a child – with nearly 97 percent of these taxpayers receiving Child Tax Credit. And for tax year 2020, 45 percent of the returns filed by taxpayers 65 or older reported pension or annuity income but reflected no income from wages. For many older taxpayers now raising their grandchildren, the option to claim EITC based on Social Security or Railroad Retirement benefits, or other retirement income based on a taxpayer’s earnings history, would further the credit’s goal of providing assistance to lower income families. This is especially true in multi-generational households, where raising children two or more generations removed may have been unplanned. In that vein, I have proposed legislative changes for restructuring and modernizing the EITC. Because the EITC is a credit for lower income families, its eligibility should more accurately reflect its target population.

Other credits may be available

Taxpayers 65 or older, and taxpayers under age 65 who receive taxable disability income due to being retired on permanent and total disability, may qualify for the Credit for the Elderly or Disabled. To be eligible for this credit, qualified individuals must also meet two income limitations: both their adjusted gross income and the total of their nontaxable Social Security and other nontaxable pensions, annuities, or disability income, must be below the designated amounts corresponding to the taxpayer’s filing status. If eligible, taxpayers should complete Schedule R, Credit for the Elderly or Disabled, and attach it to their tax return when filing. Taxpayers needing assistance to determine if they are eligible for this credit can use the IRS’s interactive tool, Do I Qualify for the Credit for the Elderly or Disabled?

Taxpayers paying a care provider to care for a spouse (or other qualifying relative) who was physically or mentally incapable of self-care so they could work or look for work should also consider their eligibility for the Child and Dependent Care Tax Credit. In 2021, the American Rescue Plan Act of 2021 (ARPA) temporarily increased this credit to provide additional help to working caregivers during the COVID-19 pandemic. For 2021 only, ARPA increased the limit on expenses that can be claimed to $8,000 for one qualifying person and $16,000 for two or more qualifying persons. The maximum credit amount was raised to 50 percent of employment-related expenses, which equals a maximum credit of $4,000 for one qualifying person or $8,000 for two or more qualifying persons. In addition, in 2021, the credit became potentially refundable for the first time.

Normally, a taxpayer (and spouse, if married filing jointly) must have “earned income” to qualify for the Child and Dependent Care Credit. Special earned income rules apply, however, for taxpayers and their spouses who are disabled. A disabled spouse is considered to have earnings of at least $250 for each month or part of a month they are unable to care for themselves. Therefore, disabled taxpayers, or taxpayers with a disabled spouse, may also benefit from this credit. Taxpayers who are uncertain regarding their eligibility for the Child and Dependent Care Credit may use the Interactive Child and Dependent Care Credit Eligibility Assistant on IRS.gov to determine eligibility.

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      

TAS Tax Tip: Why do I owe a penalty and interest and what can I do about it?

Posted by Admin Posted on Aug 02 2022

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There are many reasons why the IRS may charge penalties on your tax account. The IRS is legally required, under IRC § 6601(a), to charge interest when you fail to pay the full amount you owe on time. Interest may also accrue on penalties. Interest, and any applicable penalties, will continue to accrue until you pay your balance due in full. Here are some of the most common penalties, information on why they may have been charged, and how to request penalty abatement (removal) if applicable.

First let’s talk about some common penalty charges on individual accounts, along with interest, and why the IRS charges them.

Common penalties include:

  • Failure to file – you didn’t file your tax return by the return due date or extended due date if an extension to file is requested and approved.
  • Failure to pay – you didn’t pay the taxes reported on your tax return in full by the due date of the original tax return. An extension to file doesn’t extend the time to pay so you must pay your taxes by the original due date of the tax return even if you have requested an extension of time to file your tax return. In addition, the IRS may charge a failure to pay penalty if the IRS sends a request for payment and you fail to pay on time.
  • Failure to pay proper estimated tax – you didn’t pay enough taxes due for the year with your quarterly estimated tax payments, or through withholding, when required.
  • Bad check – your bank doesn’t honor your check or other form of payment.

Interest

The IRS is required to charge interest on any unpaid balance owed until it is paid in full. See the chart on the IRS’s Interest page for more details.

See Notice 746: Information about Your Notice, Penalty and Interest.

How can I dispute IRS penalties?

If you were affected by the pandemic or other circumstances, the IRS may be able to remove or reduce some penalties due to reasonable cause, but only if you tried to comply with the tax law but were unable to due to facts and circumstances beyond your control. If this applies to you and you have the necessary documentation to support your claim, you can call the toll-free number on your IRS notice or write a letter to request penalty relief due to reasonable cause.

The IRS may also provide administrative relief from a penalty that would otherwise be applicable under its First Time Penalty Abatement policy. In this instance, the IRS may provide relief if:

  • You didn’t previously have to file a tax return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty;
  • You filed all currently required returns or filed an extension of time to file; and
  • You have paid, or arranged to pay, any tax due.

The IRS may also be able to waive penalties if a Statutory Exception exists. Tax legislation may provide an exception to a penalty. Specific statutory exceptions can be found in the penalty-related Internal Revenue Code (IRC) sections. These would include situations like receiving erroneous written advice from the IRS.

See the Penalty Relief page or the Penalty Relief Due to First Time Penalty Abatement or Other Administrative Waiver page for more details about when penalties can be abated or reversed.

What if the IRS denies my penalty abatement request?

If you received a notice or letter stating the IRS didn’t grant your request for penalty relief, you may be able to request a hearing with the IRS Independent Office of Appeals. Use the Penalty Appeal Online Self-help Tool for more information. You have 30 days from the date of the rejection letter to file your request for an appeal. Refer to your rejection letter for the specific deadline.

Refer to Penalty Appeal Eligibility and Publication 4576, Orientation to the Penalty Appeals Process for more details.

How do I request removal of interest charges?

If any of your tax and/or penalties are reduced, the IRS will also automatically reduce the related interest. Interest is charged by law and will accrue until your tax account is fully paid. Interest can only be reduced or removed under certain circumstances due to unreasonable IRS error or IRS delay, not because of reasonable cause nor because it’s the first time you have accrued interest on your account.

To dispute interest due to an unreasonable IRS error or IRS delay, submit Form 843, Claim for Refund and Request for Abatement or send the IRS a signed letter requesting that the IRS reduce or adjust the overcharged interest. For more information, see Instructions for Form 843, and IRC § 6404(e)(1).

What else do I need to know?

The IRS will continue to charge the failure-to-pay penalty up to 25% of the unpaid taxes or until the tax is paid in full, whichever comes first. In general, the IRS won’t abate the failure-to-pay penalty until the underlying tax has been paid in full. Be aware that if there is still a balance due, even after the penalty is removed, interest will continue to accrue until the account is paid in full, so the sooner you pay the balance, the less you will have to pay in penalties and interest.

There are several ways you can send a payment, including payment options if you cannot full pay right now. See the IRS Pay webpage or our Paying Taxes Get Help pages and TAS Tax Tip: Need help resolving a tax amount owed or finding the right payment option?

As of this date, the IRS response times for calls and written submissions is still being affected by the ongoing COVID-19 situation, so see the IRS Operational status page, including the section on Answered a Letter or Notice, for more details. However, even if the IRS takes a bit longer to address your request, if granted, all abated penalties (and associated interest) will be removed as appropriate.

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

Source: TAS

Tax benefits and resources for people experiencing homelessness

Posted by Admin Posted on Aug 02 2022

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As of January 2020, EndHomelessness.org reports that there were over 580,000 homeless people in the United States. This includes individuals who have no housing or shelter, working taxpayers who are unable to secure housing due to costs, and those who live in shelters. If someone you know is experiencing homelessness, the Taxpayer Advocate Service (TAS) asks you to share this important information with them about tax benefits and other helpful resources.

Many people in the homeless community have taxable income sources that may qualify them for various benefits, including:

  • Earned Income Tax Credit, available to taxpayers with low to moderate earned income, with or without a qualifying child.
  • Education Credits, available to taxpayers who incurred qualified education expenses. Some education credits are refundable.
  • Health Care Premium Tax Credit, available to eligible individuals and families afford premiums for health insurance purchased through the Health Insurance Marketplace.
  • Child Tax Credit, available to individuals with qualifying children. Portions of this credit are available even those who do not have income.
  • Recovery Rebate Credit, potentially available to individuals who did not receive an economic impact payment.

The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer free basic tax return preparation to qualified individuals.

Low Income Taxpayer Clinics (LITCs) are also available to assist low-income individuals who have a tax dispute with the IRS. LITCs also provide education and outreach to individuals who speak English as a second language.

Some people in the homeless community are also victims of identity theft. Sometimes family members or others inappropriately claim homeless individuals as dependents. Others file tax returns using a homeless person’s identity. It can be difficult for homeless individuals to resolve identity theft issues. Read more about identity theft here.

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

After Filing Your Taxes, What Records Can You Toss?

Posted by Admin Posted on Aug 02 2022

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If you’ve filed your 2021 tax return, you may want to do some spring cleaning, starting with tax-related paper clutter. Paring down is good. Just be careful to hold on to essential records that may be needed in the event of an IRS audit. Some documents may be needed to help you collect a future refund or assist with filing your return next year. Before you start tossing or shredding documents, read the rules to learn what must be kept (and for how long) and what can be safely discarded.

The general rules

At a minimum, you should keep tax records for as long as the IRS can audit your tax return or assess additional taxes. That’s usually three years after you file your return. This means you potentially can get rid of most records related to tax returns for 2018 and earlier years.

However, the statute of limitations extends to six years for taxpayers who understate their adjusted gross income by more than 25%. What constitutes an understatement may go beyond simply not reporting items of income. So, to be safe, a general rule of thumb is to save tax records for six years from filing.

Keep some records longer

You need to hang on to some tax-related records beyond the statute of limitations. For example:

  • Keep the tax returns themselves indefinitely, so you can prove to the IRS that you did file a legitimate return. (If you didn’t file a return or if you filed a fraudulent return, there’s no statute of limitations.)
  • Retain W-2 forms until you begin receiving Social Security benefits. That may seem long, but if questions arise regarding your work record or earnings for a particular year, you’ll need your W-2 forms to help provide the documentation needed.
  • Keep records related to real estate or investments for as long as you own the assets, plus at least three years after you sell them and report the sales on your tax return (or six years if you want extra protection).
  • Hang on to records associated with retirement accounts until you’ve depleted the accounts and reported the last withdrawal on your tax return, plus three (or six) years.

If you’re still not sure about a specific document, feel free to ask us.

Other reasons to retain records

Keep in mind that these are the federal tax record retention guidelines. Your state and local tax record requirements may differ. In addition, lenders, co-op boards and other private parties may require you to produce copies of your tax returns as a condition of lending money, approving a purchase or otherwise doing business with you. Contact us with questions or concerns about recordkeeping.

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     

Spear phishing targets tax pros and other businesses

Posted by Admin Posted on Aug 02 2022

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Tax pros take their responsibilities to protect client data seriously. Knowing common identity theft scams, like spear phishing, is one way they can do that. Spear phishing scams can target specific individuals or specific groups. Spear phishing scams affect all types of businesses and organizations, including small businesses with a client database, like tax pros' firms.

Thieves use spear phishing to steal computer system credentials.

Spear phishing scams target tax pros to steal their account credentials or install malicious software. Thieves can then steal client data and the tax preparer's identity to file fraudulent tax returns for refunds.

Some common types of spear phishing emails include emails that claim to be from a tax preparation application provider that have the IRS logo, reference legitimate IRS programs or e-services, and use subject lines like, "Action Required: Your account has now been put on hold."

Once someone has clicked the malicious link, the scam email will send them to a fake website, which prompts the victim to enter their credentials. If they do so, thieves can use this information to file fraudulent returns by using the stolen credentials. Other spear phishing emails may pose as potential new clients use malicious links or attachments that will download malware onto the victim's computer to steal information.

If someone suspects an email is a phishing attempt, they shouldn't respond, clink any links in the email or open any attachments.

Tax pros can use these tips to help protect client data:

  • Use separate personal and business email accounts
  • Protect email accounts with strong passwords and two-factor authentication
  • Install an anti-phishing toolbar to help identify known phishing sites
  • Use security software products with anti-phishing tools
  • Use security software to help protect systems from malware and scan emails for viruses
  • Never open or download attachments from unknown senders, including potential clients, request additional information to help verify their identity or call them to confirm the email is from them
  • Send password-protected and encrypted documents only
  • Don't respond to suspicious or unknown emails; if the phishing email is IRS-related, save the email as a file, attach that file to an email, and send to phishing@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

Using Alternative Energy For Business Can Bring Tax Benefits

Posted by Admin Posted on Aug 02 2022

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If you’re a business owner, you might be wondering if using alternative energy technologies in your company can help you manage energy costs and improve your bottom line. If this sounds interesting, you should know there’s also a valuable federal income tax benefit that applies to the acquisition of many types of alternative energy property: the business energy credit.

The credit is intended primarily for business users. But be aware that other energy tax breaks apply if you use alternative energy in your home or if you produce energy for sale.

What property is eligible?

The business energy credit is equal to a portion of the cost of the following types of property (with the caveat that construction must begin before 2024):

  • Equipment that uses solar energy to generate electricity for heating and cooling structures, for hot water, or for heat used in industrial or commercial processes (except for swimming pools),
  • Equipment that uses solar energy to illuminate a structure inside using fiber-optic-distributed sunlight,
  • Specific fuel-cell property,
  • Certain small wind energy property,
  • Specific waste energy property, and
  • Certain offshore wind facilities with construction beginning before 2026.

If construction of equipment that uses solar energy to generate electricity for heating and cooling structures, for hot water, or for heat used in industrial or commercial processes begins this year, the credit rate is 26%. It’s reduced to 22% for construction beginning in calendar year 2023. And if the property isn’t placed in service before 2026, the credit is 10%.

For the other types of property mentioned above, if construction begins this year, the credit is also 26%. It’s also reduced to 22% for construction beginning in 2023. But if the property isn’t placed in service before 2026, the credit is 0%.

The only exception is the final type of property mentioned above, certain offshore wind facilities. This type of property isn’t subject to a phaseout.

The business energy credit is equal to 10% of the following types of property with construction beginning before 2024:

  • Specific equipment that is used to produce, distribute, or use energy derived from a geothermal deposit,
  • Certain cogeneration property,
  • Some microturbine property, and
  • Certain equipment that uses the ground, or ground water, to heat or cool a structure.

The downside and the upside

There are several restrictions related to the credit. For example, it isn't available for property acquired with certain nonrecourse financing. Additionally, if the credit is allowable for property, the “basis” of that property is reduced by 50% of the allowable credit.

On the other hand, a favorable aspect is that, for the same property, the credit can sometimes be used in combination with other benefits. Examples include federal income tax expensing, state tax credits and utility rebates.

There are business considerations unrelated to the tax and nontax benefits that may influence your decision to use alternative energy. And even if you choose to use it, you might do so without owning the equipment, which would mean forgoing the business energy credit.

Still wondering?

As you can see, there are many issues to consider and you may have questions. We can help you work through the tax and other financial aspects of these alternative energy tax considerations.

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              

TAS Tax Tip: What to do if you receive notification your tax return is being examined or audited

Posted by Admin Posted on July 15 2022

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If the IRS selects your tax return for audit (also called examination), it doesn’t automatically mean something is wrong.

The IRS performs audits by mail or in person. The notice you receive will have specific information about why your return is being examined, what documents if any they need from you, and how you should proceed.

Once the IRS completes the examination, it may accept your return as filed or propose changes. These changes may affect the amount of tax you owe or the amount of your refund.

Got an IRS notice saying they are auditing your tax return?

If you are unable to understand the notice, you can use our Did you get a notice from the IRS? section on our Home page that allows you to enter the notice or letter number to find out more about it, what action you may need to take, and where in the IRS process it falls. Or you can go to our Taxpayer Roadmap directly to see where your tax return is within the IRS process, how the return got there, and what’s next. Once in the Roadmap, you can still look up a specific notice if it isn’t already listed to find out what to do next.

Type of audit/examination and what to do for each type

The IRS notice should confirm whether the audit is being conducted by correspondence (by mail) or in person. The actions you need to take will depend on how the audit is being conducted.

  • For correspondence audits, see our Audits by Mail Get Help page for a summary of how the process works and what actions you should take.
  • For in person audits, see our Audits in Person Get Help page for a summary of how the process works and what actions you should take.

You can also visit the IRS Audits page for more information about why your return may have been selected and more details on how far back IRS can go to examine a return, how long it may take, and more. You can also read Publication 3468, IRS Examination Process.

Be aware that IRS audits are still being affected by COVID-19. See the exam guidance memoranda in IRS Operations During COVID-19: Compliance for the most up-to-date information on IRS actions. You should also see the sections for Answered a Notice or letter and Sent a missing form or document for updated information related to expected timing for an IRS reply.

Sometimes IRS offers alternative methods to reply or submit documentation

When you review the IRS notice, there may be special circumstances in which the IRS may offer digital alternatives for submitting documentation or working with the IRS examiner. See our NTA Blog: Lifecycle of a Tax Return: Correspondence Audits: Increased Communication Alternatives Are in Progress for more information on two available alternatives. The IRS article, Accelerating Digital Communications to Solve Pandemic Challenges and Improve the Taxpayer Experience, also discusses digital options.

However, taxpayers must be invited to participate in these digital options, Secure Messaging and the Document Upload Tool (DUT). So, again, review your notice carefully to see if one or both of these options are available in your case and for information on how to use them.

What if you find out the IRS already closed their initial audit?

If you receive a tax bill for an additional tax amount the IRS assessed (added to your account) or a change in a credit you claimed and you disagree with the subsequent amount the IRS says you owe, see our Audit Reconsideration Get Help page for next steps you can take.

You may request audit reconsideration if you:

  • Did not respond to or appear for your original audit,
  • Moved and did not receive correspondence from the IRS,
  • Have additional information to present that you did not provide during your original audit, or
  • Disagree with the assessment from the audit.

You can also see Publication 3598, What You Should Know About the Audit Reconsideration Process, for more details on what you need to do to resolve the issue.

What can I do if I need further help dealing with the IRS audit process?

If you need or want assistance in dealing with an IRS audit or reconsideration, you have the right to representation. This means you can hire an attorney, certified public accountant (CPA), or enrolled agent to represent you before the IRS. Know that:

  • Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS.
  • Taxpayers who are heading to an interview with the IRS may select someone to represent them. Taxpayers who retain representation don’t have to attend with their representative unless the IRS formally summons them to appear.
  • In most situations, the IRS must suspend an interview if a taxpayer requests to consult with a representative, such as an attorney, certified public accountant or enrolled agent.
  • Any attorney, CPA, enrolled agent, enrolled actuary, or other person permitted to represent a taxpayer before the IRS, who’s not disbarred or suspended from practice before the IRS, will need to submit a signed written Power of Attorney to represent a taxpayer before the IRS before the IRS can discuss your case with them.

We recommend that you learn about the credentials and qualifications of tax representatives before choosing one. You can also use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help you find tax professionals in your area who currently hold professional credentials recognized by the IRS.

You may be eligible for free representation (or representation for a nominal fee) through a Low Income Taxpayer Clinic. In order to qualify for assistance from an LITC, generally a taxpayer’s income must be below a certain threshold (the income ceilings for the 2022 calendar year can be found on the page link above), and the amount in dispute with the IRS is usually less than $50,000. Each clinic will determine if you meet the income ceilings and other criteria before it agrees to represent you. See Publication 4134, Low Income Taxpayer Clinic List, to find a LITC near you or by calling the IRS toll-free at 800-829-3676.

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

Home Credits

Posted by Admin Posted on July 15 2022

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If you own a home or are planning to buy one, you may have tax credits available. There are two common home credits:

Mortgage Interest Credit: helps lower-income individuals afford home ownership.

Residential Energy Credits: helps recover some of the cost of improving the energy efficiency of your home.

If you are planning to buy a home

The Mortgage Interest Credit helps certain individuals afford home ownership. If you qualify, you can claim the credit each year for part of the mortgage interest you pay.

You’ll need a qualified Mortgage Credit Certificate (MCC) from your state or local government. See recommended actions below.

If you’ve made your home energy efficient

You may be able to take Residential Energy Credits, if you made energy-saving improvements to your home and it’s in the United States. For example:  You may qualify if you install exterior windows that meet or exceed the Energy Star Program requirements to reduce heat loss. See recommended action below.

What should I do?

If you are planning to buy a home

The Mortgage Interest Credit helps certain individuals afford home ownership. If you qualify, you can claim the credit each year for part of the mortgage interest you pay.

You’ll need a qualified Mortgage Credit Certificate (MCC) from your state or local government.

Generally, an MCC is issued only with a new mortgage for the purchase of your main home. The MCC will contain important information for calculating the credit, including the certificate credit rate (the percentage of the interest you can claim), and the “certified indebtedness amount” (only the interest on that amount qualifies for the credit).

You must ask the appropriate government agency for an MCC before you get a mortgage and buy your home. Contact your state or local housing finance agency for information about the availability of MCCs in your area.

To claim the credit, complete IRS Form 8396, Mortgage Interest Credit, and attach it to your income tax return.

If you itemize your deductions on IRS Schedule A (Form 1040), Itemized Deductions, you must reduce your home mortgage interest deduction by the amount of the mortgage interest credit allowable for the tax year.

If you paid the mortgage interest to a related person, you can’t claim the credit.

If you’ve made your home energy efficient

You may be able to take Residential Energy Credits, if you made energy-saving improvements to your home and it’s in the United States. For example:  You may qualify if you install exterior windows that meet or exceed the Energy Star Program requirements to reduce heat loss.

Residential Energy Credits

The residential energy efficient property credit, which you can claim for property that’s placed in service between January 1, 2016 and December 31, 2023.

The nonbusiness energy property credit, which applies to property you placed in service (installed and ready to use) by December 31, 2021. The lifetime limitation aggregate credit for all tax years after 2005 is $500.

You can claim both credits by completing IRS Form 5695, Residential Energy Credits, and attaching it to your tax return. This form explains what property qualifies for each credit and how to calculate each one. If you owned your home jointly with someone other than your spouse, each homeowner must complete his or her own IRS Form 5695.

Keeping good records

Keep full and accurate records to support your credits. Know the cost of your home, or the cost of major improvements to it, or the amounts you’ve taken as deductions on your tax return for use of your home. You’ll also need to use these documents to determine the basis (your original cost/purchase price) or adjusted basis (your cost, plus adjustments such as improvement costs) of your home.

Keep records that include your purchase contract and settlement papers if you bought the property, or other information that shows you acquired it by gift or inheritance.

Keep any receipts, canceled checks, and similar records for improvements or other additions to the basis of your home.

“Additions to basis” are items that go beyond minor repairs, and add to the value or extend the life of the property.

Examples include putting an addition on your home, replacing a roof, repaving a driveway, or rewiring.

You should also keep track of any decreases to the basis.

This includes residential energy credits, D.C. first-time homebuyer credit, allowed or allowable depreciation if you use your home for rental or business activities, payments received for property easements or right-of-way, and insurance reimbursements or tax deductions for casualty losses (fire, flood, etc.).

How will this affect me?

 

If you sell your home within nine years, you may have to repay all or part of the benefit you received from the Mortgage Interest Credit program.

You must keep your records for as long as they’re important for meeting any federal tax law requirement. For things like home basis information, this may mean keeping records for as long as you own the property and for a time after it’s sold.

If you refinance your original mortgage loan on which you received an MCC, you must get a new MCC to claim the credit on the new loan. The amount you can claim on the new loan may change.

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

IRS online account makes it easy for taxpayers to view their tax info anytime

Posted by Admin Posted on July 15 2022

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Taxpayers who want to check their account information including balance, payments, tax records and more, can log into their IRS online account. It's a simple and secure way to get information fast.

Taxpayers can view:

  • Their payoff amount, which is updated for the current day
  • The balance for each tax year for which they owe taxes
  • Their payment history
  • Key information from their most current tax return as originally filed
  • Payment plan details if they have one
  • Digital copies of select IRS notices
  • Economic Impact Payments if they received any
  • Their address on file

Taxpayers can also use their online account to:

  • Select an electronic payment option.
  • Set up an online payment agreement.
  • Access tax records and transcripts.
  • Approve and electronically sign Power of Attorney and Tax Information Authorization requests from their tax professional.

Taxpayer's balance will update no more than once every 24 hours, usually overnight. Taxpayers should also allow 1 to 3 weeks for payments to show up in the payment history.

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

Here’s what taxpayers need to know about business related travel deductions

Posted by Admin Posted on July 15 2022

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Business travel can be costly. Hotel bills, airfare or train tickets, cab fare, public transportation – it can all add up fast. The good news is business travelers may be able off-set some of those cost by claiming business travel deductions when they file their taxes.

Here are some details about these valuable deductions that all business travels should know.

Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. The travel period must be substantially longer than an ordinary day's work and a need for sleep or rest to meet the demands the work while away.

Travel expenses must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.

Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.

Travel expenses for conventions are deductible if attendance benefits the business and there are special rules for conventions held outside North America.

Deductible travel expenses while away from home include the costs of:

  • Travel by airplane, train, bus or car between your home and your business destination.
  • Fares for taxis or other types of transportation between an airport or train station to a hotel, from a hotel to a work location.
  • Shipping of baggage and sample or display material between regular and temporary work locations.
  • Using a personally owned car for business which can include an increase in mileage rates.
  • Lodging and non-entertainment-related meals.
  • Dry cleaning and laundry.
  • Business calls and communication.
  • Tips paid for services related to any of these expenses.
  • Other similar ordinary and necessary expenses related to the business travel.

Self-employed or farmers with travel deductions

Travel deductions for the National Guard or military reserves

National Guard or military reserve servicemembers can claim a deduction for unreimbursed travel expenses paid during the performance of their duty.

Recordkeeping

Well-organized records make it easier to prepare a tax return. Keep records, such as receipts, canceled checks, and other documents that support a deduction.

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

An overview of the IRS’s 2022 Dirty Dozen tax scams

Posted by Admin Posted on July 15 2022

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Compiled annually, the Dirty Dozen lists a variety of common scams that taxpayers can encounter anytime. The IRS warns taxpayers, tax professionals and financial institutions to beware of these scams. This year's list is divided into five groups. Here's an overview of the top twelve tax scams of 2022.

Potentially abusive arrangements

The 2022 Dirty Dozen begins with four transactions that are wrongfully promoted and will likely attract additional agency compliance efforts in the future. Those four abusive transactions involve charitable remainder annuity trusts, Maltese individual retirement arrangements, foreign captive insurance, and monetized installment sales.

Pandemic-related scams

This IRS reminds taxpayers that criminals still use the COVID-19 pandemic to steal people's money and identity with phishing emails, social media posts, phone calls, and text messages.

All these efforts can lead to sensitive personal information being stolen, and scammers using this to try filing a fraudulent tax return as well as harming victims in other ways. Some of the scams people should continue to be on the lookout for include Economic Impact Payment and tax refund scams, unemployment fraud leading to inaccurate taxpayer 1099-Gs, fake employment offers on social media, and fake charities that steal taxpayers' money.

Offer in Compromise "mills"

Offer in Compromise or OIC "mills," make outlandish claims, usually in local advertising, about how they can settle a person's tax debt for pennies on the dollar. Often, the reality is that taxpayers pay the OIC mill a fee to get the same deal they could have gotten on their own by working directly with the IRS. These "mills" are a problem all year long, but they tend to be more visible right after the filing season ends and taxpayers are trying to resolve their tax issues perhaps after receiving a balance due notice in the mail.

Suspicious communications

Every form of suspicious communication is designed to trick, surprise, or scare someone into responding before thinking. Criminals use a variety of communications to lure potential victims. The IRS warns taxpayers to be on the lookout for suspicious activity across four common forms of communication: email, social media, telephone, and text messages. Victims are tricked into providing sensitive personal financial information, money, or other information. This information can be used to file false tax returns and tap into financial accounts, among other schemes.

Spear phishing attacks

Spear phishing scams target individuals or groups. Criminals try to steal client data and tax preparers' identities to file fraudulent tax returns for refunds. Spear phishing can be tailored to attack any type of business or organization, so everyone needs to be skeptical of emails requesting financial or personal information.

A recent spear phishing email used the IRS logo and a variety of subject lines such as "Action Required: Your account has now been put on hold" to steal tax professionals' software preparation credentials. The scam email contains a link that if clicked will send users to a website that shows the logos of several popular tax software preparation providers. Clicking on one of these logos will prompt a request for tax preparer account credentials. The IRS warns tax pros not to respond or take any of the steps outlined in the email. The IRS has observed similar spear phishing emails claiming to be from "tax preparation application providers."

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

See How Low Income Taxpayer Clinics Help Taxpayers Get Results

Posted by Admin Posted on July 15 2022

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What is a Low Income Taxpayer Clinic (LITC)?

Low Income Taxpayer Clinics (LITCs) assist low-income individuals who have a tax dispute with the IRS and provide education and outreach to individuals who speak English as a second language. Services are offered for free or a small fee. Clinics participating in the LITC Program ensure the fairness and integrity of the tax system for low-income taxpayers.

How do LITCs help taxpayers?

Have you ever wondered exactly what LITCs do? Here are just a few examples of LITC’s recent successes:

  • A single mother was out of work and needed surgery. She withdrew funds from her retirement account to pay bills. Unable to make ends meet, with her house in foreclosure and her car needing major repairs, she was referred her to an LITC attorney, who discovered that she had not filed tax returns from 2017 through 2019. The LITC helped her complete the past-due returns, generating refunds of over $21,000. She also received much-needed Economic Impact Payments, resulting in over $2,000 in additional funds. The taxpayer was able to pay off her outstanding debts, with enough left to buy her family a reliable car so she could get back and forth to work after recovering from surgery.
  • A low-income veteran with substantial health problems who worked as a truck driver didn’t keep records of his business expenses. He owed over $100,000 in federal taxes. The taxpayer reached out to an LITC for help when the IRS threatened to seize his home. He had enough equity in his house to pay the liability, but the LITC demonstrated that the taxpayer could not rent a home for less than his low mortgage payment and successfully advocated to have the taxpayer’s liability be placed in currently-not-collectible status, allowing him to keep his home.
  • A taxpayer was referred to an LITC after the IRS held 2019 tax refund of over $6,000 because she had not yet filed a 2017 tax return. The taxpayer hadn’t filed because she thought she had been misclassified as an independent contractor. The LITC attorney worked with the taxpayer to file a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, to challenge her employment status. The LITC also helped the taxpayer file her 2017 tax return and gather proof of her financial hardship. The LITC worked with the Taxpayer Advocate Service to have only part of the taxpayer’s 2019 refund applied to the 2017 tax liability, resulting in nearly $5,000 being refunded to the taxpayer to relieve her hardship.

How you can help

The LITC grant application period is open until June 16. More information about LITCs and the work they do to represent, educate and advocate on behalf of low-income and ESL taxpayers is available in IRS Publication 5066, LITC 2021 Program Report. A complete overview of the requirements to be an LITC can be found in Publication 3319, LITC Grant Application Package and Guidelines. A short video about the LITC program is also 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: TAS

Extension filers: IRS.gov is the source for summertime tax help; agency encourages people to file soon

Posted by Admin Posted on July 15 2022

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WASHINGTON — With millions of people still waiting to file their tax returns, the IRS reminds them to file as soon as possible and take advantage of special tools available on IRS.gov that can help them file.

Summer may be a busy time for many, but it's a great time to start tax planning - whether you still need to file a 2021 tax return or start planning for next year's tax season. The IRS website is the fastest and most convenient way to get tax-related information and help. The online tools are available any time, so taxpayers can use them at their convenience.

Here are some important reasons for taxpayers to visit IRS.gov this summer.

Get tax information 24/7

Taxpayers can use IRS.gov to:

  • View the filing page to get information on most federal income tax topics.
  • Access the Interactive Tax Assistant tool for answers to many tax law questions.
  • Sign into their individual IRS online account to view their balance an tax records, manage communication preferences, make payments and more.
  • Find the most up-to-date information about their tax refunds using the Where's My Refund? tool. Taxpayers can check the status of their refund 24 hours after the IRS acknowledges receipt of an e-filed return.

Taxpayers can also download the official IRS mobile app, IRS2Go, to check their refund status, make payments, find free tax preparation assistance, sign up for helpful tax tips and more.

Adjust withholding now to avoid tax surprises next year

Summer is a great time for taxpayers to check their withholding to avoid a tax surprise next filing season. Life events like marriage, divorce, having a child or a change in income can affect taxes.

The IRS Tax Withholding Estimator on IRS.gov helps employees assess their income tax, credits, adjustments and deductions, and determine whether they need to change their withholding. If a change is recommended, the estimator will provide instructions to update their withholding with their employer either online or by submitting a new Form W-4, Employee's Withholding Allowance Certificate.

File electronically

Taxpayers who requested an extension to October 17 or missed the April 18 deadline can still prepare and e-file returns for free with IRS Free File, if they qualify. The IRS accepts electronically filed returns 24/7. There's no reason to wait until October 17 if filers have all the information and documentation they need to file an accurate return today. They can get their refund faster by choosing direct deposit.

Taxpayers who missed the April 18 deadline and owe should file and pay electronically as soon as possible to reduce penalties and interest. Taxpayers can make payments or set up payment plans online.

Find a taxpayer assistance center

The Taxpayer Assistance Center Locator tool has a new look and feel, featuring a dynamic map, a directions button and two tabs for inputting search criteria. It's important to remember that Taxpayer Assistance Centers operate by appointment only. Taxpayers can make an appointment by calling the number for the office they want to visit.

Read information in other languages

Many IRS webpages are now available in Spanish, Vietnamese, Russian, Korean, Haitian Creole and Chinese. Some of the multilingual resources include the Taxpayer Bill of Rightse-file resources and many tax forms and publications.

Access the Alternative Media Center

At the online Alternative Media Center (AMC), taxpayers will find a variety of accessible products to help with the use of assistive technology such as screen reading software, refreshable Braille displays and screen magnifying software. These products include tax forms, instructions and publications that can be downloaded or viewed online as Section 508 compliant PDFs, HTML, eBraille, text and large print.

Please note that every product is not available in all formats. For example, tax forms are not available as HTML. To request paper copies of tax forms or instructions or publications in Braille or large print, taxpayers can call the tax form telephone number at 800-829-3676. Taxpayers can complete Form 9000, Alternative Media PreferencePDF, to choose to receive their IRS tax notices in Braille, large print, audio or electronic formats. This includes notices about additional taxes or penalties owed. Taxpayers can include the completed form with their tax return, mail it as a standalone form to the IRS or they can call 800-829-1040.

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
 

IRAs are one tool in the retirement planning toolbox

Posted by Admin Posted on July 15 2022

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There are many ways people plan for retirement. Individual Retirement Arrangements, or IRAs, are a common one. IRAs provide tax incentives for people to make investments that can provide financial security when they retire. These accounts can be with a bank or other financial institution, a life insurance company, mutual fund, or stockbroker.

Here are some things to know about a traditional IRA.

  • traditional IRA is a tax-advantaged personal savings plan where contributions may be tax deductible.
  • Generally, the money in a traditional IRA isn't taxed until it's withdrawn.
  • There are annual limits to contributions depending on the person's age and the type of IRA.
  • When planning when to withdraw money from an IRA, taxpayers should know that:
    • They may face a 10% penalty and a tax bill if they withdraw money before age 59½, unless they qualify for an exception.
    • Usually, they must start taking withdrawals from their IRA when they reach age 72. For tax years 2019 and earlier, that age was 70½.
    • Special distribution rules apply for IRA beneficiaries.

Roth IRAs are like traditional IRAs, but there are some important differences.

A Roth IRA is another tax-advantaged personal savings plan with many of the same rules as a traditional IRA but there are exceptions:

  • A taxpayer can't deduct contributions to a Roth IRA.
  • Qualified distributions are tax-free.
  • Roth IRAs don't require withdrawals until after the death of the owner.

Here are a few other types of IRAs:

  • Savings Incentive Match Plan for Employees. A SIMPLE IRA allows employees and employers to contribute to traditional IRAs set up for employees. It is suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
  • Simplified Employee Pension. A SEP IRA is set up by an employer. The employer makes contributions directly to an IRA set up for each employee.
  • Rollover IRA. This is when the IRA owner receives a payment from their retirement plan and deposits it into a different IRA within 60 days.

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

People should know if their pastime is a hobby or a business

Posted by Admin Posted on July 15 2022

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From collecting stamps and woodworking to crafting and quilting, people have all kinds of hobbies – and most of these hobbies will never turn a profit. For hobbies that do earn income, people should know that they must report it on their tax return. They should also be mindful that their hobby might be a business.

Determining whether they should classify the activity as a hobby or a business can be confusing, but the bottom line is that a business operates to make a profit. People pursue hobbies for sport or recreation, not profit. There are a few other things people should consider when determining if their project is a hobby or business. No single consideration is the deciding factor, but taxpayers should review all of them when determining whether their activities are a business.

Here are the things taxpayers should evaluate to decide whether they have a hobby or a business:

  • Whether the taxpayer carries out the activity in a businesslike manner and maintains complete and accurate books and records.
     
  • Whether the time and effort the taxpayer puts into the activity show they intend to make it profitable.
     
  • Whether they depend on income from the activity for their livelihood.
     
  • Whether any losses are due to circumstances beyond the taxpayer's control or are normal for the startup phase of their type of business.
     
  • Whether they change methods of operation to improve profitability.
     
  • Whether the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business.
     
  • Whether the taxpayer was successful in making a profit in similar activities in the past.
     
  • Whether the activity makes a profit in some years and how much profit it makes.
     
  • Whether the taxpayers 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, 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

Spear phishing targets tax pros and other businesses

Posted by Admin Posted on July 13 2022

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Tax pros take their responsibilities to protect client data seriously. Knowing common identity theft scams, like spear phishing, is one way they can do that. Spear phishing scams can target specific individuals or specific groups. Spear phishing scams affect all types of businesses and organizations, including small businesses with a client database, like tax pros' firms.

Thieves use spear phishing to steal computer system credentials.

Spear phishing scams target tax pros to steal their account credentials or install malicious software. Thieves can then steal client data and the tax preparer's identity to file fraudulent tax returns for refunds.

Some common types of spear phishing emails include emails that claim to be from a tax preparation application provider that have the IRS logo, reference legitimate IRS programs or e-services, and use subject lines like, "Action Required: Your account has now been put on hold."

Once someone has clicked the malicious link, the scam email will send them to a fake website, which prompts the victim to enter their credentials. If they do so, thieves can use this information to file fraudulent returns by using the stolen credentials. Other spear phishing emails may pose as potential new clients use malicious links or attachments that will download malware onto the victim's computer to steal information.

If someone suspects an email is a phishing attempt, they shouldn't respond, clink any links in the email or open any attachments.

Tax pros can use these tips to help protect client data:

  • Use separate personal and business email accounts
  • Protect email accounts with strong passwords and two-factor authentication
  • Install an anti-phishing toolbar to help identify known phishing sites
  • Use security software products with anti-phishing tools
  • Use security software to help protect systems from malware and scan emails for viruses
  • Never open or download attachments from unknown senders, including potential clients, request additional information to help verify their identity or call them to confirm the email is from them
  • Send password-protected and encrypted documents only
  • Don't respond to suspicious or unknown emails; if the phishing email is IRS-related, save the email as a file, attach that file to an email, and send to phishing@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

Companies who promise to eliminate tax debt sometimes leave taxpayers high and dry

Posted by Admin Posted on July 13 2022

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As the old saying goes: When something sounds too good to be true, it probably is. Taxpayers with outstanding tax bills might be tempted by businesses who advertise and offer to help them reduce their tax debt. These businesses, often called Offer in Compromise mills, make huge claims about reducing unpaid taxes for pennies on the dollar. Unfortunately, these companies sometimes don't deliver and charge large fees.

An Offer in Compromise with the IRS can help some taxpayers who can't pay their tax bill.

An Offer in Compromise is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed. The offer program gives eligible taxpayers a path toward paying off their debt when they otherwise couldn't or would face financial hardship.

The OIC mills that are dishonest take advantage of taxpayers' lack of knowledge to make a quick buck.

These OIC mills urge people to hire their company to file an OIC application, even though the taxpayer won't qualify. They often charge big fees to prepare applications that they know the IRS will deny. This unfair practice wastes taxpayers' time and money.

Taxpayers who do qualify for an OIC can get the same deal working directly with the IRS, without the extra fees.

The OIC mills that are dishonest are a problem all year long, but they step up their advertising after the filing season ends, when taxpayers are trying to resolve their tax issues.

Here's what taxpayers considering an OIC should know:

  • Individual taxpayers can use the IRS's Offer in Compromise Pre-Qualifier tool to see if they're eligible.
  • When a taxpayer is ready to apply, they can watch an OIC video playlist that will lead them through the steps and forms to calculate an appropriate offer based on their assets, income, expenses and future earning potential.
  • Taxpayers must make an offer based on their true ability to pay.
  • Applying does not guarantee that the IRS will accept the taxpayer's offer.

Finding reputable tax help

People who want help from a reputable tax profession can review Choosing a Tax Professional page on IRS.gov to find information about tax preparer credentials and qualifications. They can then use IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find a preparer by type of credential or qualification.

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

All taxpayers should familiarize themselves with the Taxpayer Bill of Rights

Posted by Admin Posted on July 13 2022

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By law, all taxpayers have fundamental rights when they're interacting with the IRS. It's important that all taxpayers know and understand their rights. The Taxpayer Bill of Rights presents these rights in 10 categories.

Here's an overview of these rights. For full official details about each right, visit the links below. 

Taxpayers have the right to know what they need to do to comply with the tax laws.
 

Taxpayers have the right to receive prompt, courteous and professional assistance when working with the IRS and the freedom to speak to a supervisor about inadequate service.
 

Taxpayers have 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.
 

Taxpayers have the right to object to formal IRS actions or proposed actions and provide justification with additional documentation.
 

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including certain penalties.
 

Taxpayers have the right to know the maximum amount of time they have to challenge an IRS position and the maximum amount of time the IRS must audit a particular tax year or collect a tax debt.
 

Taxpayers have the right to expect that any IRS inquiry, examination or enforcement action will comply with the law and be no more intrusive than necessary.
 

Taxpayers have the right to expect that their tax information will remain confidential.
 

Taxpayers have the right to retain an authorized representative of their choice to represent them in their interactions with the IRS.
 

Taxpayers have the right to expect fairness from the tax system. This includes considering all facts and circumstances that might affect their liabilities, ability to pay or provide information timely.

 

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.

Sourced: IRS

An overview of the IRS’s 2022 Dirty Dozen tax scams

Posted by Admin Posted on July 13 2022

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Compiled annually, the Dirty Dozen lists a variety of common scams that taxpayers can encounter anytime. The IRS warns taxpayers, tax professionals and financial institutions to beware of these scams. This year's list is divided into five groups. Here's an overview of the top twelve tax scams of 2022.

Potentially abusive arrangements

The 2022 Dirty Dozen begins with four transactions that are wrongfully promoted and will likely attract additional agency compliance efforts in the future. Those four abusive transactions involve charitable remainder annuity trusts, Maltese individual retirement arrangements, foreign captive insurance, and monetized installment sales.

Pandemic-related scams

This IRS reminds taxpayers that criminals still use the COVID-19 pandemic to steal people's money and identity with phishing emails, social media posts, phone calls, and text messages.

All these efforts can lead to sensitive personal information being stolen, and scammers using this to try filing a fraudulent tax return as well as harming victims in other ways. Some of the scams people should continue to be on the lookout for include Economic Impact Payment and tax refund scams, unemployment fraud leading to inaccurate taxpayer 1099-Gs, fake employment offers on social media, and fake charities that steal taxpayers' money.

Offer in Compromise "mills"

Offer in Compromise or OIC "mills," make outlandish claims, usually in local advertising, about how they can settle a person's tax debt for pennies on the dollar. Often, the reality is that taxpayers pay the OIC mill a fee to get the same deal they could have gotten on their own by working directly with the IRS. These "mills" are a problem all year long, but they tend to be more visible right after the filing season ends and taxpayers are trying to resolve their tax issues perhaps after receiving a balance due notice in the mail.

Suspicious communications

Every form of suspicious communication is designed to trick, surprise, or scare someone into responding before thinking. Criminals use a variety of communications to lure potential victims. The IRS warns taxpayers to be on the lookout for suspicious activity across four common forms of communication: email, social media, telephone, and text messages. Victims are tricked into providing sensitive personal financial information, money, or other information. This information can be used to file false tax returns and tap into financial accounts, among other schemes.

Spear phishing attacks

Spear phishing scams target individuals or groups. Criminals try to steal client data and tax preparers' identities to file fraudulent tax returns for refunds. Spear phishing can be tailored to attack any type of business or organization, so everyone needs to be skeptical of emails requesting financial or personal information.

A recent spear phishing email used the IRS logo and a variety of subject lines such as "Action Required: Your account has now been put on hold" to steal tax professionals' software preparation credentials. The scam email contains a link that if clicked will send users to a website that shows the logos of several popular tax software preparation providers. Clicking on one of these logos will prompt a request for tax preparer account credentials. The IRS warns tax pros not to respond or take any of the steps outlined in the email. The IRS has observed similar spear phishing emails claiming to be from "tax preparation application providers."

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

Source: IRS

How to file a final tax return for someone who has passed away

Posted by Admin Posted on June 30 2022

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When someone dies, their surviving spouse or representative files the deceased person's final tax return. On the final tax return, the surviving spouse or representative will note that the person has died. The IRS doesn't need any other notification of the death.

Usually, the representative filing the final tax return is named in the person's will or appointed by a court. Sometimes when there isn't a surviving spouse or appointed representative, a personal representative will file the final return.

Here are some things to know about filing the final return

  • The IRS considers someone married for the entire year that their husband or wife died if they don't remarry during that year.
  • The surviving spouse is eligible to use filing status married filing jointly or married filing separately.
  • The final return is due by the regular April tax date unless the surviving spouse or representative has an extension to file.

Who should sign the return

When e-filing, the surviving spouse or representative should follow the directions provided by the software for the correct signature and notation requirements. For paper returns, the filer should write the word deceased, the deceased person's name and the date of death across the top. Here's who should sign the return:

  • Any appointed representative must sign the return. If it's a joint return, the surviving spouse must also sign it.
  • If there isn't an appointed representative, the surviving spouse filing a joint return should sign the return and write in the signature area labeled, filing as surviving spouse.
  • If there's no appointed representative and no surviving spouse, the person in charge of the deceased person's property must file and sign the return as "personal representative."

Other documents to include

  • Court-appointed representatives should attach a copy of the court document showing their appointment.
  • Representatives who aren't court-appointed must include Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer to claim any refund. Surviving spouses and court-appointed representatives don't need to complete this form.
  • The IRS doesn't need a copy of the death certificate or other proof of death.

If tax is due, the filer should submit payment with the return or visit the payments page of IRS.gov for other payment options. If they can't pay the amount due immediately, they may qualify for a payment plan or installment agreement.

Qualifying widow or widower

Surviving spouses with dependent children may be able to file as a Qualifying Widow(er) for two years after their spouse's death. This filing status allows them to use joint return tax rates and the highest standard deduction amount if they don't itemize deductions.

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 continues work on inventory of tax returns; original tax returns filed in 2021 to be completed this week

Posted by Admin Posted on June 30 2022

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WASHINGTON — Following intensive work during the past several months, the Internal Revenue Service announced today that processing on a key group of individual tax returns filed during 2021 will be completed by the end of this week.

Due to issues related to the pandemic and staffing limitations, the IRS began 2022 with a larger than usual inventory of paper tax returns and correspondence filed during 2021. The IRS took a number of steps to address this, and the agency is on track to complete processing of originally filed Form 1040 (individual tax returns without errors) received in 2021 this week.

Business paper returns filed in 2021 will follow shortly after. The IRS continues to work on the few remaining 2021 individual tax returns that have processing issues or require additional information from the taxpayer.

As of June 10, the IRS had processed more than 4.5 million of the more than 4.7 million individual paper tax returns received in 2021. The IRS has also successfully processed the vast majority of tax returns filed this year: More than 143 million returns have been processed overall, with almost 98 million refunds worth more than $298 billion being issued.

IRS employees continue working hard to process these and other tax returns filed in the order received. The IRS continues to receive current and prior-year individual returns and related correspondence as people file extensions, amended returns and a variety of business tax returns.

To date, more than twice as many returns await processing compared to a typical year at this point in the calendar year, although the IRS has worked through almost a million more returns to date than it had at this time last year. And a greater percentage of this year's inventory awaiting processing is comprised of original returns which, generally, take less time to process than amended returns.

To work to address the unprocessed inventory by the end of this year, the IRS has taken aggressive, unprecedented steps to accelerate this important processing work while maintaining accuracy. This effort included significant, ongoing overtime for staff throughout 2022, creating special teams of employees focused solely on processing aged inventory, and expediting hiring of thousands of new workers and contractors to help with this ongoing effort.

Additionally, the IRS has greatly improved the process for taxpayers whose paper and electronically filed returns were suspended during processing for manual review and correction – referred to as error resolution. Last filing season, an IRS tax examiner could correct an average of 70 tax returns with errors per hour. Thanks to new technology implemented this filing season, 180 to 240 returns can now be corrected per hour. As of June 12, 2021, there were 8.9 million tax returns in error resolution. As of June 10, 2022, there were just 360,000 returns awaiting correction.

The IRS will continue its intense effort to make progress on processing these paper returns in the months ahead.

"IRS employees have been working tirelessly to process these tax returns as quickly as possible and help people who are waiting on refunds or resolution of an account issue," said IRS Commissioner Chuck Rettig. "Completing the individual returns filed last year with no errors is a major milestone, but there is still work to do. We remain focused on doing everything possible to expedite processing of these tax returns, and we continue to add more people to this effort as our hiring efforts continue this summer."

Rettig emphasized that adding sustained funding increases for the IRS will help the agency add more employees to process tax returns and answer phones as well as help improve technology and ensure fair enforcement of the tax laws.

"Taxpayers and tax professionals deserve the absolute highest-quality service from the nation's tax system," Rettig said. "Long-term and consistent funding for the agency is critical to ensuring the IRS is prepared for future tax seasons. It's also critical for the IRS to be ready to answer the call for the nation during the next crisis, just as the agency did delivering three rounds of historic stimulus payments and advance Child Tax Credit payments during the pandemic."

The IRS reminds millions of taxpayers who have not yet filed their 2021 tax returns this year – including those who requested an extension until October 17 – to make sure they file their returns electronically with direct deposit to avoid delays. People who use e-file avoid the delays facing those who file paper returns; e-filed returns with no errors are typically processed in 21 days.

The IRS also urges people to file as soon as they are ready. There is no need to wait until the last minute before the October 17 extension deadline. Filing sooner avoids potential delays for taxpayers, and it also assists the larger ongoing IRS efforts to complete processing tax returns this year.

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

Source: IRS 

Year-round tax planning: All taxpayers should understand eligibility for credits and deductions

Posted by Admin Posted on June 30 2022

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Tax credits and deductions can help lower the amount of tax owed. All taxpayers should begin planning now to take advantage of the credits and deductions they are eligible for when they file their 2022 federal income tax return next year.

Here are a few facts that can help taxpayers with their year-round tax planning:

  • Adjusted Gross Income, or AGI, is a taxpayer's total gross income minus specific deductions that can reduce the taxpayer's income before calculating tax owed. AGI is the starting point for calculating taxes and determining a taxpayer's eligibility for certain tax credits and deductions that can help lower their tax bill.
  • Taxable income is a taxpayer's AGI minus the standard deduction or itemized deductions, whichever is greater.
  • The standard deduction is a set dollar amount that reduces taxable income. Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions and using the option that lowers their tax the most.
  • Properly claiming tax credits can reduce taxes owed or boost refunds.
  • Some tax credits, like the earned income tax credit, are refundable, which means an eligible taxpayer can get money refunded to them even if they don't owe any taxes.
  • To claim a deduction or credit, taxpayers should keep records that show their eligibility for it.

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

Claiming a child as a dependent when parents are divorced, separated or live apart

Posted by Admin Posted on June 30 2022

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Parents who are divorced, separated, never married or live apart and who share custody of a child with an ex-spouse or ex-partner need to understand the specific rules about who may be eligible to claim the child for tax purposes. This can make filing taxes easier for both parents and avoid errors that may lead to processing delays or costly tax mistakes.

Only one person may be eligible to claim the qualifying child as a dependent.

Only one person can claim the tax benefits related to a dependent child who meets the qualifying child rulesPDF. Parents can't share or split up the tax benefits for their child on their respective tax returns.

It's important that each parent understands who will claim their child on their tax return. If two people claim the same child on different tax returns, it will slow down processing time while the IRS determines which parent's claim takes priority.

 Custodial parents generally claim the qualifying child as a dependent on their return.

  • The custodial parent is the parent with whom the child lived for the greater number of nights during the year. The other parent is the noncustodial parent.
  • In most cases, because of the residency test, the custodial parent claims the child on their tax return.
  • If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income.

Tie-breaker rules may apply if the child is a qualifying child of more than one person.

  • Although the child may meet the conditions to be a qualifying child of either parent, only one person can actually claim the child as a qualifying child, provided the taxpayer is eligible.
  • People should carefully read Publication 504, Divorced or Separated Individuals to understand who is eligible to claim a qualifying child.

Noncustodial parents may be eligible to claim a qualifying child.

Special rules apply for a child to be treated as a qualifying child of the noncustodial parent.

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 provides guidance for residents of Puerto Rico to claim the Child Tax Credit

Posted by Admin Posted on June 30 2022

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WASHINGTON — The Internal Revenue Service today issued guidance for certain individuals in Puerto Rico on how to file and claim the Child Tax Credit payments that they are entitled to receive under the American Rescue Plan Act.

"It's important for residents of Puerto Rico to know that starting with Tax Year 2021, having only one child qualifies you for the Child Tax Credit," said IRS Commissioner Chuck Rettig. "We want everyone in Puerto Rico who's entitled to this benefit to file to receive the Child Tax Credit."

Residents of Puerto Rico must file a federal tax return with the IRS to claim the Child Tax Credit. The credit can be claimed on Form 1040-PR, Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta PropiaForm 1040-SS, U.S. Self-Employment Tax ReturnForm 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors. Form 1040-PR is a Spanish-language form. Form 1040 and Form 1040-SR have Spanish-language versions. One of these tax returns can be filed to claim the Child Tax Credit even after last month's filing deadline. In fact, families who don't owe taxes to the IRS can file their 2021 tax return and claim the Child Tax Credit for the 2021 tax year at any point until April 15, 2025, without any penalty.

Revenue Procedure 2022-22PDF provides details for bona fide residents of Puerto Rico who have children but do not have a 2021 federal tax filing requirement, providing them with a simplified way to file one of these tax returns with the IRS to claim the Child Tax Credit. They may follow one of the simplified procedures announced today if:

·  Their income for taxable year 2021 is completely exempt from taxation because it is from sources within Puerto Rico,

·  Their modified adjusted gross income for purposes of the Child Tax Credit is less than or equal to (i) $150,000, if married and filing jointly or filing as a surviving spouse; (ii) $112,500, if filing as head of household; and (iii) $75,000, if the filer is a single filer or is married and filing a separate return,

·  They are eligible to claim the Child Tax Credit in an amount greater than zero,

·  They are a U.S. citizen or resident alien (or are treated as a United States resident),

·  They are not required to file a Form 1040-PR, Form 1040-SS, Form 1040, or Form 1040-SR for taxable year 2021, such as to report tax on self-employment income, and

·  They have not already filed a paper or electronic Form 1040-PR, Form 1040-SS, Form 1040, or Form 1040-SR for taxable year 2021.

The simplified filing procedures direct eligible Form 1040-PR and Form 1040-SS filers to follow the instructions for those forms except that they are not required to report their modified adjusted gross income on line 1 of Part I of the tax return. Eligible Form 1040 and Form 1040-SR filers are directed to follow the instructions for those forms except that they are not required to report their modified adjusted gross income on lines 1 through 3 of Schedule 8812 (Form 1040), Credits for Qualifying Children and Other Dependents.

For 2021, the American Rescue Plan increased the Child Tax Credit from $2,000 per qualifying child to:

·  $3,600 for children ages 5 and under at the end of 2021; and

·  $3,000 for children ages 6 through 17 at the end of 2021.

The American Rescue Plan also made the credit fully refundable. This means that bona fide residents of Puerto Rico can claim the full amount of the credit for taxable year 2021 even if they had no income and paid no U.S. Social Security taxes.

All filers may file a Schedule LEP (Form 1040), Request for Change in Language Preference (also available as Anexo LEP (Formulario 1040(SP))Solicitud para Cambiar la Preferencia de Idioma), with their tax return to request a change in language preference for further communications from the IRS.

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

Source: IRS

What people new to the workforce need to know about income tax withholding

Posted by Admin Posted on June 30 2022

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For many new grads and other people entering the workforce for the first time, filling out new hire paperwork can be confusing — what's a W-4, anyway? New employees should ensure they understand their tax situation and do some planning now, so they're in good shape at tax time next year. It's important to know the correct amount of tax to withhold.

Get tax withholding right.

Federal income tax is a pay-as-you-go tax. This means, taxpayers pay the tax as they earn or receive income during the year. Employers take out – or withhold – income tax from employee paychecks and pay it to the IRS in the taxpayer's name.

If an employee doesn't have enough tax withheld, they may face an unexpected tax bill and a possible penalty when they file a tax return next year. If they overpay or have too much tax withheld during the year, the employee will likely get a tax refund next year. Adjusting the tax withheld up front may mean a bigger paycheck throughout the year.

Form W-4, Employee's Withholding Certificate.

New employees must complete Form W-4 so that their employer can withhold the correct amount of federal income tax from their pay. Read the instructions carefully. The employer will base the amount of withholding on the information the employee provides on their W-4 and how much the employee earns.

In addition to when they start a new job, people can also submit a new W-4 when their personal or financial situation changes, and they want to update their withholding.

Taxpayers can use the Tax Withholding Estimator.

If a taxpayer isn't sure how much tax they should have withheld, they can use the Tax Withholding Estimator tool on IRS.gov to:

  • Estimate their federal income tax withholding.
  • See how their refund, take-home pay, or tax due is affected by their withholding amount.
  • Choose an estimated withholding amount that works for them.

To use the tool, taxpayers need their most recent pay statements or estimated salary, other income totals and their most recent income tax return. The tool doesn't ask for sensitive information such as name, Social Security number, address, or bank account numbers.

Not all workers are employees.

Workers are classified as either contractors or employees, according to certain rules regarding the financial and behavior control the business has over the worker and the type of relationship they have. Workers who are independent contractors need to pay their taxes directly since they won't have an employer withholding money from their paycheck. Depending on how much they earn, they may need to pay estimated tax on a quarterly basis.

Keeping tax forms in a safe place.

Employers typically send Forms W-2 end-of-year tax documents in January. This is a taxpayer's record of the income they received throughout the year and the amount of money withheld for federal, state, local and other taxes. Taxpayers should be sure to hold on to all the tax documents received in the year and store them in a safe place to help ensure they can file an accurate 2022 tax 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

What taxpayers need to know about making 2022 estimated tax payments

Posted by Admin Posted on June 21 2022

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By law, everyone must pay tax as they earn income. Generally taxpayers must pay at least 90 percent of their taxes throughout the year through withholding, estimated or additional tax payments or a combination of the two. If they don't, they may owe an estimated tax penalty when they file. Some taxpayers earn income not subject to withholding. For small business owners and self-employed people, that usually means making quarterly estimated tax payments.

Here are some key things to help taxpayers determine if they need to make estimated tax payments:

  • Generally, taxpayers need to make estimated tax payments if they expect to owe $1,000 or more when they file their 2022 tax return, after adjusting for any withholding.
  • The IRS urges anyone in this situation to check their withholding using the Tax Withholding Estimator on IRS.gov. If the estimator suggests a change, the taxpayer can submit a new Form W-4 PDF to their employer.
  • Aside from business owners and self-employed individuals, people who need to make estimated payments also include sole proprietors, partners and S corporation shareholders. It also often includes people involved in the sharing economy.
  • Corporations generally must make these payments if they expect to owe $500 or more on their 2022 tax return.
  • Aside from income tax, taxpayers can pay other taxes through estimated tax payments. This includes self-employment tax and the alternative minimum tax.
  • The remaining deadlines for paying 2022 quarterly estimated tax are: June 15, September 15, and January 17, 2023.
  • Taxpayers can check out these forms for details on how to figure their payments:
  • Taxpayers can visit IRS.gov to find options for paying estimated taxes. These include:
  • Anyone who pays too little tax PDFthrough withholding, estimated tax payments, or a combination of the two may owe a penalty. In some cases, the penalty may apply if their estimated tax payments are late. The penalty may apply even if the taxpayer is due a refund.

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

Here’s what businesses need to know about the enhanced business meal deduction

Posted by Admin Posted on June 21 2022

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The IRS encourages businesses to begin planning now to take advantage of tax benefits available to them when they file their 2022 federal income tax return. This includes the enhanced business meal deduction.

For 2021 and 2022 only, businesses can generally deduct the full cost of business-related food and beverages purchased from a restaurant. Otherwise, the limit is usually 50% of the cost of the meal.

To qualify for the enhanced deduction:

  • The business owner or an employee of the business must be present when food or beverages are provided.
  • Meals must be from restaurants, which includes businesses that prepare and sell food or beverages to retail customers for immediate on-premises or off-premises consumption.
  • Payment or billing for the food and beverages occurs after December 31, 2020, and before January 1, 2023.
  • The expense cannot be lavish or extravagant.

Grocery stores, convenience stores and other businesses that mostly sell pre-packaged goods not for immediate consumption, do not qualify as restaurants. ­

Employers may not treat certain employer-operated eating facilities as restaurants, even if they operate under contract by a third party.

Here's what business owners need to know about certain costs:

  • The cost of the meal can include taxes and tips.
  • The cost of transportation to and from the meal isn't part of the cost of a business meal.

Entertainment events

Business owners may be able to deduct the costs of meals and beverages provided during an entertainment event if either of these apply:

  • the purchase of the food and beverages occurs separately from the entertainment
  • the cost of the food and beverages is separate from the cost of the entertainment on one or more bills, invoices, or receipts.

Businesses should review the special recordkeeping rules that apply to business meals.

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

Some tax considerations for people who are separating or divorcing

Posted by Admin Posted on June 21 2022

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When people go through a legal separation or divorce, the change in their relationship status also affects their tax situation. The IRS considers a couple married for filing purposes until they get a final decree of divorce or separate maintenance.

Update withholding

When someone becomes divorced or separated, they usually need to file a new Form W-4 with their employer to claim the proper withholding. If they receive alimony, they may have to make estimated tax payments. The Tax Withholding Estimator tool on IRS.gov can help people figure out if they're withholding the correct amount.

Understand the tax treatment of alimony and separate maintenance

Amounts paid to a spouse or a former spouse under a divorce decree, a separate maintenance decree, or a written separation agreement may be alimony or separate maintenance payments for federal tax purposes. Certain alimony or separate maintenance payments are deductible by the payer spouse, and the recipient spouse must include it in income.

However, individuals can't deduct alimony or separate maintenance payments made under a divorce or separation agreement executed after 2018 or executed before 2019 but later modified if the modification expressly states the repeal of the deduction for alimony payments applies to the modification. Alimony and separate maintenance payments received under such an agreement are not included in the income the recipient spouse.

Determine who will claim a dependent child if filing separate returns

Generally, the parent with custody of a child can claim that child on their tax return. If parents split custody fifty-fifty and aren't filing a joint return, they'll have to decide which parent gets to claim the child. There are tie-breaker rules if the parents can't agree. Child support payments aren't deductible by the payer and aren't taxable to the payee.

Report property transfers, if needed

Usually, there is no recognized gain or loss on the transfer of property between spouses, or between former spouses if the transfer is because of a divorce. People may have to report the transaction on a gift tax return.

Consider filing status

Divorcing couples who are still married as of the end of the year are treated as married for the year and must determine their filing status. The What Is My Filing Status tool on IRS.gov can help people figure out what status makes sense for their situation.

Here the statuses separating or recently divorced people should consider:

  • Married filing jointly. On a joint return, married people report their combined income and deduct their combined allowable expenses. For many couples, filing jointly results in a lower tax than filing separately.
  • Married filing separately. If spouses file separate tax returns, they each report only their own income, deductions, and credits on their individual return. Each spouse is responsible only for the tax due on their own return. People should consider whether filing separately or jointly is better for them.
  • Head of household. Some separated people may be eligible to file as head of household if all of these apply:
    • Their spouse didn't live in their home for the last six months of the year.
    • They paid more than half the cost of keeping up their home for the year.
    • Their home was the main home of their dependent child for more than half the year.
  • Single. Once the final decree of divorce or separate maintenance is issued, a taxpayer will file as single starting for the year it was issued, unless they are eligible to file as head of household or they remarry by the end of the year.

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

Fast facts to help taxpayers understand backup withholding

Posted by Admin Posted on June 21 2022

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Under the tax law, payers responsible for knowing who they are paying. To accomplish this, payers are required to collect the legal name and taxpayer identification number, or TIN, from vendors they pay. Generally, backup withholding is required when a service vendor does not provide the payer their TIN timely or accurately. This type of withholding can apply to most payments reported on certain Forms 1099 and W-2G.

Here's what taxpayers need to know about backup withholding.

Backup withholding is required on certain non-payroll amounts when certain conditions apply.

The payer making such payments to the payee doesn't generally withhold taxes, and the payees report and pay taxes on this income when they file their federal tax returns. There are, however, situations when the payer is required to withhold a certain percentage of tax to make sure the IRS receives the tax due on this income.

Backup withholding is set at a specific percentage.

The current rate is 24 percent.

Payments subject to backup withholding include:

  • Interest payments
  • Dividends
  • Payment card and third-party network transactions
  • Patronage dividends, but only if at least half the payment is in money
  • Rents, profits, or other gains
  • Commissions, fees, or other payments for work done as an independent contractor
  • Payments by brokers
  • Barter exchanges
  • Payments by fishing boat operators, but only the part that is paid in actual money and that represents a share of the proceeds of the catch
  • Royalty payments
  • Gambling winnings, if not subject to gambling withholding
  • Taxable grants
  • Agriculture payments

Examples when the payer must deduct backup withholding:

  • If a payee has not provided the payer a Taxpayer Identification Number.
    • A TIN specifically identifies the payee.
    • TINs include Social Security numbers, Employer Identification Numbers, Individual Taxpayer Identification Numbers and Adoption Taxpayer Identification Numbers.
  • If the IRS notified the payer that the payee provided an incorrect TIN; that is the TIN does not match the name in IRS records. Payees should make sure that the payer has their correct name and TIN to avoid backup withholding.

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

When the lemonade stand makes bank: Young entrepreneurs and taxes

Posted by Admin Posted on June 16 2022

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Teens and young adults often go into business for themselves over the summer or after school. This work can include babysitting, lawn mowing, dog walking or other part-time or temporary work. When a teen or young adult is an employee of a business, their employer withholds taxes from their paycheck. However, when they are classified as an independent contractor or are self-employed, they're responsible for paying taxes themselves.

Things to keep in mind:

  • Everyone, including minors, must file a tax return if they had net earnings from self-employment of at least $400.
  • If they owe taxes, teens and young adults should file their own tax return, even if their parent or guardian claims them as a dependent.
  • Teens and young adults can prepare and sign their own tax return. There is no minimum age to sign a tax return.
  • Parents can't claim a dependent's earned income on their own tax return.
  • In addition to income tax, people who are self-employed are generally responsible for self-employment tax as well. It's like the Social Security and Medicare taxes withheld from the pay of most wage earners.
  • Teens and young adults can lower the amount of tax they owe by deducting certain expenses.

Here's what young entrepreneurs can do to keep on top of their tax responsibilities:

Keep records. It's good to make and keep financial records and receipts during the year. Recordkeeping can help track income and deductible expenses and provide the information needed for a tax return.

Pay estimated tax, if required. If a teen or young adult being claimed as a dependent expect to owe at least $1,000 in tax for 2022, they must make estimated payments on a quarterly basis. They should be sure to pay enough tax on time to avoid a penalty. They can use one of these forms to calculate their estimated taxes:

If a taxpayer also has a job where tax is withheld by their employer, they can request that their withholding be increased to cover their estimated taxes from their self-employed income. That way, they don't have pay estimated tax separately. The Tax Withholding Estimator is a great tool to help wage earners figure out how much they should be withholding.

File a tax return. When tax season rolls around, young taxpayers can review the information and forms, gather their records and e-file their tax return. When preparing to file a tax return, they should make sure to review all their records, including estimated tax they've already paid.

If people owe taxes, they can pay electronically through Online Account and IRS Direct Pay. Visit the Payments page of IRS.gov for the full list of payment 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

IRS increases mileage rate for remainder of 2022

Posted by Admin Posted on June 16 2022

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WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rate for the final 6 months of 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.

For the final 6 months of 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year. The new rate for deductible medical or moving expenses (available for active-duty members of the military) will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. These new rates become effective July 1, 2022. The IRS provided legal guidance on the new rates in Announcement 2022-13PDF, issued today.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2022. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. For travel from Jan. 1 through June 30, 2022, taxpayers should use the rates set forth in Notice 2022-03PDF.

"The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices," 
said IRS Commissioner Chuck Rettig. "We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate.” 

While fuel costs are a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs. 

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. 

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

 

The 14 cents per mile rate for charitable organizations remains unchanged as it is set by statute.

Midyear increases in the optional mileage rates are rare, the last time the IRS made such an increase was in 2011.

 

MILEAGE RATE CHANGES

 

Purpose

Rates 1/1 through 6/30/2022

Rates 7/1 through 12/31/2022

Business

58.5

62.5

Medical/Moving

18

22

Charitable

14

14

 

 

 

 

 

 

 

 

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

Dirty Dozen: Scammers use every trick in their communication arsenal to steal your identity, personal financial information, money and more

Posted by Admin Posted on June 16 2022

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WASHINGTON — Suspicious communications in all its forms designed to either trick, surprise or scare someone into responding before thinking is No. 7 on the 2022 "Dirty Dozen" scams warning list, the Internal Revenue Service announced today, warning everyone to be on the lookout for bogus calls, texts, emails and posts online to gain trust or steal.

Criminals have used these methods for years and they persist because these tricks work enough times to keep the scammers at it. Victims are tricked into providing sensitive personal financial information, money or other information. This can be used to file false tax returns and tap into financial accounts, among other schemes.

"If you are surprised or scared by a call or text, it's likely a scam so proceed with extreme caution," said IRS Commissioner Chuck Rettig. "I urge everyone to verify a suspicious email or other communication independently of the message in question."

The IRS has compiled the annual Dirty Dozen list for more than 20 years as a way of alerting taxpayers and the tax professional community about scams and schemes. The list is not a legal document or a literal listing of agency enforcement priorities. It is designed to raise awareness among a variety of audiences that may not always be aware of developments involving tax administration.

As part of the Security Summit effort with the states and the nation's tax industry, the IRS has made great strides in preventing and reducing tax-related identity theft. But it remains a serious threat to taxpayers and tax professionals who don't adequately protect Social Security numbers (SSN) and other personal information.

For example, criminals can quickly file a fake tax return using a stolen SSN in the hope that it has not already appeared on another filed return. People frequently don't know they are a victim of identity theft until they are notified by the IRS of a possible issue with their tax return or their return is rejected because the SSN appears on a return already filed.

Here are some common scams the IRS continues to see. Taxpayers should take extra caution with these schemes, which continue to evolve and change:

Text message scams: These scams are sent to taxpayers' smartphones and can reference things like COVID-19 and/or "stimulus payments." These messages often contain bogus links claiming to be IRS websites or other online tools. Other than IRS Secure Access, the IRS does not use text messages to discuss personal tax issues, such as those involving bills or refunds. The IRS also will not send taxpayers messages via social media platforms.

If a taxpayer receives an unsolicited SMS/text that appears to be from either the IRS or a program closely linked to the IRS, the taxpayer should take a screenshot of the text message and include the screenshot in an email to phishing@irs.gov with the following information:

  • Date, time and time zone they received the text message
  • Phone number that received the text message
  • The IRS reminds everyone NOT to click links or open attachments in unsolicited, suspicious or unexpected text messages whether from the IRS, state tax agencies or others in the tax community.

Email phishing scams: The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS initiates most contacts through regular mail. If a taxpayer receives an unsolicited fraudulent email that appears to be from either the IRS or a program closely linked to the IRS, report it by sending the email as an attachment to phishing@irs.gov. The Report Phishing and Online Scams page at IRS.gov provides complete details.

Phone scams: The IRS does not leave pre-recorded, urgent or threatening messages. In many variations of the phone scam, victims are told if they do not call back, a warrant will be issued for their arrest. Other verbal threats include law-enforcement agency intervention, deportation or revocation of licenses.

Criminals can fake or "spoof" caller ID numbers to appear to be anywhere in the country, including from an IRS office. This prevents taxpayers from being able to verify the caller's true number. Fraudsters also have spoofed local sheriff's offices, state departments of motor vehicles, federal agencies and others, to convince taxpayers the call is legitimate.

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

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

Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties. For anyone who doesn't owe taxes and has no reason to think they do: Do not give out any information. Hang up immediately. For more information, see IRS warning: Scammers work year-round; stay vigilant.

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

Understanding taxpayer rights: Everyone has the right to finality

Posted by Admin Posted on June 16 2022

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Taxpayers interacting with the IRS have the right to finality. This right comes into play for taxpayers who are going through an audit. These taxpayers have the right to know when the IRS has finished the audit. This is one of ten basic rights — known collectively as the Taxpayer Bill of Rights.

Here's what taxpayers in the process of an audit, should know about their right to finality:

  • Taxpayers have the right to know:
    • The maximum amount of time they have to challenge the IRS's position.
    • The maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. 
    • When the IRS has finished an audit.
       
  • The IRS generally has three years from the date taxpayers file their returns to assess any additional tax for that tax year.
     
  • There are some limited exceptions to the three-year rule, including when taxpayers fail to file returns for specific years or file false or fraudulent returns. In these cases, the IRS has an unlimited amount of time to assess tax for that tax year.
     
  • The IRS generally has 10 years from the assessment date to collect unpaid taxes. This 10-year period cannot be extended, except for taxpayers who enter into installment agreements or the IRS obtains court judgments.
     
  • There are circumstances when the 10-year collection period may be suspended. This can happen when the IRS cannot collect money due to the taxpayer's bankruptcy or there's an ongoing collection due process proceeding involving the taxpayer.
     
  • A statutory notice of deficiency is a letter proposing additional tax the taxpayer owes. This notice must include the deadline for filing a petition with the tax court to challenge the amount proposed.
     
  • Generally, a taxpayer will only be subject to one audit per tax year. However, the IRS may reopen an audit for a previous tax year, if the IRS finds it necessary. This could happen, for example, if a taxpayer files a fraudulent 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

People can protect themselves from tax-related identity theft with an Identity Protection PIN

Posted by Admin Posted on June 16 2022

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Identity Protection PINs stop identity thieves from filing fraudulent tax returns. When a taxpayer chooses to participate in this program, the IRS assigns them a six-digit number which the taxpayer uses to prove their identity when they file their tax return. This extra layer of protection provides peace of mind, especially for people who have already been a victim of identity theft.

How to get an IP PIN

The Get An IP PIN tool lets people with an SSN or ITIN request an IP PIN online after they verify their identity. Taxpayers should review the Secure Access requirements before they try to use the Get An IP PIN tool.

Tax pros can help clients affected by identity theft by urging them to get an IP PIN quickly. Even if a thief has already filed a fraudulent tax return, an IP PIN would prevent the taxpayer from being a repeat victim of tax-related identity theft in the future.

Important information about IP PINs

  • For security reasons, enrolled participants get a new IP PIN each year. That IP PIN is valid for one year.
  • Enrolled taxpayers can log back into the Get An IP PIN tool to see their current IP PIN.
  • People with an IP PIN must use it when filing any federal tax returns during the year, including prior year tax returns. 
  • IP PIN users should only share their number with the IRS and their trusted tax preparation provider. The IRS will never call, email or text a request for the IP PIN.
  • Currently, taxpayers can get an IP PIN for 2022. The IRS will issue new IP PINs starting in January 2023.

Taxpayers who can't validate their identity online can still get an IP PIN

Taxpayers who can't validate their identity online, and whose income is below a certain threshold, can file Form 15227, Application for an Identity Protection Personal Identification NumberPDF. The 2022 threshold is $73,000 for individuals or $146,000 for married filing jointly.

Once an IRS receives the form, a representative will call the phone number the taxpayer provided to validate the taxpayer's identity. However, for security reasons, the IRS will assign an IP PIN for the next filing season, and the taxpayer can't use the IP PIN for the current filing season.

Taxpayers who can't validate their identity online or by phone, and who are ineligible to file a Form 15227 can make an appointment at a Taxpayer Assistance Center. They will need to bring one current government-issued picture ID and another identification document to prove their identity. Once verified, the taxpayer will get an IP PIN in the mail, usually within three weeks.

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

The Where’s My Refund tool is now better than ever

Posted by Admin Posted on June 16 2022

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The IRS recently rolled out a new and improved Where's My Refund tool. This updated tool allows taxpayers to check the status of their refunds for the 2021, 2020, and 2019 tax years.

To use the tool, taxpayers will need their Social Security number or ITIN, filing status and expected refund amount from their original tax return for the year they're checking.

About the tool

Available on IRS.gov or the IRS2Go mobile app, Where's My Refund allows taxpayers to track their refund through three stages:

1.   Return received.

2.   Refund approved.

3.   Refund sent.

Using this tool, taxpayers can start checking the status of their refund within:

  • 24 hours after e-filing a tax year 2021 return.
  • Three or four days after e-filing a tax year 2019 or 2020 return.
  • Four weeks after mailing a return.

Eligible people who haven't filed a 2021 tax return yet, including those who requested an extension to file, can use IRS Free File to prepare and file their federal tax return for free. Filing electronically is fast, accurate and secure. When an individual chooses direct deposit their refund goes directly from the IRS into their bank or financial account getting them their refund in the fastest time possible. When the IRS accepts the electronically filed return, taxpayers can track their refund with the Where's My Refund tool.

Additional refund status information

The Where's My Refund tool should be the first place people go for more information about checking the status of a tax refund. There's no need to call the IRS to check on refund status unless it's been more than 21 days since they filed the return, or the tool says the IRS can provide more information.

Where taxpayers can find other information about their account

Taxpayers can log in to their Online Account to find their prior year adjusted gross income, balance due and other account information. They can also see their payment history or other tax records.

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

For those who pay estimated taxes, second quarter June 15 deadline approaches

Posted by Admin Posted on June 14 2022

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The Internal Revenue Service reminds taxpayers who pay estimated taxes that the deadline to pay their second quarter tax liability is June 15.

Taxes are pay-as-you-go

This means taxpayers need to pay most of the tax they expect to owe during the year, as income is received. There are two ways to do that:

1.   Withholding from pay, pension or certain government payments such, as Social Security.

2.   Making quarterly estimated tax payments during the year.

Estimated tax is the method used to pay tax on income that isn't subject to withholding. This includes income from self-employment, interest, dividends, rent, gains from the sale of assets, prizes and awards.

Taxpayers may also have to pay estimated tax if the amount of income tax being withheld from their salary, pension or other income isn't enough. If necessary, those who receive a salary or wages can avoid having to pay estimated taxes by asking their employer to withhold more tax from their earnings. To do this, taxpayers should submit a new Form W-4 to their employer. There is a special line on Form W-4 for them to enter the additional amount they want their employer to withhold.

Who must pay estimated tax?

Individuals, including sole proprietors, partners and S corporation shareholders, generally have to make estimated tax payments if they expect to have a tax liability of $1,000 or more when they file their return.

Individual taxpayers can use the IRS Interactive Tax Assistant online to see if they are required to pay estimated taxes. They can also see the worksheet in Form 1040-ES, Estimated Tax for Individuals, for more details on who must pay estimated tax.

Corporations generally have to make estimated tax payments if they expect to owe tax of $500 or more when they file their return. Corporations can see Form 1120-W, Estimated Tax for Corporations, for more information.

Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be especially helpful to those who have dividend or capital gain income, owe alternative minimum tax or self-employment tax, or have other special situations.

How to avoid an underpayment penalty

Taxpayers can avoid an underpayment penalty by owing less than $1,000 at tax time or by paying most of their taxes during the year. Generally, for 2022 that means making payments of at least 90% of the tax expected on their 2022 return, or taxpayers who pay at least 100 percent of the tax shown on their return for tax year 2021.

Special rules apply to some groups of taxpayers, such as farmers, fishers, certain higher income taxpayers, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year. For more information, refer to Form 1040-ES.

Generally, taxpayers should make estimated tax payments in four equal amounts to avoid a penalty. However, if they receive income unevenly during the year, they may be able to vary the amounts of the payments to avoid or lower the penalty by using the annualized installment method. Taxpayers can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if they owe a penalty for underpaying their estimated tax.

Third quarter payments are due September 15 and the final estimated tax payment for tax year 2022 is due on January 17, 2023.

Tax Withholding Estimator

The Tax Withholding Estimator offers a step-by-step method for effectively ensuring taxpayers have the right amount of tax withheld from their paychecks or other income that is subject to withholding.

Using the Tax Withholding Estimator can help taxpayers prevent having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.

How to pay estimated taxes

An electronic payment is the fastest, easiest and most secure way for individuals to make an estimated tax payment. Taxpayers can securely log into their IRS Online Account or use IRS Direct Pay to submit a payment from their checking or savings account. Taxpayers can also pay using a debit, credit card or digital wallet. Taxpayers should note that the payment processor, not the IRS, charges a fee for debit and credit card payments. Both Direct Pay and the pay by debit, credit card or digital wallet options are available online at IRS.gov/payments and through the IRS2Go app.

Taxpayers can also use the Electronic Federal Tax Payment System (EFTPS) to make an estimated tax payment.

Corporations must use electronic funds transfer to make all federal tax deposits (such as deposits of employment, excise and corporate income tax). This includes installment payments of estimated tax. Generally, an electronic funds transfer is made using the Electronic Federal Tax Payment System (EFTPS). However, if the corporation does not want to use EFTPS, it can arrange for its tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on its behalf.

If taxpayers opt to mail a check or money order, they should make them payable to the "United States Treasury."

Form 1040-ES, Estimated Tax for Individuals, includes instructions to help taxpayers figure their estimated taxes. For information on all payment options, visit Pay Online.

IRS.gov assistance 24/7

Tax help is available 24/7 on IRS.gov. The IRS website offers a variety of online tools to help taxpayers find answers to common tax questions. For example, taxpayers can search the Interactive Tax AssistantTax Topics and Frequently Asked Questions to get answers to common questions.

The IRS is continuing to expand ways to communicate to taxpayers who prefer to get tax information in other languages. The IRS has posted translated tax resources in 20 other languages on IRS.gov. For more information, see We Speak Your Language.

 

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

PLANNING FOR THE NET INVESTMENT INCOME TAX

Posted by Admin Posted on June 01 2022

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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

I got a notice or letter from the IRS – now what do I do?

Posted by Admin Posted on June 01 2022

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The IRS will send a notice or a letter for any number of reasons, including:

 

  • Identifying a specific issue on your federal tax return or account that needs action;
  • Explaining changes to your return or account;
  • Asking for missing or more information; or
  • Requesting a payment.

 

You can handle most of this correspondence without calling, visiting an IRS office, or involving the Taxpayer Advocate Service (TAS) by following the instructions in the notice or letter.

However, sometimes these letters or notices can be confusing and hard to understand. Here are some tips to help you when you receive a notice or letter from the IRS.

1. Determine the reason the notice or letter was sent

Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. If you need help understanding the information provided, the IRS has a Search Notice and Letters feature on the Understanding Your IRS Notice or Letter page. TAS also has a tool called the Taxpayer Roadmap, which includes copies of common letters and notices that you can use.

You can find the notice (CP) or letter (LTR) number on either the top or the bottom right-hand corner of your correspondence. Once you find it, you can enter that number in the search feature and you will be taken to a corresponding page that has more general information that may help.

The Taxpayer Advocate Service has a GET HELP section on various topics that can lead you through important information and steps and actions necessary to help you resolve many common tax issues.

2. Do I need to reply?

Whether you need to reply or not will depend on the issue.

If you agree with the information or change listed on the notice or letter, generally there is no need to reply. If the action causes a balance due, then you should take action immediately. Other times, even if you do agree, you may need to provide specific information to resolve the issue, particularly if you need to verify your identity.

If you disagree, you will need to act as soon as possible, as penalties and interest may be accruing, depending on the circumstances. The letter should outline what that action is and include a due date for your response.

Whether you agree or not, if it requires a reply – do not delay! Delaying can create more issues. See more on this below.

3. When to respond

If your notice or letter requires a response by a specific date, there are many reasons you’ll want to comply. Here are just a few:

  • minimize additional interest and penalty charges;
  • prevent further action from being taken on the account or against you; and
  • preserve your appeal rights if you don’t agree.

If you need more time to respond than the notice or letter indicates, contact the IRS using the contact information included on the notice or letter or call the general number, shown below, but only if a specific contact is not indicated.

4. How and where to reply

All notices and letters should tell you where to send your response, whether it’s to a mailing address or fax number. (Note: The IRS generally does not allow communication via email yet, although they are currently working on developing some alternative digital communication options.)

Follow the instructions in your notice or letter. See the IRS Operational status page for IRS customer service timeframes and updates as there are still some delays due to the ongoing pandemic.

5. What if I want to talk to someone?

Each notice or letter should include contact information. Some phone numbers on notices or letters are general IRS toll-free numbers, but if a specific employee is working your case, it will show a specific phone number to reach that employee or the department manager. The telephone number is usually found in the upper right-hand corner of your notice or letter.

As a last resort, you can use the IRS toll-free number at 800-829-1040. Have a copy of your tax return and the correspondence available when you call. But your best option is to use the specific number or address provided.

6. Wait – I still need help

You can resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional.

If you can’t afford to hire a tax professional to assist you, you may be eligible for free or low cost representation from an attorney, certified public accountant, or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). In addition, LITCs can help if you speak English as a second language and need help understanding the notice or letter. For more information or to find an LITC near you, see the LITC page at www.taxpayeradvocate.irs.gov/litcmap or IRS Publication 4134, Low Income Taxpayer Clinic List.

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      

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

Posted by Admin Posted on June 01 2022

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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

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

Posted by Admin Posted on June 01 2022

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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 

WHAT DO BANKS LOOK FOR IN A LOAN REQUEST?

Posted by Admin Posted on May 25 2022

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

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

  • Have you invested at least 25% or 50% of savings or personal equity into the business for the loan you are requesting? (Keep in mind that 100% of your business will not be financed by an investor.)
  • Do your work history, your credit report and letters of recommendation show a healthy record of credit worthiness? This is a key factor.
  • Do you have the training and experience necessary to operate a successful business?
  • Do your loan proposal and business plan document your knowledge of and dedication to the success of the business?
  • Is the cash flow of the business sufficient to make the monthly payments on the requested loan?

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Información y recursos gratis para empezar un negocio

Posted by Admin Posted on May 05 2022

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El Servicio de Impuestos Internos quiere que los contribuyentes sepan que hay recursos gratuitos en IRS.gov para aquellos que están empezando un negocio. Las pequeñas empresas juegan un papel fundamental en la economía de la nación. El IRS tiene una variedad de recursos disponibles para ayudar a los empresarios a cumplir con sus responsabilidades tributarias, así como para ayudar a sus empleados.

Selección de la estructura empresarial

Al iniciar un negocio, los contribuyentes deben decidir qué estructura de entidad empresarial establecer. La estructura de la empresa determina el formulario de declaración de impuestos que se debe presentar. Las estructuras empresariales más comunes son:

  • Empresario por cuenta propia - Cuando alguien es dueño de un negocio no incorporado por sí mismo.
  • Sociedad - La relación entre dos o más personas para hacer comercio o negocios.
  • Corporaciones - Al formar una corporación, los posibles accionistas intercambian dinero, propiedades, o ambos, por el capital en acciones de la corporación.
  • Corporaciones S - Son corporaciones que eligen pasar los ingresos corporativos, las pérdidas, las deducciones y los créditos a través de sus accionistas a efectos del impuesto federal.
  • Compañía de Responsabilidad Limitada (LLC por sus siglas en inglés) - Están permitidas por la ley estatal y pueden estar sujetas a diferentes regulaciones. El IRS tratará una LLC como una corporación, sociedad, o como parte de la declaración de impuestos del propietario (por ejemplo, empresario por cuenta propia) dependiendo de las elecciones hechas por la LLC y su número de miembros.

Entendiendo los impuestos de negocios

La estructura del negocio que se opera determina qué impuestos hay que pagar y cómo hacerlo. A continuación, están los cuatro tipos generales de impuestos empresariales:

  • Impuesto sobre los ingresos - Todas las empresas, excepto las sociedades, deben presentar una declaración anual del impuesto sobre los ingresos. Las sociedades colectivas presentan una declaración informativa.
  • Impuesto sobre el trabajo por cuenta propia - Es un impuesto de seguro social y Medicare que se aplica principalmente a las personas que trabajan por cuenta propia. Los pagos contribuyen a la cobertura de la persona bajo el sistema del seguro social.
  • Impuesto sobre el empleo - Cuando las pequeñas empresas tienen empleados, la empresa tiene ciertas responsabilidades tributarias sobre el empleo que debe pagar y formularios que debe presentar.
  • Impuestos especiales - Los impuestos especiales se aplican a diversos bienes, servicios y actividades. Estos impuestos pueden recaer sobre el fabricante, el minorista o el consumidor, dependiendo del impuesto específico.

Nota: Por lo general, los propietarios de empresas deben pagar los impuestos sobre los ingresos, incluyendo el impuesto sobre el trabajo por cuenta propia, realizando pagos regulares de impuestos estimados durante el año.

Saber cuándo hay que obtener un número de identificación del empleador (EIN por sus siglas en inglés)

El número de identificación del empleador (EIN) también se conoce como el Número Federal de Identificación de Impuestos y es usado para identificar a una entidad de negocios. Generalmente, las empresas necesitan un EIN. Este es un servicio gratuito ofrecido por el Servicio de Impuestos Internos y los propietarios de empresas pueden obtener su EIN inmediatamente.

Manteniendo buenos registros

El mantenimiento de registros adecuados ayudará a las pequeñas empresas a monitorear su progreso, a preparar estados financieros, a identificar las fuentes de ingresos, a hacer un seguimiento de los gastos deducibles, a hacer un seguimiento de su base en la propiedad, a preparar sus declaraciones de impuestos y a respaldar los elementos declarados en sus declaraciones de impuestos. Los contribuyentes deben mantener sus registros durante al menos 3 años.

Escogiendo un año comercial

Los pequeños negocios deben calcular sus ingresos tributables sobre la base de un año tributario. Un "año tributario" es un período de contabilidad anual para declarar los ingresos y los gastos. Los años tributarios que pueden utilizar las pequeñas empresas son

  • Año natural – 12 meses consecutivos que comienzan el 1 de enero y terminan el 31 de diciembre.
  • Año tributario – 12 meses consecutivos que terminan en el último día de cualquier mes excepto diciembre. Un año tributario de 52-53 semanas es un año tributario que varía de 52 a 53 semanas pero que no tiene que terminar en el último día de un mes.

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        

Understanding taxpayer rights: The right to challenge the IRS's position and be heard

Posted by Admin Posted on May 05 2022

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Every taxpayer has a set of fundamental rights when working with the IRS which are known collectively as the Taxpayer Bill of Rights. One of these is the right to challenge the IRS's position and be heard.

Here are some details about what this right means for taxpayers.

Taxpayers have the right to:

  • Raise objections.
  • Provide additional documentation in response to formal or proposed IRS actions.
  • Expect the IRS to consider their timely objections.
  • Have the IRS consider any supporting documentation promptly and fairly.
  • Receive a response if the IRS does not agree with their position.

Here are some specific things this right provides taxpayers.

  • In some cases, the IRS will notify a taxpayer that their tax return has a math or clerical error. If this happens, the taxpayer:
    • Has 60 days to tell the IRS that they disagree.
    • Should provide copies of any records that may help correct the error.
    • May call the number listed on the letter or bill for assistance.
    • Can expect the agency to make the necessary adjustment to their account and send a correction if the IRS upholds the taxpayer's position.
  • Here's what will happen if the IRS does not agree with the taxpayer's position:
    • The agency will issue a notice proposing a tax adjustment. This is a letter that comes in the mail.
    • This notice provides the taxpayer with a right to challenge the proposed adjustment.
    • The taxpayer makes this challenge by filing a petition in U.S. Tax Court. The taxpayer must generally file the petition within 90 days of the date of the notice, or 150 days if it is addressed outside the United States.
       
  • Taxpayers can submit documentation and raise objections during an audit. If the IRS does not agree with the taxpayer's position, the agency issues a notice explaining why it is increasing the tax. Prior to paying the tax, the taxpayer has the right to petition the U.S. Tax Court and challenge the agency's decision.
     
  • In some circumstances, the IRS must provide a taxpayer with an opportunity for a hearing before an independent Office of Appeals. The agency must do this:
    • Before taking enforcement actions to collect a tax debt. These actions include levying the taxpayer's bank account. Immediately after filing a notice of federal tax lien in the appropriate state filing location. If the taxpayer disagrees with the decision of the Appeals Office, they can petition the U.S. Tax Court.

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       

Entender los derechos de los contribuyentes: El derecho de cuestionar la posición del IRS y de ser escuchado

Posted by Admin Posted on May 05 2022

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Cada uno de los contribuyentes tiene una serie de derechos fundamentales al tratar con el IRS que se conocen colectivamente como la Carta de Derechos del Contribuyente. Uno de ellos es el de cuestionar la posición del IRS y de ser escuchado.

Aquí hay algunos detalles acerca de lo que significa este derecho para los contribuyentes.

Los contribuyentes tienen derecho a:

  • Presentar objeciones.
  • Proveer documentación adicional como respuesta a acciones propuestas o acciones finales llevadas acabo por el IRS.
  • Esperar a que el IRS considere sus objeciones de manera oportuna.
  • Esperara que el IRS considere cualquier documentación de respaldo de manera oportuna y justa.
  • Recibir una respuesta si el IRS no está de acuerdo con su posición.

Aquí hay algunas cosas específicas que este derecho proporciona a los contribuyentes.

  • En algunos casos, el IRS notificará al contribuyente que su declaración de impuestos tiene un error matemático o administrativo. Si esto sucede, el contribuyente: 
    • Tiene 60 días para decirle al IRS que no está de acuerdo.
    • Debe proporcionar copias de cualquier documento que pueda ayudar a corregir el error.
    • Puede llamar al número que figura en la carta o factura para obtener ayuda.
    • Puede esperar que la agencia haga los ajustes necesarios a su cuenta y envíe una corrección si el IRS está de acuerdo con la posición del contribuyente.
       
  • Esto es lo que sucederá si el IRS no está de acuerdo con la posición del contribuyente:
    • La agencia emitirá un aviso proponiendo un ajuste de impuestos. Esta es una carta que viene en el correo.
    • Este aviso proporciona al contribuyente el derecho a impugnar el ajuste propuesto.
    • El contribuyente hace esta impugnación mediante la presentación de una petición en el Tribunal de Impuestos del los Estados Unidos. El contribuyente generalmente debe presentar la petición dentro de los 90 días a partir de la fecha del aviso, o 150 días si se dirige fuera de los Estados Unidos.
       
  • Los contribuyentes pueden presentar documentación y presentar objeciones durante una auditoría. Si el IRS no está de acuerdo con la posición del contribuyente, la agencia emite un aviso explicando por qué está aumentando el impuesto. Antes de pagar el impuesto, el contribuyente tiene derecho a presentar una petición ante el Tribunal de Impuestos del los Estados Unidos e impugnar la decisión de la agencia.
     
  • En algunas circunstancias, el IRS debe proveer al contribuyente la oportunidad de una audiencia ante una Oficina de Apelaciones independiente. La agencia debe hacer esto:
    • Antes de tomar medidas de cumplimiento para cobrar una deuda tributaria. Estas acciones incluyen el embargo de la cuenta bancaria del contribuyente. Inmediatamente después de presentar un aviso de gravamen por impuesto federal en el lugar de presentación estatal correspondiente. Si el contribuyente no está de acuerdo con la decisión de la Oficina de Apelaciones, puede presentar una petición ante el Tribunal de Impuestos del los Estados Unidos.

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  

Here’s how taxpayers can resolve common after-tax-day issues

Posted by Admin Posted on May 04 2022

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This year’s deadline to file and pay federal income taxes has passed for most people. If a taxpayer is due a refund, there is no penalty for filing late. However, those who owe and missed the deadline without requesting an extension should file quickly to limit penalties and interest.

Here are some tips for taxpayers handling some of the most common after-tax-day issues.

Check refund status
Taxpayers can check on their refund using the Where's My Refund? tool. It is available on IRS.gov and the IRS2Go app. To use this tool, taxpayers need their Social Security number or ITIN, tax filing status and the exact amount of the refund claimed on their tax return. The tool updates once daily, so there's no need to check more often. Taxpayers without access to a computer can call 800-829-1954.

Check withholding
All taxpayers are encouraged to check their withholding using the Tax Withholding Estimator on IRS.gov. This will help them make sure their employers are withholding the right amount of tax from their paychecks. Doing this now will help avoid an unexpected amount due and possibly a penalty when they prepare and file their taxes next year.

Taxpayers can use the results from the Estimator to help complete a new Form W-4 and adjust their income tax withholding with their employer. Taxpayers who receive pension income can use the results to complete a Form W-4P and submit to their payer.

Review payment options
Taxpayers who owe taxes can review all payment options online. These include:

Carefully consider if they need to amend a tax return
After filing their tax return, taxpayers may find they made an error or forgot to enter something on it. The IRS strongly recommends taxpayers use the Interactive Tax Assistant, Should I File an Amended Return? to help determine if they should correct an error or make other changes to the tax return they already filed.

Common errors taxpayers should fix are those made about filing status, income, deductions, and credits. Taxpayers usually do not need to file an amended return to fix a math error or if they forgot to attach a form or schedule. Normally, the IRS will correct the math error and notify the taxpayer by mail. Similarly, the agency will send a letter requesting any missing forms or schedules.

Taxpayers expecting a refund should not file an amended return before their original return has been processed

The IRS issues most refunds in fewer than 21 days for taxpayers who filed electronically and chose direct deposit. However, some returns have errors or need more review and may take longer to process.

Things that can delay a refund:

The IRS will contact taxpayers by mail if it needs more information to process their 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

Contribuyentes con deuda tributaria que no cumplieron con plazo del 18 de abril deben presentar ahora para reducir multas e intereses; no es muy tarde para reclamar Crédito tributario por hijos

Posted by Admin Posted on May 04 2022

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WASHINGTON — El Servicio de Impuestos Internos, IRS, anima a los contribuyentes que no cumplieron con la fecha límite del lunes, 18 de abril para presentar su declaración de impuestos, a que presenten lo más pronto posible. Aunque los contribuyentes que esperan un reembolso no reciben multas por presentar después de la fecha límite, aquellos que deben impuestos y no cumplen con la fecha límite sin pedir una prórroga deben presentar rápidamente para reducir las multas e intereses.

Las familias que no deben impuestos al IRS aún pueden presentar su declaración de impuestos de 2021 y reclamar el Crédito tributario por hijos para el año tributario 2021 en cualquier momento hasta el 15 de abril de 2025, sin ninguna multa. Este año también marca la primera vez en la historia que muchas familias con niños en Puerto Rico serán elegibles para reclamar el Crédito tributario por hijos, que se ha ampliado para proporcionar hasta $3,600 por niño.

Algunos contribuyentes califican automáticamente para obtener tiempo adicional para presentar y pagar sus impuestos sin multas e intereses, e incluyen:

Presente sin multas para recibir un reembolso de impuestos

Algunas personas eligen no presentar una declaración de impuestos porque no ganaron lo suficiente para tener que presentar. Pero pueden pasar la oportunidad de recibir un reembolso de impuestos. La única manera de recibir un reembolso es al presentar una declaración de impuestos. No hay multas por presentar después de la fecha límite si se le debe un reembolso. Se anima a contribuyentes a que usen opciones para presentar electrónicamente, que incluyen Free File del IRS, disponible en IRS.gov hasta el 17 de octubre para preparar y presentar declaraciones electrónicamente.

Aunque la mayoría de los créditos tributarios pueden usarse para reducir la cantidad de impuestos adeudados, existen varios créditos que permiten a los contribuyentes recibir dinero después de pagar lo que deben. Ejemplos más comunes de estos créditos reembolsables son el Crédito tributario por ingreso del trabajoCrédito por gastos de cuidado de niños y dependientes (en inglés) y el Crédito tributario por hijos (en inglés). Aquellos que usualmente no presentan una declaración y no fueron elegibles para la tercera ronda de Pagos de impacto económico o que recibieron menos de la cantidad total pueden ser elegibles para reclamar el Crédito de recuperación de reembolso de 2021 al presentar su declaración de impuestos de 2021. Muchas veces los contribuyentes no presentan una declaración de impuestos para reclamar estos u otros créditos para los que pueden ser elegibles.

Generalmente, el IRS emite nueve de cada 10 reembolsos en menos de 21 días a contribuyentes que presentan electrónicamente y escogen depósito directo. Sin embargo, es posible que una declaración de impuestos requiera una revisión adicional o se demore. El IRS procesa declaraciones de impuestos de papel en el orden en el que se reciben.

Contribuyentes pueden verificar el estado de su reembolso a través de la herramienta ¿Dónde está mi reembolso? en IRS.gov, IRS2Go o al llamar a la línea automática de reembolsos al 800-829-1954. Contribuyentes necesitan el número de Seguro Social principal en la declaración de impuestos, el estado civil tributario y el monto de reembolso esperado. La herramienta se actualiza una vez al día, generalmente durante la noche, así que no hay necesidad de verificar con más frecuencia.

Presente para reducir multas e intereses

Contribuyentes deben presentar su declaración de impuestos, pedir una prórroga y pagar cualquier deuda lo más pronto posible para reducir multas e intereses. Una prórroga para presentar no es una prórroga para pagar deudas. Una prórroga le otorga seis meses adicionales con una nueva fecha límite del 17 de octubre. Multas e intereses aplican para impuestos adeudados después del 18 de abril y se cobra interés por impuestos y multas hasta que el monto se pague en su totalidad.

Presentar y pagar lo más que se pueda es clave ya que la multa por no presentar una declaración y la multa por pago tardío se suman rápidamente.

Aunque un contribuyente no pueda pagar de inmediato los impuestos adeudados, todavía debe presentar una declaración de impuestos lo antes posible para reducir posibles multas. El IRS tiene más información para los contribuyentes que adeudan al IRS, pero no pueden pagar.

Por lo general, la multa por no presentar una declaración es del 5 por ciento del impuesto adeudado por cada mes o parte de un mes en que una declaración de impuestos llega tarde. Pero si se presenta una declaración más de 60 días después de la fecha límite, la multa mínima es de $435 o 100 por ciento del impuesto no pagado, lo que sea menor.

La tasa básica de multa por incumplimiento de pago es generalmente del 0.5 por ciento del impuesto no pagado adeudado por cada mes o parte de un mes hasta que los impuestos se paguen en su totalidad o hasta que alcance el 25 por ciento. Para más información, vea la página de multas en IRS.gov.

Para obtener más información, consulte la página de reducción de multas por primera vez en IRS.gov.

Pague impuestos adeudados electrónicamente en IRS.gov/pagos

Aquellos que deben impuestos pueden pagar rápido y seguramente a través de su Cuenta en líneaPago Directo del IRS, con tarjeta de débito, crédito o billetera digital, o solicitando un plan de pago en línea (que incluye un acuerdo de pago a plazos). Contribuyentes que pagan electrónicamente reciben confirmación inmediata cuando envían su pago. Con Pago Directo y el Sistema Electrónico de Pago de Impuestos Federales (EFTPS), contribuyentes pueden optar por recibir notificaciones por correo electrónico sobre sus pagos.

Seleccionar un profesional de impuestos

El IRS ofrece consejos para ayudar a los contribuyentes a elegir un preparador de declaraciones de impuestos.

El Directorio de preparadores de impuestos federales con credenciales y calificaciones selectas (en inglés) puede ayudar a contribuyentes a encontrar preparadores de declaraciones de impuestos que poseen una credencial profesional reconocida por el IRS o que han completado los requisitos para el Programa anual de temporada de presentación del IRS.

Carta de Derechos del Contribuyente

Contribuyentes tienen derechos fundamentales bajo la ley que los protegen cuando interactúan con el IRS. La Carta de Derechos del Contribuyente presenta estos derechos en 10 categorías. La Publicación 1 del IRS, Derechos del Contribuyente, destaca estos derechos y la obligación de la agencia de protegerlos.

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 Tax Withholding Estimator helps taxpayers get their federal withholding right

Posted by Admin Posted on May 04 2022

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All taxpayers should review their federal withholding each year to make sure they're not having too little or too much tax withheld. Doing this now can help protect against facing an unexpected tax bill or penalty in 2023.The sooner taxpayers check their withholding, the easier it is to get the right amount of tax withheld.

Taxpayers whose employers withhold federal income tax from their paycheck can use the IRS Tax Withholding Estimator to help decide if they should make a change to their withholding. This online tool guides users through the process of checking their withholding to help determine the right amount to withhold for their personal situation. Taxpayers can check with their employer to update their withholding or submit a new Form W-4, Employee's Withholding Certificate.

Adjustments to withholding
Individuals should generally increase withholding if they hold more than one job at a time or have income from sources not subject to withholding. If they don't make any changes, they may owe additional tax and possibly penalties when filing their tax return.

Individuals should generally decrease their withholding if they qualify for income tax credits or deductions other than the basic standard deduction.

Either way, those who need to adjust their withholding must prepare a new Form W-4, Employee's Withholding Certificate. They need to submit the new Form W-4 to their employer as soon as possible since withholding occurs throughout the year.

Individuals who should check their withholding include those:

  • who experienced a marriage, divorce, birth or adoption of child, purchase of a new home or retirement
  • who are working two or more jobs at the same time or who only work for part of the year
  • who claim credits such as the child tax credit
  • with dependents age 17 or older
  • who itemized deductions on prior year returns
  • with other personal and financial changes

Tax Withholding Estimator benefits
The IRS Tax Withholding Estimator can help taxpayers:

  • determine if they should complete a new Form W-4.
  • know what information to put on a new Form W-4.
  • save time because the tool completes the form worksheets.

Taxpayers should prepare before using the Tax Withholding Estimator by having their most recent pay statements, information for other income sources and their most recent income tax return. The tool does not ask for sensitive information such as name, Social Security number, address, or bank account numbers.

Taxpayers shouldn't use the Tax Withholding Estimator if:

  • They have a pension but not a job. They should estimate their tax withholding with the new Form W-4P.
  • They have nonresident alien status. They should use Notice 1392, Supplement Form W-4 Instructions for Nonresident Aliens.
  • Their tax situation is complex. This includes alternative minimum tax, long-term capital gains or qualified dividends. See Publication 505, Tax Withholding and Estimated Tax.

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

Qué debe hacer si no cumplió con la fecha límite de abril para presentar y pagar impuestos

Posted by Admin Posted on May 04 2022

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La fecha límite del impuesto federal sobre los ingresos ya pasó para la mayoría de los contribuyentes individuales. Sin embargo, algunos no han presentado sus declaraciones de impuestos de 2021 ni han pagado los impuestos adeudados.

Algunas personas pueden optar por no presentar una declaración de impuestos porque no ganaron suficiente dinero para que se les exigiera presentar (en inglés). En general, no recibirán una multa si se les debe un reembolso. Sin embargo, pueden perder la oportunidad de recibir un reembolso.

Por otro lado, los impuestos adeudados y no pagados antes del 18 de abril de 2022 están sujetos a multas e intereses. Los contribuyentes en Maine y Massachusetts tenían hasta el 19 de abril para presentar y pagar debido al feriado del Día de los Patriotas en esos estados.

La persona que no haya presentado y adeuda impuestos debe presentar una declaración tan pronto como pueda y pagar todo lo que pueda para reducir las multas e intereses. Las opciones de presentación electrónica, incluido Free File del IRS, aún están disponibles en IRS.gov hasta el 17 de octubre de 2022.

La comunidad militar también puede presentar sus impuestos a través de MilTax (en inglés), un recurso tributario gratuito que se ofrece a través del Departamento de la Defensa. Los contribuyentes elegibles (en inglés) pueden usar MilTax para presentar electrónicamente una declaración de impuestos federales y hasta tres declaraciones estatales de forma gratuita.

Los contribuyentes deben revisar sus opciones de pago. El IRS brinda información para los contribuyentes que no pueden pagar los impuestos que adeudan.

Algunos contribuyentes pueden tener tiempo adicional para presentar sus declaraciones de impuestos y pagar los impuestos adeudados. Esto incluye algunas víctimas de desastres (en inglés)contribuyentes que viven en el extranjero (en inglés), ciertos miembros del servicio militar y personal de apoyo elegible en zonas de combate (en inglés).

Es muy importante que presenten sus impuestos pronto porque las multas e intereses por presentación tardía y pago fuera del plazo de impuestos no pagados se acumulan rápidamente. Sin embargo, en algunos casos, un contribuyente que presenta la declaración después de la fecha límite puede calificar para un alivio de la multa. Para aquellos que se les cobre una multa, pueden comunicarse con el IRS llamando al número que figura en su aviso y explicar por qué no pudieron presentar y pagar a tiempo.

Los contribuyentes que tienen un historial de presentación y pago oportuno a menudo califican para el alivio de sanciones administrativas. Un contribuyente generalmente califica si ha presentado y pagado a tiempo durante los últimos tres años y cumple con otros requisitos. Para obtener más detalles, los contribuyentes deben visitar la página de reducción de multa incurrida por primera vez en IRS.gov.

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 open and carefully read any mail from the IRS

Posted by Admin Posted on May 04 2022

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The IRS mails letters or notices to taxpayers for a variety of reasons including:

• They have a balance due.
• They are due a larger or smaller refund.
• The agency has a question about their tax return.
• They need to verify identity.
• The agency needs additional information.
• The agency changed their tax return.

If a taxpayer receives an IRS letter or notice, they should:

• Not ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. The notice or letter will explain the reason for the contact and gives instructions on what to do.

 Not panic. The IRS and its authorized private collection agencies generally contact taxpayers by mail. Most of the time, all the taxpayer needs to do is read the letter carefully and take the appropriate action.

• Read the notice carefully and completely. If the IRS changed the tax return, the taxpayer should compare the information provided in the notice or letter with the information in their original return. In general, there is no need to contact the IRS if the taxpayer agrees with the notice.

• Respond timely. If the notice or letter requires a response by a specific date, taxpayers should reply in a timely manner to:

o avoid delays in processing their tax return
o minimize additional interest and penalty charges
o preserve their appeal rights if they don't agree

• Pay amount due. Taxpayers should pay as much as they can, even if they can't pay the full amount. People can pay online or apply online for a payment agreement, including installment agreements, or an Offer in Compromise. The agency offers several payment options.

• Keep a copy of the notice or letter. It's important that taxpayers keep a copy of all notices or letters with other tax records. They may need these documents later.

• Remember there is usually no need to call the IRS. If a taxpayer must contact the IRS by phone, they should use the number in the upper right-hand corner of the notice. The taxpayer should have a copy of their tax return and letter when calling. Typically, taxpayers only need to contact the agency if they don't agree with the information, if the IRS requests additional information, or if the taxpayer has a balance due. Taxpayers can also write to the agency at the address on the notice or letter. Taxpayer replies are worked on a first-come, first-served basis and will be processed based the date the IRS receives it.

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       

Así es como los contribuyentes pueden resolver problemas comunes después del día de impuestos

Posted by Admin Posted on May 04 2022

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La fecha límite de este año para presentar y pagar los impuestos federales sobre los ingresos ya pasó para la mayoría de las personas. Si a un contribuyente se le debe un reembolso, no hay multa por presentar la declaración tarde. Sin embargo, quienes deban y no hayan cumplido el plazo sin solicitar una prórroga deben presentarla rápidamente para limitar las multas y los intereses.

A continuación, se ofrecen algunos consejos para que los contribuyentes resuelvan algunos de los problemas más comunes después de la fecha límite para presentar la declaración de impuestos.

Verificar el estado del reembolso

Los contribuyentes pueden verificar el estado de su reembolso a través de la herramienta ¿Dónde está mi reembolso? Está disponible en IRS.gov y en la aplicación IRS2Go. Para usar esta herramienta, los contribuyentes necesitan su número de Seguro Social o ITIN, el estado de la declaración de impuestos y la cantidad exacta del reembolso reclamado en su declaración de impuestos. La herramienta se actualiza una vez al día, por lo que no es necesario verificar más a menudo. Los contribuyentes sin acceso a una computadora pueden llamar al 800-829-1954.

Verificar las retenciones

Se anima a todos los contribuyentes a que verifiquen sus retenciones a través del Estimador de Retención de Impuestos en IRS.gov. Esto les ayudará a asegurarse de que sus empleadores les retienen la cantidad correcta de impuestos de sus cheques de pago. Hacer esto ahora ayudará a evitar una cantidad inesperada a pagar y posiblemente una multa cuando preparen y presenten sus impuestos el próximo año.

Los contribuyentes pueden usar los resultados del Estimador para ayudar a completar un nuevo Formulario W-4 y ajustar su retención de impuestos con su empleador. Los contribuyentes que reciben ingresos por pensiones pueden usar los resultados para completar un Formulario W-4P y presentarlo a su pagador.

Revisar las opciones de pago

Los contribuyentes que deben impuestos pueden revisar todas las opciones de pago en línea que incluyen:

Considerar cuidadosamente si necesitan enmendar una declaración de impuestos

Después de presentar su declaración de impuestos, los contribuyentes pueden descubrir que cometieron un error u olvidaron ingresar alguna información. El IRS les recomienda encarecidamente a los contribuyentes que usen el Asistente Interactivo de Impuestos, ¿Debo presentar una declaración enmendada? (en inglés) para ayudar a determinar si deben corregir un error o hacer otros cambios en la declaración de impuestos que ya presentaron.

Los errores más comunes que los contribuyentes deben corregir son el estado civil, los ingresos, las deducciones y los créditos. Por lo general, los contribuyentes no necesitan presentar una declaración enmendada para corregir un error matemático o si se olvidaron de adjuntar un formulario o un anexo. Normalmente, el IRS corregirá el error matemático y notificará al contribuyente por correo. Asimismo, la agencia enviará una carta solicitando los formularios o anexos que falten.

Los contribuyentes que esperan un reembolso no deben presentar una declaración enmendada antes de que su declaración original haya sido procesada

El IRS emite la mayoría de los reembolsos en menos de 21 días para los contribuyentes que presentaron la declaración electrónicamente y eligieron el depósito directo. Sin embargo, algunas declaraciones tienen errores o necesitan más revisión y pueden tardar más tiempo en procesarse.

Cosas que pueden retrasar un reembolso:

El IRS se pondrá en contacto con los contribuyentes por correo si necesita más información para procesar su 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   

Contribuyentes deben abrir y leer carta o aviso del IRS cuidadosamente

Posted by Admin Posted on May 04 2022

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El IRS envía cartas o avisos a los contribuyentes por diferentes razones que incluyen:

  • Tienen un saldo adeudado.
  • Se les debe un reembolso mayor o menor.
  • La agencia tiene una pregunta acerca de su declaración de impuestos.
  • Necesitan verificar la identidad.
  • La agencia necesita información adicional.
  • La agencia cambió su declaración de impuestos.

Lo que los contribuyentes deben hacer si reciben una carta o aviso del IRS:

  • No la ignore. La mayoría de las cartas y avisos del IRS son acerca de las declaraciones de impuestos federales o cuentas tributarias. El aviso o carta explicará el motivo del contacto y dará instrucciones acerca de qué hacer.
     
  • No se asuste. El IRS y sus agencias privadas de recaudación autorizadas generalmente se comunican con los contribuyentes por correo. La mayoría de las veces todo lo que el contribuyente necesita hacer es leer la carta cuidadosamente y tomar la acción apropiada.
     
  • Lea el aviso con cuidado y por completo. Si el IRS cambió la declaración de impuestos, el contribuyente debe comparar la información proporcionada en el aviso o carta con la información en su declaración original. En general, no es necesario comunicarse con el IRS si el contribuyente está de acuerdo con el aviso.
     
  • Tome medidas oportunas. Si el aviso o carta requiere una respuesta antes de una fecha específica, los contribuyentes deben responder oportunamente para:
    • evitar retrasos en el procesamiento de su declaración de impuestos
    • minimizar los intereses adicionales y cargos de multas
    • preservar sus derechos de apelación si no están de acuerdo
       
  • Pague la cantidad adeudada. Los contribuyentes deben pagar todo lo que puedan, incluso si no pueden pagar el monto total. Las personas pueden pagar en línea o solicitar un acuerdo de pago en línea, incluidos los planes de pagos a plazos, o un ofrecimiento de transacción. La agencia ofrece varias opciones de pago.
     
  • Guarde una copia del aviso o carta. Es importante que los contribuyentes mantengan una copia de todos los avisos o cartas con otros archivos tributarios. Es posible que necesiten estos documentos más adelante.
     
  • Recuerde que generalmente no hay necesidad de llamar al IRS. Si un contribuyente tiene que comunicarse con el IRS por teléfono, debe usar el número que aparece en la esquina superior derecha del aviso. El contribuyente debe tener una copia de su declaración de impuestos y la carta al llamar. Por lo general, los contribuyentes solo necesitan comunicarse con la agencia si no están de acuerdo con la información, si el IRS solicita información adicional o si el contribuyente tiene un saldo adeudado. Los contribuyentes también pueden escribir a la agencia a la dirección en el aviso o carta. Las respuestas de los contribuyentes se procesan por orden de llegada y procesaremos su repuesta a partir de la fecha en que el IRS lo reciba. 

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

What someone should do if they missed the April deadline to file and pay taxes

Posted by Admin Posted on May 04 2022

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The federal income tax deadline has passed for most individual taxpayers. However, some haven't filed their 2021 tax returns or paid their tax due.

Some people may choose not to file a tax return because they didn't earn enough money to be required to file. Generally, they won't receive a penalty if they are owed a refund. However, they may miss out on receiving a refund.

On the other hand, tax owed and not paid by April 18, 2022, is subject to penalties and interest. Taxpayers in Maine and Massachusetts had until April 19 to file and pay due to the Patriots' Day holiday in those states.

Anyone who didn't file and owes tax should file a return as soon as they can and pay as much as they can to reduce penalties and interest. Electronic filing options, including IRS Free File, are still available on IRS.gov through October 17, 2022, to prepare and file returns electronically.

The military community can also file their taxes using MilTax, a free tax resource offered through the Department of Defense. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.

If taxpayers find that they owe taxes, they can review their available payment options. The IRS has information for taxpayers who can't pay taxes they owe.

Some taxpayers may have extra time to file their tax returns and pay any taxes due. This includes some disaster victims, taxpayers living overseas, certain military service members and eligible support personnel in combat zones.

Filing soon is very important because the late-filing and late-payment penalties and interest on unpaid taxes add up quickly. However, in some cases, a taxpayer filing after the deadline may qualify for penalty relief. For those charged a penalty, they may contact the IRS by calling the number on their notice and explain why they couldn't file and pay on time.

Taxpayers who have a history of filing and paying on time often qualify for administrative penalty relief. A taxpayer usually qualifies if they have filed and paid timely for the past three years and meet other requirements. For details, taxpayers should visit the first-time penalty abatement page on IRS.gov.

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

Source: IRS       

Estimador de Retención de Impuestos del IRS ayuda a contribuyentes a obtener retención federal correcta

Posted by Admin Posted on May 04 2022

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Todos los contribuyentes deben revisar su retención federal cada año para asegurarse de que no se les retengan muy pocos o demasiados impuestos. Hacer esto ahora puede ayudar a evitar una cuenta o multa tributaria inesperada en el 2023. Cuanto antes los contribuyentes verifiquen su retención, más fácil será obtener la cantidad de retención de impuestos correcta.

Los contribuyentes que tienen empleadores que les retienen el impuesto federal de su cheque de pago pueden usar el Estimador de Retención de Impuestos del IRS para ayudar a decidir si deben hacer un cambio en su retención. Esta herramienta en línea orienta a los usuarios a través del proceso de verificación de su retención para ayudar a determinar la cantidad correcta de retención para su situación personal. Los contribuyentes pueden consultar con su empleador para actualizar su retención o enviar un nuevo Formulario W-4 (SP), Certificado de retenciones del empleado.

Ajustes a la retención

Generalmente, las personas deben aumentar la retención si tienen más de un trabajo a la vez o si tienen ingresos de fuentes no sujetas a retención. Si no hacen ningún cambio, es probable que deban impuestos adicionales y, posiblemente multas al presentar su declaración de impuestos.

Por lo general, las personas deben reducir su retención si califican para créditos o deducciones de impuestos sobre los ingresos que no sea la deducción estándar básica.

De cualquier manera, aquellos que necesitan ajustar su retención deben preparar un nuevo Formulario W-4 y enviarlo a su empleador lo antes posible, ya que la retención se realiza durante todo el año.

Las personas que deben verificar su retención incluyen aquellas:

  • que experimentaron matrimonio, divorcio, nacimiento o adopción de un hijo, compra de una nueva casa o jubilación
  • que tienen dos o más trabajos al mismo tiempo o que solo trabajan una parte del año
  • que reclaman créditos como el Crédito tributario por hijos
  • que tienen dependientes de 17 años o más
  • que realizaron deducciones detalladas en las declaraciones de años anteriores
  • que tienen otros cambios personales y financieros

Beneficios del Estimador de Retención de Impuestos

El Estimador de Retención de Impuestos del IRS puede ayudar a los contribuyentes a:

  • determinar si deben completar un nuevo Formulario W-4.
  • saber qué información incluir en un nuevo Formulario W-4.
  • ahorrar tiempo ya que la herramienta completa las hojas de trabajo del formulario

Los contribuyentes deben prepararse antes de usar el Estimador de Retención de Impuestos al tener sus comprobantes de pago más recientes, información de otras fuentes de ingresos y su declaración de impuestos más reciente. La herramienta no solicita información confidencial como nombre, número de Seguro Social, dirección o números de cuenta bancaria.

Los contribuyentes no deben usar el Estimador de Retención de Impuestos si:

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  

TAX SAVING TECHNIQUE

Posted by Admin Posted on Apr 28 2022

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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

Revisiting Worker Classification Rules

Posted by Admin Posted on Apr 28 2022

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Over the last year, many companies have experienced workforce fluctuations and have engaged independent contractors to address staffing needs. In May, the U.S. Department of Labor (DOL) announced that it had withdrawn the previous administration’s independent contractor rule that had been scheduled to go into effect earlier this year. That rule generally would have made it easier to classify certain workers as independent contractors for the purposes of the Fair Labor Standards Act (FLSA), and thus make them ineligible for minimum wage and other FLSA protections.

While worker classification for DOL purposes isn’t necessarily the same for IRS purposes, now is a good time to revisit the federal tax implications of worker classification.

Tax obligations

The question of whether a worker is an independent contractor or an employee for federal income and employment tax purposes is a complex one. If a worker is an employee, the company must withhold federal income and payroll taxes, and pay the employer’s share of FICA taxes on the wages, plus FUTA tax. And there may be state tax obligations as well.

These obligations don’t apply if a worker is an independent contractor. In that case, the business simply sends the contractor a Form 1099-NEC for the year showing the amount paid (if the amount is $600 or more).

No uniform definition

The IRS and courts have generally ruled that individuals are employees if the organization they work for has the right to control and direct them in the jobs they’re performing. Otherwise, the individuals are generally independent contractors, though other factors are considered.

Some employers that have misclassified workers as independent contractors may get some relief from employment tax liabilities under Internal Revenue Code Section 530. In general, this protection applies only if an employer filed all federal returns consistent with its treatment of a worker as a contractor and treated all similarly situated workers as contractors.

The employer must also have a “reasonable basis” for not treating the worker as an employee. For example, a “reasonable basis” exists if a significant segment of the employer’s industry traditionally treats similar workers as contractors. (Note: Sec. 530 doesn't apply to certain types of technical services workers. And some categories of individuals are subject to special rules because of their occupations or identities.)

Asking for a determination

Under certain circumstances, you may want to ask the IRS (on Form SS-8) to rule on whether a worker is an independent contractor or employee. However, be aware that the IRS has a history of classifying workers as employees rather than independent contractors.

Consult a CPA before filing Form SS-8 because doing so may alert the IRS that your company has worker classification issues — and inadvertently trigger an employment tax audit. It may be better to ensure you are properly treating a worker as an independent contractor so that the relationship complies with the tax rules.

Latest developments

With growth in the “gig” economy and other changes to the ways Americans are working, the question of who is an independent contractor and who is an employee will likely continue to evolve. Stay tuned for the latest developments and contact us for any help you may need with worker classification.

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 Apr 28 2022

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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.                                   

 

WHAT LEVEL OF HOME INSURANCE SHOULD I BUY?

Posted by Admin Posted on Apr 21 2022

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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

MULTISTATE RESIDENT? WATCH OUT FOR DOUBLE TAXATION

Posted by Admin Posted on Apr 21 2022

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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 Apr 21 2022

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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

ARPA Provides More Than Just Direct Payments to Taxpayers

Posted by Admin Posted on Apr 11 2022

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On March 11, another round of COVID-19 relief legislation was signed into law. The American Rescue Plan Act (ARPA) includes funding for individuals, businesses, and state and local governments, but also some significant tax-related provisions.

ARPA extends and expands some tax provisions in the CARES Act and the Consolidated Appropriations Act (CAA) and also includes some new tax-related provisions.

A quick look

Here’s a quick look at some of the tax provisions that may affect you:

Individuals

Recovery rebates of up to $1,400 for singles and heads of households and $2,800 for married couples filing jointly — plus $1,400 per qualifying dependent (including adult dependents) — subject to adjusted gross income (AGI) phaseouts starting at $75,000 for singles, $112,500 for heads of households and $150,000 for joint filers and ending at $80,000, $120,000 and $160,000, respectively

Increased Child credit, including advance payments of part of the credit later this year

Expanded child and dependent care tax credit

Tax-free treatment of forgiven student loan debt

Exclusion from gross income of the first $10,200 in unemployment benefits received

Businesses and other employers

Extended and expanded tax credits for retaining employees, through Dec. 31, 2021

Extended and modified payroll tax credits for paid sick and family leave, through Sept. 30, 2021

Extended excess business loss limitation, through Dec. 31, 2026

Expansion of the Section 162(m) limits on the tax deduction public companies can take for executive compensation to cover the CEO, the CFO and the five next highest paid employees, beginning in 2027

How will you benefit?

This is just a brief overview of the tax-related provisions of ARPA. Additional rules and limits apply. Contact your tax advisor for more details on these provisions and how you might benefit.

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        

For the first time, maximum educator expense deduction rises to $300 in 2022; limit $250 for those filing 2021 tax returns

Posted by Admin Posted on Mar 30 2022

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WASHINGTON — The Internal Revenue Service today reminded teachers and other educators planning ahead for 2022 that they'll be able to deduct up to $300 of out-of-pocket classroom expenses when they file their federal income tax return next year.

This is the first time the annual limit has increased since the special educator expense deduction was enacted in 2002. For tax-years 2002 through 2021, the limit was $250 per year. This means for people currently filing their 2021 tax returns due in April, the deduction is limited to $250. The limit will rise in $50 increments in future years based on inflation adjustments.

For 2022, an eligible educator can deduct up to $300 of qualifying expenses. If they are married and file a joint return with another eligible educator, the limit rises to $600. But in this situation, not more than $300 for each spouse.

Who qualifies?

Educators can claim this deduction, even if they take the standard deduction. Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal or aide in a school for at least 900 hours during the school year. Both public- and private-school educators qualify.

What's deductible?

Educators can deduct the unreimbursed cost of:

  • Books, supplies and other materials used in the classroom.
  • Equipment, including computer equipment, software and services.
  • COVID-19 protective items to stop the spread of the disease in the classroom. This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the Centers for Disease Control and Prevention (CDC).
  • Professional development courses related to the curriculum they teach or the students they teach. For these expenses, it may be more beneficial to claim another educational tax benefit, especially the lifetime learning credit. For details, see Publication 970, Tax Benefits for Education, particularly Chapter 3.

Qualified expenses don't include expenses for home schooling or for nonathletic supplies for courses in health or physical education. As with all deductions and credits, the IRS reminds educators to keep good records, including receipts, cancelled checks and other documentation.

Reminder for 2021 tax returns being filed now: Deduction limit is $250

With the tax deadline just around the corner, the IRS reminds any educator still working on their 2021 return that they can claim any qualifying expenses on Schedule 1, Line 11. For 2021, the deduction limit is $250. If they are married and file a joint return with another eligible educator, the limit rises to $500. But in this situation, not more than $250 for each spouse.

Whether a return is self-prepared or prepared with the assistance of a tax professional or trained community volunteer, the IRS urges everyone to file electronically and choose direct deposit for any refund. For details, visit IRS.gov/efile.

In addition, the IRS urges anyone with tax due to choose the speed and convenience of paying electronically, such as with IRS Direct Pay, a free service available only on IRS.gov. For information about this and other payment options, visit IRS.gov/payments.

This year, the tax-filing deadline is:

  • Monday, April 18 for most taxpayers.
  • Tuesday, April 19 for residents of Maine and Massachusetts.
  • Wednesday, June 15 for most Americans who live abroad.

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

 

Taxpayers should file their tax return on time to avoid costly interest and penalty fees

Posted by Admin Posted on Mar 30 2022

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Taxpayers should file their tax return by the deadline even if they cannot pay their full tax bill. Taxpayers who owe tax and don't file on time, may be charged a failure-to-file penalty. This penalty is usually five percent of the tax owed for each month, or part of a month that the tax return is late, up to 25%.

If an individual taxpayer owes taxes, but can't pay in full by the April 18, 2022, deadline, they should:

File their tax return or request an extension of time to file by the April 18 deadline.

  • People who owe tax and do not file their return on time or request an extension may face a failure-to-file penalty for not filing on time.
  • Taxpayers should remember that an extension of time to file is not an extension of time to pay. An extension gives taxpayers until October 17, 2022, to file their 2021 tax return, but taxes owed are still due April 18, 2022.

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

Pay as much as possible by the April 18 due date.

Set up a payment plan as soon as possible.

Interest is based on the amount of tax owed and for each day it's not paid in full. Interest rates are determined every three months and can vary, based on type of tax; for example, individual or business-tax liabilities. More information is available on the Interest on Underpayments and Overpayments 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

Valuable tax benefits for members of the military

Posted by Admin Posted on Mar 30 2022

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Members of the military may qualify for tax benefits not available to civilians. For example, they don't have to pay taxes on some types of income. Special rules may lower the tax they owe or allow them more time to file and pay their federal taxes.

Here are some of these special tax benefits:

  • Combat pay exclusion: If someone serves in a combat zonepart or all of their pay is tax-free. This also applies to people working in an area outside a combat zone when the Department of Defense certifies that area is in direct support of military operations in a combat zone. There are limits to this exclusion for commissioned officers.
     
  • Other nontaxable benefits: Base allowance for housing, base allowance for subsistence and uniform allowances are among several government pay items excluded from gross income, which means they are not taxed.
     
  • Moving expenses: Some non-reimbursed moving expenses may be tax deductible. To deduct these expenses, the taxpayer must be a member of the Armed Forces on active duty and their move must be due to a military order or result of a permanent change of station.
     
  • Deadline extensions: Some members of the military – such as those who serve overseas – can postpone most tax deadlines. Those who qualify can get automatic extensions of time to file and pay their taxes. 
     
  • Earned income tax credit: Special rules allow military members who get nontaxable combat pay to choose to include it in their taxable income. One reason they might do this is to increase the amount of their earned income tax credit. People who qualify for this credit could owe less tax or even get a larger refund. Also, taxpayers can use their 2019 earned income to figure their 2021 earned income credit if their 2019 earned income is more than their 2021 earned income.
     
  • Joint return signatures: Both spouses must normally sign a joint income tax return. However, if military service prevents that from happening, one spouse may be able to sign for the other or get a power of attorney. Service members may want to consult with their installation's legal office to see if a power of attorney is right for them.
     
  • Reserve and National Guard travel: Members of a reserve component of the Armed Forces may be able to deduct their unreimbursed travel expenses on their return. To do so, they must travel more than 100 miles away from home in connection with their performance of services as a member of the reserves.
     
  • ROTC allowances: Some amounts paid to ROTC students in advanced training are not taxable. However, active-duty ROTC pay is taxable. This includes things like pay for summer advanced camp.

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

Get an automatic six more months to file; all taxpayers can use IRS Free File to request an extension

Posted by Admin Posted on Mar 30 2022

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WASHINGTON — The Internal Revenue Service reminds taxpayers that if they're unable to file their tax return by this year's April 18 deadline, there's an easy, online option to get more time to complete their return.

Taxpayers who need more time to complete their return can request an automatic six-month extension to file. An extension allows for extra time to gather, prepare and file paperwork with the IRS; however, taxpayers should be aware that:

  • An extension to file their return doesn't grant them an extension to pay their taxes,
  • They should estimate and pay any owed taxes by their regular deadline to help avoid possible penalties and
  • They must file their extension no later than the regular due date of their return.

E-file an extension form for free

Individual tax filers, regardless of income, can use IRS Free File to electronically request an automatic tax-filing extension. The fastest and easiest way to get an extension is through IRS Free File on IRS.gov. Taxpayers can electronically request an extension on Form 4868 PDF. Filing this form gives taxpayers until October 17 to file their tax return. To get the extension, taxpayers must estimate their tax liability on this form and should timely pay any amount due.

Get an extension when making a payment

Other fast, free and easy ways to get an extension include using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card or digital wallet. There's no need to file a separate Form 4868 extension request when making an electronic payment and indicating it's for an extension. The IRS will automatically count it as an extension.

Important reminders on extensions

The IRS reminds taxpayers that a request for an extension provides extra time to file a tax return, but not extra time to pay any taxes owed. Payments are still due by the original deadline. Taxpayers should file even if they can't pay the full amount. By filing either a return on time or requesting an extension by the April 18 filing deadline, they'll avoid the late-filing penalty, which can be 10 times as costly as the penalty for not paying.

Taxpayers who pay as much as they can by the due date, reduce the overall amount subject to penalty and interest charges. The interest rate is currently four percent per year, compounded daily. The late-filing penalty is generally five percent per month and the late-payment penalty is normally 0.5 percent per month.

The IRS will work with taxpayers who cannot pay the full amount of tax they owe. Other options to pay, such as getting a loan or paying by credit card, may help resolve a tax debt. Most people can set up a payment plan on IRS.gov to pay off their balance over time.

Other automatic extensions

Certain eligible taxpayers get more time to file without having to ask for extensions. These include:

  • U.S. citizens and resident aliens who live and work outside of the United States and Puerto Rico get an automatic 2-month extension to file their tax returns. They have until June 15 to file. However, tax payments are still due April 18 or interest will be charged.
  • Members of the military on duty outside the United States and Puerto Rico also receive an automatic two-month extension to file. Those serving in combat zones have up to 180 days after they leave the combat zone to file returns and pay any taxes due. Details are available in Publication 3, Armed Forces' Tax Guide PDF.
  • When the President makes a disaster area declaration, the IRS can postpone certain taxpayer deadlines for residents and businesses in the affected area. People can find information on the most recent tax relief for disaster situations on the IRS website.

The deadline to submit 2021 tax returns or an extension to file and pay tax owed this year falls on April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots' Day holiday in those states.

 

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 CAN I DO TO ENSURE THAT I AM INSURED ADEQUATELY?

Posted by Admin Posted on Mar 22 2022

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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  

Deductible taxes

Posted by Admin Posted on Mar 22 2022

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

1. State and local income taxes, or general sales taxes;

2. Real estate taxes; and

3. Personal property taxes

The Tax Cuts and Jobs Act (TCJA) limit the cumulative amount of the above taxes an individual can deduct in a calendar year to $10,000.

You can deduct estimated taxes paid to state or local governments and prior year's state or local income tax as long as they were paid during the tax year. If deducting sales taxes instead, you may deduct actual expenses or use optional tables provided by the IRS to determine your deduction amount, relieving you of the need to save receipts. Sales taxes paid on motor vehicles and boats may be added to the table amount, but only up to the amount paid at the general sales tax rate. Taxpayers will check a box on Schedule A, Itemized Deductions, to indicate whether their deduction is for income or sales tax.

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

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

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

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: Reuters

Car donation to charity organizations

Posted by Admin Posted on Mar 22 2022

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The IRS reminds taxpayers that specific rules apply for taking a tax deduction for donating cars to charities. If the claimed value of the donated motor vehicle, boat or plane exceeds $500, you can deduct the smaller of the vehicle's FMV on the date of the contribution or the gross proceeds received from the sale of the vehicle.

People who want to take a deduction for the donation of their vehicle on their tax return should take quite a few steps, but here is the most obvious:

Check that the Organization is Qualified.

Taxpayers must make certain that they contribute their car to an eligible organization; otherwise, their donation will not be tax deductible. Taxpayers can search Tax Exempt Organization Search to check that an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified.  Please contact us if you're considering a car donation for your tax return!

If you have any questions regarding accounting, domestic taxation, 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: Reuters          

Taxpayers must report tip money as income on their tax return

Posted by Admin Posted on Mar 22 2022

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For those working in the service industry, tips are often a vital part of their income. Like most forms of income, tips are taxable. Therefore, it's also vital that people understand the tax obligations that come with tip income. Here's some information to help taxpayers report tip income so they don't receive a surprise tax bill.

Taxpayers must include all tips they receive in their gross income. This includes:

Tips directly from customers.

Tips added using credit, debit or gift cards.

Tips from a tip-splitting arrangement with other employees.

The value of non-cash tips, such as tickets, passes or other items of value is also income and subject to tax.

Three things can help taxpayers to correctly report their tip income.

Keep a daily tip record.

Report tips to their employer.

Report all tips on their income tax return.

Use the Interactive Tax Assistant

This online tool provides answers to tax law questions. Taxpayers can use the Interactive Tax Assistant on IRS.gov to find out if their tip income is taxable.

What employers need to know

If an employee receives $20 or more in any month, they must report their tips for that month to their employer by the 10th day of the next month. The employer must withhold federal income, Social Security and Medicare taxes on the reported tips.

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       

Selling your home

Posted by Admin Posted on Mar 16 2022

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If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years.

To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale. You also must not have excluded gain on another home sold during the two years before the current sale.

If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualify for the exclusion. But both of you would have to meet the use test to claim the $500,000 maximum amount.

To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before the sale. The two years may consist of 24 full months or 730 days. Short absences, such as for a summer vacation, count as periods of use. Longer breaks, such as a one-year sabbatical, do not.

If you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home due to health, a change in place of employment, or certain unforeseen circumstances. Unforeseen circumstances include, for example, divorce or legal separation, natural or man-made disaster resulting in a casualty to your home, or an involuntary conversion of your home.  Send us a message for more!

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

Source: Reuters

How to keep your personal and tax information safe

Posted by Admin Posted on Mar 16 2022

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Here are some tips to follow to keep you and your private information safe in various situations.

Staying safe on social media

Don’t post or send private or tax related information anywhere on these types of platforms. Even if you have your social media accounts set to a limited audience under privacy settings, if you are using an open wi-fi network, like at the local coffee shop or in a hotel room, your information can be captured as it goes over that connection.

Don’t open or respond to direct messages coming from social media platforms. For example, anybody that can see your public profile on Facebook, can generate a direct message to you, even when they are not listed in your ‘friends’ categories. Opening these messages can often then let this sender begin a conversation with you. Fraudsters can use this new access to try to obtain information from you, which they can use to steal your identity.

See our TAS Tax Tips: Keep safe on social media at tax time – Don’t post or message tax info article for more information.

Staying safe while using email, phone or on a website

Don’t click links or open attachments in unsolicited emails or text messages about your tax return or those claiming to be from the IRS. These messages are fraudulent and could contain malware that could compromise your personal information.

Don’t provide personal information or send a payment to anyone claiming to be a government official before verifying their identity.

It’s important to remember that the IRS will never:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, iTunes gift card, or wire transfer.

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 saying they can have the taxpayer arrested for not paying.

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

Don’t visit or click on website addresses that doesn’t end in ‘.gov’. There are lots of times where websites are built to look like official government sites but are not the real thing. So, be wary if the link doesn’t use “https” at the beginning (which means it is secure) or ‘.gov’ at the end (.gov is the extension all official offices use.).

See Here’s how taxpayers can avoid the hooks of phishing scams for more information.

Staying safe by choosing a credible tax professional

Don’t use a ghost preparer. A ghost preparer won’t sign a tax return they prepare for you. Always check credentials before working with any tax return preparer. (See our Tax Tip Choosing the right tax return preparer for you for more on this topic.)

Don’t sign a blank tax return, even if it is a family member helping you. Wait to sign until after you have reviewed the completed information. You are responsible for what appears on tax returns filed with the IRS. Signing a blank tax return allows someone else the opportunity to potentially report incorrect information, which you may be held liable for later.

Don’t fall for false claims by preparers. If an individual or company offers to ‘save you thousands on taxes’ or ‘get you the biggest refund you’ve ever had’ be very cautious. Generally, if it sounds too good to be true, it probably is (video). Everyone pays a set amount of taxes, per the tax laws, and legally must follow those rules.

Visit the Abusive Tax Schemes and Abusive Tax Return Preparers – IRS Lead Development Center for more information on this topic.

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

Plug-In Electric Vehicles (PEVs)

Posted by Admin Posted on Mar 16 2022

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For vehicles acquired after December 31, 2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.

The credit is available only to the original purchaser of a new qualifying vehicle, and the vehicle must be placed in service in the same year the credit is being claimed on the return. If the qualifying vehicle is leased the credit is available only to the leasing company. Also, the vehicle must be used primarily in the United States.

Additional conditions regarding qualified manufacturers and phase out rules may also apply in determining credit eligibility. To find out whether your car qualifies for the Qualified Plug-in Electric Drive Motor Vehicle tax credit, you can go to the IRS.gov website and search for "plug-in vehicles" or contact us for more information.

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

Source: Reuters

Charitable contributions

Posted by Admin Posted on Mar 16 2022

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When preparing to file your federal tax return, don't forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction for your corporation (if you are a member of a flow-through business entity) or your personal taxes if you itemize deductions on IRS Form 1040, Schedule A.

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

You cannot deduct contributions made to specific individuals, political organizations and candidates, the value of your time or services and the cost of raffles, bingo, or other games of chance.

To be deductible, contributions must be made to qualified organizations.

Organizations can tell you if they are qualified and if donations to them are deductible.Taxpayers can also search the Tax Exempt Organization Search (TEOS) online tool, to check that an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified. Alternatively, contact us for more!

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

Source: Reuters          

Amended Tax Returns

Posted by Admin Posted on Mar 10 2022

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When preparing to file your federal tax return, don't forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction for your corporation (if you are a member of a flow-through business entity) or your personal taxes if you itemize deductions on IRS Form 1040, Schedule A.

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

You cannot deduct contributions made to specific individuals, political organizations and candidates, the value of your time or services and the cost of raffles, bingo, or other games of chance.

To be deductible, contributions must be made to qualified organizations.

Organizations can tell you if they are qualified and if donations to them are deductible.Taxpayers can also search the Tax Exempt Organization Search (TEOS) online tool, to check that an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified. Alternatively, contact us for more!

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

Source: Reuters 

Earned Income Tax Credit for Certain Workers

Posted by Admin Posted on Mar 10 2022

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Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

The IRS estimates that 25 percent of people who qualify don't claim the credit and at the same time, there are millions of Americans who have claimed the credit in error, many of whom simply don't understand the criteria.

EITC is based on the amount of your earned income and the number of qualifying children in your household. If you have children, they must meet the relationship, age and residency requirements. And, you must file a tax return to claim the credit.

Its easier than ever to find out if you qualify for EITC using the online tool, EITC Assistant. Please contact us for more information!

Are you eligible for any of these tax credits?

Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns, advises the IRS. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Below are some of the credits taxpayers could be eligible to claim:

Earned Income Tax Credit This is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the EITC. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. For more information, see IRS Publication 596, Earned Income Credit (EIC).

Child Tax Credit This credit is for people who have a qualifying child under age 17. The maximum amount of the credit is $1,400 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see Pub. 972, Child Tax Credit.

Child and Dependent Care Credit This is for expenses paid for the care of children under age 13, or for a disabled spouse or dependent, to enable the taxpayer to work. There is a limit to the amount of qualifying expenses. The credit is a percentage of those qualifying expenses. For more information, see Pub. 503, Child and Dependent Care Expenses.

Adoption Credit Adoptive parents can take a tax credit of up to $13,570 for 2017 and $13,810 for 2018 for qualifying expenses paid to adopt an eligible child. For more information, see Form 8839, Qualified Adoption Expenses.

Credit for the Elderly and Disabled This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are U.S. citizens or residents. There are income limitations. For more information, see Pub.524, Credit for the Elderly or the Disabled.

Education Credits There are two credits available, the American Opportunity Credit (formerly called the Hope Credit) and the Lifetime Learning Credit, for people who pay higher education costs. The American Opportunity Credit is for the payment of the first four years of tuition and related expenses for an eligible student for whom the taxpayer claims as a dependent on the tax return. The Lifetime Learning Credit is available for all post-secondary education for an unlimited number of years. A taxpayer cannot claim both credits for the same student in one year. For more information, see Publication 970, Tax Benefits for Education.

Retirement Savings Contribution Credit Eligible individuals may be able to claim a credit for a percentage of their qualified retirement savings contributions, such as contributions SIMPLE plan. To be eligible, you must be at least age 18 at the end of the year and not a full-time student or an individual for whom someone else claims a personal exemption. Also, your adjusted gross income (AGI) must be below a certain amount. For more information, see chapter three in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

There are other credits available to eligible taxpayers.  Please contact us so we may analyze your specific situation, and offer advice.

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: Reuters

Foreign Income

Posted by Admin Posted on Mar 10 2022

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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.

An important point to remember is that citizens living outside the U.S. may be able to exclude up to $102,100 for 2017 and $103,900 for 2018, of their foreign source income if they meet certain requirements. However, the exclusion does not apply to payments made by the U.S. government to its civilian or military employees living outside the U.S. Please contact us if you feel you may have earned foreign income to learn more!

If you have any questions regarding 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: Reuters

Credit for the elderly or disabled

Posted by Admin Posted on Mar 10 2022

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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: Reuters

Steps for tracking your 2021 federal income tax refund

Posted by Admin Posted on Mar 02 2022

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If you filed a 2021 federal income tax return and are expecting a refund from the IRS, you may want to find out the status of the refund or at least get an idea of when you might receive it. You can start checking on the status of your refund within 24 hours after the IRS has received your electronically filed return, or 4 weeks after you mailed a paper return. Currently you might be waiting a bit longer to receive a refund due to the effects of COVID-19, new tax law changes, and possible errors made on the tax return.

Follow these steps for tracking your 2021 federal income tax refund:

Gather the following information and have it handy:

Social security number (SSN) or Individual Taxpayer Identification Number (ITIN)

Your filing status

Your exact refund amount

You will need this information to use the first two refund status tools below.

Use one of these IRS refund status tools to check on the status of your return and refund:

Where’s My Refund?

IRS2Go mobile app

Also see “Tax Season Refund Frequently Asked Questions” for what these tools can tell you and what they can’t.

Or you can view your online account.

However, when accessing your online account, you will need to verify your identity through an online security process. If you are signing in for the first time, see our TAS Tax Tip: Verifying your identity to access certain IRS systems article for what information you will need to provide and how to finish the security process. You should also review the frequently asked questions listed on the sign-in page and these Online Account Frequently Asked Questions for more information.

Do not call the IRS unless instructed to by the application to call.

These online tools are updated every 24 hours and truly are the best way to get your refund status.

Be aware of processing delays

Again, this year some tax returns with errors or items on the return that need an IRS correction due to a tax law change will take longer than the normal timeframes to process, so expect delays. It may take the IRS more than the normal 21 days (for electronically filed returns) to issue refunds for some 2021 tax returns that require review, including but not limited to, ones that claim the Recovery Rebate Credit, the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Note: For all tax returns that claim EITC and/or CTC, those refunds must be held, by law, until after mid-February and cannot be released before then.

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 

SHOULD I KEEP COLLISION COVERAGE ON MY OLD CAR?

Posted by Admin Posted on Mar 02 2022

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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

Refinancing your home

Posted by Admin Posted on Mar 02 2022

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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: Reuters

Amended Tax Returns

Posted by Admin Posted on Feb 21 2022

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

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

Your filing status

Your total income

Your deductions or credits

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

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

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

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

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

If you have any questions regarding 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: Reuters           

Check Withholding to Avoid a Tax Surprise

Posted by Admin Posted on Feb 21 2022

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Whether or not you owed taxes or received a refund last year, check your tax withholding to avoid not having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. This is even more important due to the recent changes to the tax law for 2018 and beyond. On the other end, if you had a large refund you lost out on having the money in your pocket throughout the year. Changing jobs, getting married or divorced, buying a home or having children can all result in changes in your tax calculations.

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

If you have any questions regarding 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: Reuters  

Tax Incentives for Higher Education

Posted by Admin Posted on Feb 21 2022

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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.

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 your student loan was canceled, you may not have to include any amount in income.

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

Source: Reuters

5 Tips For Early Tax Preparation

Posted by Admin Posted on Feb 21 2022

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

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

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

If you have any questions regarding 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: Reuters 

Filing a Tax Extension

Posted by Admin Posted on Feb 21 2022

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If you can't meet the 2022 April 18 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 18 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, 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: Reuters           

WITH A DIVORCE, WHAT ARE THE TAX IMPLICATIONS?

Posted by Admin Posted on Feb 15 2022

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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

INNOCENT SPOUSE RULES: PROTECTION UNDER SOME CIRCUMSTANCES

Posted by Admin Posted on Feb 15 2022

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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      

Beware of “wash sales” when selling securities

Posted by Admin Posted on Feb 15 2022

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If you’re planning to sell capital assets at a loss to offset gains that have been realized during the year, it’s important to beware of the “wash sale” rule. Under this tax rule, if you sell stock or securities for a loss and buy substantially identical stock shares or securities back within the 30-day period before or after the sale date, the loss can’t be claimed for tax purposes.

The rule

The wash sale rule is designed to prevent taxpayers from benefiting from a loss without parting with ownership in any significant way. Note that the rule applies to a 30-day period before or after the sale date to prevent “buying the stock back” before it’s even sold. (If you participate in any dividend reinvestment plans, the wash sale rule may be inadvertently triggered when dividends are reinvested under the plan, if you’ve separately sold some of the same stock at a loss within the 30-day period.)

Although the loss can’t be claimed on a wash sale, the disallowed amount is added to the cost of the new stock. So, the disallowed amount can be claimed when the new stock is finally disposed of (other than in a wash sale).

An example

Assume you buy 500 shares of XYZ Inc. for $10,000 and sell them on November 5 for $3,000. On November 30, you buy 500 shares of XYZ again for $3,200. Since the shares were “bought back” within 30 days of the sale, the wash sale rule applies. Therefore, you can’t claim a $7,000 loss. Your basis in the new 500 shares is $10,200: the actual cost plus the $7,000 disallowed loss.

If only a portion of the stock sold is bought back, only that portion of the loss is disallowed. So, in the above example, if you’d only bought back 300 of the 500 shares (60%), you would be able to claim 40% of the loss on the sale ($2,800). The remaining $4,200 loss that is disallowed under the wash sale rule would be added to your cost of the 300 shares.

No surprises

The wash sale rule can come as a nasty surprise at tax time. 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  tatements, 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 Feb 15 2022

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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

Tracking down donation substantiation

Posted by Admin Posted on Feb 02 2022

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If you’re like many Americans, letters from your favorite charities may be appearing in your mailbox acknowledging your 2021 donations. But what happens if you haven’t received such a letter? Can you still claim a deduction for the gift on your 2021 income tax return? It depends.

What’s required

To support a charitable deduction, you need to comply with IRS substantiation requirements. This generally includes obtaining a contemporaneous written acknowledgment from the charity stating the amount of the donation if it’s cash. If the donation is property, the acknowledgment must describe the property, but the charity isn’t required to provide a value. The donor must determine the property’s value.

“Contemporaneous” means the earlier of the date you file your tax return or the extended due date of your return. So, if you donated in 2021 but haven’t yet received substantiation from the charity, it’s not too late (as long as you haven’t filed your 2021 return). Contact the charity and request a written acknowledgment.

Keep in mind that, if you made a cash gift of under $250 with a check or credit card, generally a canceled check, bank statement or credit card statement is sufficient. However, if you received something in return for the donation, you generally must reduce your deduction by its value and the charity is required to provide you a written acknowledgment as described earlier.

Deduction for nonitemizers

Generally, taxpayers who don’t itemize their deductions (and instead claim the standard deduction) can’t claim a charitable deduction. But, under the CARES Act, individuals who didn’t itemize deductions could claim a federal income tax write-off for up to $300 of cash contributions to IRS-approved charities for the 2020 tax year.

Fortunately, the Consolidated Appropriations Act extended this tax break to cover $300 of cash contributions made in 2021. The law also doubled the deduction limit to $600 for married, joint-filing couples for cash contributions made in 2021.

Let us assist you

Additional substantiation requirements apply to some types of donations. We can help you determine whether you have sufficient substantiation for the donations you hope to deduct on your 2021 income tax return. We also can guide you on the substantiation you’ll need for gifts you’re planning this year to ensure you can enjoy the desired deductions on your 2022 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: Thomson Reuters

Businesses can still deduct 100% of restaurant meals

Posted by Admin Posted on Feb 02 2022

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Business owners, 2022 is well underway. So, don’t forget that a provision tucked inside 2020’s Consolidated Appropriations Act suspended the 50% deduction limit for certain business meals for calendar years 2021 and 2022. That means your business can deduct 100% of the cost of business-related meals provided by a restaurant.

A closer look

As you may recall, previously you could generally deduct only 50% of the “ordinary and necessary” food and beverage costs you incurred while operating your business. Now you can deduct your full eligible costs.

What’s more, the legislation refers to food and beverages provided “by” a restaurant rather than “in” a restaurant. So, takeout and delivery restaurant meals also are fully deductible.

Remember the rules

Some familiar IRS requirements still apply:

  • The food and beverages can’t be lavish or extravagant under the circumstances.
  • The meal must involve a current or prospective customer, client, supplier, employee, agent, partner or professional advisor with whom you could reasonably expect to engage in the due course of business.
  • You or one of your employees must be present when the food or beverages are served.

Entertainment expenses still aren’t deductible, but meals served during entertainment events can be deductible if charged separately. If food or beverages are provided at an entertainment activity, further rules apply.

More information

Also be aware that, in November of last year, the IRS issued guidance on per diems related to the temporary 100% deduction for restaurant food and beverages. Contact us for further details about when you can deduct meal expenses.

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: Reuters

Could your company reap tax benefits from a heavy SUV purchase?

Posted by Admin Posted on Feb 02 2022

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Many businesses need to invest in heavy sport utility vehicles (SUVs) to transport equipment and provide timely services. Fortunately, they may be able to claim valuable tax deductions for the purchases. If you’re thinking about buying one (or if your bought one in 2021), be sure to brush up on the tax rules.

Bonus depreciation

Under current law, first-year bonus depreciation is available for qualified new and used property that’s acquired and placed in service during the tax year. New and pre-owned heavy SUVs, pickups and vans acquired and put to business use in 2021 or 2022 are potentially eligible for 100% first-year bonus depreciation.

Be aware that this generous tax break is scheduled to begin to be reduced for vehicles that are acquired and placed in service after December 31, 2022. That’s added incentive to invest in a heavy SUV this year.

The 100% first-year bonus depreciation write-off will reduce your federal income tax bill and self-employment tax bill, if applicable. You might get a state income tax deduction, too.

Weight and use requirements

100% bonus depreciation is available only if the manufacturer’s gross vehicle weight rating (GVWR) is above 6,000 pounds. You can verify a vehicle’s GVWR by looking at the manufacturer’s label, usually found on the inside edge of the driver’s side door where the door hinges meet the frame.

Another requirement is that you must use the vehicle more than 50% for business. If your business use is between 51% and 99%, you can deduct that percentage of the cost in the first year the vehicle is placed in service.

Detailed, contemporaneous expense records are essential in case the IRS challenges your business-use percentage. So, keep track of the miles you’re driving for business purposes, compared to the vehicle’s total mileage for the year. Recordkeeping is easier today because of the many mobile apps designed for this purpose.

You could also simply keep a handwritten calendar or mileage log in your vehicle and record details as business trips occur. Maintaining contemporaneous records is critical; calendars or logs compiled after the fact may not withstand IRS scrutiny.

The right moves

Did you purchase an eligible vehicle and place it in service in 2021? Or are you considering doing so in 2022? Consult with us to help evaluate the right business tax moves.

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: Reuters          

Get more worms by filing your tax return early

Posted by Admin Posted on Feb 02 2022

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They say the early bird gets the worm. Early federal income tax filers may get a couple worms, which is a good thing in this metaphor.

Although it may seem like a quaint tradition to wait until the deadline (usually April 15, but actually April 18 in 2022), there’s more than one valid reason for getting your return completed and submitted well before this date. But you have to have the necessary documents to do so.

Prevent identity theft

In one tax identity theft scheme, a thief uses another individual’s personal information to file a fraudulent tax return early in the filing season and claim a bogus refund. The real taxpayer discovers the fraud when he or she files a return and is told by the IRS that the return is being rejected because one with the same Social Security number has already been filed for the tax year.

While the taxpayer should ultimately be able to prove that his or her return is the legitimate one, tax identity theft can be a hassle to straighten out and significantly delay a refund. Filing early may be your best defense: If you file first, it will be the tax return filed by a potential thief that will be rejected, not yours.

Get a potentially earlier refund

Another reason to file early is you may put yourself closer to the front of the line to receive your tax refund (if you’re owed one). The IRS website still indicates that it expects to issue most refunds for the 2021 tax year within the usual 21 days, despite the massive pandemic-related delays that affected millions of 2020 tax returns.

The time is typically shorter if you file electronically and receive a refund by direct deposit into a bank account. Direct deposit also avoids the possibility that a refund check could be lost, stolen, returned to the IRS as undeliverable or caught in mail delays.

Look for your documents

To file your tax return, you need your Form W-2s (if you’re an employee) and Form 1099s (if you’ve worked as an independent contractor or “gig worker”). January 31 is the deadline for employers to issue 2021 Form W-2s to employees and, generally, for businesses to issue Form 1099s to recipients of any 2021 interest, dividend or reportable miscellaneous income payments (including those made to independent contractors).

If you haven’t received a W-2 or 1099 by February 1, first contact the entity that should have issued it. If that doesn’t work, you can contact the IRS for assistance.

Don’t wait!

As of this writing, some taxpayers may still be waiting to receive their 2020 federal income tax refunds. A few people (mostly on social media) have floated the idea of refusing to file their 2021 income tax returns until they receive their refund. Is this a good idea?

No, it’s not. Failing to file your return will only lead to bigger headaches later, possibly even penalties and criminal prosecution. Plus, if you’re owed a 2021 refund, you may receive that money before your 2020 refund. But the only way to get it is to file!

If you have questions or would like an appointment to prepare your return, please contact us. We can help you ensure you file an accurate return that takes advantage of all the breaks available to you.

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

Source: Reuters

AFTER MARRIAGE, WHAT ARE THE TAX IMPLICATIONS?

Posted by Admin Posted on Jan 26 2022

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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

PERSONAL DOCUMENTS

Posted by Admin Posted on Jan 26 2022

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

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

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

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

Personal Documents To Keep For One Year

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

Personal Documents To Keep For Three Years

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

Personal Documents To Keep For Six Years

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

Personal Records To Keep Forever

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811

Source: Thomson Reuters

The Right to Quality Service

Posted by Admin Posted on Jan 26 2022

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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 

TAXABLE VS. TAX-ADVANTAGED: WHERE TO HOLD INVESTMENTS

Posted by Admin Posted on Jan 26 2022

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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

 

IRS updates FAQs for 2021 Child Tax Credit and Advance Child Tax Credit Payments

Posted by Admin Posted on Jan 21 2022

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WASHINGTON — The Internal Revenue Service today updated frequently asked questions (FAQs) for the 2021 Child Tax Credit and Advance Child Tax Credit to help eligible families properly claim the credit when they prepare and file their 2021 tax return.

This extensive FAQ update PDF includes multiple streamlined questions for use by taxpayers and tax professionals and is being issued as expeditiously as possible.

The updates can be found in:

Recipients of advance Child Tax Credit payments will need to compare the amount of payments received during 2021 with the amount of the Child Tax Credit that can be claimed on their 2021 tax return.

Those that received less than the amount they are eligible for can claim a credit for the remaining amount. Those that received more than they are eligible for may need to repay some or all of the excess amount.

The IRS will send Letter 6419 in January of 2022 to provide the total amount of advance Child Tax Credit payments that were received in 2021. The IRS urges taxpayers receiving these letters to make sure they hold onto them to assist them in preparing their 2021 federal tax returns in 2022.

More information about reliance is available.

IRS-FAQ

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

2022 tax filing season begins Jan. 24; IRS outlines refund timing and what to expect in advance of April 18 tax deadline

Posted by Admin Posted on Jan 21 2022

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The Internal Revenue Service announced that the nation's tax season will start on Monday, January 24, 2022, when the tax agency will begin accepting and processing 2021 tax year returns.

The January 24 start date for individual tax return filers allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly. Updated programming helps ensure that eligible people can claim the proper amount of the Child Tax Credit after comparing their 2021 advance credits and claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.

"Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare," said IRS Commissioner Chuck Rettig. "The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don't face processing delays. Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year. And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. People should make sure they report the correct amount on their tax return to avoid delays."

The IRS encourages everyone to have all the information they need in hand to make sure they file a complete and accurate return. Having an accurate tax return can avoid processing delays, refund delays and later IRS notices. This is especially important for people who received advance Child Tax Credit payments or Economic Impact Payments (American Rescue Plan stimulus payments) in 2021; they will need the amounts of these payments when preparing their tax return. The IRS is mailing special letters to recipients, and they can also check amounts received on IRS.gov.

Like last year, there will be individuals filing tax returns who, even though they are not required to file, need to file a 2021 return to claim a Recovery Rebate Credit to receive the tax credit from the 2021 stimulus payments or reconcile advance payments of the Child Tax Credit. People who don't normally file also could receive other credits.

April 18 tax filing deadline for most

The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way federal holidays do. The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia for everyone except taxpayers who live in Maine or Massachusetts. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots' Day holiday in those states. Taxpayers requesting an extension will have until Monday, October 17, 2022, to file.

Awaiting processing of previous tax returns? People can still file 2021 returns

Rettig noted that IRS employees continue to work hard on critical areas affected by the pandemic, including processing of tax returns from last year and record levels of phone calls coming in.

"In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me," Rettig said. "IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us. And we will continue to look for ways to improve. We want to deliver as much as possible while also protecting the health and safety of our employees and taxpayers. Additional resources are essential to helping our employees do more in 2022 – and beyond."

The IRS continues to reduce the inventory of prior-year individual tax returns that have not been fully processed. As of December 3, 2021, the IRS has processed nearly 169 million tax returns. All paper and electronic individual 2020 refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.

Taxpayers generally will not need to wait for their 2020 return to be fully processed to file their 2021 tax returns and can file when they are ready.

Key information to help taxpayers

The IRS encourages people to use online resources before calling. Last filing season, as a result of COVID-era tax changes and broader pandemic challenges, the IRS phone systems received more than 145 million calls from January 1 – May 17, more than four times more calls than in an average year. In addition to IRS.gov, the IRS has a variety of other free options available to help taxpayers, ranging from free assistance at Volunteer Income Tax Assistance and Tax Counseling for the Elderly locations across the country to the availability of the IRS Free File program.

"Our phone volumes continue to remain at record-setting levels," Rettig said. "We urge people to check IRS.gov and establish an online account to help them access information more quickly. We have invested in developing new online capacities to make this a quick and easy way for taxpayers to get the information they need."

Last year's average tax refund was more than $2,800. More than 160 million individual tax returns for the 2021 tax year are expected to be filed, with the vast majority of those coming before the traditional April tax deadline.

Overall, the IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically if they choose direct deposit and there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.

By law, the IRS cannot issue a refund involving the Earned Income Tax Credit or Additional Child Tax Credit before mid-February, though eligible people may file their returns beginning on January 24. The law provides this additional time to help the IRS stop fraudulent refunds from being issued.

Some returns, filed electronically or on paper, may need manual review, which delays the processing, if our systems detect a possible error or missing information, or there is suspected identity theft or fraud. Some of these situations require us to correspond with taxpayers, but some do not. This work does require special handling by an IRS employee so, in these instances, it may take the IRS more than the normal 21 days to issue any related refund. In those cases where IRS is able to correct the return without corresponding, the IRS will send an explanation to the taxpayer.

File electronically and choose direct deposit

To speed refunds, the IRS urges taxpayers to file electronically with direct deposit information as soon as they have everything they need to file an accurate return. If the return includes errors or is incomplete, it may require further review that may slow the tax refund. Having all information available when preparing the 2021 tax return can reduce errors and avoid delays in processing.

Most individual taxpayers file IRS Form 1040 or Form 1040-SR once they receive Forms W-2 and other earnings information from their employers, issuers like state agencies and payers. The IRS has incorporated recent changes to the tax laws into the forms and instructions and shared the updates with its partners who develop the software used by individuals and tax professionals to prepare and file their returns. Forms 1040 and 1040-SR and the associated instructions are available now on IRS.gov. For the latest IRS forms and instructions, visit the IRS website at IRS.gov/forms.

Free File available January 14

IRS Free File will open January 14 when participating providers will accept completed returns and hold them until they can be filed electronically with the IRS. Many commercial tax preparation software companies and tax professionals will also be accepting and preparing tax returns before January 24 to submit the returns when the IRS systems open.

The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds – as well having all the information they need to file an accurate return to avoid delays. The IRS's Free File program allows taxpayers who made $73,000 or less in 2021 to file their taxes electronically for free using software provided by commercial tax filing companies. More information will be available on Free File later this week.

In addition to IRS Free File, the IRS's Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs free basic tax return preparation to qualified individuals. 

Watch for IRS letters about advance Child Tax Credit payments and third Economic Impact Payments

The IRS started sending Letter 6419, 2021 advance Child Tax Credit, in late December 2021 and continues to do so into January. The letter contains important information that can help ensure the return is accurate. People who received the advance CTC payments can also check the amount of the payments they received by using the CTC Update Portal available on IRS.gov.

Eligible taxpayers who received advance Child Tax Credit payments should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advance Child Tax Credit payments can claim the full credit by filing a tax return.

The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to individuals who received a third payment in 2021 in late January. While most eligible people already received their stimulus payments, this letter will help individuals determine if they are eligible to claim the Recovery Rebate Credit for missing stimulus payments. If so, they must file a 2021 tax return to claim their remaining stimulus amount. People can also use IRS online account to view their Economic Impact Payment amounts.

Both letters include important information that can help people file an accurate 2021 tax return. If the return includes errors or is incomplete, it may require further review while the IRS corrects the error, which may slow the tax refund. Using this information when preparing a tax return electronically can reduce errors and avoid delays in processing.

The fastest way for eligible individuals to get their 2021 tax refund that will include their allowable Child Tax Credit and Recovery Rebate Credit is by filing electronically and choosing direct deposit.

Tips to make filing easier

To avoid processing delays and speed refunds, the IRS urges people to follow these steps:

Organize and gather 2021 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, Adoption Taxpayer Identification Numbers, and this year's Identity Protection Personal Identification Numbers valid for calendar year 2022.

Check IRS.gov for the latest tax information, including the latest on reconciling advance payments of the Child Tax Credit or claiming a Recovery Rebate Credit for missing stimulus payments. There is no need to call.

Set up or log in securely at IRS.gov/account to access personal tax account information including balance, payments, and tax records including adjusted gross income.

Make final estimated tax payments for 2021 by Tuesday, January 18, 2022, to help avoid a tax-time bill and possible penalties.

Individuals can use a bank account, prepaid debit card or mobile app to use direct deposit and will need to provide routing and account numbers. Learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool.

File a complete and accurate return electronically when ready and choose direct deposit for the quickest refund.

Key filing season dates

There are several important dates taxpayers should keep in mind for this year's filing season:

  • January 14: IRS Free File opens. Taxpayers can begin filing returns through IRS Free File partners; tax returns will be transmitted to the IRS starting January 24. Tax software companies also are accepting tax filings in advance.
     
  • January 18: Due date for tax year 2021 fourth quarter estimated tax payment.
     
  • January 24: IRS begins 2022 tax season. Individual 2021 tax returns begin being accepted and processing begins
     
  • January 28: Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
     
  • April 18: Due date to file 2021 tax return or request extension and pay tax owed due to Emancipation Day holiday in Washington, D.C., even for those who live outside the area.
     
  • April 19: Due date to file 2021 tax return or request extension and pay tax owed for those who live in MA or ME due to Patriots' Day holiday
     
  • October 17: Due date to file for those requesting an extension on their 2021 tax returns

Planning ahead

It's never too early to get ready for the tax-filing season ahead. For more tips and resources, check out the Get Ready page on IRS.gov.

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

Tax filing step 1: Gather all year-end income documents

Posted by Admin Posted on Jan 13 2022

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As taxpayers are getting ready to file their taxes, the first thing they should do is gather their records. To avoid processing delays that may slow their refund, taxpayers should gather all year-end income documents before filing a 2021 tax return.

It's important for people to have all the necessary documents before starting to prepare their return. This 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 numbers memorized. Still, it's a good idea to have them on hand to double check that the numbers on the tax return are 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.
  • Don't have a bank account? Learn how to open an account at an FDIC-insured bank or through the National Credit Union Locator Tool. Veterans can access the Veterans Benefits Banking Program.
  • Forms W-2 from employer(s).
  • Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan.
  • Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy.
  • Form 1099-INT for interest received.
  • Other income documents and records of virtual currency transactions.
  • Form 1095-A, Health Insurance Marketplace Statement. Taxpayers will need this form to reconcile advance payments or claim the premium tax credit.
  • Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments.
  • Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the Recovery Rebate Credit.

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 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

Create an Online Account to view your balances, make payments, get transcripts, and more.

Posted by Admin Posted on Jan 13 2022

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The IRS offers an online account application for individual taxpayers. With online account access, you can view:

  • The total amount you owe, including balance details by year;
  • Your payment history and any scheduled or pending payments
  • Key information from your most recent tax return;
  • Payment plan details, if you have one;
  • Digital copies of select notices from the IRS;
  • Your Economic Impact Payments, if any;
  • Your address on file; and
  • Authorization requests from tax professionals.

You can also:

  • Make a payment online;
  • See payment plan options and request a plan via Online Payment Agreement;
  • Access your tax records via Get Transcript; and
  • Approve or reject authorization requests from tax professionals.

However, some taxpayers have difficulty satisfying the Identification (ID) authentication requirements of the application. These requirements are necessary to screen out unauthorized access and to prevent potential hacks of taxpayer information. Read on to learn how to pass these ID requirements and enroll.

To register for an online services account, you will need the following:

  • Email address;
  • Social Security Number (SSN) or Individual Tax Identification Number (ITIN);
  • Tax filing status and mailing address;
  • One financial account number linked to your name:
    • Last 8 digits of a credit card number (other than American Express, debit or corporate cards);
    • Student loan account number, unless issued by Nelnet;
    • Mortgage or home equity loan number;
    • Home equity line of credit (HELOC) account number; or
    • Auto loan number; and
  • Mobile phone linked to your name (for faster registration) or ability to receive an activation code by mail.

Please note that your account balance will update only once every 24 hours, usually overnight, and check/money order payments may take up to three weeks to appear on your account.

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

I got a notice or letter from the IRS – now what do I do?

Posted by Admin Posted on Jan 13 2022

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The IRS will send a notice or a letter for any number of reasons, including:

  • Identifying a specific issue on your federal tax return or account that needs action;
  • Explaining changes to your return or account;
  • Asking for missing or more information; or
  • Requesting a payment.

You can handle most of this correspondence without calling, visiting an IRS office, or involving the Taxpayer Advocate Service (TAS) by following the instructions in the notice or letter.

However, sometimes these letters or notices can be confusing and hard to understand. Here are some tips to help you when you receive a notice or letter from the IRS.

1. Determine the reason the notice or letter was sent

Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. If you need help understanding the information provided, the IRS has a Search Notice and Letters feature on the Understanding Your IRS Notice or Letter page. TAS also has a tool called the Taxpayer Roadmap, which includes copies of common letters and notices that you can use.

You can find the notice (CP) or letter (LTR) number on either the top or the bottom right-hand corner of your correspondence. Once you find it, you can enter that number in the search feature and you will be taken to a corresponding page that has more general information that may help.

The Taxpayer Advocate Service has a GET HELP section on various topics that can lead you through important information and steps and actions necessary to help you resolve many common tax issues.

2. Do I need to reply?

Whether you need to reply or not will depend on the issue.

If you agree with the information or change listed on the notice or letter, generally there is no need to reply. If the action causes a balance due, then you should take action immediately. Other times, even if you do agree, you may need to provide specific information to resolve the issue, particularly if you need to verify your identity.

If you disagree, you will need to act as soon as possible, as penalties and interest may be accruing, depending on the circumstances. The letter should outline what that action is and include a due date for your response.

Whether you agree or not, if it requires a reply – do not delay! Delaying can create more issues. See more on this below.

3. When to respond

If your notice or letter requires a response by a specific date, there are many reasons you’ll want to comply. Here are just a few:

  • minimize additional interest and penalty charges;
  • prevent further action from being taken on the account or against you; and
  • preserve your appeal rights if you don’t agree.

If you need more time to respond than the notice or letter indicates, contact the IRS using the contact information included on the notice or letter or call the general number, shown below, but only if a specific contact is not indicated.

4. How and where to reply

All notices and letters should tell you where to send your response, whether it’s to a mailing address or fax number. (Note: The IRS generally does not allow communication via email yet, although they are currently working on developing some alternative digital communication options.)

Follow the instructions in your notice or letter. See the IRS Operational status page for IRS customer service timeframes and updates as there are still some delays due to the ongoing pandemic.

5. What if I want to talk to someone?

Each notice or letter should include contact information. Some phone numbers on notices or letters are general IRS toll-free numbers, but if a specific employee is working your case, it will show a specific phone number to reach that employee or the department manager. The telephone number is usually found in the upper right-hand corner of your notice or letter.

As a last resort, you can use the IRS toll-free number at 800-829-1040. Have a copy of your tax return and the correspondence available when you call. But your best option is to use the specific number or address provided.

6. Wait – I still need help

You can resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional.

If you can’t afford to hire a tax professional to assist you, you may be eligible for free or low cost representation from an attorney, certified public accountant, or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). In addition, LITCs can help if you speak English as a second language and need help understanding the notice or letter. For more information or to find an LITC near you, see the LITC page at www.taxpayeradvocate.irs.gov/litcmap or IRS Publication 4134, Low Income Taxpayer Clinic List.

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                                   

Decoding IRS Transcripts and the New Transcript Format: Part II

Posted by Admin Posted on Jan 13 2022

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While IRS transcripts can be helpful, reading and understanding them can be complicated. The IRS’s processing system, the Integrated Data Retrieval System (IDRS), uses a system of codes to identify a transaction the IRS is processing and to maintain a history of actions posted to a taxpayer’s account. These Transaction Codes (TCs) basically provide processing instructions to the IRS’s system. To make IRS transcripts user-friendly for the public, the IRS provides a literal description of each TC shown on a taxpayer’s IRS transcript. Although helpful, sometimes these descriptions don’t adequately explain the account transaction.  Document 11734, Transaction Code Pocket Guide, is a summarized list of TCs taken from section 8A of the IRS’s Document 6209, ADP and IDRS Information Reference Guide, both of which may be helpful when reviewing an IRS transcript.

A Closer Look at the IRS Record of Account Transcript

As shown in the fictitious example below, the Record of Account Transcript will summarize any balance due or overpayment on a taxpayer’s account for the specified year at the top of the form. If the account reflects a balance due, the transcript provides the date to which any accrued penalty and interest were calculated. Next, the transcript will show specific information from the taxpayer’s return – or the corrected amounts resulting from any changes to the return caused by either a request from the taxpayer or an IRS determination. This is noteworthy should a taxpayer find it necessary to file an amended return. The correct figures must be used as the starting point on Form 1040X, Amended US Individual Income Tax Return, when requesting any subsequent account adjustments – otherwise, processing problems may occur.

Figure 1

IRS Record of Account Transcript example

The Tax Account Portion of the Record of Accounts

This section of the Record of Accounts Transcript provides details regarding the taxpayer’s account activity, as shown in Figure 2.

Figure 2


Tax Account Portion of the Record of Accounts Transcript example

Some of the common TCs on the tax account portion of a transcript are:

  • TC 150 – Date of filing and the amount of tax shown on the taxpayer’s return when filed – or as corrected by the IRS when processed;
  • TC 196 – Interest Assessed;
  • TC 276 – Failure to Pay Tax Penalty;
  • TC 291 – Abatement Prior Tax Assessment;
  • TC 300 – Additional Tax or Deficiency Assessment by Examination Division or Collection Division;
  • TC 420 – Examination Indicator reflects that a return is under examination consideration though the return may or may not ultimately be audited;
  • TC 428 – Examination or Appeals Case Transfer;
  • TC 460 – Extension of Time for Filing;
  • TC 480 – Offer in Compromise Pending;
  • TC 494 – Notice of Deficiency;
  • TC 520 – IRS Litigation Instituted;
  • TC 530 – Indicates that an account is currently not collectible;
  • TC 582 – Lien Indicator;
  • TC 768 – Earned Income Credit;
  • TC 806 – Reflects any credit the taxpayer is given for tax withheld, as shown on the tax return and the taxpayer’s information statements such as Forms W-2 and 1099 attached to the taxpayer’s tax return; and
  • TC 846 – Represents the issuance of a taxpayer’s refund if the credits and withholding exceed the amount of tax due, and there are no issues with the return, the system will automatically generate a refund.

In the above example, tax credits, withholding credits, credits for interest the IRS owes to a taxpayer, and tax adjustments that reduce the amount of tax owed, are shown as negative amounts on the tax account transcript. In other words, negative amounts on an IRS transcript can be considered amounts “in the taxpayer’s favor.”

Because TCs on a taxpayer’s account are essentially instructions to the IRS system, it is important to note that some TCs are input for informational reasons not directly associated with an accounting-related dollar amount.

I hope we have not confused you. Using the IRS’s Pocket Guide should help you understand the transcript and provide you with the key information you are seeking.

The Tax Return Portion of the Record of Accounts

The tax return portion of the Record of Accounts depicts most of the line entries on the taxpayer’s tax return when it was filed. Figure 3 provides only the income section of our fictitious example; however, the actual Record of Accounts will depict all the sections of a taxpayer’s filed tax return and can be useful when the taxpayer has not maintained a copy of his or her return and needs to know what was reported to the IRS on his or her return. 

Figure 3


Tax Return Portion of the Record of Accounts transcript example

New Tax Transcript Format and Utilizing a Customer File Number

In July 2021, IRS updated a webpage on IRS.gov to educate taxpayers regarding the new transcript format and use of the “customer file number,” which was designed to better protect taxpayer data. This new format partially masks personally identifiable information. However, financial data will remain visible to allow for tax return preparation, tax representation, or income verification. These changes apply to transcripts for both individual and business taxpayers.

Here’s what is visible on the new tax transcript format:

  • Last four digits of any Social Security number on the transcript: XXX-XX-1234;
  • Last four digits of any Employer Identification Number on the transcript: XX-XXX1234;
  • Last four digits of any account or telephone number;
  • First four characters of first name and first four characters of the last name for any individual (first three characters if the name has only four letters);
  • First four characters of any name on the business name line (first three characters if the name has only four letters);
  • First six characters of the street address, including spaces; and
  • All money amounts, including wage and income, balance due, interest, and penalties.

For security reasons, the IRS no longer offers fax service for most transcript types to both taxpayers and third parties and has stopped its third-party mailing service via Forms 4506, 4506-T, and 4506T-EZ.

Lenders and others who use the Forms 4506 series to obtain transcripts for income verification purposes should consider other options such as participating in the Income Verification Express Service or having the customer provide the transcript.

Only individual taxpayers may use Get Transcript Online or Get Transcript by Mail.  Because the full Taxpayer Identification Number is no longer visible, the IRS created an entry for a Customer File Number. The Customer File Number is a ten-digit number assigned by the third-party, for example, a loan number that can be manually entered when the taxpayer completes his or her Get Transcript Online or Get Transcript by Mail request. This Customer File Number will then display on the transcript when it is downloaded or mailed to the taxpayer. The transcript’s Customer File Number serves as a tracking number that enables a lender or other third party to match the transcript to the taxpayer making the transcript request.      

Conclusion

Taxpayers needing tax return, tax account, or information return information may quickly find what they need through the IRS’s Get Transcript Online portal or their online account. I continue to urge the IRS to expand the Online Account functionality and increase its availability to practitioners and businesses. The current functionalities provide many basic and helpful information, and I look forward to continued expansion of functionality. Transcripts are free and provide a wealth of information. I encourage taxpayers to explore this option. If an IRS transcript can meet a taxpayer’s needs, it may be preferable to trying to contact the IRS or other more time-consuming methods of requesting tax account information.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: TAS         

Decoding IRS Transcripts and the New Transcript Format: Part I

Posted by Admin Posted on Jan 13 2022

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Many individuals may not know they can request, receive, and review their tax records via a tax transcript from the IRS at no charge. Transcripts are often used to validate income and tax filing status for mortgage applications, student loans, social services, and small business loan applications and for responding to an IRS notice, filing an amended return, or obtaining a lien release. Transcripts can also be useful to taxpayers when preparing and filing tax returns by verifying estimated tax payments, Advance Child Tax Credits, Economic Income Payments/stimulus payments, and/or an overpayment from a prior year return.

The IRS maintains records for all taxpayers – individuals, businesses, and other entities – and provides five types of transcripts. A requested transcript may provide information regarding the date the IRS received a return; payment history including refunds, transfers between tax years and overpayment credits; balance due amounts; interest assessed; refundable credits allowed; basic examination information; and Forms W-2 or 1099 information.

Taxpayers may be able to get answers to their questions quickly and efficiently by requesting and reviewing their transcript – that is, if they can decipher them. Taxpayers (and tax professionals with a properly executed Form 2848, Power of Attorney, or Form 8821, Tax Information Authorization) can request a transcript online through the IRS’s Get Transcript Online portal or their online accountby mail; or by calling the IRS’s automated phone transcript service at 800-908-9946. With the difficulty reaching the IRS by phone or correspondence during the last two filing seasons, using the portal or online account may be more efficient than calling the IRS due to long wait times, the potential inability to speak with an available customer service representative, or the length of time for the IRS to respond to a mailed transcript request. The IRS’s Get Transcript page is available in five languages, and the online application is also available in Spanish.

 

What Transcript Should Taxpayers Ask For?

There are several types of transcripts that can meet a taxpayer’s needs.

  • Tax Return Transcript: This shows most items reflected on a taxpayer’s original tax return, including adjusted gross income, and accompanying forms and schedules for the current year and three prior years. This transcript will often be accepted by lending institutions for student loan or mortgage purposes. Note: the secondary spouse on a joint return must use Get Transcript Online or Form 4506-T to request this transcript type. When using Get Transcript by Mail or phone, the primary taxpayer on the return must make the request.
  • Wage and Income Transcript: This provides data from the third-party information statements the IRS has received for a specific taxpayer, such as Forms W-2, 1099, 1098, or 5498, and can be useful if the taxpayer did not receive or retain a copy of these documents. Wage and Income Transcripts are available for up to ten years. While the Wage and Income transcript provides federal withholding amounts, it does not reflect state tax withholdings, which may limit its use when preparing state income tax returns.
  • Tax Account Transcript: This provides basic tax return data (marital status, adjusted gross income, taxable income) along with listing the activity on a tax account, such as tax adjustments, payments, etc., for the current year and up to ten prior years using Get Transcript Online. When using Get Transcript by Mail or phone, taxpayers are limited to the current tax year and returns processed during the prior three years.
  • Record of Account Transcript: This is the most comprehensive transcript. It combines the Tax Return Transcript and the Tax Account Transcript to provide a more complete picture of a taxpayer’s tax return and subsequent account activity for the current year and for returns processed in the three prior years.
  • Verification of Non-Filing Letter: This provides proof that the IRS has no record of a filed Form 1040-series tax return for the year requested. However, it doesn’t indicate whether a taxpayer was required to file a return for that year. This letter is available after June 15 for the current tax year or any time for the prior three tax years using Get Transcript Online.

Another Option: Log in to Your Personal Online Account

Individual taxpayers with an Online Account can immediately access the above transcript options for the current filing year and three prior years and in some cases up to ten years of data. They can also see the total amount owed, balance details by year, payment history and any scheduled or pending payments; key information from the most recent tax return; payment plan details, if the taxpayer has one; digital copies of select notices from the IRS; Economic Impact Payments received, if any; the address on file; and any authorization requests from tax professionals. If taxpayers have not created an online account, this may be the impetus to do so, but be aware many taxpayers are not able to pass the authentication process. The IRS will be updating its authentication process by the end of the year, which is anticipated to reduce the unsuccessful attempts to establish an online account.

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 

Common errors taxpayers should avoid

Posted by Admin Posted on Jan 13 2022

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Filing a tax return electronically reduces errors because the tax software does the math, flags common errors and prompts taxpayers for missing information.

Using a reputable tax preparer – including certified public accountants, enrolled agents or other knowledgeable tax professionals – can also help avoid errors. Mistakes can result in a processing delay, which can mean it takes more time to get a refund.

Here are some common errors to avoid when preparing a tax return:

  • Missing or inaccurate Social Security numbers. Each SSN on a tax return should appear exactly as printed on the Social Security card.

 

  • Misspelled names. Likewise, a name listed on a tax return should match the name on that person's Social Security card.

 

  • Incorrect filing status. Some taxpayers choose the wrong filing status. The Interactive Tax Assistant on IRS.gov can help taxpayers choose the correct status especially if more than one filing status applies. Tax software also helps prevent mistakes with filing status.

 

  • Math mistakes. Math errors are one of the most common mistakes. They range from simple addition and subtraction to more complex calculations. Taxpayers should always double check their math. Better yet, tax prep software does it automatically.

 

  • Figuring credits or deductions. Taxpayers can make mistakes figuring things like their earned income tax creditchild and dependent care credit, and the standard deduction. Taxpayers should always follow the instructions carefully. For example, a taxpayer who's 65 or older, or blind, should claim the correct, higher standard deduction if they're not itemizing. The Interactive Tax Assistant can help determine if a taxpayer is eligible for tax credits or deductions. Attach any required forms and schedules.

 

  • Incorrect bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for a taxpayer to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax return.

 

  • Unsigned forms. An unsigned tax return isn't valid…period. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney Taxpayers can avoid this error by filing their return electronically and digitally signing it before sending it to the IRS.

 

  • Filing with an expired individual tax identification number. If a taxpayer's ITIN is expired, they should go ahead and file using the expired number. The IRS will process that return and treat it as a return filed on time. However, the IRS won't allow any exemptions or credits to a return filed with an expired ITIN. Taxpayers will receive a notice telling the taxpayer to renew their number. Once the taxpayer renews the ITIN, the IRS will process return normally.

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     

HOW CREDITS AND DEDUCTIONS WORK

Posted by Admin Posted on Jan 03 2022

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Tax credits and deductions can change the amount of tax you owe so you pay less.

Credits can reduce the amount of tax you owe.

Deductions can reduce the amount of your income before you calculate the tax you owe.

Claim Federal Tax Credits and Deductions

Claim certain credits and deductions on your tax return and you may be able to get a larger refund, while others may give you a refund even if you don't owe any tax.

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

BUDGETING FOR BABY

Posted by Admin Posted on Jan 03 2022

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Babies bring joy and excitement. They also bring substantial adjustments to the family budget! According to U.S. News and World Report, after adjusting for inflation, it costs about $267,233 in 2021 dollars to raise a baby to age 18 (based on previously published Bureau of Labor Statistics data). That’s a daunting number, to be sure. Fortunately, there are some things you can do to, shall we say, pacify the challenge.

Check your insurance

Life and disability insurance are critical. Life insurance provides financial protection if an income-earner in your family dies. Term insurance can be a cost-effective option. It offers protection for a specific period, such as 20 years (at which point many children will be relatively self-sufficient, and the loss of income less harmful). Of course, you’ll also need to ensure that your will names a guardian to look after your children in case of your death while they’re still minors.

Disability insurance provides financial protection if a breadwinner becomes disabled and no longer can earn a living. While some employers offer disability insurance, the policies often don’t provide enough income to cover all expenses. And Social Security disability benefits might not offer the protection you expect. For instance, to obtain the benefits, the breadwinner typically must be unable to work at any job. So, consider purchasing your own policy that will pay if you can’t continue in your current job. The distinction might make a difference.

Review tax breaks

Eligible parents can receive a valuable Child Tax Credit. And if you pay a caregiver to watch your baby so you can work, you may be able to claim the dependent care credit. For 2021, depending on your income, this can be up to 50% of eligible childcare expenses, up to $8,000 for one child, or $16,000 for two or more. The caregiver typically can’t be a dependent, your spouse or a parent of the child.

Another option is a dependent care Flexible Spending Account (FSA). This is an employer-sponsored program that allows parents to set aside up to $10,500 (for 2021) pretax annually (up to $5,250 if you’re married and file separately) to cover qualified childcare expenses. It’s important to note that you can’t use both the credit and the FSA for the same expenses.

Start saving for college early

The sooner you start saving for your baby’s education, the more you can leverage the value of compounding. If you save $200 per month starting at your baby’s birth and earn a 6% return, you’ll have nearly $78,000 in 18 years!

One of the best options, potentially, is a Section 529 education savings plan. It allows you to save for college expenses, as well as K-12 tuition expenses. Contributions aren’t tax-deductible for federal purposes, but many states offer tax benefits. Withdrawals used for qualified education expenses (limited to $10,000 per year for K-12 tuition) aren’t subject to federal income tax, and typically not subject to state income tax.

Get expert advice

Whether you have a baby on the way or your family expanded earlier in the year, it’s important to make sure you’re taking the right steps to ensure your child’s financial security. We can offer advice to help you evaluate various options and maximize your tax 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

FOLLOW THESE TIPS TO HELP PREVENT COMMON ISSUES AND AVOID REFUND DELAYS

Posted by Admin Posted on Jan 03 2022

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Ready to file your tax return? Stop and check out these tax tips below before you file to avoid tax errors and pass “go” with confidence.

Use your year-end income statements (e.g., Forms W-2/1099) to verify your income. Your income figures must match what is reported on year-end statements. Always use the information reported on any year-end income statements, such as Form W-2 or Form 1099, Schedule K-1, virtual currency statements, etc.).

In case you didn’t know, the IRS’s computer systems compare the income that you report on your tax return to what has been reported to them by payers. When income and/or federal income tax withholding don’t match, this will cause a delay in the processing of the return and any refund until the discrepancy is resolved.

Year-end statements can include corrections or bonuses and therefore wouldn’t match, for example, your last pay stub figures.

Review all forms for accuracy before filing. If you find any discrepancies, contact the payer immediately and request the payer issue a corrected statement as soon as possible.

Double check that your information is correct for yourself and your dependents. Check name spellings, taxpayer identification numbers, dates of birth, addresses, and your bank account information for accuracy. Be aware that you must have valid Social Security numbers for all your dependents before filing or that may not only delay processing of your tax return, but in certain instances disqualify you for some refundable credits, like the Earned Income Tax Credit.

Check for all credits and deductions for which you may be eligible. Review the tax form instructions to ensure you claim all the deductible items and credits for which you are eligible. You can also see the IRS’s Credits and Deductions pages. Complete any worksheets, schedules, or forms to support those items.

A lot of the eligibility requirements for these items often change yearly, and the forms and formulas used to calculate them can be complex to complete.

Generally, family-related credits and deductions are the areas that have the most errors and one of the main reasons (after income/wage mismatches we just mentioned) that cause return processing slow-downs.

So, follow the instructions carefully, double check your entry information and always re-check your math.

Don’t forget your W-2s, 1099s, and other required attachments. This includes Form 8962 if you are claiming the Premium Tax Credit and Form 1099-G if you received unemployment benefits. Any income document that shows federal income tax was withheld must be attached to your return, if you are filing by paper.

If you are filing electronically, follow the software provider’s instructions.

If you are unable to obtain your W-2 (or other information returns like Form 1099, Schedule K-1, etc.) from payers because they closed, you can call the IRS for assistance at 1-800-829-1040, but you must wait until after February 1.

If you received unemployment benefits in 2021, you will get a Form 1099-G, Certain Government Payments, from the agency paying the benefits. The agency will either automatically send a paper copy or, if the agency does not mail the form, recipients will need to visit the agency’s website to get an electronic version of the form. The agency usually provides a paper copy by January 31.

If you received a federal tax refund in 2021, you may have been paid interest. Refund interest payments are taxable and must be reported on federal income tax returns. See the Form 1040 Instructions for more details. In January 2022, the IRS will send Form 1099-INT to anyone who received interest totaling $10 or more.

If you received Economic Impact Payments in 2021, you will have to calculate whether you received the full amount for which you are eligible. If you did not receive the full amount to which you are entitled you should follow the tax return instructions on how to claim this on your tax return.

If you received Advance Child Tax Credit payments in 2021, you will need to reconcile these payments against the total credit for which you are eligible on your 2021 individual tax return. The advance payments you are receiving during 2021 cover only half of the total credit, so you will claim the remaining portion on the 2021 tax return.

Use Letter 6419 that the IRS sent to you in January 2022, to provide the total amount of advance Child Tax Credit payments that were disbursed to you and follow the tax return’s instructions carefully.

If you received any of these payments in error, you also have to report that information on the tax return.

Use E-file, and either Direct Deposit or Direct Pay too. We recommend electronically filing your tax return – it’s faster, more accurate and secure. If you’ve been hesitant in the past to switch over from paper, now’s the time to make the move!

If you are using the same software as the prior year, you’ll want to check that only the current year information is present, and that prior year data didn’t transfer over which may cause an error.

Always double check your figures before hitting submit.

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

GIG WORKERS: HERE COMES AN ESTIMATED TAX DEADLINE

Posted by Admin Posted on Dec 16 2021

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If you’re a gig worker or otherwise self-employed, and you don’t have taxes withheld from a paycheck, you likely have to make quarterly estimated tax payments to the IRS. Be advised that the fourth quarter 2021 estimated tax payment deadline for individuals is coming up on Tuesday, January 18, 2022.

 A pay-as-you-go system

If you do have some withholding from paychecks or payments you receive but you receive other types of income such as Social Security, prizes, rent, interest and dividends, you may still have to make estimated payments. And if you fail to make the required payments, you may be subject to a penalty as well as interest.

Generally, you need to make estimated tax payments for 2021 if you expect withholding to be less than the smaller of 90% of your tax for 2021 or 100% of your 2020 tax. (The applicable amount is 110% of your 2020 tax if your 2020 adjusted gross income was more than $150,000, or $75,000 if married filing separately.)

Sole proprietors, partners and S corporation shareholders generally must make estimated tax payments if they expect to owe $1,000 or more in tax when filing a tax return.

Quarterly due dates

If you’re new to estimated tax payments, be prepared to submit them throughout the year. The due dates are typically April 15, June 15, September 15 and January 15 of the following year. However, if the date falls on a weekend or holiday, the deadline is the next business day.

Estimated tax is calculated by factoring in expected gross income, taxable income, deductions and credits for the year. The easiest way to pay estimated tax is electronically through the Electronic Federal Tax Payment System. You can also pay estimated tax by check or money order using the Estimated Tax Payment Voucher, or by credit or debit card.

Seasonal businesses

Most individuals make estimated tax payments in the four installments. You simply determine the required annual payment, divide the number by four and make four equal payments by the due dates.

However, you may be able to make smaller payments during some quarters under an “annualized income method.” This can be useful to people whose income isn’t uniform over the year, perhaps because of a seasonal business. You may also want to use the annualized income method if a large portion of your income comes from capital gains on the sale of securities that you sell at various times during the year.

The correct amount

Estimated tax payments are just like paying a traditional tax bill in that you want to fulfill your obligation without overpaying the federal government. Contact our firm with any questions you may have about setting up estimated tax payments or using the annualized income method.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters 

FOR BUSINESS FINANCING, WHAT KINDS OF LOANS EXIST?

Posted by Admin Posted on Dec 13 2021

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You must know the exact amount of money that you need, what your purpose is and how you will repay it in order to be successful in getting a loan. You must convince the lender in a written proposal that you are a good credit risk.

There are two basic kinds of loans, although terms vary by lender:

Short-term and long-term, maturity periods of up to one year are generally short-term, which include accounts receivable loans, working capital loans and lines of credit.

Maturities greater than a year and less than seven years is a typical long-term loan. Equipment and real estate loans can have maturity up to 25 years. Major business expenses such as purchasing real estate and facilities, durable equipment, construction, vehicles, furniture and fixtures, etc. are a few purposes for long-term loans.                                                

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

DEDUCTIBLE HOME OFFICE

Posted by Admin Posted on Dec 13 2021

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Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

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

Source: Thomson Reuters

WHAT ARE THE POSSIBLE IMPLICATIONS IF I CO-SIGN FOR A LOAN?

Posted by Admin Posted on Dec 13 2021

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

LIVING THE DREAM OF EARLY RETIREMENT

Posted by Admin Posted on Dec 13 2021

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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 Dec 08 2021

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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

TAX INCENTIVES FOR EDUCATION

Posted by Admin Posted on Dec 08 2021

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

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

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

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

Source: Thomson Reuters

ARPA Provides More Than Just Direct Payments to Taxpayers

Posted by Admin Posted on Dec 08 2021

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On March 11, another round of COVID-19 relief legislation was signed into law. The American Rescue Plan Act (ARPA) includes funding for individuals, businesses, and state and local governments, but also some significant tax-related provisions.

ARPA extends and expands some tax provisions in the CARES Act and the Consolidated Appropriations Act (CAA) and also includes some new tax-related provisions.

A quick look

Here’s a quick look at some of the tax provisions that may affect you:

Individuals

Recovery rebates of up to $1,400 for singles and heads of households and $2,800 for married couples filing jointly — plus $1,400 per qualifying dependent (including adult dependents) — subject to adjusted gross income (AGI) phaseouts starting at $75,000 for singles, $112,500 for heads of households and $150,000 for joint filers and ending at $80,000, $120,000 and $160,000, respectively

Increased Child credit, including advance payments of part of the credit later this year

Expanded child and dependent care tax credit

Tax-free treatment of forgiven student loan debt

Exclusion from gross income of the first $10,200 in unemployment benefits received

Businesses and other employers

Extended and expanded tax credits for retaining employees, through Dec. 31, 2021

Extended and modified payroll tax credits for paid sick and family leave, through Sept. 30, 2021

Extended excess business loss limitation, through Dec. 31, 2026

Expansion of the Section 162(m) limits on the tax deduction public companies can take for executive compensation to cover the CEO, the CFO and the five next highest paid employees, beginning in 2027

How will you benefit?

This is just a brief overview of the tax-related provisions of ARPA. Additional rules and limits apply. Contact your tax advisor for more details on these provisions and how you might benefit.

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        

Important information you need to know about refunds

Posted by Admin Posted on Dec 08 2021

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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           

DOES MY CAR AFFECT MY INSURANCE RATE?

Posted by Admin Posted on Dec 08 2021

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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  

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

Posted by Admin Posted on Dec 08 2021

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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

IS THE PERSON AT YOUR DOOR REALLY FROM THE IRS?

Posted by Admin Posted on Dec 08 2021

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In certain situations, the IRS may send an employee out to your residence or place of business to collect past due taxes or conduct an audit of your return. With in-person scams continuing to take place across the country, the Taxpayer Advocate Service wants you to know how and when the IRS may contact you in person to help you protect yourself against possible in-person scams.

Eight things to know about in-person contacts from the IRS:

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

There are special circumstances when the IRS will come to your home or business.

These include:

When you have an overdue tax bill;

When the IRS needs to secure a delinquent tax return or a delinquent employment tax payment;

To tour a business as part of an audit; or As part of a criminal investigation.


Revenue Officers are IRS employees who work cases that involve an amount owed or a delinquent tax return. Generally, Revenue Officer home or business visits are unannounced.

Revenue Officers carry two forms of official identification, a pocket commission and a HSPD-12 card. Both forms of ID have a photo of the employee and serial numbers. You can (and should) ask to see both IDs before discussing any sensitive or personal information. You may also call the IRS at a phone number provided by the Revenue Officer to confirm his or her identity.

The IRS can assign certain cases to private collection agencies (PCAs) after notifying you in writing. These PCAs will never visit you at your home or business.

The IRS will not ask you to make a payment to anyone other than to the U.S. Department of the Treasury.

Revenue Agents are IRS employees conducting audits. They may call you to set up appointments, but not without having first notified you by mail. Therefore, by the time a Revenue Agent visits you at your home or business, you will be aware of the audit.

An IRS Criminal Investigator may visit your home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment.

When interacting with you, Revenue Officers have the responsibility to educate you about the Taxpayer Bill of Rights (TBOR) and identify economic hardships if you have an outstanding federal tax debt and payment creates a hardship. They also have the responsibility to consider other means of resolving tax debts, including installment agreements and offers in compromise.

IRS employees do not:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.

Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe.

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

If you believe you were visited by someone impersonating the IRS, you can find information on how to report scams here.

Need help with a specific tax problem?

The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers' rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn't working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.
Visit www.taxpayeradvocate.irs.gov or call 877-777-4778.

Read more about the kinds of problems TAS handles and how we may be able to assist you with yours.

For current information about IRS operations during the COVID-19 pandemic, please visit irs.gov.

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

Source: TAS   

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

Posted by Admin Posted on Dec 08 2021

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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

SHOULD I REFINANCE?

Posted by Admin Posted on Dec 08 2021

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHAT SHOULD I ASK ABOUT THE CAR LEASE?

Posted by Admin Posted on Dec 08 2021

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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

IS MORE INSURANCE NECESSARY FOR MARRIED COUPLES?

Posted by Admin Posted on Dec 01 2021

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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

SPECIAL CIRCUMSTANCES

Posted by Admin Posted on Dec 01 2021

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source : Thomson Reuters

TAX SAVING TECHNIQUE

Posted by Admin Posted on Dec 01 2021

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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

DEDUCTING MORTGAGE INTEREST

Posted by Admin Posted on Dec 01 2021

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

HOW CAN I EASILY COMPARE PRICES BETWEEN INSURANCE COMPANIES?

Posted by Admin Posted on Dec 01 2021

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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

AMENDED RETURNS

Posted by Admin Posted on Dec 01 2021

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

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

4 ways to withdraw cash from a corporation

Posted by Admin Posted on Nov 17 2021

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Owners of closely held corporations often want or need to withdraw cash from the business. The simplest way, of course, is to distribute the money as a dividend. However, a dividend distribution isn’t tax-efficient because it’s taxable to the owner to the extent of the corporation’s earnings and profits. It also isn’t deductible by the corporation. Here are four alternative strategies to consider:

1. Capital repayments. To the extent that you’ve capitalized the corporation with debt, including amounts that you’ve advanced to the business, the corporation can repay the debt without the repayment being treated as a dividend. Additionally, interest paid on the debt can be deducted by the corporation.

This assumes that the debt has been properly documented with terms that characterize debt and that the corporation doesn’t have an excessively high debt-to-equity ratio. If there isn’t proper documentation or the debt-to-equity ratio is too high, the “debt” repayment may be taxed as a dividend. If you make future cash contributions to the corporation, consider structuring them as debt to facilitate later withdrawals on a tax-advantaged basis.

2. Compensation. Reasonable compensation that you, or family members, receive for services rendered to the corporation is deductible by the business. However, it’s also taxable to the recipient(s). This same rule applies to any compensation (in the form of rent) that you receive from the corporation for the use of property.

In both cases, the compensation amount must be reasonable in terms of the services rendered or the value of the property provided. If it’s considered excessive, the excess will be a nondeductible corporate distribution (and taxable to the recipient as a dividend).

3. Property sales. You can withdraw cash from the corporation by selling property to it. However, certain sales should be avoided. For example, you shouldn’t sell property to a more than 50%-owned corporation at a loss, since the loss will be disallowed. And you shouldn’t sell depreciable property to a more than 50%-owned corporation at a gain, since the gain will be treated as ordinary income, rather than capital gain.

A sale should be on terms that are comparable to those in which an unrelated third party would purchase the property. You may need to obtain an independent appraisal to establish the property’s value.

4. Loans. You can withdraw cash tax-free from the corporation by borrowing money from it. However, to prevent having the loan characterized as a corporate distribution, it should be properly documented in a loan agreement or note. It should also be made on terms that are comparable to those in which an unrelated third party would lend money to you, including a provision for interest (at least equal to the applicable federal rate) and principal. Also, consider what the corporation’s receipt of interest income will mean.

These are just a few ideas. If you’re interested in discussing these or other possible ways to withdraw cash from a closely held corporation, contact us. We can help you identify the optimal approach at the lowest tax cost.

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        

Special tax deduction helps most people give up to $600 to charity, even if they don’t itemize

Posted by Admin Posted on Nov 17 2021

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The Internal Revenue Service reminds taxpayers that a special tax provision will allow more Americans to easily deduct up to $600 in donations to qualifying charities on their 2021 federal income tax return.

Ordinarily, people who choose to take the standard deduction cannot claim a deduction for their charitable contributions. But a temporary law change now permits them to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to qualifying charitable organizations. Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify.

Under this provision, individual tax filers, including married individuals filing separate returns, can claim a deduction of up to $300 for cash contributions made

to qualifying charities during 2021. The maximum deduction is increased to $600 for married individuals filing joint returns.

Included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, a more limited version of this temporary tax benefit originally only applied to tax-year 2020. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December, generally extended it through the end of 2021.

Cash contributions include those made by check, credit card or debit card as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with their volunteer services to a qualifying charitable organization. Cash contributions don't include the value of volunteer services, securities, household items or other property.

The IRS reminds taxpayers to make sure they're donating to a recognized charity. To receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool.

Cash contributions to most charitable organizations qualify. But contributions made either to supporting organizations or to establish or maintain a donor advised fund do not. Contributions carried forward from prior years do not qualify, nor do contributions to most private foundations and most cash contributions to charitable remainder trusts.

In general, a donor-advised fund is a fund or account maintained by a charity in which a donor can, because of being a donor, advise the fund on how to distribute or invest amounts contributed by the donor and held in the fund. A supporting organization is a charity that carries out its exempt purposes by supporting other exempt organizations, usually other public charities.

Keep good records

Special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining an acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt for contributions of cash.

For details on the recordkeeping rules for substantiating gifts to charity, see Publication 526, Charitable Contributions, available on IRS.gov.

Remind families about the Child Tax 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 

IRS issues another 430,000 refunds for adjustments related to unemployment compensation

Posted by Admin Posted on Nov 17 2021

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The Internal Revenue Service recently sent approximately 430,000 refunds totaling more than $510 million to taxpayers who paid taxes on unemployment compensation excluded from income for tax year 2020.

The IRS efforts to correct unemployment compensation overpayments will help most of the affected taxpayers avoid filing an amended tax return. So far, the IRS has identified over 16 million taxpayers who may be eligible for the adjustment. Some will receive refunds, while others will have the overpayment applied to taxes due or other debts.

The American Rescue Plan Act (ARPA) of 2021, enacted in March, excluded the first $10,200 in unemployment compensation per taxpayer paid in 2020. The $10,200 is the amount excluded when calculating one's adjusted gross income (AGI); it is not the amount of refund. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000.

Earlier this year, the IRS began its review of tax returns filed prior to the enactment of ARPA to identify the excludible unemployment compensation. To date, the IRS has issued over 11.7 million refunds totaling $14.4 billion. This latest batch of corrections affected over 519,000 returns, with 430,000 taxpayers receiving refunds averaging about $1,189.

The review of returns and processing corrections is nearly complete as the IRS already reviewed the simplest returns and is now concentrating on more complex returns. The IRS plans to issue another batch of corrections before the end of the year.

Impacted taxpayers will generally receive letters from the IRS within 30 days of the adjustment, informing them of what kind of adjustment was made (refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

The IRS also is making corrections for Earned Income Tax Credit, Additional Child Tax Credit, American Opportunity Credit, Premium Tax Credit and Recovery Rebate Credit amounts affected by the exclusion. Most taxpayers need not take any action and there is no need to call the IRS.

The IRS will be sending notices in November and December to individuals who did not claim the Earned Income Tax Credit or the Additional Child Tax Credit but may now be eligible for them.

These notices are not confirmation that they are eligible for these credits and will require a response from the taxpayer if eligible rather than filing an amended return. For taxpayers who become eligible for other credits and/or deductions after the exclusion is calculated but not claimed on their original return, they must file a Form 1040-X, Amended U.S. Individual Income Tax Return, to claim any new 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: IRS 

Is disability income taxable?

Posted by Admin Posted on Nov 17 2021

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Many Americans receive disability income. If you’re one of them or know someone who is, you may wonder whether it’s taxable. As is often the case with tax questions, the answer is “it depends.”

Key factor

The key factor is who paid the disability income (or who paid for the disability insurance funding the income). If the income is paid directly to you by your employer, it’s taxable to you as ordinary salary or wages would be. Taxable disability benefits are also subject to federal income tax withholding, though, depending on the disability plan, they sometimes aren’t subject to Social Security tax.

Frequently, disability payments aren’t made by the employer but by an insurer under a policy providing disability coverage or under an arrangement having the effect of accident or health insurance. In such cases, the tax treatment depends on who paid for the coverage. If your employer paid for it, then the income is taxable to you just as if paid directly to you by the employer. On the other hand, if it’s a policy you paid for, the payments you receive under it aren’t taxable.

Even if your employer arranges for the coverage (in other words, it’s a policy made available to you at work), the benefits aren’t taxed to you if you pay the premiums. For these purposes, if the premiums are paid by the employer but the amount paid is included as part of your taxable income from work, the premiums are treated as paid by you.

Two examples

Let’s say your salary is $1,000 a week ($52,000 a year). Under a disability insurance arrangement made available to you by your employer, $10 a week ($520 for the year) is paid on your behalf by your employer to an insurance company. A total of $52,520 is included in income as your wages for the year on your W-2 form: the $52,000 paid to you plus the $520 in disability insurance premiums. In this case, the insurance is treated as paid for by you. If you become disabled and receive benefits, they aren’t taxable income to you.

Now, let’s look at an example with the same facts as above but with one exception: Only $52,000 is included in income as your wages for the year on your W-2 because the amount paid for the insurance coverage qualifies as excludable under the rules for employer-provided health and accident plans. In this case, the insurance is treated as paid for by your employer. If you become disabled and receive benefits, they are taxable income to you.

Note: There are special rules in the case of a permanent loss (or loss of the use) of a part or function of the body, or a permanent disfigurement.

Any questions?

This discussion doesn’t cover the tax treatment of Social Security disability benefits, which may be taxed under different rules. Contact us if you’d like to discuss this further or have questions about regular disability income.

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

Source: Thomson Reuters        

TAX SAVING TECHNIQUE

Posted by Admin Posted on Nov 09 2021

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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

CREDIT FOR THE ELDERLY OR DISABLED

Posted by Admin Posted on Nov 09 2021

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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

THE RIGHT TO BE INFORMED

Posted by Admin Posted on Nov 09 2021

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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               

EVERY BUSINESS OWNER NEEDS AN EXIT STRATEGY

Posted by Admin Posted on Nov 09 2021

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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                   

Is an Offer in Compromise Right for You?

Posted by Admin Posted on Oct 26 2021

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What is an Offer in Compromise?

An offer in compromise (offer) allows you to settle your tax debt for less than the full amount you owe. There are three types of offers. We will focus on Doubt as to Liability Offers first.

Doubt as to Liability (DATL) offer – You have a legitimate doubt you owe all or part of the tax debt.

  • DATL offers are submitted using Form 656-L, Offer in Compromise (Doubt as to Liability).
  • No deposit or application fee is required for this type offer. However, you do need to offer at least $1, based on what you believe the correct amount of tax should be. If you believe you don’t owe any tax, refer to the instructions in Form 656-L for other alternatives to a DATL offer.

What to send with a DATL offer

  •  Pages 5-8 of Form 656-L.
  •  A written statement explaining why the tax debt (or part of the debt) is incorrect.
  •  Supporting documentation that will help the IRS identify the reason(s) you doubt the accuracy.
  •  If supporting documentation is not available and you cannot reconstruct your books and records, you should provide a detailed explanation as to why the tax debt or portion of the tax debt is incorrect.

Where to send your DATL offer

Mail your offer package to:
Brookhaven Internal Revenue Service, COIC Unit
P.O. Box 9008, Stop 681-D
Holtsville, NY 11742-9008

Due to the ongoing impact of COVID-19 on IRS operations, please visit IRS Operations During COVID-19: Mission-critical functions continue for any updates before mailing your offer package.

Next, let’s discuss the other two types of offers.

Doubt as to Collectibility (DATC) offer – You agree that you owe the debt, but you can’t afford to pay it in full and pay your basic living expenses at the same time.

Effective tax administration (ETA) offer – You have enough income and assets to pay the full amount and there is no doubt that the tax is legally owed but doing so would create a hardship for you. ETA offers may also be considered if it would be unfair and inequitable to require you to pay the full amount because of exceptional circumstances. ETA offers are only available if you don’t qualify for the first two types of offers.

What you need to know before filing a DATC or ETA offer

For DATC and ETA offers, the IRS will first determine if your debt can be paid in full through a monthly installment agreement. You should consider if an installment agreement is an option. Since the amount of your offer will be based on your “reasonable collection potential,” TAS encourages you to use the Offer In Compromise Pre-Qualifier tool to see if you qualify for an offer. Use of this tool is not a guarantee of offer acceptance.

What to send with a DATC or ETA offer

  • Completed Form 656, Offer in Compromise. This form is part of the Form 656-Booklet, Offer in Compromise.
  • Financial forms to let the IRS know about your monthly income, expenses, assets, and liabilities. These forms are also part of the Form 656-Booklet.
  • Individuals submitting either a DATC or ETA offer should complete Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals. Be sure to consider national and local standards when you list your expenses.
  • Businesses submitting either a DATC or ETA offer should complete Form 433-B (OIC), Collection Information Statement for Businesses.
  • Copies of all verification documents listed in the checklist on Form 433-A (OIC) for individuals, or Form 433-B (OIC) for businesses.
  • Your offer payment and application fee. See the next section for more details.

How much to pay with your DATC or ETA offer

  • You must submit an initial payment with your offer in compromise unless you are an individual who qualifies for a low-income waiver.
  • If you want to pay your offer in a lump sum, you need to pay 20 percent of the amount you offer with your offer package.
  • If you want to pay your offer in periodic payments (over no more than a two-year period), you need to include your first payment with your offer package.
  • OIC application fee, currently $205, unless you qualify for the low-income waiver. If you qualify for this waiver, be sure to check the low-income certification box in Section 1 of Form 656.

Where to send your DATC or ETA offer

Mail your offer package based on where you live.

If you reside in:

Mail your offer package to:

AZ, CA, CO, HI, ID, KY, MS, NM, NV, OK, OR, TN, TX, UT, WA

Memphis IRS Center COIC Unit
P.O. Box 30803, AMC
Memphis, TN 38130-0803

AK, AL, AR, CT, DC, DE, FL, GA, IA, IL, IN, KS, LA, MA, MD, ME, MI, MN, MO, MT, NC, ND, NE, NH, NJ, NY, OH, PA, PR, RI, SC, SD, VA, VT, WI, WV, WY, or have a foreign address

Brookhaven IRS Center COIC Unit P.O. Box 9007 Holtsville, NY 11742-9007

Due to the ongoing impact of COVID-19 on IRS operations, please visit IRS Operations During COVID-19: Mission-critical functions continue for any updates before mailing your offer package.

When is the IRS unable to consider your DATC or ETC offer?

Your offer cannot be considered if:

  • You are in bankruptcy.
  • You did not include an application fee or check the low-income certification box on Form 656.
  • You did not include the required initial payment with the offer (20 percent of the offered amount for lump sum offers or the first payment for periodic offers) or check the low-income certification box in the applicable section of Form 656.
  • Your case is with the Department of Justice.
  • There are no debts on your account, i.e., your tax refund paid your debt in full and there are no other outstanding debts.
  • The collection statute expiration date (CSED) has expired for all tax liabilities included in your offer.

You have not filed all your tax returns and received a bill from the IRS for at least one tax liability.

  • You have not made all required estimated tax payments for the current year.
  • You are a business owner with employees, and have not made all required federal tax deposits for the current quarter.
  • Your debt is the result of a restitution amount ordered by a court or a tax debt that has been reduced to judgment.

More information

  • If the IRS is unable to consider your offer, it will return your application fee but not your partial payment.
  • Even if your offer can be considered, it may be returned for several reasons, for example if you don’t provide the necessary paperwork or you fail to stay in filing and payment compliance while the IRS considers your offer.
  • The employee assigned to your case may request additional documentation from you. It’s important to respond quickly and ask for more time if you need it.
  • If your offer is returned, you may have the right to contest that decision.
  • While your offer is being considered you can generally expect no new levies to be filed, but the IRS may file a Notice of Federal Tax Lien.
  • If your offer is accepted, the IRS will hold your refunds through the calendar year in which your offer is accepted.
  • If your offer is rejected, you can appeal that decision with Form 13711, Request for Appeal of Offer in Compromise.
  • You must file and pay your taxes on time for five years after your offer is accepted. If you don’t, the IRS can terminate the offer and reinstate your full liability including accrued penalties and interest, minus any OIC payments and refunds applied after acceptance of the offer.

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   

Decoding IRS Transcripts and the New Transcript Format: Part II

Posted by Admin Posted on Oct 26 2021

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Reading and Understanding IRS Transcripts 

While IRS transcripts can be helpful, reading and understanding them can be complicated. The IRS’s processing system, the Integrated Data Retrieval System (IDRS), uses a system of codes to identify a transaction the IRS is processing and to maintain a history of actions posted to a taxpayer’s account. These Transaction Codes (TCs) basically provide processing instructions to the IRS’s system. To make IRS transcripts user-friendly for the public, the IRS provides a literal description of each TC shown on a taxpayer’s IRS transcript. Although helpful, sometimes these descriptions don’t adequately explain the account transaction.  Document 11734, Transaction Code Pocket Guide, is a summarized list of TCs taken from section 8A of the IRS’s Document 6209, ADP and IDRS Information Reference Guide, both of which may be helpful when reviewing an IRS transcript. 

A Closer Look at the IRS Record of Account Transcript 

As shown in the fictitious example below, the Record of Account Transcript will summarize any balance due or overpayment on a taxpayer’s account for the specified year at the top of the form. If the account reflects a balance due, the transcript provides the date to which any accrued penalty and interest were calculated. Next, the transcript will show specific information from the taxpayer’s return – or the corrected amounts resulting from any changes to the return caused by either a request from the taxpayer or an IRS determination. This is noteworthy should a taxpayer find it necessary to file an amended return. The correct figures must be used as the starting point on Form 1040X, Amended US Individual Income Tax Return, when requesting any subsequent account adjustments – otherwise, processing problems may occur. 

Figure 1 

The Tax Account Portion of the Record of Accounts 

This section of the Record of Accounts Transcript provides details regarding the taxpayer’s account activity, as shown in Figure 2. 

Figure 2
 

Some of the common TCs on the tax account portion of a transcript are: 

  • TC 150 – Date of filing and the amount of tax shown on the taxpayer’s return when filed – or as corrected by the IRS when processed; 
  • TC 196 – Interest Assessed; 
  • TC 276 – Failure to Pay Tax Penalty; 
  • TC 291 – Abatement Prior Tax Assessment; 
  • TC 300 – Additional Tax or Deficiency Assessment by Examination Division or Collection Division; 
  • TC 420 – Examination Indicator reflects that a return is under examination consideration though the return may or may not ultimately be audited; 
  • TC 428 – Examination or Appeals Case Transfer; 
  • TC 460 – Extension of Time for Filing; 
  • TC 480 – Offer in Compromise Pending; 
  • TC 494 – Notice of Deficiency; 
  • TC 520 – IRS Litigation Instituted; 
  • TC 530 – Indicates that an account is currently not collectible; 
  • TC 582 – Lien Indicator; 
  • TC 768 – Earned Income Credit; 
  • TC 806 – Reflects any credit the taxpayer is given for tax withheld, as shown on the tax return and the taxpayer’s information statements such as Forms W-2 and 1099 attached to the taxpayer’s tax return; and 
  • TC 846 – Represents the issuance of a taxpayer’s refund if the credits and withholding exceed the amount of tax due, and there are no issues with the return, the system will automatically generate a refund. 

In the above example, tax credits, withholding credits, credits for interest the IRS owes to a taxpayer, and tax adjustments that reduce the amount of tax owed, are shown as negative amounts on the tax account transcript. In other words, negative amounts on an IRS transcript can be considered amounts “in the taxpayer’s favor.” 

Because TCs on a taxpayer’s account are essentially instructions to the IRS system, it is important to note that some TCs are input for informational reasons not directly associated with an accounting-related dollar amount. 

I hope we have not confused you. Using the IRS’s Pocket Guide should help you understand the transcript and provide you with the key information you are seeking. 

The Tax Return Portion of the Record of Accounts 

The tax return portion of the Record of Accounts depicts most of the line entries on the taxpayer’s tax return when it was filed. Figure 3 provides only the income section of our fictitious example; however, the actual Record of Accounts will depict all the sections of a taxpayer’s filed tax return and can be useful when the taxpayer has not maintained a copy of his or her return and needs to know what was reported to the IRS on his or her return.  

Figure 3
 

New Tax Transcript Format and Utilizing a Customer File Number 

In July 2021, IRS updated a webpage on IRS.gov to educate taxpayers regarding the new transcript format and use of the “customer file number,” which was designed to better protect taxpayer data. This new format partially masks personally identifiable information. However, financial data will remain visible to allow for tax return preparation, tax representation, or income verification. These changes apply to transcripts for both individual and business taxpayers. 

Here’s what is visible on the new tax transcript format: 

  • Last four digits of any Social Security number on the transcript: XXX-XX-1234; 
  • Last four digits of any Employer Identification Number on the transcript: XX-XXX1234; 
  • Last four digits of any account or telephone number; 
  • First four characters of first name and first four characters of the last name for any individual (first three characters if the name has only four letters); 
  • First four characters of any name on the business name line (first three characters if the name has only four letters); 
  • First six characters of the street address, including spaces; and 
  • All money amounts, including wage and income, balance due, interest, and penalties. 

For security reasons, the IRS no longer offers fax service for most transcript types to both taxpayers and third parties and has stopped its third-party mailing service via Forms 4506, 4506-T, and 4506T-EZ. 

Lenders and others who use the Forms 4506 series to obtain transcripts for income verification purposes should consider other options such as participating in the Income Verification Express Service or having the customer provide the transcript. 

Only individual taxpayers may use Get Transcript Online or Get Transcript by Mail.  Because the full Taxpayer Identification Number is no longer visible, the IRS created an entry for a Customer File Number. The Customer File Number is a ten-digit number assigned by the third-party, for example, a loan number that can be manually entered when the taxpayer completes his or her Get Transcript Online or Get Transcript by Mail request. This Customer File Number will then display on the transcript when it is downloaded or mailed to the taxpayer. The transcript’s Customer File Number serves as a tracking number that enables a lender or other third party to match the transcript to the taxpayer making the transcript request.       

Conclusion 

Taxpayers needing tax return, tax account, or information return information may quickly find what they need through the IRS’s Get Transcript Online portal or their online account. I continue to urge the IRS to expand the Online Account functionality and increase its availability to practitioners and businesses. The current functionalities provide many basic and helpful information, and I look forward to continued expansion of functionality. Transcripts are free and provide a wealth of information. I encourage taxpayers to explore this option. If an IRS transcript can meet a taxpayer’s needs, it may be preferable to trying to contact the IRS or other more time-consuming methods of requesting tax account 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         

Feel like you are not responsible for a debt owed by your spouse or ex-spouse?

Posted by Admin Posted on Oct 26 2021

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Saying “I do” doesn’t necessarily mean you’re responsible for your spouse’s or ex-spouse’s debts.

If your spouse has a debt (this debt could be for any number of things – child support, spousal support, a federal debt (e.g., student loans), or a federal tax debt) and you file your taxes using the Married-Filing-Joint tax filing status, the IRS can apply your refund to one of these debts, which is known as an “offset”. Or they can take a collection action against you for the tax debt you and your spouse owe, such as filing of the Notice of Federal Tax Lien or issuing a levy. However, if you’re not legally responsible for the past-due amount, you may still be entitled to receive your share of the refund or request relief from joint and several liability, depending on the facts of the situation.

In some situations, you may agree that you are responsible for the debt. If this is the case, you can either do nothing and let the refund be applied or if that doesn’t cover the entire debt, you can seek payment options with the agency the debt is owed to.

But if you feel you are not responsible for the debt, there are two way to request relief – through Injured Spouse and Innocent Spouse Procedures.

1.   An injured spouse status involves obtaining a refund of a spouse’s interest in an overpayment that has been offset by the IRS. See IRC Section 6402.

2.   Innocent spouse status relieves a spouse of the responsibility for paying taxes that are owed jointly and severally with the other spouse. See IRC Sections 66 and 6015.

Below is short introduction of the two procedures for which you may be eligible based on your particular facts and circumstances:

Injured Spouse: You can request that you be treated as an injured spouse, if you filed a joint tax return and all or part of a refund is taken to pay a debt owed only by your spouse and not you. See the Injured Spouse page for step-by-step instructions for filing this claim and what information is needed. We also have a short video that explains what injured spouse means and when to file a claim.

Innocent Spouse: In general, if you file married filing jointly both of you are responsible for federal taxes owed. This is called joint and several liability, meaning the IRS can collect a joint liability from either you or your spouse even if you’ve divorced after you filed a joint tax return.

However, for instances involving individual earned income or self-employment taxes only, by requesting innocent spouse relief, you can be considered for relief of responsibility from paying tax, interest, and penalties, if your spouse (or former spouse) improperly reported items or omitted items on your tax return. For example, Household Employment taxes, Individual Shared Responsibility payments, and business taxes and trust fund recovery penalty for employment taxes are not eligible for innocent spouse relief.

The three types of relief available are:

  • Innocent spouse relief
  • Separation of liability
  • Equitable relief

Each type of relief has different requirements. See IRS Publication 971 for more information.
If you still can’t find the information you need in Publication 971, see these other resources to help you determine if you should file for Innocent Spouse relief:

If you file an Innocent Spouse claim, but the IRS denies your claim and you still disagree, see Appeal an Innocent Spouse Determination for next steps to take.

Additional help

In either of the above situations, if you have taken the required steps and filed the proper claim information timely, but you are still unable to resolve the issue, see if you qualify for help from the Taxpayer Advocate Service.

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     

I got a notice or letter from the IRS – now what do I do?

Posted by Admin Posted on Oct 26 2021

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The IRS will send a notice or a letter for any number of reasons, including: 

  • Identifying a specific issue on your federal tax return or account that needs action; 
  • Explaining changes to your return or account; 
  • Asking for missing or more information; or 
  • Requesting a payment. 

You can handle most of this correspondence without calling, visiting an IRS office, or involving the Taxpayer Advocate Service (TAS) by following the instructions in the notice or letter. 

However, sometimes these letters or notices can be confusing and hard to understand. Here are some tips to help you when you receive a notice or letter from the IRS. 

1. Determine the reason the notice or letter was sent 

Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. If you need help understanding the information provided, the IRS has a Search Notice and Letters feature on the Understanding Your IRS Notice or Letter page. TAS also has a tool called the Taxpayer Roadmap, which includes copies of common letters and notices that you can use. 

You can find the notice (CP) or letter (LTR) number on either the top or the bottom right-hand corner of your correspondence. Once you find it, you can enter that number in the search feature and you will be taken to a corresponding page that has more general information that may help. 

The Taxpayer Advocate Service has a GET HELP section on various topics that can lead you through important information and steps and actions necessary to help you resolve many common tax issues. 

2. Do I need to reply? 

Whether you need to reply or not will depend on the issue. 

If you agree with the information or change listed on the notice or letter, generally there is no need to reply. If the action causes a balance due, then you should take action immediately. Other times, even if you do agree, you may need to provide specific information to resolve the issue, particularly if you need to verify your identity. 

If you disagree, you will need to act as soon as possible, as penalties and interest may be accruing, depending on the circumstances. The letter should outline what that action is and include a due date for your response. 

Whether you agree or not, if it requires a reply – do not delay! Delaying can create more issues. See more on this below. 

3. When to respond 

If your notice or letter requires a response by a specific date, there are many reasons you’ll want to comply. Here are just a few: 

  • minimize additional interest and penalty charges; 
  • prevent further action from being taken on the account or against you; and 
  • preserve your appeal rights if you don’t agree. 

If you need more time to respond than the notice or letter indicates, contact the IRS using the contact information included on the notice or letter or call the general number, shown below, but only if a specific contact is not indicated. 

4. How and where to reply 

All notices and letters should tell you where to send your response, whether it’s to a mailing address or fax number. (Note: The IRS generally does not allow communication via email yet, although they are currently working on developing some alternative digital communication options.) 

Follow the instructions in your notice or letter. See the IRS Operational status page for IRS customer service timeframes and updates as there are still some delays due to the ongoing pandemic. 

5. What if I want to talk to someone? 

Each notice or letter should include contact information. Some phone numbers on notices or letters are general IRS toll-free numbers, but if a specific employee is working your case, it will show a specific phone number to reach that employee or the department manager. The telephone number is usually found in the upper right-hand corner of your notice or letter. 

As a last resort, you can use the IRS toll-free number at 800-829-1040. Have a copy of your tax return and the correspondence available when you call. But your best option is to use the specific number or address provided. 

6. Wait – I still need help 

You can resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional

If you can’t afford to hire a tax professional to assist you, you may be eligible for free or low cost representation from an attorney, certified public accountant, or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). In addition, LITCs can help if you speak English as a second language and need help understanding the notice or letter. For more information or to find an LITC near you, see the LITC page at www.taxpayeradvocate.irs.gov/litcmap or IRS Publication 4134, Low Income Taxpayer Clinic List. 

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                                    

Create an Online Account to view your balances, make payments, get transcripts, and more

Posted by Admin Posted on Oct 26 2021

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The IRS offers an online account application for individual taxpayers. With online account access, you can view: 

  • The total amount you owe, including balance details by year; 
  • Your payment history and any scheduled or pending payments 
  • Key information from your most recent tax return; 
  • Payment plan details, if you have one; 
  • Digital copies of select notices from the IRS; 
  • Your Economic Impact Payments, if any; 
  • Your address on file; and 
  • Authorization requests from tax professionals. 

You can also: 

  • Make a payment online; 
  • See payment plan options and request a plan via Online Payment Agreement; 
  • Access your tax records via Get Transcript; and 
  • Approve or reject authorization requests from tax professionals. 

However, some taxpayers have difficulty satisfying the Identification (ID) authentication requirements of the application. These requirements are necessary to screen out unauthorized access and to prevent potential hacks of taxpayer information. Read on to learn how to pass these ID requirements and enroll. 

To register for an online services account, you will need the following: 

  • Email address; 
  • Social Security Number (SSN) or Individual Tax Identification Number (ITIN); 
  • Tax filing status and mailing address; 
  • One financial account number linked to your name: 
  • Last 8 digits of a credit card number (other than American Express, debit or corporate cards); 
  • Student loan account number, unless issued by Nelnet; 
  • Mortgage or home equity loan number; 
  • Home equity line of credit (HELOC) account number; or 
  • Auto loan number; and 
  • Mobile phone linked to your name (for faster registration) or ability to receive an activation code by mail

Please note that your account balance will update only once every 24 hours, usually overnight, and check/money order payments may take up to three weeks to appear on your account. 

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 305-274-5811.

Source: TAS                

USE CAPITAL LOSSES TO OFFSET CAPITAL GAINS

Posted by Admin Posted on Oct 26 2021

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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

Need options for when you owe federal taxes, but can’t pay in full?

Posted by Admin Posted on Oct 26 2021

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The best-case scenario is to pay your taxes in full (Easy Payment Methods explained video) by the due date of the tax return (May 17, 2021 for your 2020 returns), because otherwise both a failure to pay penalty and interest will may continue to be assessed until it is fully paid.

However, due to the lingering effects of COVID-19, many people are facing financial difficulties. So, if you are unable to pay your taxes in full, the IRS has several options that you can consider based on your financial situation.

Here’s a summary of some of the options available and links to get more information and how start the process of making the type of request you choose.

  • Payment Plans – the IRS provides a variety of payment plan options, including the ability to apply online for a payment plan. The benefit to applying online is once you complete your online application you will receive immediate notification of whether your payment plan has been approved. Also, if you run into trouble, this option allows you to “chat” online with an IRS assistor to help you finish the process or get other guidance on further options. Setup fees may be higher if you apply for a payment plan by phone, mail, or in-person.

The availability of a payment plan will depend on your income, the amount owed, and how long it will take to pay. In some cases, there are both short-term and long-term options available, again, depending on the amount you owe. The information on this page will tell you all you need to know about payment plans. In some cases, you can set up a payment plan to automatically deduct payments from banking accounts, paychecks or you can make payments electronically or mail-in payments yourself. In most instances, you can also choose your payment date too.

Can’t pay now – If the IRS determines that you cannot pay any of your tax debt at this time, they may report your account as currently not collectible (CNC) and temporarily delay collection until your financial condition improves. Being designated as CNC does not mean the debt goes away, it means the IRS has determined you cannot afford to pay the debt at this time. Prior to approving your request to delay collection, the IRS may ask you to complete a Collection Information Statement (Form 433-F PDFForm 433-A PDF or Form 433-B PDF and provide proof of your financial status (this may include information about your assets and your monthly income and expenses).

You should know that if the IRS does delay collecting from you, your debt will increase because penalties and interest continue to be charged until you pay the full amount. During a temporary delay, the IRS will again review your ability to pay, generally annually. The IRS may also file a Notice of Federal Tax Lien to protect the government’s interest in your assets.

You should also review our TAS Currently Not Collectible page and video, before you start the process. Also, be sure to file all prior year tax returns (if you were required to file a return), even if you can’t pay the amount you owe on any returns right now, before requesting this option. You can find filing help options on our page above as well.

If the IRS decides you can make some type of payment and you still disagree, you do have options. We recommend reading our TAS Currently Not Collectible page for more information about this.

Offer In Compromise – A Doubt as to Collectability or an Effective Tax Administration offer in compromise (OIC) allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability or doing so creates a financial hardship.

The OIC process is not for everyone and generally requires a non-refundable fee, so explore all other payment options before submitting an OIC. If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.

Review our TAS OIC page and video about OICs before you start the process. You can also read “An offer in compromise may help some taxpayers settle their tax bill,” use the IRS Offer in Compromise Pre-Qualifier Tool to see if you may be eligible to make an offer, and the see links in the “Resources” section below, for additional information on OICs.

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   

Additional help is now available for visually impaired and other taxpayers with disabilities

Posted by Admin Posted on Oct 26 2021

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The Internal Revenue Service (IRS) Policy Statement 1-47, Reasonable Accommodations for People with Disabilities (see IRM 1.2.1.2.12), requires the IRS to take necessary actions to ensure taxpayers with disabilities have an equal opportunity to participate effectively in its programs, activities and services. If a taxpayer is unable to read IRS forms, publications and correspondence issued in standard print, they may request an accessible copy of that product in an alternative format.

The IRS has established an Accessibility Helpline at 833-690-0598, where taxpayers, who use assistive technology such as screen reading software, refreshable Braille displays and screen magnifying software may request assistance in getting certain IRS forms and products in an alternative media format (Section 508 compliant PDF, HTML, eBraille, text and large print).

Getting accessible forms and products

The IRS already provides a number of accessible tax forms, instructions and publications on the Accessible Forms and Publications page, including some Taxpayer Advocate Service (TAS) publications, so look there first. To request paper copies of tax forms, instructions or publications in Braille or large print, you can also call the tax form telephone number at 800-829-3676. However, if you are having trouble requesting these products or have questions about current and future accessibility services or other alternative media formats available to taxpayers with disabilities, please call the Accessibility Helpline at 833-690-0598.

Getting accessible IRS notice or letters

If you receive a notice or letter in print format and prefer it in Braille or large print, choose one of the three options below to request your preferred alternative media format:

  • Call the tax assistance number at 800-829-1040.
  • Fax your notice and a cover sheet to: Alternative Media Center, at 855-473-2006. On the cover sheet, write “Alternative Media Format” at the top and include your name, address, daytime phone number and your preferred format.
  • Mail your notice with a note stating your preferred format (Braille or large print) to: Internal Revenue Service, Alternative Media Center, 400 N. 8th St. Room G39, Richmond, VA 23219.

Once the IRS receives your request it will take up to 15 business days to convert the notice or letter and mail it back to you.

Note: The IRS is developing a process to make it easier for visually impaired taxpayers to request post-filing tax notices — such as notices about additional taxes or penalties owed — in Braille, large print, audio or electronic formats. The new process is expected to be in place by January 31, 2022.

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  

The right to finality

Posted by Admin Posted on Oct 20 2021

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Taxpayers interacting with the IRS have the right to finality. This right comes into play for taxpayers who are going through an audit. These taxpayers have the right to know when the IRS has finished the audit. This is one of ten basic rights — known collectively as the Taxpayer Bill of Rights.

Here's what taxpayers in the process of an audit, should know about their right to finality:

·  Taxpayers have the right to know:
 

o The maximum amount of time they have to challenge the IRS's position.

o The maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. 

o When the IRS has finished an audit.
 

·  The IRS generally has three years from the date taxpayers file their returns to assess any additional tax for that tax year.
 

·  There are some limited exceptions to the three-year rule, including when taxpayers fail to file returns for specific years or file false or fraudulent returns. In these cases, the IRS has an unlimited amount of time to assess tax for that tax year.
 

·  The IRS generally has 10 years from the assessment date to collect unpaid taxes. This 10-year period cannot be extended, except for taxpayers who enter into installment agreements or the IRS obtains court judgments.
 

·  There are circumstances when the 10-year collection period may be suspended. This can happen when the IRS cannot collect money due to the taxpayer's bankruptcy or there's an ongoing collection due process proceeding involving the taxpayer.
 

·  A statutory notice of deficiency is a letter proposing additional tax the taxpayer owes. This notice must include the deadline for filing a petition with the tax court to challenge the amount proposed.
 

·  Generally, a taxpayer will only be subject to one audit per tax year. However, the IRS may reopen an audit for a previous tax year, if the IRS finds it necessary. This could happen, for example, if a taxpayer files a fraudulent 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                                   

REPORT YOUR VIRTUAL CURRENCY TRANSACTIONS.

Posted by Admin Posted on Oct 20 2021

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Virtual currency is a digital representation of value other than a representation of the U.S. dollar or a foreign currency (“real currency”). Virtual currency is used as a unit of account, a store of value, or a medium of exchange. TAS wants to help you understand the tax treatment of virtual currency that can be converted into, or exchanged for, real currency.

Bitcoin is one example of a convertible virtual currency. Bitcoin is a cryptocurrency, which is a specific type of virtual currency that uses cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain. A transaction involving cryptocurrency that is recorded on a distributed ledger is referred to as an “on-chain” transaction. A transaction that is not recorded on the distributed ledger is referred to as an “off-chain” transaction, where individuals can engage directly with each other without necessarily using a trusted third party like a cryptocurrency exchange.

Why are virtual currency transactions taxable?

Income is generally taxable regardless of the source it comes from. As such, virtual currency transactions are taxable just like ‘traditional’ transactions involving money for goods or services, or an exchange of property for other property or services. Virtual currency is treated as property by the IRS and general tax principles that apply to property transactions apply if you sell, exchange, or otherwise transact using virtual currency.

How are virtual currency transactions taxed?

In general, individuals who transact with virtual currency, including buying and selling virtual currency or exchanging virtual currency, hold the virtual currency as a capital asset and the transactions result in capital gain or capital loss. Since virtual currency is considered property, the same general principles apply. However, virtual currency received as compensation for services is treated the same as wages and results in ordinary income to the recipient who then holds the virtual currency as a capital asset.

The following examples illustrate several common transactions involving virtual currency:

  • Sales: When you sell virtual currency, it is generally a capital asset and you must report the transaction along with any capital gain or loss on the sale.
    • Example: If Mary purchased 5 Bitcoins for $50,000 in April and sold all of her Bitcoins in July for $52,000, she would have short-term capital gain of $2,000 (the sales price less the purchase price). If Mary sold the Bitcoins for $48,000, she would have a short-term capital loss on the sale, that must be reported too, but it would be subject to any limitations on capital loss deductions.
  • Exchanges: If you exchange virtual currency held as a capital asset for services or other property, including goods or another virtual currency, you must report the transaction and any capital gain or loss resulting from the exchange.
    • Example: If Bill buys 5 Bitcoins for $50,000 in April and exchanges them for another virtual currency in June worth $40,000 at the date and time of the exchange, Bill would report a $10,000 short-term capital loss on the transaction. In this case, Bill would have to look at his other capital losses and could potentially be limited in how much he could deduct in the current year. Likewise, if the exchanged virtual currency was worth $60,000 instead of $40,000, Bill would report a $10,000 short-term capital gain on the transaction.
  • Earnings: When you receive property, including virtual currency, in exchange for performing services, whether or not you perform the services as an employee, you must report the earnings as ordinary income. Compensation for services are reported and taxed the same regardless of how the compensation is received (dollars, virtual currencies, property, or other services).If you receive virtual currency in return for providing services as an employee, it’s considered wages and is subject to Federal income tax withholding, Federal Insurance Contributions Act (FICA) tax, and Federal Unemployment Tax Act (FUTA) tax and must be reported by your employer on Form W-2, Wage and Tax Statement, like traditional wages paid in U.S. dollars. If you receive virtual currency in return for providing services and are not an employee of the payor, you are self-employed, and may be considered an independent contractor. Income from self-employment is often reported on Form 1099-MISC, Miscellaneous Income.
    • Example: If Deng receives $100,000 for providing services as an employee, he should report this as “wages” on his income tax return. If Deng is not an employee, the compensation is reported on Schedule 1 or Schedule C. Deng must report this income on his income tax return regardless of whether he receives a W-2, 1099-MISC, or other information return.
  • Hard forks: A hard fork occurs when a cryptocurrency undergoes a protocol change resulting in a permanent diversion from the legacy distributed ledger. This may result in the creation of a new cryptocurrency in addition to the legacy cryptocurrency. If your cryptocurrency went through a hard fork, but you did not receive any new cryptocurrency you don’t have taxable income.
    • Example: Maria holds 10 units of cryptocurrency A that has a hard fork after which she also has 10 units of cryptocurrency B. Regardless of how she receives the new cryptocurrency B, she has income. If the 10 units of cryptocurrency B are worth $50 at the date and time she receives them, Maria will have taxable income of $50 that she must report in the year she receives the cryptocurrency B.
  • Unreported transactions: You must report income, gain, or loss from all taxable transactions involving virtual currency on your Federal income tax return for the year of the transaction, regardless of the amount or whether you receive a payee statement (like a Form W-2) or information return (like a Form 1099-MISC).

For more information on the tax treatment of property transactions, see Publication 544, Sales and Other Dispositions of Assets.

What virtual currency transactions are not taxable?

Generally, the same rules that apply to other property apply to virtual currency. Not all property transactions are taxable. For example, the following transactions are not taxable:

  • Transactions with yourself. If you transfer virtual currency from a wallet, address, or account belonging to you, to another wallet, address, or account that also belongs to you, the transfer is a non-taxable event, even if you receive an information return reporting the transfer.
  • Bona fide gifts. If you receive virtual currency as a bona fide gift, the gift is not taxable. You will report any income or loss when you sell, exchange, or otherwise dispose of the virtual currency.
  • Charitable donations. If you donate virtual currency to a charitable organization described in Internal Revenue Code Section 170(c), you will not report income, gain, or loss from the donation.
  • Soft forks. A soft fork occurs when a distributed ledger undergoes a protocol change that does not result in a diversion of the ledger and thus does not result in the creation of a new cryptocurrency. Because soft forks do not result in you receiving new cryptocurrency, you will be in the same position you were in prior to the soft fork, meaning that the soft fork will not result in any income to you.

Where Are Virtual Currency Transactions Reported?

Transactions conducted in virtual currency are generally reported on the same tax forms as transactions in other property. They are also reported on a new checkbox on Form 1040. Virtual currency transactions must be reported on:

What records do I need to maintain regarding my transactions using virtual currency?

The Internal Revenue Code and regulations require taxpayers to maintain records that are sufficient to establish the positions taken on tax returns. You should therefore maintain records documenting receipts, sales, exchanges, or other dispositions of virtual currency and the fair market value of the virtual currency for at least three years after reporting any taxable event or have other reporting requirements even if they’re not immediately taxable.

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

ABLE accounts: A valuable financial solution for people with disabilities

Posted by Admin Posted on Oct 20 2021

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Achieving a Better Life Experience or ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families. These accounts help disabled people pay qualified disability-related expenses without affecting their eligibility for government assistance programs.

Here are some key things people should know about these accounts.

Annual contribution limit

  • The 2021 limit is $15,000.
  • Certain employed ABLE account beneficiaries may make an additional contribution up to the lesser of these amounts:
    • The designated beneficiary's compensation for the tax year.
    • The poverty line for a one-person household. For 2021, this amount is $12,880 in the continental U.S., $16,090 in Alaska and $14,820 in Hawaii. 

Saver's credit

  • ABLE account designated beneficiaries may be eligible to claim the saver's credit for a percentage of their contributions. 
  • The beneficiary claims the credit on Form 8880, Credit for Qualified Retirement Savings Contributions PDF. The saver's credit is a non-refundable credit available to individuals who meet these three requirements:
    • Are at least 18 years old at the close of the taxable year
    • Are not a dependent or a full-time student
    • Meet the income requirements

Rollovers and transfers from section 529 plans

  • Families may roll over funds from a 529 plan to another family member's ABLE account. 
  • The ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder. Rollovers from a section 529 plan count toward the annual contribution limit. For example, the $15,000 annual contribution limit would be met by parents contributing $10,000 to their child's ABLE account and rolling over $5,000 from a 529 plan to the same ABLE account.

Qualified disability expenses

  • States can offer ABLE accounts to help people who become disabled before age 26 or their families pay for disability-related expenses. These expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology and personal support services.
  • Though contributions aren't deductible for federal tax purposes, distributions, including earnings, are tax-free to the beneficiary, if they are used to pay qualified disability expenses. 

 

Source: IRS     

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

  

Decoding IRS Transcripts and the New Transcript Format: Part I

Posted by Admin Posted on Oct 12 2021

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Many individuals may not know they can request, receive, and review their tax records via a tax transcript from the IRS at no charge. Transcripts are often used to validate income and tax filing status for mortgage applications, student loans, social services, and small business loan applications and for responding to an IRS notice, filing an amended return, or obtaining a lien release. Transcripts can also be useful to taxpayers when preparing and filing tax returns by verifying estimated tax payments, Advance Child Tax Credits, Economic Income Payments/stimulus payments, and/or an overpayment from a prior year return.

The IRS maintains records for all taxpayers – individuals, businesses, and other entities – and provides five types of transcripts. A requested transcript may provide information regarding the date the IRS received a return; payment history including refunds, transfers between tax years and overpayment credits; balance due amounts; interest assessed; refundable credits allowed; basic examination information; and Forms W-2 or 1099 information.

Taxpayers may be able to get answers to their questions quickly and efficiently by requesting and reviewing their transcript – that is, if they can decipher them. Taxpayers (and tax professionals with a properly executed Form 2848, Power of Attorney, or Form 8821, Tax Information Authorization) can request a transcript online through the IRS’s Get Transcript Online portal or their online accountby mail; or by calling the IRS’s automated phone transcript service at 800-908-9946. With the difficulty reaching the IRS by phone or correspondence during the last two filing seasons, using the portal or online account may be more efficient than calling the IRS due to long wait times, the potential inability to speak with an available customer service representative, or the length of time for the IRS to respond to a mailed transcript request. The IRS’s Get Transcript page is available in five languages, and the online application is also available in Spanish.

What Transcript Should Taxpayers Ask For?

There are several types of transcripts that can meet a taxpayer’s needs.

  • Tax Return Transcript: This shows most items reflected on a taxpayer’s original tax return, including adjusted gross income, and accompanying forms and schedules for the current year and three prior years. This transcript will often be accepted by lending institutions for student loan or mortgage purposes. Note: the secondary spouse on a joint return must use Get Transcript Online or Form 4506-T to request this transcript type. When using Get Transcript by Mail or phone, the primary taxpayer on the return must make the request.
  • Wage and Income Transcript: This provides data from the third-party information statements the IRS has received for a specific taxpayer, such as Forms W-2, 1099, 1098, or 5498, and can be useful if the taxpayer did not receive or retain a copy of these documents. Wage and Income Transcripts are available for up to ten years. While the Wage and Income transcript provides federal withholding amounts, it does not reflect state tax withholdings, which may limit its use when preparing state income tax returns.
  • Tax Account Transcript: This provides basic tax return data (marital status, adjusted gross income, taxable income) along with listing the activity on a tax account, such as tax adjustments, payments, etc., for the current year and up to ten prior years using Get Transcript Online. When using Get Transcript by Mail or phone, taxpayers are limited to the current tax year and returns processed during the prior three years.
  • Record of Account Transcript: This is the most comprehensive transcript. It combines the Tax Return Transcript and the Tax Account Transcript to provide a more complete picture of a taxpayer’s tax return and subsequent account activity for the current year and for returns processed in the three prior years.
  • Verification of Non-Filing Letter: This provides proof that the IRS has no record of a filed Form 1040-series tax return for the year requested. However, it doesn’t indicate whether a taxpayer was required to file a return for that year. This letter is available after June 15 for the current tax year or any time for the prior three tax years using Get Transcript Online.

Another Option: Log in to Your Personal Online Account

Individual taxpayers with an Online Account can immediately access the above transcript options for the current filing year and three prior years and in some cases up to ten years of data. They can also see the total amount owed, balance details by year, payment history and any scheduled or pending payments; key information from the most recent tax return; payment plan details, if the taxpayer has one; digital copies of select notices from the IRS; Economic Impact Payments received, if any; the address on file; and any authorization requests from tax professionals. If taxpayers have not created an online account, this may be the impetus to do so, but be aware many taxpayers are not able to pass the authentication process. The IRS will be updating its authentication process by the end of the year, which is anticipated to reduce the unsuccessful attempts to establish an online account.

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  

The Deductibility of Medical Expenses

Posted by Admin Posted on Oct 12 2021

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Individual taxpayers may be able to claim medical expense deductions on their tax returns. However, the rules can be challenging, and it can be difficult to qualify. Here are six points to keep in mind:

1. You must itemize to claim this deduction. To benefit from itemizing, your total itemized deductions must exceed your standard deduction. Besides medical expenses, itemized deductions may include property taxes, state and local income tax, mortgage interest, charitable donations, etc., subject to various rules and limits.

With the increased standard deduction that’s been available in recent years, far fewer taxpayers are benefitting from itemizing. For 2021, the standard deduction is $25,100 for married couples filing jointly, $18,800 for heads of households and $12,550 for singles.

2. Your expenses must be fairly significant. The medical expense deduction can be claimed only to the extent your eligible costs exceed 7.5% of your adjusted gross income (AGI). Remember, expenses paid via tax-advantaged accounts (such as Flexible Spending Accounts or Health Savings Accounts) or reimbursable by insurance aren’t deductible.

If you’ll benefit from itemizing deductions this year and your year-to-date medical expenses are close to exceeding the 7.5% of AGI “floor,” moving or “bunching” nonurgent medical procedures and other controllable expenses into this year may allow you to exceed the 7.5% floor and benefit from the medical expense deduction. If your expenses already exceed the floor, bunching can increase your deduction.

3. Health insurance premiums may help. This can total thousands of dollars a year. Even if your employer provides health coverage, you can deduct the portion of the premiums that you pay, unless you paid them pre-tax. (Check with your employer if you’re not sure).

Long-term care insurance premiums are also included as medical expenses, subject to limits based on age.

4. Transportation counts. The cost of getting to and from medical treatments counts as a medical expense. This includes taxi fares, public transportation or using your own car.

Car costs can be calculated at 16 cents a mile for miles driven in 2021, plus tolls and parking. Alternatively, you can deduct certain actual costs (such as for gas and oil) that directly relate to your medical transportation.

5. Controllable costs are key. These include the costs of glasses, hearing aids, dental work, mental health counseling and other ongoing expenses in connection with medical needs. Purely cosmetic expenses generally don’t qualify.

Prescription drugs (including insulin) qualify, but over-the-counter medications and vitamins don’t. Neither do amounts paid for treatments that are illegal under federal law (such as medical marijuana), even if state law permits them. The services of therapists and nurses can qualify if they relate to medical conditions and aren’t for general health.

6. Don’t overlook smoking-cessation and weight-loss programs. Amounts paid for participating in smoking-cessation programs and for prescribed drugs designed to alleviate nicotine withdrawal are deductible. However, nonprescription nicotine gum and patches aren’t.

A weight-loss program is deductible if undertaken as treatment for a disease diagnosed by a physician. Deductible expenses include fees paid to join a program and attend periodic meetings. The cost of diet food isn’t deductible.

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    

Being Prepared For An IRS Audit

Posted by Admin Posted on Oct 12 2021

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The IRS recently announced it intends to hire thousands of new employees as part of a tax-enforcement push. This could mean an uptick in audits sometime soon, likely focused on wealthier individuals and business owners. (Some tax returns are chosen randomly as well.)

The best way to survive an IRS audit is to prepare for one in advance. On an ongoing basis, you should systematically maintain documentation (invoices, bills, canceled checks, receipts and other proof) for the items that you report on your tax return. Maintain and back up these records safely. With that said, it also helps to know what might catch the tax agency’s attention.

Audit hot spots

Certain types of tax-return entries are known to the IRS to involve inaccuracies, so they may lead to an audit. One example is significant inconsistencies between tax returns filed in the past and your most current tax return. If you miscalculate deductions or try to claim unusually high ones, your return could be flagged. And if you’re a business owner, gross profit margin or expenses markedly different from those of similar companies could subject you to an audit.

Certain types of deductions, such as auto and travel expense write-offs, may be questioned by the IRS because there are strict recordkeeping requirements involved. In addition, an owner-employee salary that’s inordinately higher or lower than those of similar and similarly located companies can catch the IRS’s eye, especially if the business is a corporation.

Contact methods

The IRS normally has three years within which to conduct an audit, and often an audit doesn’t begin until a year or more after you file a return. If you’re selected for an audit, you’ll be notified by letter. Generally, the IRS doesn’t make initial contact by phone. If there’s no response to the letter, the agency may follow up with a call. Ignore unsolicited email messages about an audit. The IRS doesn’t contact people in this manner; these are scams.

Many audits simply request that you mail in documentation to support certain deductions that you’ve claimed. Others may ask you to provide receipts and other documents to a local IRS office. Only the harshest version, the field audit, requires you to meet personally with one or more IRS auditors.

Keep in mind that the tax agency won’t demand an immediate response to a mailed notice. You’ll be informed of the discrepancies in question and given time to prepare. You’ll need to collect and organize all relevant income and expense records. If any records are missing, you’ll have to reconstruct the information as accurately as possible based on other documentation.

How we can help

If the IRS chooses you for an audit, our firm can help you understand what the IRS is disputing (it’s not always clear) and then gather the documents and information needed. We can also help you respond to the auditor’s inquiries in the most expedient and effective manner.

Above all, don’t panic! Many audits are routine. By taking a meticulous, proactive approach to how you track, document and file your tax-related information, whether for an individual or business return, you’ll make an audit easier and even decrease the chances that one will happen in the first place.

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              

Important Reminders for October 15 Extension Filers

Posted by Admin Posted on Oct 07 2021

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Most taxpayers who requested an extension of time to file for their 2020 federal income tax return will have until Friday, October 15, 2021, to file.

Although October 15 is the last day for most people to file, some taxpayers may have more time. These taxpayers include:

Here are some key reminders for extension filers.

Tax Filing information

Nearly everyone can e-file their tax return for free through IRS Free File. The program is available on IRS.gov now through October 15. E-filing is easy, safe, and the most accurate way for people to file their tax returns. The TAS website has additional information on Free File options and additional information on options for filing a tax return.

Filing when a refund is due: Taxpayers who are able should use direct deposit to get their tax refund electronically deposited into their financial account. If you are filing a paper return, check the Where to File Tax Returns webpage or the Form instructions to determine the correct address for where to mail it.

Paying a tax balance: The deadline to pay 2020 federal income taxes was May 17, 2021. If you did not already make a payment, the best way to pay is online from a checking or savings account with IRS Direct Pay, by debit or credit card (this option has an associated fee), or by Electronic Funds Withdrawal when you e-file.

Those who owe and can’t pay their balance in full should pay as much as they can when they file to reduce interest and penalties. Taxpayers who cannot pay in full should evaluate payment options as soon as possible and choose one to resolve any remaining balance to help avoid or reduce any further potential penalties and interest. The TAS website has additional Get Help information on many topics related to paying taxes.

Taxpayers can always check their account balance, view payments made, view prior tax accounts or view and apply for payment options online. For more information about online accounts, see our TAS Tax Tip: Create an Online Account to view your balances, make payments, get transcripts, and more and the IRS’s Frequently Asked Questions About Online Account.

Missed tax filing deadline

What should taxpayers do about a missed filing deadline? Anyone who did not request an extension by this year’s May 17 deadline or misses the October 15 extension date should file and pay as soon as possible. (See the ‘Filing’ section above for more filing related information.) This will stop additional interest and penalties from accruing. See Filing Past Due Tax Returns for more information.

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

Source: TAS         

WHAT DO I NEED TO INCLUDE IN A GOOD LOAN PROPOSAL?

Posted by Admin Posted on Sept 28 2021

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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

Newly expanded ‘Closing a Business’ information provides step-by-step actions

Posted by Admin Posted on Sept 28 2021

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Closing your business can be a difficult and challenging task. The Taxpayer Advocate Service (TAS) partnered with IRS to expand its Closing a Business page to help business owners understand the specific actions needed, from a federal tax perspective, for each type of business.

However, before you make the decision to close, if it is due to financial reasons related to the coronavirus, please use TAS’s COVID-19 Business Tax Relief Tool to see if you qualify for new employer tax credits that may help you stay in business. Read more about the benefits of this tool before you try.

If ultimately you do need to close your business, whether you have a sole proprietorship, partnership or corporation, the information on this page will help you understand:

  • What forms you need to file;
  • How to report the income you receive; and,
  • How to claim the expenses you incur before closing your business.

Remember to also check your state responsibilities when closing a business.

TAS Resources

Taxpayer Advocate Service Help

The Taxpayer Advocate Service (TAS) is uniquely positioned to assist all taxpayers (and their representatives), including individuals, businesses, and exempt organizations. If you qualify for our help, an advocate will be with you at every turn and do everything possible to assist through the process.

Currently, 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. Visit our Contact Us page to learn more.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial  tatements, please give us a call at 305-274-5811.                                   

Source : TAS 

The Right to Quality Service

Posted by Admin Posted on Sept 28 2021

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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 

WHAT ARE THE ADVANTAGES OF PREPAYING A MORTGAGE, AND SHOULD I IF I CAN?

Posted by Admin Posted on Sept 28 2021

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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

REFINANCING YOUR HOME

Posted by Admin Posted on Sept 28 2021

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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 CAN I DO TO ENSURE THAT I AM INSURED ADEQUATELY?

Posted by Admin Posted on Sept 28 2021

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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  

LIVING THE DREAM OF EARLY RETIREMENT

Posted by Admin Posted on Sept 28 2021

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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           

-Important information you need to know about refunds

Posted by Admin Posted on Sept 28 2021

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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   

WHY SHOULD I HAVE LIFE INSURANCE? DO I REALLY NEED IT?

Posted by Admin Posted on Sept 28 2021

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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

Small business owners should see if they qualify for the home office deduction

Posted by Admin Posted on Sept 21 2021

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Many Americans have been working from home due to the pandemic, but only certain people will qualify to claim the home office deduction. This deduction allows qualifying taxpayers to deduct certain home expenses on their tax return when they file their 2021 tax return next year.

Here are some things to help taxpayers understand the home office deduction and whether they can claim it:

Employees are not eligible to claim the home office deduction.

  • The home office deduction, reported on Form 8829, is available to both homeowners and renters.
  • There are certain expenses taxpayers can deduct. They include mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent.
  • Taxpayers must meet specific requirements to claim home expenses as a deduction. Even then, the deductible amount of these types of expenses may be limited.
  • The term "home" for purposes of this deduction:
    • Includes a house, apartment, condominium, mobile home, boat or similar property which provide basic living accommodations.
    • A separate structure on the property such as an unattached garage, studio, barn or greenhouse.
      • Any portion of a home used exclusively as a hotel, motel, inn or similar establishment does NOT qualify as a "home" and, therefore, does not qualify for a home office deduction.
  • Generally, there are two basic requirements for the taxpayer's home to qualify as a deduction:
    • There must be exclusive use of a portion of the home for conducting business on a regular basis. For example, a taxpayer who uses an extra room to run their business can take a home office deduction only for that extra room so long as it is used both regularly and exclusively in the business.
    • The home must be the taxpayer's principal place of business. A taxpayer can also meet this requirement if administrative or management activities are conducted at the home and there is no other location to perform these duties. Therefore, someone who conducts business outside of their home but also uses their home to conduct business may still qualify for a home office deduction.
      • A portion of a home that is used exclusively for conducting business on a regular basis but not used as the principal place of business, will qualify for a home office deduction if either patients, clients or customers are met in the home or there is a separate structure that is used exclusively for conducting business on a regular basis.
  • Taxpayers who qualify may choose one of two methods to calculate their home office expense deduction:
    • Using the simplified method consisting of a rate of $5 per square foot for business use of the home which is limited to a maximum size of 300 square feet and a maximum deduction $1,500.
    • Using the regular method whereby deductions for a home office are based on the percentage of the home devoted to business use. Any use a whole room or part of a room for conducting their business will involve figuring out the percentage of the home used for business activities to deduct indirect expenses. Direct expenses are deducted in full.

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

Source: IRS   

WHICH IS BETTER, BUYING OR LEASING MY NEXT CAR?

Posted by Admin Posted on Sept 21 2021

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

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

  • Beginning costs
  • Continual costs
  • Total costs
  • Is there a possibility of deduction of any of the costs due to the car being used for business?
  • How important is it to have ownership of the car

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

Source: Thomson Reuters

BUSINESS OR HOBBY?

Posted by Admin Posted on Sept 21 2021

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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

 

IRS reminds business owners to correctly identify workers as employees or independent contractors

Posted by Admin Posted on Sept 21 2021

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The Internal Revenue Service reminds business owners that it's critical to correctly determine whether the individuals providing services are employees or independent contractors.

An employee is generally considered to be anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public. Doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers or auctioneers are generally independent contractors.

Independent contractor vs. employee

Whether a worker is an independent contractor or an employee depends on the relationship between the worker and the business. Generally, there are three categories to examine:

  • Behavioral Control − Does the company control or have the right to control what the worker does and how the worker does the job?
  • Financial Control − Does the business direct or control the financial and business aspects of the worker's job. Are the business aspects of the worker's job controlled by the payer? (Things like how the worker is paid, are expenses reimbursed, who provides tools/supplies, etc.)
  • Relationship of the Parties − Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

Misclassified worker 

Misclassifying workers as independent contractors adversely affects employees because the employer's share of taxes is not paid, and the employee's share is not withheld. If a business misclassified an employee without a reasonable basis, it could be held liable for employment taxes for that worker. Generally, an employer must withhold and pay income taxes, Social Security and Medicare taxes, as well as unemployment taxes. Workers who believe they have been improperly classified as independent contractors can use IRS Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report their share of uncollected Social Security and Medicare taxes due on their compensation.

Voluntary Classification Settlement Program

The Voluntary Classification Settlement Program (VCSP) is an optional program that provides taxpayers with an opportunity to reclassify their workers as employees for future tax periods for employment tax purposes with partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat their workers (or a class or group of workers) as employees. Taxpayers must meet certain eligibility requirements, apply by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS.

Who is self-employed?

Generally, someone is self-employed if any of the following apply to them.

Self-employed individuals generally are required to file an annual tax return and pay estimated tax quarterly. They generally must pay self-employment tax (Social Security and Medicare tax) as well as income tax. Self-employed taxpayers may be able to claim the home office deduction if they use part of a home for business.

What about the gig economy?

The gig economy − also called sharing economy or access economy−is activity where people earn income providing on-demand work, services or goods. Gig economy income must be reported on a tax return, even if the income is: from part-time, temporary or side work; not reported on a Form 1099-K, 1099-MISC, W-2 or other income statement; or paid in any form, including cash, property, goods or virtual currency.

Help spread the word - Advance Child Tax Credit

The IRS encourages employers to help get the word out about the advance payments of the Child Tax Credit during Small Business Week. Employers have direct access to many who may receive this credit. More information on the Advance Child Tax Credit is available on IRS.gov. The website has tools employers can use to deliver this information, including e-posters, drop-in articles (for paycheck stuffers, newsletters) and social media posts to share.

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     

 

Here’s how taxpayers can rebuild records after a natural disaster

Posted by Admin Posted on Sept 08 2021

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After a natural disaster, taxpayers need records to help them prove and recover disaster-related losses. This may be for tax purposes, getting support from federal assistance program or for insurance claims.

While personal or business property may have been destroyed, all hope is not lost. Here are some steps that can help people reconstruct important records.

Tax records

  • Get free tax return transcripts immediately using Get Transcript on IRS.gov.
  • Order transcripts by calling 800-908-9946 and following the prompts.

Financial statements

People can gather past statements from their credit card company or bank. These records may be available online. People can also contact their bank to get paper copies of these statements.

Property records

  • To get documents related to property, homeowners can contact the title company, escrow company or bank that handled the purchase of their home or other property.
  • Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
  • For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
  • When no other records are available, people should check the county assessor's office for old records that might address the value of the property.
  • Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. These include Kelley's Blue Book, the National Automobile Dealers Association and Edmunds.

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      

Retirement and taxes: Understanding IRAs

Posted by Admin Posted on Sept 08 2021

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Individual Retirement Arrangements, or IRAs, provide tax incentives for people to make investments that can provide financial security for their retirement. These accounts can be set up with a bank or other financial institution, a life insurance company, mutual fund or stockbroker.

Here's a basic overview to help people better understand this type of retirement savings account.

  • Contribution. The money that someone puts into their IRA. There are annual limits to contributions depending on their age and the type of IRA. Generally, a taxpayer or their spouse must have earned income to contribute to an IRA.
     
  • Distribution. The amount that someone withdraws from their IRA.
     
  • Withdraws. Taxpayers may face a 10% penalty and a tax bill if they withdraw money before age 59 ½, unless they qualify for an exception.
     
  • Required distribution. There are requirements for withdrawing from an IRA:
  • Someone generally must start taking withdrawals from their IRA when they reach age 70½.
  • Per the 2019 SECURE Act, if a person's 70th birthday is on or after July 1, 2019, they do not have to take withdrawals until age 72.
  • Special distribution rules apply for IRA beneficiaries.
     
  • Traditional IRA. An IRA where contributions may be tax-deductible. Generally, the amounts in a traditional IRA are not taxed until they are withdrawn.
     
  • Roth IRA. This type of IRA that is subject to the same rules as a traditional IRA but with certain exceptions:
  • A taxpayer cannot deduct contributions to a Roth IRA.
  • Qualified distributions are tax-free.
  • Roth IRAs do not require withdrawals until after the death of the owner.
     
  • Savings Incentive Match Plan for Employees. This is commonly known as a SIMPLE IRA. Employees and employers may contribute to traditional IRAs set up for employees. It may work well as a start-up retirement savings plan for small employers.
     
  • Simplified Employee Pension. This is known as a SEP-IRA. An employer can make contributions toward their own retirement and their employees' retirement. The employee owns and controls a SEP.
     
  • Rollover IRA. This is when the IRA owner receives a payment from their retirement plan and deposits it into a different IRA within 60 days.

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        

September is National Preparedness Month; IRS urges taxpayers to prepare for natural disasters

Posted by Admin Posted on Sept 08 2021

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WASHINGTON — September is National Preparedness Month. With the height of hurricane season fast approaching and the ongoing threat of wildfires in some parts of the country, the Internal Revenue Service reminds everyone to develop an emergency preparedness plan.

All taxpayers, from individuals to organizations and businesses, should take time now to create or update their emergency plans.

Taxpayers can begin getting ready for a disaster with a preparedness plan that includes securing and duplicating essential tax and financial documents, creating lists of property and knowing where to find information once a disaster has occurred. Securing this information can help in the aftermath of a disaster, and it can help people more quickly take advantage of disaster relief available from the IRS.

Start secure

Taxpayers should keep critical original documents inside waterproof containers in a secure space. Documents such as tax returns, birth certificates, deeds, titles and insurance policies should also be duplicated and kept with a trusted person outside the area a natural disaster may affect.

Make copies

If original documents are available only on paper, taxpayers can use a scanner and save them on a USB flash drive, CD or in the cloud, which provide security and easy portability.

Document valuables

After a disaster hits, photographs and videos of a home or business's contents can help support claims for insurance or tax benefits. All property, especially expensive and high- value items, should be recorded. The IRS disaster-loss workbooks can help individuals and businesses compile lists of belongings or business equipment.

Employer fiduciary bonds

Employers using payroll service providers should check if their provider has a fiduciary bond in place to protect the employer in the event of a default by provider. Employers are encouraged to create an Electronic Federal Tax Payment System account at EFTPS.gov to monitor their payroll tax deposits and receive email alerts.

Know where to go

Reconstructing records after a disaster may be required for tax purposes, getting federal assistance or insurance reimbursement. Find out if financial institutions provide statements and documents electronically. Taxpayers who have lost some or all of their records during a disaster should visit IRS' Reconstructing Records webpage.

IRS is ready to help

Taxpayers living in a federally declared disaster can visit the IRS Tax Relief in Disaster Situations webpage or Around the Nation on IRS.gov and check for the available disaster tax relief. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. Affected taxpayers can call 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

A taxpayer impacted by a disaster outside of a federally-declared disaster area may qualify for disaster relief. This includes taxpayers who are not physically located in a disaster area, but whose records necessary to meet a filing or payment deadline postponed during the relief period are located in a covered disaster area.

For more information about National Preparedness Month, visit Ready.gov/september.

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

Source: IRS    

Taxpayers can protect themselves from scammers by knowing how the IRS communicates

Posted by Admin Posted on Sept 08 2021

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If the IRS does call a taxpayer, it should not be a surprise because the agency will generally send a notice or letter first. Understanding how the IRS communicates can help taxpayers protect themselves from scammers who pretend to be from the IRS with the goal of stealing personal information.

Here are some facts about how the IRS communicates with taxpayers:

  • The IRS doesn't normally initiate contact with taxpayers by email. Do not reply to an email from someone who claims to be from the IRS because the IRS email address could be spoofed or fake. Emails from IRS employees will end in IRS.gov.
  • The agency does not send text messages or contact people through social media. Fraudsters will impersonate legitimate government agents and agencies on social media and try to initiate contact with taxpayers.
  • When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service. Debt relief firms send unsolicited tax debt relief offers through the mail. Fraudsters will often claim they already notified the taxpayer by U.S. Mail.
  • Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always. Taxpayers can search IRS notices by visiting Understanding Your IRS Notice or Letter. However, not all IRS notices are searchable on that site and just because someone references an IRS notice in email, phone call, text, or social media, does not mean the request is legitimate.
  • IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit. The IRS encourages taxpayers to review, How to Know it's Really the IRS Calling or Knocking on Your Door: Collection.
  • Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice. Private debt collection should not be confused with debt relief firms who will call, send lien notices via U.S. Mail, or email taxpayers with debt relief offers. Taxpayers should contact the IRS regarding filing back taxes properly.
  • IRS revenue officers and agents routinely make unannounced visits to a taxpayer's home or place of business to discuss taxes owed, delinquent tax returns or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer. However, taxpayers should remember that payment will never be requested to a source other than the U.S. Treasury.
  • When visited by someone from the IRS, the taxpayers should always ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credential.

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

Source  : IRS       

Which business website costs are deductible?

Posted by Admin Posted on Sept 08 2021

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Every business needs a website, but it’s not always easy to determine which costs of running one are deductible. Fortunately, established rules that generally apply to the deductibility of more long-standing business costs provide business owners with a basic idea of how to anticipate and handle the tax impact of a website. And the IRS has issued guidance that applies to software costs.

Hardware considerations

Hardware costs generally fall under the standard rules for depreciable equipment. Specifically, once website-related assets are up and running, you can deduct 100% of the cost in the first year they’re placed in service (before 2023). This favorable treatment is allowed under the 100% first-year bonus depreciation break.

In later years, you can probably deduct 100% of these costs in the year the assets are placed in service under the Section 179 first-year depreciation expensing privilege. However, Sec. 179 deductions are subject to several limitations.

For the 2021 tax year, the maximum Sec. 179 deduction is $1.05 million, subject to a phaseout rule. Under the rule, the deduction is phased out if more than a specified amount of qualified property is placed in service during the year. The threshold amount for 2021 is $2.62 million.

There’s also a taxable income limit. Under it, your Sec. 179 deduction can’t exceed your business taxable income. In other words, Sec. 179 deductions can’t create or increase an overall tax loss. However, any Sec. 179 deduction amount that you can’t immediately deduct is carried forward and can be deducted in later years (to the extent permitted by the applicable limits).

Software issues

Similar rules apply to off-the-shelf software that you buy for your business. However, software license fees are treated differently from purchased software costs for tax purposes. Payments for leased or licensed software used for your website are currently deductible as ordinary and necessary business expenses.

An alternative position is that your software development costs are currently deductible research and development costs under the tax code. To qualify for this treatment, the costs must be paid or incurred by December 31, 2022. A more conservative approach would be to capitalize the costs of internally developed software. Then you would depreciate them over 36 months.

If your website is primarily for advertising, you can also currently deduct internal website software development costs as ordinary and necessary business expenses.

Are you paying a third party for software to run your website? This is commonly referred to as “software as a service.” In general, payments to third parties are currently deductible as ordinary and necessary business expenses.

Still important

So much of business today seems to happen in virtual places other than your website — such as social media, apps and teleconferencing calls. Nonetheless, a central website where you can provide a solid overview of your company is still important. We can help you determine the appropriate tax treatment of website costs.

 

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          

Interest rates remain the same for the fourth quarter 2021

Posted by Admin Posted on Sept 08 2021

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WASHINGTON — The Internal Revenue Service announced that interest rates will remain the same for the calendar quarter beginning October 1, 2021. The rates will be:

  • 3% for overpayments (2% in the case of a corporation);
     
  • 0.5 % for the portion of a corporate overpayment exceeding $10,000;
     
  • 3% percent for underpayments; and
     
  • 5% percent for large corporate underpayments.

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

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

The interest rates announced today are computed from the federal short-term rate determined during July 2021 to take effect August 1, 2021, based on daily compounding.

Revenue Ruling 2021-17, announcing the rates of interest, will appear in Internal Revenue Bulletin 2021-37, dated September 13, 2021.

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

Source : IRS       

IRS: Tax relief now available to victims of Hurricane Ida; Oct. 15 deadline, other dates extended to Jan. 3

Posted by Admin Posted on Sept 08 2021

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WASHINGTON — Victims of Hurricane Ida that began on August 26 now have until January 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today.

The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently this includes the entire state of Louisiana, but taxpayers in Ida-impacted localities designated by FEMA in neighboring states will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

"During this difficult time, the IRS stands ready to help victims of Hurricane Ida," said IRS Commissioner Chuck Rettig. "We want people affected by this devastating hurricane focused on their safety and recovery for themselves and their families. To provide assistance now and in the weeks ahead, we have a variety of different types of relief available to help people and businesses affected by this disaster."

The tax relief postpones various tax filing and payment deadlines that occurred starting on August 26, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on October 15, 2021, will now have until January 3, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.

The January 3, 2022 deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. It also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on November 15, 2021. Businesses with extensions also have the additional time including, among others, calendar-year corporations whose 2020 extensions run out on October 15, 2021.

In addition, penalties on payroll and excise tax deposits due on or after August 26 and before September 10, will be abated as long as the deposits are made by September 10, 2021.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year (2020). Be sure to write the FEMA declaration number – 4611 − for Hurricane Ida in Louisiana on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by Hurricane Ida and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.

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

Source: IRS       

Taxpayers should be on the lookout for new version of SSN scam

Posted by Admin Posted on Aug 24 2021

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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          

Know the Nuances of the Nanny Tax

Posted by Admin Posted on Aug 24 2021

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Many families hire household workers to care for their children, their home or their outdoor spaces. If you’re among them, be sure you know the nuances of the “nanny tax.”

Withholding taxes

For federal tax purposes, a household worker is anyone who does household work for you and isn’t an independent contractor. Common examples include child care providers, housekeepers and gardeners.

If you employ such a person, you aren’t required to withhold federal income taxes from the individual’s pay unless the worker asks you to and you agree. In that case, the worker would need to complete a Form W-4. However, you may have other withholding and payment obligations.

You must withhold and pay Social Security and Medicare taxes, otherwise known as “FICA” taxes, if your worker earns cash wages of $2,300 or more (excluding food and lodging) during 2021. If you reach the threshold, all wages (not just the excess) are subject to FICA taxes.

Employers are responsible for withholding the worker’s share and must pay a matching employer amount. The Social Security tax portion of FICA taxes is 6.2% for both the employer and the worker (12.4% total). Medicare tax is 1.45% each for the employer and the worker (2.9% total). If you prefer, you can pay your worker’s share of Social Security and Medicare taxes, instead of withholding it from pay.

However, if your worker is under 18 and child care isn’t his or her principal occupation, you don’t have to withhold FICA taxes. Therefore, if your worker is really a student/part-time babysitter, there’s no FICA tax liability.

Reporting and paying

You pay nanny tax by increasing your quarterly estimated tax payments or increasing withholding from your wages rather than by making an annual lump-sum payment. You don’t have to file any employment tax returns — even if you’re required to withhold or pay tax — unless you own a business. Instead, your tax professional will report employment taxes on Schedule H of your individual Form 1040 tax return.

On your return, your employer identification number (EIN) will be included when reporting employment taxes. The EIN isn’t the same as your Social Security number. If you need an EIN, you must file Form SS-4.

A keen awareness

Retaining a household worker calls for careful recordkeeping and a keen awareness of the applicable rules. Keep in mind that you may also have federal unemployment tax (FUTA) liability, as well as state and local tax obligations. Contact us for assistance complying.

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       

Seniors and immigrants to watch out for predators

Posted by Admin Posted on Aug 24 2021

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The Internal Revenue Service continued its "Dirty Dozen" tax scams with a warning for people to watch out for predators using tax-related schemes ranging from fake charities to scams targeting seniors and immigrants.

The IRS continues to see a group of ruses by dishonest people who trick others into doing something illegal or which ultimately causes them harm. Predators encourage otherwise honest people to do things they don't realize are illegal or prey on their good will to take something from them.

Several schemes involve fraudsters targeting groups like seniors or immigrants, posing as fake charities impersonating IRS authorities, charging excessive fees for Offers in Compromise, conducting unemployment insurance fraud and unscrupulously preparing tax returns.

Here are five of this year's "Dirty Dozen" scams.

Fake charities

The IRS advises taxpayers to be on the lookout for scammers who set up fake organizations to take advantage of the public's generosity. They especially take advantage of tragedies and disasters, such as the COVID-19 pandemic.

Scams requesting donations for disaster relief efforts are especially common on the phone. Taxpayers should always check out a charity before they donate, and they should not feel pressured to give immediately.

Taxpayers who give money or goods to a charity may be able to claim a deduction on their federal tax return by reducing the amount of their taxable income. But taxpayers should remember that to receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, use the IRS Tax Exempt Organization Search tool. (It's also important for taxpayers to remember that they can't deduct gifts to individuals or to political organizations and candidates.)

Here are some tips to remember about fake charity scams:

  • Individuals should never let any caller pressure them. A legitimate charity will be happy to get a donation at any time, so there's no rush. Donors are encouraged to take time to do the research.
  • Potential donors should ask the fundraiser for the charity's exact name, web address and mailing address, so it can be confirmed later. Some dishonest telemarketers use names that sound like large well-known charities to confuse people.
  • Be careful how a donation is paid. Donors should not work with charities that ask them to pay by giving numbers from a gift card or by wiring money. That's how scammers ask people to pay. It's safest to pay by credit card or check — and only after having done some research on the charity.

For more information about fake charities see the information on fake charity scams on the Federal Trade Commission web site.

Immigrant/senior fraud

IRS impersonators and other scammers are known to target groups with limited English proficiency as well as senior citizens. These scams are often threatening in nature.

While it has diminished some recently, the IRS impersonation scam remains a common scam. This is where a taxpayer receives a telephone call threatening jail time, deportation or revocation of a driver's license from someone claiming to be with the IRS. Taxpayers who are recent immigrants often are the most vulnerable and should ignore these threats and not engage the scammers.

The IRS reminds taxpayers that the first contact with the IRS will usually be through mail, not over the phone. Legitimate IRS employees will not threaten to revoke licenses or have a person deported. These are scare tactics.

As phone scams pose a major threat to people with limited access to information, including individuals not entirely comfortable with the English language, the IRS has added new features to help those who are more comfortable in a language other than English. The Schedule LEP PDF allows a taxpayer to select in which language they wish to communicate. Once they complete and submit the schedule, they will receive future communications in that selected language preference.

Additionally, the IRS is providing tax information, forms and publications in many languages other than English. IRS Publication 17, Your Federal Income Tax, is now available in Spanish, Chinese (simplified and traditional), Vietnamese, Korean and Russian.

Seniors beware

Senior citizens and those who care about them need to be on alert for tax scams targeting older Americans. The IRS recognizes the pervasiveness of fraud targeting older Americans, along with the Department of Justice and FBI, the Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB), among others.

In an effort to make filing taxes easier for seniors, the IRS reminds seniors born before Jan. 2, 1956 that the IRS has re-designed the Form 1040 and its instructions, and that they can use the Form 1040SR and related instructions.

The IRS reminds seniors that the best source for information about their federal taxes is the IRS website.

Offer in Compromise "mills"

Offer in Compromise mills contort the IRS program into something it's not – misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars.

"We're increasingly concerned that people having trouble paying their taxes are being duped into misleading claims about settling their tax debts for 'pennies on the dollar'," said IRS Commissioner Chuck Rettig. "The IRS urges people to take a few minutes to review information on IRS.gov to see if they might be a good candidate for the program – and avoiding costly promoters who advertise on radio and television."

The IRS reminds taxpayers to beware of promoters claiming their services are needed to settle with the IRS, that their tax debts can be settled for "pennies on the dollar" or that there is a limited window of time to resolve tax debts through the Offer in Compromise (OIC) program.

An "offer," or OIC, is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to settle, or "compromise," federal tax liabilities by accepting less than full payment under certain circumstances. However, some promoters are inappropriately advising indebted taxpayers to file an OIC application with the IRS, even though the promoters know the person won't qualify. This costs honest taxpayers money and time.

Taxpayers should be especially wary of promoters who claim they can obtain larger offer settlements than others or who make misleading promises that the IRS will accept an offer for a small percentage. Companies advertising on TV or radio frequently can't do anything for taxpayers that they can't do for themselves by contacting the IRS directly.

Taxpayers can go to IRS.gov and review the Offer in Compromise Pre-Qualifier Tool to see if they qualify for an OIC. The IRS reminds taxpayers that under the First Time Penalty Abatement policy, taxpayers can go directly to the IRS for administrative relief from a penalty that would otherwise be added to their tax debt.

Unscrupulous tax return preparers

Although most tax preparers are ethical and trustworthy, taxpayers should be wary of preparers who won't sign the tax returns they prepare, often referred to as ghost preparers. For e-filed returns, the "ghost" will prepare the return, 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 (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 quick profit by promising a big refund or charging fees based on the size of the refund.

Unscrupulous tax return preparers may also:

  • Require payment in cash only and will 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.

It's important for taxpayers to choose their 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.

Taxpayers should also remember that they are legally responsible for what is on their tax return even if it is prepared by someone else. Consumers can help protect themselves by choosing a reputable tax preparer.

Unemployment insurance fraud

Unemployment fraud often involves individuals acting in coordination with or against employers and financial institutions to get state and local assistance to which they are not entitled. These scams can pose problems that can adversely affect taxpayers in the long run.

States, employers and financial institutions need to be aware of the following scams related to unemployment insurance:

  • Identity-related fraud: Filers submit applications for unemployment payments using stolen or fake identification information to perpetrate an account takeover.
  • Employer-employee collusion fraud: The employee receives unemployment insurance payments while the employer continues to pay the employee reduced, unreported wages.
  • Misrepresentation of income fraud: An individual returns to work and fails to report the income to continue receiving unemployment insurance payments, or in an effort to receive higher unemployment payments, applicants claim higher wages than they actually earned.
  • Fictitious employer-employee fraud: Filers falsely claim they work for a legitimate company, or create a fictitious company, and supply fictitious employee and wage records to apply for unemployment insurance payments.
  • Insider fraud: State employees use credentials to inappropriately access or change unemployment claims, resulting in the approval of unqualified applications, improper payment amounts, or movement of unemployment funds to accounts that are not on the application.

Below is a short list of financial red flag indicators of unemployment fraud:

  • Unemployment payments are coming from a state other than the state in which the customer reportedly resides or has previously worked.
  • Multiple state unemployment payments are made within the same disbursement timeframe.
  • Unemployment payments are made in the name of a person other than the account holder or in the names of multiple unemployment payment recipients.
  • Numerous deposits or electronic funds transfers (EFTs) are made that indicate they are unemployment payments from one or more states to people other than the account holder(s).
  • A higher amount of unemployment payments is seen in the same timeframe compared to similar customers and the amount they received.

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

Source: IRS  

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

Posted by Admin Posted on Aug 24 2021

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

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

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

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

Note that the IRS does not:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
  • Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.
  • Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If you owe taxes:

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

Here is what the IRS will do:

If an IRS representative visits you, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. HSPD-12 is a government-wide standard for secure and reliable forms of identification for federal employees and contractors. You have the right to see these credentials. And if you would like to verify information on the representative’s HSPD-12 card, the representative will provide you with a dedicated IRS telephone number for verifying the information and confirming their identity.

Collection

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

Learn more about the IRS revenue officers’ collection work.

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

Learn more about how to know if it’s really an IRS Private Debt Collector.

Audits

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

Learn more about the IRS audit process.

Criminal Investigations

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

Learn more about the What Criminal Investigation Does and How Criminal Investigations are Initiated.

Beware of Impersonations

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

For a comprehensive listing of recent tax scams and consumer alerts, visit Tax Scams/Consumer Alerts.

Know Who to Contact

  • Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
  • Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.
  • Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.

If you have any questions regarding accounting, domestic taxation, 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            

Identity Theft and Unemployment Benefits

Posted by Admin Posted on Aug 23 2021

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States have experienced a surge in fraudulent unemployment claims filed by organized crime rings using stolen identities. Criminals are using these stolen identities to fraudulently collect benefits across multiple states.

Because unemployment benefits are taxable income, states issue Form 1099-G, Certain Government Payments, to recipients and to the IRS to report the amount of taxable compensation received and any withholding. Box 1 on the form shows "Unemployment Compensation." You should report fraud to the issuing state agency and request a corrected Form 1099-G.

For details on how to report fraud to state workforce agencies, how to obtain a corrected Form 1099-G, a list of state contacts and other steps you should take if you are a victim, see the U.S. Department of Labor’s DOL.gov/fraud page. Please follow Department of Labor guidance on reporting fraud and protecting yourself from additional scams.

You may be a victim of unemployment identity theft if you received:

  • Mail from a government agency about an unemployment claim or payment and you did not recently file for unemployment benefits. This includes unexpected payments or debit cards and could be from any state.
  • An IRS Form 1099-G reflecting unemployment benefits you weren't expecting. Box 1 on this form may show unemployment benefits you did not receive or an amount that exceeds your records for the unemployment benefits you did receive. The form itself may be from a state in which you did not file for benefits.
  • While you are still employed, a notice from your employer indicating that your employer received a request for information about an unemployment claim in your name.

IRS Information for Taxpayers

When you file your income taxes, ONLY include income you received, even if you have not yet received a corrected 1099-G from the state.
 

  • The processing of your tax return should not be delayed while your report of unemployment identity theft is under investigation.
  • Do not report the incorrect 1099-G income on your tax return.
  • The American Rescue Plan of 2021 provides for a one-time exemption of $10,200 per person in unemployment benefits to individuals and couples who earned $150,000 or less last year. If you have already filed your taxes, do not file an amended return. The IRS will issue additional guidance.
  • There is no requirement to file a Form 14039, Identity Theft Affidavit. A Form 14039 should be filed only if the taxpayers' e-filed tax return is rejected because a duplicate return with their Social Security number is already on file or if the IRS instructs them to file a Form 14039.
  • Taxpayers who were victims of an unemployment benefits identity theft scheme should consider opting into the IRS Identity Protection PIN program. An IP PIN is a six-digit number that helps prevent thieves from filing federal tax returns in the names of identity theft victims. The IP PIN is a voluntary program open to any taxpayer who can verify his or her identity. See details at Get an IP PIN.

IRS Information for Employers

Employers are often the first line of defense against unemployment fraud. Employers should:

  • Respond quickly to state notices that its employees have filed for unemployment claims, especially if the names on the notices are not employees;
  • Be alert to misuse of the IRS-issued Employer Identification Number that fraudsters may use to file jobless claims;
  • File a Form 14039-B PDF, Business Identity Theft Affidavit, if the company’s EIN is being used to generate fraudulent unemployment benefit claims.
  • Write to the IRS to close out the business tax account if the company is going out of business; this will help curtail the misuse of dormant EINs.

Justice Department Warns on Fake Unemployment Benefit Websites

The Department of Justice recently warned that fraudsters are creating websites mimicking unemployment benefit websites, including state workforce agency (SWA) websites, for the purpose of unlawfully capturing consumers’ personal information.
To lure consumers to these fake websites, fraudsters send spam text messages and emails purporting to be from an SWA and containing a link. The fake websites are designed to trick consumers into thinking they are applying for unemployment benefits and disclosing personally identifiable information and other sensitive data. That information can then be used by fraudsters to commit identity theft.

Help stop these scams by reporting them and using the list of state contacts at DOL.gov/fraud.

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                                 

5 Key Points About Bonus Depreciation

Posted by Admin Posted on Aug 23 2021

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Like most business owners, you’ve probably heard about 100% bonus depreciation — and hopefully you’ve been claiming it when appropriate. It’s available for a wide range of qualifying asset purchases and allows you to deduct the entire expense of an eligible asset in the year it’s placed in service.

But there are many important details to keep in mind as you plan your asset purchases for 2021 and beyond. Here are five key points about this powerful tax-saving tool:

1. It’s scheduled to be reduced and eliminated. Under current law, 100% bonus depreciation will be gradually reduced and eliminated for property placed in service in 2023 through 2026. Thus, an 80% rate will apply to property placed in service in 2023, 60% in 2024, 40% in 2025, and 20% in 2026. Bonus depreciation will be eliminated for 2027 and later years.

For some aircraft (generally, company planes) and for costs of certain property with a long production period, the reduction is scheduled to take place beginning a year later, from 2024 through 2027. Then it will be eliminated beginning in 2028.

Of course, Congress could pass legislation to extend bonus depreciation.

2. It’s available for new and most used property. Before a Tax Cuts and Jobs Act (TCJA) provision went into effect in late 2017, used property didn’t qualify for bonus depreciation. It currently qualifies unless the taxpayer is the party that previously used the property or unless the property was acquired in ineligible transactions. (These are, generally, acquisitions that are tax-free or from a related person or entity.)

3. In some situations you should elect to turn it down. Taxpayers can elect out of bonus depreciation for one or more classes of property. The election out may be useful for certain businesses. These include sole proprietorships and pass-through entities, such as partnerships, S corporations and, typically, limited liability companies, that want to prevent the “wasting” of depreciation deductions from applying them against lower-bracket income in the year property was placed in service — instead of applying them against anticipated higher-bracket income in future years.

C corporations are currently taxed at a flat rate. But because an increase to the corporate rate has been proposed, it could also make sense for C corporations to elect out of bonus depreciation this year.

4. Certain building improvements are eligible. Before the TCJA, bonus depreciation was available for two types of real property: 1) land improvements other than buildings, such as fencing and parking lots, and 2) qualified improvement property (QIP), a broad category of internal improvements made to nonresidential buildings after the buildings have been placed in service.

The TCJA inadvertently eliminated bonus depreciation for QIP. However, 2020’s CARES Act made a retroactive technical correction to the TCJA that makes QIP placed in service after December 31, 2017, eligible for bonus depreciation.

5. 100% bonus depreciation has — temporarily — reduced the importance of Section 179 expensing. If you own a smaller business, you’ve likely benefited from Sec. 179 expensing. This is an elective benefit that, subject to dollar limits, allows an immediate deduction of the cost of equipment, machinery, off-the-shelf computer software and certain building improvements.

Sec. 179 has been enhanced by the TCJA, but the availability of 100% bonus depreciation is economically equivalent and has greatly reduced the cases in which Sec. 179 expensing is useful. If bonus depreciation is reduced and eliminated as scheduled, then the importance of Sec. 179 will return for many taxpayers.

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 July 30 2021

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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

Ten Things to Know About Advance Child Tax Credit Payments

Posted by Admin Posted on July 30 2021

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For taxpayers wanting more information about the 2021 Child Tax Credit and advanced payment option, here’s ten things you need to know.

  1. The IRS is determining potential Advanced Child Tax Credit Payment (AdvCTC) eligibility* using information from:
    • taxpayer’s 2020 tax return (or, in some cases, taxpayer’s 2019 tax return),
      or
    •  taxpayer’s information submitted by using the Non-Filers tool on IRS.gov last year (to register for an Economic Impact Payment),
      or
    • taxpayer’s information submitted using the new non-filer tool this year.
      *Note that this is not necessarily the same as the information that the IRS will use to determine your bank account information.
  2. If taxpayer is unsure if they qualify, they can use the Advance Child Tax Credit Eligibility Assistant tool to find out.
  3. Families who are eligible for AdvCTC (based on the above) will receive three letters.
  4.  The monthly payment amount will be up to $300 per month for each qualifying child under age 6, and up to $250 per month for each qualifying child ages 6 to 17.
  5.  Payments start July 15, 2021. Additional payments will be issued:
    Aug. 13 | Sept. 15 | Oct. 15 | Nov. 15 | and Dec. 15.
  6. Payments will be issued either by direct deposit or paper check.
  7. Taxpayers will be able to use the IRS Child Tax Credit Update Portal to:
    • Check if they are enrolled to receive advance payments.
    • Unenroll to stop getting advance payments. Important note: if taxpayers are married filing joint, both must unenroll.
    • Provide or update bank account information for monthly payments sent in August or later.
      Note: More functionality within this tool will be added later this year that will allow taxpayers to:
    • Make changes to your address;
    • Report a change to your dependents;
    • Report a change in marital status; and
    • Report a change in income.
  8. Taxpayers who unenroll can still report the Child Tax Credit on their 2021 individual income tax return.
  9.  All taxpayers who receive AdvCTC will be required to reconcile the total payments received versus the total Child Tax Credit they qualify for on their 2021 Individual Tax Return, when they file in 2022.

10. The best places to find more information about AdvCTC are:

 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                                 

IRS readies nearly 4 million refunds for unemployment compensation overpayments

Posted by Admin Posted on July 30 2021

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The Internal Revenue Service announced that it will issue another round of refunds to nearly 4 million taxpayers who overpaid their taxes on unemployment compensation received last year.

The American Rescue Plan Act of 2021, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000.

Refunds by direct deposit will begin July 14 and refunds by paper check will begin July 16. The IRS previously issued refunds related to unemployment compensation exclusion in May and June, and it will continue to issue refunds throughout the summer.

To ease the burden on taxpayers, the IRS has been reviewing the Forms 1040 and 1040SR that were filed prior to the law's enactment to identify those people who are due an adjustment. For taxpayers who overpaid, the IRS will either refund the overpayment, apply it to other outstanding taxes or other federal or state debts owed.

For this round, the IRS identified approximately 4.6 million taxpayers who may be due an adjustment. Of that number, approximately 4 million taxpayers are expected to receive a refund. The refund average is $1,265, which means some will receive more and some will receive less.

Most taxpayers need not take any action and there is no need to call the IRS. However, if, as a result of the excluded unemployment compensation, taxpayers are now eligible for deductions or credits not claimed on the original return, they should file a Form 1040-X, Amended U.S. Individual Income Tax Return.

Taxpayers should file an amended return if they:

  • did not submit a Schedule 8812 with the original return to claim the Additional Child Tax Credit and are now eligible for the credit after the unemployment compensation exclusion;
  • did not submit a Schedule EIC with the original return to claim the Earned Income Tax Credit (with qualifying dependents) and are now eligible for the credit after the unemployment compensation exclusion;
  • are now eligible for any other credits and/or deductions not mentioned below. Make sure to include any required forms or schedules.

Taxpayers do not need to file an amended return if they:

  • already filed a tax return and did not claim the unemployment exclusion; the IRS will determine the correct taxable amount of unemployment compensation and tax;
  • have an adjustment, because of the exclusion, that will result in an increase in any non-refundable or refundable credits reported on the original return;
  • did not claim the following credits on their tax return but are now eligible when the unemployment exclusion is applied: Recovery Rebate Credit, Earned Income Credit with no qualifying dependents or the Advance Premium Tax Credit. The IRS will calculate the credit and include it in any overpayment;
  • filed a married filing joint return, live in a community property state, and entered a smaller exclusion amount than entitled on Schedule 1, line 8.

Taxpayers will generally receive letters from the IRS within 30 days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

 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        

Can Your Business Benefit From the Enhanced Employee Retention Credit?

Posted by Admin Posted on July 30 2021

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Over the course of the COVID-19 pandemic, many businesses have had to shut down or reduce operations, causing widespread furloughs and layoffs. Fortunately, employers that have kept workers on their payrolls may be eligible for a refundable employee retention credit. Three laws have created, extended and enhanced the credit.

The original law

The CARES Act created the employee retention credit in March of 2020. The credit originally:

Equaled 50% of qualified employee wages paid by an eligible employer in an applicable 2020 calendar quarter,

Was subject to an overall wage cap of $10,000 per eligible employee, and

Was available to eligible large and small employers.

The credit covered wages paid from March 13, 2020, through Dec. 31, 2020.

What’s changed

The Consolidated Appropriations Act (CAA), signed into law in December of 2020, extended the covered wage period to include the first two calendar quarters of 2021, ending on June 30, 2021. And now the American Rescue Plan Act (ARPA), signed into law on March 11, has extended it again through Dec. 31, 2021.

In addition, for the first two quarters of 2021, the CAA increased the overall covered wage ceiling to 70% of qualified wages paid during the applicable quarter. And it increased the per-employee covered wage ceiling to $10,000 of qualified wages paid during the applicable quarter (versus a $10,000 annual ceiling under the original rules). Because of the ARPA extension, these higher wage ceilings now apply to all four quarters of 2021.

Substantial tax savings

Additional rules and limits apply to the employee retention credit, and these are just some of the changes made to it. But the potential tax savings can be substantial. Contact your tax advisor for more information about this tax saving opportunity.

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     

The IRS begins adjusting tax returns for unemployment compensation exclusion

Posted by Admin Posted on July 30 2021

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On May 14, the IRS issued notification that it began making adjustments to 2020 tax returns to allow the exclusion of unemployment compensation of up to $10,200, as included in the American Rescue Plan Act of 2021.

Here’s some quick facts you need to know:

  • The adjustments will be done in phases.
  1. The first phase, began on May 6, 2021, and includes single taxpayers who had the simplest tax returns, such as those filed by taxpayers who did not claim children or any refundable tax credits.
  2. The second phase is scheduled to begin after the completion of the first phase and will include married filing joint taxpayers with more complex tax returns.
  • The $10,200 per person exclusion applies to taxpayers, single or married filing jointly, with modified adjusted gross income of less than $150,000. The $10,200 is the amount of income exclusion, not the amount of the refund.
  • A notice, CP 21 or CP 22, will be issued within 30 days to inform you of the adjustment and let you know if the adjustment created a balance due, refund, or no change. You should keep any Notice you receive for your tax records.
  • Refund amounts will vary and not all adjustments will result in a refund.
  • If the adjustment results in a refund, it will be issued as a direct deposit (if the IRS has your bank account information) or a check (if no valid bank account information is available), as long as no other past due amounts are owed which the IRS is obligated to collect.
  1. If other amounts are owed, such as past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or certain federal nontax debts (e.g., student loans), the refund will be offset to pay them.
  2. The IRS will send a separate notice to you if the refund is sent to pay unpaid debts.

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

Posted by Admin Posted on July 30 2021

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

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

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

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

Note that the IRS does not:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
  • Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.
  • Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If you owe taxes:

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

Here is what the IRS will do:

If an IRS representative visits you, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. HSPD-12 is a government-wide standard for secure and reliable forms of identification for federal employees and contractors. You have the right to see these credentials. And if you would like to verify information on the representative’s HSPD-12 card, the representative will provide you with a dedicated IRS telephone number for verifying the information and confirming their identity.

Collection

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

Learn more about the IRS revenue officers’ collection work.

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

Learn more about how to know if it’s really an IRS Private Debt Collector.

Audits

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

Learn more about the IRS audit process.

Criminal Investigations

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

Learn more about the What Criminal Investigation Does and How Criminal Investigations are Initiated.

Beware of Impersonations

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

For a comprehensive listing of recent tax scams and consumer alerts, visit Tax Scams/Consumer Alerts.

Know Who to Contact

  • Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
  • Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.
  • Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.
  •  If you have any questions regarding accounting, domestic taxation, 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 Do I Owe a Penalty and Interest and What Can I Do About It?

Posted by Admin Posted on July 29 2021

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There are many reasons why the IRS may charge penalties on your tax account. The IRS is legally required, under Internal Revenue Code (IRC) § 6601, to charge interest when you fail to pay the full amount you owe on time. Interest may also accrue on penalties. Interest and any applicable penalties will continue to accrue until you pay your balance due in full. Here are some of the most common penalties, information on why they may have been charged, and how to request penalty abatement (removal) if applicable.

First let’s talk about some common penalty charges on individual accounts, along with interest, and why the IRS charges them.

Penalties (and the reasons for them) include:

  • Failure to file – when you don’t file your tax return by the return due date or extended due date if an extension to file is requested and approved.
  • Failure to pay – when you don’t pay the taxes reported on your tax return in full by the due date of the original tax return. An extension to file doesn’t extend the time to pay so you must pay your taxes by the original due date of the tax return even if you have requested an extension of time to file your tax return. In addition, the IRS may charge a failure to pay penalty if the IRS makes a notice and demand for payment and you fail to pay on time.
  • Failure to pay proper estimated tax – when you don’t pay enough taxes due for the year with your quarterly estimated tax payments, or through withholding, when required.
  • Bad check – when your bank doesn’t honor your check or other form of payment.

Interest

The IRS is required to charge interest on any unpaid balance owed until it is paid in full. See the chart on the IRS’s Interest page for more details.

See Notice 746: Information about Your Notice, Penalty and Interest

Common scenarios where you may get penalty and interest charges

Here are some common scenarios this year where you may see penalty and interest charges, and how to handle them.

  • I sent a payment to the IRS, but I still got a bill with penalty and interest charges. What can I do?If you mailed a payment in 2021 to the IRS on or before May 17, it may still be unopened in the backlog of mail the IRS is processing due to COVID-19. See the information for Received a Bill or Notice and Sent Us a Check for more details. The IRS will process your payment with the date the IRS received it. Do not cancel your check, and make sure funds are available for when the IRS processes your payment.
  • I received penalty and interest charges because I did not pay yet. What are my options?First, it’s important to understand that applicable penalties and interest will continue to accrue until the account is paid in full, so the sooner you pay the balance, the less you will have to pay in penalties and interest.

There are a number of ways you can send a payment, including payment options if you cannot full pay right now, see the IRS Pay webpage or our articles File by May 17; here are some options and Need options for when you owe federal taxes, but can’t pay in full?

How can I dispute IRS penalties?

If you were affected by the pandemic or other circumstances, the IRS may be able to remove or reduce some penalties due to reasonable cause, but only if you tried to comply with the tax law but were unable to due to facts and circumstances beyond your control. If this applies to you and you have the necessary documentation to support your claim, you can call the toll-free number on your IRS notice or write a letter to request penalty relief due to reasonable cause.

See the IRS reasonable cause relief page for more details.

The IRS will also consider the following situations for waiving penalties:

What if the IRS denies my penalty abatement request?

If the IRS rejects your request to remove a penalty, you may be able to request a conference or hearing with the IRS Independent Office of Appeals. You have 30 days from the date of the rejection letter to file your request for an appeal.

Refer to Penalty Appeal Eligibility and Publication 4576, Orientation to the Penalty Appeals Process for more details.

How do I request removal of interest charges?

If any of your tax and/or penalties are reduced, the IRS will also automatically reduce the related interest.

The IRS doesn’t remove or reduce interest for reasonable cause or as first-time relief. Interest is charged by law and will continue until your tax account is fully paid.

The IRS may only reduce the amount of interest you owe if the interest is due to an unreasonable error or delay by an IRS officer or employee in performing a ministerial or managerial act.

Use Form 843 PDF to request a reduction in interest. See Instructions for Form 843 PDF and IRC Section 6404(e)(1) for additional information.

What else do I need to know?

The IRS will continue to charge failure-to-pay penalty up to 25% in total or until the tax is paid in full, whichever comes first. In general, the IRS won’t abate the failure-to-pay penalty until the underlying tax has been paid in full. Be aware that if there is still a balance due, even after the penalty is removed, interest will continue to accrue until the account is paid in full.

As of this date, the IRS response times for calls and written submissions is still being affected by the ongoing Coronavirus situation, so see the IRS Operational status page, including the section on Answered a Letter or Notice, for more details. However, even if the IRS takes a bit longer to address your request, if granted, all applicable penalties (and associated interest) will be removed as appropriate.

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

Source: TAS     

ARPA Provides More Than Just Direct Payments to Taxpayers

Posted by Admin Posted on July 28 2021

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On March 11, another round of COVID-19 relief legislation was signed into law. The American Rescue Plan Act (ARPA) includes funding for individuals, businesses, and state and local governments, but also some significant tax-related provisions.

ARPA extends and expands some tax provisions in the CARES Act and the Consolidated Appropriations Act (CAA) and also includes some new tax-related provisions.

A quick look

Here’s a quick look at some of the tax provisions that may affect you:

Individuals

Recovery rebates of up to $1,400 for singles and heads of households and $2,800 for married couples filing jointly — plus $1,400 per qualifying dependent (including adult dependents) — subject to adjusted gross income (AGI) phaseouts starting at $75,000 for singles, $112,500 for heads of households and $150,000 for joint filers and ending at $80,000, $120,000 and $160,000, respectively

Increased Child credit, including advance payments of part of the credit later this year

Expanded child and dependent care tax credit

Tax-free treatment of forgiven student loan debt

Exclusion from gross income of the first $10,200 in unemployment benefits received

Businesses and other employers

Extended and expanded tax credits for retaining employees, through Dec. 31, 2021

Extended and modified payroll tax credits for paid sick and family leave, through Sept. 30, 2021

Extended excess business loss limitation, through Dec. 31, 2026

Expansion of the Section 162(m) limits on the tax deduction public companies can take for executive compensation to cover the CEO, the CFO and the five next highest paid employees, beginning in 2027

How will you benefit?

This is just a brief overview of the tax-related provisions of ARPA. Additional rules and limits apply. Contact your tax advisor for more details on these provisions and how you might benefit.

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        

Beware of scammers offering help with getting advanced child tax credit payments

Posted by Admin Posted on July 28 2021

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We know a lot of eligible families are excited to learn how to get part of their Child Tax Credit in advance this year. So are scammers. The Taxpayer Advocate Service wants you to be alert of potential scams that might use that eagerness to harm you and your family by offering to help you get that money.

Here are some common scams to avoid:

Don’t fall for anyone making calls, sending emails, texts or direct messages, or posting on social media offering to help you apply for child tax credit benefits or offering ways to get advanced payment money quicker or get you more money through a larger child tax credit.

Also don’t provide any personal information in response to advertisements, especially any individual or company asking for the following information:

  • Social Security, bank account, debit and credit card numbers or other financial information
  • Home address, work address, or telephone number(s)
  • Any tax return related information

The IRS will never ask for you to pay by cash, gift card, credit card, wire transfer through companies like Money Gram or Western Union, or cryptocurrency to get help with making sure you get the necessary information to receive this payment. IRS, TAS, or other official government tax related information assistance is always free!

Go to the IRS Tax Scams/Consumer Alerts site if you think something sounds too good to be true. They publish warnings about the most recently identified scams, schemes, and phishing efforts. If you do encounter this type of activity, please also visit the Tax Scams – How to Report Them page to report it. Reporting these illegal efforts helps other taxpayers who might not be so savvy, potentially avoid falling prey to them. It also provides a lead for federal agencies to potentially identify and halt those activities, where possible.

2021 Advanced Child Tax Credit general information

As part of the Rescue Plan Act Armeican, families may be eligible for an increased child tax credit amount and may receive advanced payments of the credit for 2021. Eligible families will be receiving monthly payments from the government starting July 15 through December 2021,

The IRS will send these monthly payments directly to people who qualify, based on 2020 or 2019 tax return information on file, through direct deposit, paper checks, or debit cards, with no action required by you to get these payments as long as the IRS has this information on file.

Eligible families will get up to half of their child tax credit in these monthly payments and the other half when they file their 2021 taxes.

More details are coming soon and will be updated on IRS.gov about:

  • how to get official help filing a 2020 tax return to ensure you receive these payments (in addition to what’s already on the IRS Filing and Free File pages);
  • choosing to un-enroll or opt-out (so you get the payment in full instead on your 2021 tax return, in 2022); or
  • changing information the IRS has on file to calculate these advanced payments.

Use ONLY official IRS or TAS websites

For the real deal on information about advanced payments of the Child Tax Credit, refer only to the official IRS.gov Advance Child Tax Credit Payments in 2021 page or IRS News page, or monitor our Taxpayer Advocate Service siteNews and Information page or Coronavirus (COVID-19) Tax Relief page.

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

Taxpayers may file a 2020 superseding return changing their joint filing election to receive the third economic impact payment

Posted by Admin Posted on July 22 2021

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Economic Impact Payments

The IRS previously issued two rounds of economic impact payments (EIPs). The IRS delivered over 160 million payments for the first round of EIPs and 147 million payments for the second round of EIPs. The IRS has currently disbursed approximately 159 million payments for the third round of EIPs based on the adjusted gross incomes of the taxpayers’ latest processed returns from 2019 or 2020. The IRS is also automatically issuing and will continue to issue true-up payments for those individuals who already received a third EIP based on their 2019 tax return but have since filed their 2020 tax return and qualify for additional EIP funds. However, since enactment of the legislation many eligible victims of domestic abuse face issues in receiving their EIPs.

If the IRS determined the EIP based upon a filed joint tax return, it electronically deposited the EIP to the bank account shown on the joint return or it issued a check in both taxpayers’ names and sent the check to the address shown on the joint return. And on March 30, the IRS advised joint filers that taxpayer may receive half of the EIP payment as a direct deposit and the other half as a check, so keep an eye on your mailbox.

Superseding Returns

In my April 29, 2020, blog, I called attention to superseding returns — returns filed after an original return but before the due date of the original return. Returns are typically due on April 15, but taxpayers can submit a Form 4868, Application for Automatic Extension of Time to File, until October 15. Taxpayers can use superseding returns to correct an error or change a tax election as a substitute for the original filed return. For example, taxpayers might elect to have an overpayment shown on an original return applied to the tax owed the following year. By filing a second (superseding) return, taxpayers can change that election and receive the refund in the current year instead.

Superseding returns are treated as a replacement of an original return, and the IRS adjusts its records accordingly (see, for example, Internal Revenue Manual (IRM) 21.6.7.4.10). As I noted in a recent blog, it is important to remember the IRS treats the original return filing date as the key date for assessment and refund statute purposes — not the date the superseding return was filed if the superseding return was filed before an extended due date.

Superseding Return Changing Filing Status

Another reason to file a superseding return would be to change the election to file a joint return. For example, taxpayers who were married at the conclusion of the tax year, filed a joint return, and subsequently divorced or separated might decide to change their filing statuses (to married filing separately or head of household, if eligible).  One additional benefit is each spouse would receive their EIP individually rather than receive their EIP as an electronic deposit to a joint bank account they no longer share, or via a check in both their names to an address they no longer share.

Taxpayers who are still married, particularly victims of domestic abuse, may also decide to change their joint return election by filing a timely superseding return. This may be especially important when they do not have access to the bank account shown on the filed joint return, or they cannot access the mail at the address shown on the joint return, and the other joint filer may misappropriate their share of EIP.

The IRM takes the position that superseding returns changing the joint filing election must be filed before the due date of the original return without regard to extensions. The deadline for filing an original return was postponed to May 17, 2021, for tax year 2020 (see Treas. Reg. § 1.6013–1(a)(1)). Taxpayers may request extensions to file beyond that date and may file superseding returns if they do so by the extended filing date, but the IRS’s position set forth in its IRM states that for irrevocable elections (e.g., section 179, Joint to Separate) a return filed after the original due date but on or before the extended due date does not constitute a superseding return.

If the IRS did not issue the first or second EIP based on a taxpayer’s filed superseding return changing a joint filing status and instead based the EIP on the prior joint return, the taxpayer may still claim a Recovery Rebate Credit (RRC) on their 2020 income tax return, Form 1040, line 30. However, taxpayers should expect that their refund will be delayed because the IRS will manually review the claim if its records are inconsistent with the RRC.  The IRS will likely issue a math error notice explaining that it is reducing or eliminating the claimed RRC because the EIP was previously paid. This leaves the taxpayer in a situation that is similar to the one I discussed in my February 11, 2021, blog — EIP is based on a joint return but the joint election was invalid because it was coerced or the taxpayers were not married. In either instance, taxpayers will have the opportunity to explain their situation by responding to the math error notice and must respond within 60 days that the joint election was invalid or was superseded and they did not receive the EIP to which they were entitled.

Conclusion and Recommendation

Taxpayers who did not receive their first or second EIP after they filed a superseding return changing their election from filing jointly may still be eligible for the RRC on their 2020 income tax return. Taxpayers may still file a superseding return electing to file married filing separately or head of household for the 2020 return by May 17 which may trigger a separate EIP after processing the superseded return.  That superseded return would be the basis for the third EIP.

I will continue to work with the IRS to ensure appropriate math error notice procedures are in place to assist with the processing of the 2020 RRC for those taxpayers that filed superseding returns changing their election to file a joint return.  Victims of domestic violence in particular may benefit from these procedures.

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

A Tax Quirk of Being a Business Partner

Posted by Admin Posted on July 22 2021

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If you’re a partner in a business, you may have encountered a situation that gave you pause: In any given year, you may have been taxed on more partnership income than was distributed to you. The cause of this quirk of taxation lies in the way partnerships and partners are taxed.

Pass-through taxation

Unlike regular corporations, partnerships aren’t subject to income tax. Instead, each partner is taxed on the partnership’s earnings — whether or not they’re distributed to the partners. Similarly, if a partnership has a loss, the loss is passed through to the partners. (Be aware that various rules may prevent partners from currently using their share of a partnership’s loss to offset other income.)

While a partnership isn’t subject to income tax, it’s treated as a separate entity for purposes of determining its income, gains, losses, deductions and credits. This makes it possible to pass through to partners their share of these items.

Partnership items

A partnership must file an information return, which is IRS Form 1065, “U.S. Return of Partnership Income.” On this form, the partnership separately identifies income, deductions, credits and other items. This is so partners can properly treat items that are subject to limits or other rules that could affect their treatment at the partner level.

Examples of such items include capital gains and losses, interest expense on investment debts, and charitable contributions. Each partner gets a Schedule K-1 showing his or her share of partnership items.

Basis and distribution rules

Basis and distribution rules ensure that partners aren’t taxed twice. A partner’s initial basis in his or her partnership interest (which varies depending on how the interest was acquired) is increased by his or her share of partnership taxable income.

When that income is paid out to partners in cash, they aren’t taxed on the cash if they have sufficient basis. Instead, partners reduce their basis by the distribution amount. If a cash distribution exceeds a partner’s basis, then the excess is taxed to the partner as a gain (often, capital gain).

The tax ins and outs

Partnership structure offers owners many benefits, but it’s important to understand the tax ins and outs. Contact us to discuss further.

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   

Curtailing Cryptocurrency Tax Surprises

Posted by Admin Posted on July 22 2021

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As investing in Bitcoin, Dogecoin and other cryptocurrencies becomes increasingly popular, investors need to understand the potential tax ramifications. Unlike traditional currency, the IRS views cryptocurrency as property for federal income tax purposes and even asks about it on Form 1040.

Many transactions involving cryptocurrency — such as purchases of goods or services — become taxable events where the purchase is also considered a sale. In addition, certain changes to the blockchain (the distributed digital “ledger” on which cryptocurrency transactions are typically recorded) can trigger taxable income.

Gains and losses

Because cryptocurrency is property, investors recognize a capital gain or loss when they sell it in exchange for traditional currency. As with other capital assets, the amount of gain or loss is the difference between the adjusted basis in the cryptocurrency (usually, the amount paid to acquire it) and the amount for which it’s sold. And, as with other capital assets, gain or loss may be short term or long term, depending on whether an investor held the cryptocurrency for more than one year. If cryptocurrency is sold at a loss, there may be limitations on the deductibility of the capital losses.

Cryptocurrency owners often are surprised to discover that using cryptocurrency to pay for goods or services can also trigger a capital gain or loss. Let’s say you purchased 10 units of cryptocurrency 10 years ago for $1,000 each, or a total of $10,000. This year, when the cryptocurrency’s price has climbed to $5,000 per unit, you use it to purchase a $50,000 car. Assuming your adjusted basis in the cryptocurrency is $10,000, you’ll recognize a $40,000 long-term capital gain. Generally, your gain or loss is the difference between your adjusted basis in the cryptocurrency and the fair market value of the goods or services you receive in exchange for it.

Forks and drops

In some cases, a cryptocurrency owner may recognize taxable income because of certain blockchain events. Taxable income may be triggered even if you don’t conduct transactions or take any other actions with the cryptocurrency.

IRS guidance in 2019 addressed the tax implications of two types of blockchain events: “hard forks” and “airdrops.” A hard fork occurs “when a cryptocurrency on a distributed ledger undergoes a protocol change resulting in a permanent diversion from the legacy or existing distributed ledger.” Put much more simply, it’s when a single cryptocurrency is split in two.

A hard fork may or may not be followed by an airdrop, which the IRS describes as “a means of distributing units of a cryptocurrency to the distributed ledger addresses of multiple taxpayers.” According to the guidance, when an airdrop follows a hard fork, it “results in the distribution of units of the new cryptocurrency to addresses containing the legacy cryptocurrency.” In simpler terms, it’s when “free coins” representing the new cryptocurrency are dropped into the existing cryptocurrency wallets of the owners of the legacy cryptocurrency.

If the new cryptocurrency isn’t airdropped or otherwise transferred to an account of the legacy cryptocurrency’s owner, a hard fork doesn’t trigger taxable income. On the other hand, if a hard fork is followed by an airdrop (which enables owners to immediately dispose of the new cryptocurrency), the owner recognizes ordinary income in the year the new cryptocurrency is received.

Stay current

Buying and selling cryptocurrency involves significant risk, including the possibility you could lose part or all of the money you’ve invested. Tax treatment of cryptocurrency is also subject to change. The IRS will likely continue to provide guidance on the distinctive tax issues presented by cryptocurrency. We can help you stay current on these developments and work with you to avoid unpleasant tax surprises.

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                              

Keep safe on social media at tax time – Don’t post or message tax info

Posted by Admin Posted on July 22 2021

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Social media timelines, forums and community groups may be a great way to connect with others and even comment publicly about something, but it’s not a great place to share your personal tax information.

Turning to social media and posting personal financial information such as tax transcripts or refund details are just examples of what you should not be doing. Also, asking personal tax details of others, puts you and them at risk for identity theft.

Never post your:

  • IRS account transcripts,
  • IRS Where’s My Refund status images,
  • Refund amounts,
  • Bank account or routing numbers,

Pictures or snapshots of tax returns and other documents with tax and personal information on them such as TAS Form 911, Request for Taxpayer Advocate Service Assistance.

TAS does not have the ability to open cases or respond to incoming messaging originating from our social media sites or any of our subscriber lists. If you qualify for TAS assistance, please follow the instructions on our “Submit a Request for Assistance” page.

Official Information Sources

Both the TAS and the IRS continuously strive to provide information to help you get your refund timely, to resolve return or account issues, and to help you protect yourself from fraud and ID theft. Unfortunately, the current Coronavirus (COVID-19) pandemic is exactly the type of situation that thieves and fraudsters look for to exploit.

The current IRS tax return processing programming is there to help prevent and identify possible ID Theft scenarios in relation to your account. Unfortunately, this programming protection can also delay a legitimate refund while information cross-checking is in process. And it can delay it past normal refund release timeframes in many cases.

Watch for official IRS notices and letters mailed to you that contain tax return and account updates. The correspondence may request you to take certain steps or actions to resolve any discrepancies identified. If identity theft is suspected, you may receive an official IRS letter 5071c requesting you to contact the IRS Identity Verification telephone number provided in the letter.

 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         

WHAT LEVEL OF HOME INSURANCE SHOULD I BUY?

Posted by Admin Posted on July 07 2021

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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

TAXPAYER BILL OF RIGHTS 6: THE RIGHT TO FINALITY

Posted by Admin Posted on July 07 2021

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The Taxpayer Bill of Rights (TBOR) is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service (IRS). The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Finality.

Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.

What you can expect:

  • The IRS generally has three years from the date you file your return to assess any additional tax for that tax year. There are some limited exceptions to this rule. For example, if you fail to file a return or you file a false or fraudulent return, the IRS has an unlimited amount of time to assess tax for that tax year.
  • The IRS generally has 10 years from the assessment date to collect unpaid taxes from you. The IRS can’t extend this 10-year period unless you agree to extend the period as part of an installment agreement to pay your tax debt or the IRS obtains a court judgment. However, there are some situations where the IRS may suspend the ten-year collection period and resume it later. The IRS may be able to do this if there’s a period when the IRS cannot collect, such as times of bankruptcy or a collection due process proceeding.
  • If you believe you have overpaid your taxes, you can file a refund claim asking for the money back. Generally, you must file a refund claim within three years from the date you filed your original return, or two years from the date you paid the tax, whichever is later.
  • If the IRS sends you a notice proposing additional tax (statutory notice of deficiency), the notice must include the deadline for when you can file a petition with the Tax Court to challenge the amount proposed.
  • To timely challenge a statutory notice of deficiency in Tax Court, you must file your petition within 90 days of the date of the statutory notice (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). If you do not timely file a petition, the IRS will assess the amount proposed in the statutory notice and you will receive a bill.
  • Generally, the IRS can only examine (audit) your tax return once for any given tax year. However, the IRS may reopen a previously examined return if the IRS finds it necessary. For example, if there is evidence of fraud, the IRS can reopen an exam.

To find out more about the TBOR and what it means to you, visit: https://www.taxpayeradvocate.irs.gov

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages. 

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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      

TAXPAYER BILL OF RIGHTS 7: THE RIGHT TO PRIVACY

Posted by Admin Posted on July 07 2021

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The Taxpayer Bill of Rights (TBOR) is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service (IRS). The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Privacy.

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.

What you can expect:

  • There are limits on the amount of wages that the IRS can levy (seize) to collect tax that you owe. A portion of your wages are protected from levy. The protected amount is the equivalent to the standard deduction, plus any deductions for personal exemptions.
  • The IRS can’t seize certain personal items, such as necessary schoolbooks, clothing, undelivered mail and certain amounts of furniture and household items. The IRS also can’t seize your primary home without court approval. It also must show there is no reasonable, alternative way to collect the tax debt from you.
  • If you submit an offer to settle your tax debt, and the offer relates only to how much you owe (known as a Doubt as to Liability Offer in Compromise), you do not need to submit any financial documentation.
  • The IRS should not seek intrusive and extraneous information about your lifestyle during an audit if there is no reasonable sign that you have unreported income.
  • During a Collection Due Process hearing, the Office of Appeals must consider whether the IRS’s proposed collection action balances the need for efficient tax collection with ensuring the IRS’s collection actions are no more intrusive to you than necessary.
  • More information about the IRS Privacy Policy is available online.

To find out more about the TBOR and what it means to you, visit: https://www.taxpayeradvocate.irs.gov

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages. 

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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  

TAXPAYER BILL OF RIGHTS 5: THE RIGHT TO APPEAL AN IRS DECISION IN AN INDEPENDENT FORUM

Posted by Admin Posted on July 07 2021

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The Taxpayer Bill of Rights (TBOR) is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service (IRS). The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Appeal an IRS Decision in an Independent Forum.

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.

What you can expect:

  • The IRS Commissioner must ensure that there is an independent IRS Office of Appeals. It’s an office that is separate from the IRS office that initially reviewed your case. Generally, Appeals will not discuss a case with the IRS to the extent that those communications appear to compromise the independence of Appeals.
  • Publication 5, Your Appeal Rights and How to Prepare a Protest If You Don’t Agree PDF, tells you how to appeal your tax case if you don’t agree with the IRS’s findings.
  • If the IRS has sent you a statutory notice of deficiency, which is a notice proposing additional tax, and you timely file a petition with the United States Tax Court, you may dispute the proposed adjustment in tax court before you have to pay the tax. For more information about the United States Tax Court, see the Court’s taxpayer information page.
  • Generally, if you fully paid the tax and the IRS denies your tax refund claim, or if the IRS takes no action on the claim within six months, then you may file a refund suit. You can file a suit in a United States District Court or the United States Court of Federal Claims. However, you generally have only two years to file a refund suit from the date the IRS mails you a notice that denies your claim.

To find out more about the TBOR and what it means to you, visit: https://www.taxpayeradvocate.irs.gov

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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 announces two new online tools to help families manage Child Tax Credit payments

Posted by Admin Posted on June 30 2021

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The Internal Revenue Service launched two new online tools designed to help families manage and monitor the advance monthly payments of Child Tax Credits under the American Rescue Plan. These two new tools are in addition to the Non-filer Sign-up Tool, announced last week, which helps families not normally required to file an income tax return to quickly register for the Child Tax Credit.

The new Child Tax Credit Eligibility Assistant allows families to answer a series of questions to quickly determine whether they qualify for the advance credit.

The Child Tax Credit Update Portal allows families to verify their eligibility for the payments and if they choose to, unenroll, or opt out from receiving the monthly payments so they can receive a lump sum when they file their tax return next year. This secure, password-protected tool is available to any eligible family with internet access and a smart phone or computer. Future versions of the tool planned in the summer and fall will allow people to view their payment history, adjust bank account information or mailing addresses and other features. A Spanish version is also planned.

Both the Child Tax Credit Eligibility Assistant and Child Tax Credit Update Portal are available now on IRS.gov.

The American Rescue plan increased the maximum Child Tax Credit amount in 2021 to $3,600 per child for children under the age of 6 and to $3,000 per child for children ages 6 through 17. The advance Child Tax Credit payments, which will generally be made on the 15th of each month, create financial certainty for families to plan their budgets. Eligible families will receive a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 through 17. The first monthly payment of the expanded and newly-advanceable Child Tax Credit will be made on July 15. Most families will begin receiving monthly payments automatically next month without any further action required.

"IRS employees continue to work hard to help people receive this important credit," IRS Commissioner Chuck Rettig said. "The Update Portal is a key piece among the three new tools now available on IRS.gov to help families understand, register for and monitor these payments. We will be working across the nation with partner groups to share information and help eligible people receive the advance payments."

More features coming to the Update Portal soon

Coming soon, families will be able to use the Child Tax Credit Update Portal to check the status of their payments. In late June, people will be able to update their bank account information for payments starting in August. In early August, a feature is planned that will allow people to update their mailing address. Then, in future updates planned for this summer and fall, they will be able to use this tool for things like updating family status and changes in income.

For more information see the FAQs, which will continue to be updated.

Update Portal allows people to unenroll

Instead of receiving these advance payments, some families may prefer to wait until the end of the year and receive the entire credit as a refund when they file their 2021 return. In this first release of the tool, the Child Tax Credit Update Portal now enables these families to quickly and easily unenroll from receiving monthly payments.

The unenroll feature can also be helpful to any family that no longer qualifies for the Child Tax Credit or believes they will not qualify when they file their 2021 return. This could happen if, for example:

Their income in 2021 is too high to qualify them for the credit.

Someone else (an ex-spouse or another family member, for example) qualifies to claim their child or children as dependents in 2021.

Their main home was outside of the United States for more than half of 2021.

Accessing the Update Portal

To access the Child Tax Credit Update Portal, a person must first verify their identity. If a person has an existing IRS username or an ID.me account with a verified identity, they can use those accounts to easily sign in. People without an existing account will be asked to verify their identity with a form of photo identification using ID.me, a trusted third party for the IRS. Identity verification is an important safeguard and will protect your account from identity theft.

Anyone who lacks internet access or otherwise cannot use the online tool may unenroll by contacting the IRS at the phone number included in your outreach letter.

Who is getting a monthly payment

In general, monthly payments will go to eligible families who:

Filed either a 2019 or 2020 federal income tax return.

Used the Non-Filers tool on IRS.gov in 2020 to register for an Economic Impact Payment.

Registered for the advance Child Tax Credit this year using the new Non-Filer Sign-up Tool on IRS.gov.

An eligible family who took any of these steps does not need to do anything else to get their payments.

Normally, the IRS will calculate the advance payment based on the 2020 income tax return. If that return is not available, either because it has not yet been filed or it has not yet been processed, the IRS is instead determining the payment using the 2019 tax return.

Eligible families will receive advance payments, either by direct deposit or check. Each payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. The IRS will issue advance Child Tax Credit payments on these dates: July 15, August 13, September 15, October 15, November 15 and December 15.

The IRS urges any family who hasn't yet filed their 2020 return – or 2019 return – to do so as soon as possible so they can receive any advance payment they're eligible for. At the same time, the agency cautions that tax returns must be processed by June 28 to be reflected in the first batch of monthly payments scheduled for July 15, so eligible families filing now will likely receive payments in the following months. Even if monthly payments begin after July, the IRS will adjust the monthly amounts upward to ensure that people still receive half of their total eligible Child Tax Credit benefit by the end of the year.

Filing soon will also ensure that the IRS has their most current bank account information, as well as key details about qualifying family members. This includes people who don't normally file a tax return, such as families experiencing homelessness and people in underserved groups.

For most people, the fastest and easiest way to file a return is by using IRS Free File, available only on IRS.gov. Besides qualifying them for these advance payments, using Free File will also enable them to claim other family-oriented tax benefits, if eligible, such as the Earned Income Tax Credit and the Recovery Rebate Credit/Economic Impact Payments.

New tool helps non-filers register

For families who don't normally file an income tax return, another easy option is to register for these advance payments using the new Non-filer Sign-up Tool, introduced recently, and available only on IRS.gov. Among other things, the tool asks users to supply current bank information, along with key details about themselves and their qualifying children. The tool then automatically fills in a very basic 2020 federal income tax return that is electronically sent to the IRS. The new tool was developed in partnership with Intuit and the Free File Alliance.

Child Tax Credit Eligibility Assistant unveiled

Before filing a return or using the Non-filer Sign-up Tool, families unsure of whether they qualify for either the credit or the advance payments may want to check out another new tool — the Child Tax Credit Eligibility Assistant. By answering a series of questions, the tool helps people determine if they qualify for the credit and the payments.

The IRS emphasized that because the Child Tax Credit Eligibility Assistant requests no personalized information, it is not a registration tool, but merely an eligibility tool. Nevertheless, it can still help an eligible family determine whether they should take the next step and either file an income tax return or register using the Non-filer Sign-up Tool.

Personal help available

IRS and its partners are helping families register for the payments using the Non-filer Sign-up Tool. During late June and early July, free events will take place in Atlanta, Brooklyn, Detroit, Houston, Las Vegas, Los Angeles, Miami, Milwaukee, Philadelphia, Phoenix, St. Louis and Washington, D.C. More details will be available soon on IRS.gov.

Child Tax Credit 2021

The IRS has created a special Advance Child Tax Credit 2021 page, designed to provide the most up-to-date information about the credit and the advance payments. It's at IRS.gov/childtaxcredit2021.

Among other things, it provides direct links to the Non-Filer Sign Up Tool, the Child Tax Credit Update Portal, the Child Tax Credit Eligibility Assistant, a set of frequently asked questions and other useful resources.

Child Tax Credit changes

The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children ages 6 through 17. Before 2021, the credit was worth up to $2,000 per eligible child.

The new maximum credit is available to taxpayers with a modified adjusted gross income (AGI) of:

$75,000 or less for singles,

$112,500 or less for heads of household and

$150,000 or less for married couples filing a joint return and qualified widows and widowers.

For most people, modified AGI is the amount shown on Line 11 of their 2020 Form 1040 or 1040-SR. Above these income thresholds, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every $1,000 in modified AGI. In addition, the credit is fully refundable for 2021. This means that eligible families can get it, even if they owe no federal income tax. Before this year, the refundable portion was limited to $1,400 per child.

Help spread the word

The IRS urges community groups, non-profits, associations, education organizations and anyone else with connections to people with children to share this critical information about the Child Tax Credit as well as other important benefits. Among other things, the IRS is already working closely with its community partners to ensure wide access to the Non-filer Sign-up Tool and the Child Tax Credit Update Portal. The agency is also providing additional materials and information that can be easily shared by social media, email and other methods.

For the most up-to-date information on the Child Tax Credit and advance payments, visit Advance Child Tax Credit Payments in 2021.

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 anuncia dos nuevas herramientas en línea para ayudar a familias a administrar pagos del Crédito tributario por hijos

Posted by Admin Posted on June 30 2021

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 El Servicio de Impuestos Internos lanzó hoy dos nuevas herramientas en línea diseñadas para ayudar a las familias a administrar y monitorizar los pagos mensuales adelantados del Crédito tributarios por hijos bajo el Plan de Rescate Estadounidense. Estas dos nuevas herramientas se suman a la herramienta Non-filer Sign-up, anunciada la semana pasada, para que las familias que normalmente no tienen que presentar una declaración de impuestos puedan inscribirse rápidamente para el Crédito tributario por hijos.

El nuevo Asistente de elegibilidad del Crédito tributario por hijos (en inglés) permite a las familias responder a una serie de preguntas para determinar rápidamente si califican para el crédito por adelantado.

El Portal de actualización del Crédito tributario por hijos (en inglés) permite a las familias verificar su elegibilidad para los pagos y, si así lo desean, cancelar la inscripción u optar por no recibir los pagos mensuales para que puedan recibir una suma global cuando presenten su declaración de impuestos el próximo año. Esta herramienta segura y protegida por contraseña está disponible para cualquier familia elegible con acceso a Internet y un teléfono inteligente o computadora. Las versiones futuras de la herramienta previstas para el verano y el otoño permitirán a las personas ver su historial de pagos, ajustar la información de la cuenta bancaria o las direcciones de correo y otras funciones. También está prevista una versión en español.

Tanto el Asistente de elegibilidad para el Crédito tributario por hijos como el Portal de actualización del Crédito tributario por hijos están disponibles ahora en IRS.gov.

El Plan de Rescate Estadounidense aumentó el monto máximo del Crédito tributario por hijos en 2021 a $3,600 por niño para niños menores de 6 años y a $3,000 por niño para niños de 6 a 17 años. Los pagos anticipados del Crédito tributario por hijos, que generalmente se realizarán el 15 de cada mes, crean certeza financiera para que las familias planifiquen sus presupuestos. Las familias elegibles recibirán un pago de hasta $300 por mes por cada niño menor de 6 años, y hasta $250 por mes por cada niño de 6 a 17 años. El 15 de julio se realizará el primer pago mensual del Crédito tributario por hijos ampliado. La mayoría de las familias comenzarán a recibir pagos mensuales automáticamente el próximo mes sin que se requiera ninguna acción adicional.

"Los empleados del IRS continúan trabajando duro para ayudar a las personas a recibir este importante crédito", dijo Chuck Rettig, Comisionado del IRS. "El Portal de actualización es una pieza clave entre las tres nuevas herramientas ahora disponibles en IRS.gov para ayudar a las familias a comprender, inscribirse y monitorizar estos pagos. Trabajaremos en todo el país con grupos asociados para compartir información y ayudar a las personas elegibles a recibir los pagos por adelantado".

Mejoras futuras pronto llegaran al Portal de actualización

Próximamente, las familias podrán usar el Portal de actualización del Crédito tributario por hijos para verificar el estado de sus pagos. A fines de junio, las personas podrán actualizar la información de su cuenta bancaria para los pagos a partir de agosto. A principios de agosto, se planifica una función que permitirá a las personas actualizar su dirección postal. Luego, en futuras actualizaciones planificadas para este verano y otoño, podrán usar esta herramienta para cosas como actualizar el estado de la familia y cambios en los ingresos.

Para obtener más información, consulte las preguntas frecuentes, que seguirán actualizándose.

Portal de actualización permite a las personas a cancelar su inscripción

En lugar de recibir estos pagos por adelantado, algunas familias pueden preferir esperar hasta fin de año y recibir el crédito completo como reembolso cuando presenten su declaración de 2021. El Portal de actualización del Crédito tributario por hijos ahora permite a estas familias cancelar su inscripción de los pagos mensuales de manera rápida y fácil.

La función para cancelar también puede ser útil para cualquier familia que ya no califica para el Crédito tributario por hijos o cree que no calificará cuando presente su declaración de 2021. Esto podría ocurrir si, por ejemplo:

  • Sus ingresos en 2021 son demasiado altos para calificarlos para el crédito.
  • Alguien más (un excónyuge u otro miembro de la familia, por ejemplo) ahora califica para reclamar a su hijo o hijos como dependientes.
  • Su hogar principal estuvo fuera de los Estados Unidos durante más de la mitad de 2021.

Acceder al portal

Para acceder al Portal de actualización del Crédito tributario por hijos, una persona debe primero verificar su identidad. Si una persona tiene un nombre de usuario del IRS existente o una cuenta ID.me (en inglés) con una identidad verificada, puede usar esas cuentas para iniciar sesión fácilmente. A las personas sin una cuenta existente se les pedirá que verifiquen su identidad con una forma de identificación con foto a través de ID.me, un tercero de confianza para el IRS. La verificación de identidad es una protección importante y protegerá su cuenta del robo de identidad.

Cualquier persona que no tenga acceso a Internet o que no pueda usar la herramienta en línea puede cancelar su inscripción comunicándose con el IRS al número de teléfono incluido en su carta de divulgación.

¿Quién recibe el pago mensual?

Por lo general, los pagos mensuales se emitirán a las familias elegibles que:

  • Presentaron una declaración de impuestos federales de 2019 o 2020.
  • Usaron la herramienta Non-Filers en IRS.gov para inscribirse para un pago de impacto económico en 2020.
  • Se inscribieron para el Crédito tributario por hijos por adelantado mediante la nueva herramienta Non-Filer Sign-up en IRS.gov.

Una familia elegible que hizo una de estas cosas no necesita tomar ninguna acción para obtener su pago.

Normalmente, el IRS calculará la cantidad del pago a base de la declaración de impuestos de 2020. Si esa declaración no está disponible, ya sea porque aún no se ha presentado o procesado, el IRS determinará la cantidad del pago con la declaración de 2019.

Las familias elegibles comenzarán a recibir pagos por adelantado, ya sea mediante depósito directo o cheque. El pago será de hasta $300 por mes por cada niño calificado menor de 6 años y hasta $250 por mes por cada niño calificado de 6 a 17 años. El IRS emitirá pagos por adelantado del Crédito tributario por hijos: el 15 de julio, el 13 de agosto, el 15 de septiembre, el 15 de octubre, el 15 de noviembre y el 15 de diciembre.

El IRS insta a cualquier familia que aún no haya presentado su declaración de 2020 - o su declaración de 2019 - a hacerlo lo antes posible para que puedan recibir cualquier pago por adelantado para el que sean elegibles. Al mismo tiempo, la agencia advirtió que una presentación ahora es demasiado tarde para que se refleje en el primer lote de pagos mensuales programados para el 15 de julio. Pero la presentación ahora todavía permitirá que las familias elegibles reciban pagos a finales de este año. Incluso si los pagos mensuales comienzan después de julio, los montos mensuales aún se ajustarán al aumento para asegurar que todavía reciban la mitad de su beneficio elegible total del Crédito tributario por hijos.

Presentar pronto también asegurará que el IRS tenga su información bancaria más actualizada, así como detalles clave acerca de los miembros de la familia que califican. Esto incluye a las personas que normalmente no presentan una declaración de impuestos, como las familias sin hogar, los pobres en áreas rurales y otros grupos desamparados.

Para la mayoría de las personas, la manera más rápida y fácil de presentar una declaración es mediante el sistema de Free File del IRS, disponible sólo en IRS.gov. Además de calificarlos para estos pagos por adelantado, el uso de Free File también les permitirá reclamar otros beneficios tributarios orientados a la familia, como el Crédito tributario por ingreso del trabajo y el Crédito de recuperación de reembolso.

Nueva herramienta ayuda a los que no presentan impuestos a inscribirse

Para las familias que normalmente no presentan una declaración, otra opción fácil es inscribirse para estos pagos por adelantado a través de la nueva herramienta Non-Filer Sign-up presentada recientemente y disponible solo en IRS.gov. Entre otras cosas, la herramienta pide a los usuarios que proporcionen información bancaria actualizada, junto con detalles clave acerca de ellos mismos y sus hijos calificados. La herramienta entonces completa automáticamente una declaración de impuestos federales de 2020 que se envía electrónicamente al IRS. La nueva herramienta fue desarrollada en colaboración con Intuit y Free File Alliance.

Asistente de elegibilidad del Crédito tributario por hijos

Antes de presentar una declaración o usar la herramienta Non-Filer Sign-up, las familias que no están seguras si califican para el crédito o los pagos por adelantado tal vez quieran usar otra nueva herramienta: el Asistente de elegibilidad del Crédito tributario por hijos. Al contestar una serie de preguntas, la herramienta permite a cualquier persona hacer una determinación preliminar de si califican para el crédito y los pagos.

El IRS destacó que debido a que el Asistente de elegibilidad del Crédito tributario por hijos no solicita información personal, no es una herramienta de inscripción, sino simplemente una herramienta de elegibilidad. Sin embargo, aún puede ayudar a una familia elegible a determinar si debe hacer el siguiente paso y presentar una declaración o inscribirse oficialmente con la herramienta Non-Filer Sign-up.

Ayuda personal disponible

El IRS y sus socios ayudan a las familias a inscribirse para los pagos a través de la herramienta Non-Filer Sign-up. Durante finales de junio y principios de julio, se llevarán a cabo eventos gratuitos en Atlanta, Brooklyn, Detroit, Houston, Las Vegas, Los Ángeles, Miami, Milwaukee, Filadelfia, Phoenix, St. Louis y Washington, DC. Más detalles próximamente en IRS.gov.

Crédito tributario por hijos de 2021

El IRS creó una página especial del pago por adelantado del Crédito tributario por hijos de 2021 y está diseñada para proporcionar la información más actualizada acerca del crédito y los pagos por adelantado. Está en IRS.gov/creditoporhijos2021.

Entre otras cosas, proporciona enlaces directos a la herramienta Non-Filer Sign-up, el Portal de actualización del Crédito tributario por hijos, el Asistente de elegibilidad del Crédito tributario por hijos, un conjunto de preguntas frecuentes y otros recursos útiles.

Cambios al Crédito tributario por hijos

El Plan de Rescate Estadounidense elevó el máximo del Crédito tributario por hijos en 2021 a $3,600 para niños calificados menores de 6 años y a $3,000 por niño para niños calificados entre 6 y 17 años. Antes de 2021, el crédito valía hasta $2,000 por niño calificado elegible y los de 17 años no se consideraban niños calificados para el crédito.

El nuevo crédito máximo está disponible para los contribuyentes con un ingreso bruto ajustado modificado (AGI) de:

  • $75,000 o menos para personas solteras,
  • $112,500 o menos para jefes de hogar y
  • $150,000 o menos para parejas casadas que presentan una declaración conjunta y para viudas y viudos calificados.

Para la mayoría de las personas, el AGI modificado es la cantidad que se muestra en la línea 11 de su Formulario 1040 o 1040-SR de 2020. Por encima de estos umbrales de ingresos, la cantidad adicional por encima del crédito original de $2,000, ya sea $1,000 o $1,600 por hijo, se reduce en $50 por cada $1,000 adicional en AGI modificado.

Además, todo el crédito es totalmente reembolsable para 2021. Esto significa que las familias elegibles pueden obtenerlo, incluso si no deben impuestos federales. Antes de este año, la porción reembolsable estaba limitada a $1,400 por hijo.

Ayude a correr la voz

El IRS insta a los grupos comunitarios, organizaciones sin fines de lucro, asociaciones, grupos educativos y cualquier otra persona con conexiones con personas con niños a compartir esta información crítica acerca del pago por adelantado del Crédito tributario por hijos, así como otros beneficios importantes. Entre otras cosas, el IRS ya trabaja en estrecha colaboración con grupos de la comunidad para garantizar un acceso amplio a la herramienta Non-Filer Sign-up. El IRS proveerá materiales e información adicional en el futuro que se pueden compartir fácilmente a través de las redes sociales, correo electrónico y otros métodos.

Para obtener información más actualizada del Crédito tributario por hijo y los pagos por adelantado, visite Pagos por adelantado del Crédito tributario por hijos en 2021.

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

Herramienta en línea del IRS ayuda a familias a ver si califican para Crédito tributario por hijos; una de tres herramientas ahora disponibles para próximos pagos por adelantado

Posted by Admin Posted on June 30 2021

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El Departamento del Tesoro y el Servicio de Impuestos Internos exhortaron hoy a las familias a tomar ventaja de una herramienta en línea especial que puede ayudarles a determinar si califican para el Crédito tributario por hijos y los pagos mensuales por adelantado programados para el 15 de julio.

Disponible únicamente en IRS.gov, el nuevo Asistente de elegibilidad para los pagos por adelantado del Crédito tributario por hijos, lanzado a principios de semana, es interactivo y fácil de usar. Al contestar una serie de preguntas personales y de sus familiares, un padre u otro miembro de la familia puede determinar rápidamente si califica para el crédito.

Aunque cualquiera puede usar esta herramienta, puede ser especialmente útil para las familias que normalmente no presentan una declaración de impuestos federales y aún no han presentado una declaración de impuestos de 2019 o 2020. A menudo, se trata de personas que reciben pocos o ningún ingreso e incluso las personas sin hogar, los hogares de bajos ingresos y otros grupos desamparados. El uso de esta herramienta puede ayudarles a decidir si deben hacer el siguiente paso e inscribirse para los pagos de Crédito tributario por hijos en otra nueva herramienta del IRS que se lanzó a principios de esta semana.

"Esta nueva herramienta proporciona un primer paso importante para ayudar a las personas a entender si califican para el Crédito tributario por hijos, lo cual es especialmente importante para aquellos que normalmente no presentan una declaración de impuestos", dijo Chuck Rettig, Comisionado del IRS. "El Asistente de elegibilidad trabaja en conjunto con otras funciones en IRS.gov para ayudar a las personas a recibir este importante crédito. El IRS trabaja arduamente para entregar el Crédito tributario por hijos ampliado, y estaremos emitiendo ayuda adicional para los contribuyentes en el futuro cercano. Siempre que sea posible, ayúdenos a ayudar a otros distribuyendo información del Crédito tributario por hijos en sus comunidades".

Para ayudar a las personas a entender y recibir este beneficio, el IRS creó una página especial del pago por adelantado del Crédito tributario por hijos de 2021 en IRS.gov/creditoporhijos2021 y está diseñada para proporcionar la información más actualizada acerca del crédito y los pagos por adelantado. Entre otras cosas, la página ya cuenta con un enlace a la herramienta Non-Filer Sign-up, y el Asistente de elegibilidad del Crédito tributario por hijos, así como una tercera herramienta lanzada a principios de semana, el Portal de actualización del Crédito tributario por hijos.

El Asistente de elegibilidad del Crédito tributario por hijos no solicita ninguna información de identificación personal (PII, por sus siglas en inglés) para ningún miembro de la familia. Por esa razón, sus resultados no son una determinación oficial del IRS. Aunque los resultados son confiables, si las preguntas se contestan con exactitud, deben considerarse hipotéticas o preliminares. Ni las respuestas proporcionadas por el usuario, ni los resultados, son retenidos por el IRS.

Después de verificar con el Asistente de elegibilidad, la herramienta Non-Filer Sign-up está disponible para ayudar a aquellos que normalmente no presentan declaraciones de impuestos

La herramienta Non-Filer Sign-up está diseñada para ayudar a las familias elegibles que normalmente no presentan declaraciones de impuestos a inscribirse para los pagos mensuales del Crédito tributario por hijos.

Esta herramienta, una actualización de la herramienta Non-Filers del IRS para los Pagos del impacto económico del año pasado, también está diseñada para ayudar a las personas elegibles que normalmente no presentan declaraciones de impuestos, a inscribirse para la tercera ronda de Pagos de impacto económico de $1,400 (también conocidos como cheques de estímulo) y reclamar el Crédito de recuperación de reembolso por cualquier monto de las dos primeras rondas de Pagos de impacto económico que no hayan recibido.

Desarrollada en colaboración con Intuit y ofrecida a través de Free File Alliance, esta herramienta proporciona una manera gratis y fácil para las personas elegibles que no tienen la obligación de presentar una declaración de impuestos proporcionarle al IRS la información necesaria para calcular y emitir sus pagos por adelantando del Crédito tributario por hijos. Esto incluye nombre, dirección y números de Seguro Social. Esto también les permite proveer información de sus hijos calificados menores de 17 años, sus otros dependientes, y su información bancaria de depósito directo para que el IRS pueda depositar de una manera rápida y fácil los pagos directamente en su cuenta de cheques o ahorros. Está disponible sólo en IRS.gov.

La herramienta Non-Filer Sign-up no debe usarla cualquier persona que ha presentado una declaración de impuestos federales de 2019 o 2020.

La mayoría de las familias no tienen que hacer nada

Las familias elegibles que ya presentaron o tienen planes de presentar declaraciones de impuestos de 2019 o 2020 no deben usar la herramienta Non-Filer Sign-up. Una vez que el IRS procese su declaración de impuestos de 2019 o 2020, la información se usará para determinar la elegibilidad y emitir pagos por adelantado.

Las familias que deseen reclamar otros beneficios tributarios, como el Crédito tributario por ingreso del trabajo para familias de ingresos bajos y moderados, no deben usar esta herramienta y deben presentar una declaración de impuestos regular. Para ellos, la manera más rápida y fácil de presentar una declaración es el sistema de Free File, disponible sólo en IRS.gov.

Cuidado con las estafas

El IRS insta a todos a estar atentos a las estafas relacionadas tanto con los pagos por adelantado del Crédito tributario por hijos como de los Pagos de impacto económico. El IRS destacó que la única manera de obtener cualquiera de estos beneficios es al presentar una declaración de impuestos con el IRS o inscribirse en línea a través de la herramienta Non-Filer Sign-up, únicamente en IRS.gov. Cualquier otra opción es una estafa.

Tenga cuidado con las estafas por correo electrónico, llamadas telefónicas o mensajes de texto relacionados con los pagos. Recuerde, el IRS nunca envía comunicaciones electrónicas no solicitadas para pedir que abra archivos adjuntos o visite un sitio web no gubernamental.

Portal de actualización del Crédito tributario por hijos

A principios de esta semana, el Departamento del Tesoro y el IRS lanzaron otra herramienta útil, el Portal de actualización del Crédito tributario por hijos. Inicialmente, esta herramienta solo permite a cualquiera persona que haya sido determinada elegible recibir los pagos por adelantado, ver su elegibilidad y cancelar inscripción u optar por no participar en el programa de pagos por adelantado. Más adelante, se les permitirá a las personas verificar el estado de sus pagos y hacer actualizaciones a su información, incluyendo la información de su cuenta bancaria. Más tarde en el año la herramienta también estará disponible en español.

Grupos comunitarios pueden ayudar

El IRS insta a los grupos comunitarios, organizaciones sin fines de lucro, asociaciones, grupos educativos y cualquier otra persona con conexiones con personas con niños a compartir esta información crítica acerca del pago por adelantado del Crédito tributario por hijos, así como otros beneficios importantes. Entre otras cosas, el IRS ya trabaja en estrecha colaboración con sus socios comunitarios para garantizar un amplio acceso a la herramienta Non-Filer Sign-up y al Portal de actualización del Crédito tributarios por hijos. La agencia también está proporcionando materiales e información adicional que se puede compartir fácilmente a través de las redes sociales, el correo electrónico y otros métodos.

Acerca de los pagos por adelantado del Crédito tributario por hijos

El nuevo Crédito tributario por hijos ampliado fue autorizado por la Ley del Plan de Rescate Estadounidense, promulgada en marzo. Normalmente, el IRS calculará el pago de acuerdo con la información de la declaración de impuestos de una familia de 2020, incluyendo aquellos que usan la herramienta Non-Filer Sign-up. Si esa declaración no está disponible porque aún no se ha presentado o todavía se está procesando, el IRS determinará la cantidad del pago inicial con la declaración de 2019 o la información ingresada mediante la herramienta Non-Filers que estaba disponible en 2020.

El pago será de hasta $300 por mes por cada niño menor de 6 años y hasta $250 por mes por cada niño de 6 a 17 años.

Para asegurarse de que las familias tengan fácil acceso a su dinero, el IRS emitirá estos pagos por depósito directo, siempre y cuando el IRS tenga disponible la información bancaria correcta. De lo contrario las personas deben estar al pendiente de su buzón a partir del 15 de julio ya que el pago llegará por correo. Las fechas de envío de los pagos por adelantado del Crédito tributario por hijos son el 15 de julio, 15 de agosto, 15 de septiembre, 15 de octubre, 15 de noviembre y 15 de diciembre.

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 online tool helps families see if they qualify for the Child Tax Credit; one of three tools now available for the upcoming advance payments

Posted by Admin Posted on June 30 2021

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The Treasury Department and the Internal Revenue Service urge families to take advantage of a special online tool that can help them determine whether they qualify for the Child Tax Credit and the special monthly advance payments beginning on July 15.

Available exclusively on IRS.gov, the new Child Tax Credit Eligibility Assistant, launched earlier this week, is interactive and easy to use. By answering a series of questions about themselves and their family members, a parent or other family member can quickly determine whether they qualify for the credit.

Though anyone can use this tool, it may be particularly useful to families who don't normally file a federal tax return and have not yet filed either a 2019 or 2020 tax return. Often, these are people who receive little or no income, including those experiencing homelessness, low income households, and other underserved groups. Using this tool can help them decide whether they should take the next step and register for the Child Tax Credit payments on another new IRS tool unveiled earlier this week.

"This new tool provides an important first step to help people understand if they qualify for the Child Tax Credit, which is especially important for those who don't normally file a tax return," said IRS Commissioner Chuck Rettig. "The eligibility assistant works in concert with other features on IRS.gov to help people receive this important credit. The IRS is working hard to deliver the expanded Child Tax Credit, and we will be rolling out additional help for taxpayers in the near future. Where possible, please help us help others by distributing CTC information in your communities."

To help people understand and receive this benefit, the IRS has created a special Advance Child Tax Credit 2021 page at IRS.gov/childtaxcredit2021 designed to provide the most up-to-date information about the credit and the advance payments. Among other things, the page already features a link to both the Non-filer Sign-up Tool, and the Child Tax Credit Eligibility Assistant, along with a third tool launched earlier this week—the Child Tax Credit Update Portal.

The Child Tax Credit Eligibility Assistant does not request any personally-identifiable information (PII) for any family member. For that reason, its results are not an official determination by the IRS. Though the results are reliable, if the questions are answered accurately, they should be considered preliminary. Neither the answers supplied by the user, nor the results, are retained by the IRS.

After checking the Eligibility Assistant, Non-filer Sign-Up Tool is available to help those who don't normally file tax returns

The online Non-filer Sign-Up Tool is designed to help eligible families who don't normally file tax returns register for the monthly Advance Child Tax Credit payments.

This tool, an update of last year's IRS Economic Impact Payment Non-filers tool, is also designed to help eligible individuals who don't normally file tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed.

Developed in partnership with Intuit and delivered through the Free File Alliance, this tool provides a free and easy way for eligible people who don't make enough income to have an income tax return-filing obligation to provide the IRS the basic information needed to figure and issue their Advance Child Tax Credit payments. This includes name, address, and social security numbers. This also enables them to provide information about their qualifying children age 17 and under, their other dependents, and their direct deposit bank information so the IRS can quickly and easily deposit the payments directly into their checking or savings account. It is available only on IRS.gov.

The Non-filer Sign-Up tool should not be used by anyone who has already filed a 2019 or 2020 federal income tax return.

No action needed by most other families

Eligible families who already filed or plan to file 2019 or 2020 income tax returns should not use the Non-filer Sign-Up Tool. Once the IRS processes their 2019 or 2020 tax return, the information will be used to determine eligibility and issue advance payments.

Families who want to claim other tax benefits, such as the Earned Income Tax Credit for low-and moderate-income families, should not use this tool and instead file a regular tax return. For them, the fastest and easiest way to file a return is the Free File system, available only on IRS.gov.

Watch out for scams

The IRS urges everyone to be on the lookout for scams related to both Advance Child Tax Credit payments and Economic Impact Payments. The IRS emphasized that the only way to get either of these benefits is by either filing a tax return with the IRS or registering online through the Non-filer Sign-up Tool, exclusively on IRS.gov. Any other option is a scam.

Watch out for scams using email, phone calls or texts related to the payments. Remember, the IRS never sends unsolicited electronic communications asking anyone to open attachments or visit a non-governmental web site.

Child Tax Credit Update Portal

Earlier this week, Treasury and IRS launched another useful tool, the Child Tax Credit Update Portal. Initially, this tool only enables anyone who has been determined to be eligible for advance payments to see that they are eligible and unenroll from (opt out of) the advance payment program. Later, it will allow people to check on the status of their payments and make updates to their information, including their bank account information. Later this year, the tool will also be available in Spanish.

Community partners can help

The IRS urges community groups, non-profits, associations, education organizations and anyone else with connections to people with children to share this critical information about the Advance Child Tax Credit as well as other important benefits. Among other things, the IRS is already working closely with its community partners to ensure wide access to the Non-filer Sign-up Tool and the Child Tax Credit Update Portal. The agency is also providing additional materials and information that can be easily shared by social media, email and other methods.

About the Advance Child Tax Credit

The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. Normally, the IRS will calculate the payment based on a family's 2020 tax return, including those who use the Non-filer Sign-up Tool. If that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020.

The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 through 17.

To make sure families have easy access to their money, the IRS will issue these payments by direct deposit, as long as correct banking information has previously been provided to the IRS. Otherwise, people should watch their mail around July 15 for their mailed payment. The dates for the Advance Child Tax Credit payments are July 15, August 13, September 15, October 15, November 15, and December 15.

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      

 

Revisiting Worker Classification Rules

Posted by Admin Posted on June 09 2021

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Over the last year, many companies have experienced workforce fluctuations and have engaged independent contractors to address staffing needs. In May, the U.S. Department of Labor (DOL) announced that it had withdrawn the previous administration’s independent contractor rule that had been scheduled to go into effect earlier this year. That rule generally would have made it easier to classify certain workers as independent contractors for the purposes of the Fair Labor Standards Act (FLSA), and thus make them ineligible for minimum wage and other FLSA protections.

While worker classification for DOL purposes isn’t necessarily the same for IRS purposes, now is a good time to revisit the federal tax implications of worker classification.

Tax obligations

The question of whether a worker is an independent contractor or an employee for federal income and employment tax purposes is a complex one. If a worker is an employee, the company must withhold federal income and payroll taxes, and pay the employer’s share of FICA taxes on the wages, plus FUTA tax. And there may be state tax obligations as well.

These obligations don’t apply if a worker is an independent contractor. In that case, the business simply sends the contractor a Form 1099-NEC for the year showing the amount paid (if the amount is $600 or more).

No uniform definition

The IRS and courts have generally ruled that individuals are employees if the organization they work for has the right to control and direct them in the jobs they’re performing. Otherwise, the individuals are generally independent contractors, though other factors are considered.

Some employers that have misclassified workers as independent contractors may get some relief from employment tax liabilities under Internal Revenue Code Section 530. In general, this protection applies only if an employer filed all federal returns consistent with its treatment of a worker as a contractor and treated all similarly situated workers as contractors.

The employer must also have a “reasonable basis” for not treating the worker as an employee. For example, a “reasonable basis” exists if a significant segment of the employer’s industry traditionally treats similar workers as contractors. (Note: Sec. 530 doesn't apply to certain types of technical services workers. And some categories of individuals are subject to special rules because of their occupations or identities.)

Asking for a determination

Under certain circumstances, you may want to ask the IRS (on Form SS-8) to rule on whether a worker is an independent contractor or employee. However, be aware that the IRS has a history of classifying workers as employees rather than independent contractors.

Consult a CPA before filing Form SS-8 because doing so may alert the IRS that your company has worker classification issues — and inadvertently trigger an employment tax audit. It may be better to ensure you are properly treating a worker as an independent contractor so that the relationship complies with the tax rules.

Latest developments

With growth in the “gig” economy and other changes to the ways Americans are working, the question of who is an independent contractor and who is an employee will likely continue to evolve. Stay tuned for the latest developments and contact us for any help you may need with worker classification.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.                                   

Source: Thomson Reuters    

How do I find my refund information?

Posted by Admin Posted on June 09 2021

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If you filed a 2020 tax return and are expecting a refund from the IRS, you may want to find out the status of the refund or at least get an idea of when you might receive it. You can start checking on the status of your refund within 24 hours after the IRS has received your electronically-filed return or 4 weeks after you mailed a paper return. Currently you might be waiting a bit longer to receive it due to the effects of COVID-19, new tax law changes, and possible errors made on the tax return. However, here are the best ways to find the status of a refund:

Also see “Tax Season Refund Frequently Asked Questions” for what these applications can tell you and what they can’t.

Do not call the IRS unless instructed by the application to call. These online tools are updated every 24 hours and truly are the best way to get your refund status.

What you will need to use the above tools

  • Social security number (SSN) or Individual Taxpayer Identification Number (ITIN)
  • Your filing status
  • Your exact refund amount

Be aware of processing delays

Again, this year some tax returns with errors or items on the return that need an IRS correction due to a tax law change are taking longer than the normal timeframes to process, so expect delays. In a nutshell, it is taking the IRS more than the normal 21 days to issue refunds for some 2020 tax returns that require review, including but not limited to, incorrect Recovery Rebate Credit amounts, or that used 2019 income to figure the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC).

See our NTA blogs titled “2021 Filing Season Bumps in the Road: Part I,” “2021 Filing Season Bumps in the Road: Part II” and the IRS’s Operational Status page, question and answer titled: Filed an Individual Tax Return (Form 1040) for tax year 2019 or tax year 2020, a Business Tax Return or an Amended Return (updated May 7, 2021) for details of why delays may occur.

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          

2 More Ways Parents Are Benefitting From the American Rescue Plan Act

Posted by Admin Posted on June 09 2021

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When you think back on this spring, you may fondly recall a substantial deposit made to your bank account by the federal government (if you were eligible). Economic Impact Payments were a focal point of the American Rescue Plan Act (ARPA), signed into law in March, and the payments were even larger for parents with dependent children. But ARPA contains two other provisions that benefit parents:

1. Child credit expansion and advance payments. For 2021, this refundable tax credit has been increased from $2,000 to $3,000 per child — $3,600 for children under six years of age. In addition, qualifying children now include 17-year-olds.

The child credit is subject to modified adjusted gross income (AGI) phaseout rules and begins to phase out when MAGI exceeds:

  • $400,000 for married couples who file a joint return, and
  • $200,000 for other taxpayers.

The increased credit amount ($1,000 or $1,600) is subject to lower income phaseouts than the ones that apply to the first $2,000 of the credit. The increased amount begins to phase out when MAGI exceeds:

  • $150,000 for joint filers,
  • $112,500 for heads of household, and
  • $75,000 for other taxpayers.

ARPA also calls for the IRS to make periodic advance payments of the child credit totaling 50% of the estimated 2021 credit amount. The IRS has announced the payments will begin on July 15, 2021. They’ll then be made on the 15th of each month (unless the 15th falls on a weekend or holiday).

Recipients will receive the monthly payments through direct deposit, paper check or debit cards. The IRS says that it is committed to maximizing the use of direct deposit.

2. Child and dependent care break increases. For 2021, the amount of qualifying expenses for the refundable child and dependent care credit has been increased to:

1. $8,000 (from $3,000) if there’s one qualifying care individual, and

2. $16,000 (from $6,000) if there are two or more such individuals.

The maximum percentage of qualifying expenses for which credit is allowed has been increased from 35% to 50%. So the credit ultimately is worth up to $4,000 or $8,000. But the credit is subject to an income-based phaseout beginning at household income levels exceeding $125,000.

The amount you can contribute to a child and dependent care Flexible Spending Account (FSA, also sometimes referred to as a “dependent care assistance program”) also has been increased. For 2021, it’s $10,500 (up from $5,000 for 2020). The FSA pays or reimburses you for these expenses. But you can’t claim a tax credit for expenses paid by or reimbursed through an FSA.

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 sending letters to more than 36 million families who may qualify for monthly Child Tax Credits; payments start July 15

Posted by Admin Posted on June 09 2021

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WASHINGTON — The Internal Revenue Service has started sending letters to more than 36 million American families who, based on tax returns filed with the agency, may be eligible to receive monthly Child Tax Credit payments starting in July.

The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. The letters are going to families who may be eligible based on information they included in either their 2019 or 2020 federal income tax return or who used the Non-Filers tool on IRS.gov last year to register for an Economic Impact Payment.

Families who are eligible for advance Child Tax Credit payments will receive a second, personalized letter listing an estimate of their monthly payment, which begins July 15.

Most families do not need to take any action to get their payment. Normally, the IRS will calculate the payment amount based on the 2020 tax return. If that return is not available, either because it has not yet been filed or it has not yet been processed, the IRS will instead determine the payment amount using the 2019 return.

Eligible families will begin receiving advance payments, either by direct deposit or check. The payment will be up to $300 per month for each qualifying child under age 6 and up to $250 per month for each qualifying child ages 6 to 17.The IRS will issue advance Child Tax Credit payments on July 15, August 13, September 15, October 15, November 15 and December 15.

Eligible families should file tax returns soon

The IRS urges individuals and families who haven't yet filed their 2020 return – or 2019 return – to do so as soon as possible so they can receive any advance payment they're eligible for.

Filing soon will also ensure that the IRS has their most current banking information, as well as key details about qualifying children. This includes people who don't normally file a tax return, such as families experiencing homelessness, the rural poor, and other underserved groups.

For most people, the fastest and easiest way to file a return is by using the Free File system, available only on IRS.gov.

Throughout the summer, the IRS will be adding additional tools and online resources to help with the advance Child Tax Credit. One of these tools will enable families to unenroll from receiving these advance payments and instead receive the full amount of the credit when they file their 2021 return next year.

Additionally, later this year, individuals and families will also be able to go to IRS.gov and use a Child Tax Credit Update Portal to notify IRS of changes in their income, filing status, or number of qualifying children; update their direct deposit information; and make other changes to ensure they are receiving the right amount as quickly as possible.

Other tools coming soon

The IRS has created a special Advance Child Tax Credit 2021 page at IRS.gov/childtaxcredit2021, designed to provide the most up-to-date information about the credit and the advance payments.

In the next few weeks, the page will also feature other useful new online tools, including:

  • An interactive Child Tax Credit eligibility tool to help families determine whether they qualify for the Advance Child Tax Credit payments.
  • Another tool, the Child Tax Credit Update Portal, will initially enable anyone who has been determined to be eligible for advance payments unenroll/ to opt out of the advance payment program. Later this year, it will allow people to check on the status of their payments, make updates to their information, and be available in Spanish. More details will be available soon about the online Child Tax Credit Update Portal.

Child Tax Credit Changes

The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for qualifying children under the age of 6 and to $3,000 per child for qualifying children between ages 6 and 17. Before 2021, the credit was worth up to $2,000 per eligible child, and 17 year-olds were not considered as qualifying children for the credit.

The new maximum credit is available to taxpayers with a modified adjusted gross income (AGI) of:

  •  $75,000 or less for singles,
  •  $112,500 or less for heads of household, and
  •  $150,000 or less for married couples filing a joint return and qualified widows and widowers.

For most people, modified AGI is the amount shown on Line 11 of their 2020 Form 1040 or 1040-SR. Above these income thresholds, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every extra $1,000 in modified AGI.

In addition, the entire credit is fully refundable for 2021. This means that eligible families can get it, even if they owe no federal income tax. Before this year, the refundable portion was limited to $1,400 per child.

The IRS urges community groups, non-profits, associations, education organizations, and others with connections to people with children to share this critical information about the Child Tax Credit as well as other important benefits. The IRS will be providing in the near future additional materials and information that can be easily shared by social media, email and other methods.

For the most up-to-date information on the Child Tax Credit and advance payments, visit Advance Child Tax Credit Payments in 2021.

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 sending more than 2.8 million refunds to those who already paid taxes on 2020 unemployment compensation.

Posted by Admin Posted on June 09 2021

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WASHINGTON — The Internal Revenue Service is sending more than 2.8 million refunds this week to taxpayers who paid taxes on unemployment compensation that new legislation now excludes as income.

IRS efforts to correct unemployment compensation overpayments will help most affected taxpayers avoid filing an amended tax return. So far, the IRS has identified 13 million taxpayers that may be eligible for the adjustment. Some will receive refunds, which will be issued periodically, and some will have the overpayment applied to taxes due or other debts. For some there will be no change.

The American Rescue Plan Act of 2021 (ARPA) excluded up to $10,200 in unemployment compensation per taxpayer paid in 2020. The $10,200 is the maximum amount that can be excluded when calculating taxable income; it is not the amount of refunds.

Earlier this month, the IRS began its programming review of tax returns filed prior to the enactment of ARPA to identify the excludible unemployment compensation. The IRS also is making corrections for the Earned Income Tax Credit, Premium Tax Credit and Recovery Rebate Credit affected by the exclusion.

Taxpayers who have qualifying children and who become eligible for EITC after the exclusion is calculated may have to file an amended return to claim any new benefits. The IRS can adjust tax returns for those who are single with no children and who become eligible for EITC. The IRS also can adjust tax returns where EITC was claimed and qualifying children identified.

To date, the IRS has reviewed over 3.1 million returns, with more than 2.8 million receiving refunds.

The IRS plans to issue the next set of refunds in mid-June. The review of returns and processing corrections will continue during the summer as the IRS continues to review the simplest returns and then turns to more complex returns.

Taxpayers will receive letters from the IRS, generally within 30 days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

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    

What taxpayers need to know about getting their unclaimed 2017 tax refunds

Posted by Admin Posted on May 27 2021

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The IRS reminds taxpayers they may have money waiting for them. An estimated 1.3 million taxpayers didn't file a 2017 Form 1040 federal income tax return and are due a refund.

Here are some things taxpayers should know about these unclaimed refunds:

To collect the money, taxpayers must file their 2017 tax return with the IRS no later than this year's tax deadline, Monday, May 17.

When a taxpayer who is getting a refund does not file a return, the law gives them three years to claim that tax refund. If the taxpayer does not file a tax return within three years, the money goes back to the U.S. Treasury. For 2017 tax returns, the three-year window closes May 17, 2021.

The law requires taxpayers to properly address and mail the tax return to the IRS. It must be postmarked by the May deadline.

The IRS may hold the 2017 refunds of taxpayers who have not filed tax returns for 2018 and 2019.

The unclaimed money will be applied to any amounts still owed to the IRS or a state tax agency. The money may also be used to offset unpaid child support or past due federal debts, such as student loans.

By failing to file a tax return, people stand to lose more than just their tax refund. Many low-and moderate-income workers may be eligible for the earned income tax credit. For 2017, the credit was worth as much as $6,318. The EITC helps individuals and families whose incomes are below certain thresholds. The 2017 thresholds were:

  • $48,340 for those with three or more qualifying children; $53,930 if married filing jointly
  • $45,007 for people with two qualifying children; $50,597 if married filing jointly
  • $39,617 for those with one qualifying child; $45,207 if married filing jointly
  • $15,010 for people without qualifying children; $20,600 if married filing jointly

Current and prior year tax forms are available on the Forms, Instructions and Publications page of IRS.gov or by calling toll-free 800-TAX-FORM (800-829-3676).

Taxpayers who are missing forms W-2, 1098, 1099 or 5498 for the years 2017, 2018 or 2019 should request copies from their employer, bank, or other payer. Taxpayers who are unable to get missing forms can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. Taxpayers can use the information on the transcript to file their 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        

Créditos tributarios para empleadores

Posted by Admin Posted on May 27 2021

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Crédito de licencia pagada para vacunas — La Ley del Plan de Rescate Estadounidense de 2021 (ARP) permite a los empleadores pequeños y medianos, y a ciertos empleadores gubernamentales, reclamar créditos tributarios que les reembolsan el costo de proporcionar licencia por enfermedad y familiar pagada a sus empleados debido a COVID-19, incluida la licencia tomada por empleados para recibir o recuperarse de las vacunas de COVID-19. Los créditos tributarios de ARP están disponibles para empleadores elegibles que pagan licencia por enfermedad y familiar desde el 1ro de abril de 2021 hasta el 30 de septiembre de 2021. Para obtener mas información consulte nuestra hoja de datos.

Crédito de retención de empleados — Nueva ley extiende el crédito tributario por coronavirus a los empleadores que mantienen a los trabajadores en nómina (en inglés): la nueva ley extiende el crédito tributario por coronavirus a los empleadores que mantienen a los trabajadores en nómina. La Ley de Certeza del Contribuyente y de Alivio Tributario por Desastres de 2020, promulgada el 27 de diciembre de 2020, modificó y extendió el Crédito de retención de empleados (y la disponibilidad de ciertos pagos por adelantado de los créditos tributarios) bajo la sección 2301 de la Ley CARES.

Créditos por licencia familiar y por enfermedad —  Créditos tributarios relacionados con COVID-19 para licencias pagadas proporcionadas por pequeñas y medianas empresas (en inglés): Créditos tributarios relacionados con COVID-19 para licencias pagas proporcionadas por pequeñas y medianas empresas. La Ley de Alivio Tributario relacionada con COVID de 2020, promulgada el 27 de diciembre de 2020, enmendó y extendió los créditos tributarios por licencia familiar y por enfermedad pagada en virtud de las secciones 7001-7005 de la Ley de Familias Primero en Respuesta al Coronavirus.

Muchas empresas que se han visto gravemente afectadas por el coronavirus (COVID-19) calificarán para dos nuevos créditos tributarios del empleador: el Crédito por licencia familiar y por enfermedad y el Crédito por retención de empleados.

Crédito por licencia familiar y por enfermedad

Un empleado que no puede trabajar (incluido el teletrabajo) debido a la cuarentena o la cuarentena del coronavirus o tiene síntomas de coronavirus y está buscando un diagnóstico médico, tiene derecho a una licencia por enfermedad remunerada de hasta diez días (hasta 80 horas) a la tarifa de pago regular del empleado, o, si es más alto, el salario mínimo federal o cualquier salario mínimo estatal o local aplicable, hasta $511 por día, pero no más de $5,110 en total.

Cuidando a alguien con coronavirus

Un empleado que no puede trabajar debido al cuidado de alguien con coronavirus o al cuidado de un niño porque la escuela o el lugar de cuidado del niño está cerrado, o el proveedor de cuidado infantil no está disponible debido al coronavirus, tiene derecho a licencia por enfermedad remunerada por hasta dos semanas (hasta 80 horas) a dos tercios de la tarifa de pago regular del empleado o, si es mayor, el salario mínimo federal o cualquier salario mínimo estatal o local aplicable, hasta $200 por día, pero no más de $2,000 en total.

Cuidado de niños debido al cierre de la guardería o la escuela

Un empleado que no puede trabajar debido a la necesidad de cuidar a un niño cuya escuela o lugar de cuidado está cerrado o cuyo proveedor de cuidado de niños no está disponible debido al coronavirus, también tiene derecho a una licencia familiar y médica pagada equivalente a dos tercios del pago regular del empleado, hasta $200 por día y $10,000 en total. Se pueden contar hasta diez semanas de licencia calificada para el crédito de licencia familiar.

Crédito para empleadores elegibles

Los empleadores elegibles tienen derecho a recibir un crédito por el monto total de la licencia por enfermedad y la licencia familiar requeridas, más los gastos relacionados con el plan de salud y la parte del empleador del impuesto de Medicare sobre la licencia, durante el período del 1 de abril de 2020 al 31 de diciembre, 2020. El crédito reembolsable se aplica contra ciertos impuestos laborales sobre los salarios pagados a todos los empleados. Los empleadores elegibles pueden reducir los depósitos de impuestos federales sobre el empleo en previsión del crédito. También pueden solicitar un anticipo de los créditos pagados por enfermedad y licencia familiar por cualquier monto no cubierto por la reducción de depósitos. Los pagos adelantados se emitirán mediante cheque en papel a los empleadores.

Crédito de retención de empleados

Los empleadores elegibles pueden reclamar el crédito de retención de empleados, un crédito tributario reembolsable equivalente al 50 por ciento de hasta $10,000 en salarios calificados (incluidos los gastos del plan de salud), pagado después del 12 de marzo de 2020 y antes del 1 de enero de 2021. Los empleadores elegibles son aquellas empresas con operaciones que se han suspendido parcial o totalmente debido a órdenes gubernamentales debido a COVID-19, o negocios que tienen una disminución significativa en los ingresos brutos en comparación con 2019.

El crédito reembolsable tiene un tope de $5,000 por empleado y se aplica contra ciertos impuestos laborales sobre los salarios pagados a todos los empleados. Los empleadores elegibles pueden reducir los depósitos de impuestos federales sobre el empleo en anticipación del crédito. También pueden solicitar un anticipo del crédito de retención de empleados por cualquier monto no cubierto por la reducción de depósitos. Los pagos adelantados se emitirán mediante cheque en papel a los empleadores.

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 Living Abroad

Posted by Admin Posted on May 27 2021

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If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

When to File

If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic 2-month extension to file your return without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15.  Note that you must pay any tax due by April 15 or interest will be charged starting from April 15.

Where to File

If you are a U.S. citizen or resident alien (including a green card holder) and you live in a foreign country, mail your U.S. tax return to:

Department of the Treasury

Internal Revenue Service Center

Austin, TX 73301-0215

USA

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       

Cómo informar sobre cuentas bancarias y financieras extranjeras

Posted by Admin Posted on May 27 2021

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Cómo informar sobre cuentas bancarias y financieras extranjeras

Las personas estadounidenses tienen cuentas financieras en el extranjero por una variedad de razones legítimas, incluyendo conveniencia y acceso. Deben presentar un Informe de Cuentas Bancarias y Financieras Extranjeras (FBAR) porque las instituciones financieras extranjeras pueden no estar sujetas a los mismos requisitos de presentación de información que las instituciones financieras nacionales.

El FBAR es una herramienta también usada por el gobierno de los Estados Unidos para identificar a las personas que pueden estar usando cuentas financieras extranjeras para eludir la ley estadounidense. El gobierno puede usar la información de FBAR para identificar o rastrear fondos usados con fines ilícitos o para identificar los ingresos no reportados mantenidos o generados en el extranjero.

Quién debe informar

Desde 1970, la Ley de Secreto Bancario requiere que las personas de los EE. UU, presenten un FBAR (en inglés) si tienen:

1. Interés financiero en, autoridad de firma, u otra autoridad sobre una o más cuentas, tales como una cuenta bancaria, una cuenta de corretaje, un fondo mutuo, un fideicomiso u otra cuenta financiera extranjera, y

2. El valor agregado de todas las cuentas financieras extranjeras supera los $10,000 en cualquier momento durante el año calendario.

Una persona de los EE. UU. es un ciudadano o residente de los Estados Unidos o cualquier entidad legal doméstica, como una sociedad, corporación, compañía de responsabilidad limitada, patrimonio o fideicomiso.

Un país extranjero incluye cualquier área fuera de los Estados Unidos, tierras indias (tal como se define en la Ley Reguladora de Juegos Indios (en inglés) y estos territorios y posesiones de los EE. UU.:

Islas Marianas del Norte,

Distrito de Columbia,

Samoa Americana,

Guam

Puerto Rico

Islas Vírgenes de los Estados Unidos, y

Territorios en fideicomiso de las Islas del Pacífico.

Cómo presentar el informe

Los que deben informar sus cuentas en el extranjero deben presentar el FBAR electrónicamente a través del Sistema de Presentación Electrónica de la BSA (en inglés). El FBAR vence el 15 de abril. Si el 15 de abril cae sábado, domingo o día feriado legal, el FBAR vence el siguiente día laborable. Los contribuyentes no presentan el FBAR con declaraciones de impuestos individuales, comerciales, fiduciarias o de patrimonio.

Aquellos que no pueden presentar electrónicamente su FBAR, deben llamar a la Línea de Ayuda Regulatoria de la Red de Ejecución de Delitos Financieros al 800-949-2732 para solicitar una exención de presentar electrónicamente. Las personas que llamen desde fuera de los Estados Unidos pueden comunicarse con la línea de ayuda al 703-905-3975.

Cuentas de propiedad conjunta. Si dos personas poseen conjuntamente una cuenta financiera extranjera, o si varias personas tienen un interés parcial en una cuenta, entonces cada persona tiene un interés financiero en esa cuenta, y cada persona debe informar el valor completo de la cuenta en un FBAR.

Excepción para cónyuges. Los cónyuges no necesitan presentar FBAR por separado si completan y firman el Formulario 114A, Registro de Autorización para Presentar FBAR Electrónicamente (en inglés) PDF, y:

1. Todas las cuentas financieras declarables del cónyuge que no presentó son propiedad conjunta del cónyuge que presenta la declaración, y

2. El cónyuge que presenta, informa las cuentas de propiedad conjunta con el cónyuge que no presentó en un FBAR presentado a tiempo.

De lo contrario, ambos cónyuges deben presentar un FBAR separado, y cada cónyuge debe informar el valor total de las cuentas de propiedad conjunta.

El sistema de presentación electrónica no permitirá las firmas de ambos cónyuges en el mismo formulario electrónico, solo el cónyuge que presenta firma en el sistema. Los contribuyentes no presentan el Formulario 114a con el FBAR; lo guardan para sus archivos.

Niños. En general, un niño es responsable de presentar su propio FBAR. Si un niño no puede presentar su propio FBAR por algún motivo, como la edad, el padre o tutor del niño debe presentarlo. Si el niño no puede firmar su FBAR, un padre o tutor debe firmarlo.

Cuentas no reportadas en FBAR

Las personas no necesitan informar cuentas financieras extranjeras mantenidas en cuentas de jubilación individuales (descritas en las secciones 408 y 408A del Código de Impuestos Internos) y planes de jubilación calificados para impuestos (descritos en, secciones 401(a), 403(a) o 403(b)) del Código de Impuestos Internos en el FBAR. Las instrucciones de FBAR (en inglés) PDF enumera otras excepciones.

Cómo informar el valor de las cuentas financieras extranjeras

Los que presentan el FBAR deben calcular e informar razonablemente el mayor valor de los activos monetarios o no monetarios en sus cuentas durante el año calendario. Pueden confiar en sus estados periódicos de cuenta si las declaraciones muestran razonablemente el mayor valor de la cuenta durante el año.

Los declarantes calculan el mayor valor en la moneda de la cuenta. Si aún no están en dólares estadounidenses, convierten ese valor en dólares estadounidense usando la tasa de cambio del último día del año calendario (en inglés). Si la tasa de la Oficina del Servicio Fiscal del Departamento del Tesoro no está disponible, pueden usar otra tasa de cambio válida e informar la fuente de la tasa. Por ejemplo, el valor de una cuenta ubicada en Japón puede mostrarse en los estados de cuenta en yenes japoneses. Los declarantes calculan el mayor valor de la cuenta en yenes y luego lo convertirían en dólares estadounidenses.

La Guía de Referencia del FBAR del IRS (en inglés) PDF tiene otros ejemplos de cómo informar el valor de la cuenta. El sitio web de la Red de Cumplimiento de Delitos Financieros (FinCEN, por sus siglas en inglés) tiene pasos para informar el valor máximo de la cuenta (en inglés).

Comparación de los requisitos del Formulario 8938 y FBAR

Además de los requisitos del Informe de Cuentas Bancarias y Financieras Extranjeras (FBAR) de cuentas bancarias y financieras extranjeras (FBAR), ciertos contribuyentes de los EE. UU. presentan el Formulario 8938, Declaración de activos financieros extranjeros especificados (en inglés). Las cuentas que se informan en el Formulario 8938 a menudo también se deben informar en el FBAR. A diferencia del FBAR, los contribuyentes presentan el Formulario 8938 con sus declaraciones de impuestos federales

Dependiendo de la situación del contribuyente, es posible que deba presentar el Formulario 8938 o el FBAR o ambos, y es posible que deba informar ciertas cuentas extranjeras en ambos formularios. Los contribuyentes pueden encontrar una comparación de los requisitos del Formulario 8938 y FBAR (en inglés) en IRS.gov.

Fecha de vencimiento extendida para presentar el FBAR

Aquellos que no cumplieron con la fecha de vencimiento del 15 de abril deben presentar antes del 15 de octubre, la fecha de vencimiento extendida automáticamente para el FBAR. No necesitan solicitar prórroga. Si no tienen toda su información para presentar antes de la fecha de vencimiento extendida, deben presentar la declaración más completa posible y modificar el informe cuando tengan más información.

Enmendar un FBAR

Aquellos que necesiten corregir un FBAR presentado deben presentar un nuevo FBAR con la información corregida y marcar el nuevo FBAR como "enmendado." Rellene completamente, incluso los campos que no necesitan corrección. Pueden presentar electrónicamente el FBAR enmendado con el Sistema de Presentación Electrónica o presentarlo en papel con una exención de presentación electrónica de FinCEN.

Si presentan electrónicamente un FBAR enmendado, deben marcar la casilla "enmendada" en el Formulario FinCEN 114. El campo del Identificador de Informe Previo del BSA se activará, e ingresará el número de ID de BSA del FBAR original. Si presentaron electrónicamente el FBAR original, encontrarán el número de ID de BSA en el correo electrónico de confirmación enviado por FinCEN. Si no pueden localizar el número de identificación de BSA o si presentaron en papel el FBAR original, deben ingresar ceros en el campo de Identificador de Informe Previo de la BSA.

Presentación tardía de FBAR

Si una persona se entera de que debería haber presentado un FBAR el año anterior, debe presentar electrónicamente el FBAR tardío tan pronto como sea posible. El Sistema de Presentación Electrónica de la BSA les permite ingresar al año calendario que están informando, incluidos los años anteriores. También les ofrece una opción para explicar el motivo de la presentación tardía o mostrar si es parte de un programa de cumplimiento del IRS.

Multas por no presentar un FBAR

Aquellos que no presentan un FBAR cuando es necesario pueden estar sujetos a multas civiles y penales. Las infracciones criminales de las reglas de FBAR pueden resultar en una multa y/o cinco años de prisión. El gobierno de EE. UU. ajusta las multas anualmente por inflación.

El IRS no penalizará a aquellas personas que reporten adecuadamente las cuentas financieras extranjeras en un FBAR de presentación tardía y el IRS considera que tienen motivos razonables para la presentación tardía.

Archivos

Aquellos que deben presentar un FBAR deben mantener archivos de cuentas por lo general por cinco años a partir de la fecha de vencimiento de FBAR, incluyendo:

Nombre en cada cuenta,

Número de cuenta u otra designación,

Nombre y dirección del banco extranjero u otra persona que mantenga la cuenta,

Tipo de cuenta y,

Mayor valor de cada cuenta durante el período de informe.

También deben conservar copias de sus FBAR presentados

Los funcionarios o empleados que presentan un FBAR para informar el control sobre la cuenta financiera extranjera de un empleador no necesitan mantener personalmente los registros de las cuentas de sus empleadores.

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        

Happy Graduation!

Posted by Admin Posted on May 20 2021

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Congratulations to Dayana Machado, a member of the Lord Breakspeare Callagham family for her BA in Accounting.

We are very proud of you Dayana!

Taxpayers should file their tax return on time even if they can’t pay their tax bill in full

Posted by Admin Posted on May 18 2021

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Taxpayers should file their tax return by the deadline even if they cannot pay the full amount due.

If an individual taxpayer owes taxes, but can't pay in full by the May 17, 2021 deadline, they should:

File their tax return or request an extension of time to file by the May 17 deadline.

People who owe tax and do not file their return on time or request an extension may face a failure-to-file penalty for not filing on time.

Taxpayers should remember that an extension of time to file is not an extension of time to pay. An extension gives taxpayers until October 15, 2021 to file their 2020 tax return, but taxes owed are still due May 17, 2021.

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.

Pay as much as possible by the May 17 due date.

Whether filing a return or requesting an extension, taxpayers must pay their tax bill in full by the May deadline to avoid interest and penalties.

People who do not pay their taxes on time will face a failure-to-pay penalty.

The IRS has options for taxpayers who can't afford to pay taxes they owe.

Set up a payment plan as soon as possible.

Taxpayers who owe but cannot pay in full by May 17 don't have to wait for a tax bill to set up a payment plan.

They can apply for a payment plan on IRS.gov.

Taxpayers can also submit a payment plan request using Form 9465, Installment Agreement Request.

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

American Rescue Plan tax credits available to small employers to provide paid leave to employees receiving COVID-19 vaccines; new fact sheet outlines details

Posted by Admin Posted on May 18 2021

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WASHINGTON — The Internal Revenue Service and the Treasury Department announced further details of tax credits available under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.

The additional details, provided in a fact sheet released today, spell out some basic facts about the employers eligible for the tax credits. It also provides information on how these employers may claim the credit for leave paid to employees related to COVID-19 vaccinations

Eligible employers, such as businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee receiving the vaccine and for any time needed to recover from the vaccine. For example, if an eligible employer offers employees a paid day off in order to get vaccinated, the employer can receive a tax credit equal to the wages paid to employees for that day (up to certain limits).

"This new information is a shot in the arm for struggling small employers who are working hard to keep their businesses going while also watching out for the health of their employees," said IRS Commissioner Chuck Rettig. "Our work on this issue is part of a larger effort by the IRS to assist the nation recover from the pandemic."

The American Rescue Plan Act of 2021 (ARP) allows small and midsize employers, and certain governmental employers, to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. Self-employed individuals are eligible for similar tax credits.

The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through Sept. 30, 2021.

The paid leave credits under the ARP are tax credits against the employer's share of the Medicare tax. The tax credits are refundable, which means that the employer is entitled to payment of the full amount of the credits if it exceeds the employer's share of the Medicare tax.

In anticipation of claiming the credits on the Form 941, Employer's Quarterly Federal Tax Return , eligible employers can keep the federal employment taxes that they otherwise would have deposited, including federal income tax withheld from employees, the employees' share of social security and Medicare taxes and the eligible employer's share of social security and Medicare taxes with respect to all employees up to the amount of credit for which they are eligible. If the eligible employer does not have enough federal employment taxes on deposit to cover the amount of the anticipated credits, the eligible employer may request an advance by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Self-employed individuals may claim comparable credits on the Form 1040, U.S. Individual Income 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                  

Do’s and Don’ts for taxpayers who get a letter or notice from the IRS

Posted by Admin Posted on May 18 2021

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The IRS mails letters or notices to taxpayers for a variety of reasons including if:

They have a balance due.

They are due a larger or smaller refund.

The agency has a question about their tax return.

They need to verify identity.

The agency needs additional information.

The agency changed their tax return.

Here are some do's and don'ts for taxpayers who receive one:

Don't ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. The notice or letter will explain the reason for the contact and gives instructions on what to do.

Don't panic. The IRS and its authorized private collection agencies generally contact taxpayers by mail. Most of the time, all the taxpayer needs to do is read the letter carefully and take the appropriate action.

Do read the notice. If the IRS changed the tax return, the taxpayer should compare the information provided in the notice or letter with the information in their original return. In general, there is no need to contact the IRS if the taxpayer agrees with the notice.

Do respond timely. If the notice or letter requires a response by a specific date, taxpayers should reply in a timely manner to:

Minimize additional interest and penalty charges.

preserve their appeal rights if they don't agree.

Do pay amount due. Taxpayers should pay as much as they can, even if they can't pay the full amount. People can pay online or apply for an Online Payment Agreement or Offer in Compromise. The agency offers several payment options.

Do keep a copy of the notice or letter. It's important to keep a copy of all notices or letters with other tax records. Taxpayers may need these documents later.

Do remember there is usually no need to call the IRS. If a taxpayer must contact the IRS by phone, they should use the number in the upper right-hand corner of the notice. The taxpayer should have a copy of their tax return and letter when calling. Typically, taxpayers only need to contact the agency if they don't agree with the information, if the IRS request additional information, or if the taxpayer has a balance due. Taxpayers can also write to the agency at the address on the notice or letter. If taxpayers write, they should allow at least 30 days for a response.

Do avoid scams. The IRS will never contact a taxpayer using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure if they owe money to the IRS can view their tax account information on IRS.gov.

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        

Taxpayers shouldn’t believe these myths about federal tax refunds

Posted by Admin Posted on May 18 2021

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Now that many taxpayers have filed their federal tax returns, they're eager for details about their refund. When it comes to refunds, there are several common myths that can mislead taxpayers.

Getting a refund this year means there's no need to adjust withholding for 2021

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. Also, taxpayers who experience a life event like marriage, divorce, birth of a child, an adoption or are no longer able to claim a person as a dependent are encouraged to check their withholding.

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 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 usually occur 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 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        

All taxpayers are now eligible for identity protection PINs

Posted by Admin Posted on May 10 2021

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The IRS has expanded the Identity Protection PIN Opt-In Program to all taxpayers who can verify their identity.

The Identity Protection PIN is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayers' personally identifiable information.

Here are a few key things to know about the IP PIN Opt-In program.

This is a voluntary program.

Taxpayers must pass a rigorous identity verification process.

Spouses and dependents are eligible for an IP PIN if they can verify their identities.

An IP PIN is valid for a calendar year.

People must get a new IP PIN each filing season.

The online IP PIN tool is offline between November and mid-January each year.

Correct IP PINs must be entered on electronic and paper tax returns to avoid rejections and delays.

Taxpayers should Never share their IP PIN with anyone but their trusted tax provider.

The IRS will never call, text or email requesting their IP PIN.

People should beware of scams to steal their IP PIN.

There currently is no opt-out option but the IRS is working on one for 2022.

How to get an IP PIN

Taxpayers who want an IP PIN for 2021 should use Get an IP PIN tool on IRS.gov. This tool uses Secure Access authentication verify a person's identity. Taxpayers should review the Secure Access requirements before they try to use the Get An IP PIN tool. There is no need to file a Form 14039, Identity Theft Affidavit, to join the program.

Once a taxpayer have authenticated their identity, their 2021 IP PIN immediately will be revealed to them. This PIN must be used when prompted by electronic tax returns or written near the signature line on paper tax returns.

Options for taxpayers who can't verify their identity online

Taxpayers whose adjusted gross income is $72,000 or less may complete Form 15227 (EN-SP), Application for an Identity Protection Personal Identification Number PDF, and mail or fax it to the IRS. A customer service representative will contact the taxpayer and verify their identity by phone. Taxpayers should have their prior year tax return for verification process.

Taxpayers who verify their identity this way will have an IP PIN mailed to them the following tax year. This is for security reasons. Once in the program, the IP PIN will be mailed to these taxpayers each year.

Taxpayers who can't verify their identity online or by phone and are ineligible for file Form 15227 can contact the IRS and make an appointment at a Taxpayer Assistance Center to verify their identity in person. They'll need to bring should bring two forms of identification, including one government-issued picture identification.

Taxpayers who verify their identity in-person will have an IP PIN mailed to them within three weeks. Once in the program, the IP PIN will be mailed to these taxpayers each year.

 

Confirmed identity theft victims

Current tax-related identity theft victims who have been receiving IP PINs by mail will experience no change.

Taxpayers who are confirmed identity theft victims or who have filed an identity theft affidavit because of suspected stolen identity refund fraud will automatically receive an IP PIN by mail once their cases are resolved.

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 

Taxpayers should use the correct filing status for accuracy and to avoid surprises

Posted by Admin Posted on May 10 2021

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Taxpayers need to know their correct filing status and be familiar with each option. The IRS Interactive Tax Assistant can help them determine their filing status.

A taxpayer's filing status typically depends on whether they are single or married on Dec. 31, which determines their filing status for that entire year.

More than one filing status may apply in certain situations. If this is the case, taxpayers can usually choose the filing status that allows them to owe the least amount of tax.

When preparing and filing a tax return, the filing status affects:

If the taxpayer is required to file a federal tax return

If they should file a return to receive a refund

Their standard deduction amount

If they can claim certain credits

The amount of tax they should pay

Here are the five filing statuses:

Single. Normally, this status is for taxpayers who are unmarried, divorced or legally separated under a divorce or separate maintenance decree governed by state law.

Married filing jointly. If a taxpayer is married, they can file a joint tax return with their spouse. When a spouse passes away, the widowed spouse can usually file a joint return for that year.

Married filing separately. Married couples can choose to file separate tax returns. When doing so, it may result in less tax owed than filing a joint tax return.

Head of household. Unmarried taxpayers may be able to file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person living in the home for half the year.

Qualifying widow or widower with dependent child. This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply.

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        

Todos los contribuyentes ahora son elegibles para un PIN de Protección de Identidad

Posted by Admin Posted on May 10 2021

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El PIN de Protección de Identidad (IP PIN) es un código de seis dígitos asignado a contribuyentes elegibles y conocido sólo por el contribuyente y el IRS. Ayuda a evitar que los ladrones de identidad presenten declaraciones de impuestos fraudulentas mediante el uso del número de Seguro Social de un contribuyente.

Acerca del programa de suscripción

  • Este es un programa voluntario
  • Los contribuyentes deben pasar un riguroso proceso de verificación de identidad.
  • Los cónyuges y dependientes son elegibles para un IP PIN si pueden verificar sus identidades.
  • Un IP PIN es válido para un año calendario.
  • Los contribuyentes deben obtener un IP PIN nuevo cada temporada de impuestos.
  • El IP PIN debe ingresarse correctamente en las declaraciones de impuestos electrónicas  y en papel para evitar rechazos y retrasos.

Cómo obtener un IP PIN:

Los contribuyentes que desean un IP PIN deben ir a IRS.gov/IPPIN y usar la herramienta Obtenga un IP PIN.

Cuidado con las estafas para robar el IP PIN

Los contribuyentes nunca deben compartir su IP PIN con nadie más que con su proveedor de impuestos de confianza. El IRS nunca llamará, enviará un mensaje de texto o correo electrónico para solicitar su IP PIN.

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 residentes en el extranjero

Posted by Admin Posted on May 05 2021

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Si es ciudadano estadounidense o extranjero residente, las reglas para presentar declaraciones de impuestos sobre la renta, sucesiones y donaciones y pagar el impuesto estimado son generalmente las mismas, ya sea que se encuentre en los Estados Unidos o en el extranjero. Sus ingresos mundiales están sujetos al impuesto sobre la renta de los EE. UU., Independientemente de dónde resida.

Cuándo presentar

Si es ciudadano estadounidense o extranjero residente que reside en el extranjero, o está en el servicio militar fuera de los EE. UU., En la fecha de vencimiento habitual de su declaración, se le permite una extensión automática de 2 meses para presentar su declaración sin solicitar una extensión. Para una declaración de año calendario, la extensión automática de 2 meses es hasta el 15 de junio. Tenga en cuenta que debe pagar cualquier impuesto adeudado antes del 15 de abril o se cobrarán intereses a partir del 15 de abril.

Dónde presentar la solicitud

Si es ciudadano estadounidense o extranjero residente (incluido el titular de una tarjeta verde) y vive en un país extranjero, envíe su declaración de impuestos de los EE. UU. A:

Department of the Treasury

Internal Revenue Service Center

Austin, TX 73301-0215

USA

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         

Here’s how people can pay their federal taxes

Posted by Admin Posted on May 05 2021

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The May 17 deadline for individuals to file and pay their federal income tax is fast approaching. While paying taxes is not optional, people do have options when it comes to how they pay taxes. The IRS offers a variety of ways to pay taxes.

Some taxpayers must make quarterly estimated tax payments throughout the year. This includes sole proprietors, partners, and S corporation shareholders who expect to owe $1,000 or more when they file. Individuals who participate in the gig economy might also have to make estimated payments. The deadline to pay estimated taxes remains April 15, 2021.

Here are five ways for people who need to pay their taxes. They can:

Pay when they e-file using their bank account, at no charge, using electronic funds withdrawal.

Use IRS Direct Pay which allows taxpayers to pay electronically directly from their checking or savings account for free. They can choose to receive email notifications about their payments when they pay this way. Taxpayers should watch out for email schemes. IRS Direct Pay sends emails only to users who request the service.

Pay using a payment processor by credit card, debit card or digital wallet options. Taxpayers can make these payments online, by phone or through the IRS2Go app.

Make a cash payment at more than 60,000 participating retail locations nationwide. To pay with cash, visit IRS.gov and follow the instructions.

Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.

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

Personas Extranjeras

Posted by Admin Posted on May 05 2021

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Reglas relevantes a los capítulos 3 y 4.

Un beneficiario está sujeto a retención solo si es una persona extranjera. Una persona extranjera incluye un individuo extranjero no residente, una corporación extranjera, una sociedad extranjera, un fideicomiso extranjero, un patrimonio extranjero y cualquier otra persona que no sea una persona de los EE. UU. También incluye una sucursal extranjera de una institución financiera estadounidense si la sucursal extranjera es un intermediario calificado. En la mayoría de los casos, la sucursal estadounidense de una corporación o sociedad extranjera se trata como una persona extranjera.

Si una cantidad es tanto un pago retenible como una cantidad sujeta a la retención del capítulo 3 y el agente de retención retiene según el capítulo 4, puede acreditar esta cantidad contra cualquier impuesto adeudado según el capítulo 3.

Extranjero no residente

Un extranjero no residente es un individuo que no es ciudadano estadounidense o extranjero residente. Un residente de un país extranjero bajo el artículo de residencia de un tratado de impuesto sobre la renta es un individuo extranjero no residente a los efectos de la retención.

Casado con ciudadano estadounidense o extranjero residente. Las personas extranjeras no residentes casadas con ciudadanos o residentes de los EE. UU. Pueden optar por ser tratados como extranjeros residentes para ciertos fines del impuesto sobre la renta. Sin embargo, estas personas todavía están sujetas a las reglas de retención del capítulo 3 que se aplican a los extranjeros no residentes para todos los ingresos excepto los salarios. Los salarios pagados a estas personas están sujetos a retenciones graduales. Consulte la Publicación 15 Circular E, Guía de impuestos del empleador.

Persona de EE. UU.

El término "persona de los Estados Unidos" significa: Un ciudadano o residente de los Estados Unidos,

Una sociedad creada u organizada en los Estados Unidos o bajo la ley de los Estados Unidos o de cualquier estado, o el Distrito de Columbia,

Una corporación creada u organizada en los Estados Unidos o bajo la ley de los Estados Unidos o de cualquier estado, o el Distrito de Columbia,

Cualquier patrimonio o fideicomiso que no sea un patrimonio extranjero o un fideicomiso extranjero. (Consulte la sección 7701 (a) (31) del Código de Rentas Internas para obtener la definición de un patrimonio extranjero y un fideicomiso extranjero.), O

Cualquier otra persona que no sea extranjera.

ciudadano estadounidense

El término "ciudadano de los Estados Unidos" significa: Un individuo nacido en los Estados Unidos,

Un individuo cuyo padre es ciudadano de los EE. UU.,

Un ex extranjero que se ha naturalizado como ciudadano de los EE. UU.,

Un individuo nacido en Puerto Rico,

Un individuo nacido en Guam, o

Un individuo nacido en las Islas Vírgenes de EE. UU.

Residente extraterrestre

Un extranjero residente es un individuo que no es ciudadano o nacional de los Estados Unidos y que cumple con la prueba de la tarjeta verde o la prueba de presencia sustancial para el año calendario.

En la mayoría de los casos, los días que el extranjero está en los Estados Unidos como maestro, estudiante o aprendiz con una visa "F", "J", "M" o "Q" no se cuentan. Esta excepción es por un período de tiempo limitado. Para obtener más información sobre el estado de residente y no residente, las pruebas de residencia y las excepciones, consulte la Publicación 519, Guía de impuestos de EE. UU. Para extranjeros.

Nota: Si su empleado se demora en notificarle que su estado cambió de extranjero no residente a extranjero residente, es posible que tenga que hacer un ajuste al Formulario 941 si ese empleado estaba exento de la retención de impuestos de seguro social y Medicare como extranjero no residente. . Para obtener más información sobre cómo realizar ajustes, consulte el Capítulo 13 de la Publicación 15 (Circular E), Guía de impuestos del empleador.

Residente de una posesión estadounidense. Un residente de buena fe de Puerto Rico, las Islas Vírgenes de EE. UU., Guam, el Estado Libre Asociado de las Islas Marianas del Norte (CNMI) o Samoa Estadounidense que no sea ciudadano de EE. UU. O ciudadano de EE. UU. Es tratado como un extranjero no residente según las reglas de retención que se explican aquí…

Un residente de buena fe de una posesión es alguien que: Cumple con la prueba de presencia,

No tiene un domicilio fiscal fuera de la posesión, y

No tiene una conexión más cercana con los Estados Unidos o con un país extranjero que con la posesión.

La Sección 937 del Código de Rentas Internas establece el requisito de presentación del Formulario 8898, Declaración para personas que comienzan o terminan la residencia de buena fe en una posesión de los EE. UU. Este formulario informa cada cambio de residencia hacia o desde una posesión de los EE. UU. El IRS está autorizado a imponer una multa de $ 1,000 a cualquier contribuyente que esté obligado a presentar este formulario, pero que no lo haga.

Para obtener una explicación detallada de las reglas de residencia en posesión de los EE. UU. Y las reglas de obtención de ingresos, consulte la Publicación 570, Guía de impuestos para personas con ingresos de posesiones estadounidenses.

Corporaciones extranjeras

Una corporación extranjera es aquella que no se ajusta a la definición de corporación nacional. Una corporación nacional es aquella que fue creada u organizada en los Estados Unidos o bajo las leyes de los Estados Unidos, cualquiera de sus estados o el Distrito de Columbia.

Corporaciones de Guam o de las Islas Marianas del Norte. Una corporación creada u organizada en, o bajo las leyes de, Guam no se considera una corporación extranjera a los efectos de la retención de impuestos para el año fiscal si:

En todo momento durante el año fiscal, menos del 25% del valor de las acciones de la corporación es propiedad, directa o indirecta, de personas extranjeras, y

Al menos el 20% de los ingresos brutos de la corporación se obtiene de fuentes dentro de Guam o la CNMI para el período de 3 años que finaliza con el cierre del año fiscal anterior de la corporación (o el período de existencia de la corporación, si es menos) .

Nota: Las disposiciones que se discuten a continuación bajo las Islas Vírgenes de los EE. UU. Y las Corporaciones de Samoa Americana se aplicarán a las corporaciones de Guam o CNMI cuando haya un acuerdo de implementación en vigor entre los Estados Unidos y esa posesión.

Corporaciones de las Islas Vírgenes de EE. UU. Y Samoa Americana. Una corporación creada u organizada en, o bajo las leyes de, las Islas Vírgenes de los EE. UU. O Samoa Americana no se considera una corporación extranjera a los efectos de la retención de impuestos para el año fiscal si:

En todo momento durante el año fiscal, menos del 25% del valor de las acciones de la corporación es propiedad, directa o indirecta, de personas extranjeras.

Al menos el 65% de los ingresos brutos de la corporación está efectivamente relacionado con la realización de un comercio o negocio en las Islas Vírgenes de los EE. UU., Samoa Americana, Guam, la CNMI o los Estados Unidos durante el período de 3 años que finaliza con el cierre de la año fiscal de la corporación (o el período de existencia de la corporación o cualquier predecesor, si es menor), y

Ninguna parte sustancial de los ingresos de la corporación se utiliza, directa o indirectamente, para satisfacer obligaciones con una persona que no es un residente de buena fe de las Islas Vírgenes de los Estados Unidos, Samoa Americana, Guam, la CNMI o los Estados Unidos.

Fundación privada extranjera

Una fundación privada que fue creada u organizada bajo las leyes de un país extranjero es una fundación privada extranjera. Los ingresos brutos de inversiones de fuentes dentro de los Estados Unidos pagados a una fundación privada extranjera calificada están sujetos a una retención de una tasa del 4% (a menos que estén exentos por un tratado) en lugar de la tasa legal ordinaria del 30%.

Otras organizaciones, asociaciones e instituciones benéficas extranjeras

Una organización puede estar exenta del impuesto sobre la renta en virtud de la sección 501 (a) del Código de Rentas Internas y el capítulo 4 de retención de impuestos incluso si se formó de conformidad con la ley extranjera. En la mayoría de los casos, no tiene que retener impuestos sobre los pagos de ingresos a estas organizaciones extranjeras exentas de impuestos a menos que el IRS haya determinado que son fundaciones privadas extranjeras. Como regla general, dichas organizaciones extranjeras exentas de impuestos deben presentar el formulario W-8EXP al agente de retención para establecer su condición de organización extranjera exenta de impuestos.

Sin embargo, los pagos a estas organizaciones deben declararse en el Formulario 1042-S si el pago está sujeto a la retención del capítulo 3, aunque no se retengan impuestos.

Debe retener impuestos sobre los ingresos comerciales no relacionados (como se describe en la Publicación 598, Impuesto sobre los ingresos comerciales no relacionados de organizaciones exentas) de organizaciones extranjeras exentas de impuestos de la misma manera que retendría impuestos sobre ingresos similares de organizaciones no exentas cuando la organización lo hace. no proporcionarle un Formulario W-8ECI para certificar que los ingresos están efectivamente relacionados con una actividad comercial o comercial de la organización en los EE. UU.

Sucursales estadounidenses de personas extranjeras

En la mayoría de los casos, un pago a una sucursal estadounidense de una persona extranjera es un pago realizado a la persona extranjera. Sin embargo, puede tratar los pagos a sucursales estadounidenses de bancos extranjeros y compañías de seguros extranjeras que están sujetas a la supervisión reguladora de EE. UU. Como pagos realizados a una persona estadounidense, si usted y la sucursal de EE. UU. Han acordado hacerlo y si se demuestra su acuerdo. mediante un certificado de retención, formulario W-8IMY, certificado de intermediario extranjero, entidad extranjera de flujo directo o ciertas sucursales de EE. UU. para la retención de impuestos en los Estados Unidos. Para este propósito, una institución financiera del territorio que actúa como intermediario o que es una entidad de flujo directo se trata como una sucursal de EE. UU.

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         

University students and staff should be aware of IRS impersonation email scam

Posted by Admin Posted on May 05 2021

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People should be aware of an ongoing IRS-impersonation scam that appears to target educational institutions, including students and staff who have ".edu" email addresses. The suspect emails display the IRS logo and use various subject lines, such as "Tax Refund Payment" or "Recalculation of your tax refund payment." It asks people to click a link and submit a form to claim their refund.

The scam website requests taxpayers provide their:

Social Security number

First name

Last name

Date of birth

Prior year annual gross income

Driver's license number

Current address

City

State/U.S. territory

ZIP code/postal code

Electronic filing PIN

Taxpayers who believe they have a pending refund can easily check on its status using the Where's My Refund? tool on IRS.gov.

Here are a few things people can do if they believe they are a target of the scam:

Report the scam: People who receive this scam email should not click on the link in the email and report it to the IRS. For security reasons, they should save the email using save as and then send that attachment to phishing@irs.gov or forward the email as an attachment to phishing@irs.gov.

Get an Identity Protection PIN: Taxpayers who believe they may have provided identity thieves with their personal information should consider immediately obtaining an Identity Protection PIN. This is a voluntary opt-in program. An IP PIN is a six-digit number that helps prevent identity thieves from filing fraudulent tax returns in the victim's name.

Report identity theft: Taxpayers who attempt to e-file their tax return and find it rejected because a return with their SSN has been filed should file a Form 14039, Identity Theft Affidavit PDF to report themselves as a possible identity theft victim. See Identity Theft Central to learn about the signs of identity theft and actions to take.

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

Treasury Department and IRS provide safe harbor for small businesses to claim deductions relating to first-round Paycheck Protection Program loans

Posted by Admin Posted on May 05 2021

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WASHINGTON — The Treasury Department and the Internal Revenue Service issued Revenue Procedure 2021-20 https://www.irs.gov/pub/irs-drop/rp-21-20.pdf for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the original eligible expenses because they relied on guidance issued before the enactment of tax relief legislation in December of 2020.

Under prior guidance, businesses that received PPP loans to cover payroll costs, interest on covered mortgage obligations, covered rent obligation payments, and covered utility payments could not deduct corresponding expenses.

With the Dec. 27, 2020, enactment of the Consolidated Appropriations Act, 2021, businesses now may claim these deductions even though they received PPP loans to cover original eligible expenses. These businesses can use the safe harbor provided by this guidance to deduct those expenses on the return for the immediately subsequent year.

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       

Foreign Persons

Posted by Admin Posted on May 05 2021

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Rules relevant to chapters 3 and 4.

A payee is subject to withholding only if it is a foreign person. A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U.S. person. It also includes a foreign branch of a U.S. financial institution if the foreign branch is a qualified intermediary. In most cases, the U.S. branch of a foreign corporation or partnership is treated as a foreign person.

If an amount is both a withholdable payment and an amount subject to chapter 3 withholding and the withholding agent withholds under chapter 4, it may credit this amount against any tax due under chapter 3.

Nonresident alien

A nonresident alien is an individual who is not a U.S. citizen or a resident alien. A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding.

Married to U.S. citizen or resident alien. Nonresident alien individuals married to U.S. citizens or residents may choose to be treated as resident aliens for certain income tax purposes. However, these individuals are still subject to the chapter 3 withholding rules that apply to nonresident aliens for all income except wages. Wages paid to these individuals are subject to graduated withholding. Refer to Publication 15 Circular E, Employer's Tax Guide.

U.S. person

The term "United States person" means:

A citizen or resident of the United States,

A partnership created or organized in the United States or under the law of the United States or of any State, or the District of Columbia,

A corporation created or organized in the United States or under the law of the United States or of any State, or the District of Columbia,

Any estate or trust other than a foreign estate or foreign trust. (See Internal Revenue Code section 7701(a)(31) for the definition of a foreign estate and a foreign trust.), or

Any other person that is not a foreign person.

U.S. citizen

The term "United States citizen" means:

An individual born in the United States,

An individual whose parent is a U.S. citizen,

A former alien who has been naturalized as a U.S. citizen,

An individual born in Puerto Rico,

An individual born in Guam, or

An individual born in the U.S. Virgin Islands.

Resident alien

A resident alien is an individual that is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year.

In most cases, the days the alien is in the United States as a teacher,  student, or trainee on an "F", "J", "M", or "Q" visa are not counted. This exception is for a limited period of time. For more information on resident and nonresident status, the tests for residence, and the exceptions to them, refer to Publication 519, U.S. Tax Guide for Aliens.

Note: If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. For more information on making adjustments, refer to Chapter 13 of Publication 15 (Circular E), Employer's Tax Guide.

Resident of a U.S. possession. A bona fide resident of Puerto Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI) or American Samoa who is not a U.S. citizen or a U.S. national is treated as a nonresident alien for the withholding rules explained here. A bona fide resident of a possession is someone who:

Meets the presence test,

Does not have a tax home outside the possession, and

Does not have a closer connection to the United States or to a foreign country than to the possession.

Section 937 of the Internal Revenue Code establishes the filing requirement for Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession. This form reports each change of residency to or from a U.S. possession. The IRS is authorized to impose a $1,000 penalty on any taxpayer who is liable to file this form, but who fails to file it.

For a detailed explanation of the U.S. possession residency rules and income sourcing rules, please refer to Publication 570, Tax Guide for Individuals With Income From U.S. Possessions.

Foreign corporations

A foreign corporation is one that does not fit the definition of a domestic corporation. A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia.

Guam or Northern Mariana Islands corporations. A corporation created or organized in, or under the laws of, Guam is not considered a foreign corporation for the purpose of withholding tax for the tax year if:

At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, and

At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less).

Note: The provisions discussed below under U.S. Virgin Islands and American Samoa Corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession.

U.S. Virgin Islands and American Samoa corporations. A corporation created or organized in, or under the laws of, the U.S. Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if:

At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons.

At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U.S. Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and

No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U.S. Virgin Islands, American Samoa, Guam, the CNMI, or the United States.

Foreign private foundation

A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to withholding of a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate.

Other foreign organizations, associations, and charitable institutions

An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code and chapter 4 withholding tax even if it was formed under foreign law. In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. As a general rule, such foreign tax-exempt organizations should file Form W-8EXP with the withholding agent in order to establish their status as a foreign tax-exempt organization.

Payments to these organizations, however, must be reported on Form 1042-S if the payment is subject to chapter 3 withholding, even though no tax is withheld.

You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations when the organization does not provide you a Form W-8ECI to certify that the income is effectively connected with a U.S. trade or business of the organization.

U.S. branches of foreign persons

In most cases, a payment to a U.S. branch of a foreign person is a payment made to the foreign person. You may, however, treat payments to U.S. branches of foreign banks and foreign insurance companies that are subject to U.S. regulatory supervision as payments made to a U.S. person, if you and the U.S. branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding. For this purpose, a territory financial institution acting as an intermediary or that is a flow-through entity is treated as a U.S. branch.

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

Recovery Rebate Credit and Economic Impact Payment information you might need to know

Posted by Admin Posted on Apr 22 2021

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Economic Impact Payments (EIPs), also known as stimulus payments, and the related Recovery Rebate Credits (RRCs) are essentially divided into two tax years: 2020 and 2021. The information outlined below is to help you understand which EIPs relate to which RRC and how to find more information about each.

Please share this information: If you have friends, family or clients who do not have internet access, please feel free to print this article and share it with them. Both TAS and IRS phone lines are overloaded with calls, so taxpayers who chose to call may encounter long wait times. Help get this information out to others.

Tax Year 2020

Two EIPs (EIP1 and EIP2) were issued to eligible taxpayers during 2020 and early 2021. These EIPs were advanced payments of the Recovery Rebate Credit (RRC), a refundable credit, claimed on the 2020 Individual Tax Return.

How do I get these EIPs if I didn’t receive them or got an incorrect amount?

If you are eligible and did not receive either or both EIPs, you now must claim them as the RRC on the 2020 Form 1040, Individual Income Tax or Form 1040-SR, U.S. Tax Return for Seniors. The Form 1040 and Form 1040-SR instructions include a worksheet you can use to figure the amount of any RRC for which you are eligible.The eligibility criteria for the RRC is generally the same as for EIPs, except that the RRC is based on tax year 2020 information, instead of the tax year 2019 or tax year 2018 information used for EIP1 and tax year 2019 information used for EIP2.

If you are not normally required to file a tax return, you still must file either a 2020 Form 1040, Individual Income Tax or Form 1040-SR, U.S. Tax Return for Seniors to get the amount owed.

There is no other way to receive the amount of 2020 stimulus/RRC credit you may be entitled to, with one exception:

If you did not receive an EIP payment, but did get Notice 1444, visit the IRS’s Economic Impact Payments page and look for the EIP Frequently Asked Questions and Answers pages; then, under the section titled Payment Issued but Lost, Stolen, Destroyed or Not Received, follow the applicable instructions. Note the EIP FAQ pages are separated for the EIP1, EIP2, and EIP3 payments, so make sure you are looking at the correct page for the EIP you are missing.

How long will it take to get a refund?

If you are eligible for a refund of your 2020 income tax, then the amount you receive for the Recovery Rebate Credit will be included as part of your 2020 tax refund. It will not be issued separately. You can check the status of your refund under Where’s My Refund?

Generally, you will receive your refund within 3 weeks if you file electronically or 8 weeks if you mail your return. See How long you may have to wait? for more details. If the IRS identifies an error in your calculation for this (or anything else reported on your return), it could also cause a delay while IRS make any necessary corrections. Please note that the IRS is experiencing delays in processing mailed tax returns. To receive any tax refund you are due, we recommend you file your tax return electronically as quickly as possible. If you need assistance with electronically filing and you meet the eligibility requirements, a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site may be able to assist you.Be aware though, that the 2020 Recovery Rebate Credit can be reduced to pay debts owed to other Federal government agencies (separate from federal income tax debt), as well as to state agencies. Keep in mind that the credit is part of your tax refund and your tax refund is subject to any offset. However, see the National Taxpayer Advocate’s blog, dated March 15, 2021 for more information concerning 2020 RRC offsets.

Why is my 2020 Recovery Rebate Credit different than expected?

The IRS is mailing letters to some taxpayers who claimed the 2020 credit, but may be getting a different amount than they expected. Here are some common reasons the IRS corrected the credit:

The individual was claimed as a dependent on another person’s 2020 tax return.

The individual did not provide a Social Security number valid for employment.

The qualifying child was age 17 or older on January 1, 2020.

Math errors relating to calculating adjusted gross income and any EIPs already received.

IRS.gov has a special section – Correcting Recovery Rebate Credit issues after the 2020 tax return is filed – that provides additional information explaining what errors may have occurred. Taxpayers who disagree with the IRS calculation should review their letter as well as the questions and answers for what information they should have available when contacting the IRS. See IRS information letters about Economic Impact Payments and the Recovery Rebate Credit or visit IRS.gov/rrc and the frequently asked questions by topic for more details.

Where can I find more information?

See our Coronavirus (COVID-19) Tax Relief page, Recovery Rebate Credit & Economic Impact Payments section and Additional Economic Impact Payment Information section for more detailed information or go to the following IRS.gov pages:

 

2020 Recovery Rebate Credit (RRC)

Topic A: Claiming the Recovery Rebate Credit if you aren’t required to file a tax return

Topic B: Eligibility

Topic C: Claiming the Credit

Topic D: Calculating the Credit

Topic E: Receiving the Credit

Topic F: Finding the First and Second Economic Impact Payment Amounts to Calculate the 2020 Recovery Rebate Credit

Topic G: Correcting issues after the 2020 tax return is filed

See also TAS’s Ability to Help With Delayed Refunds Is Limited.

Tax Year 2021

The American Rescue Plan Act of 2021, enacted March 11, 2021, provides a 2021 Recovery Rebate Credit (RRC) which can be claimed on 2021 Individual Income Tax Returns. It also provides for an advanced payment of the RRC in calendar year 2021 through payments that are referred to as Economic Impact Payments (EIP3), similar to what was done in 2020, but with different eligibility criteria and payment amounts. More detailed information about when and how to claim the RRC on the 2021 individual tax forms will be provided prior to the opening of the 2021 filing season.

How much should my EIP3 amount be?

Generally, the amount will be $1,400 (or $2,800 in the case of a joint return), plus an additional $1,400 per each qualifying dependent of the taxpayer, for all U.S. residents with adjusted gross income up to a threshold phase-out of $75,000 ($150,000 in the case of a joint return or a surviving spouse, and $112,500 in the case of a head of household), who are not a dependent of another taxpayer and have a work-eligible Social Security number (SSN). The rebate amount is phased out above certain income levels.

When should I get my 2021 EIP3 payment and how can I check on it?

The IRS started issuing the EIP3 to eligible individuals in phases in March of 2021. EIP3 will be sent each week to eligible individuals throughout most of the calendar year 2021 by direct deposit, or mailed as a check, or a debit card, as the IRS continues to process tax returns. You can check your payment status in the Get My Payment tool.

Where can I find more information?

See our Coronavirus (COVID-19) Tax Relief page, 2021 Recovery Rebate Credit & Economic Impact Payments sections and Additional Economic Impact Payment Information section for more detailed information or go to the following IRS.gov pages:

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

ARPA Provides More Than Just Direct Payments to Taxpayers

Posted by Admin Posted on Apr 22 2021

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On March 11, another round of COVID-19 relief legislation was signed into law. The American Rescue Plan Act (ARPA) includes funding for individuals, businesses, and state and local governments, but also some significant tax-related provisions.

ARPA extends and expands some tax provisions in the CARES Act and the Consolidated Appropriations Act (CAA) and also includes some new tax-related provisions.

A quick look

Here’s a quick look at some of the tax provisions that may affect you:

Individuals

Recovery rebates of up to $1,400 for singles and heads of households and $2,800 for married couples filing jointly — plus $1,400 per qualifying dependent (including adult dependents) — subject to adjusted gross income (AGI) phaseouts starting at $75,000 for singles, $112,500 for heads of households and $150,000 for joint filers and ending at $80,000, $120,000 and $160,000, respectively

Increased Child credit, including advance payments of part of the credit later this year

Expanded child and dependent care tax credit

Tax-free treatment of forgiven student loan debt

Exclusion from gross income of the first $10,200 in unemployment benefits received

Businesses and other employers

Extended and expanded tax credits for retaining employees, through Dec. 31, 2021

Extended and modified payroll tax credits for paid sick and family leave, through Sept. 30, 2021

Extended excess business loss limitation, through Dec. 31, 2026

Expansion of the Section 162(m) limits on the tax deduction public companies can take for executive compensation to cover the CEO, the CFO and the five next highest paid employees, beginning in 2027

How will you benefit?

This is just a brief overview of the tax-related provisions of ARPA. Additional rules and limits apply. Contact your tax advisor for more details on these provisions and how you might benefit.

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 may file a 2020 superseding return changing their joint filing election to receive the third economic impact payment.

Posted by Admin Posted on Apr 22 2021

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Economic Impact Payments

The IRS previously issued two rounds of economic impact payments (EIPs). The IRS delivered over 160 million payments for the first round of EIPs and 147 million payments for the second round of EIPs. The IRS has currently disbursed approximately 159 million payments for the third round of EIPs based on the adjusted gross incomes of the taxpayers’ latest processed returns from 2019 or 2020. The IRS is also automatically issuing and will continue to issue true-up payments for those individuals who already received a third EIP based on their 2019 tax return but have since filed their 2020 tax return and qualify for additional EIP funds. However, since enactment of the legislation many eligible victims of domestic abuse face issues in receiving their EIPs.

If the IRS determined the EIP based upon a filed joint tax return, it electronically deposited the EIP to the bank account shown on the joint return or it issued a check in both taxpayers’ names and sent the check to the address shown on the joint return. And on March 30, the IRS advised joint filers that taxpayer may receive half of the EIP payment as a direct deposit and the other half as a check, so keep an eye on your mailbox.

Superseding Returns

In my April 29, 2020, blog, I called attention to superseding returns — returns filed after an original return but before the due date of the original return. Returns are typically due on April 15, but taxpayers can submit a Form 4868, Application for Automatic Extension of Time to File, until October 15. Taxpayers can use superseding returns to correct an error or change a tax election as a substitute for the original filed return. For example, taxpayers might elect to have an overpayment shown on an original return applied to the tax owed the following year. By filing a second (superseding) return, taxpayers can change that election and receive the refund in the current year instead.

Superseding returns are treated as a replacement of an original return, and the IRS adjusts its records accordingly (see, for example, Internal Revenue Manual (IRM) 21.6.7.4.10). As I noted in a recent blog, it is important to remember the IRS treats the original return filing date as the key date for assessment and refund statute purposes — not the date the superseding return was filed if the superseding return was filed before an extended due date.

Superseding Return Changing Filing Status

Another reason to file a superseding return would be to change the election to file a joint return. For example, taxpayers who were married at the conclusion of the tax year, filed a joint return, and subsequently divorced or separated might decide to change their filing statuses (to married filing separately or head of household, if eligible).  One additional benefit is each spouse would receive their EIP individually rather than receive their EIP as an electronic deposit to a joint bank account they no longer share, or via a check in both their names to an address they no longer share.

Taxpayers who are still married, particularly victims of domestic abuse, may also decide to change their joint return election by filing a timely superseding return. This may be especially important when they do not have access to the bank account shown on the filed joint return, or they cannot access the mail at the address shown on the joint return, and the other joint filer may misappropriate their share of EIP.

The IRM takes the position that superseding returns changing the joint filing election must be filed before the due date of the original return without regard to extensions. The deadline for filing an original return was postponed to May 17, 2021, for tax year 2020 (see Treas. Reg. § 1.6013–1(a)(1)). Taxpayers may request extensions to file beyond that date and may file superseding returns if they do so by the extended filing date, but the IRS’s position set forth in its IRM states that for irrevocable elections (e.g., section 179, Joint to Separate) a return filed after the original due date but on or before the extended due date does not constitute a superseding return.

If the IRS did not issue the first or second EIP based on a taxpayer’s filed superseding return changing a joint filing status and instead based the EIP on the prior joint return, the taxpayer may still claim a Recovery Rebate Credit (RRC) on their 2020 income tax return, Form 1040, line 30. However, taxpayers should expect that their refund will be delayed because the IRS will manually review the claim if its records are inconsistent with the RRC.  The IRS will likely issue a math error notice explaining that it is reducing or eliminating the claimed RRC because the EIP was previously paid. This leaves the taxpayer in a situation that is similar to the one I discussed in my February 11, 2021, blog — EIP is based on a joint return but the joint election was invalid because it was coerced, or the taxpayers were not married. In either instance, taxpayers will have the opportunity to explain their situation by responding to the math error notice and must respond within 60 days that the joint election was invalid or was superseded and they did not receive the EIP to which they were entitled.

Conclusion and Recommendation

Taxpayers who did not receive their first or second EIP after they filed a superseding return changing their election from filing jointly may still be eligible for the RRC on their 2020 income tax return. Taxpayers may still file a superseding return electing to file married filing separately or head of household for the 2020 return by May 17 which may trigger a separate EIP after processing the superseded return.  That superseded return would be the basis for the third EIP.

I will continue to work with the IRS to ensure appropriate math error notice procedures are in place to assist with the processing of the 2020 RRC for those taxpayers that filed superseding returns changing their election to file a joint return.  Victims of domestic violence in particular may benefit from these procedures.

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

Can Your Business Benefit From the Enhanced Employee Retention Credit?

Posted by Admin Posted on Apr 22 2021

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Over the course of the COVID-19 pandemic, many businesses have had to shut down or reduce operations, causing widespread furloughs and layoffs. Fortunately, employers that have kept workers on their payrolls may be eligible for a refundable employee retention credit. Three laws have created, extended and enhanced the credit.

The original law

The CARES Act created the employee retention credit in March of 2020. The credit originally:

Equaled 50% of qualified employee wages paid by an eligible employer in an applicable 2020 calendar quarter,

Was subject to an overall wage cap of $10,000 per eligible employee, and

Was available to eligible large and small employers.

The credit covered wages paid from March 13, 2020, through Dec. 31, 2020.

What’s changed

The Consolidated Appropriations Act (CAA), signed into law in December of 2020, extended the covered wage period to include the first two calendar quarters of 2021, ending on June 30, 2021. And now the American Rescue Plan Act (ARPA), signed into law on March 11, has extended it again through Dec. 31, 2021.

In addition, for the first two quarters of 2021, the CAA increased the overall covered wage ceiling to 70% of qualified wages paid during the applicable quarter. And it increased the per-employee covered wage ceiling to $10,000 of qualified wages paid during the applicable quarter (versus a $10,000 annual ceiling under the original rules). Because of the ARPA extension, these higher wage ceilings now apply to all four quarters of 2021.

Substantial tax savings

Additional rules and limits apply to the employee retention credit, and these are just some of the changes made to it. But the potential tax savings can be substantial. Contact your tax advisor for more information about this tax saving opportunity.

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 Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline

Posted by Admin Posted on Mar 24 2021

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WASHINGTON — The Treasury Department and Internal Revenue Service announced  that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

"This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities," said IRS Commissioner Chuck Rettig. "Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to."

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.

Individual taxpayers do not need to file any 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 May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until October 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.

This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn't subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer.

State tax returns

The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, 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.

Winter storm disaster relief for Louisiana, Oklahoma and Texas

Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline.

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        

American Rescue Plan Act (H.R. 1319)

Posted by Admin Posted on Mar 24 2021

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President Biden signed into law the American Rescue Plan Act (ARPA), H.R. 1319. A few highlights of the $1.9 trillion Act include an exclusion of up to $10,200 of unemployment benefits received for taxpayers making less than $150,000; a third economic impact payment that is an advance of 2021 tax credit; changes to the child tax credit, earned income credit and dependent care credit. The IRS announced that they are reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov. The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time.

The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.                                   

Source: Thomson Reuters

HOW DO I FILE AN AUTO INSURANCE CLAIM?

Posted by Admin Posted on Mar 24 2021

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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

MULTISTATE RESIDENT? WATCH OUT FOR DOUBLE TAXATION

Posted by Admin Posted on Mar 24 2021

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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

THE TAX ADVOCATE SERVICE, PROVIDED BY THE IRS

Posted by Admin Posted on Mar 24 2021

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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

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

Posted by Admin Posted on Mar 24 2021

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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 

HOW CAN I EASILY COMPARE PRICES BETWEEN INSURANCE COMPANIES?

Posted by Admin Posted on Mar 18 2021

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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

REFINANCING YOUR HOME

Posted by Admin Posted on Mar 18 2021

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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

CHARITABLE GIVING IN A TIME OF CRISIS

Posted by Admin Posted on Mar 18 2021

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The novel coronavirus (COVID-19) pandemic has created much financial stress, but the crisis has also generated an intense need for charitable action. If you’re able to continue donating during this difficult period, the Coronavirus Aid, Relief, and Economic Security (CARES) Act may make it a little easier for you to do so, whether you’re a small or large donor.

Tax benefits

From an income tax perspective, the CARES Act has expanded charitable contribution deductions. Individual taxpayers who don’t itemize can take advantage of a new above-the-line $300 deduction for cash contributions to qualified charities in 2020. “Above-the-line” means the deduction reduces adjusted gross income (AGI). You can take this in addition to your standard deduction.

For larger donors, the CARES Act has eased the limitation on charitable deductions for cash contributions made to public charities in 2020, boosting it from 60% to 100% of AGI. There’s no requirement that your contributions be related to COVID-19.

Careful steps

To be able to claim a donation deduction, whatever the size, you need to ensure you’re giving to a qualified charity. You can check a charity’s eligibility to receive tax-deductible contributions by visiting the IRS’s Tax-Exempt Organization Search.

If you’re making a large gift, it’s a good idea to do additional research on the charities you’re considering so you can make sure they use their funds efficiently and effectively. The IRS tool provides access to detailed financial information about charitable organizations, such as Form 990 information returns and IRS determination letters.

Even if a charity is financially sound when you make a gift, there’s no guarantee it won’t suffer financial distress, file for bankruptcy protection or even cease operations down the road. The last thing you likely want is for a charity to use your gifts to pay off its creditors or for a purpose unrelated to the mission that inspired you to give in the first place.

One way to manage these risks is to restrict the use of your gift. For example, you might limit the use to assisting a specific constituency or funding medical research. These restrictions can be documented in a written gift or endowment fund agreement.

Generous impact

Indeed, charitable giving is more important than ever. Contact our firm for help allocating funds for a donation and understanding the tax impact of your generosity.

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 LEVEL OF HOME INSURANCE SHOULD I BUY?

Posted by Admin Posted on Mar 18 2021

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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

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

Posted by Admin Posted on Mar 10 2021

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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 10 2021

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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

TAXPAYER BILL OF RIGHTS 6: THE RIGHT TO FINALITY

Posted by Admin Posted on Mar 02 2021

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The Taxpayer Bill of Rights (TBOR) is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service (IRS). The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Finality.

Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.

What you can expect:

  • The IRS generally has three years from the date you file your return to assess any additional tax for that tax year. There are some limited exceptions to this rule. For example, if you fail to file a return or you file a false or fraudulent return, the IRS has an unlimited amount of time to assess tax for that tax year.
  • The IRS generally has 10 years from the assessment date to collect unpaid taxes from you. The IRS can’t extend this 10-year period unless you agree to extend the period as part of an installment agreement to pay your tax debt or the IRS obtains a court judgment. However, there are some situations where the IRS may suspend the ten-year collection period and resume it later. The IRS may be able to do this if there’s a period when the IRS cannot collect, such as times of bankruptcy or a collection due process proceeding.
  • If you believe you have overpaid your taxes, you can file a refund claim asking for the money back. Generally, you must file a refund claim within three years from the date you filed your original return, or two years from the date you paid the tax, whichever is later.
  • If the IRS sends you a notice proposing additional tax (statutory notice of deficiency), the notice must include the deadline for when you can file a petition with the Tax Court to challenge the amount proposed.
  • To timely challenge a statutory notice of deficiency in Tax Court, you must file your petition within 90 days of the date of the statutory notice (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). If you do not timely file a petition, the IRS will assess the amount proposed in the statutory notice and you will receive a bill.
  • Generally, the IRS can only examine (audit) your tax return once for any given tax year. However, the IRS may reopen a previously examined return if the IRS finds it necessary. For example, if there is evidence of fraud, the IRS can reopen an exam.

To find out more about the TBOR and what it means to you, visit: https://www.taxpayeradvocate.irs.gov

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages. 

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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      

TAXPAYER BILL OF RIGHTS 5: THE RIGHT TO APPEAL AN IRS DECISION IN AN INDEPENDENT FORUM

Posted by Admin Posted on Mar 02 2021

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The Taxpayer Bill of Rights (TBOR) is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service (IRS). The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Appeal an IRS Decision in an Independent Forum.

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.

What you can expect:

  • The IRS Commissioner must ensure that there is an independent IRS Office of Appeals. It’s an office that is separate from the IRS office that initially reviewed your case. Generally, Appeals will not discuss a case with the IRS to the extent that those communications appear to compromise the independence of Appeals.
  • Publication 5, Your Appeal Rights and How to Prepare a Protest If You Don’t Agree PDF, tells you how to appeal your tax case if you don’t agree with the IRS’s findings.
  • If the IRS has sent you a statutory notice of deficiency, which is a notice proposing additional tax, and you timely file a petition with the United States Tax Court, you may dispute the proposed adjustment in tax court before you have to pay the tax. For more information about the United States Tax Court, see the Court’s taxpayer information page.
  • Generally, if you fully paid the tax and the IRS denies your tax refund claim, or if the IRS takes no action on the claim within six months, then you may file a refund suit. You can file a suit in a United States District Court or the United States Court of Federal Claims. However, you generally have only two years to file a refund suit from the date the IRS mails you a notice that denies your claim.

To find out more about the TBOR and what it means to you, visit: https://www.taxpayeradvocate.irs.gov

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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      

TAXPAYER BILL OF RIGHTS 7: THE RIGHT TO PRIVACY

Posted by Admin Posted on Mar 02 2021

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The Taxpayer Bill of Rights (TBOR) is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service (IRS). The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Privacy.

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.

What you can expect:

  • There are limits on the amount of wages that the IRS can levy (seize) to collect tax that you owe. A portion of your wages are protected from levy. The protected amount is the equivalent to the standard deduction, plus any deductions for personal exemptions.
  • The IRS can’t seize certain personal items, such as necessary schoolbooks, clothing, undelivered mail and certain amounts of furniture and household items. The IRS also can’t seize your primary home without court approval. It also must show there is no reasonable, alternative way to collect the tax debt from you.
  • If you submit an offer to settle your tax debt, and the offer relates only to how much you owe (known as a Doubt as to Liability Offer in Compromise), you do not need to submit any financial documentation.
  • The IRS should not seek intrusive and extraneous information about your lifestyle during an audit if there is no reasonable sign that you have unreported income.
  • During a Collection Due Process hearing, the Office of Appeals must consider whether the IRS’s proposed collection action balances the need for efficient tax collection with ensuring the IRS’s collection actions are no more intrusive to you than necessary.
  • More information about the IRS Privacy Policy is available online.

To find out more about the TBOR and what it means to you, visit: https://www.taxpayeradvocate.irs.gov

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages. 

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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  

PPP Loans: What 2020 Borrowers Need to Know in 2021

Posted by Admin Posted on Mar 02 2021

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Almost a year ago, the Paycheck Protection Program (PPP) was launched in response to the COVID-19 crisis. If your company took out such a loan, you’re likely curious about the tax consequences — particularly for loans that have been forgiven — and also about the launch of “second-draw” PPP loans.

Forgiveness criteria

An eligible recipient may have a PPP loan forgiven in an amount equal to the sum of various costs incurred and payments made during the covered period. These include payroll costs, interest (but not principal) payments on any covered mortgage obligation (for mortgages in place before February 15, 2020), payments for any covered rent obligation (for leases that began before February 15, 2020), and covered utility payments (for utilities that were turned on before February 15, 2020). Also eligible are covered operations expenditures, property damage costs, supplier costs and worker protection expenses.

Your covered period would normally have been the 24-week period beginning on the date you took out the loan (ending no later than December 31, 2020, if that was before the expiration of the 24-week period). If you received a PPP loan before June 5, 2020, you could elect a shorter 8-week covered period. If you didn’t elect the 8-week period and instead used the longer 24-week period, you had to maintain payroll levels for the full 24 weeks to be eligible for loan forgiveness. If you didn't make an election, the 24-week period applies.

An eligible recipient seeking forgiveness of indebtedness on a covered loan must verify that the amount for which forgiveness is requested was used to retain employees, make interest payments on a covered mortgage obligation, make payments on a covered lease obligation or make covered utility payments.

Cancellation and deductibility

The reduction or cancellation of indebtedness generally results in cancellation of debt income to the debtor. However, the forgiveness of PPP debt is excluded from gross income. Your tax attributes (net operating losses, credits, capital and passive activity loss carryovers, and basis) won’t generally be reduced on account of this exclusion.

The CARES Act was silent on whether expenses paid with the proceeds of PPP loans could be deducted. The IRS took the position that these expenses were not deductible. However, under the Consolidated Appropriations Act (CAA), enacted at the end of 2020, expenses paid from the proceeds of PPP loans are deductible.

“Second-draw” PPP loans

Under the CAA, eligible businesses may be able take out so-called “second-draw” PPP loans. These loans are primarily intended for beleaguered small businesses with 300 or fewer employees that have used up, or will soon use up, the proceeds from initial PPP loans. The maximum second-draw loan amount is $2 million, and only one such loan can be taken out.

To qualify for a second-draw loan, a business must demonstrate at least a 25% decline in gross receipts in any quarter of 2020 as compared to the corresponding quarter in 2019. Qualifying businesses can generally borrow up to 2.5 times their average monthly payroll costs for either the one-year period before the date on which the loan is made or calendar year 2019. The application deadline is March 31, 2021.

Any questions?

A PPP loan may complicate your company’s 2020 income tax filing, but a second draw could provide a much-needed influx of cash. Please contact us with any questions you might have.

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 4: THE RIGHT TO CHALLENGE THE IRS’S POSITION AND BE HEARD

Posted by Admin Posted on Mar 02 2021

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The Taxpayer Bill of Rights is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service. The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.
 
It includes The Right to Challenge the IRS’s Position and Be Heard.

Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.

What you can expect:

  • If the IRS notifies you that your tax return has a math or clerical error, you have 60 days to tell the IRS that you disagree. You should provide photocopies of any records that may help correct the error. In addition, you may call the number listed on your notice or bill for help. If the IRS agrees with your position, we will make the necessary adjustment to your account and send you a corrected notice.
  • If the IRS does not adopt your position, it will send a notice proposing a tax adjustment (known as a statutory notice of deficiency). The statutory notice of deficiency gives you the right to challenge the proposed adjustment in the United States Tax Court before paying it. To do this, you need to file a petition within 90 days of the date of the notice (150 days if the notice is addressed to you outside the United States). For more information about the United States Tax Court, see the Court’s taxpayer information page.
  • If you submit documentation or raise objections during a return examination (or audit), and the IRS does not agree with your position, it will issue you a statutory notice of deficiency. This notice will explain why the IRS is increasing your tax, which gives you the right to petition the U.S. Tax Court prior to paying the tax.
  • When the IRS notifies you of plans to levy your bank account or other property, you’ll generally have an opportunity to request a hearing before the Office of Appeals. Also, you’ll generally have an opportunity to appeal the proposed or actual filing of a notice of federal tax lien.

To find out more about the TBOR and what it means to you, visit: https://www.taxpayeradvocate.irs.gov

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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 Child Tax Credit is so Valuable

Posted by Admin Posted on Feb 25 2021

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If you’re a parent, or soon will be, you’re no doubt aware of how expensive it is to pay for food, clothes, activities and education. Fortunately, the federal child tax credit is available to help many taxpayers with children under the age of 17, and there’s a dependent credit for those who are eligible with older children.

An expanded break

Before the Tax Cuts and Jobs Act (TCJA) kicked in, the child tax credit was $1,000 per qualifying child. But it was reduced for eligible married couples filing jointly by $50 for every $1,000 (or part of $1,000) by which their adjusted gross income (AGI) exceeded $110,000 ($75,000 for unmarried taxpayers).

Starting with the 2018 tax year, and applying through the 2025 tax year, the TCJA doubled the child tax credit to $2,000 per qualifying child under 17. It also created a $500 credit per dependent who isn’t a qualifying child under 17. There’s no age limit for the $500 credit, but IRS tests for dependency must be met.

The TCJA also substantially increased the thresholds at which the credit begins to phase out. Starting with the 2018 tax year, the total credit amount allowed to a married couple filing jointly is reduced by $50 for every $1,000 (or part of a $1,000) by which their AGI exceeds $400,000. The threshold is $200,000 for other taxpayers. So, many taxpayers who were once ineligible for the credit because their AGI was too high are now eligible to claim it.

SSN requirement

In order to claim the child tax credit for a qualifying child, you must include the child’s Social Security number (SSN) on your tax return. Under previous law, you could instead use an individual taxpayer identification number (ITIN) or adoption taxpayer identification number (ATIN).

If a qualifying child doesn’t have an SSN, you won’t be able to claim the $2,000 credit. However, you can claim the $500 dependent credit for that child using an ITIN or an ATIN. The SSN requirement doesn’t apply for non-qualifying-child dependents but, if there’s no SSN, you must provide an ITIN or ATIN for each dependent for whom you’re claiming a $500 credit.

Don’t miss out

The changes made by the TCJA generally increase the value of these credits and widen their availability to more taxpayers. Please contact us for further information or ask about it when we prepare your tax 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: Thomson Reuters

TAXABLE VS. TAX-ADVANTAGED: WHERE TO HOLD INVESTMENTS

Posted by Admin Posted on Feb 24 2021

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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: Claiming the Health Care Premium Tax Credit

Posted by Admin Posted on Feb 24 2021

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The Premium Tax Credit (PTC) makes health insurance more affordable by helping eligible individuals and their families pay premiums for coverage purchased through the Health Insurance Marketplace (also referred to as the Marketplace or Exchange).

There are two ways to get the credit:

  • If you qualify for advance payments of the premium tax credit (APTC), you can choose to have all or some of the advance payments paid directly to the insurance provider to help cover your monthly premiums.
  • You can choose to receive the entire benefit when you claim the PTC on your tax return.

However, whether you chose to get advanced payments or claim the credit on the tax return, you must file a federal income tax return, even if otherwise not required to file, and include a completed Form 8962, Premium Tax Credit. If you do not include this form when filing, the IRS will stop processing your tax return and request it from you.

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

Source: TAS      

TAS Tax Tip: How to Address Unemployment Compensation Related Identity Theft

Posted by Admin Posted on Feb 24 2021

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During 2020, millions of taxpayers were impacted by the COVID-19 pandemic through job loss or reduced work hours. Some taxpayers who faced unemployment or reduced work hours applied for and received unemployment compensation from their state. States issue 1099-G, Certain Government Payments to you and to the IRS to report taxable income, including unemployment compensation.

However, identity thieves took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made as a result of these fraudulent claims went to the identity thieves, while the victims whose names and personal information were taken, did not receive any of the payments. However, the victims may receive a Form 1099-G saying that amount was paid to them anyway.

Here’s how you may find out if your information was used for false claims:

  • Receive a Form 1099-G for unemployment benefits that you did not receive.

If you receive a Form 1099-G for an amount you did not receive, contact the issuing state agency to request a revised Form 1099-G showing you did not receive these benefits. The state agency should send a corrected Form 1099-G reporting $0 in box 1 (zero benefits paid) to you (the identity theft victim) and then they will file a copy with the IRS as soon as possible after the error is discovered.

Act quickly if this is an identity theft situation. If you are unable to obtain a timely, corrected form from your state agency, you should still file an accurate tax return, reporting only the income you received. However, you may still get a notification from the IRS as your tax return is processed. See below for more information.

  • Receive a notification from the IRS, after filing a tax return.

You may receive some type of notification (e.g., letter) indicating:

  • that someone else used your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), or
  • that IRS income records – income from unemployment or income from an employer you did not work for – do not match what you reported to the IRS.

Both types of instances involve identity theft and can happen whether you file electronically or on paper. Different methods of communication are used by the IRS to notify you for each situation.

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      

-DOES MY CAR AFFECT MY INSURANCE RATE?

Posted by Admin Posted on Feb 24 2021

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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  

Tax time is seasonal, but the Taxpayer Bill of Rights applies all year

Posted by Admin Posted on Feb 01 2021

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All taxpayers have fundamental rights when they’re interacting with the IRS. These rights apply all year long, not just during tax season. The Taxpayer Bill of Rights presents these rights in 10 categories.

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

Taxpayer Bill of Rights 1: The Right to Be Informed

Posted by Admin Posted on Jan 29 2021

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The Taxpayer Bill of Rights is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service. The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Be Informed.

Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws 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 you can expect:

  • Certain notices must include the amount (if any) of the tax, interest, and certain penalties you owe. It must explain why you owe these amounts.
  • When the IRS fully or partially disallows your claim for a refund, it must explain the specific reasons why.
  • Help with Understanding Your IRS Notice or Letter is available online at IRS.gov.
  • If the IRS proposes to assess tax against you, it must explain the process – from examination (audit) through collection – in its first letter. This letter should explain your options for a review by an independent Office of Appeals and how the Taxpayer Advocate Service may be able to help you.
  • If you enter a payment plan, known as an installment agreement, the IRS must send you an annual statement. This gives you a record of balances and payments.
  • You can access current and prior year IRS forms and publications at IRS.gov. You can also request order them by calling 800-829-3676.
  • IRS also uses several social media tools that provide helpful tax information to a broad audience. You can find IRS on Twitter, YouTube, LinkedIn and the IRS2Go free mobile app.

To find out more about the TBOR and what it means to you visit: https://www.taxpayeradvocate.irs.gov

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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

Taxpayer Bill of Rights 2: The Right to Quality Service

Posted by Admin Posted on Jan 29 2021

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The Taxpayer Bill of Rights is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service. The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Quality Service.

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 speak to a supervisor about inadequate service.

What you can expect:

  • You can find answers to most tax questions on IRS.gov. If you cannot find an answer to your tax issue on the IRS website or in published instructions, please contact the IRS for help. IRS representatives care about the quality of the service provided to you and are available to help. Here are some things to consider when contacting the IRS.
    • The IRS provides a contact phone number on the top right corner of the notice or letter.
    • IRS representatives should listen objectively and consider all relevant information.
    • They should answer questions promptly, accurately and thoroughly.
  • Generally, you can speak to an employee’s supervisor if you have a problem.
  • 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. Be mindful of tax scams. Remember, the IRS does not make aggressive phone calls that threaten arrest or prison.
  • The IRS must include information about your right to get help from the Taxpayer Advocate Service in all statutory notices of deficiency. It should tell you how to contact TAS.
  • If you are eligible for Low Income Taxpayer Clinic (LITC) assistance, the IRS may provide information about your options for legal help.

To find out more about the TBOR and what it means to you visit https://www.taxpayeradvocate.irs.gov.

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages. 

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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 taxpayers need to know to claim the earned income tax credit

Posted by Admin Posted on Jan 29 2021

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The earned income tax credit can give qualifying workers with low-to-moderate income a substantial financial boost. In 2019, the average amount of this credit was $2,476. It not only reduces the amount of tax someone owes but may give them a refund even if they don't owe any taxes or aren't required to file a return. People must meet certain requirements and file a federal tax return in order to receive this credit.

EITC eligibility

  • A taxpayer's eligibility for the credit may change from year to year, so it's a good idea for people to use the EITC Assistant to find out if they qualify.
     
  • Eligibility can be affected by major life changes such as:
    • a new job or loss of a job
    • unemployment benefits
    • a change in income
    • a change in marital status
    • the birth or death of a child
    • a change in a spouse's employment situation
       
  • Taxpayers qualify based on their income and the filing status they use on their tax return. The credit can be more if they have one or more children who live with them for more than half the year and meet other requirements.

New this tax season

There's a new rule to help people impacted by a job loss or change in income in 2020. taxpayers can use their2019 earned income to figure your EITC, if their 2019 earned income was more than their 2020 earned income. The same is true for the additional child tax credit. For details, see the instructions for Form 1040 PDF.

2020 Maximum credit amounts allowed

The maximum credit amounts are based on whether the taxpayer can claim a child for the credit and the number of children claimed:

  • Zero children: $538
  • One child: $3,584
  • Two children: $5,920
  • Three or more children: $6,660

2020 income limits

Those who are working and earn less than these amounts may qualify for the EITC:

Married filing jointly:

  • Zero children: $21,710
  • One child: $47,646
  • Two children: $53,330
  • Three or more children: $56,844

Head of household and single:

  • Zero children: $15,820
  • One child: $41,756
  • Two children: $47,440
  • Three or more children: $50,954

Taxpayers who are married filing separately can't claim EITC.

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

Taxpayer Bill of Rights 3: The Right to Pay No More Than the Correct Amount of Tax

Posted by Admin Posted on Jan 29 2021

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The Taxpayer Bill of Rights (TBOR) is a cornerstone document that highlights the 10 fundamental rights taxpayers have when dealing with the Internal Revenue Service. The IRS wants every taxpayer to be aware of these rights in the event they need to work with the IRS on a personal tax matter. The IRS continues to publicly highlight these rights to taxpayers. The IRS also regularly reminds its employees about these rights. The IRS expects employees to understand and apply taxpayer rights throughout every encounter with taxpayers.

IRS Publication 1, Your Rights as a Taxpayer, includes a full list of taxpayers’ rights.

It includes The Right to Pay No More Than the Correct Amount of Tax.

Taxpayers have 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.

What you can expect:

  • If you believe you have overpaid your taxes, you can file for a refund; however, there are specific time frames in which you must file your claim. For more information, see Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund.
  • If you receive an IRS notice or bill and believe there is an error on it, write to the IRS office that sent it to you within the time frame given. You should provide photocopies of any records that may help correct the error. Also, you may call the number listed on your notice or bill for help. If you are correct, the IRS will make the necessary adjustment to your account and send you a corrected notice.
  • If you discover an error after you file your return, you may need to amend your return. You should file an amended return if there is an error or change in your filing status, income, deductions or credits. However, the IRS may automatically correct math errors on a return, and may accept returns with certain forms or schedules left out. In these cases, you do not need to amend your return. If you disagree with an adjustment the IRS made, you must request within 60 days that the IRS reverse the change. This timeline preserves your right to challenge the proposed adjustment in court, if needed, before paying it. 
  • You may request that any amount owed be removed if it exceeds the correct amount due under the law, if the IRS has assessed it after the period allowed by law, or if the assessment was done in error or violation of the law.
  • You may request that the IRS remove any interest from your account if the IRS caused unreasonable errors or delays. For example, if the IRS delays issuing a statutory notice of deficiency because the assigned IRS employee was away for several months attending training, and interest accrues during this time, the IRS may abate the interest related to the delay.
  • You can submit an offer in compromise, asking the IRS to accept less than the full amount of your tax debt, if you believe you don’t owe all or part of the debt. Use Form 656-L, Offer in Compromise PDF.

If you enter a payment plan, known as an installment agreement, the IRS must send you an annual statement. The statement provides balances and a record of payments.

To find out more about the TBOR and what it means to you visit: https://www.taxpayeradvocate.irs.gov.

The IRS offers Publication 1, Your Rights as a Taxpayer, in several languages

By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law. The IRS has more tax information in other languages too. See the “Languages” menu at the top of any IRS.gov page.

The IRS also is committed to protecting taxpayers’ civil rights. The IRS will not tolerate discrimination based on age, color, disability, race, reprisal, national origin, English proficiency, religion, sex, sexual orientation or status as a parent. This includes any contact with IRS employees and the staff or volunteers at community sites.

If a taxpayer faces discrimination, they can send a written complaint PDF to the IRS Civil Rights Division.

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

Get a federal tax refund faster with direct deposit

Posted by Admin Posted on Jan 29 2021

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The Internal Revenue Service reminds taxpayers that the fastest way to get their tax refund is by filing electronically and choosing direct deposit.

Direct deposit is free, fast, simple, safe and secure. Taxpayers can even split their refund to have it deposited into one, two or three different accounts.

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 either they or their tax preparer type 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 U.S. affiliated accounts that are in their name, their spouse's name or both if it's a joint account. Many people do not use checks and may find their routing and account numbers on their online bank account or mobile app.

Taxpayers may have a refund applied to their prepaid debit card. Many reloadable prepaid cards have account and routing numbers that could be provided to the IRS. But check with the financial institution to make sure the card can be used and verify the routing number and account number, which may be different from the card number.

There are mobile apps that may allow for direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Check with the mobile app provider to confirm what numbers to use.

Have the bank routing and account number when having taxes prepared. The IRS does not have the ability to accept this information after a return is filed.

Don't have a bank account?

Visit the FDIC website for information on where to find a bank that can open an account online and how to choose the right account. Veterans can use the Veterans Benefits Banking Program (VBBP) for access to financial services at participating banks. Tax return preparers may also offer electronic payment options.

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 Form 8888, Allocation of Refund PDF (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.

Combining Electronic Filing plus direct deposit yields fastest refunds

The safest and most accurate way to file a tax return is to file electronically. Many people may be eligible to file electronically for free. Most refunds are issued in less than 21 days, but some returns may take longer. 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 mailing a 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 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                 

Did You Know That Unemployment Compensation Is Taxable and Could Impact a Taxpayer’s Earned Income Tax Credit (EITC)?

Posted by Admin Posted on Jan 27 2021

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In January of 2021, a record high number of taxpayers will receive a Form 1099-G, Certain Government Payments, indicating the amount of unemployment compensation (UC) paid to them during 2020 that must be reported on their 2020 federal income tax return. 2020 has been a difficult year, particularly for those experiencing unemployment. Taxpayers who received UC, including any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, may be unaware that generally, unemployment benefits are included in gross income, like a regular paycheck, and can be taxed. For taxpayers expecting to receive the EITC, it’s important to remember that UC can reduce the amount of EITC, even to zero.

Taxability of UC: UC is not subject to certain payroll taxes, for example, Social Security and Medicare taxes, and withholding is not required. However, taxpayers may still have to pay federal and state income taxes on that income.  The federal income tax treatment of UC depends on the type of program paying the benefits. The IRS provides a tool to help taxpayers determine if payments received for being unemployed are taxable.

The amount of UC shown in box 1 on the Form 1099-G is taxable and must be reported on a federal income tax return for the tax year it was received. UC generally includes any amount received under an unemployment compensation law of the United States or of a state. For example, it includes benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund, state unemployment insurance benefits, railroad unemployment compensation benefits, disability payments from a government program paid as a substitute for unemployment compensation, unemployment assistance under the Disaster Relief and Emergency Assistance Act of 1974, etc.  For more information, see IRS Publication 525, Taxable and Nontaxable Income.

Taxpayers should also consider potential state tax requirements, because UC may be taxable in some states. With over 65 million initial jobless claims filed during 2020, many taxpayers will be reporting UC on their tax returns for the first time.

Increased UC under the CARES Act: The CARES Act, signed into law on March 27, 2020, just as U.S. unemployment reached a record high of 14.7 percent in April, increased UC for many unemployed taxpayers and further expanded benefits to certain categories of workers not ordinarily eligible to receive these benefits, such as self-employed workers and independent contractors. The Department of Labor reported that during the week ending November 21, 2020, 33 states were still offering extended benefits to unemployed workers.

UC Impact on EITC: In addition to reporting UC on their income tax returns for the first time, taxpayers may receive a significantly lower EITC because their 2020 earned income was less than expected. The amount of EITC fluctuates based on the taxpayer’s earned income and adjusted gross income. The EITC is a complex area of law and most low income taxpayers require specialized assistance in order to claim the credit successfully. The IRS provides a helpful tool to help taxpayers determine eligibility for the EITC and an estimated credit amount. However, not all taxpayers can avail themselves of the tool — a 2018 Taxpayer Advocate Service (TAS) study found that more than 11 percent of low income taxpayers and over 28 percent of seniors never use the internet.

Taxpayers living paycheck to paycheck or from one unemployment check to the next may be anticipating the EITC based on last year’s earned income. However, earned income does not include amounts received as UC. Thus, a taxpayer receiving UC may report less earned income for the purpose of computing the EITC, resulting in a reduction or elimination of the credit. In addition, taxpayers who did not opt for voluntary withholding may see reduced refunds or have a tax due as a result.

To address the negative tax consequences of UC not constituting earned income, I am recommending that Congress allow UC to be included as qualifying income in computing the EITC during national disasters. This legislative recommendation has special meaning in the year of the coronavirus pandemic, with so many jobless taxpayers reliant on UC as a primary source of income. The recommendation will be included in the 2021 Purple Book issued in conjunction with my 2020 Annual Report to Congress.

Collection Alternatives: Some taxpayers may be reluctant to file balance due tax returns if they are unable to pay the tax by the due date. Taxpayers who owe tax and fail to file and pay on time will most likely owe interest and penalties on the tax they pay late. Two penalties may apply – for filing late and for paying late.  Interest accrues on top of penalties. The penalty for late filing can be as much as five percent of the unpaid taxes each month up to a maximum of 25 percent, while the penalty for late payment is generally 0.5 percent of the taxpayer’s unpaid taxes per month up to a maximum of 25 percent of unpaid taxes. If both penalties apply, the maximum amount charged for the two penalties is five percent per month. Taxpayers can avoid incurring the failure-to-file-penalty by timely filing their return. Where taxpayers have a balance due on their returns and are unable to pay that balance in full, the IRS offers collection alternatives, such as installment agreements and offers in compromise. Some taxpayers may qualify to be placed in currently not collectible status.  During 2020, the IRS expanded collection alternatives for individuals experiencing COVID-19-related financial difficulties. The IRS website contains information on these alternatives. Eligible taxpayers may contact a Low Income Taxpayer Clinic (LITC) for assistance with understanding their filing obligations and collection alternatives.

Communication with Taxpayers: Millions of taxpayers will receive Form 1099-G for the first time and may not appreciate the effect UC will have on their tax returns, including the amount of the EITC. Taxpayers may receive the form in the mail or may receive instructions to retrieve an electronic version of Form 1099-G from their state’s website. We encourage the IRS to continue educating taxpayers about the taxability of UC. In addition to posting information on IRS.gov, I recommend the IRS engage stakeholders, such as Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) partners, and community organizations to spread the word to potential EITC recipients that the amount of their 2020 credit may be less than they are expecting. TAS will also collaborate with the IRS on including UC information in its EITC outreach materials at the beginning of the filing season.

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

Follow these tips to help prevent common tax return filing issues and refund delays

Posted by Admin Posted on Jan 27 2021

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Ready to file your tax return? Stop and check out these tax tips before you file to avoid delays and pass “go” with confidence.

Use your Form W-2, not your pay stub, to verify your income. Your employer generally has until February 1 to issue your Form W-2, and you should wait to receive it before you file. In case you didn’t know, IRS computer systems compare the income that is reported on your tax return to what has been reported to IRS. When income and/or federal income tax withholding don’t match, this can cause a delay in the processing of the return and any refund.

Double check that your information is correct for yourself and your dependents. Check name spellings, taxpayer identification numbers, dates of birth, addresses, and your bank account information for accuracy. Be aware that you must have valid Social Security numbers for all your dependents before filing or that may not only delay processing of your tax return, but in certain instances disqualify you for some refundable credits, like the Earned Income Tax Credit.

Don’t forget your W-2s, 1099s, and other attachments. This includes Form 8962 if you are claiming the Premium Tax Credit and Form 1099-G if you received unemployment benefits. Any income document that shows federal income tax was withheld must be attached to your return, if you are filing by paper. If you are filing electronically, follow the software provider’s instructions. If you are unable to obtain your W-2 (or other information returns like Form 1099, K-1, etc.) from your employer, because they closed, you can call the IRS for assistance at 1-800-829-1040, but you must wait until after February 1.

In January, some people who received unemployment benefits in 2020 will get a Form 1099-G, Certain Government Payments, from the agency paying the benefits. The agency will either automatically send a hard copy or, if the agency does not mail the form, recipients will need to visit the agency’s website to get an electronic version of the form.

Also, taxpayers who received a federal tax refund in 2020 may have been paid interest. Refund interest payments are taxable and must be reported on federal income tax returns. In January 2021, the IRS will send Form 1099-INT to anyone who received interest totaling $10 or more.

You need a Form 1098-T from an eligible educational institution to claim education expenses. Eligible educational institutions have until January 31, to provide this form on paper or electronically to students. If not received by January 31, you’ll need to contact the Institution.

Be aware of tax software that imports prior year data automatically. If you are using the same software as the prior year, you’ll want to check that only the current year information is present, and that prior year data didn’t transfer over which may cause an error. So, double check your figures before hitting submit.

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

IRS issues standard mileage rates for 2021

Posted by Admin Posted on Jan 27 2021

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The Internal Revenue Service issued the 2021 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2021, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56 cents per mile driven for business use, down 1.5 cents from the rate for 2020,
  • 16 cents per mile driven for medical, or moving purposes for qualified active duty members of the Armed Forces, down 1 cent from the rate for 2020, and
  • 14 cents per mile driven in service of charitable organizations, the rate is set by statute and remains unchanged from 2020.

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

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces.

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

Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

Notice 2021-02 PDF, contains the optional 2021 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2021 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

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

¿Sabía que la compensación por desempleo es tributable y podría afectar el Crédito tributario por ingreso del trabajo (EITC, por sus siglas en inglés) de un contribuyente?

Posted by Admin Posted on Jan 27 2021

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En enero de 2021, un número récord de contribuyentes recibirá un Formulario 1099-G, Certain Government Payment (Ciertos pagos del gobierno, en inglés), indicando la cantidad de compensación por desempleo (UC, por sus siglas en inglés) que se les pagó durante 2020 y que deben declarar en su declaración del impuesto federal sobre los ingresos de 2020. El año 2020 ha sido un año  difícil, sobre todo para aquellas personas que experimentan el desempleo. Los contribuyentes que recibieron la UC, incluso cualquier parte de la compensación especial por desempleo autorizada según la Ley de Ayuda, Alivio y Seguridad Económica por el Coronavirus (CARES, por sus siglas en inglés), pueden no saber que, por lo general, los beneficios por el desempleo se incluyen en los ingresos brutos como un cheque de pago normal y pueden estar sujetos a impuestos. Para los contribuyentes que esperan recibir el EITC, es importante recordar que la UC  puede reducir la cantidad de EITC, incluso a cero.

Imponibilidad sobre la compensación por desempleo (UC): La UC no está sujeta a ciertos impuestos sobre la nómina, por ejemplo los impuestos al Seguro Social y al Medicare y no se requiere la retención de impuestos. Sin embargo, puede que los contribuyentes aún tengan que pagar impuestos federales y estatales sobre esos ingresos. El tratamiento del impuesto federal sobre los ingresos de la UC depende de la clase de programa que pague los beneficios. El IRS proporciona una herramienta (en inglés) para ayudar a los contribuyentes a determinar si los pagos recibidos por estar desempleados son tributables.

La cantidad de la UC que se muestra en la casilla 1 del Formulario 1099-G es tributable y debe declararse en una declaración del impuesto federal sobre los ingresos del año tributario en que se recibió. La UC generalmente incluye cualquier cantidad recibida conforme a una ley de compensación por desempleo de los Estados Unidos o de un estado. Por ejemplo, incluye los beneficios pagados por un estado o el Distrito de Columbia del Fondo de Fideicomiso Federal de Desempleo; los beneficios del seguro de desempleo estatal; los beneficios de compensación por el desempleo ferroviario; los  pagos por incapacidad de un programa gubernamental pagado como sustituto de la compensación por desempleo; asistencia por desempleo conforme a la Ley de Alivio por Desastres y Asistencia por Emergencias de 1974, etcétera. Para obtener más información consulte la Publicación 525 del IRS, Taxable and Nontaxable Income, en inglés (Ingresos tributables y no tributables).

Los contribuyentes deben también considerar los potenciales requisitos tributarios estatales, ya que la UC puede ser tributable en algunos estados. Con más de 65 millones (en inglés)  de reclamaciones iniciales de desempleo presentadas durante 2020, muchos contribuyentes por primera vez declararán la UC en sus declaraciones de impuestos.

 

Aumento de la UC conforme a la ley CARES: La Ley CARES, promulgada el 27 de marzo de 2020, así como el desempleo en los Estados Unidos llegó a una tasa récord de 14.7 por ciento en abril (en inglés), aumentó la UC para muchos contribuyentes desempleados y amplió aún más los beneficios  a ciertas categorías de trabajadores que normalmente no reúnen los requisitos para recibir estos beneficios, tales como los trabajadores por cuenta propia y los contratistas independientes. El Departamento de Trabajo informó que durante la semana que terminó el 21 de noviembre de 2020 (en inglés), 33 estados seguían ofreciendo beneficios ampliados a los trabajadores desempleados.

 

  1. Impacto de la UC en el EITC: Además de declarar por primera vez la UC en sus declaraciones de impuestos, los contribuyentes pueden recibir un EITC significativamente más bajo porque sus ingresos de trabajo en 2020 fueron menores de lo esperado. La cantidad del EITC fluctúa con base en el ingreso de trabajo y el ingreso bruto ajustado del contribuyente. El EITC es un área compleja de la ley (en inglés) y la mayoría de los contribuyentes con bajos niveles de ingresos requieren asistencia especializada para reclamar el crédito con éxito. El IRS proporciona una herramienta útil para ayudar a los contribuyentes a determinar la elegibilidad para el EITC y una cantidad estimada del crédito. Sin embargo, no todos los contribuyentes pueden aprovechar la herramienta — un estudio del Servicio del Defensor del Contribuyente (TAS) de 2018 (en inglés) encontró que más del 11 por ciento de los contribuyentes con bajos niveles de ingresos y más del 28 por ciento de las personas mayores de edad nunca utilizan internet.

Los contribuyentes que viven de cheque en cheque o de un cheque por desempleo al siguiente, pueden anticipar un EITC con base en los ingresos de trabajo del año pasado. Sin embargo, el ingreso de trabajo no incluye las cantidades recibidas como compensación por desempleo (en inglés). Por lo tanto, un contribuyente que reciba la UC puede declarar menos ingreso de trabajo para los propósitos de calcular el EITC, lo que resulta en una reducción o eliminación del crédito. Además, los contribuyentes que no eligieron la retención voluntaria pueden ver reembolsos reducidos o adeudar un impuesto (en inglés) como resultado.

Para abordar las consecuencias tributarias negativas de que la UC no constituya ingreso de trabajo, recomiendo que el Congreso permita que la UC se incluya como ingresos calificados en el cálculo del EITC durante desastres nacionales. Esta recomendación legislativa tiene un significado especial en el año de la pandemia del coronavirus, con tantos contribuyentes desempleados que dependen de la UC como fuente primaria de ingresos. La recomendación se incluirá en el Libro Morado de 2021, emitido conjuntamente con mi Informe Anual al Congreso de 2020.

Alternativas de cobro: Algunos contribuyentes pueden estar reacios a presentar declaraciones de impuestos con saldos adeudados si no pueden pagar los impuestos para la fecha de vencimiento. Los contribuyentes que adeudan impuestos y que no presenten y paguen oportunamente probablemente adeudarán intereses y multas sobre el impuesto que pagan tardío. Hay dos multas que pueden corresponder – por presentar tardío y por pagar tardío. Los intereses se acumulan sobre ambas multas. La multa por la presentación tardía puede ser hasta el cinco por ciento de los impuestos no pagados cada mes hasta un máximo del 25 por ciento, mientras que la multa por el pago tardío generalmente es el 0.5 por ciento de los impuestos no pagados del contribuyente por mes hasta un máximo de 25 por ciento de los impuestos no pagados. Si se aplican ambas multas, la cantidad máxima que se cobra por las dos multas es del cinco por ciento al mes. Los contribuyentes pueden evitar incurrir en la multa por no presentar mediante la presentación oportuna de sus declaraciones. Cuando los contribuyentes tienen un saldo adeudado en sus declaraciones y no pueden pagar ese saldo en su totalidad, el IRS ofrece alternativas de cobro, tales como los planes de pagos a plazos y los ofrecimientos de transacción. Algunos contribuyentes pueden calificar para ser colocados en el estado de “cuenta no cobrable actualmente”. Durante 2020, el IRS amplió las alternativas de cobro para las personas que experimentan dificultades financieras relacionadas con la COVID-19. La página web del IRS, en inglés, contiene información sobre estas alternativas. Los contribuyentes elegibles pueden comunicarse con una Clínica para contribuyentes con bajos niveles de ingresos (LITC) (en inglés) para obtener ayuda para entender sus obligaciones de presentación y las alternativas de cobro.

Comunicación con los contribuyentes: Millones de contribuyentes recibirán por primera vez el Formulario 1099-G y puede que no comprendan el efecto que la UC tendrá en sus declaraciones de impuestos, incluso la cantidad del EITC. Los contribuyentes pueden recibir el formulario por correo o pueden recibir instrucciones para recuperar una versión electrónica del Formulario 1099-G del sitio web de su estado. Animamos al IRS a continuar educando a los contribuyentes sobre la imponibilidad de la UC. Además de publicar información en IRS.gov/español, recomiendo que el IRS involucre a las partes interesadas, tales como los socios de la Asistencia tributaria por voluntarios (VITA, por sus siglas en inglés) y de Asesoramiento tributario para los Ancianos (TCE, por sus siglas en inglés), y las organizaciones comunitarias para difundir a los posibles beneficiarios del EITC que  la cantidad de su crédito en 2020 puede ser menor de lo que esperan. El TAS también colaborará con el IRS en la inclusión de la información de la UC en sus materiales de divulgación del EITC al comienzo de la temporada de presentación de impuestos.

Asistencia en la preparación de la declaración de impuestos: Si los contribuyentes han recibido la UC durante 2020 y no están seguros de qué hacer, los programas de VITA y TCE proporcionan asistencia gratuita para la preparación de la declaración de impuestos a los contribuyentes  elegibles. Los VITA ofrecen preparación gratuita de las declaraciones de impuestos básicas a las personas que generalmente ganan $57,000 o menos, a las personas con discapacidades, y a las personas con dominio limitado del inglés, mientras que los TCE proporcionan asistencia para la preparación de impuestos a los contribuyentes mayores de 60 años de edad. Algunos sitios de los VITA y TCE ofrecerán ayuda virtual a los contribuyentes en lugar de ayuda en persona. Los contribuyentes también pueden acceder a la Alianza Free File (en inglés), que es una coalición sin fines de lucro de compañías de software tributario líderes en la industria, que colabora con el IRS para ayudar a los estadounidenses a preparar y presentar electrónicamente sus declaraciones de impuestos federales de forma rápida, segura y gratuita.

A medida que muchos contribuyentes siguen navegando por un futuro económico incierto en medio de la pandemia, el TAS está listo para ayudar y dirigir a los contribuyentes a los recursos que necesitan.

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: TAS      

REPORT YOUR VIRTUAL CURRENCY TRANSACTIONS.

Posted by Admin Posted on Jan 21 2021

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What is virtual currency?

Virtual currency is a digital representation of value other than a representation of the U.S. dollar or a foreign currency (“real currency”). Virtual currency is used as a unit of account, a store of value, or a medium of exchange. TAS wants to help you understand the tax treatment of virtual currency that can be converted into, or exchanged for, real currency.

Bitcoin is one example of a convertible virtual currency. Bitcoin is a cryptocurrency, which is a specific type of virtual currency that uses cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain. A transaction involving cryptocurrency that is recorded on a distributed ledger is referred to as an “on-chain” transaction. A transaction that is not recorded on the distributed ledger is referred to as an “off-chain” transaction, where individuals can engage directly with each other without necessarily using a trusted third party like a cryptocurrency exchange.

Why are virtual currency transactions taxable?

Income is generally taxable regardless of the source it comes from. As such, virtual currency transactions are taxable just like ‘traditional’ transactions involving money for goods or services, or an exchange of property for other property or services. Virtual currency is treated as property by the IRS and general tax principles that apply to property transactions apply if you sell, exchange, or otherwise transact using virtual currency.

How are virtual currency transactions taxed?

In general, individuals who transact with virtual currency, including buying and selling virtual currency or exchanging virtual currency, hold the virtual currency as a capital asset and the transactions result in capital gain or capital loss. Since virtual currency is considered property, the same general principles apply. However, virtual currency received as compensation for services is treated the same as wages and results in ordinary income to the recipient who then holds the virtual currency as a capital asset.

The following examples illustrate several common transactions involving virtual currency:

  • Sales: When you sell virtual currency, it is generally a capital asset and you must report the transaction along with any capital gain or loss on the sale.
    • Example: If Mary purchased 5 Bitcoins for $50,000 in April and sold all of her Bitcoins in July for $52,000, she would have short-term capital gain of $2,000 (the sales price less the purchase price). If Mary sold the Bitcoins for $48,000, she would have a short-term capital loss on the sale, that must be reported too, but it would be subject to any limitations on capital loss deductions.
  • Exchanges: If you exchange virtual currency held as a capital asset for services or other property, including goods or another virtual currency, you must report the transaction and any capital gain or loss resulting from the exchange.
    • Example: If Bill buys 5 Bitcoins for $50,000 in April and exchanges them for another virtual currency in June worth $40,000 at the date and time of the exchange, Bill would report a $10,000 short-term capital loss on the transaction. In this case, Bill would have to look at his other capital losses and could potentially be limited in how much he could deduct in the current year. Likewise, if the exchanged virtual currency was worth $60,000 instead of $40,000, Bill would report a $10,000 short-term capital gain on the transaction.
  • Earnings: When you receive property, including virtual currency, in exchange for performing services, whether or not you perform the services as an employee, you must report the earnings as ordinary income. Compensation for services are reported and taxed the same regardless of how the compensation is received (dollars, virtual currencies, property, or other services).If you receive virtual currency in return for providing services as an employee, it’s considered wages and is subject to Federal income tax withholding, Federal Insurance Contributions Act (FICA) tax, and Federal Unemployment Tax Act (FUTA) tax and must be reported by your employer on Form W-2, Wage and Tax Statement, like traditional wages paid in U.S. dollars. If you receive virtual currency in return for providing services and are not an employee of the payor, you are self-employed, and may be considered an independent contractor. Income from self-employment is often reported on Form 1099-MISC, Miscellaneous Income.
    • Example: If Deng receives $100,000 for providing services as an employee, he should report this as “wages” on his income tax return. If Deng is not an employee, the compensation is reported on Schedule 1 or Schedule C. Deng must report this income on his income tax return regardless of whether he receives a W-2, 1099-MISC, or other information return.
  • Hard forks: A hard fork occurs when a cryptocurrency undergoes a protocol change resulting in a permanent diversion from the legacy distributed ledger. This may result in the creation of a new cryptocurrency in addition to the legacy cryptocurrency. If your cryptocurrency went through a hard fork, but you did not receive any new cryptocurrency you don’t have taxable income.
    • Example: Maria holds 10 units of cryptocurrency A that has a hard fork after which she also has 10 units of cryptocurrency B. Regardless of how she receives the new cryptocurrency B, she has income. If the 10 units of cryptocurrency B are worth $50 at the date and time she receives them, Maria will have taxable income of $50 that she must report in the year she receives the cryptocurrency B.
  • Unreported transactions: You must report income, gain, or loss from all taxable transactions involving virtual currency on your Federal income tax return for the year of the transaction, regardless of the amount or whether you receive a payee statement (like a Form W-2) or information return (like a Form 1099-MISC).

For more information on the tax treatment of property transactions, see Publication 544, Sales and Other Dispositions of Assets.

What virtual currency transactions are not taxable?

Generally, the same rules that apply to other property apply to virtual currency. Not all property transactions are taxable. For example, the following transactions are not taxable:

  • Transactions with yourself. If you transfer virtual currency from a wallet, address, or account belonging to you, to another wallet, address, or account that also belongs to you, the transfer is a non-taxable event, even if you receive an information return reporting the transfer.
  • Bona fide gifts. If you receive virtual currency as a bona fide gift, the gift is not taxable. You will report any income or loss when you sell, exchange, or otherwise dispose of the virtual currency.
  • Charitable donations. If you donate virtual currency to a charitable organization described in Internal Revenue Code Section 170(c), you will not report income, gain, or loss from the donation.
  • Soft forks. A soft fork occurs when a distributed ledger undergoes a protocol change that does not result in a diversion of the ledger and thus does not result in the creation of a new cryptocurrency. Because soft forks do not result in you receiving new cryptocurrency, you will be in the same position you were in prior to the soft fork, meaning that the soft fork will not result in any income to you.

Where Are Virtual Currency Transactions Reported?

Transactions conducted in virtual currency are generally reported on the same tax forms as transactions in other property. They are also reported on a new checkbox on Form 1040. Virtual currency transactions must be reported on:

What records do I need to maintain regarding my transactions using virtual currency?

The Internal Revenue Code and regulations require taxpayers to maintain records that are sufficient to establish the positions taken on tax returns. You should therefore maintain records documenting receipts, sales, exchanges, or other dispositions of virtual currency and the fair market value of the virtual currency for at least three years after reporting any taxable event or have other reporting requirements even if they’re not immediately taxable.

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

2021 tax filing season begins Feb. 12; IRS outlines steps to speed refunds during pandemic

Posted by Admin Posted on Jan 21 2021

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The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.

To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need. People can begin filing their tax returns immediately with tax software companies, including IRS Free File partners. These groups are starting to accept tax returns now, and the returns will be transmitted to the IRS starting February 12.

"Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop to prepare for this as well as delivering Economic Impact Payments in record time," said IRS Commissioner Chuck Rettig. "Given the pandemic, this is one of the nation's most important filing seasons ever. This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible."

Last year's average tax refund was more than $2,500. More than 150 million tax returns are expected to be filed this year, with the vast majority before the Thursday, April 15 deadline.

Under the PATH Act, the IRS cannot issue a refund involving the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves.

The IRS anticipates a first week of March refund for many EITC and ACTC taxpayers if they file electronically with direct deposit and there are no issues with their tax returns. This would be the same experience for taxpayers if the filing season opened in late January. Taxpayers will need to check Where's My Refund for their personalized refund date.

Overall, the IRS anticipates nine out of 10 taxpayers will receive their refund within 21 days of when they file electronically with direct deposit if there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.

Tips for taxpayers to make filing easier

To speed refunds and help with their tax filing, the IRS urges people to follow these simple steps:

  • File electronically and use direct deposit for the quickest refunds.
     
  • Check IRS.gov for the latest tax information, including the latest on Economic Impact Payments. There is no need to call.
     
  • For those who may be eligible for stimulus payments, they should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who didn't receive a payment or only received a partial payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount.
     
  • Remember, advance stimulus payments received separately are not taxable, and they do not reduce the taxpayer's refund when they file in 2021.

Key filing season dates

There are several important dates taxpayers should keep in mind for this year's filing season:

  • January 15. IRS Free File opens. Taxpayers can begin filing returns through Free File partners; tax returns will be transmitted to the IRS starting Feb. 12. Tax software companies also are accepting tax filings in advance.
     
  • January 29. Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
     
  • February 12. IRS begins 2021 tax season. Individual tax returns begin being accepted and processing begins.
     
  • February 22. Projected date for the IRS.gov Where's My Refund tool being updated for those claiming EITC and ACTC, also referred to as PATH Act returns.
     
  • First week of March. Tax refunds begin reaching those claiming EITC and ACTC (PATH Act returns) for those who file electronically with direct deposit and there are no issues with their tax returns.
     
  • April 15. Deadline for filing 2020 tax returns.
     
  • October 15. Deadline to file for those requesting an extension on their 2020 tax returns

Filing season opening

The filing season open follows IRS work to update its programming and test its systems to factor in the second Economic Impact Payments and other tax law changes. These changes are complex and take time to help ensure proper processing of tax returns and refunds as well as coordination with tax software industry, resulting in the February 12 start date.

The IRS must ensure systems are prepared to properly process and check tax returns to verify the proper amount of EIP's are credited on taxpayer accounts – and provide remaining funds to eligible taxpayers.

Although tax seasons frequently begin in late January, there have been five instances since 2007 when filing seasons did not start for some taxpayers until February due to tax law changes made just before the start of tax 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: IRS        

Get an Identity Protection PIN to protect yourself from tax-related identity theft

Posted by Admin Posted on Jan 21 2021

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The Taxpayer Advocate Service (TAS) is pleased to share the news that the Internal Revenue Service (IRS) has now opened up enrollment in the Identity Protection PIN (IP PIN) program to anyone who has a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) and is able to verify his or her identity. TAS has long advocated for this change. Beginning in 2004 and through 2019, the National Taxpayer Advocate has made 46 recommendations to the IRS in the Annual Reports to Congress on improving IDT victim assistance. The IRS has adopted over half of these recommendations over this timeframe. TAS continues to advocate for even more improvement to assist IDT victims; see our 2019 Report to Congress for more information.

Starting in mid-January 2021, you may voluntarily opt into the IP PIN program as a proactive way to protect yourself from tax-related identity theft.

What is an IP PIN and why you should consider getting one?

An IP PIN is a six-digit number that prevents someone else from filing a tax return using your SSN or ITIN. The IP PIN is known only to you and the IRS and helps verify your identity when you file your electronic or paper tax return.

The IP PIN is valid for one year. Each January, a newly generated IP PIN must be obtained.
Any primary taxpayer (listed first on the return), secondary taxpayer (listed second on the return), or dependent may obtain an IP PIN if they can pass the identity proofing requirements.

How do I get an IP PIN?

If you’re volunteering for the IP PIN Opt-In Program you should use the online Get An IP PIN tool which will be available mid-January.

If you don’t already have an account on IRS.gov, you must register to validate your identity. Before you register, read about the secure access identity authentication process.

If you’re volunteering for the IP PIN Opt-In program and you can’t successfully validate your identity through the Get an IP PIN tool, there are alternatives. Please note: using an alternative method will delay your IP PIN. One alternative to using the online tool is filing Form 15227, Application for an Identity Protection Personal Identification Number (available mid-January 2021) if your income is $72,000 or less. To apply this way, you must have:

  • A valid SSN or ITIN;
  • An adjusted gross income of $72,000 or less; and
  • Access to a telephone.

IRS will use the telephone number provided on the Form 15227 to call you, validate your identity, and assign you an IP PIN for the next filing season. For security reasons, the IP PIN cannot be used for the current filing season. You will receive your IP PIN via the U.S. Postal Service the following year and in the future.

For other application options, see IRS’s Get An Identity Protection PIN (IP PIN) page.

How does the IP PIN process work?

Enter the six-digit IP PIN when prompted by your tax software product, provide it to your trusted tax professional preparing your tax return, or enter it on your paper tax return.

Be aware, correct IP PINs must be entered on electronic and paper tax returns to avoid rejections and delays. An incorrect or missing IP PIN will result in the rejection of your e-filed return or a delay of your paper return until it can be verified.

Don’t reveal your IP PIN

Your IP PIN should be known only to your tax professional and only when you are ready to sign and submit your return. Be aware that the IRS will never ask for your IP PIN. Phone calls, emails, or texts asking for your IP PIN are scams.

Want to opt-out of the program later?

The IRS plans to offer an opt out feature to the IP PIN program in 2022 if taxpayers find it is not right for them.

For more information about the program and other alternative application options, see IRS’s Get An Identity Protection PIN (IP PIN) page and FAQs about the Identity Protection Personal Identification Number (IP PIN).

For more information about Identity Theft, visit IRS’s Identity Theft Central site and our Identity Theft Get Help page.

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 COVID-19 Legislation May Affect Your Taxes

Posted by Admin Posted on Jan 11 2021

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The Consolidated Appropriations Act (CAA), signed into law Dec. 27, 2020, provides extensive relief in response to the COVID-19 pandemic, such as another round of “recovery rebate” payments to individuals and an expansion of the Paycheck Protection Program (PPP) for businesses and other employers. The legislation includes some tax relief as well.

A brief overview

Here’s a brief overview of some of the tax-related provisions that may affect you or your business:

Individuals

  • Permanent reduction of adjusted gross income (AGI) floor to 7.5% for medical expense deductions
  • Extended nonitemizer deduction for up to $300 of cash donations ($600 for married couples filing jointly) to qualified charities through 2021
  • Extended 100% of AGI deduction limit for cash donations to qualified charities through 2021
  • Extended exclusion for certain employer payments of student loans through 2025

Businesses and other employers

  • Clarification of tax treatment for PPP loans, certain loan forgiveness and other financial assistance under COVID-19 legislation
  • Extended payroll tax credits for paid leave required under the Families First Coronavirus Response Act (FFCRA) through March 2021
  • Extended and expanded tax credits for retaining employees under the Coronavirus Aid, Relief and Economic Security (CARES) Act through June 2021
  • 100% business meals deduction for food and beverages provided by restaurants in 2021 and 2022
  • Extended Work Opportunity credit through 2025
  • Extended New Markets credit through 2025
  • Extended family medical leave credit through 2025

More details

This is just a brief look at some of the most significant tax-related provisions in this 5,500+ page legislation. Contact us for more details on how the CAA may affect you.

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

Source: Thomson Reuters    

Second round of Economic Impact Payments have begun

Posted by Admin Posted on Jan 11 2021

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The IRS began delivering a second round of Economic Impact Payments (EIP 2) as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans.

Payments are automatic for eligible taxpayers

No action is required by eligible individuals to receive this second payment, as the payments are automatic.

As with the first round of payments issued under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, most recipients will receive these payments by direct deposit. For Social Security and other beneficiaries who received the first round of payments via Direct Express, they will receive this second payment the same way. Anyone who received the first round of payments earlier this year but doesn’t receive a payment via direct deposit will generally receive a check or, in some instances, a debit card.

Who is eligible and how much will I receive?

Generally, if you have adjusted gross income (AGI) for 2019 up to $75,000 for single individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.

The second round of payments, or “EIP 2,” is up to $600 for single taxpayers and up to $1,200 for married couples filing a joint return. In addition, those with qualifying children will also receive up to $600 for each qualifying child. Dependents who are 17 and older are not eligible for the child payment.

When will I receive the payment?

Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of January 4, 2021. Payments are automatic and you should not contact your financial institution with questions about payment timing. Paper checks began to be mailed out on December 30. The current round of stimulus payments should be completed by Jan. 15, according to the bill’s text.

Can I track my payment?

Taxpayers can use the IRS’s Get My Payment tool, in English or Spanish, to see payment information.

Get My Payment will let you confirm:

  • That we sent your second Economic Impact payment, also known as a stimulus payment.
  • That we sent your first payment. Some people received their first Economic Impact Payment in partial payments. If you received partial payments, the application will show only the most recent.
  • Your payment type: direct deposit or mail.

Note: Data is updated once per day overnight, so there’s no need to check back more than once per day.

IRS phone assistors and the Taxpayer Advocate Service do not have additional information beyond what’s available on IRS.gov and in the Get My Payment application.

What if I did not get a payment previously, but I qualify?

Eligible individuals who did not receive an Economic Impact Payment – either the first or the second payment – will be able to claim a Recovery Rebate Credit (RRC) when they file their 2020 tax returns in 2021. People will see the EIPs referred to as the RRC on Form 1040 or Form 1040-SR since the EIPs are an advance payment of the RRC.

Please note that the new tax law provision now allows families to receive payments for the taxpayers and qualifying children of the family who have work-eligible Social Security Numbers (SSNs). If you file jointly with your spouse and only one individual has a valid SSN, the spouse with a valid SSN will receive up to a $600 payment and up to $600 for each qualifying child claimed on the 2019 tax return. However, if neither has a valid SSN, no payment will be allowed even if their qualifying child has a valid SSN. People in this group who don’t receive an EIP, can claim an RRC when they file their 2020 tax returns.

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

Follow these tips to help prevent common tax return filing issues and refund delays

Posted by Admin Posted on Jan 11 2021

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Ready to file your tax return? Stop and check out these tax tips before you file to avoid delays and pass “go” with confidence.

Use your Form W-2, not your pay stub, to verify your income. Your employer generally has until February 1 to issue your Form W-2, and you should wait to receive it before you file. In case you didn’t know, IRS computer systems compare the income that is reported on your tax return to what has been reported to IRS. When income and/or federal income tax withholding don’t match, this can cause a delay in the processing of the return and any refund.

Double check that your information is correct for yourself and your dependents. Check name spellings, taxpayer identification numbers, dates of birth, addresses, and your bank account information for accuracy. Be aware that you must have valid Social Security numbers for all your dependents before filing or that may not only delay processing of your tax return, but in certain instances disqualify you for some refundable credits, like the Earned Income Tax Credit.

Don’t forget your W-2s, 1099s, and other attachments. This includes Form 8962 if you are claiming the Premium Tax Credit and Form 1099-G if you received unemployment benefits. Any income document that shows federal income tax was withheld must be attached to your return, if you are filing by paper. If you are filing electronically, follow the software provider’s instructions. If you are unable to obtain your W-2 (or other information returns like Form 1099, K-1, etc.) from your employer, because they closed, you can call the IRS for assistance at 1-800-829-1040, but you must wait until after February 1.

In January, some people who received unemployment benefits in 2020 will get a Form 1099-G, Certain Government Payments, from the agency paying the benefits. The agency will either automatically send a hard copy or, if the agency does not mail the form, recipients will need to visit the agency’s website to get an electronic version of the form.

Also, taxpayers who received a federal tax refund in 2020 may have been paid interest. Refund interest payments are taxable and must be reported on federal income tax returns. In January 2021, the IRS will send Form 1099-INT to anyone who received interest totaling $10 or more.

You need a Form 1098-T from an eligible educational institution to claim education expenses. Eligible educational institutions have until January 31, to provide this form on paper or electronically to students. If not received by January 31, you’ll need to contact the Institution.

Be aware of tax software that imports prior year data automatically. If you are using the same software as the prior year, you’ll want to check that only the current year information is present, and that prior year data didn’t transfer over which may cause an error. So, double check your figures before hitting submit.

Find a free event

Our local Taxpayer Advocate offices around the country are offering virtual events, during January 2021, that go over these tips in more detail. In addition, some events will include more information about us and how we can help, should you need it throughout the year. Don’t worry if you can’t make one of these scheduled events though, as you can always download our one-page flyer showing these tips or print this page to review as you complete your tax 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       

Taxpayers who don’t itemize can take a special $300 charitable contribution deduction on 2020 tax returns

Posted by Admin Posted on Jan 11 2021

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The Coronavirus Aid, Relief and Economic Security (CARES) Act includes several temporary provisions designed to help charities. These include higher elective limits for charitable cash contribution made by certain corporations, higher deduction limits for individuals and businesses for certain food donations made to food banks and other eligible charities, and a special $300 deduction.

The special $300 charitable contribution deduction is available to individual taxpayers who choose to take the standard deduction rather than itemizing their deductions. So, if you do not file Schedule A, Itemized Deductions, with your 2020 Form 1040 series income tax return, you can still take this $300 deduction ($150 deduction if your filing status is married filing separately) if your charitable cash donations qualify.

Prior to the CARES act change charitable contribution deductions could only be claimed on Schedule A and did not directly affect the adjusted gross income you reported on your tax return.

Please note that this article discusses only the special $300 charitable contribution deduction for individuals. For more information about other Coronavirus related tax relief provisions, visit IRS.gov/coronavirus.

What is allowed?

Charitable cash donations of up to $300 made to qualifying organizations before December 31, 2020, are now deductible for individuals who choose to use the standard deduction rather than itemizing their deductions.

Cash donations include those made by check, credit card or debit card. They don’t include donated services, household items, securities or other property.

What donations are considered allowable?

Though cash donations to most charitable organizations qualify, some do not. Before making a donation, people should check the special Tax Exempt Organization Search (TEOS) tool on IRS.gov to make sure the organization qualifies and is eligible for tax-deductible donations.

Where do I claim it on my tax return?

The donation amount will be reported on Form 1040 series tax returns. Review the related form instructions for exactly where to report it on the form.

Forms and instructions can be found on IRS.gov at Forms, Instructions & Publications.

What records do I need to keep?

By law, special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining a receipt or acknowledgement letter from the charity before filing a tax return and retaining a cancelled check or credit card receipt.

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

6 Key Tax Q&As for 2021

Posted by Admin Posted on Jan 11 2021

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Right now, you may be more concerned about your 2020 tax bill than you are about how to handle your personal finances in the new year. However, as you deal with your annual tax filing, it’s a good idea to also familiarize yourself with pertinent amounts that may have changed for 2021.

Not all tax figures are adjusted for inflation and, even if they are, they may be unchanged or change only slightly each year because of low inflation. In addition, some tax amounts can only change with new tax legislation. Here are six commonly asked (and answered) Q&As about 2021 tax-related figures:

1. How much can I contribute to an IRA for 2021? If you’re eligible, you can contribute $6,000 a year into a traditional or Roth IRA, up to 100% of your earned income. If you’re age 50 or older, you can make another $1,000 “catch up” contribution. (These amounts are the same as they were for 2020.)

2. I have a 401(k) plan through my job. How much can I contribute to it? For 2021, you can contribute up to $19,500 to a 401(k) or 403(b) plan. You can make an additional $6,500 catch-up contribution if you’re age 50 or older. (These amounts are also the same as they were for 2020.)

3. I sometimes hire a babysitter and a cleaning person. Do I have to withhold and pay FICA tax on the amounts I pay them? In 2021, the threshold for when a domestic employer must withhold and pay FICA for babysitters, house cleaners and other domestic employees is increasing to $2,300 from $2,200 for 2020.

4. How much do I have to earn in 2021 before I can stop paying Social Security tax on my salary? The Social Security tax wage base is $142,800 for 2021, up from $137,700 for 2020. That means that you don’t owe Social Security tax on amounts earned above that. (You must pay Medicare tax on all amounts that you earn.)

5. What’s the standard deduction for 2021? The Tax Cuts and Jobs Act eliminated the tax benefit of itemizing deductions for many people by significantly increasing the standard deduction and reducing or eliminating various itemized deductions. For 2021, the standard deduction amount is $25,100 for married couples filing jointly (up from $24,800 for 2020). For single filers, the amount is $12,550 (up from $12,400) and, for heads of households, it’s $18,800 (up from $18,650).

So, if the amount of your itemized deductions (such as charitable gifts and mortgage interest) are less than the applicable standard deduction amount, you won’t benefit from itemizing for 2021.

6. How much can I give to one person without triggering a gift tax return in 2021? The gift tax annual exclusion for 2021 is $15,000, unchanged from last year. This amount is only adjusted in $1,000 increments, so it typically increases only every few years.

These are only some of the tax figures that may apply to you. For more information about your tax picture, or if you have questions, don’t hesitate to contact us.

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   

IS THE PERSON AT YOUR DOOR REALLY FROM THE IRS?

Posted by Admin Posted on Dec 14 2020

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In certain situations, the IRS may send an employee out to your residence or place of business to collect past due taxes or conduct an audit of your return. With in-person scams continuing to take place across the country, the Taxpayer Advocate Service wants you to know how and when the IRS may contact you in person to help you protect yourself against possible in-person scams.

Eight things to know about in-person contacts from the IRS:

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

There are special circumstances when the IRS will come to your home or business.

These include:

When you have an overdue tax bill;

When the IRS needs to secure a delinquent tax return or a delinquent employment tax payment;

To tour a business as part of an audit; or As part of a criminal investigation.
 

Revenue Officers are IRS employees who work cases that involve an amount owed or a delinquent tax return. Generally, Revenue Officer home or business visits are unannounced.

Revenue Officers carry two forms of official identification, a pocket commission and a HSPD-12 card. Both forms of ID have a photo of the employee and serial numbers. You can (and should) ask to see both IDs before discussing any sensitive or personal information. You may also call the IRS at a phone number provided by the Revenue Officer to confirm his or her identity.

The IRS can assign certain cases to private collection agencies (PCAs) after notifying you in writing. These PCAs will never visit you at your home or business.

The IRS will not ask you to make a payment to anyone other than to the U.S. Department of the Treasury.

Revenue Agents are IRS employees conducting audits. They may call you to set up appointments, but not without having first notified you by mail. Therefore, by the time a Revenue Agent visits you at your home or business, you will be aware of the audit.

An IRS Criminal Investigator may visit your home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment.

When interacting with you, Revenue Officers have the responsibility to educate you about the Taxpayer Bill of Rights (TBOR) and identify economic hardships if you have an outstanding federal tax debt and payment creates a hardship. They also have the responsibility to consider other means of resolving tax debts, including installment agreements and offers in compromise.

IRS employees do not:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.

Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe.

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

If you believe you were visited by someone impersonating the IRS, you can find information on how to report scams here.

Need help with a specific tax problem?

The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers' rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn't working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.
Visit www.taxpayeradvocate.irs.gov or call 877-777-4778.

Read more about the kinds of problems TAS handles and how we may be able to assist you with yours.

For current information about IRS operations during the COVID-19 pandemic, please visit irs.gov.

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

Source: TAS   

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

Posted by Admin Posted on Dec 14 2020

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In certain situations, the IRS may send an employee out to your residence or place of business to collect past due taxes or conduct an audit of your return. With in-person scams continuing to take place across the country, the Taxpayer Advocate Service wants you to know how and when the IRS may contact you in person to help you protect yourself against possible in-person scams.

Eight things to know about in-person contacts from the IRS:

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

There are special circumstances when the IRS will come to your home or business.

These include:

When you have an overdue tax bill;

When the IRS needs to secure a delinquent tax return or a delinquent employment tax payment;

To tour a business as part of an audit; or As part of a criminal investigation.

Revenue Officers are IRS employees who work cases that involve an amount owed or a delinquent tax return. Generally, Revenue Officer home or business visits are unannounced.

Revenue Officers carry two forms of official identification, a pocket commission and a HSPD-12 card. Both forms of ID have a photo of the employee and serial numbers. You can (and should) ask to see both IDs before discussing any sensitive or personal information. You may also call the IRS at a phone number provided by the Revenue Officer to confirm his or her identity.

The IRS can assign certain cases to private collection agencies (PCAs) after notifying you in writing. These PCAs will never visit you at your home or business.

The IRS will not ask you to make a payment to anyone other than to the U.S. Department of the Treasury.

Revenue Agents are IRS employees conducting audits. They may call you to set up appointments, but not without having first notified you by mail. Therefore, by the time a Revenue Agent visits you at your home or business, you will be aware of the audit.

An IRS Criminal Investigator may visit your home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment.

When interacting with you, Revenue Officers have the responsibility to educate you about the Taxpayer Bill of Rights (TBOR) and identify economic hardships if you have an outstanding federal tax debt and payment creates a hardship. They also have the responsibility to consider other means of resolving tax debts, including installment agreements and offers in compromise.

IRS employees do not:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.

Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe.

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

If you believe you were visited by someone impersonating the IRS, you can find information on how to report scams here.

Need help with a specific tax problem?

The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers' rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn't working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.
Visit www.taxpayeradvocate.irs.gov or call 877-777-4778.

Read more about the kinds of problems TAS handles and how we may be able to assist you with yours.

For current information about IRS operations during the COVID-19 pandemic, please visit irs.gov.

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

Source: TAS   

WHAT ARE THE ADVANTAGES OF PREPAYING A MORTGAGE, AND SHOULD I IF I CAN?

Posted by Admin Posted on Dec 14 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

HOW SIGNIFICANTLY DOES MY ADDRESS AFFECT MY INSURANCE?

Posted by Admin Posted on Dec 14 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  

RENEW INDIVIDUAL TAXPAYER IDENTIFICATION NUMBERS BEFORE THEY EXPIRE

Posted by Admin Posted on Dec 14 2020

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Earlier this year, the IRS issued a reminder to certain Individual Taxpayer Identification Numbers (ITIN) holders whose ITINs expire on December 31, 2020. An individual taxpayer’s failure to timely renew an ITIN may result in a delay of a refund claimed on a 2020 federal income tax return.

The renewal process can take up to sixty days or more, so it is critical to begin the process of renewal now.

Who needs to renew?

Taxpayers who expect to file a federal tax return during 2021 and whose ITIN contains the middle digits 88 (For example: 9NN-88-NNNN) or 90, 91, 92, 94, 95, 96, 97, 98, or 99.

Note: Taxpayer ITINs need to be renewed even if the taxpayer has used it in the last three years.

The IRS may have already sent you a notice about this, but if you did not take action yet, please do so to avoid problems later.

How do I renew an ITIN?

To renew an ITIN, a taxpayer must complete a Form W-7 and submit all required documentation. Taxpayers submitting a Form W-7 to renew their ITIN are not required to attach a federal tax return. However, taxpayers must still note a reason for needing an ITIN on the Form W-7. See the Form W-7 instructions for detailed information.

Taxpayers with an expiring ITIN have the option to renew ITINs for their entire family at the same time. Those who have received a renewal letter from the IRS can choose to renew the family's ITINs together, even if family members have an ITIN with middle digits that have not been identified for expiration. Family members include the tax filer, spouse and any dependents claimed on the tax return.

See our Getting An ITIN help page or the IRS’s reminder page for more information about ways to submit the Form W-7 application package.

How do I avoid errors?

Double check your Form W-7 for missing entries.

Ensure you attach all required documentation (e.g., medical records, school records, identification documents like a valid passport, etc.).

Ensure all required signatures are on the Form W-7.

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

Source: TAS       

INTRAFAMILY LOANS AND A FAMILY BANK

Posted by Admin Posted on Dec 14 2020

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Among the primary goals of estate planning is to put in writing how you want your wealth distributed to loved ones after your death. But what if you want to use that wealth to help a family member in need while you’re still alive? This has become an increasingly common and pressing issue this year because of the COVID-19 pandemic and changes to the U.S. economy.

One way to help family members hit hard by job loss or increased debt is through an intrafamily loan or even by establishing a full-fledged family bank.

Structure loans carefully

Lending can be a way to provide your family financial assistance without triggering unwanted gift taxes. As long as a loan is structured in a manner similar to an arm’s-length loan between unrelated parties, it won’t be treated as a taxable gift.

This means, among other steps, documenting the loan with a promissory note and charging interest at or above the applicable federal rate (which is now historically low). You’ll also need to establish a fixed repayment schedule and ensure that the borrower has a reasonable prospect of repaying the loan.

Even if taxes aren’t a concern, intrafamily loans offer important benefits. For example, they allow you to help your family financially without depleting your wealth or creating a sense of entitlement. Done right, these loans can promote accountability and help cultivate the younger generation’s entrepreneurial capabilities by providing financing to start a business.

Maybe open a bank

Too often, however, people lend money to family members with little planning or regard for potential unintended consequences. Rash lending decisions may lead to misunderstandings, hurt feelings, conflicts among family members and false expectations. That’s where a family bank comes into play.

A family bank is a family-owned and funded entity — such as a dynasty trust, a family limited partnership or a combination of the two — designed for the sole purpose of making intrafamily loans. Often, family banks can offer financing to family members who might have difficulty obtaining a loan from a bank or other traditional funding sources, or lend at more favorable terms.

By “professionalizing” family lending activities, a family bank can preserve the tax-saving power of intrafamily loans while minimizing negative consequences. The key to avoiding family conflicts and resentment is to build a strong governance structure that promotes communication, decision making and transparency.

Establishing guidelines regarding the types of loans the family bank is authorized to make — and allowing all family members to participate in the decision-making process — ensures that family members are treated fairly and avoids false expectations.

Learn more

More than likely, someone in your extended family has faced difficult financial circumstances this year. Contact us to learn more about intrafamily loans.

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

Source:Thomson Reuters         

NEWLY EXPANDED ‘CLOSING A BUSINESS’ INFORMATION PROVIDES STEP-BY-STEP ACTIONS

Posted by Admin Posted on Dec 14 2020

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Closing your business can be a difficult and challenging task. The Taxpayer Advocate Service (TAS) partnered with IRS to expand its Closing a Business page to help business owners understand the specific actions needed, from a federal tax perspective, for each type of business.

However, before you make the decision to close, if it is due to financial reasons related to the coronavirus, please use TAS’s COVID-19 Business Tax Relief Tool to see if you qualify for new employer tax credits that may help you stay in business. Read more about the benefits of this tool before you try.

If ultimately you do need to close your business, whether you have a sole proprietorship, partnership or corporation, the information on this page will help you understand:

What forms you need to file;

How to report the income you receive; and,

How to claim the expenses you incur before closing your business.

Remember to also check your state responsibilities when closing a business.

TAS Resources

COVID-19 Business Tax Relief Tool

Coronavirus (COVID-19) Tax Relief

Taxpayer Advocate Service Help

The Taxpayer Advocate Service (TAS) is uniquely positioned to assist all taxpayers (and their representatives), including individuals, businesses, and exempt organizations. If you qualify for our help, an advocate will be with you at every turn and do everything possible to assist through the process.

Currently, 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. Visit our Contact Us page to learn more.

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

Source: TAS      

HANDLE MUTUAL FUNDS CAREFULLY AT YEAR END

Posted by Admin Posted on Dec 14 2020

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As we approach the end of 2020, now is a good time to review any mutual fund holdings in your taxable accounts and take steps to avoid potential tax traps. Here are some tips.

Avoid surprises

Unlike with stocks, you can’t avoid capital gains on mutual funds simply by holding on to the shares. Near the end of the year, funds typically distribute all or most of their net realized capital gains to investors. If you hold mutual funds in taxable accounts, these gains will be taxable to you regardless of whether you receive them in cash or reinvest them in the fund.

For each fund, determine how large these distributions will be and get a breakdown of long-term vs. short-term gains. If the tax impact will be significant, consider strategies to offset the gain. For example, you could sell other investments at a loss.

Buyer beware

Avoid buying into a mutual fund shortly before it distributes capital gains and dividends for the year. There’s a common misconception that investing in a mutual fund just before the ex-dividend date (the date by which you must own shares to qualify for a distribution) is like getting free money.

In reality, the value of your shares is immediately reduced by the amount of the distribution, so you’ll owe taxes on the gain without actually achieving an economic benefit.

Seller beware, too

If you plan to sell mutual fund shares that have appreciated in value, consider waiting until just after year end so you can defer the gain until 2021 — unless you think you’ll be subject to a higher rate next year. In that scenario, you’d likely be better off recognizing the gain and paying the tax this year.

When you do sell shares, keep in mind that, if you bought them over time, each block will have a different holding period and cost basis. To reduce your tax liability, it’s possible to select shares for sale that have higher cost bases and longer holding periods (known as the specific identification method), thereby minimizing your gain (or maximizing your loss) and avoiding higher-taxed short-term gains.

Think beyond taxes

Investment decisions shouldn’t be driven by tax considerations alone. You also need to know your risk tolerance and keep an eye on your overall financial goals. Nonetheless, taxes are still an important factor. Contact us to discuss these and other year-end strategies for minimizing the tax impact of your mutual fund holdings.

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      

TAXABLE VS. TAX-ADVANTAGED: WHERE TO HOLD INVESTMENTS

Posted by Admin Posted on Dec 04 2020

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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

The Right to Be Informed

Posted by Admin Posted on Dec 03 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   

HOW SHOULD UNMARRIED COUPLES PROTECT THEIR ESTATE AND FINANCIAL HOLDINGS?

Posted by Admin Posted on Dec 03 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

Here’s what taxpayers can do now to Get Ready to file taxes in 2021

Posted by Admin Posted on Dec 03 2020

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Check their withholding and make any adjustments soon

Since most taxpayers typically only have a few pay dates left this year, checking their withholding soon is especially important. It's even more important for those who:

  • Received a smaller refund than expected after filing their 2019 taxes this year.
  • Owed an unexpected tax bill last year.
  • Experienced personal or financial changes that might change their tax liability.

Some people may owe an unexpected tax bill when they file their 2020 tax return next year, if they didn't have enough withheld throughout the year. To avoid this kind of surprise, taxpayers should use the Tax Withholding Estimator to perform a quick paycheck or pension income checkup. Doing so helps them decide if they need to adjust their withholding or make estimated or additional tax payments now.

Gather tax documents and keep them for at least three years

Everyone should come up with a recordkeeping system. Whether it's electronic or paper, they should use a system to keep all important information in one place. Having all needed documents on hand before they prepare their return helps them file a complete and accurate tax return. This includes:

  • Their 2019 tax return.
  • Form W-2 from employers.
  • Form 1099 from banks and other payers.
  • Forms 1095-A from the marketplace for those claiming the premium tax credit.
  • Form 1099-NEC, Nonemployee Compensation.
  • Notice 1444, Your Economic Impact Payment.

Most income is taxable, including unemployment compensation, refund interest and income from the gig economy and virtual currencies. Therefore, taxpayers should also gather any documents from these types of earnings. People should keep copies of tax returns and all supporting documents for at least three years.

Confirm mailing and email addresses

To make sure forms make it to the taxpayer on time, people should confirm now that each employer, bank and other payer has the taxpayer's current mailing address or email address. Typically, forms start arriving by mail or are available online in January.

Remember these new things when preparing for the 2021 tax filing season

  • Taxpayers may be able to claim the recovery rebate credit if they met the eligibility requirements in 2020 and one of the following applies to them:
    • They didn't receive an Economic Impact Payment in 2020.
    • They are single and their payment was less than $1,200.
    • They are married, filed jointly for 2018 or 2019 and their payment was less than $2,400.
    • They didn't receive $500 for each qualifying child.
  • Taxpayers who received a federal tax refund in 2020 may have been paid interest. The IRS sent interest payments to individual taxpayers who timely filed their 2019 federal income tax returns and received refunds. Most interest payments were received separately from tax refunds. Interest payments are taxable and must be reported on 2020 federal income tax returns. In January 2021, the IRS will send a Form 1099-INT, Interest Income to anyone who received interest totaling at least $10.

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

ABLE accounts are a valuable benefit for taxpayers with disabilities

Posted by Admin Posted on Dec 03 2020

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Living with a disability can come with additional expenses. Achieving a Better Life Experience accounts are authorized tax-advantaged 529A accounts that help disabled people pay qualified disability-related expenses.

Here are some key things people should know about these accounts.

Annual contribution limit

  • The limit remains $15,000 in 2020.
  • Certain employed ABLE account beneficiaries may make an additional contribution up to the lesser of these amounts:
    • The designated beneficiary's compensation for the tax year 
    • The poverty line for a one-person household. For 2020, this amount is $12,490 in the continental U.S., $15,600 in Alaska and $14,380 in Hawaii. 

Saver's credit

  • ABLE account designated beneficiaries may now be eligible to claim the saver's credit for a percentage of their contributions. 
  • The beneficiary claims the credit on Form 8880, Credit for Qualified Retirement Savings Contributions PDF. The saver's credit is a non-refundable credit available to individuals who meet these three requirements:
    • Are at least 18 years old at the close of the taxable year
    • Are not a dependent or a full-time student
    • Meet the income requirements

Rollovers and transfers from section 529 plans

  • Families may now roll over funds from a 529 plan to another family member's ABLE account. 
  • The ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder. Rollovers from a section 529 plan count toward the annual contribution limit. For example, the $15,000 annual contribution limit would be met by parents contributing $10,000 to their child's ABLE account and rolling over $5,000 from a 529 plan to the same ABLE account.

Qualified disability expenses

  • States can offer ABLE accounts to help people who become disabled before age 26 or their families pay for disability-related expenses. These expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology and personal support services.
  • Though contributions aren't deductible for federal tax purposes, distributions, including earnings, are tax-free to the beneficiary, as long as they are used to pay qualified disability expenses. 

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      

CREDIT FOR THE ELDERLY OR DISABLED

Posted by Admin Posted on Dec 03 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

Security Summit partners warn taxpayers of new COVID-related text scam

Posted by Admin Posted on Dec 03 2020

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The Internal Revenue Service, state tax agencies and the tax industry are warning of a new text scam created by thieves that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment.

The IRS, states and industry, working together as the Security Summit, remind taxpayers that neither the IRS nor state agencies will ever text taxpayers asking for bank account information so that an EIP deposit may be made.

"Criminals are relentlessly using COVID-19 and Economic Impact Payments as cover to try to trick taxpayers out of their money or identities," said IRS Commissioner Chuck Rettig. "This scam is a new twist on those we've been seeing much of this year. We urge people to remain alert to these types of scams."

The scam text message states: "You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment …" The text includes a link to a fake phishing web address.

This fake phishing URL, which appears to come from a state agency or relief organization, takes recipients to a fraudulent website that impersonates the IRS.gov Get My Payment website. Individuals who visit the fraudulent website and then enter their personal and financial account information will have their information collected by these scammers.

People who receive this text scam should take a screen shot of the text message that they received and then include the screenshot in an email to phishing@irs.gov with the following information:

The IRS does not send unsolicited texts or emails. The IRS does not call people with threats of jail or lawsuits, nor does it demand tax payments on gift cards.

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 to mask key business transcript details; protect taxpayers from identity theft

Posted by Admin Posted on Dec 03 2020

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Moving to protect business taxpayers from identity theft, the Internal Revenue Service announced that starting December 13 it will begin masking sensitive data on business tax transcripts.

The announcement provides 30 days for stakeholders to make any adjustments. The IRS began informing tax professionals of this change during the summer Nationwide Tax Forums. The agency previously masked sensitive data on individual tax transcripts two years ago.

A tax transcript is a summary of a tax return. Transcripts are often used by tax professionals to prepare prior year tax returns or represent the client before the IRS. Lenders and others use tax transcripts for income verification purposes.

Here's what is visible on the new tax transcript:

  • Last four digits of any Employer Identification Number listed on the transcript: XX-XXX1234
  • Last four digits of any Social Security number or Individual Tax Identification Number listed on the transcript: XXX-XX-1234
  • Last four digits of any account or telephone number
  • First four characters of the first, and last name for any individual (first three characters if the name has only four letters)
  • First four characters of any name on the business name line
  • First six characters of the street address, including spaces
  • All money amounts, including wage and income, balance due, interest and penalties

For both the individual and business tax transcript, there is space for a Customer File Number. The Customer File Number is an optional 10-digit number that can be created usually by third parties that allow them to match a transcript to a taxpayer. The Customer File Number field will appear on the transcript when that number is entered on Line 5 of Form 4506-T, Request for Transcript of Tax Return, and Form 4506T-EZ.

Here's how it would work for a taxpayer seeking to verify income for a lender:

1.   The lender will assign a 10-digit number, for example, a loan number, to the Form 4506-T. The Form 4506-T may be signed and submitted by the taxpayer or signed by the taxpayer and submitted by the lender.

2.   The Customer File Number assigned by the requestor on the Form 4506-T will populate on the transcript. The requestor may assign any number except the taxpayer's Social Security number or Employer Identification Number.

3.   Once received by the requester, the transcript's Customer File Number serves as the tracking number to match it to the taxpayer.

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 Criminal Investigation releases Fiscal Year 2020 Annual Report; identifies $2.3 billion in tax fraud

Posted by Admin Posted on Nov 25 2020

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The Internal Revenue Service released the Criminal Investigation Division's annual report, highlighting the agency's successes and criminal enforcement actions taken in fiscal year 2020, the majority of which occurred during COVID-19. A key achievement was the identification of over $10 billion in tax fraud and other financial crimes.

"The special agents and professional staff who make up Criminal Investigation continue to perform at an incredibly high-level year after year," said IRS Commissioner Chuck Rettig. "Even in the face of a global pandemic, the CI workforce initiated nearly 1,600 investigations and identified $2.3 billion in tax fraud schemes. This is no small feat during a challenging year, and their work is critical to protecting taxpayers and the integrity of our tax system."

Key focuses of CI in fiscal year 2020 included COVID-19 related fraud, cybercrimes, with an emphasis on virtual and cryptocurrencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud and tax-related identity theft.

In response to COVID-19 related crimes, CI special agents quickly adapted their investigative techniques to initiate cases into fraudulent claims for Economic Impact Payments, Paycheck Protection Program loans, and refundable payroll tax credits from the Coronavirus Aid, Relief, and Economic Security Act.

"This year, more than any in recent memory, demonstrated the extraordinary agility and adaptability of the CI workforce," said Jim Lee, Chief of CI. "Clearly, unscrupulous individuals sought to exploit the economic safeguards put in place to buttress a nation in crisis. These individuals and groups were instead met with a cadre of special agents determined to thwart their efforts."

In fiscal year 2020, CI initiated 1,598 cases, applying 73% of its time to tax related investigations. The number of CI special agents increased by one percent, following special agent hiring to offset planned retirements. CI continued increasing its usage of data analytics and strengthening its international partnerships to assist in finding the most impactful cases. One important partnership remained the Joint Chiefs of Global Tax Enforcement (J5); a transnational committee comprised of tax organizations from five countries. In FY 2020 alone, more information was shared regarding cryptocurrency, tax crimes, and related enforcement, than in the previous ten years combined. CI also saw the first guilty pleas for a case under the J5 umbrella.

As the only federal law enforcement agency with jurisdiction over federal tax crimes, CI has one of the highest conviction rates in federal law enforcement − at 90.4%. The high conviction rate reflects the thoroughness of CI investigations and the high caliber of CI agents. CI is routinely called upon by prosecutors and partner agencies across the country to lead financial investigations on a wide variety of financial crimes.

"While the annual report is an excellent summation of the hard work and dedication exhibited by CI, this year's report takes on special significance," Lee said. "This report unequivocally reflects the efforts of a workforce undaunted by unprecedented personal and professional challenges. I am profoundly grateful to serve with the men and women of CI."

The 2020 report is interactive, summarizes a wide variety of CI activity during the year and features examples of cases from each field office on a wide range of financial crimes. The federal fiscal year begins October 1 and ends on September 30.

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       

Get Ready for Taxes: Get ready now to file 2020 federal income tax returns

Posted by Admin Posted on Nov 25 2020

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The Internal Revenue Service  encourages taxpayers to take necessary actions this fall to help them file their federal tax returns timely and accurately in 2021, including special steps related to Economic Impact Payments (EIP).

This is the first in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A special page, updated and available on IRS.gov, outlines steps taxpayers can take now to prepare for the 2021 tax return filing season ahead.

Steps taxpayers can take now to make tax filing easier in 2021

Taxpayers should gather Forms W-2, Wage and Tax Statement, Forms 1099-MISC, Miscellaneous Income, and other income documents to help determine if they're eligible for deductions or credits. They'll also need their Notice 1444, Your Economic Impact Payment, to calculate any Recovery Rebate Credit they may be eligible for on their 2020 Federal income tax return.

Most income is taxable, including unemployment compensation, refund interest and income from the gig economy and virtual currencies.

Taxpayers with an Individual Taxpayer Identification Number (ITIN) should ensure it hasn't expired before they file their 2020 federal tax return. If it has, IRS recommends they submit a Form W-7, Application for IRS Individual Taxpayer Identification Number, now to renew their ITIN. 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.

Taxpayers can use the Tax Withholding Estimator on IRS.gov to help determine the right amount of tax to have withheld from their paychecks. If they need to adjust their withholding for the rest of the year time is running out, they should submit a new Form W-4, Employee's Withholding Certificate, to their employer as soon as possible.

Taxpayers who received non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income, may have to make estimated tax payments. Payment options can be found at IRS.gov/payments.

New in 2021: Those who didn't receive an EIP may be able to claim the Recovery Rebate Credit

Taxpayers may be able to claim the Recovery Rebate Credit if they met the eligibility criteria in 2020 and:

  • They didn't receive an Economic Impact Payment this year, or
  • Their Economic Impact Payment was less than $1,200 ($2,400 if married filing jointly for 2019 or 2018) plus $500 for each qualifying child.
  • For additional information about the Economic Impact Payment, taxpayers can visit the Economic Impact Payment Information Center.

Received interest on a federal tax refund? Remember these are taxable; include when filing

Taxpayers who received a federal tax refund in 2020 may have been paid interest. The IRS sent interest payments to individual taxpayers who timely filed their 2019 federal income tax returns and received refunds. Most interest payments were received separately from tax refunds. Interest payments are taxable and must be reported on 2020 federal income tax returns. In January 2021, the IRS will send a Form 1099-INT, Interest Income, to anyone who received interest totaling at least $10.

Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a 2020 federal tax refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer.

EITC/ACTC-related refunds should be available by first week of March

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. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they chose direct deposit and there are no other issues with their tax return. Taxpayers should use Where's My Refund? for their personalized refund date.

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       

The Tax Impact of Business Property Remediation

Posted by Admin Posted on Nov 25 2020

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If your company faces the need to “remediate” or clean up environmental contamination, the money you spend can be tax-deductible as ordinary and necessary business expenses. Unfortunately, every type of environmental cleanup expense cannot be currently deducted — some cleanup costs must be capitalized (spread over multiple years for tax purposes).

To lower your current year tax bill as much as possible, you’ll want to claim as many immediate income tax benefits as allowed for the expenses you incur. So, it’s a good idea to explore the tax impact of business property remediation before you embark on the project. If you’ve already done cleanup during 2020, review the costs closely before filing your 2020 tax return.

Deduct vs. capitalize

Generally, cleanup costs are currently deductible to the extent they cover “incidental repairs” — for example, encapsulating exposed asbestos insulation. Other deductible expenses may include the actual cleanup costs, as well as expenses for environmental studies, surveys and investigations, fees for consulting and environmental engineering, legal and professional fees, and environmental “audit” and monitoring costs.

You may also be able to currently claim tax deductions for cleaning up contamination that your business caused on your own property (for example, removing soil contaminated by dumping wastes from your own manufacturing processes and replacing it with clean soil) — if you acquired that property in an uncontaminated state.

On the other hand, remediation costs generally must be capitalized if the remediation:

  • Adds significantly to the value of the cleaned-up property,
  • Prolongs the useful life of the property, or
  • Adapts the property to a new or different use.

In addition, you’ll likely need to capitalize the costs if the remediation makes up for depreciation, amortization or depletion that’s been claimed for tax purposes, or if it creates a separate capital asset that’s useful beyond the current tax year.

However, parts of these types of remediation costs may qualify for a current deduction. It depends on the facts and circumstances of your situation. For instance, in one case, the IRS required a taxpayer to capitalize the costs of surveying for contamination various sites that proved to be contaminated, but the agency allowed a current deduction for the costs of surveying the sites that proved to be uncontaminated.

Complex treatment

Along with federal tax deductions, state or local tax incentives may be available for cleaning up contaminated property. The tax treatment for the expenses can be complex. If you have environmental cleanup expenses, we can help plan your efforts to maximize the deductions 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: Thomson Reuters    

Catching Up On Catch-up Contributions

Posted by Admin Posted on Nov 25 2020

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When it comes to retirement planning, many people tend to focus on two things: opening a retirement savings account and then eventually drawing funds from it. However, there are other important aspects to truly doing everything you can to grow your nest egg.

One of them is celebrating your 50th birthday. This is because those age 50 or older on December 31 of any given year can start making “catch-up” contributions to their employer-sponsored retirement plans that year (assuming the plan allows them). These are additional contributions to certain accounts beyond the regular annual limits.

Maybe you haven’t yet saved as much for retirement as you’d like to. Or perhaps you’d just like to make the most of tax-advantaged savings opportunities. Whatever the case may be, now is a good time to get caught up on the 2020 catch-up contribution amounts because you might be able to increase your contributions for the year.

401(k)s and SIMPLEs

Under 401(k) limits for 2020, if you’re age 50 or older, you can contribute an extra $6,500 after you’ve reached the $19,500 maximum limit for all employees. That’s a total of $26,000.

If your employer offers a Savings Incentive Match Plan for Employees (SIMPLE) instead, your regular contribution maxes out at $13,500 in 2020. If you’re 50 or older, you’re allowed to contribute an additional $3,000 — or $16,500 in total for the year.

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

Self-employed plans

If you’re self-employed, retirement plans such as an individual 401(k) — or solo 401(k) — also allow catch-up contributions. A solo 401(k) is a plan for those with no other employees. You can defer 100% of your self-employment income or compensation, up to the regular 2020 aggregate deferral limit of $19,500, plus a $6,500 catch-up contribution in 2020. But that’s just the employee salary deferral portion of the contribution.

You can also make an “employer” contribution of up to 20% of self-employment income or 25% of compensation. The total combined employee-employer contribution is limited to $57,000, plus the $6,500 catch-up contribution.

IRAs, too

Catch-up contributions to non-Roth accounts not only can enlarge your retirement nest egg, but also can reduce your 2020 tax liability, generally if made by Dec. 31, 2020.

Keep in mind that catch-up contributions are available for IRAs, too. The deadline for 2020 IRA contributions isn’t until April 15, 2021, but deductible contributions may be limited or unavailable based on your income and whether you (or your spouse) is covered by a retirement plan at work. Please contact us for more information.

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

Source: Thomson Reuters    

TAXABLE VS. TAX-ADVANTAGED: WHERE TO HOLD INVESTMENTS

Posted by Admin Posted on Nov 18 2020

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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

REFINANCING YOUR HOME

Posted by Admin Posted on Nov 18 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

PLANNING FOR THE NET INVESTMENT INCOME TAX

Posted by Admin Posted on Nov 18 2020

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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

LIVING THE DREAM OF EARLY RETIREMENT

Posted by Admin Posted on Nov 18 2020

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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           

IRS: Check tax withholdings now as the last quarter of 2020 begins

Posted by Admin Posted on Nov 02 2020

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WASHINGTON — The Internal Revenue Service today reminded taxpayers that now is the perfect time to review their tax withholding and payments to avoid a surprise when filing next year.

An adjustment or two made now may boost take home pay or allow taxpayers to pay more in the last quarter of 2020 to avoid a surprise tax bill.

Some things to consider that will affect taxes owed in 2020 include:

  • Coronavirus tax relief – Tax help for taxpayers, businesses, tax-exempt organizations and others – including health plans – affected by coronavirus (COVID-19).
  • Disasters such as wildfires and hurricanes – Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area.
  • Unemployment compensation – Millions of Americans got taxable unemployment compensation, many of them for the first time. Taxes can be withheld from their benefits.
  • Job loss – IRS Publication 4128, Tax Impact of Job Loss PDF, explains how this unfortunate circumstance can create new tax issues.
  • Workers moving into the gig economy due to the pandemic – IRS advises people earning income in the gig economy to consider quarterly estimated tax payments to stay current.
  • Life changes such as marriage or childbirth – Getting married or having a child are just a couple of life events that can affect your refund or how much you owe.

Pay as you go

Taxes are generally paid throughout the year whether from salary withholding, quarterly estimated tax payments or a combination of both. About 70% of taxpayers, however, over withhold their taxes every year which typically results in a refund. The average refund in 2020 was well over $2,400.

Taxpayers can pay electronically, throughout the year, online, by phone or with a mobile device and the IRS2Go app. They can choose an electronic payment option to schedule estimated tax payments and receive email notifications about their payments.

Taxpayers can also visit IRS.gov/account to view their taxes owed, payment history and key tax return information from their most recent tax return as originally filed and, if they have one, they'll see details about their payment plan.

Regarding refunds

IRS reminds people that there are many factors that affect the timing of a refund. The fastest way to get a tax refund is by filing electronically and choosing Direct Deposit. IRS issues most refunds in less than 21 days, but it's possible it can take longer.

Tax Withholding Estimator

The IRS launched an improved Tax Withholding Estimator tool last summer to make it easier for everyone to have the right amount of tax withheld during the year. This is especially important for anyone who faced an unexpected tax bill or a penalty when they filed this year. It's also an important step for those who made withholding adjustments in 2020, had a major life change or were adversely affected by the pandemic.

The tool offers workers, as well as retirees, self-employed individuals and other taxpayers, a more user-friendly step-by-step tool for effectively tailoring the amount of income tax they have withheld from wages and pension payments.

The tax withholding estimator has several key features for ease of use:

  • Plain language throughout the tool to improve comprehension.
  • The ability to more effectively target at the time of filing either a tax due amount close to zero or a refund amount.
  • A progress tracker to help users see how much more information they need to input.
  • The ability to move back and forth through the steps, correct previous entries and skip questions that don't apply.
  • Enhanced tips and links to help the user quickly determine if they qualify for various tax credits and deductions.
  • Self-employment tax for a user who has self-employment income in addition to wages or pensions.
  • Automatic calculation of the taxable portion of any Social Security benefits.
  • A mobile-friendly design.

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

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

Newly expanded ‘Closing a Business’ information provides step-by-step actions

Posted by Admin Posted on Nov 02 2020

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Closing your business can be a difficult and challenging task. The Taxpayer Advocate Service (TAS) partnered with IRS to expand its Closing a Business page to help business owners understand the specific actions needed, from a federal tax perspective, for each type of business.

However, before you make the decision to close, if it is due to financial reasons related to the coronavirus, please use TAS’s COVID-19 Business Tax Relief Tool to see if you qualify for new employer tax credits that may help you stay in business. Read more about the benefits of this tool before you try.

If ultimately you do need to close your business, whether you have a sole proprietorship, partnership or corporation, the information on this page will help you understand:

  • What forms you need to file;
  • How to report the income you receive; and,
  • How to claim the expenses you incur before closing your business.

Remember to also check your state responsibilities when closing a business.

TAS Resources

Taxpayer Advocate Service Help

The Taxpayer Advocate Service (TAS) is uniquely positioned to assist all taxpayers (and their representatives), including individuals, businesses, and exempt organizations. If you qualify for our help, an advocate will be with you at every turn and do everything possible to assist through the process.

Currently, 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. Visit our Contact Us page to learn more.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial  tatements, please give us a call at 305-274-5811.                                   

Source: TAS 

Para ayudar a quienes no presentan impuestos, el IRS estableció el 10 de noviembre como el “Día nacional de inscripción para pagos de impacto económico”

Posted by Admin Posted on Nov 02 2020

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WASHINGTON — El Servicio de Impuestos Internos estableció el día 10 de noviembre como el "Día nacional de inscripción para pagos de impacto económico", ya que la agencia y sus socios a través de todo el país lanzan un impulso final para animar a todos los que normalmente no presentan una declaración de impuestos a inscribirse para recibir un pago de impacto económico.

El "Día nacional de inscripción para pagos de impacto económico" tendrá lugar unos días antes de la fecha límite de inscripción extendida al 21 de noviembre. Este evento especial contará con el apoyo de grupos de socios del IRS dentro y fuera de la comunidad tributaria que incluyen aquellos que trabajan con comunidades de bajos ingresos y desatendidas. Estos grupos ayudarán a correr la voz sobre la nueva fecha límite del 21 de noviembre y, en algunos casos, proporcionarán apoyo especial a las personas que todavía necesitan inscribirse para los pagos.

El IRS ya envió casi 9 millones de cartas a personas que pueden ser elegibles para pagos de impacto económico de $1,200, pero normalmente no presentan una declaración de impuestos. Las cartas, junto con el evento especial del 10 de noviembre, anima a las personas a usar la herramienta Non-Filers: Enter Info Here, disponible únicamente en IRS.gov.

"Nuestros grupos de socios han sido una parte crítica de la campaña de publicidad y educación sin precedentes del IRS este año para comunicarle a las más personas posible la información acerca de estos pagos," dijo Chuck Rettig, Comisionado del IRS. "Como resultado, millones de estadounidenses usaron exitosamente la herramienta Non-Filers y recibieron su pago de impacto económico. La inscripción es rápida y fácil, e instamos a todos a compartir esta información para llegar a la mayor cantidad de personas antes del día de vencimiento del 21 de noviembre".

Para apoyar el esfuerzo en curso, así como el "Día nacional de inscripción para pagos de impacto económico", muchos grupos de socios trabajan con el IRS, ayudando a traducir y poner a disposición en 35 idiomas información y recursos de los pagos de impacto económico. El IRS también planifica un esfuerzo especial en las redes sociales para apoyar la campaña de inscripción final en varios idiomas.

Mientras que la mayoría de los contribuyentes elegibles de los Estados Unidos recibieron automáticamente sus pagos de impacto económico, otros que no tienen la obligación de presentar necesitan usar la herramienta Non-Filers para inscribirse con el IRS para obtener su pago. Por lo general, esto incluye a las personas que reciben pocos o ningún ingreso.

Desde que el IRS lanzo la herramienta Non-Filers en la primavera, más de 8 millones de personas que normalmente no están obligadas a presentar una declaración de impuestos se han inscrito para los pagos. El IRS continúa trabajando para comunicarle a otras personas que aún no han usado la herramienta, lo que resultó en el envió especial de las cartas y al evento especial de inscripción del 10 de noviembre.

La herramienta está diseñada para personas con ingresos generalmente menores de $24,400 para parejas casadas, y $12,200 para solteros que no pueden ser reclamados como dependientes por otra persona. Esto incluye a parejas e individuos que se encuentran sin hogar.

Cualquier persona que use la herramienta Non-Filers puede acelerar la llegada de su pago al elegir recibirlo por depósito directo. Aquellos que no elijan esta opción recibirán un cheque.

A partir de dos semanas después de inscribirse, las personas pueden hacer un seguimiento del estado de su pago a través de la herramienta Obtener mi pago, solamente disponible en IRS.gov.

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

-College savings showdown: 529s vs. Roth IRAs

Posted by Admin Posted on Nov 02 2020

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Many people assume that a 529 plan is the ideal college savings tool, but other vehicles can help parents save for college expenses, too. Take the Roth IRA, for example. Whether you should use one or the other (or both) depends on several factors, including how much you intend to contribute and how you’ll use the earnings.

Plan snapshots

A 529 plan allows participants to make substantial nondeductible contributions — up to hundreds of thousands of dollars, depending on the plan and state limits. The funds grow tax-free, and there’s no tax on withdrawals, provided they’re used for “qualified higher education expenses” such as tuition, fees, books, computers, and room and board. Other qualified expenses include up to $10,000 of primary or secondary school tuition per student per year and, new under last year’s SECURE Act, up to $10,000 of student loans per beneficiary. If you use the funds for other purposes, you’ll generally be subject to income taxes and a 10% penalty on the earnings portion. Some 529 plans are also eligible for state tax breaks.

Roth IRA contributions also are nondeductible and grow tax-free. And you can withdraw those contributions anytime, tax- and penalty-free, for any purpose. Qualified distributions of earnings — generally, after age 59½ and more than five years after your first contribution — are also tax- and penalty-free.

Advantages and drawbacks

The main advantages of 529 plans are generous contribution limits and the ability to accept contributions from relatives or friends. Roth IRAs, on the other hand, are subject to annual contribution limits of currently $6,000 ($7,000 if you’re 50 or older). So, even if you and your spouse each set up Roth IRAs when your child is born, the most you’ll be able to contribute over 18 years is $216,000 (not taking into account any future inflation increases to the contribution limit). Additional drawbacks are that you must have earned income at least equal to the contribution, and you can’t contribute to a Roth IRA if your adjusted gross income exceeds certain limits.

Funds in a 529 plan that aren’t used for qualified education expenses will eventually trigger taxes and penalties when they’re withdrawn. However, with a Roth IRA, you can use contributions, as well as qualified distributions of earnings, for any purpose without triggering taxes or penalties. This includes items that wouldn’t be qualified expenses under a 529 plan, such as a car or off-campus housing expenses that exceed the college’s room and board allowance. Plus, if you don’t need all your Roth IRA funds for college expenses, you can leave them in the account indefinitely.

Consider goals

Before selecting a plan, consider your overall financial, retirement and estate planning goals. Our firm can help.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial  tatements, please give us a call at 305-274-5811.                                   

Source: Thomson Reuters   

Unemployment Compensation is Taxable - Explore Your Options Now

Posted by Admin Posted on Nov 02 2020

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Unemployment compensation, including special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, must generally be included in gross income. If you are receiving unemployment benefits, the benefits are taxable. Do you know you can have tax withheld so you may not owe when you file your tax return next year?

How this may affect you

  • If you receive unemployment compensation this year, you must report it on your tax return.
  • Tax is not withheld automatically from unemployment benefits.
  • Even if you have returned to work, you may not have enough tax withheld between now and the end of the year to cover the tax due on your unemployment compensation.
  • If you don’t have enough tax withheld, you may also have to pay penalties and interest.
  • Unemployment compensation is considered unearned income, so it doesn’t count when calculating the Earned Income Tax Credit (EITC). This means your EITC may be less than you expect, depending on how much unemployment compensation you receive.

What you can do now so you won’t owe at tax time

  • If you currently receive unemployment compensation, you may choose to have a flat ten percent withheld from your unemployment benefits to cover part or all of your tax liability.
  • You should contact the agency paying you benefits to see if it has its own form you need to fill out for voluntary withholding. If not, you should fill out Form W-4V, Voluntary Withholding Request, and give it to that agency. Don’t send it to the IRS.
  • If you were unemployed but have returned to work, you may increase the tax withheld on your paychecks or make estimated tax payments. The estimated tax payment for the first two quarters of 2020 was due on July 15. The third quarter payment was due on September 15, 2020, and the fourth quarter payment is due on January 15, 2021. More information is available here.

 Other things you should know

  • If you receive unemployment benefits in 2020, you should receive a Form 1099-G, Certain Government Payments, in late January or early February 2021.
  • You can find the amount of unemployment compensation you received in 2020 in Box 1 of the form. Be sure to report this income on your 2020 tax return.
  • You can find the amount of tax withheld in Box 4 of the form. Be sure to claim this withholding on your 2020 tax return, along with any tax withheld from your paycheck or any other sources.
  • If you have too much tax withheld, you may either request a refund on your 2020 tax return or have it applied to 2021 taxes. The choice is yours.

Taxpayer Advocate Service Help

Currently, the Taxpayer Advocate Service (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. Visit our Contact Us page to see who qualifies for TAS assistance. We will also be posting updated operational status information there as well.

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: TAS 

Is It Time for a Cost Segregation Study? & Beware of “Wash Sales” When Selling Securities

Posted by Admin Posted on Nov 02 2020

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Is it time for a cost segregation study?

Because of the economic impact of the COVID-19 crisis, many companies may want to conserve cash and not buy much equipment this year. As a result, you may not be able to claim as many depreciation tax deductions as in the past. However, if your company owns real property, there’s another approach to depreciation to consider: a cost segregation study.

Depreciation basics

Business buildings generally have a 39-year depreciation period (27.5 years for residential rental properties). Typically, companies depreciate a building’s structural components — including walls, windows, HVAC systems, plumbing and wiring — along with the building. Personal property (such as equipment, machinery, furniture and fixtures) is eligible for accelerated depreciation, usually over five or seven years. And land improvements, such as fences, outdoor lighting and parking lots, are depreciable over 15 years.

Often, businesses allocate all or most of their buildings’ acquisition or construction costs to real property, overlooking opportunities to allocate costs to shorter-lived personal property or land improvements. Items that appear to be “part of a building” may in fact be personal property. Examples include removable wall and floor coverings, removable partitions, awnings and canopies, window treatments, signs and decorative lighting.

Pinpointing costs

A cost segregation study combines accounting and engineering techniques to identify building costs that are properly allocable to tangible personal property rather than real property. Although the relative costs and benefits of a cost segregation study will depend on your particular facts and circumstances, it can be a valuable investment.

It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. And, thanks to the Tax Cuts and Jobs Act, the potential benefits of a cost segregation study are now even greater than they were a few years ago because of enhancements to certain depreciation-related tax breaks.

Worth a look

Cost segregation studies have costs all their own, but the potential long-term tax benefits may make it worth your while to undertake the process. Contact our firm for further 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  tatements, please give us a call at 305-274-5811.                                   

Source: Thomson Reuters   

Beware of “wash sales” when selling securities

Posted by Admin Posted on Oct 29 2020

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If you’re planning to sell capital assets at a loss to offset gains that have been realized during the year, it’s important to beware of the “wash sale” rule. Under this tax rule, if you sell stock or securities for a loss and buy substantially identical stock shares or securities back within the 30-day period before or after the sale date, the loss can’t be claimed for tax purposes.

The rule

The wash sale rule is designed to prevent taxpayers from benefiting from a loss without parting with ownership in any significant way. Note that the rule applies to a 30-day period before or after the sale date to prevent “buying the stock back” before it’s even sold. (If you participate in any dividend reinvestment plans, the wash sale rule may be inadvertently triggered when dividends are reinvested under the plan, if you’ve separately sold some of the same stock at a loss within the 30-day period.)

Although the loss can’t be claimed on a wash sale, the disallowed amount is added to the cost of the new stock. So, the disallowed amount can be claimed when the new stock is finally disposed of (other than in a wash sale).

An example

Assume you buy 500 shares of XYZ Inc. for $10,000 and sell them on November 5 for $3,000. On November 30, you buy 500 shares of XYZ again for $3,200. Since the shares were “bought back” within 30 days of the sale, the wash sale rule applies. Therefore, you can’t claim a $7,000 loss. Your basis in the new 500 shares is $10,200: the actual cost plus the $7,000 disallowed loss.

If only a portion of the stock sold is bought back, only that portion of the loss is disallowed. So, in the above example, if you’d only bought back 300 of the 500 shares (60%), you would be able to claim 40% of the loss on the sale ($2,800). The remaining $4,200 loss that is disallowed under the wash sale rule would be added to your cost of the 300 shares.

No surprises

The wash sale rule can come as a nasty surprise at tax time. 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  tatements, please give us a call at 305-274-5811.                                   

Source : Thomson Reuters   

To help non-filers, IRS sets Nov. 10 as ‘National EIP Registration Day;’ Register at IRS.gov for Economic Impact Payment

Posted by Admin Posted on Oct 29 2020

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WASHINGTON — The Internal Revenue Service today set November 10 as "National EIP Registration Day," as the agency and partners across the country launch a final push to encourage everyone who doesn't normally file a tax return to register to receive an Economic Impact Payment.

"National EIP Registration Day" will take place just a few days ahead of the extended November 21 registration deadline. This special event will feature support from IRS partner groups inside and outside of the tax community, including those that work with low-income and underserved communities. These groups will help spread the word about the new November 21 deadline and, in some cases, provide special support for people who still need to register for the payments.

The IRS has already sent nearly 9 million letters to people who may be eligible for the $1,200 Economic Impact Payments but don't normally file a tax return. The letters, along with the special November 10 event, both urge people to use the Non-Filers: Enter Info Here tool, available exclusively on IRS.gov.

"Our partner groups have been a critical part of the unprecedented IRS outreach and education campaign this year to contact as many people as possible about these payments," said IRS Commissioner Chuck Rettig. "As a result, millions of Americans have successfully used the Non-filers portal and received their Economic Impact Payment. Registration is quick and easy, and we urge everyone to share this information to reach as many people before time runs out on November 21."

To support the ongoing effort as well as "National EIP Registration Day," many partner groups have been working with the IRS, helping translate and making available Economic Impact Payment information and resources in 35 languages. The IRS also plans a special push on social media to support the final registration drive in multiple languages.

While most eligible U.S. taxpayers have automatically received their Economic Impact Payment, others who don't have a filing obligation should use the Non-Filers tool to register with the IRS to get their money. Typically, this includes people who receive little or no income.

Since the Non-Filers tool launched in the spring, over 8 million people who normally aren't required to file a tax return have registered for the payments. The IRS continues to work to reach others who haven't used the tool yet, which led to the special mailing and the special Nov. 10 registration event.

The tool is designed for people with incomes typically below $24,400 for married couples, and $12,200 for singles who could not be claimed as a dependent by someone else. This includes couples and individuals who are experiencing homelessness.

Anyone using the Non-Filers tool can speed up the arrival of their payment by choosing to receive it by direct deposit. Those not choosing this option will get a check.

Beginning two weeks after they register, people can track the status of their payment using the Get My Payment tool, available only on IRS.gov.

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

IRS: Revise la retención de impuestos ahora que comienza el último trimestre de 2020

Posted by Admin Posted on Oct 29 2020

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WASHINGTON — El Servicio de Impuestos Internos les recordó hoy a los contribuyentes que ahora es el tiempo oportuno para hacer una revisión de impuestos y pagos para evitar una sorpresa al presentar el próximo año.

Un ajuste o dos ahora puede aumentar lo que reciben en su cheque de pago o permitir que algunas personas paguen más en el último trimestre de 2020 para evitar una factura de impuestos inesperada.

Algunas cosas para considerar que afectarán los impuestos adeudados en 2020 incluyen:

Pague según gane

Los impuestos generalmente se pagan durante todo el año, ya sea por retención salarial, pagos de impuestos estimados trimestrales o una combinación de ambos. Alrededor del 70 por ciento de los contribuyentes, sin embargo, retienen impuestos en exceso cada año, lo que normalmente resulta en un reembolso. El reembolso promedio en 2020 fue de más de $2,400.

Los contribuyentes pueden pagar electrónicamente, durante todo el año, en línea, por teléfono o con un dispositivo móvil y la aplicación IRS2Go. Pueden elegir una opción de pago electrónico para programar pagos de impuestos estimados y recibir notificaciones por correo electrónico acerca de sus pagos.

Los contribuyentes también pueden visitar IRS.gov/cuenta para ver los impuestos adeudados, el historial de pagos y la información clave de su declaración de impuestos más reciente tal como se presentó originalmente y, si tienen uno, verán detalles acerca de su plan de pago.

Acerca de reembolsos

El IRS recuerda a las personas que hay muchos factores que afectan cuándo emitimos un reembolso. La manera más rápida de obtener un reembolso de impuestos es presentar electrónicamente y elegir Depósito Directo (en inglés). El IRS emite la mayoría de los reembolsos en menos de 21 días, pero es posible que tarde más.

Estimador de Retención de Impuestos

El IRS lanzó la mejorada herramienta Estimador de Retención de Impuestos el verano pasado para facilitar que todos tengan la cantidad correcta de impuestos retenidos durante el año. Esto es especialmente importante para cualquiera que recibió una factura de impuestos o una multa inesperada cuando presentaron este año. También es un paso importante para aquellos que hicieron ajustes de retención en 2020 o tuvieron un cambio importante en su vida o se vieron afectados negativamente por la pandemia.

La herramienta les ofrece a los trabajadores, así como a los jubilados, individuos que trabajan por su cuenta y otros contribuyentes, una herramienta paso a paso más dinámica y fácil de usar para adaptar eficazmente el monto del impuesto sobre los ingresos que han retenido de los salarios y los pagos de pensiones.

El estimador de retención de impuestos tiene varias características clave para facilitar su uso:

  • Lenguaje sencillo en toda la herramienta para mejorar la comprensión.
  • La capacidad de identificar de manera más efectiva al momento de presentar impuestos un monto adeudado de impuestos cercano a cero o un monto de reembolso.
  • Un nuevo rastreador de progreso para ayudar al usuario a ver cuánta más información necesita ingresar.
  • La capacidad de seguir los pasos indicados, corregir entradas previas y omitir preguntas que no aplican.
  • Consejos y enlaces para ayudar al usuario a determinar rápidamente si califican para varios créditos y deducciones tributarias.
  • Impuesto de trabajo por cuenta propia para un usuario que tiene ingresos de trabajo por cuenta propia además de salarios o pensiones.
  • Cálculo automático de la porción tributable de cualquier beneficio del Seguro Social.
  • Un diseño apto para dispositivos móviles.

Además, el nuevo Estimador de Retención de Impuestos facilita ingresar salarios y retenciones de cada trabajo retenido por el contribuyente y su cónyuge, así como ingresar por separado las pensiones y otras fuentes de ingresos. Al final del proceso, la herramienta hace recomendaciones de retención específicas para cada trabajo y cada cónyuge, y explica claramente lo que el contribuyente debe hacer.

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

- AMT LESS “TOOTHY” BUT MAY STILL TAKE A BITE

Posted by Admin Posted on Oct 29 2020

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AMT less “toothy” but may still take a bite

For many years, the alternative minimum tax (AMT) posed a risk to many taxpayers in the middle- to upper-income brackets. The Tax Cuts and Jobs Act (TCJA) took much of the “teeth” out of the AMT by raising the inflation-adjusted exemption. As a result, middle-income earners have had less to worry about, but those whose income has substantially increased (or remains high) should still watch out for its bite.

Basic rules

The AMT was established to ensure that higher-income individuals pay at least a minimum tax, even if they have many large deductions that significantly reduce their “regular” income tax. If your AMT liability is greater than your regular income tax liability, you must pay the difference as AMT — in addition to the regular tax.

As mentioned, the TCJA substantially increased the AMT exemption for 2018 through 2025. The exemption reduces the amount of AMT income that’s subject to the AMT. The 2020 exemption amounts are $72,900 (for single filers), $113,400 (for married joint filers) and $56,700 (for married separate filers).

AMT rates begin at 26% and rise to 28% at higher income levels. That top rate is lower than the maximum regular income tax rate of 37%, but fewer deductions are allowed for the AMT. For example, you can’t deduct state and local income or sales taxes, property taxes and certain other expenses.

Risk factors

The AMT exemption phases out when your AMT income surpasses the applicable threshold, so high-income earners remain susceptible. However, even some taxpayers who consider themselves middle-income earners may trigger the AMT by exercising incentive stock options or incurring large capital gains.

For example, because the exemption phases out based on income, realizing substantial capital gains could cause you to lose part or all of that exemption and, thus, subject you to AMT liability. If it looks like you could get hit by the AMT this year, you might want to delay sales of highly appreciated assets until next year (if you don’t expect to be subject to the AMT then) or use an installment sale to spread the gains (and potential AMT liability) over multiple years.

Also, be aware that claiming substantial itemized deductions for expenses that aren’t deductible for AMT purposes used to be a major risk factor for falling into the AMT net. However, because the TCJA limited or eliminated some of these deductions for regular income tax purposes (such as the deduction for state and local taxes and miscellaneous itemized deductions subject to a 2% of adjusted gross income floor, respectively), this is now much less of a risk.

Appropriate strategies

Since passage of the TCJA, the AMT may have become an afterthought for many people. However, it’s still worth a look to see whether it could create undesirable tax consequences for you. Please contact us for help assessing your exposure to the AMT and, if necessary, implementing appropriate strategies for your tax situation.

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.                                   

DEDUCTIBLE TAXES

Posted by Admin Posted on Sept 29 2020

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-AFTER A DIVORCE, WHAT HAPPENS TO MY CREDIT HISTORY?

Posted by Admin Posted on Sept 29 2020

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If the name on your account changes, lenders may appraise the application and credit line to decide if your qualifications meet the credit standards. You may be asked to reapply.

To avoid inconvenience, maintain credit in your own name. Preserving your own, separate, credit history makes things easier in the future. In an emergency, if you need credit, it will be available.

Avoid using your spouse's name - i.e. Mrs. Peter Johnson - for purpose of credit.

Get an update on your credit report. Be sure that your name, as well as your spouse's, is being reported correctly. If you would like to use your spouse's credit history to your benefit, simply write a letter to the credit agency and request that both names be put on the account.

Find out if there is any incomplete or inaccurate data in your account. Send the credit bureau a letter asking them to correct this information. They need to confirm receipt within a normal time period and inform you when the mistake is fixed.

Improving your own credit history in your name should be simple if you have been sharing accounts with your spouse. Make a call to a major credit bureau and ask for copies of your account information. Get in touch with the issuers of the cards with whom you share accounts with your spouse and request to have your name on the account as well.

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

-IS NOW THE TIME FOR SOME LIFE INSURANCE?

Posted by Admin Posted on Sept 28 2020

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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

IS NOW THE TIME FOR SOME LIFE INSURANCE?.

Posted by Admin Posted on Sept 14 2020

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Many people reach a point in life when buying some life insurance is highly advisable. Once you determine that you need it, the next step is calculating how much you should get and what kind.

Careful calculations

If the coverage is to replace income and support your family, this starts with tallying the costs that would need to be covered, such as housing and transportation, child care, and education — and for how long. For many families, this will be only until the youngest children are on their own.

Next, identify income available to your family from Social Security, investments, retirement savings and any other sources. Insurance can help bridge any gaps between the expenses to be covered and the income available.

If you’re purchasing life insurance for another reason, the purpose will dictate how much you need:

  • Funeral costs. An average funeral bill can top $7,000. Gravesite costs typically add thousands more to this number.
  • Mortgage payoff. You may need coverage equal to the amount of your outstanding mortgage balance.
  • Estate planning. If the goal is to pay estate taxes, you’ll need to estimate your estate tax liability. If it’s to equalize inheritances, you’ll need to estimate the value of business interests going to each child active in your business and purchase enough coverage to provide equal inheritances to the inactive children.

Term vs. permanent

The next question is what type of policy to purchase. Life insurance policies generally fall into two broad categories: term or permanent.

Term insurance is for a specific period. If you die during the policy’s term, it pays out to the beneficiaries you’ve named. If you don’t die during the term, it doesn’t pay out. It’s typically much less expensive than permanent life insurance, at least if purchased while you’re relatively young and healthy.

Permanent life insurance policies last until you die, so long as you’ve paid the premiums. Most permanent policies build up a cash value that you may be able to borrow against. Over time, the cash value also may reduce the premiums.

Because the premiums are typically higher for permanent insurance, you need to consider whether the extra cost is worth the benefits. It might not be if, for example, you may not require much life insurance after your children are grown.

But permanent life insurance may make sense if you’re concerned that you could become uninsurable, if you’re providing for special-needs children who will never be self-sufficient, or if the coverage is to pay estate taxes or equalize inheritances.

Some comfort

No one likes to think about leaving loved ones behind. But you’ll no doubt find some comfort in having a life insurance policy that helps cover your family’s financial needs and plays an important role in your estate plan. Let us help you work out the details.

For more information on the appeals process, please contact us!

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

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

Posted by Admin Posted on Sept 14 2020

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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

YOUR APPEAL RIGHTS-

Posted by Admin Posted on Sept 14 2020

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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 Sept 14 2020

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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

FOR BUSINESS FINANCING, WHAT KINDS OF LOANS EXIST?-

Posted by Admin Posted on Aug 26 2020

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You must know the exact amount of money that you need, what your purpose is and how you will repay it in order to be successful in getting a loan. You must convince the lender in a written proposal that you are a good credit risk.

There are two basic kinds of loans, although terms vary by lender:

Short-term and long-term, maturity periods of up to one year are generally short-term, which include accounts receivable loans, working capital loans and lines of credit.

Maturities greater than a year and less than seven years is a typical long-term loan. Equipment and real estate loans can have maturity up to 25 years. Major business expenses such as purchasing real estate and facilities, durable equipment, construction, vehicles, furniture and fixtures, etc. are a few purposes for long-term loans.                                                

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHAT WILL WORKER’S COMPENSATION COVER IF I EVER NEED IT?

Posted by Admin Posted on Aug 24 2020

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Worker's compensation will only cover you for injuries that occur on the job site. The compensation varies from state to state, but most states will pay throughout the lifetime of the worker, in the case of a permanent disability.

You can get all of the information that you need regarding individual state's worker's compensation benefits by contacting your state's Department of Labor.

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  

SPECIAL CIRCUMSTANCES-

Posted by Admin Posted on Aug 24 2020

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

PERSONAL DOCUMENTS-

Posted by Admin Posted on Aug 24 2020

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

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

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

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

Personal Documents To Keep For One Year

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

Personal Documents To Keep For Three Years

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

Personal Documents To Keep For Six Years

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

Personal Records To Keep Forever

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

AMENDED RETURNS-

Posted by Admin Posted on Aug 24 2020

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

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-USE CAPITAL LOSSES TO OFFSET CAPITAL GAINS-

Posted by Admin Posted on Aug 24 2020

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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

BUSINESS DOCUMENTS-

Posted by Admin Posted on Aug 24 2020

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Business Documents To Keep For One Year

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

Business Documents To Keep For Three Years

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

Business Documents To Keep For Six Years

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

Business Records To Keep Forever

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IRS UNVEILS "DIRTY DOZEN" LIST OF TAX SCAMS FOR 2020; AMERICANS URGED TO BE VIGILANT TO THESE THREATS DURING THE PANDEMIC AND ITS AFTERMATH

Posted by Admin Posted on Aug 20 2020

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WASHINGTON — The Internal Revenue Service announced its annual "Dirty Dozen" list of tax scams with a special emphasis on aggressive and evolving schemes related to coronavirus tax relief, including Economic Impact Payments.

This year, the Dirty Dozen focuses on scams that target taxpayers. The criminals behind these bogus schemes view everyone as potentially easy prey. The IRS urges everyone to be on guard all the time and look out for others in their lives.

"Tax scams tend to rise during tax season or during times of crisis, and scam artists are using pandemic to try stealing money and information from honest taxpayers," said IRS Commissioner Chuck Rettig. "The IRS provides the Dirty Dozen list to help raise awareness about common scams that fraudsters use to target people. We urge people to watch out for these scams. The IRS is doing its part to protect Americans. We will relentlessly pursue criminals trying to steal your money or sensitive personal financial information."

Taxpayers are encouraged to review the list in a special section on IRS.gov and be on the lookout for these scams throughout the year. Taxpayers should also remember that they are legally responsible for what is on their tax return even if it is prepared by someone else. Consumers can help protect themselves by choosing a reputable tax preparer.

The IRS urges taxpayers to refrain from engaging potential scammers online or on the phone. The IRS plans to unveil a similar list of enforcement and compliance priorities this year as well.

An upcoming series of press releases will emphasize the illegal schemes and techniques businesses and individuals use to avoid paying their lawful tax liability. Topics will include such scams as abusive micro captives and fraudulent conservation easements.

Here are this year's "Dirty Dozen" scams:

Phishing:

Taxpayers should be alert to potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a tax bill, refund or Economic Impact Payments. Don't click on links claiming to be from the IRS. Be wary of emails and websites − they may be nothing more than scams to steal personal information.

IRS Criminal Investigation has seen a tremendous increase in phishing schemes utilizing emails, letters, texts and links. These phishing schemes are using keywords such as "coronavirus," "COVID-19" and "Stimulus" in various ways.

These schemes are blasted to large numbers of people in an effort to get personal identifying information or financial account information, including account numbers and passwords. Most of these new schemes are actively playing on the fear and unknown of the virus and the stimulus payments. (For more see IR-2020-115, IRS warns against COVID-19 fraud; other financial schemes.)

Fake Charities:

Criminals frequently exploit natural disasters and other situations such as the current COVID-19 pandemic by setting up fake charities to steal from well-intentioned people trying to help in times of need. Fake charity scams generally rise during times like these.

Fraudulent schemes normally start with unsolicited contact by telephone, text, social media, e-mail or in-person using a variety of tactics. Bogus websites use names similar to legitimate charities to trick people to send money or provide personal financial information. They may even claim to be working for or on behalf of the IRS to help victims file casualty loss claims and get tax refunds.

Taxpayers should be particularly wary of charities with names like nationally known organizations. Legitimate charities will provide their Employer Identification Number (EIN), if requested, which can be used to verify their legitimacy. Taxpayers can find legitimate and qualified charities with the search tool on IRS.gov.

Threatening Impersonator Phone Calls:

IRS impersonation scams come in many forms. A common one remains bogus threatening phone calls from a criminal claiming to be with the IRS. The scammer attempts to instill fear and urgency in the potential victim. In fact, the IRS will never threaten a taxpayer or surprise him or her with a demand for immediate payment.

Phone scams or "vishing" (voice phishing) pose a major threat. Scam phone calls, including those threatening arrest, deportation or license revocation if the victim doesn't pay a bogus tax bill, are reported year-round. These calls often take the form of a "robocall" (a text-to-speech recorded message with instructions for returning the call).

The IRS will never demand immediate payment, threaten, ask for financial information over the phone, or call about an unexpected refund or Economic Impact Payment. Taxpayers should contact the real IRS if they worry about having a tax problem.

Social Media Scams:

Taxpayers need to protect themselves against social media scams, which frequently use events like COVID-19 to try tricking people. Social media enables anyone to share information with anyone else on the Internet. Scammers use that information as ammunition for a wide variety of scams. These include emails where scammers impersonate someone's family, friends or co-workers.

Social media scams have also led to tax-related identity theft. The basic element of social media scams is convincing a potential victim that he or she is dealing with a person close to them that they trust via email, text or social media messaging.

Using personal information, a scammer may email a potential victim and include a link to something of interest to the recipient which contains malware intended to commit more crimes. Scammers also infiltrate their victim's emails and cell phones to go after their friends and family with fake emails that appear to be real and text messages soliciting, for example, small donations to fake charities that are appealing to the victims.

EIP or Refund Theft:

The IRS has made great strides against refund fraud and theft in recent years, but they remain an ongoing threat. Criminals this year also turned their attention to stealing Economic Impact Payments as provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Much of this stems from identity theft whereby criminals file false tax returns or supply other bogus information to the IRS to divert refunds to wrong addresses or bank accounts.

The IRS recently warned nursing homes and other care facilities that Economic Impact Payments generally belong to the recipients, not the organizations providing the care. This came following concerns that people and businesses may be taking advantage of vulnerable populations who received the payments. These payments do not count as a resource for determining eligibility for Medicaid and other federal programs They also do not count as income in determining eligibility for these programs. See IR-2020-121, IRS alert: Economic Impact Payments belong to recipient, not nursing homes or care facilities for more.

Taxpayers can consult the Coronavirus Tax Relief page of IRS.gov for assistance in getting their EIPs. Anyone who believes they may be a victim of identity theft should consult the Taxpayer Guide to Identity Theft on IRS.gov.

Senior Fraud:

Senior citizens and those who care about them need to be on alert for tax scams targeting older Americans. The IRS recognizes the pervasiveness of fraud targeting older Americans along with the Department of Justice and FBI, the Federal Trade Commission, the Consumer Financial Protection Bureau (CFPB), among others.

Seniors are more likely to be targeted and victimized by scammers than other segments of society. Financial abuse of seniors is a problem among personal and professional relationships. Anecdotal evidence across professional services indicates that elder fraud goes down substantially when the service provider knows a trusted friend or family member is taking an interest in the senior's affairs.

Older Americans are becoming more comfortable with evolving technologies, such as social media. Unfortunately, that gives scammers another means of taking advantage. Phishing scams linked to Covid-19 have been a major threat this filing season. Seniors need to be alert for a continuing surge of fake emails, text messages, websites and social media attempts to steal personal information.

Scams targeting non-English speakers:

IRS impersonators and other scammers also target groups with limited English proficiency. These scams are often threatening in nature. Some scams also target those potentially receiving an Economic Impact Payment and request personal or financial information from the taxpayer.

Phone scams pose a major threat to people with limited access to information, including individuals not entirely comfortable with the English language. These calls frequently take the form of a "robocall" (a text-to-speech recorded message with instructions for returning the call), but in some cases may be made by a real person. These con artists may have some of the taxpayer's information, including their address, the last four digits of their Social Security number or other personal details – making the phone calls seem more legitimate.

A common one remains the IRS impersonation scam where a taxpayer receives a telephone call threatening jail time, deportation or revocation of a driver's license from someone claiming to be with the IRS. Taxpayers who are recent immigrants often are the most vulnerable and should ignore these threats and not engage the scammers.

Unscrupulous Return Preparers:

Selecting the right return preparer is important. They are entrusted with a taxpayer's sensitive personal data. Most tax professionals provide honest, high-quality service, but dishonest preparers pop up every filing season committing fraud, harming innocent taxpayers or talking taxpayers into doing illegal things they regret later.

Taxpayers should avoid so-called "ghost" preparers who expose their clients to potentially serious filing mistakes as well as possible tax fraud and risk of losing their refunds. With many tax professionals impacted by COVID-19 and their offices potentially closed, taxpayers should take particular care in selecting a credible tax preparer.

Ghost preparers don't sign the tax returns they prepare. They may print the tax return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost preparer will prepare but not digitally sign as the paid preparer. By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a Preparer Tax Identification Number (PTIN). Paid preparers must sign and include their PTIN on returns.

Unscrupulous preparers may also target those without a filing requirement and may or may not be due a refund. They promise inflated refunds by claiming fake tax credits, including education credits, the Earned Income Tax Credit (EITC) and others. Taxpayers should avoid preparers who ask them to sign a blank return, promise a big refund before looking at the taxpayer's records or charge fees based on a percentage of the refund.

Taxpayers are ultimately responsible for the accuracy of their tax return, regardless of who prepares it. Taxpayers can go to a special page on IRS.gov for tips on choosing a preparer.

Offer in Compromise Mills:

Taxpayers need to wary of misleading tax debt resolution companies that can exaggerate chances to settle tax debts for "pennies on the dollar" through an Offer in Compromise (OIC). These offers are available for taxpayers who meet very specific criteria under law to qualify for reducing their tax bill. But unscrupulous companies oversell the program to unqualified candidates so they can collect a hefty fee from taxpayers already struggling with debt.

These scams are commonly called OIC "mills," which cast a wide net for taxpayers, charge them pricey fees and churn out applications for a program they're unlikely to qualify for. Although the OIC program helps thousands of taxpayers each year reduce their tax debt, not everyone qualifies for an OIC. In Fiscal Year 2019, there were 54,000 OICs submitted to the IRS. The agency accepted 18,000 of them.

Individual taxpayers can use the free online Offer in Compromise Pre-Qualifier tool to see if they qualify. The simple tool allows taxpayers to confirm eligibility and provides an estimated offer amount. Taxpayers can apply for an OIC without third-party representation; but the IRS reminds taxpayers that if they need help, they should be cautious about whom they hire.

Fake Payments with Repayment Demands:

Criminals are always finding new ways to trick taxpayers into believing their scam including putting a bogus refund into the taxpayer's actual bank account. Here's how the scam works:

A con artist steals or obtains a taxpayer's personal data including Social Security number or Individual Taxpayer Identification Number (ITIN) and bank account information. The scammer files a bogus tax return and has the refund deposited into the taxpayer's checking or savings account. Once the direct deposit hits the taxpayer's bank account, the fraudster places a call to them, posing as an IRS employee. The taxpayer is told that there's been an error and that the IRS needs the money returned immediately or penalties and interest will result. The taxpayer is told to buy specific gift cards for the amount of the refund.

The IRS will never demand payment by a specific method. There are many payment options available to taxpayers and there's also a process through which taxpayers have the right to question the amount of tax we say they owe. Anytime a taxpayer receives an unexpected refund and a call from us out of the blue demanding a refund repayment, they should reach out to their banking institution and to the IRS.

Payroll and HR Scams:

Tax professionals, employers and taxpayers need to be on guard against phishing designed to steal Form W-2s and other tax information. These are Business Email Compromise (BEC) or Business Email Spoofing (BES). This is particularly true with many businesses closed and their employees working from home due to COVID-19. Currently, two of the most common types of these scams are the gift card scam and the direct deposit scam.

In the gift card scam, a compromised email account is often used to send a request to purchase gift cards in various denominations. In the direct deposit scheme, the fraudster may have access to the victim's email account (also known as an email account compromise or "EAC"). They may also impersonate the potential victim to have the organization change the employee's direct deposit information to reroute their deposit to an account the fraudster controls.

BEC/BES scams have used a variety of ploys to include requests for wire transfers, payment of fake invoices as well as others. In recent years, the IRS has observed variations of these scams where fake IRS documents are used in to lend legitimacy to the bogus request. For example, a fraudster may attempt a fake invoice scheme and use what appears to be a legitimate IRS document to help convince the victim.

The Direct Deposit and other BEC/BES variations should be forwarded to the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) where a complaint can be filed. The IRS requests that Form W-2 scams be reported to: phishing@irs.gov (Subject: W-2 Scam).

Ransomware:

This is a growing cybercrime. Ransomware is malware targeting human and technical weaknesses to infect a potential victim's computer, network or server. Malware is a form of invasive software that is often frequently inadvertently downloaded by the user. Once downloaded, it tracks keystrokes and other computer activity. Once infected, ransomware looks for and locks critical or sensitive data with its own encryption. In some cases, entire computer networks can be adversely impacted.

Victims generally aren't aware of the attack until they try to access their data, or they receive a ransom request in the form of a pop-up window. These criminals don't want to be traced so they frequently use anonymous messaging platforms and demand payment in virtual currency such as Bitcoin.

Cybercriminals might use a phishing email to trick a potential victim into opening a link or attachment containing the ransomware. These may include email solicitations to support a fake COVID-19 charity. Cybercriminals also look for system vulnerabilities where human error is not needed to deliver their malware.

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

AVOID SCAMS OFFERING ECONOMIC IMPACT PAYMENTS

Posted by Admin Posted on Aug 20 2020

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Scammers are counting on confusion about the Coronavirus Tax Relief offered to taxpayers who are impacted by the Coronavirus (COVID-19) and Economic Impact Payments (EIPs). Taxpayers should be aware of the numerous scams designed to steal their money and personal information.

The Internal Revenue Service (IRS) does not initiate contact with taxpayers to request any personal or financial information in order to receive an EIP through:

  • Phone,
  • Email,
  • Text messages,
  • Websites, or
  • Social media sites, groups or forums.

Be cautious of anyone demanding money from you in order to receive an EIP. You don’t need to make a payment to receive an EIP.

Spread the word. Tell your friends, relatives and neighbors - do not to respond to any requests pretending to be associated with Coronavirus Tax Relief or EIPs.

FAKE WEBSITES

There are many scammers who use websites designed to look almost identical to a federal agency website, but they will not have the right URL or website address. Make sure you are looking at a website that starts with “https://” and ends with “.gov.” Otherwise they are likely not a valid U.S. government site. If you receive an email, text message, web link or other communication from an unknown source or sender, avoid clicking on the link or opening the attachments.

CHARITABLE DONATIONS

If you choose to donate to a charitable organization, use the IRS Tax Exempt Organization search tool to verify an organization’s federal tax status before donating.

REPORT SCAMS

IRS Coronavirus-related (COVID-19) scams should be reported to the National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submitted through the NCDF web Complaint Form. The NCDF is a national coordinating agency within the Department of Justice’s Criminal Division dedicated to improving the detection, prevention, investigation, and prosecution of criminal conduct related to natural and man-made disasters and other emergencies, such as COVID-19. Hotline staff will obtain information regarding your complaint, which will then be reviewed by law enforcement officials.

Fraud or theft of EIPs can also be reported online to the Treasury Inspector General for Tax Administration (TIGTA). TIGTA investigates external attempts to corruptly interfere with federal tax administration, including IRS-related Coronavirus scams.

Report unsolicited emails or social media attempts to gather information that appear to be from the IRS, the Taxpayer Advocate Service (TAS) or other government agencies by forwarding them to phishing@irs.gov. You should not engage potential scammers online or on the phone.

TAS ASSISTANCE

Know that TAS is assisting taxpayers who find themselves in hardship situations or dealing with IRS tax problems they’ve been unable to resolve directly with the IRS. Please understand though, that TAS is not able to respond to general inquiries about IRS EIPs. And for the time being, assistance provided by TAS is being provided to taxpayers virtually.

For questions about EIPs, please go to the www.irs.gov/eipfaq, call the EIP help line at 800-919-9835, or visit our TAS Coronavirus (COVID-19) Tax Relief site.

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        

-IRS TAKES NEW STEPS TO ENSURE PEOPLE WITH CHILDREN RECEIVE $500 ECONOMIC IMPACT PAYMENTS

Posted by Admin Posted on Aug 20 2020

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WASHINGTON — The Internal Revenue Service continues to look for ways to help people who were unable to provide their information in time to receive Economic Impact Payments for their children. As part of that effort, the Internal Revenue Service announced today it will reopen the registration period for federal beneficiaries who didn't receive $500 per child payments earlier this year.

The IRS urges certain federal benefit recipients to use the IRS.gov Non-Filers tool starting August 15 through September 30 to enter information on their qualifying children to receive the supplemental $500 payments.

Those eligible to provide this information include people with qualifying children who receive Social Security retirement, survivor or disability benefits, Supplemental Security Income (SSI), Railroad Retirement benefits and Veterans Affairs Compensation and Pension (C&P) benefits and did not file a tax return in 2018 or 2019.

The IRS anticipates the catch-up payments, equal to $500 per eligible child, will be issued by mid-October.

"IRS employees have been working non-stop to deliver more than 160 million Economic Impact Payments in record time. We have coordinated outreach efforts with thousands of community-based organizations and have provided materials in more than two dozen languages," said IRS Commissioner Chuck Rettig. "Given the extremely high demand for EIP assistance, we have continued to prioritize and increase resource allocations to eligible individuals, including those who may be waiting on some portion of their payment. To help with this, we are allocating additional IRS resources to ensure eligible recipients receive their full payments during this challenging time."

Used the Non-Filers tool after May 5? No action needed.

For those Social Security, SSI, Department of Veterans Affairs and Railroad Retirement Board beneficiaries who have already used the Non-Filers tool to provide information on children, no further action is needed. The IRS will automatically make a payment in October.

Didn't use the IRS Non-Filers tool yet? Provide information by September 30.

For those who received Social Security, SSI, RRB or VA benefits and have not used the Non-Filers tool to provide information on their child, they should register online by Sept. 30 using the Non-Filers: Enter Payment Info Here tool, available exclusively on IRS.gov. Remember, anyone who filed or plans to file either a 2018 or 2019 tax return should file the tax return and not use this tool.

For those unable to access the Non-Filers tool, they may submit a simplified paper return following the procedures described in this FAQ on IRS.gov.

Any beneficiary who misses the September 30 deadline will need to wait until next year and claim it as a credit on their 2020 federal income tax return.

Those who received their original Economic Impact Payment by direct deposit will also have any supplemental payment direct deposited to the same account. Others will receive a check.

Eligible recipients can check the status of their payments using the Get My Payment tool on IRS.gov. In addition, a notice verifying the $500-per-child supplemental payment will be sent to each recipient and should be retained with other tax records.

Other Non-Filers can still get a payment; must act by October 15.

Though most Americans have already received their Economic Impact Payments, the IRS reminds people with little or no income and who are not required to file tax returns that they remain eligible to receive an Economic Impact Payment.

People in this group should also use the Non-Filers' tool – but they need to act by October 15 to receive their payment this year.

Anyone who misses the October 15 deadline will need to wait until next year and claim it as a credit on their 2020 federal income tax return.

Available in both English and Spanish, the Non-Filers tool is designed for people with incomes typically below $24,400 for married couples, and $12,200 for singles. This includes couples and individuals who are experiencing homelessness. People can qualify, even if they don't work or have no earned income. But low- and moderate-income workers and working families eligible to receive special tax benefits, such as the Earned Income Tax Credit or Child Tax Credit, cannot use this tool. They will need to file a regular return by using IRS Free File or by another method.

Other important notices involving Economic Impact Payments:

Spouse's past-due child support. The IRS is actively working to resolve cases where a portion or all of an individual's payment was taken and applied to their spouse's past-due child support. People in this situation do not need to take any action. The IRS will automatically issue the portion of the EIP that was applied to the other spouse's debt.

Spouses of deceased taxpayers. Upon enactment of the CARES Act, the IRS initially implemented the legislation consistent with processes and procedures relating to the 2008 stimulus payments (which were transmitted to deceased individuals). After further review this spring, Treasury determined that those who died before receipt of the EIP should not receive the advance payment. As a result, the EIP procedures were modified to prevent future payments to deceased individuals. The cancellation of uncashed checks is part of this process. Some EIPs to spouses of deceased taxpayers were cancelled. The IRS is actively working on a systemic solution to reissue payments to surviving spouses of deceased taxpayers who were unable to deposit the initial EIPs paid to the deceased and surviving spouse. For EIPs that have been cancelled or returned, the surviving spouse will automatically receive their share of the EIP.

The IRS has taken steps to get payments to as many eligible individuals as possible. A recent oversight report confirmed that the IRS correctly computed the amount due for 98% of the payments issued. However, the IRS acknowledges the significance for those who have not yet received their full payment. The IRS continues to look at ways to help people get the right amount of the payment and will continue to provide updates on additional enhancements as they 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: IRS 

IRS ADVICE FOR THOSE WHO MISSED THE JULY 15 DEADLINE, FILE NOW TO AVOID BIGGER BILL

Posted by Admin Posted on Aug 20 2020

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WASHINGTON — For those who missed the July 15 tax deadline and didn't request an extension, the Internal Revenue Service reminds taxpayers about some important tips, including filing electronically as soon as possible to reduce potential penalties.

Some taxpayers may have extra time to file and pay any taxes due without penalties and interest. These include:

  • Members of the military who served or are currently in a combat zone. They qualify for an additional extension of at least 180 days to file and pay taxes.
  • Support personnel in combat zones or a contingency operation in support of the Armed Forces. They may also qualify for a filing and payment extension of at least 180 days.
  • Some disaster victims. Those who qualify have more time to file and pay what they owe.

The IRS offers these after-tax-day tips:

File to get a tax refund

The only way to get a refund is to file a tax return. There is no penalty for filing after the deadline if a refund is due. Use electronic filing options including IRS Free File available on IRS.gov through October 15 to prepare and file returns electronically.

The IRS reminds taxpayers that, while we continue to process electronic and paper tax returns, issue refunds, and accept payments, we're experiencing delays in processing paper tax returns due to limited staffing. If a taxpayer filed a paper tax return, we will process it in the order we received it. Do not file a second tax return or call the IRS.

Taxpayers can track a refund using the Where's My Refund? tool on IRS.gov, IRS2Go and by phone at 800-829-1954. Taxpayers need the primary Social Security number on the tax return, the filing status and the expected refund amount. The tool updates once daily, usually overnight, so checking more frequently will not yield different results. The "Where's My Refund?" tool cannot be used to track Economic Impact Payments.

File to reduce penalties and interest

Normally, taxpayers should file their tax return, or request an extension, and pay any taxes they owe by the deadline to avoid penalties and interest. Taxpayers need to remember that an extension to file is not an extension to pay. Penalties and interest will apply to taxes owed after July 15.

Even if a taxpayer can't afford to immediately pay the taxes they owe, they should still file a tax return as soon as possible to reduce possible penalties. The IRS has more information for taxpayers who owe the IRS, but cannot afford to pay.

Ordinarily, the failure-to-file penalty is 5% of the tax owed for each month or part of a month that a tax return is late. But if a return is filed more than 60 days after the due date, the minimum penalty is either $435 or 100% of the unpaid tax, whichever is less. Filing and paying as much as possible is important because the late-filing penalty and late-payment penalty add up quickly. The basic failure-to-pay penalty rate is generally 0.5% of unpaid tax owed for each month or part of a month. For more see IRS.gov/penalties.

Taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer will usually qualify if they have filed and paid timely for the past three years and meet other requirements. For more information, see the first-time penalty abatement page on IRS.gov.

Pay taxes due electronically

Those who owe taxes can view their balance, pay with IRS Direct Pay, by debit or credit card or apply online for a payment plan, including an installment agreement. Several other electronic payment options are available on IRS.gov/payments. They are secure and easy to use. Taxpayers paying electronically receive immediate confirmation when they submit their payment. With Direct Pay and the Electronic Federal Tax Payment System (EFTPS), taxpayers can opt in to receive email notifications about their payments.

Need help? Tips for selecting a tax professional

Taxpayers can also look for help from a tax professional. Taxpayers can use several options to help find a tax preparer. One resource is Choosing a Tax Professional, which includes a wealth of consumer guidance for selecting a tax professional. There are various types of tax return preparers, including enrolled agents, certified public accountants, attorneys and some who don't have a professional credential.

The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is a free searchable and sortable database. It includes the name, city, state and zip code of credentialed return preparers who are CPAs, enrolled agents or attorneys, as well as those who have completed the requirements for the IRS Annual Filing Season Program. A search of the database can help taxpayers verify credentials and qualifications of tax professionals or locate a tax professional in their geographic 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: IRS 

SHOULD I REFINANCE?-

Posted by Admin Posted on Aug 12 2020

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-HOW DOES LEGAL TREATMENT DIFFER BETWEEN MARRIED AND UNMARRIED COUPLES?-

Posted by Admin Posted on Aug 12 2020

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Unmarried couples don't:

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

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

Source: Thomson Reuters

DEDUCTING MORTGAGE INTEREST-

Posted by Admin Posted on Aug 12 2020

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-SPECIAL TAX BENEFITS FOR MEMBERS OF THE MILITARY AND THEIR FAMILIES-

Posted by Admin Posted on Aug 04 2020

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Members of the military may qualify for special tax benefits. For instance, they don't have to pay taxes on some types of income. Special rules could lower the tax they owe or allow them more time to file and pay their federal taxes.

Here are some of these special tax benefits:

  • Combat pay exclusion: If someone serves in a combat zonepart or all of their pay is tax-free. This also applies to people working in an area outside a combat zone when the Department of Defense certifies that area is in direct support of military operations in a combat zone. There are limits to this exclusion for commissioned officers.
  • Other nontaxable benefits: Base allowance for housing, base allowance for subsistence and uniform allowances are among several government pay items excluded from gross income, which means they are not taxed.
  • Moving expenses: Some non-reimbursed moving expenses may be tax deductible. To deduct these expenses, the taxpayer must be a member of the Armed Forces on active duty and their move must be due to a military order or result of a permanent change of station.
  • Deadline extensions: Some members of the military – such as those who serve overseas – can postpone most tax deadlines. Those who qualify can get automatic extensions of time to file and pay their taxes.
  • Earned income tax credit: Special rules allow military members who get nontaxable combat pay to choose to include it in their taxable income. One reason they might do this is to increase the amount of their earned income tax credit. People who qualify for this credit could owe less tax or even get a larger refund.
  • Joint return signatures: Both spouses must normally sign a joint income tax return. However, if military service prevents that from happening, one spouse may be able to sign for the other or get a power of attorney. Service members may want to consult with their installation's legal office to see if a power of attorney is right for them. 
  • Reserve and National Guard travel: Members of a reserve component of the Armed Forces may be able to deduct their unreimbursed travel expenses on their return. In order to do so, they must travel more than 100 miles away from home in connection with their performance of services as a member of the reserves.
  • ROTC allowances: Some amounts paid to ROTC students in advanced training are not taxable. However, active duty ROTC pay is taxable. This includes things like pay for summer advanced camp.

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       

RISKS VS. BENEFITS OF LIFE INSURANCE LOANS

Posted by Admin Posted on Aug 04 2020

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Because of the economic downturn triggered by the COVID-19 crisis, many people have found themselves in need of cash to pay unexpected medical bills, mortgage payments and other expenses. One option is to borrow against the cash value of a permanent life insurance policy, but such loans aren’t risk-free.

Recognizing potential pitfalls

Before you borrow against a life insurance policy, consider risks such as:

Reduced benefits for heirs. If you die before repaying the loan or choose not to repay it, the loan balance plus any accrued interest will reduce the benefits payable to your heirs. This can be a hardship for family members if they’re counting on the insurance proceeds to replace your income or to pay estate taxes or other expenses.

Possible financial and tax consequences. Depending on your repayment schedule, there’s a risk that the loan balance plus accrued interest will grow beyond your policy’s cash value. This may cause your policy to lapse, which can trigger unfavorable tax consequences and deprive your family of the policy’s death benefit.

Eligibility. You can borrow against a life insurance policy only if you’ve built up enough cash value. This can take many years, so don’t count on a relatively new policy as a funding source.

Tapping cash value

There can be advantages to borrowing from a life insurance policy over a traditional loan. These include:

Lower costs. Interest rates are usually lower than those available from banks and credit card companies, and there are little or no fees or closing costs.

Simplicity and speed. So long as your insurer offers loans, there’s no approval process, lengthy application, credit check or income verification. Generally, you can obtain the funds within five to 10 business days.

Flexibility. Most insurers don’t impose restrictions on use of the funds. And you have the flexibility to design your own repayment schedule. You can even choose not to repay the loan, though that has negative tax consequences.

Generally no tax impact (as long as policy doesn’t lapse). Funds acquired by borrowing from a policy aren’t considered income, so they’re typically not reported to the IRS. This differs significantly from surrendering a policy in exchange for its cash value, which triggers taxable gains to the extent the cash value exceeds your investment in the policy (generally, premiums paid less any dividends or withdrawals). Note that interest paid on the loan typically isn’t deductible.

Reviewing your options

Be sure you really need to borrow from a life insurance policy before doing so. Consider alternatives, such as selling an asset or reducing expenses. We can help you make the right choice.

Sidebar: Dispelling a myth

There’s a common misconception that, when you borrow against a life insurance policy, you’re “borrowing from yourself.” In other words, when you pay interest on the loan, you’re essentially paying yourself.

This may be true when you borrow money from a retirement plan, but it’s not accurate when it comes to life insurance policy loans. In fact, you’re borrowing from your insurer, pledging the cash value of your policy as collateral and paying interest to the company. Policy loans may be cheaper than traditional loans, but they’re not free.

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 POSSIBLE IMPLICATIONS IF I CO-SIGN FOR A LOAN?-

Posted by Admin Posted on Aug 04 2020

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IRS: NEW LAW PROVIDES RELIEF FOR ELIGIBLE TAXPAYERS WHO NEED FUNDS FROM IRAs AND OTHER RETIREMENT PLANS

Posted by Admin Posted on Aug 04 2020

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WASHINGTON — The Internal Revenue Service provided a reminder that the Coronavirus Aid, Relief, and Economic Security (CARES) Act can help eligible taxpayers in need by providing favorable tax treatment for withdrawals from retirement plans and IRAs and allowing certain retirement plans to offer expanded loan options.

Can I get money from my retirement account now?

Under the CARES Act, individuals eligible for coronavirus-related relief may be able to withdraw up to $100,000 from IRAs or workplace retirement plans before December 31, 2020, if their plans allow. In addition to IRAs, this relief applies to 401(k) plans, 403(b) plans, profit-sharing plans and others.

These coronavirus-related withdrawals:

  • May be included in taxable income either over a three-year period (one-third each year) or in the year taken, at the individual's option.
     
  • Are not subject to the 10% additional tax on early distributions that would otherwise apply to most withdrawals before age 59½,
     
  • Are not subject to mandatory tax withholding, and
     
  • May be repaid to an IRA or workplace retirement plan within three years.

Can I take out a loan?

Individuals eligible to take coronavirus-related withdrawals may also, until September 22, 2020, be able to borrow as much as $100,000 (up from $50,000) from a workplace retirement plan, if their plan allows. Loans are not available from an IRA.

For eligible individuals, plan administrators can suspend, for up to one year, plan loan repayments due on or after March 27, 2020, and before January 1, 2021. A suspended loan is subject to interest during the suspension period, and the term of the loan may be extended to account for the suspension period.

Taxpayers should check with their plan administrator to see if their plan offers these expanded loan options and for more details about these options.

Who is eligible?

To be eligible for COVID-19 relief, coronavirus-related withdrawals or loans can only be made to an individual if:

  • The individual is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (collectively, COVID-19) by a test approved by the Centers for Disease Control and Prevention (including a test authorized under the Federal Food, Drug, and Cosmetics Act);
     
  • The individual's spouse or dependent is diagnosed with COVID-19 by such a test; or
     
  • The individual experiences adverse financial consequences as a result of:
     
    • The individual being quarantined, being furloughed or laid off, having work hours reduced, being unable to work due to lack of childcare, having a reduction in pay (or self-employment income), or having a job offer rescinded or start date for a job delayed, due to COVID-19;
    • The individual's spouse or a member of the individual's household (that is, someone who shares the individual's principal residence) being quarantined, being furloughed or laid off, having work hours reduced, being unable to work due to lack of childcare, having a reduction in pay (or self-employment income), or having a job offer rescinded or start date for a job delayed, due to COVID-19; or
    • Closing or reducing hours of a business owned or operated by the individual, the individual's spouse, or a member of the individual's household, due to COVID-19.

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 BANKS LOOK FOR IN A LOAN REQUEST?

Posted by Admin Posted on Aug 04 2020

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

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

  • Have you invested at least 25% or 50% of savings or personal equity into the business for the loan you are requesting? (Keep in mind that 100% of your business will not be financed by an investor.)
  • Do your work history, your credit report and letters of recommendation show a healthy record of credit worthiness? This is a key factor.
  • Do you have the training and experience necessary to operate a successful business?
  • Do your loan proposal and business plan document your knowledge of and dedication to the success of the business?
  • Is the cash flow of the business sufficient to make the monthly payments on the requested loan?

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WITH GLITCH FIXED, CONSIDER BUSINESS PROPERTY UPGRADES

Posted by Admin Posted on Aug 04 2020

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The Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law in March, has provided more than just relief in response to the COVID-19 pandemic. It also contains a beneficial change in the tax rules for many improvements to interior parts of nonresidential buildings, referred to as qualified improvement property (QIP).

Recent history

When the Tax Cuts and Jobs Act was passed in 2017, it contained an inadvertent drafting error by Congress. The error made it so that any QIP placed in service after December 31, 2017, wasn’t classified as 15-year property and therefor wasn’t eligible for 100% bonus depreciation. So, the cost of QIP had to be deducted over a 39-year period rather than over a 15-year period or entirely in the year the QIP was placed in service.

Investments qualifying as QIP generally include upgrades to retail, restaurant and leasehold property. Hence, the problem became commonly known as the “retail glitch.”

The fix

Fortunately, when drafting the CARES Act, Congress fixed the retail glitch. Most businesses can now claim 100% bonus depreciation for QIP — or depreciate it over 15 years — assuming all applicable rules are followed. (Note that improvements related to a building’s enlargement, elevator or escalator, or internal structural framework don’t qualify.)

Because of the slowdown in the U.S. economy, your business (like so many others) may not be in a financial position to undertake a QIP project right away. But when investing in your business is looking feasible, factor this tax break into your considerations for making future property improvements.

Even if you can’t afford to invest in QIP this year, you might be able to enjoy some QIP tax benefits now. The correction is retroactive to any QIP placed in service after December 31, 2017. So if you made eligible improvements in 2018 or 2019, you may be able claim a tax refund.

Next steps

While claiming 100% bonus depreciation may sound like a no-brainer, keep in mind that in some circumstances it might be more beneficial to depreciate QIP over 15 years. Either option can produce a tax refund for prior years; it’s just the size of the refund that will differ. We can help you determine if your property improvement investments qualify as QIP and, if so, assess whether 100% bonus depreciation or 15-year depreciation is better for you.

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

Source: Thomson Reuters    

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

Posted by Admin Posted on July 29 2020

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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, pleasegiveus a call at 305-274-5811.                                   

Source: Thomson Reuters

-WHICH IS BETTER, BUYING OR LEASING MY NEXT CAR?-

Posted by Admin Posted on July 23 2020

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

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

  • Beginning costs
  • Continual costs
  • Total costs
  • Is there a possibility of deduction of any of the costs due to the car being used for business?
  • How important is it to have ownership of the car

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

Source: Thomson Reuters

IRS UNCLAIMED REFUNDS OF $1.5 BILLION WAITING FOR TAX YEAR 2016; TAXPAYERS FACE JULY 15 DEADLINE

Posted by Admin Posted on July 23 2020

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WASHINGTON — Unclaimed income tax refunds worth more than $1.5 billion await an estimated 1.4 million individual taxpayers who did not file a 2016 federal income tax return, according to the Internal Revenue Service.

"The IRS wants to help taxpayers who are owed refunds but haven't filed their 2016 tax returns yet," said IRS Commissioner Chuck Rettig. "Time is quickly running out for these taxpayers. There's only a three-year window to claim these refunds, and the window closes on July 15. To claim the refund, a return for tax year 2016 must be filed by July 15, 2020."

In Notice 2020-23 (PDF), the IRS extended the due date for filing tax year 2016 returns and claiming refunds for that year to July 15, 2020, as a result of the COVID-19 pandemic. As the IRS is issuing Economic Impact Payments to Americans, the agency urges taxpayers who haven't filed past due tax returns to file now to claim these valuable refunds.

To collect refunds for tax year 2016, taxpayers must file their 2016 tax returns with the IRS no later than this year's extended tax due date of July 15, 2020.

The IRS estimates the midpoint for the potential refunds for 2016 to be $861 — that is, half of the refunds are more than $861 and half are less.

In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury.

For 2016 tax returns, the window closes July 15, 2020, for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15 date.

The IRS reminds taxpayers that there is no penalty for filing late when a refund is involved. Taxpayers seeking a 2016 tax refund should know that their checks may be held if they have not filed tax returns for 2017 and 2018. In addition, the refund will be applied to any amounts owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans.

By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2016. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2016, the credit was worth as much as $6,269.

The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2016 were:

  • $47,955 ($53,505 if married filing jointly) for those with three or more qualifying children;
  • $44,648 ($50,198 if married filing jointly) for people with two qualifying children;
  • $39,296 ($44,846 if married filing jointly) for those with one qualifying child, and;
  • $14,880 ($20,430 if married filing jointly) for people without qualifying children.

Current and prior year tax forms (such as the tax year 2016 Form 1040, 1040-A and 1040-EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2016, 2017 or 2018 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. Alternatively, they can mail Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return.

State-by-state estimates of individuals who may be due 2016 income tax refunds

State or District Estimated Number of Individuals Median Potential Refund Total Potential Refunds*
Alabama 23,300 $859 $24,614,400
Alaska 5,500 $979 $6,754,900
Arizona 32,400 $762 $32,281,600
Arkansas 13,400 $822 $13,798,800
California 130,600 $816 $135,981,300
Colorado 27,500 $809 $28,276,500
Connecticut 14,300 $930 $16,213,300
Delaware 5,600 $878 $6,114,500
District of Columbia 3,700 $904 $4,224,600
Florida 99,000 $874 $105,706,400
Georgia 48,600 $792 $49,682,700
Hawaii 7,700 $932 $8,785,600
Idaho 6,200 $727 $5,876,000
Illinois 51,700 $909 $57,312,200
Indiana 32,700 $887 $35,129,700
Iowa 14,700 $908 $15,735,600
Kansas 14,600 $877 $15,706,800
Kentucky 18,700 $869 $19,517,100
Louisiana 24,400 $849 $26,410,100
Maine 5,600 $802 $5,482,200
Maryland 28,200 $873 $31,619,700
Massachusetts 29,900 $956 $34,261,900
Michigan 46,600 $853 $49,591,400
Minnesota 21,000 $803 $21,155,300
Mississippi 12,900 $777 $12,931,600
Missouri 32,400 $828 $33,522,400
Montana 4,600 $781 $4,582,000
Nebraska 7,800 $845 $8,081,700
Nevada 15,900 $859 $16,922,300
New Hampshire 6,500 $965 $7,474,300
New Jersey 36,200 $936 $41,268,900
New Mexico 9,600 $833 $10,219,600
New York 70,300 $958 $80,830,100
North Carolina 44,900 $833 $46,044,500
North Dakota 4,000 $949 $4,539,800
Ohio 52,900 $841 $54,542,900
Oklahoma 21,000 $866 $22,600,000
Oregon 21,400 $762 $21,237,200
Pennsylvania 55,200 $919 $60,505,200
Rhode Island 3,900 $926 $4,410,100
South Carolina 17,200 $769 $17,323,700
South Dakota 3,800 $899 $3,976,100
Tennessee 29,000 $840 $29,834,800
Texas 143,400 $898 $159,809,900
Utah 11,100 $766 $11,037,700
Vermont 2,800 $892 $2,897,400
Virginia 37,900 $827 $39,977,600
Washington 37,200 $918 $42,273,300
West Virginia 7,200 $921 $7,830,000
Wisconsin 19,900 $781 $19,483,100
Wyoming 3,400 $920 $3,766,100
Totals 1,418,300 $861 $1,518,154,900

*Excluding credits.

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       

 

-TAXPAYERS NEED TO RESUME PAYMENTS BY JULY 15

Posted by Admin Posted on July 22 2020

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WASHINGTON — The IRS reminds taxpayers who took advantage of the People First Initiative tax relief and did not make previously owed tax payments between March 25 to July 15 that they need to restart their payments.

As the IRS continues to reopen its operations across the country, taxpayers who were in payment agreements and skipped any payments from March 25 and July 15 should start paying again to avoid penalties and possible default on their agreements.

"Through the People First Initiative, we have endeavored to provide unprecedented relief to help those who owed federal taxes and allow them extra time," said IRS Commissioner Chuck Rettig. "As we resume a phased-in approach to our normal operations, we are sympathetic to the many Americans still suffering COVID-related hardships and stand ready to continue offering help to those who need it."

Here's what taxpayers should do to resume their payment agreements to the IRS, including Installment Agreements, Offers in Compromise, and Private Debt Collection program payments:

Installment Agreements

Taxpayers who suspended their installment agreement payments between April 1 and July 15, 2020, will need to resume their payments by their first monthly payment due date after July 15. Taxpayers should be aware that the IRS didn't default their agreement, but interest did accrue, and the balance remained.

Taxpayers who had their bank suspend direct debit payments should contact the bank immediately to ensure their first monthly payment due date occurring on or after July 15, 2020 is sent to avoid penalties.

If a taxpayer can't meet their current installment agreement terms due to a COVID related hardship, they can revise the agreement on IRS.gov/paymentplan or call the customer service number on their IRS notice if they have a Direct Debit Installment Agreement (DDIA).

Offer in Compromise

Pending Offers: If the IRS is currently reviewing a taxpayer's submitted offer but hasn't accepted it yet, the taxpayer should resume their required payments starting July 15, 2020. The IRS will amend the taxpayer's offer to allow them to pay any skipped payments at the end of the offer period, if the offer is accepted.

Already Accepted Offers: If a taxpayer has an Offer in Compromise agreement, and the taxpayer was unable to make the payments on their accepted offer because of a COVID-19 hardship, the taxpayer should resume payments and make up the missed payments by July 15, 2020. If the taxpayer is unable to make up the missed payments, they can contact the number on the IRS notice to discuss their situation.

Private Debt Collection

The IRS did not forward new delinquent accounts to Private Collection Agencies (PCAs) from April 1 through July 15, 2020, and PCA interaction with taxpayers was limited to inbound telephone calls unless requested by a taxpayer in a voicemail or correspondence.

Taxpayers who had their PCA payments on hold should resume payments by July 15. The IRS encourages taxpayers to work with their assigned PCA to establish a new payment arrangement or restructure an existing one based on their current situation.

Taxpayers Who Owe But Can't Pay

The IRS reminds taxpayers who are experiencing a hardship or who have questions about their payments to call the customer service number provided on their notice but be mindful that wait times could be long. Phone lines remain extremely busy as the IRS resumes operations. Taxpayers also have a variety of options through IRS.gov/payments to make one time or recurring payments without having to contact the IRS.

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

Source : IRS       

-DEDUCTIBLE HOME OFFICE-

Posted by Admin Posted on July 22 2020

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Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

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

Source: Thomson Reuters

Taxpayers should report tip income on their tax return

Posted by Admin Posted on July 22 2020

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Generally, income received from any source, including tips, is taxable. Here's some information to help taxpayers report tip income.

All tips that taxpayers receive are income and subject to federal income tax. Taxpayers must include all tips they receive in their gross income. This includes:

  • Tips directly from customers.
  • Tips added using credit cards.
  • Tips from a tip-splitting arrangement with other employees.

The value of non-cash tips, such as tickets, passes or other items of value is also income and subject to tax.

Three things can help taxpayers to correctly report their tip income.

  • Keep a daily tip record.
  • Report tips to their employer.
  • Report all tips on their income tax return.

Use the Interactive Tax Assistant

This online tool provides answers to tax law questions. Taxpayers can use the Interactive Tax Assistant on IRS.gov to find out if their tip income is taxable.

If an employee receives $20 or more in any month, they must report their tips for that month to their employer by the 10th day of the next month. The employer must withhold federal income, Social Security and Medicare taxes on the reported tips.

The tax filing deadline has been postponed to Wednesday, July 15, 2020. The IRS is processing tax returns, issuing refunds and accepting payments. Taxpayers who mailed a tax return will experience a longer wait. There is no need to mail a second tax return or call the IRS.

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

Source: IRS      

NO OLVIDE QUE LOS BENEFICIOS DEL SEGURO SOCIAL PUEDEN ESTAR SUJETOS A IMPUESTOS

Posted by Admin Posted on July 22 2020

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Los contribuyentes que reciben beneficios del Seguro Social pueden tener que pagar impuestos federales sobre una parte de esos beneficios.

Los beneficios del Seguro Social incluyen beneficios mensuales de jubilación, supervivencia y discapacidad. No incluyen pagos suplementarios de ingresos de seguridad, que no están sujetos a impuestos.

La parte de los beneficios que están sujetos a impuestos depende de los ingresos y el estado civil tributario del contribuyente.

Para saber si sus beneficios son tributables, los contribuyentes deben:

  • Tomar la mitad del dinero del Seguro Social que recaudaron durante el año y agregarlo a sus otros ingresos.

Otros ingresos incluyen pensiones, salarios, intereses, dividendos y ganancias de capital.

  • Si son solteros y ese total asciende a más de $25,000, entonces parte de sus beneficios del Seguro Social pueden estar sujetos impuestos.

Si están casados ​​y presentan una declaración conjunta, deben tomar la mitad de su Seguro Social, más la mitad del Seguro Social de su cónyuge, y agregarlo a todos sus ingresos combinados. Si ese total es más de $32,000, entonces parte de su Seguro Social puede estar sujeto a impuestos.

El cincuenta por ciento de los beneficios de un contribuyente puede estar sujeto a impuestos si:

  • Presenta como soltero, jefe de familia, viudo o viudo calificado con ingresos de $25,000 a $34,000.
  • Casado que presentó una declaración por separado y vivió separado de su cónyuge durante todo 2019 con ingresos de $25,000 a $34,000.
  • Casado que presenta una declaración conjunta con ingresos de $32,000 a $44,000.

Hasta el 85 por ciento de los beneficios de un contribuyente pueden estar sujetos a impuestos si:

  • Presenta como soltero, jefe de familia o viuda o viudo calificado con más de $34,000 de ingresos.
  • Casado que presenta una declaración conjunta con más de $44,000 de ingresos.
  • Casado ​​que presenta una declaración por separado y vivió separado de su cónyuge durante todo 2019 con más de $34,000 de ingresos.
  • Casado ​​que presenta una declaración por separado y vivió con su cónyuge en cualquier momento durante 2019.

El Asistente Interactivo de Impuestos en IRS.gov puede ayudar a los contribuyentes a responder la pregunta ¿Son tributables mis beneficios de Seguro Social o Retiro Ferroviario Nivel I? (en inglés).

El plazo de presentación de impuestos se pospuso hasta el miércoles, 15 de julio de 2020. El IRS está procesando declaraciones de impuestos, emitiendo reembolsos y aceptando pagos. Los contribuyentes que enviaron una declaración de impuestos experimentarán una espera más larga. No es necesario enviar una segunda declaración de impuestos o llamar al 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         

TAX INCENTIVES FOR EDUCATION

Posted by Admin Posted on July 22 2020

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

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

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

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

Source: Thomson Reuters 

KEEPING UP WITH THE NET OPERATING LOSS RULES

Posted by Admin Posted on July 16 2020

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When a trade or business’s deductible expenses exceed its income, a net operating loss (NOL) generally occurs. When filing your 2019 income tax return, you might find that your business has an NOL — and you may be able to turn it to your tax advantage. But the rules applying to NOLs have changed and changed again. Let’s review.

Pre-TCJA

Before 2017’s Tax Cuts and Jobs Act (TCJA), when a business incurred an NOL, the loss could be carried back up to two years. Any remaining amount could then be carried forward up to 20 years.

A carryback generates an immediate tax refund, boosting cash flow. A carryforward allows the company to apply the NOL to future years when its tax rate may be higher.

Post-TCJA

The changes made under the TCJA to the tax treatment of NOLs generally weren’t favorable to taxpayers. According to those rules, for NOLs arising in tax years ending after December 31, 2017, most businesses couldn’t carry back a qualifying NOL.

This was especially detrimental to trades or businesses that had been operating for only a few years. They tend to generate NOLs in those early years and greatly benefit from the cash-flow boost of a carryback. On the plus side, the TCJA allowed NOLs to be carried forward indefinitely, as opposed to the previous 20-year limit.

For NOLs arising in tax years beginning after December 31, 2017, the TCJA also stipulated that an NOL carryforward generally can’t be used to shelter more than 80% of taxable income in the carryforward year. (Under previous law, generally up to 100% could be sheltered.)

COVID-19 response

The NOL rules were changed yet again under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. For NOLs arising in tax years beginning in 2018 through 2020, taxpayers are now eligible to carry back the NOLs to the previous five tax years. You may be able to file amended returns for carryback years to receive a tax refund now.

The CARES Act also modifies the treatment of NOL carryforwards. For tax years beginning before 2021, taxpayers can now potentially claim an NOL deduction equal to 100% of taxable income (rather than the 80% limitation under the TCJA) for prior-year NOLs carried forward into those years. For tax years beginning after 2020, taxpayers may be eligible for a 100% deduction for carryforwards of NOLs arising in tax years before 2018 plus a deduction equal to the lesser of 1) 100% of NOL carryforwards from post-2017 tax years, or 2) 80% of remaining taxable income (if any) after deducting NOL carryforwards from pre-2018 tax years.

Complicated rules

The NOL rules have always been complicated and multiple law changes have complicated them further. It’s also possible there could be more tax law changes this year affecting NOLs. Please contact us for further clarification and more information.

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

Source: Thomson Reuters 

CHARITABLE GIVING IN A TIME OF CRISIS

Posted by Admin Posted on July 16 2020

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The novel coronavirus (COVID-19) pandemic has created much financial stress, but the crisis has also generated an intense need for charitable action. If you’re able to continue donating during this difficult period, the Coronavirus Aid, Relief, and Economic Security (CARES) Act may make it a little easier for you to do so, whether you’re a small or large donor.

Tax benefits

From an income tax perspective, the CARES Act has expanded charitable contribution deductions. Individual taxpayers who don’t itemize can take advantage of a new above-the-line $300 deduction for cash contributions to qualified charities in 2020. “Above-the-line” means the deduction reduces adjusted gross income (AGI). You can take this in addition to your standard deduction.

For larger donors, the CARES Act has eased the limitation on charitable deductions for cash contributions made to public charities in 2020, boosting it from 60% to 100% of AGI. There’s no requirement that your contributions be related to COVID-19.

Careful steps

To be able to claim a donation deduction, whatever the size, you need to ensure you’re giving to a qualified charity. You can check a charity’s eligibility to receive tax-deductible contributions by visiting the IRS’s Tax-Exempt Organization Search.

If you’re making a large gift, it’s a good idea to do additional research on the charities you’re considering so you can make sure they use their funds efficiently and effectively. The IRS tool provides access to detailed financial information about charitable organizations, such as Form 990 information returns and IRS determination letters.

Even if a charity is financially sound when you make a gift, there’s no guarantee it won’t suffer financial distress, file for bankruptcy protection or even cease operations down the road. The last thing you likely want is for a charity to use your gifts to pay off its creditors or for a purpose unrelated to the mission that inspired you to give in the first place.

One way to manage these risks is to restrict the use of your gift. For example, you might limit the use to assisting a specific constituency or funding medical research. These restrictions can be documented in a written gift or endowment fund agreement.

Generous impact

Indeed, charitable giving is more important than ever. Contact our firm for help allocating funds for a donation and understanding the tax impact of your generosity.

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 FILE ON TIME EVEN IF THEY CAN’T PAY THEIR FULL TAX BILL

Posted by Admin Posted on July 16 2020

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Taxpayers should file their tax return by the deadline even if they cannot pay the full amount due. Otherwise, they may end up owing even more because penalties and interest can cause a taxpayer's debt to grow.

If a taxpayer owes taxes, but can't pay by the July 15, 2020 deadline, they should:

File their tax return or request an extension of time to file.

Taxpayers who can't file their return on time, should request an extension to file. Without this extension, they may face a failure-to-file penalty.

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.

Pay what they can by the deadline.

Taxpayers must pay their bill on time. If they don't, they will could face a failure-to-pay penalty. Taxpayers should remember that an extension of time to file is not an extension of time to pay. 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.

Set up a payment plan.

Taxpayers who know they owe taxes but can't pay by the deadline have options. For example, they can apply for a payment plan on IRS.gov or in writing using Form 9465, Installment Agreement Request.

The tax filing deadline has been postponed to Wednesday, July 15, 2020. The IRS is processing tax returns, issuing refunds and accepting payments. Taxpayers who mailed a tax return will experience a longer wait. There is no need to mail a second tax return or call the IRS.

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

Source: IRS       

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 Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-IS NOW THE TIME FOR SOME LIFE INSURANCE?-

Posted by Admin Posted on Sept 30 2019

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Many people reach a point in life when buying some life insurance is highly advisable. Once you determine that you need it, the next step is calculating how much you should get and what kind.

Careful calculations

If the coverage is to replace income and support your family, this starts with tallying the costs that would need to be covered, such as housing and transportation, child care, and education — and for how long. For many families, this will be only until the youngest children are on their own.

Next, identify income available to your family from Social Security, investments, retirement savings and any other sources. Insurance can help bridge any gaps between the expenses to be covered and the income available.

If you’re purchasing life insurance for another reason, the purpose will dictate how much you need:

  • Funeral costs. An average funeral bill can top $7,000. Gravesite costs typically add thousands more to this number.
  • Mortgage payoff. You may need coverage equal to the amount of your outstanding mortgage balance.
  • Estate planning. If the goal is to pay estate taxes, you’ll need to estimate your estate tax liability. If it’s to equalize inheritances, you’ll need to estimate the value of business interests going to each child active in your business and purchase enough coverage to provide equal inheritances to the inactive children.

Term vs. permanent

The next question is what type of policy to purchase. Life insurance policies generally fall into two broad categories: term or permanent.

Term insurance is for a specific period. If you die during the policy’s term, it pays out to the beneficiaries you’ve named. If you don’t die during the term, it doesn’t pay out. It’s typically much less expensive than permanent life insurance, at least if purchased while you’re relatively young and healthy.

Permanent life insurance policies last until you die, so long as you’ve paid the premiums. Most permanent policies build up a cash value that you may be able to borrow against. Over time, the cash value also may reduce the premiums.

Because the premiums are typically higher for permanent insurance, you need to consider whether the extra cost is worth the benefits. It might not be if, for example, you may not require much life insurance after your children are grown.

But permanent life insurance may make sense if you’re concerned that you could become uninsurable, if you’re providing for special-needs children who will never be self-sufficient, or if the coverage is to pay estate taxes or equalize inheritances.

Some comfort

No one likes to think about leaving loved ones behind. But you’ll no doubt find some comfort in having a life insurance policy that helps cover your family’s financial needs and plays an important role in your estate plan. Let us help you work out the details.

For more information on the appeals process, please contact us!

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-SPECIAL CIRCUMSTANCES-

Posted by Admin Posted on Sept 30 2019

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-EARNED INCOME TAX CREDIT FOR CERTAIN WORKERS-

Posted by Admin Posted on Sept 30 2019

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Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

The IRS estimates that 25 percent of people who qualify don't claim the credit and at the same time, there are millions of Americans who have claimed the credit in error, many of whom simply don't understand the criteria.

EITC is based on the amount of your earned income and the number of qualifying children in your household. If you have children, they must meet the relationship, age and residency requirements. And, you must file a tax return to claim the credit.

It's easier than ever to find out if you qualify for EITC using the online tool, EITC Assistant. Please contact us for more information!

Are you eligible for any of these tax credits?

Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns, advises the IRS. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Below are some of the credits taxpayers could be eligible to claim:

  • Earned Income Tax Credit This is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the EITC. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. For more information, see IRS Publication 596, Earned Income Credit (EIC).
  • Child Tax Credit This credit is for people who have a qualifying child. The maximum amount of the credit is $2,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see Pub. 972, Child Tax Credit.
  • Child and Dependent Care Credit This is for expenses paid for the care of children under age 13, or for a disabled spouse or dependent, to enable the taxpayer to work. There is a limit to the amount of qualifying expenses. The credit is a percentage of those qualifying expenses. For more information, see Pub. 503, Child and Dependent Care Expenses.
  • Adoption Credit Adoptive parents can take a tax credit of up to $13,460 for 2016 and $13,570 for 2017 for qualifying expenses paid to adopt an eligible child. For more information, see Form 8839, Qualified Adoption Expenses.
  • Credit for the Elderly and Disabled This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are citizens or residents. There are income limitations. For more information, see Pub.524, Credit for the Elderly or the Disabled.
  • Education Credits There are two credits available, the American Opportunity Credit (formerly called the Hope Credit) and the Lifetime Learning Credit, for people who pay higher education costs. The American Opportunity Credit is for the payment of the first four years of tuition and related expenses for an eligible student for whom the taxpayer claims an exemption on the tax return. The Lifetime Learning Credit is available for all post-secondary education for an unlimited number of years. A taxpayer cannot claim both credits for the same student in one year. For more information, see Publication 970, Tax Benefits for Education.
  • Retirement Savings Contribution Credit Eligible individuals may be able to claim a credit for a percentage of their qualified retirement savings contributions, such as contributions to a traditional or Roth IRA or salary reduction contributions to a SEP or SIMPLE plan. To be eligible, you must be at least age 18 at the end of the year and not a full-time student or an individual for whom someone else claims a personal exemption. Also, your adjusted gross income (AGI) must be below a certain amount. For more information, see chapter three in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

There are other credits available to eligible taxpayers.  Please contact us so we may realize your specific situation, and offer advice.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.                                   

Source: Thomson Reuters

-BUSINESS DOCUMENTS-

Posted by Admin Posted on Sept 20 2019

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Business Documents To Keep For One Year

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

Business Documents To Keep For Three Years

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

Business Documents To Keep For Six Years

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

Business Records To Keep Forever

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-AMENDED RETURNS-

Posted by Admin Posted on Sept 19 2019

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

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-FOR BUSINESS FINANCING, WHAT KINDS OF LOANS EXIST?-

Posted by Admin Posted on Sept 19 2019

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You must know the exact amount of money that you need, what your purpose is and how you will repay it in order to be successful in getting a loan. You must convince the lender in a written proposal that you are a good credit risk.

There are two basic kinds of loans, although terms vary by lender:

Short-term and long-term, maturity periods of up to one year are generally short-term, which include accounts receivable loans, working capital loans and lines of credit.

Maturities greater than a year and less than seven years is a typical long-term loan. Equipment and real estate loans can have maturity up to 25 years. Major business expenses such as purchasing real estate and facilities, durable equipment, construction, vehicles, furniture and fixtures, etc. are a few purposes for long-term loans.                                                

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-TAX SAVING TECHNIQUES-

Posted by Admin Posted on Sept 19 2019

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-DEDUCTIBLE TAXES

Posted by Admin Posted on Sept 19 2019

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-WHAT ARE THE POSSIBLE IMPLICATIONS IF I CO-SIGN FOR A LOAN?-

Posted by Admin Posted on Aug 30 2019

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

should I refinance?

Posted by Admin Posted on Aug 30 2019

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-deducting mortgage interest-

Posted by Admin Posted on Aug 30 2019

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHAT DO BANKS LOOK FOR IN A LOAN REQUEST?

Posted by Admin Posted on Aug 30 2019

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

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

  • Have you invested at least 25% or 50% of savings or personal equity into the business for the loan you are requesting? (Keep in mind that 100% of your business will not be financed by an investor.)
  • Do your work history, your credit report and letters of recommendation show a healthy record of credit worthiness? This is a key factor.
  • Do you have the training and experience necessary to operate a successful business?
  • Do your loan proposal and business plan document your knowledge of and dedication to the success of the business?
  • Is the cash flow of the business sufficient to make the monthly payments on the requested loan?

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- HOW DOES LEGAL TREATMENT DIFFER BETWEEN MARRIED AND UNMARRIED COUPLES?

Posted by Admin Posted on Aug 30 2019

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Unmarried couples don't:

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

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

Source: Thomson Reuters

-LEGAL ISSUES DURING A DIVORCE

Posted by Admin Posted on Aug 30 2019

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

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

  • If there are important issues with regards to child custody, alimony or assets, find your own attorney.
  • Use referrals from other professionals, trusted friends or the American Academy of Matrimonial Lawyers (www.aaml.org) to find a good matrimonial lawyer.
  • Verify that the agreement of divorce approaches all topics such as insurance coverage, life health and auto.
  • On IRA accounts, life insurance policies, pension plans, 401(k) plans, and other retirement accounts make sure to modify the beneficiaries.
  • Update your will.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

 Source: Thomson Reuters

-WHICH IS BETTER, BUYING OR LEASING MY NEXT CAR?

Posted by Admin Posted on Aug 30 2019

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

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

•             Beginning costs

•             Continual costs

•             Total costs

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

•             How important is it to have ownership of the car

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

Source: Thomson Reuters

-DEDUCTIBLE HOME OFFICE

Posted by Admin Posted on Aug 30 2019

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Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

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

Source: Thomson Reuters

-TAX INCENTIVES FOR EDUCATION

Posted by Admin Posted on Aug 29 2019

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

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

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

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

Source: Thomson Reuters 

-CHARITABLE CONTRIBUTIONS

Posted by Admin Posted on Aug 19 2019

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

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

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

Organizations can tell you if they are qualified and if donations to them are deductible. IRS.gov has an Exempt Organizations Select Check online tool to help you see if an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified. Alternatively, contact us for more information!

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

Source: Thomson Reuters

-4 QUESTIONS TO ASK BEFORE HIRING HOUSEHOLD

Posted by Admin Posted on Aug 19 2019

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

1. Who’s considered a household employee?

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

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

2. When do I pay employment taxes?

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

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

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

3. Are there exceptions?

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

4. How do I make tax payments?

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

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

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

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

Source: Thomson Reuters

-IRS ALGORITHMS COULD DETECT FRAUD AND INACCURACIES IN TAX RETURNS

Posted by Admin Posted on Aug 19 2019

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

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

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

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

Source: IRS

SELF EMPLOYED? YOU MAY NEED TO INCREASE OR LOWER THE AMOUNT OF TAXES YOU PAY

Posted by Admin Posted on Aug 07 2019

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Self-employed workers are responsible for paying taxes directly to the IRS. One way is to make estimated tax payments during the year. The next due date for 2019 is Sept. 16.

The Tax Cuts and Jobs Act changed the way tax is calculated for those with substantial income not subject to withholding. As a result, many self-employed workers may need to raise or lower the amount of tax they pay each quarter.

The revised estimated tax package, Form 1040-ES, on IRS.gov is designed to help taxpayers calculate their estimated payments correctly. The package includes a quick rundown of key tax changes, income tax rate schedules for 2019, and a worksheet for figuring the right amount to pay.

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

Source: IRS  

YOU CAN CHECK THE STATUS OF YOUR REFUND

Posted by Admin Posted on Aug 07 2019

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Employees and other wage earners who filed an extension and are submitting their 2018 tax return this summer can easily check the status of their refund by using the IRS “Where’s My Refund?” tool.

This tool is available on IRS.gov and through the IRS2Go app. Taxpayers can use Where’s My Refund? to start checking the status of their tax return within 24 hours after the IRS receives an e-filed return. For paper returns, the wait is four to six weeks after the return was mailed to the IRS.

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

Source: IRS   

Aquí está la información acerca de quién puede deducir gastos de vehículos en sus declaraciones de impuestos

Posted by Admin Posted on Aug 07 2019

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Los contribuyentes que han deducido el uso de gastos de operar un vehículo en declaraciones de impuestos anteriores deben revisar si todavía pueden reclamar esta deducción. Algunos contribuyentes pueden, otros no.

Aquí hay una lista de los contribuyentes que pueden reclamar esta deducción cuando presentan sus declaraciones de impuestos:

Dueños de negocios y trabajadores por cuenta propia

Las personas que son dueños de un negocio o son trabajadores por cuenta propia y usan su vehículo para negocios pueden deducir los gastos de automóvil en su declaración de impuestos. Si un contribuyente usa el automóvil para ambos propósitos, negocio y personal, debe dividir sus gastos. La deducción se basa en la porción de millaje real usada para el negocio.

Hay dos métodos para determinar sus gastos deducibles de medio de transporte:

1.   Usando los gastos actuales.

o    Algunos ejemplos de gastos actuales incluyen:

  • Depreciación
  • Pagos de arrendamiento
  • Gasolina y aceite
  • Llantas
  • Reparaciones
  • Seguro
  • Gastos de registración/licencias
     

2.   Usando la tasa estándar de millaje.

o    Los contribuyentes que quieren usar la tasa estándar de millaje para un auto propio deben escoger este método en el primer año en que el automóvil está disponible para su uso en su negocio. 

o    Si un negocio desea usar la tasa estándar de millaje por un auto de alquiler, deben usar esta tasa por el periodo completo del alquiler.

o    La tasa estándar de millaje para 2018 es de 54.5 centavos por milla. Para 2019, es de .58 centavos por milla.

Hay requisitos de mantenimiento de archivos (en inglés) para ambos métodos.

Empleados

Los empleados que usan su automóvil para trabajar ya no pueden tomar una deducción de gastos de negocio según el empleado como parte de sus deducciones detalladas diversas reportadas en el Anexo A.  Los empleados no pueden deducir este costo incluso si su empleador no reembolsa al empleado por usar su propio auto. Esto es para los años tributarios posteriores a diciembre de 2017. La Ley de Empleos y Reducción de Impuestos suspendió varias deducciones detalladas sujetas al piso del 2 por ciento. 

Sin embargo, ciertos contribuyentes todavía pueden deducir los gastos de viaje de los empleados no reembolsados, esto incluye a los reservistas de las Fuerzas Armadas, artistas calificados y funcionarios del gobierno estatal o local.

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

Fuente: IRS  

IRS has begun sending letters to virtual currency owners advising them to pay back taxes, file amended returns; part of agency’s larger efforts

Posted by Admin Posted on Aug 07 2019

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WASHINGTON — The Internal Revenue Service has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly.

"Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," said IRS Commissioner Chuck Rettig. "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."

The IRS started sending the educational letters to taxpayers last week. By the end of August, more than 10,000 taxpayers will receive these letters. The names of these taxpayers were obtained through various ongoing IRS compliance efforts.

For taxpayers receiving an educational letter, there are three variations: Letter 6173, Letter 6174 or Letter 6174-A, all three versions strive to help taxpayers understand their tax and filing obligations and how to correct past errors.

Taxpayers are pointed to appropriate information on IRS.gov, including which forms and schedules to use and where to send them.

Last year the IRS announced a Virtual Currency Compliance campaign to address tax noncompliance related to the use of virtual currency through outreach and examinations of taxpayers. The IRS will remain actively engaged in addressing non-compliance related to virtual currency transactions through a variety of efforts, ranging from taxpayer education to audits to criminal investigations.

Virtual currency is an ongoing focus area for IRS Criminal Investigation.

IRS Notice 2014-21 states that virtual currency is property for federal tax purposes and provides guidance on how general federal tax principles apply to virtual currency transactions. Compliance efforts follow these general tax principles. The IRS will continue to consider and solicit taxpayer and practitioner feedback in education efforts and future guidance.

The IRS anticipates issuing additional legal guidance in this area in the near future.

Taxpayers who do not properly report the income tax consequences of virtual currency transactions are, when appropriate, liable for tax, penalties and interest. In some cases, taxpayers could be subject to criminal prosecution.

More information on virtual currencies can be found on IRS.gov. 

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

Source: IRS      

Year-round tax planning includes reviewing eligibility for credits and deductions

Posted by Admin Posted on July 31 2019

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Tax credits and deductions can mean more money in a taxpayer’s pocket. Most people only think about this when they file their tax return. However, thinking about it now can help make filing easier next year.

Taxpayers should be prepared to claim tax credits and deductions. So, here are a few facts about credits and deductions that can help a taxpayer with their year-round tax planning:

  • Taxable income is what’s left over after someone subtracts any eligible deductions from their adjusted gross income. This includes the standard deduction. In fact, most individual taxpayers take the standard deduction. On the other hand, some taxpayers may choose to itemize their deductions because it could lower their AGI even more.
  • The Tax Cuts and Jobs Act made changes to itemized deductions. Many individuals who formerly itemized may find it more beneficial to take the standard deduction.
  • As a general rule, if a taxpayer’s itemized deductions are larger than their standard deduction, they should itemize. Also, in some cases, taxpayers may even be required to itemize.
  • Taxpayers can use the Interactive Tax Assistant to see what expenses they may be able to itemize.
  • Taxpayers can subtract tax credits from the total amount of tax they owe. To claim a credit, taxpayers should keep records that show their eligibility for it.
  • Here are a few examples of taxpayers who can benefit from certain credits:
    • Parents may qualify for credits like the child tax credit and child and dependent care credit.
    • Families with students may qualify for the American opportunity credit or lifetime learning credit.
    • Low to moderate income taxpayers may qualify for the earned income tax credit.
  • Properly claiming these tax credits can reduce taxes owed and boost refunds. Taxpayers can check now see if they qualify to claim it next year on their tax return. Some tax credits, like the EITC, are even refundable, which means a taxpayer can get money refunded to them even if they don’t owe any taxes.

The IRS has several online tools taxpayers can use to stay updated on important tax information that may help with tax planning. In addition to visiting IRS.gov, they can download the IRS2Go app, watch IRS YouTube videos, and follow the IRS on Twitter and Instagram.

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

Source: IRS                      

Planificación tributaria incluye determinar estado civil tributario

Posted by Admin Posted on July 31 2019

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¿Soltero o casado? ¿Hijos o no hijos? Estas son solo un par de preguntas que ayudarán a alguien a determinar su estado civil tributario. Los contribuyentes, generalmente, solo piensan en su estado civil al presentar sus declaraciones. Sin embargo, esto es algo en lo que deben pensar todo el año, especialmente si cambia.

Estas son algunas cosas sobre el estado civil tributario que los contribuyentes deben considerar ahora:

El estado civil de un contribuyente se usa para determinar su:

  • Requisito de presentación
  • Deducción estándar
  • Elegibilidad para ciertos créditos
  • Cantidad correcta de impuestos

Si se aplica más de un estado civil tributario a alguien, puede usar el Asistente Tributario Interactivo (en inglés) para ayudarle a elegir el que resultará en la menor cantidad de impuestos.

Los cambios en la vida familiar pueden afectar la situación tributaria de alguien. Estos cambios incluyen:

  • Matrimonio
  • Divorcio
  • Nacimiento de un bebé
  • Adopción de un hijo
  • Muerte

Generalmente, el estado civil tributario de un contribuyente al 31 de diciembre se aplica a todo el año para propósitos del impuesto federal. Por ejemplo, si alguien se casa a finales de año, para propósitos del impuesto federal se le considera como casados por todo el año.

El IRS tiene varias herramientas que los contribuyentes pueden usar para mantenerse actualizados sobre información tributaria importante que puede ayudarles con la planificación tributaria. Además de visitar IRS.gov/espanol, pueden descargar la aplicación móvil IRS2Go, ver videos de YouTube del IRS y seguir al IRS en Twitter (en inglés) e Instagram (en inglés).

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

Fuente: IRS      

Earned Income Tax Credit (EITC)

Posted by Admin Posted on July 31 2019

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The Earned Income Tax Credit, EITC or EIC, is a benefit for working people with low to moderate income. To qualify, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file. EITC reduces the amount of tax you owe and may give you a refund.

When Can I Expect My Refund?

If you claim the earned income tax credit (EITC) or the additional child tax credit (ACTC) on your tax return, by law the IRS, can’t issue your refund before mid-February. Find out more on when to expect your refund.

After you file your return, the best way to track your refund is Where's My Refund? or the IRS2Go mobile app.

Who Qualifies

Do I Qualify for EITC?

To qualify for EITC you must have earned income from working for someone or from running or owning a business or farm and meet basic rules. And, you must either meet additional rules for workers without a qualifying child or have a child that meets all the qualifying child rules for you.

You can use Publication 5334, Do I Qualify for EITC? to see if you are eligible for EITC.

EITC Assistant

Use the EITC Assistant to see if you qualify for tax years: 2018, 2017, and 2016. The EITC Assistant helps you find out your filing status, if your child is a qualifying child, if you are eligible and estimate the amount of the EITC you may get.

Income Limits and Table

See the EITC Income Limits, Maximum Credit Amounts and Tax Law Updates for the current year, previous years and the upcoming tax year.

Claiming EITC

How Do I Claim EITC?

You need to file a tax return to claim EITC. Find out:

  • the documents you need
  • the common errors to watch for
  • the consequences of filing an EITC return with an error
  • how to get help preparing your return
  • what you need to do if your EITC was denied in a previous year
  • how to claim the credit for earlier tax years

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

Source: IRS      

Foreign Tax Credit

Posted by Admin Posted on July 31 2019

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If you paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.

Qualifying Foreign Taxes

You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U.S. possession. Generally, only income, war profits and excess profits taxes qualify for the credit. See What Foreign Taxes Qualify For The Foreign Tax Credit? for more information.

Taken as a deduction, foreign income taxes reduce your U.S. taxable income. Deduct foreign taxes on Schedule A (Form 1040), Itemized Deductions

Taken as a credit, foreign income taxes reduce your U.S. tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit.

If you choose to exclude either foreign earned income or foreign housing costs, you cannot take a foreign tax credit for taxes on income you can exclude. If you do take the credit, one or both of the choices may be considered revoked.

How to Claim the Foreign Tax Credit

File Form 1116, Foreign Tax Credit, to claim the foreign tax credit if you are an individual, estate or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession.

Corporations file Form 1118, Foreign Tax Credit—Corporations, to claim a foreign tax credit.

French Contribution Sociale Generalisee (CSG) and Contribution au Remboursement de la Dette Sociate (CRDS)

In 2019, the United States and the French Republic memorialized through diplomatic communications an understanding that the French Contribution Sociale Generalisee (CSG) and Contribution au Remboursement de la Dette Sociate (CRDS) taxes are not social taxes covered by the Agreement on Social Security between the two countries. Accordingly, the IRS will not challenge foreign tax credits for CSG and CRDS payments on the basis that the Agreement on Social Security applies to those taxes.

The IRS’s change in policy means individual taxpayers, who paid or accrued these taxes but did not claim them, can file amended returns to claim a foreign tax credit.

Generally individual taxpayers have ten (10) years to file a claim for refund of U.S. income taxes paid if they find they paid or accrued more creditable foreign taxes than what they previously claimed.  The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the foreign taxes were paid or accrued.  This means that amended returns may be filed, using Form 1040X to include accompanying Form 1116, going back to tax year 2009.

Individual taxpayers should write “French CSG/CRDS Taxes” in red at the top of Forms 1040-X, file them with accompanying Forms 1116 in accordance with the instructions for these forms.  U.S. employers may not file for refunds claiming a foreign tax credit for CSG/CRDS withheld or otherwise paid on behalf of their employees.

Compliance Issues

The foreign tax credit laws are complex.  Refer to Foreign Tax Credit Compliance Tips for help in understanding some of the more complex areas of the law.  Below are some of the compliance issues:  

  • Foreign sourced qualified dividends and/or capital gains (including long-term capital gains, collectible gains, unrecaptured section 1250 gains, and section 1231 gains) that are taxed in the United States at a reduced tax rate must be adjusted in determining foreign source income on Form 1116, Foreign Tax Credit, line 1a.
  • Interest expense must be apportioned between U.S. and foreign source income.
  • Charitable contributions are usually not apportioned against foreign source income; however, contributions to charities organized in Mexico, Canada, and Israel must be apportioned against foreign source income.
  • The amount of foreign tax that qualifies as a foreign tax credit is not necessarily the amount of tax withheld by the foreign country. If you are entitled to a reduced rate of foreign tax based on an income tax treaty between the United States and a foreign country, only that reduced tax qualifies for the credit. It is up to you whether you want to ask for a refund from the foreign country of the difference (excess) for which a foreign tax credit is not allowed.
  • If a foreign tax redetermination occurs, a redetermination of your U.S. tax liability is required in most situations. You must file a Form 1040-X or Form 1120-X. Failure to notify the IRS of a foreign tax redetermination can result in a failure to notify penalty.
  • A foreign tax credit may not be claimed for taxes on income that you exclude from U.S. gross income.

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

Source: IRS       

Planificación tributaria debe llevarse a cabo a través del año e incluir repaso de créditos y deducciones para los que califican

Posted by Admin Posted on July 31 2019

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Las deducciones y los créditos tributarios pueden rendirle más dinero a su bolsillo. La mayoría de las personas solo piensan en esto cuando presentan la declaración de impuestos. Sin embargo, pensar en ello ahora puede ayudar a facilitar la presentación de solicitudes el próximo año.

El contribuyente debe prepararse para reclamar créditos tributarios y deducciones. Por esa razón, aquí le presentamos algunos datos sobre créditos y deducciones que le podrían ayudar con su planificación de impuestos a través del año.

  • El ingreso tributable es lo que sobra luego de restar las deducciones elegibles de su ingreso bruto ajustado (AGI, por sus siglas en inglés). Esto incluye la deducción estándar. De hecho, la mayoría de los contribuyentes individuales toman la deducción estándar. Por otro lado, algunos contribuyentes optan por detallar sus deducciones porque de esa manera logran disminuir el AGI aun más. 
     
  • La Ley de Empleos y Reducción de Impuestos hizo cambios a las deducciones detalladas. Muchos contribuyentes que anteriormente detallaban sus deducciones podrían encontrar mayor beneficio al tomar la deducción estándar. 
     
  • Como regla general, si las deducciones detalladas son mayores que la deducción estándar, debería detallar. Además, en algunos casos, puede que el contribuyente tenga el requisito de detallar.
     
  • El contribuyente puede usar el Asistente Tributario Interactivo (en inglés) para ver qué gastos podrá detallar.
     
  • El contribuyente puede restar los créditos tributarios de la cantidad total que adeuda. Para reclamar un crédito, el contribuyente debe mantener registros y archivos que muestre que es elegible para tomarlos. 
     
  • Aquí le presentamos algunos ejemplos del tipo de contribuyente que se puede beneficiar de ciertos créditos:
  • Si reclama estos créditos adecuadamente, podría reducir sus impuestos adeudados y aumentar su reembolso. Los contribuyentes ya pueden revisar si califican para reclamar los créditos el próximo año en la declaración de impuestos. Algunos créditos como el EITC, también son reembolsables, lo cual significa que el contribuyente puede recibir un reembolso aun sin adeudar impuestos.

El IRS dispone de varias herramientas en línea que los contribuyentes pueden usar para mantenerse actualizados acerca de información tributaria importante que le pueda ayudar con la planificación tributaria. Además de visitar IRS.gov/espanol, pueden descargar la aplicación móvil IRS2Go, ver los videos de IRS en YouTube y seguir al IRS en Twitter e Instagram.

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

Fuente: IRS     

Buena planificación tributaria incluye mantener buenos registros

Posted by Admin Posted on July 26 2019

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La planificación tributaria debe ocurrir durante todo el año, no sólo cuando alguien presenta su declaración de impuestos. Una parte importante de la planificación tributaria es el buen mantenimiento de registros. Los registros bien organizados facilitan que un contribuyente prepare su declaración de impuestos. También puede ayudar a proporcionar respuestas en caso de que la declaración del contribuyente sea seleccionada para una auditoria o si el contribuyente recibe una notificación del IRS.

Aquí hay algunas sugerencias para ayudar a los contribuyentes a mantener buenos registros:

  • Los contribuyentes deben desarrollar un sistema que mantenga junta toda su información importante. Pueden usar un programa de software para el registro electrónico. También podrían almacenar documentos en papel en carpetas etiquetadas.
     
  • Durante todo el año, deben agregar registros de impuestos a sus archivos a medida que los reciben. Tener registros a la mano facilita la preparación de una declaración de impuestos.
     
  • También puede ayudarles a descubrir deducciones o créditos potencialmente pasados ​​por alto. Los contribuyentes deben notificar al IRS si su dirección cambia. También deben notificar a la Administración del Seguro Social de un cambio de nombre legal para evitar un retraso en el proceso de su declaración de impuestos.
     
  • Los registros que los contribuyentes deben mantener incluyen recibos, cheques cancelados y otros documentos que respaldan los ingresos, una deducción o un crédito en una declaración de impuestos.
     
  • Los contribuyentes también deben mantener registros relacionados con los bienes que transfieren o venden. Deben mantener estos registros para determinar su costo para calcular la ganancia o la pérdida.
     
  • En general, el IRS sugiere que los contribuyentes mantengan registros durante tres años a partir de la fecha en que presentaron la declaración.
     
  • Para los empresarios, no hay un método particular de contabilidad que deban usar. Sin embargo, los contribuyentes deben encontrar un método que refleje de manera clara y precisa sus ingresos y gastos brutos. Los registros deben corroborar los ingresos y los gastos. Los contribuyentes que tienen empleados deben mantener todos los registros de impuestos de empleo durante al menos cuatro años después de la fecha de vencimiento o pago del impuesto, lo que ocurra más tarde.

El IRS tiene varias herramientas en línea que los contribuyentes pueden usar para estar actualizados sobre información importante que puede ayudar con la planificación tributaria. Además de visitar IRS.gov/espanol, pueden descargar la aplicación IRS2Go, ver videos de YouTube del IRS y seguir al IRS en Twitter e Instagram (en inglés).

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

Fuente: IRS     

Tax planning includes determining filing status

Posted by Admin Posted on July 26 2019

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Single or married? Kids or no kids? These are just a couple of questions that will help someone determine their tax filing status. Taxpayers usually only think about their filing status when filing their returns. However, this is something to think about all year, especially if it changes.

Here are some things about filing status that taxpayers should consider now:

A taxpayer’s filing status is used to determine their:

  • Filing requirements
  • Standard deduction
  • Eligibility for certain credits
  • Correct amount of tax

If more than one filing status applies to someone, they can use the Interactive Tax Assistant to help them choose the one that will result in the lowest amount of tax.

Changes to family life may affect someone’s tax situation. These changes include:

  • Marriage
  • Divorce
  • Birth of a new baby
  • Adoption of a child
  • Death

Typically, a taxpayer’s status on December 31 applies to the entire year for tax purposes. For example, if someone gets married late in the year, for tax purposes they’re considered married for the entire year.

The IRS has several tools taxpayers can use to stay updated on important tax information that may help with tax planning. In addition to visiting IRS.gov, they can download the IRS2Go app, watch IRS YouTube videos, and follow the IRS on Twitter and Instagram.

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

Source: IRS                

Good tax planning includes good recordkeeping

Posted by Admin Posted on July 26 2019

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Tax planning should happen all year long, not just when someone is filing their tax return.  An important part of tax planning is recordkeeping. Well-organized records make it easier for a taxpayer to prepare their tax return. It can also help provide answers if a taxpayer’s return is selected for examination or if the taxpayer receives an IRS notice.

Here are some suggestions to help taxpayers keep good records:

  • Taxpayers should develop a system that keeps all their important info together. They can use a software program for electronic recordkeeping. They could also store paper documents in labeled folders.
  • Throughout the year, they should add tax records to their files as they receive them. Having records readily at hand makes preparing a tax return easier.
  • It may also help them discover potentially overlooked deductions or credits. Taxpayers should notify the IRS if their address changes. They should also notify the Social Security Administration of a legal name change to avoid a delay in processing their tax return.
  • Records that taxpayers should keep include receipts, canceled checks, and other documents that support income, a deduction, or a credit on a tax return.
  • Taxpayers should also keep records relating to property they dispose of or sell. They must keep these records to figure their basis for computing gain or loss.
  • In general, the IRS suggests that taxpayers keep records for three years from the date they filed the return.
  • For business taxpayers, there's no particular method of bookkeeping they must use. However, taxpayers should find a method that clearly and accurately reflects their gross income and expenses. The records should confirm income and expenses. Taxpayers who have employees must keep all employment tax records for at least four years after the tax is due or paid, whichever is later.

The IRS has several online tools taxpayers can use to stay updated on important tax information that may help with tax planning. In addition to visiting IRS.gov, they can download the IRS2Go app, watch IRS YouTube videos, and follow the IRS on Twitter and Instagram.

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

Source: IRS                        

Contribuyentes que necesitan transcripción de impuestos primero deben visitar IRS.gov

Posted by Admin Posted on July 26 2019

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Los contribuyentes pueden necesitar una transcripción de impuestos por muchas razones, como solicitar una hipoteca o un préstamo estudiantil. La página Permítanos ayudarle en IRS.gov ayudará a los contribuyentes a entender las transcripciones de impuestos. Esta página tiene enlaces a información que ayudará a los contribuyentes a conocer los diferentes tipos de transcripciones y el proceso de cómo obtener una.

Ordenar transcripción

  • Desde aquí, los contribuyentes pueden visitar las páginas donde pueden solicitar una transcripción, ya sea en línea o por correo. Los contribuyentes pueden obtener diferentes tipos de transcripciones de la serie 1040 de esta página.

Tipos de transcripción

  • Dependiendo de por qué un contribuyente necesita una transcripción, determinará qué tipo necesita. Esta página contiene información detallada acerca d lo que se incluye en los cinco tipos diferentes de transcripciones.

Preguntas frecuentes

  • Los contribuyentes pueden visitar la página de Preguntas y Respuestas para preguntas específicas sobre el servicio de Ordenar Transcripción en línea. Encontrarán preguntas frecuentes acerca de cómo obtener una transcripción tanto en línea como por correo.

Sin embargo, los contribuyentes podrían no necesitar una transcripción completa. Si solo necesitan averiguar cuánto deben o verificar los pagos que realizaron en los últimos 18 meses, pueden visitar la página de su cuenta de impuestos.

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

Fuente: IRS  

I got an IRS notice; now what do I do?

Posted by Admin Posted on July 25 2019

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The IRS will send a notice or a letter for any number of reasons. It may be about a specific issue on your federal tax return or account, explain changes to your account, ask for more information, or request a payment.

You can handle most of this correspondence without calling or visiting an IRS office if you follow the instructions in the notice.

However, sometimes these communications can be confusing and hard to understand. So, here are some tips to help you when you receive a notice or letter from the IRS. The first step is to identify the important information in the notice or letter.

Start by determining:

Reason the Notice or Letter Was Sent

Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. If you still aren’t able to understand the information provided, the IRS has a Search Notice and Letters feature on the Understanding Your IRS Notice or Letter page.

You can find the notice (CP) or letter (LTR) number on either the top or the bottom right-hand corner of your correspondence. Once you find it, you can enter that number in the search box and you will be taken to a corresponding page that has more general information that may help.

In the Taxpayer Advocate Service, we also have a GET HELP section on various topics that can lead you through important information, steps and actions necessary to help you resolve many common tax issues.

Sometimes you do not need to take any further action, but sometimes you will.

Do I Need to Reply?

Whether you need to reply or not will depend on the issue.

If you agree with the information or change listed on the notice, generally there is no need to reply. That is unless the action causes a balance due, then you would need to take some action. Other times, even if you do agree, you may need to provide specific information to resolve the issue, particularly if you need to verify your identity.

If you disagree, you will need to act as soon as possible, as penalties and interest may be accruing, depending on the circumstances. The letter should outline what that action is and include a due date for your response.

Whether you agree or not, if it requires a reply – do not delay! Delaying can create more issues. See more on this below.

When to Respond By

If your notice or letter requires a response by a specific date, there are many reasons you’ll want to comply. Here are just a few:

  • minimize additional interest and penalty charges;  
  • prevent further action from being taken on the account or against you; and
  • preserve your appeal rights if you don’t agree.

 

How and Where to Reply

All notices and letters should tell you where to send your response, whether it’s to a mailing address or fax number. (Note: The IRS generally does not allow communication via email yet, although they are currently working on developing some alternative digital communication options.)

Most correspondence can be handled without calling or visiting an IRS office if you follow the instructions in your letter or notice.

 What If I Want to Talk to Someone?

Each notice or letter should include contact information. Some phone numbers on letters or notices are general IRS toll-free numbers, but if a specific employee is working your case, it will show a specific phone number to reach that employee or the department manager. The telephone number is usually found in the upper right-hand corner of your notice or letter.

As a last resort, you can use the IRS toll-free number, 1-800-829-1040. Have a copy of your tax return and the correspondence available when you call. But your best option is to use the specific number or address provided.

When Should I Ask for Help?

You can resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional.

If you can’t afford help from a tax professional, you may be eligible for free or low cost representation from an attorney, certified public accountant, or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). In addition, LITCs can provide language assistance if you speak English as a second language and need help understanding the notice or letter.

If your IRS problem is causing you financial hardship, you've tried repeatedly and aren't receiving a response from the IRS, or you feel your taxpayer rights are not being respected, consider contacting us, the Taxpayer Advocate Service.

What Are Your Rights?

Every taxpayer has ten Rights when dealing with the IRS. For example, the Right to Be Informed, means the IRS should give you clear instructions about what you need to do to comply. You also have the Right to Pay No More Than the Correct Amount of Tax and the Right to Challenge the IRS’s Position and Be Heard. So, exercise those Rights and reply to the notice or letter if you disagree with the IRS, or provide the information needed so the IRS can get it right.

If any of those Rights aren’t being respected, again, you can contact us for assistance.

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

Source: IRS    

Filing Past Due Tax Returns

Posted by Admin Posted on July 23 2019

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

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

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

Filing a 2018 Tax Return

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

Filing 2017 or Older Prior Year Tax Returns

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

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

Consequences of Not Filing

Penalty, interest charges and other pitfalls

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

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

Loss of refund

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

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

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

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

The IRS will begin enforcement actions

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

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

Alternatives for Help

For filing help, see the links below. However, if;

  • your problem is causing financial difficulties for you, your family or your business,;  
  • you've tried repeatedly to contact the IRS but no one has responded, or
  • you face (or your business is facing) an immediate threat of adverse action, you should contact us right away.

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

Source: IRS          

Filing, Requesting an Extension of Time to File and Payment Options

Posted by Admin Posted on July 23 2019

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 The tax return filing deadline is almost here. Have you filed yet? The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.

So, if you haven’t filed yet, you should file timely to avoid possible penalties and interest. See below for tax return filing help.

Filing Help

If you need assistance with filing your 2018 tax return still, see our TAS Tax Tip: Tax Filing Help Information. You can also visit the Filing for Individuals page, Online tools and resources can help or Free tax preparation available for millions of families pages on IRS.gov.

If you haven’t filed yet and you cannot do so by the due date, you can request more time. See below for how to request more time to file. Please be aware - there are consequence to not filing at all.

Requesting an Extension of Time to File

To request more time to file your tax return, individuals can file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. This allows you six more months to file. However, if you can file sooner, do it and don’t wait the whole six months. Instead of filing Form 4868, you can apply for an automatic extension by making an electronic payment by the due date of your return. You can pay online or by phone.

See Extension of Time To File Your Tax Return on IRS.gov for more details and for information on filing extension requests for special situations.

An Extension to File Does Not Mean You Can Wait to Pay

The IRS urges people with a filing requirement and a balance due to file by the April deadline even if they cannot pay in full. Taxpayers in this situation should pay what they can and consider a payment plan for the remaining balance. This is because any monies paid after the due date will incur interest and penalties (up to the maximum allowed by law) until the balance is fully paid. There are certain instances when some or all of the penalties charged can be waived, but interest isn’t generally waived for any reason other than an IRS delay.

Payment Options

There are several payment options, but you need to review them all and understand the consequences of each before you choose. You can visit our I can't pay my taxes for more information on where to start.

Other great resources are, IRS provides various payment options for taxpayers who owe but can’t pay in full and Paying Your Taxes.

Don’t Wait

The worst thing you can do is take no action! Get help for filing, paying or both from the IRS, a Tax Return Preparer or the Taxpayer Advocate Service, if appropriate.

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

Source: IRS         

Educators can claim deduction to get money back for classroom expenses

Posted by Admin Posted on July 15 2019

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Educators may be able to deduct unreimbursed expenses on their tax return. This deduction can put money right back in the pockets of eligible teachers and other educators.

Here are some things to know about this deduction:

  • Educators can deduct up to $250 of trade or business expenses that were not reimbursed. As teachers prepare for the next school year, they should remember to keep receipts after making any purchase to support claiming this deduction.
  • The deduction is $500 if both taxpayers are eligible educators and file their return using the status married filing jointly. These taxpayers cannot deduct more than $250 each.
  • Qualified expenses are amounts the taxpayer paid themselves during the tax year.
    • Examples of expenses the educator can deduct include:
    • Professional development course fees
    • Books
    • Supplies
    • Computer equipment, including related software and services
    • Other equipment and materials used in the classroom
  • Taxpayers claim the deduction on Form 1040 or Form 1040NR. The taxpayer should remember to complete and attach Form 1040, Schedule 1 to their return.
  • To be considered an eligible educator, the taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal or aide. They must also work at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

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

Source: IRS 

Have a sunnier tax season with these summertime IRS tax tips

Posted by Admin Posted on July 15 2019

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WASHINGTON — Buying a home? Working a summer job? Volunteering? Activities that are common in the summer often qualify for tax credits or deductions. And, while summertime and part-time workers may not earn enough to owe federal income tax, they should remember to file a return to get a refund for taxes withheld early next year.

Here are some summertime tax tips from the IRS that can help taxpayers during tax season next year:

  • Marital tax bliss. Newlyweds should report any name change to the Social Security Administration before filing next year’s tax return. Then, report any address change to the United States Postal Service, employers and the IRS to ensure receipt of tax-related items.
  • Cash back for summer day camp. Unlike overnight camps, the cost of summer day camp may count as an expense towards the Child and Dependent Care Credit. See IRS Publication 503, Child and Dependent Care Expenses, for more information.
  • Part-time and summer work. Employers usually must withhold Social Security and Medicare taxes from pay for part-time and season workers even if the employees don’t earn enough to meet the federal income tax filing threshold. Self-employed workers or independent contractors need to pay their own Social Security and Medicare taxes, even if they have no income tax liability. Normally, employees receive a Form W-2, Wage and Tax Statement, from their employer — even if they don’t work there anymore — to account for the summer’s work by January 31 of the following year. The Form W-2 shows the amount of earnings, withholdings for state and federal taxes, Social Security, Medicare wages and tips. Employees use the information on this form when they file their annual tax returns.
  • Worker classification matters.  Business owners must correctly determine whether summer workers are employees or independent contractors. Independent contractors are not subject to withholding, making them responsible for paying their own income taxes plus Social Security and Medicare taxes. Workers can avoid higher tax bills and lost benefits if they know their proper status.

Though the higher standard deduction means fewer taxpayers are itemizing their deductions, those that still plan to itemize next year should keep these tips in mind:

  • Deducting state and local income, sales and property taxes. The total deduction that taxpayers can deduct for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 or $5,000 if married filing separately. Any state and local taxes paid above this amount cannot be deducted.
  • Refinancing a home. The deduction for mortgage interest is limited to interest paid on a loan secured by the taxpayer’s main home or second home that they used to buy, build, or substantially improve their main home or second home.
  • Buying a home. New homeowners buying after Dec. 15, 2017, can only deduct mortgage interest they pay on a total of $750,000, or $375,000 if married filing separately, in qualifying debt for a first and second home. For existing mortgages if the loan originated on or before Dec. 15, 2017, taxpayers continue to deduct interest on a total of $1 million in qualifying debt secured by first and second homes.
  • Donate items. Deduct money. Those long-unused items in good condition found during a summer cleaning and donated to a qualified charity may qualify for a tax deduction. Taxpayers must itemize deductions to deduct charitable contributions and have proof of all donations. Use the Interactive Tax Assistant to help determine whether you can deduct your charitable contributions.
  • Donate time. Deduct mileage. Driving a personal vehicle while donating services on a trip sponsored by a qualified charity could qualify for a tax break. Itemizers can deduct 14 cents per mile for charitable mileage driven in 2019.
  • Reporting gambling winnings and claiming gambling losses. Taxpayers who itemize can deduct gambling losses up to the amount of gambling winnings. Use the Interactive Tax Assistant to find out more about reporting gambling winnings and  losses next year.

The last two tips are for taxpayers who have not yet filed but may be due a refund and those who may need to adjust their withholding.

  • Refunds require a tax return. Although workers may not have earned enough money from a summer job to require filing a tax return, they may still want to file when tax time comes around. It is essential to file a return to get a refund of any income tax withheld. There is no penalty for filing a late return for those receiving refunds, however, by law, a return must be filed within three years to get the refund. See the Interactive Tax Assistant, Do I need to file a tax return?
  • Check withholding. Newlyweds, summertime workers, homeowners and every taxpayer in between should take some time this summer to check their tax withholding to make sure they are paying the right amount of tax as they earn it throughout the year. The Withholding Calculator on IRS.gov helps employees estimate their income tax, credits, adjustments and deductions and determine whether they need to adjust their withholding by submitting a new Form W-4, Employee's Withholding Allowance Certificate. Taxpayers should remember that, if needed, they should submit their new W-4 to their employer, not the IRS.

In addition to these tips, taxpayers can get helpful consumer tips by signing up for the IRS Tax Tips email service. For details on any of these tips, visit IRS.gov.

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

Source: IRS        

Contribuyentes pueden revisar en línea para actualizaciones sobre estado de su reembolso

Posted by Admin Posted on July 15 2019

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Los contribuyentes que solicitaron una prórroga y presentan su declaración de impuestos de 2018 este verano podrían estar esperando por su reembolso.  Es fácil para estos contribuyentes revisar el estado de su dinero. Pueden ir a IRS.gov y usar la herramienta ¿Dónde está mi reembolso? 

Esta herramienta está disponible en IRS.gov y a través de la aplicación móvil IRS2Go. Los contribuyentes pueden revisar ¿Dónde está mi reembolso? para revisar el estado de su declaración de impuestos dentro de las 24 horas luego que el IRS confirma recibir una declaración presentada electrónicamente. Para declaraciones en papel, son cuatro semanas.

La herramienta tiene un rastreador que muestra el progreso a través de tres fases:  

  • Declaración recibida
  • Reembolso aprobado
  • Reembolso enviado

Lo único que el contribuyente necesita para usar “¿Dónde está mi reembolso?” son estas tres cosas:

  • Número de seguro social
  • Estado civil tributario
  • Suma exacta del reembolso reclamado en su declaración de impuestos

Los contribuyentes deben recordar que “¿Dónde está mi reembolso?” está disponible solo en IRS.gov o a través de la aplicación móvil IRS2Go.

“¿Dónde está mi reembolso?” se actualiza una vez cada 24 horas, normalmente durante la noche, por lo cual no es necesario verificar el estado con mayor frecuencia.

Los contribuyentes solo deben llamar al número de servicio al cliente del IRS acerca del estado de su reembolso si:

  • Pasaron más de 21 días desde que presentó su declaración electrónicamente.
  • Pasaron más de seis semanas desde que envió su declaración por correo.
  • La herramienta “¿Dónde está mi reembolso?” le indica que se comunique con el IRS. 

Contribuyentes quienes adeudan deben pagar lo más posible para minimizar cargos de intereses y multas. Los contribuyentes deben visitar la página IRS.gov/pagos para explorar opciones de pago.

Los contribuyentes también deben tener cuidado con los correos electrónicos o las estafas de texto que solicitan información personal para verificar el estado de un reembolso del IRS. El IRS no contacta a los contribuyentes de esta manera. 

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

Fuente: IRS                                   

Tips for taxpayers who make money from a hobby

Posted by Admin Posted on July 15 2019

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Many people enjoy hobbies that are also a source of income. From painting and pottery to scrapbooking and soap making, these activities can be sources of both fun and finances. Taxpayers who make money from a hobby must report that income on their tax return.

If someone has a business, they operate the business to make a profit. In contrast, people engage in a hobby for sport or recreation, not to make a profit. Taxpayers should consider nine factors when determining whether their activity is a business or a hobby.

In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is done mainly for recreation or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

  • Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
  • Whether the time and effort you put into the activity indicate you intend to make it profitable.
  • Whether you depend on income from the activity for your livelihood.
  • Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
  • Whether you change your methods of operation in an attempt to improve profitability.
  • Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
  • Whether you were successful in making a profit in similar activities in the past.
  • Whether the activity makes a profit in some years and how much profit it makes.
  • Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

They should base their determination on all the facts and circumstances of their activity.

If a taxpayer receives income for an activity that they don’t carry out to make a profit, the expenses they pay for the activity are miscellaneous itemized deductions and can no longer be deducted. The taxpayer must still report the income they receive on Schedule 1, Form 1040, line 21.

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

Source: IRS   

ESTATE PLANNING PORTABILITY LIVES ON UNDER THE TCJA

Posted by Admin Posted on July 15 2019

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When the TCJA was passed, the big estate planning news was that the federal gift and estate tax exclusion doubled from $5 million to an inflation-indexed $10 million. It was further indexed for inflation to $11.18 million for 2018 and now $11.4 million for 2019.

Somewhat lost in the clamor, however, was (and is) the fact that the new law preserves the “portability” provision for married couples. Portability allows your estate to elect to permit your surviving spouse to use any of your available estate tax exclusion that is unused at your death.

A brief history

At the turn of this century, the exclusion was a mere $675,000 before being hiked to $1 million in 2002. By 2009, the exclusion increased to $3.5 million, while the top estate tax rate was reduced from 55% in 2000 to 35% in 2010, among other changes.

After a one-year estate tax moratorium in 2010, the Tax Relief Act (TRA) of 2010 reinstated the estate tax with a generous $5 million exclusion, indexed for inflation, and a top 35% tax rate. The American Taxpayer Relief Act (ATRA) of 2012 made these changes permanent, aside from increasing the top rate to 40%.

Most important, the TRA authorized portability of the estate tax exclusion, which was then permanently preserved by the ATRA. Under the portability provision, the executor of the estate of the first spouse to die can elect to have the “deceased spousal unused exclusion” (DSUE) transferred to the estate of the surviving spouse.

How the DSUE works

Let’s say Kevin and Debbie, who have two children, each own $5 million individually and $10 million jointly with rights of survivorship, for a total of $20 million. Under their wills, all assets pass first to the surviving spouse and then to the children.

If Debbie had died in early 2019, the $10 million ($5 million owned individually and $5 million held jointly) in assets would be exempt from estate tax because of the unlimited marital deduction. Thus, her entire $11.4 million exclusion would remain unused. However, if the election is made upon her death, Kevin’s estate can later use the $11.4 million of the DSUE from Debbie, plus the exclusion for the year in which Kevin dies, to shelter the remaining $8.6 million from tax, with plenty to spare for some appreciation in value.

What would have happened without the portability provision? For simplicity, let’s say that Kevin dies later in 2019. Without being able to benefit from the unused portion of Debbie’s exclusion, the $11.4 million exclusion for Kevin in 2019 leaves the $8.6 million subject to estate tax. At the 40% rate, the federal estate tax bill would amount to a whopping $3.44 million.

Although techniques such as a traditional bypass trust may be used to avoid or reduce estate tax liability, this example demonstrates the potential impact of the portability election. It also emphasizes the need for planning.

Other points of interest

Be aware that this discussion factors in only federal estate taxes. State estate taxes may also have a significant impact, particularly in some states where the estate tax exemption isn’t tied to the federal exclusion.

Also, keep in mind that, absent further legislation, the exclusion amount is slated to revert to pre-2018 levels after 2025. Portability continues, although, for those whose estates will no longer be fully sheltered, additional planning must be considered.

Furthermore, portability isn’t always the best option. Consider all relevant factors, including nontax reasons that might affect the distribution of assets under a will or living trust. For instance, a person may want to divide assets in other ways if matters are complicated by a divorce, a second marriage, or unusual circumstances.

Details, details

Every estate plan includes details that need to be checked and rechecked. Our firm can help you do so, including deciding whether portability is right for you.

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

Source: Thomson Reuters                        

Contribuyentes deben estar atentos a nuevas versiones de dos estafas

Posted by Admin Posted on July 15 2019

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Contribuyentes deben estar atentos a nuevas versiones de dos estafas

Mientras los estafadores trabajan duro todo el año, los contribuyentes deben estar atentos a una oleada de correos electrónicos de phishing y estafas telefónicas.

Los contribuyentes deben estar atentos a las nuevas versiones de dos estafas relacionadas con los impuestos. Uno involucra números de seguro social relacionados con asuntos de impuestos. La segunda, amenaza a los contribuyentes con una factura de impuestos de una agencia gubernamental ficticia. Aquí hay algunos detalles acerca de estas estafas para ayudar a los contribuyentes a reconocerlas:

El esquema del número de seguro social (SSN, por sus siglas en inglés)

  • El último giro incluye a los estafadores que afirman poder suspender o cancelar el número de seguro social de la víctima. Esta estafa es similar y a menudo asociada con la estafa de suplantación del IRS.
  • Es otro intento de los estafadores para asustar a los contribuyentes para que devuelvan los mensajes automatizados.
  • Los estafadores pueden mencionar impuestos vencidos además de amenazar con cancelar el número de seguro social del contribuyente.

Agencia de impuestos falsa

  • Este esquema involucra una carta que amenaza con un embargo o gravamen del IRS.
  • El estafador envía la carta al contribuyente por correo.
  • El embargo o gravamen se basa en impuestos atrasados falsos adeudados a una agencia inexistente.
  • La agencia falsa se llama “Bureau of Tax Enforcement” (“Oficina de Control de Impuestos”). No existe tal agencia.
  • La estafa de notificación de gravamen también hace referencia al IRS para confundir a las posibles víctimas al pensar que la carta es de una agencia legítima.

Ambos esquemas muestran señales clásicas de ser estafas. El IRS y sus socios de la Cumbre de Seguridad, las agencias tributarias estatales y la industria tributaria, les recuerdan a todos que estén alertas a las estafas que usan al IRS o los impuestos de referencia. Estar alerta es especialmente importante a fines de la primavera y principios del verano, ya que es en esta época cuando llegan facturas de impuestos y reembolsos.

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

Fuente: IRS           

Why You Should Check Your Tax Bracket

Posted by Admin Posted on July 15 2019

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Many taxpayers learned some tough lessons upon completing their 2018 tax returns regarding the changes brought forth by the Tax Cuts and Jobs Act (TCJA). If you were one of them, or even if you weren’t, now’s a good time to check your bracket to avoid any unpleasant surprises next April.

Under the TCJA, the top income tax rate is now 37% (down from 39.6%) for taxpayers with taxable income over $500,000 for 2018 (single and head-of-household filers) or $600,000 for 2018 (married couples filing jointly). These thresholds are higher than they were for the top rate in 2017 ($418,400, $444,550 and $470,700, respectively), so the top rate probably wasn’t too much of a concern for many upper-income filers.

But some singles and heads of households in the middle and upper brackets were likely pushed into a higher tax bracket much more quickly for the 2018 tax year. For example, for 2017 the threshold for the 33% tax bracket was $191,650 for singles and $212,500 for heads of households. For 2018, the rate for this bracket was reduced slightly to 32% — but the threshold for the bracket is now only $157,500 for both singles and heads of households.

So, a lot more of these filers found themselves in this bracket and many more could so again in 2019. Fortunately for joint filers, their threshold for this bracket has increased from $233,350 for 2017 to $315,000 for 2018. The thresholds for these brackets have increased slightly for 2019, due to inflation adjustments. If you expect this year’s income to be near the threshold for a higher bracket, consider strategies for reducing your taxable income and staying out of the next bracket. For example, you could take steps to accelerate deductible expenses.

But carefully consider the changes the TCJA has made to deductions. For example, you might no longer benefit from itemizing because of the nearly doubled standard deduction and the reduction or elimination of certain itemized deductions. For 2019, the standard deduction is $12,200 for singles and married individuals filing separately, $18,350 for heads of households and $24,400 for joint filers.

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

Source: Thomson Reuters                              

Disfrute de una temporada de impuestos más soleada con estos consejos tributarios de verano del IRS

Posted by Admin Posted on July 15 2019

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WASHINGTON — ¿Compra una casa? ¿Tiene un trabajo de verano? ¿Hace voluntariado? Las actividades que son comunes en el verano a menudo califican para créditos tributarios o deducciones. Y aunque puede que los que trabajan en el verano o a tiempo parcial no ganen lo suficiente como para adeudar impuestos federales, deben recordar completar una declaración de impuestos a principios del próximo año para recibir un reembolso por impuestos retenidos.

Aquí están los consejos tributarios de verano del IRS que pueden ayudar a los contribuyentes durante la temporada de impuestos el próximo año.

  • Felicidad tributaria matrimonial. Los recién casados deben informar cualquier cambio de nombre a la Administración del Seguro Social antes de presentar la próxima declaración de impuestos. Luego deben informar cualquier cambio de dirección al Servicio Postal de los Estados Unidos, a los empleadores y al IRS, para asegurarse de recibir documentación relacionada con los impuestos.
     
  • Reembolso en efectivo para campamento de verano diurno. A diferencia de los campamentos nocturnos, el costo del campamento de verano diurno puede contar como un gasto para el Crédito por Cuidado de Menores y Dependientes. Consulte la Publicación 503 del IRS, Gastos del cuidado de menores y dependientes (en inglés), para más información.
     
  • Trabajo a tiempo parcial o de verano. Es posible que los trabajadores de verano no ganen lo suficiente para adeudar impuestos, pero los empleadores generalmente deben retener los impuestos de Seguro Social y Medicare del salario. Los trabajadores por cuenta propia o contratistas independientes deben pagar sus propios impuestos del Seguro Social y Medicare, incluso si no tienen ninguna obligación tributaria. Normalmente, los empleados reciben un Formulario W-2, Declaración de Salarios e Impuestos (en inglés), de su empleador - incluso si ya no trabajan con el mismo empleador - antes del 31 de enero del año siguiente. El Formulario W-2 muestra la cantidad de ganancias, retención de impuestos estatales y federales, Seguro Social, salarios de Medicare y propinas. Los empleados usan la información de este formulario cuando presentan sus declaraciones de impuestos cada año.
     
  • La clasificación del trabajador importa. Los dueños de negocios deben determinar correctamente si los trabajadores de verano son empleados o contratistas independientes. Los contratistas independientes no están sujetos a retención, haciéndoles responsables de pagar sus propios impuestos además de impuestos de Seguro Social y Medicare. Los trabajadores pueden evitar facturas de impuestos más altas y beneficios perdidos si conocen su clasificación adecuada.

Aunque el aumento de la deducción estándar significa que menos contribuyentes detallan sus deducciones, aquellos que todavía planifican detallar el próximo año deben tener en cuenta estos consejos:

  • Deducir los impuestos estatales y locales, ventas e impuestos a la propiedad. La deducción del contribuyente por ingresos estatales y locales, ventas e impuestos a la propiedad está limitada a una deducción total combinada de $10,000 ($5,000 si casado que presenta por separado). Cualquier impuesto estatal y local pagado por encima de esta cantidad no es deducible.
     
  • Refinanciación de una vivienda. La deducción por intereses hipotecarios se limita a los intereses pagados por un préstamo garantizado por la vivienda principal o secundaria del contribuyente que usó para comprar, construir o mejorar sustancialmente la vivienda principal o secundaria.
     
  • Comprar una casa. Aquellos que compren una casa después del 15 de diciembre de 2017, solo pueden deducir los intereses hipotecarios que pagan por un total de $750,000, o $375,000 si están casados y presentan una declaración por separado, en deuda calificada para una primera y segunda vivienda. Para las hipotecas existentes, si el préstamo se originó en o antes del 15 de diciembre de 2017, los contribuyentes continúan deduciendo intereses de hasta $1 millón en deuda calificada asegurada por primera y segunda vivienda.
     
  • Donar artículos. Deducir dinero. Aquellos artículos en buenas condiciones que no se usan durante mucho tiempo y que se donan a una organización benéfica calificada, pueden calificar para una deducción tributaria. Los contribuyentes deben detallar las deducciones para deducir las contribuciones caritativas (en inglés) y tener comprobantes de todas las donaciones. Use el Asistente Tributario Interactivo para ayudar a determinar si puede deducir sus contribuciones caritativas (en inglés).
     
  • Donar tiempo. Deducir millaje. Conducir un vehículo personal mientras se donan servicios en un viaje patrocinado por una organización benéfica calificada, podría calificar para una exención de impuestos. Los que detallan sus deducciones pueden deducir 14 centavos por milla para el millaje caritativo conducido en 2019.
     
  • Reportar ganancias y reclamar pérdidas de juegos de azar. Los contribuyentes que detallan pueden deducir las pérdidas de juegos de azar hasta la cantidad de ganancias de juegos de azar. Use el Asistente Tributario Interactivo para obtener más información acerca de cómo reportar ganancias y pérdidas de juegos de azar el próximo año.

Los dos últimos consejos son para los contribuyentes que aún no han presentado, pero a quienes se les puede deber un reembolso, y aquellos que pueden necesitar ajustar su retención.

  • Los reembolsos requieren una declaración de impuestos. Aunque puede que los trabajadores no hayan ganado suficiente dinero de un trabajo de verano para tener que presentar una declaración de impuestos, es posible que quieran presentar una declaración a la hora de impuestos. Es esencial presentar una declaración para obtener un reembolso de cualquier impuesto retenido. No hay multa por presentar una declaración tarde para aquellos que reciben reembolsos, sin embargo, por ley, se debe presentar una declaración dentro de tres años para obtener un reembolso. Consulte el Asistente Tributario Interactivo, ¿Necesito presentar una declaración de impuestos? (en inglés).
     
  • Verificar retención. Los recién casados, los trabajadores de verano, los propietarios de viviendas y todos los demás contribuyentes deben tomarse algún tiempo este verano para verificar su retención de impuestos para asegurarse que se les retiene la cantidad correcta de impuestos a medida que lo ganan durante todo el año. La Calculadora de Retención en IRS.gov ayuda a los empleados a estimar sus impuestos, créditos, ajustes y deducciones, y determinar si necesitan ajustar su retención mediante la presentación de un nuevo Formulario W-4 (SP), Certificado de la Retención del Empleado. Los contribuyentes deben recordar que, si es necesario, deben presentar su nuevo W-4 a su empleador, no al IRS.

Además de estos consejos, los contribuyentes pueden obtener consejos útiles al inscribirse en el servicio de correo electrónico de Consejos Tributarios del IRS. Para obtener más información acerca de cualquiera de estos consejos, visite IRS.gov.

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

Fuente: IRS                                       

Use your 2018 return to get 2019 tax withholding right

Posted by Admin Posted on July 15 2019

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Done with taxes this year? Then use your 2018 return to get your 2019 tax withholding right.

It’s very important to have the correct amount of taxes withheld from your paycheck. Use the IRS Withholding Calculator and your 2018 tax return information to adjust your withholdings to ensure you don’t have too little or too much withheld.

Checking and then adjusting tax withholding can help make sure you:

  • don’t owe more tax than you are expecting;
  • don’t get a surprise tax bill, and possibly a penalty, when filing next year; and
  • don’t receive a refund that is much larger or smaller than expected.

It’s important to do this as early in the year as possible, so that if a tax withholding adjustment is needed, there is more time for withholding to happen evenly during the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax.

For 2018, the average refund was around than $2,700. As you do your new calculation, decide if you want to reduce withholding to have a larger paycheck and smaller refund and adjust accordingly. Then provide your employer with the new information on Form W-4, Employee’s Withholding Allowance Certificate. It’s that simple!

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

Source: IRS                

Consejos para contribuyentes que ganan dinero con un pasatiempo

Posted by Admin Posted on July 15 2019

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Muchas personas gozan de pasatiempos que también son una fuente de ingreso. Desde la pintura y la cerámica hasta hacer jabones, estas actividades pueden ser fuentes de diversión y finanzas. Los contribuyentes que ganan dinero de un pasatiempo deben reportar esos ingresos en su declaración de impuestos.

Si alguien tiene un negocio, opera el negocio para obtener ganancias. Por el contrario, las personas participan en un pasatiempo por deporte o recreación, no para recibir una ganancia. Los contribuyentes deben considerar nueve factores (en inglés) al determinar si la actividad es un negocio o un pasatiempo.

  • Si realiza la actividad de manera profesional y mantiene libros y registros completos y precisos.
  • Si el tiempo y el esfuerzo que dedica a la actividad indican que tiene la intención de hacerlo rentable.
  • Si usted depende de los ingresos de la actividad para su sustento.
  • Si sus pérdidas se deben a circunstancias fuera de su control (o son normales en la fase de inicio de su tipo de negocio).
  • Si cambia sus métodos de operación en un intento por mejorar la rentabilidad.
  • Si usted o sus asesores tienen el conocimiento necesario para llevar a cabo la actividad como un negocio exitoso.
  • Si tuvo éxito en obtener ganancias en actividades similares en el pasado.
  • Si la actividad obtiene beneficios en algunos años y cuánto beneficio obtiene.
  • Si puede esperar obtener un beneficio futuro de la apreciación de los activos utilizados en la actividad.

Asegúrese de incluir la determinación en todos los datos y circunstancias de su actividad.

Si un contribuyente recibe ingresos por una actividad que no es para generar ingresos, los gastos que pagan por la actividad son deducciones misceláneas detalladas y ya no pueden deducirse. Los contribuyentes aún deben reportar el ingreso que recibieron en el Anexo 1, Formulario 1040, Línea 21.

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

Fuente: IRS  

Taxpayers can check online to get updates about their tax refund

Posted by Admin Posted on July 15 2019

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Taxpayers who filed an extension and are submitting their 2018 tax return this summer might be waiting for their tax refund. It’s easy for these taxpayers to check on the status of their money. They can just zip over to IRS.gov and use “Where’s My Refund?”

This tool is available on IRS.gov and through the IRS2Go app. Taxpayers can use Where’s My Refund? to start checking the status of their tax return within 24 hours after the IRS receives an e-filed return. For a paper return, it’s four weeks after the taxpayer mailed it.

The tool has a tracker that displays the progress of a tax return through these three stages:

Return received

  • Refund approved
  • Refund sent

All a taxpayer needs to use “Where’s My Refund?” are these three things:

  • Their Social Security number
  • Their tax filing status
  • The exact amount of the refund claimed on their tax return

Taxpayers should remember “Where’s My Refund” is only available on the IRS website or through the IRS2Go app.

“Where’s My Refund?” updates once every 24 hours, usually overnight, so there’s no need to check the status more often.

Taxpayers should only call the IRS tax help hotline on the status of their tax refund if:

  • It has been 21 days or more since the tax return was e-filed
  • It has been six weeks or more since the return was mailed
  • When “Where’s My Refund?” tells the taxpayer to contact the IRS

Taxpayers who owe should pay as much as possible to minimize interest and penalty charges. These taxpayers can visit IRS.gov/payments to explore their payment options.

Taxpayers should also watch out for email or text scams asking for personal information in order to check the status of an IRS refund. This IRS does not contact taxpayers in this way.

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

Source: IRS          

How to Get Tax Transcripts and Copies of Tax Returns from the IRS

Posted by Admin Posted on July 15 2019

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Taxpayers should keep copies of their tax returns for at least three years. Those who need a copy of their tax return should check with their software provider or tax preparer. Prior year tax returns are available from IRS for a fee.

For those that need tax transcripts, however, IRS can help. Transcripts are free.

Tax Transcripts

A transcript summarizes return information and includes Adjusted Gross Income (AGI). They are available for the most current tax year after the IRS has processed the return. People can also get them for the past three years.

When applying for home mortgages or college financial aid, transcripts are often necessary. Mortgage companies, however, normally arrange to get one for a homeowner or potential homeowner. For people applying for college financial aid, see IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications on IRS.gov for the latest options.

Tax Return Transcript.  A tax return transcript shows most line items including AGI from an original tax return (Form 1040, 1040A or 1040EZ) as filed, along with any forms and schedules. It doesn’t show changes made after the filing of the original return. This transcript is only available for the current tax year and returns processed during the prior three years. A tax return transcript usually meets the needs of lending institutions offering mortgages and student loans.

Tax Account Transcript.  A tax account transcript shows basic data such as return type, marital status, adjusted gross income, taxable income and all payment types. It also shows changes made after the filing of the original return.

To get a transcript, people can:

Order online. Use the ‘Get Transcript’ tool available on IRS.gov. There is a link to it under the red TOOLS bar on the front page. Those who use it must authenticate their identity using the Secure Access process.

Order by phone. The number to call is 800-908-9946.

Order by mail.  Complete and send either Form 4506-T or Form 4506T-EZ to the IRS to get one by mail. Use Form 4506-T to request other tax records: tax account transcript, record of account, wage and income and verification of non-filing. These forms are available on the Forms & Pubs page on IRS.gov

Those who need an actual copy of a tax return can get one for the current tax year and as far back as six years. The fee per copy is $50. Complete and mail Form 4506 to request a copy of a tax return. Mail the request to the appropriate IRS office listed on the form. People who live in a federally declared disaster area can get a free copy. More disaster relief information is available on IRS.gov.

Plan ahead. Delivery times for online and phone orders typically take five to 10 days from the time the IRS receives the request. You should allow 30 days to receive a transcript ordered by mail and 75 days for copies of your tax return.

Avoid scams. The IRS will never initiate contact using social media or text message. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out. Those who need an actual copy of a tax return can get one for the current tax year and as far back as six years. The fee per copy is $50. Complete and mail Form 4506 to request a copy of a tax return. Mail the request to the appropriate IRS office listed on the form. People who live in a federally declared disaster area can get a free copy. More disaster relief information is available on IRS.gov.

Plan ahead. Delivery times for online and phone orders typically take five to 10 days from the time the IRS receives the request. You should allow 30 days to receive a transcript ordered by mail and 75 days for copies of your tax return.

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

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

Source: IRS

INTERNATIONAL TAX GAP SERIES

Posted by Admin Posted on July 03 2019

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The United States has income tax treaties with a number of foreign countries. Under these treaties, residents of foreign countries may be:

  • Taxed at a reduced rate or
  • Exempt from U.S. income taxes on certain items of income received from sources within the U.S.

Because treaty provisions are generally reciprocal (apply to both treaty countries), a U.S. citizen or resident who receives income from a treaty country may also be taxed at a reduced tax rate by that foreign country.

While tax treaties may reduce U.S. tax for nonresidents and foreign tax for U.S. residents and citizens, each treaty must be reviewed to determine eligibility for these provisions. This article provides some highlights about tax treaties and how to properly apply their provisions.

Saving Clause

Most tax treaties have a saving clause that preserves the right of each country to tax its own citizens and treaty residents as if no tax treaty were in effect. However, the saving clause generally excepts specified income types from its application, which may allow you to claim certain treaty benefits even if you are a U.S. citizen or resident.

Nonresident Aliens

For nonresident aliens, treaties can limit or eliminate U.S. taxes on various types of personal services and other income, such as pensions, interest, dividends, royalties, and capital gains. Many treaties limit the number of years you can claim a treaty exemption for some types of income (e.g., see provisions applicable to students/apprentices/trainees and teachers/professors/researchers). Once you reach this limit, you may no longer claim the treaty exemption. In some cases, if you exceed the limit, the income is taxed retroactively for earlier years. Treaties may also have other requirements to be eligible for benefits. Publication 901, U.S. Tax Treaties, provides a summary of these treaty provisions.

U.S. Citizens and U.S. Treaty Residents

In many cases, U.S. citizens and U.S. treaty residents will not be able to reduce their U.S. tax based on treaty provisions due to the saving clause. However, those who are subject to taxes imposed by a treaty partner are entitled to certain credits, deductions, exemptions and reductions in the rate of taxes paid to that foreign country. These treaty benefits are generally only available to residents of the United States. Foreign taxing authorities sometimes require certification from the United States that an applicant filed an income tax return as a U.S. resident, as part of the proof of entitlement to the treaty benefits. Form 8802, Application for United States Residency Certification, must be filed to obtain this certification.

Disclosing Treaty Benefits Claimed

If you claim treaty benefits that override or modify any provision of the Internal Revenue Code, and by claiming these benefits your tax is or might be reduced, you must attach a fully completed Form 8833, Treaty-Based Return Position Disclosure, to your tax return. There are exceptions to this requirement for certain types of income that are outlined in Publication 519, U.S. Tax Guide for Aliens, under the section on Reporting Treaty Benefits Claimed.

Competent Authority Assistance

If you are a U.S. citizen or U.S. resident for purposes of a treaty, you can request assistance from the U.S. competent authority if you think that the actions of the U.S., the applicable treaty country or both caused or will cause double taxation or taxation otherwise inconsistent with the treaty. You should read any treaty articles, including the mutual agreement procedure article, that apply in your situation. The U.S. competent authority cannot consider requests involving countries with which the U.S. does not have a treaty.  Refer to Competent Authority Agreements and Competent Authority Assistance for information on existing competent authority agreements and how to make a competent authority request.

Obtaining Copies of Tax Treaties

To view the text of a specific tax treaty, go United States Income Tax Treaties - A to Z. You will find the text of each treaty, and in most cases, the Technical Explanation for the treaty. The Technical Explanation provides more detail on the intent of the treaty language.

Tax treaties are updated periodically and amended by protocols.

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

Source: IRS  

In 2018 Whistleblowers were paid over 312 million dollars.

Posted by Admin Posted on July 03 2019

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The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.

Who can get an award?

The IRS may pay awards to people who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer.

The IRS is looking for solid information, not an “educated guess” or unsupported speculation. They are also looking for a significant Federal tax issue - this is not a program for resolving personal problems or disputes about a business relationship.

What are the rules for getting an award?

The law provides for two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court. These rules are found at Internal Revenue Code IRC Section 7623(b) - Whistleblower Rules.

The IRS also has an award program for other whistleblowers - generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less that $200,000. The awards through this program are less, with a maximum award of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in Tax Court. The rules for these cases are found at Internal Revenue Code IRC Section 7623(a) - Informant Claims Program, and some of the rules are different from those that apply to cases involving more than $2 million.

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

Source: IRS  

What do I need to keep for tax reasons?

Posted by Admin Posted on June 25 2019

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It is a good idea to keep all of your receipts and any other records that you may have of your income and expenses. These will come in very handy if you are audited.

It is advantageous to categorize your expenses the following way:

  • Income
  • Exemptions
  • Medical Expenses
  • Taxes
  • Business Expenses
  • Education
  • Travel
  • Auto

It is recommended that you keep these documents for three to seven years, depending on the document.

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 retirement plans are available to aid in the deferral of taxes?

Posted by Admin Posted on June 25 2019

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You have the ability to invest some of the money that you would have paid in taxes to add to your retirement fund. Many employers will offer the opportunity to defer a portion of your earnings and contribute them directly to your retirement account. Some of them may even match a portion of your savings. If this is the case, it is always advisable to save at least the amount that your employer will match. This will give you an automatic 100% gain on your money.

If you are self-employed, look into getting a Keogh, SIMPLE or a SEP IRA.

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

EDUCATION AND TAX QUESTIONS

Posted by Admin Posted on June 25 2019

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Yes, you can take distributions from your IRAs for qualifying education expenses without having to pay the 10% additional tax penalty. You may owe income tax on at least part of the amount distributed, but not the additional penalty. The amount of the distribution that is more than the education expense does not qualify for the 10% tax exception.

What tax deductions can be used for college education?

There is a limited deduction allowed for higher education and related expenses. In addition, business expense deductions are allowed, without a dollar limit, for education related to the taxpayer's business, employment included.

Is student loan interest tax deductible?

In certain instances, yes, although deductions need to adhere to a few guidelines. The deduction is also subject to income phaseouts.

The deduction ceiling is $2,500.

If you are a dependent, you may not claim the interest deduction.

You need to be the person liable for the debt and the loan must be purely for education.

Can I deduct for education that helps at the workplace?

If you are receiving this education to maintain or improve skills at your current job, yes, but not if it is to meet the minimum requirements.

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

Source: IRS

How long should I keep old tax returns?

Posted by Admin Posted on June 25 2019

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If you are audited, it is very likely that the auditor will ask to see the last few tax returns. It is recommended to keep these tax returns forever.

An added benefit of keeping your tax returns is that you can see what you claimed last year, allowing you to adjust for the current year.

If you purchased goods that you plan to sell later, you should keep the receipts to calculate your gain or loss on it correctly.

Anything regarding the property you own and any fixes and repairs that you perform.

Receipts for any jewelry or other valuable collector's items

Records for capital assets, stocks, bonds and such

What recordkeeping system should I have?

If you are an employee of a company, your system needn't be complex - you can keep your records separated in folders.

If you are a business owner, you may want to consider hiring a bookkeeper or accountant.

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

SAVING ON TAXES FOR EDUCATION

Posted by Admin Posted on June 25 2019

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There are many different ways to use tax breaks for the higher education of your children. Be aware that you can only receive one type of relief for one item. It is best to consult with a professional to determine which would be the most advantageous.

What is the education tax credit?

You must make a choice between two types of tax education credit.

  • The American Opportunity Tax Credit will work for the first 4 years of college for at least full-time study.
  • The Lifetime Learning Credit applies for as long as the student studies, but the percentage of savings per year decreases drastically.

What is a Coverdell (Section 530)?

An education IRA is different than a standard IRA in these ways:

  • Withdrawals aren't taxed if used for qualified education expenses.
  • Contributions can be made only up until the point that the client reaches 18, and all funds must be distributed by the time that they are 30.
  • Contributions are not tax deductible

How can I best use the Coverdell (section 530)?

It is possible to have various 530 accounts for the same student, each opened by different family members or friends. There is no limit to the number of people that can open an account like this for a child.

The account can be transferred to another family member at any time. If the original child decides against going to college or is granted a scholarship, another family member can still utilize the money that has been saved.

What is a qualified tuition program?

The Section 529 is a college savings program available in most states. Money is invested to cover the costs of future education. These investments grow tax free and the distributions may also be tax-free.

What differentiates the Coverdell Section 530 and the Section 529?

  • The Section 529 allows for much larger yearly investments, whereas the Section 530 currently only allows for $2000 annually.
  • The choice of investments in the Section 529 is extremely conservative and limited while the Section 530 allows for many different options.
  • The Section 530 is a nationwide program while the 529 varies from state to state.
  • The Section 530 will let you use its funds for primary and secondary education, while the Section 529 can only be used to pay up to a total of $10,000 of tuition per beneficiary (regardless of the number of contributing plans) each year at an elementary or secondary (k-12) public, private or religious school of the beneficiaries choosing.

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 other ways can I defer this year's income?

Posted by Admin Posted on June 25 2019

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If you own your business you may want to postpone sending certain invoices to ensure that you will receive payment in the following tax year. This can help greatly if some of this income would push you into a higher tax bracket. You may want to accelerate paying for expenses to cover your taxes in the current year.

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

-INNOCENT SPOUSE RULES: PROTECTION UNDER SOME CIRCUMSTANCES

Posted by Admin Posted on June 20 2019

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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      

-Vacation Homes: Do You Understand the Tax Nuances?

Posted by Admin Posted on June 20 2019

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Owning a vacation home can offer tax breaks, but they may differ from those associated with a primary residence. The key is whether a vacation home is used solely for personal enjoyment or is also rented out to tenants.

Sorting it out

If your vacation home is not rented out, or if you rent it out for no more than 14 days a year, the tax benefits are essentially the same as those you’d receive if you own your primary residence. In this scenario, you’d generally be able to deduct your mortgage interest and real estate taxes on Schedule A of your federal income tax return, up to certain limits. Also, you may exclude all your rental income.

But the rules are different if you rent out your vacation home for 15 or more days annually. First, the rental income must be reported. Second, in this scenario, the IRS considers your vacation home to be an investment property and, thus, allows deductions related to the rental of the property, with certain limitations. In addition to mortgage interest and real estate taxes, these deductions generally include insurance, utilities, housekeeping, repairs and depreciation. Also, the deduction for certain categories of expenses cannot exceed the rental income.

If you exceed this number of days of rentals and use your vacation home for personal use, these deductions will be limited by the ratio of actual rental days to the total days of use of the home. Suppose, for example, that you personally use your vacation home for 25 days and rent it for 75 days in a year, so the home is used for 100 total days. Here, you would be allowed to deduct 75% of the expenses listed above as rental expenses. Be aware that a portion of the mortgage interest and real estate taxes may be deductible on Schedule A. In certain circumstances, however, the personal portion of your mortgage interest may not be deductible.

Bottom line

If you want to maximize the tax benefits of your vacation home, limit your personal use of the home to no more than 14 days or 10% of the total rental days. If you want to personally use the home more than this, you can still realize some limited tax benefits. Contact our firm for details about your specific situation.

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   

-CONSIDER THE TAX ADVANTAGES OF QUALIFIED SMALL BUSINESS STOCK

Posted by Admin Posted on June 20 2019

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While the Tax Cuts and Jobs Act (TCJA) reduced most ordinary-income tax rates for individuals, it didn’t change long-term capital gains rates. They remain at 0%, 15% and 20%.

The capital gains rates now have their own statutory bracket amounts, but the 0% rate generally applies to taxpayers in the bottom two ordinary-income tax brackets (now 10% and 12%). And, you no longer must be in the top ordinary-income tax bracket (now 37%) to be subject to the top long-term capital gains rate of 20%. Many taxpayers in the 35% tax bracket also will be subject to the 20% rate.

So, finding ways to defer or minimize taxes on investments is still important. One way to do that — and diversify your portfolio, too — is to invest in qualified small business (QSB) stock.

QSB defined

To be a QSB, a business must be a C corporation engaged in an active trade or business and must not have assets that exceed $50 million when you purchase the shares.

The corporation must be a QSB on the date the stock is issued and during substantially all the time you own the shares. If, however, the corporation’s assets exceed the $50 million threshold while you’re holding the shares, it won’t cause QSB status to be lost in relation to your shares.

Two tax advantages

QSBs offer investors two valuable tax advantages:

1. Up to a 100% exclusion of gain. Generally, taxpayers selling QSB stock are allowed to exclude a portion of their gain if they’ve held the stock for more than five years. The amount of the exclusion depends on the acquisition date. The exclusion is 100% for stock acquired on or after Sept. 28, 2010. So, if you purchase QSB stock in 2019, you can enjoy a 100% exclusion if you hold it until sometime in 2024. (The specific date, of course, depends on the date you purchase the stock.)

2. Tax-free gain rollovers. If you don’t want to hold the QSB stock for five years, you still have the opportunity to enjoy a tax benefit: Within 60 days of selling the stock, you can buy other QSB stock with the proceeds and defer the tax on your gain until you dispose of the new stock. The rolled-over gain reduces your basis in the new stock. For determining long-term capital gains treatment, the new stock’s holding period includes the holding period of the stock you sold.

More to think about

Additional requirements and limits apply to these breaks. For example, there are many types of businesses that don’t qualify as QSBs, ranging from various professional fields to financial services to hospitality and more. Before investing, it’s important to also consider nontax factors, such as your risk tolerance, time horizon and overall investment goals. Contact us to learn more.

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

Source: Thomson Reuters       

Señales reveladoras de una estafa

Posted by Admin Posted on June 19 2019

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El IRS (y sus agencias privadas de cobro autorizadas (en inglés)) nunca:

  • Llaman para solicitar un pago inmediato mediante un método de pago específico, como tarjeta de débito prepagada, tarjeta de regalo o transferencia bancaria. El IRS no usa estos métodos para el pago de impuestos. En general, el IRS enviará primero una factura a cualquier contribuyente que deba impuestos. Todos los pagos sólo deben hacerse a nombre de la Tesorería de los EE. UU. y los cheques nunca deben hacerse a nombre de terceros.
  • Amenazan con traer de inmediato a la policía local u otros grupos de ley y orden para que arresten al contribuyente por no pagar.
  • Exigen que se paguen los impuestos sin darle al contribuyente la oportunidad de cuestionar o apelar el monto adeudado.
  • Solicitan números de tarjeta de crédito o débito por teléfono.

Para cualquier persona que no deba impuestos y no tenga razones para pensar que sí:

  • No provea ninguna información. Cuelgue de inmediato.
  • Comuníquese con el Inspector General del Tesoro para la Administración Tributaria para reportar la llamada. Use su página de informes de estafas de suplantación de identidad del IRS (en inglés).
  • Reporte la identificación de la persona que llama y/o el número para devolver la llamada al IRS a phishing@irs.gov(Asunto: Estafa telefónica del IRS).
  • Informar a la Comisión Federal de Comercio. Use el Asistente de quejas de la FTC (en inglés) en FTC.gov. Agregue en la sección de notas "Estafa telefónica del IRS".

Para cualquiera que adeuda impuestos o cree que adeuda:

  • Vea información de su cuenta de impuestos en línea en IRS.gov para ver el monto real adeudado. Los contribuyentes también pueden revisar sus opciones de pago.
  • Llame al número que aparece en el aviso de facturación, o
  • Llame al IRS al 800-829-1040. Los representantes del IRS pueden ayudar.

El IRS no usa mensajes de texto o redes sociales para hablar acerca de cuestiones tributarias personales, como las relacionadas con facturas o reembolsos. Para obtener más información, visite la página de estafas de impuestos y alertas al consumidor en IRS.gov. También se encuentra disponible información adicional acerca de estafas tributarias en los sitios de redes sociales del IRS, que incluyen los vídeos de YouTube.

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

Fuente: IRS        

Estafas telefónicas

Posted by Admin Posted on June 19 2019

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El IRS no llama y deja mensajes pregrabados, urgentes y amenazantes que solicitan se devuelvan la llamada, ni solicita información personal como números de tarjetas de crédito, contraseñas o información de cuentas bancarias. En muchas variaciones de las estafas telefónicas, se les dice a las víctimas que si no devuelven la llamada, se emitirá una orden de arresto. Otras amenazas verbales incluyen la intervención de una agencia policíaca, la deportación o la revocación de licencias.

Los delincuentes pueden adulterar o "falsificar" los números de identificación de llamadas para que parezcan estar en cualquier lugar del país, incluso desde una oficina del IRS. Esto evita que los contribuyentes puedan verificar el verdadero número de llamada. Los estafadores también han falsificado las oficinas locales del alguacil, los departamentos estatales de vehículos motorizados, las agencias federales y otros para convencer a los contribuyentes de que la llamada es legítima.

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

Fuente: IRS       

Alerta: Estafadores al acecho

Posted by Admin Posted on June 19 2019

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WASHINGTON — Aunque ya pasó la fecha límite de presentación de impuestos de abril, los estafadores continúan trabajando fuerte y el IRS instó hoy a los contribuyentes a tener cuidado con nuevas versiones de correos electrónicos de phishing y estafas telefónicas.

El IRS está viendo señales de dos nuevas variaciones de estafas relacionadas con los impuestos. La primera involucra números de Seguro Social relacionados con asuntos de impuestos, y la segunda amenaza a las personas con un recibo de impuestos de una agencia gubernamental ficticia. Aquí hay algunos detalles:

  • Números de seguro social. El último giro incluye a estafadores que afirman poder suspender o cancelar el número de seguro social de la víctima. En esta variación, la estafa de amenaza de cancelación del seguro social es similar y, a menudo, asociada con la estafa de suplantación del IRS. Es otro intento de los estafadores por asustar a las personas para que devuelvan los mensajes de voz "robocall". Los estafadores pueden mencionar impuestos atrasados además de amenazar con cancelar el número de seguro social de la persona.
     
  • Agencia de impuestos ficticia. Este esquema implica el envío por correo de una carta que amenaza con un embargo o gravamen del IRS. El embargo o gravamen se basa en impuestos morosos falsos adeudados a una agencia inexistente, la "Oficina de Fiscalización Tributaria". Es probable que la estafa de notificación de embargos también haga referencia al IRS para confundir a las posibles víctimas al pensar que la carta es de una organización legitima.

Ambas incluyen señales clásicas de estafas. El IRS y sus socios de la Cumbre de Seguridad, las agencias tributarias estatales y la industria tributaria, les recuerdan a todos que se mantengan en alerta ante las estafas que usan al IRS o incluyen referencias de impuestos, especialmente a fines de la primavera y principios del verano, a medida que llegan las facturas y reembolsos de impuestos.

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

Fuente: IRS       

Estafas de phishing por email

Posted by Admin Posted on June 19 2019

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El IRS no inicia el contacto con los contribuyentes por correo electrónico para solicitar información personal o financiera. El IRS inicia la mayoría de los contactos a través del correo regular entregado por el Servicio Postal de los Estados Unidos. Sin embargo, hay circunstancias especiales en las que el IRS llamará o visitará una casa o negocio, como cuando un contribuyente tiene una factura de impuestos vencida, para recoger una declaración de impuestos atrasada o un pago atrasado de impuestos de nómina, o para visitar una empresa como parte de una auditoría o durante investigaciones criminales.

Si un contribuyente recibe un correo electrónico no solicitado que parece provenir del IRS o de un programa estrechamente vinculado al IRS, debe reenviarlo inmediatamente a phishing@irs.gov. La página Reporte práctica fraudulenta de pesca de información proporciona detalles completos.

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

Fuente: IRS       

Adjust Tax Withholding

Posted by Admin Posted on June 19 2019

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WASHINGTON — With this year’s average tax refund around $2,700, the Internal Revenue Service reminds taxpayers they have options to control the amount of their take-home pay and the size of their tax refund by adjusting their tax withholding.

A Paycheck Checkup using the IRS Withholding Calculator can help taxpayers determine the right amount of tax they should have their employer withhold from their paychecks.

Taxes are pay-as-you-go. This means taxes must be paid as income is earned or received during the year, either through withholding or estimated tax payments. As of May 10, nearly 101.6 million taxpayers received federal tax refunds. With the average refund around $2,700, some taxpayers received a refund that was much larger than they expected, which means they paid too much tax throughout the year and took home less money in their paychecks.

To help taxpayers who want to change this amount, the Withholding Calculator will offer recommendations for adjusting withholding. A taxpayer who wants to increase the amount of their paychecks would pay less tax throughout the year by increasing the number of allowances on Form W-4. A taxpayer who would prefer a larger refund when they file would decrease their withholding allowances on Form W-4. Decreasing the number of allowances means paying more tax throughout the year and receiving a smaller paycheck.

A taxpayer’s unexpected tax surprise or larger-than-usual refund may be due to life changes such as getting married, having or adopting a child, or it may be from changes included in the Tax Cuts and Jobs Act (TCJA). The TCJA made changes to the tax law, including increasing the standard deduction, eliminating personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets. These changes affected 2018 returns and are also in effect for 2019. It’s important to check withholding every year. Just because these changes didn’t affect a taxpayer last year doesn’t mean they won’t apply this year.

Sooner is better

Checking and adjusting tax withholding as early as possible is the best way to avoid having too little or too much tax withheld from paychecks. Too little withheld could result in an unexpected tax bill or penalty at tax time next year.

Taxpayers can help manage and adjust their tax withholding by using the IRS Withholding Calculator. It’s helpful if taxpayers have their completed 2018 tax return available when using the Withholding Calculator to estimate the amount of income, deductions, adjustments and credits to enter. Taxpayers also need their most recent pay stubs to compute their withholding so far this year. Based on the Withholding Calculator’s recommendations, taxpayers can then fill out and submit a new Form W-4 to their employer.

The Withholding Calculator does not request personally identifiable information, such as name, Social Security number, address or bank account number. The IRS does not save or record the information entered on the calculator.

Estimated taxes

Some workers are considered self-employed and are responsible for paying taxes directly to the IRS. Often, this includes people involved in the sharing economy. One way to pay taxes directly to the IRS is by making estimated tax payments during the year. The next deadline for tax year 2019 estimated taxes is June 17.

TCJA changed the way tax is calculated for most taxpayers, including those with substantial income not subject to withholding. As a result, many taxpayers may need to raise or lower the amount of tax they pay each quarter through the estimated tax system.

The revised estimated tax package, Form 1040-ES, on IRS.gov is designed to help taxpayers figure these payments correctly. The package includes a quick rundown of key tax changes, income tax rate schedules for 2019 and a useful worksheet for figuring the right amount to pay.

Estimated tax penalty

Taxpayers should keep in mind that if not enough tax is paid through withholding and estimated tax payments, a penalty may be charged. A penalty may also be charged if estimated tax payments are late, even if a refund is due at tax time.

Pay electronically anytime

Taxpayers can pay their 2019 estimated tax payments electronically anytime before the final due date for the tax year. Most taxpayers make estimated tax payments in equal amounts by the four established due dates. The three remaining due dates for tax year 2019 estimated taxes are June 17, September 16, and the final payment is due January 15, 2020. Direct Pay and EFTPS are both free payment options, and taxpayers can schedule their payments in advance as well as receive email notifications about the payment. Visit IRS.gov/payments to schedule electronic payments online, by phone or via the IRS2go mobile app.

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           

-Can married couples hold property?

Posted by Admin Posted on May 02 2019

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Yes. After marriage, there are many ways of owning property. They differ from state to state.

  • Sole tenancy, which is when one individual has ownership. The property is passed on in accordance with the will at death.
  • Joint tenancy, with the privilege of survivorship. Two or more people have equal ownership. The property is passed to the joint owner upon death. This should be used to effectively avoid probate.
  • Tenancy in common, property has joint ownership with the privilege of survivorship. The property is passed on according to your will upon death.
  • Tenancy by the entirety, like joint tenancy, with privilege of survivorship. This doesn't allow a spouse to get rid of the property without the other's consent and is only possible for spouses.
  • Community property, property that is gained through marriage that has equal ownership. States such as AZ, CA, ID, LA, NV, NM, TX, WA, and WI allow community property.

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

-Upon a family member's death, what taxes are due?-

Posted by Admin Posted on May 02 2019

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The following sums up the different taxes that may need to be paid upon death of a family member:

  • Federal Estate Tax. Amounts that are given to the surviving spouse or to a charity are typically exempt from estate tax. Normally, the estate tax is only owed on estates (which, after decreasing the amount by what is given to the spouse and charity, surpasses the unified credit exemption equivalent).
  • If you need to file an estate tax return, get in touch with the IRS to get a Form 706. Within nine months of the death, absent extension date, a federal estate tax return must be filed.
  • State Estate Taxes. These differ by state. States may enforce estate taxes that may be applied on top of the federal estate taxes while others may be utilized when federal estate taxes don't. There are inheritance taxes that some states impose, which are on the individuals that receive the inheritance, rather than on the estate itself.
  • Income Taxes. The deceased's state and federal income taxes are due for the year of death. Unless an extension is solicited, the taxes are due on the regular filing date of the coming year. For the year of the death, the deceased's spouse may file a joint federal income tax return. If the spouse has a dependent child, he/she may file for an additional two years. It might be helpful to look at the IRS's Publication 559, "Information for Survivors, Executors and Administrators".

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

-Is the cost of getting a divorce a deduction?

Posted by Admin Posted on May 02 2019

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Typically no, although specific fees paid for income or estate tax advice due to the divorce may be deductible. The fees used to decide the alimony amount or to collect the alimony may be deducted. These would be subject to the 2% limitation under the miscellaneous item deductions.

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 a divorce, what happens to my credit history?

Posted by Admin Posted on May 02 2019

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If the name on your account changes, lenders may appraise the application and credit line to decide if your qualifications meet the credit standards. You may be asked to reapply.

To avoid inconvenience, maintain credit in your own name. Preserving your own, separate, credit history makes things easier in the future. In an emergency, if you need credit, it will be available.

Avoid using your spouse's name - i.e. Mrs. Peter Johnson - for purpose of credit.

Get an update on your credit report. Be sure that your name, as well as your spouse's, is being reported correctly. If you would like to use your spouse's credit history to your benefit, simply write a letter to the credit agency and request that both names be put on the account.

Find out if there is any incomplete or inaccurate data in your account. Send the credit bureau a letter asking them to correct this information. They need to confirm receipt within a normal time period and inform you when the mistake is fixed.

Improving your own credit history in your name should be simple if you have been sharing accounts with your spouse. Make a call to a major credit bureau and ask for copies of your account information. Get in touch with the issuers of the cards with whom you share accounts with your spouse and request to have your name on the account as well.

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 May 02 2019

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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

-Upon a family member's death, what taxes are due?

Posted by Admin Posted on May 02 2019

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The following sums up the different taxes that may need to be paid upon death of a family member:

  • Federal Estate Tax. Amounts that are given to the surviving spouse or to a charity are typically exempt from estate tax. Normally, the estate tax is only owed on estates (which, after decreasing the amount by what is given to the spouse and charity, surpasses the unified credit exemption equivalent).
  • If you need to file an estate tax return, get in touch with the IRS to get a Form 706. Within nine months of the death, absent extension date, a federal estate tax return must be filed.
  • State Estate Taxes. These differ by state. States may enforce estate taxes that may be applied on top of the federal estate taxes while others may be utilized when federal estate taxes don't. There are inheritance taxes that some states impose, which are on the individuals that receive the inheritance, rather than on the estate itself.
  • Income Taxes. The deceased's state and federal income taxes are due for the year of death. Unless an extension is solicited, the taxes are due on the regular filing date of the coming year. For the year of the death, the deceased's spouse may file a joint federal income tax return. If the spouse has a dependent child, he/she may file for an additional two years. It might be helpful to look at the IRS's Publication 559, "Information for Survivors, Executors and Administrators".

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.

-What can I do to avoid overpaying for a funeral of a member of my family?

Posted by Admin Posted on May 02 2019

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

  • You must be given, over the phone, price and other relevant information by the funeral provider to answer your questions.
  • You must be given 1) a disclosure of important legal rights, 2) a general price list, and 3) information about caskets for cremation, embalming and required purchases by the funeral provider.
  • You must be given, in writing, any service fees for the payment of goods or services such as flowers, obituary notices, and pallbearers, on your behalf by the funeral provider. Some funeral providers add a service fee to the cost, while other charge you only the cost of the item. You must also be given any information from the funeral provider about refunds, discounts or rebates from the supplier.
  • You must be given by the funeral provider, in writing, information regarding your right to purchase and what is available to you - an unfinished wood box, a type of casket, or an alternative for direct cremation.
  • In getting the products and services that you do want, you are not obligated to buy unwanted goods or services or pay any additional fees. You only need to pay for the goods and services you selected or that the state law requires in addition to the fee for the services of the funeral director and staff.
  • You must be given an itemized list of the total cost of the funeral goods and services selected by you. It must inform you of any cemetery, legal, or crematory requirements that you must meet to buy any funeral goods or services.
  • You are not allowed to be told that a certain funeral item or service can preserve the deceased's body for an indefinite time in the grave or claim that funeral goods (caskets or vaults) will not allow dirt, water, or other gravesite substances to enter.

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

If you have any questions regarding accounting, domestic taxation, 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 when my current or former spouse's bad credit affects me?

Posted by Admin Posted on May 02 2019

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It is possible to separate yourself from your spouse on your credit report, if the spouse's credit is hurting yours. If you can prove that he/she opened the shared accounts prior to marriage and that he/she pays the bills, you might succeed in convincing the creditor that the damaging information is relevant to your spouse and not you.

It may take persistence to demonstrate that the credit history in question doesn't reflect your own.

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 reduce the cost of my mortgage?

Posted by Admin Posted on May 02 2019

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The options that follow will help in reducing the cost of your mortgage:

  • Think about paying down your mortgage. This is an effective way for saving and raising net worth for many people. Make a decision to pay a specific amount more than the mortgage principal and faithfully stick to it.
  • Think about refinancing your mortgage. Determine if refinancing your mortgage will save you money. Calculate to see if the costs for refinancing are worth a reduction in your monthly payments. If you intend to remain in the house for at least five years, the common guideline is that at least two points reduction will make it worthwhile to refinance.

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 the division of property in a divorce work?

Posted by Admin Posted on May 02 2019

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Each state has their own laws regarding the division of property between ex-spouses. When it comes to applying those laws, matrimonial judges have a great amount of flexibility.

Whether or not an attorney represents you, you should make sure to have done the following:

  • Learn how the laws of your state function with respect to property division.
  • Make sure to have the papers to confirm that property owned separately during the marriage has been kept separate.
  • Be prepared to report any non-financial contributions to the marriage that you have made - such as any non-financial contributions to his/her financial success or spousal support while he/she went to school.
  • Be willing to report any need for alimony or child support.

Consider having the divorce agreement supply you with funds if you have not worked outside of the home during the marriage.

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

-With a divorce, what are the tax implications?

Posted by Admin Posted on May 02 2019

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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

-After marriage, what are the tax implications?

Posted by Admin Posted on May 01 2019

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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

-When retirement plans or IRAs are divided in a divorce, what happens?

Posted by Admin Posted on May 01 2019

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

Posted by Admin Posted on May 01 2019

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

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

  • The miles are higher than stated in the lease or the vehicle has unreasonable wear and tear.
  • There was an agreement to pay an amount greater than what is stated in the original contract.
  • The Lessor wins a lawsuit for a higher amount.

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

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

A few other things to keep in mind:

  • You do not get a refund if you stay under the mileage limit.
  • You probably won't have to pay for excess mileage if you purchase the car at the end of a closed-end lease and you exceed the mileage allowance.

If you have any questions regarding accounting, domestic taxation, 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 Apr 29 2019

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

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

  • If there are important issues with regards to child custody, alimony or assets, find your own attorney.
  • Use referrals from other professionals, trusted friends or the American Academy of Matrimonial Lawyers (www.aaml.org) to find a good matrimonial lawyer.
  • Verify that the agreement of divorce approaches all topics such as insurance coverage, life health and auto.
  • On IRA accounts, life insurance policies, pension plans, 401(k) plans, and other retirement accounts make sure to modify the beneficiaries.
  • Update your will.

If you have any questions regarding 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 Apr 29 2019

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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 will I need if a member of the family dies?-

Posted by Admin Posted on Apr 29 2019

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

Copies of all insurance policies.

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

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

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

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

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

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

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

If you have any questions regarding accounting, domestic taxation, 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 Apr 29 2019

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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

-Is it possible to financially prepare for divorce?

Posted by Admin Posted on Apr 29 2019

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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

-How can I negotiate for a new car?

Posted by Admin Posted on Apr 29 2019

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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 is included in the initial costs of leasing a car?

Posted by Admin Posted on Apr 29 2019

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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

-Is more insurance necessary for married couples?

Posted by Admin Posted on Apr 29 2019

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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

-What should I be on the lookout for when I am purchasing life insurance?

Posted by Admin Posted on Apr 29 2019

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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.

Fuente: Thomson Reuters

-How does an auto lease function?

Posted by Admin Posted on Apr 29 2019

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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

 

-Do I negotiate on a car lease the same as I could on a car purchase?

Posted by Admin Posted on Apr 29 2019

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Like a loan, the monthly lease payment is reliant on the term of the lease, the implied interest rate and the initial "purchase price" of the car. The "lease-end" or "residual" value varies from a loan, but is still important. This is the value that is expected at the end of the lease term.

You are paying the difference between the initial purchase price and the residual value in a lease. The lowest purchase price should be negotiated, which will lower the cost of leasing. If you don't intend to buy the car at the end of the lease term and it is closed-end, you might want to negotiate a higher residual value. Make sure that your expected mileage during the lease aligns with the allowed mileage in the agreement. If it doesn't, you may pay significant penalties when you turn the vehicle back in to the dealer.

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 2019

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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

-Who needs to be notified if a spouse changes their name after marriage?

Posted by Admin Posted on Apr 24 2019

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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

-How should unmarried couples protect their estate and financial holdings?

Posted by Admin Posted on Apr 24 2019

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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

-What is probate?

Posted by Admin Posted on Apr 09 2019

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It is the legal process of allocating the estate to the lawful heirs as well as paying the debts of the deceased. The process typically includes:

  • An individual being appointed by the court to function as the personal representative or executor of the estate. The person is usually mentioned in the will. The court will appoint a personal representative, typically the spouse, if there is no will.
  • Validating the will.
  • Letting all heirs, beneficiaries and creditors know that the will has been probated.
  • In accordance with the will or state law, organizing the estate by the personal representative.

A petition must be filed by the spouse or the selected personal representative with the court following the death. A fee for the process of probate will be charged.

Probation of a will might require legal assistance, depending on the size and complexity of the assets to probate.

If the deceased and someone else jointly owned assets, they are not subject to probate. The proceeds of a life insurance policy or Individual Retirement Account (IRA) will be paid to the beneficiary and are not subject to probate.

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  

-If my spouse died without a will, how will his/her assets be distributed?

Posted by Admin Posted on Apr 09 2019

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The law will pass on the jointly held assets with right of survivorship on to the joint holder. The designated beneficiary of the insurance policies and retirement accounts will be awarded to said individuals. The assets owned only by the decedent will be dealt with according to state law, known as intestacy. Generally, the preference is given to the spouse or children, but the laws differ from state to state.

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 resolve a consumer complaint?

Posted by Admin Posted on Apr 09 2019

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

Approach the Seller

  1. Compile all necessary evidence such as canceled checks, receipt, photographs showing the issue, a warranty, bill of sale or contract.
  2. Determine your goal. Would you like the product replaced? Would you like a refund? Are you just looking for an apology?
  3. Schedule a meeting with the manager, customer service representative or other appropriate person by calling the store or service provider. In this meeting with the individual, describe as clearly as possible the nature of the issue and what your goal is. If you can only speak by phone, write a letter as follow-up and keep detailed notes of the dates and with whom you spoke with. It is important to note that if there is a valid warranty for the product, it is best to follow-up with the manufacturer and not the merchant.
  4. Take the issue to a higher level, if this doesn't find a solution. This could be the corporate president or supervisor. At this point, you should put your complaint in writing if you have yet to do so. This letter should detail your name, phone numbers, address, and account number (if applicable). Include the date and place of purchase as well as the model and serial number if a product is involved. Concisely describe the issue at hand and the process you have gone through so far to reach a solution. Lastly, you should include what outcome you want and state a deadline for this outcome. Keep a copy of the letter for yourself and include relevant copies of documents. Make sure you keep the originals and retain copies of any correspondence you receive from the company.

Get in touch with an agency

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

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

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

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

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

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

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

Filing a lawsuit

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

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

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

If you have any questions regarding accounting, domestic taxation, 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 level of home insurance should I buy?

Posted by Admin Posted on Mar 29 2019

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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  

-What will worker's compensation cover if I ever need it?

Posted by Admin Posted on Mar 29 2019

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Worker's compensation will only cover you for injuries that occur on the job site. The compensation varies from state to state, but most states will pay throughout the lifetime of the worker, in the case of a permanent disability.

You can get all of the information that you need regarding individual state's worker's compensation benefits by contacting your state's Department of Labor.

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 exactly is long-term care insurance and how does it work?

Posted by Admin Posted on Mar 29 2019

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With long-term care insurance (LTCI), you are guaranteed to be paid a certain amount of money towards care for a specified length of time.

As the age of the covered individual increases, so does the premium, so in order to get a better rate, this is something that you may want to purchase earlier in life while the premiums are still low.

Indemnity-type insurance actually distributes the money to the caregivers, and pays the daily benefit directly to the insured party; this type can be easier because there is much less paperwork and more flexibility about how the money can be spent.

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 29 2019

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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  

-How can I easily compare prices between insurance companies?

Posted by Admin Posted on Mar 29 2019

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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

What can I do to get a good price on my homeowner's insurance?

Posted by Admin Posted on Mar 29 2019

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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  

-What should I consider when choosing a long-term insurance provider?

Posted by Admin Posted on Mar 29 2019

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It is important to look at the stability of the company that you are looking into, because they need to be there when you are in your time of need. Companies who sell long-term insurance may not be as closely regulated as other insurance companies. You can find the ratings of these companies from Standard & Poor's.

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 29 2019

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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  

-How are people classified for rate purposes?

Posted by Admin Posted on Mar 29 2019

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To ensure that you receive the best rate possible it is useful to understand how these premiums are calculated by insurers. Firstly insurers will place people into four main categories:

  • Preferred
  • Standard
  • Substandard
  • Uninsurable

Someone who has a semi-serious illness such as diabetes or heart disease can be insured but will pay a higher premium. People with a chronic illness will be placed in the substandard category. Someone with a terminal illness will be rendered uninsurable.

People with high risk jobs or hobbies will be considered substandard as well.

The premiums that you are charged will correlate with the category that you are placed in. Since the categorizing is not an exact science, one company may place you in a different category than another, thus drastically changing the prices of your premiums.

Once you are approved for coverage from a company, they cannot deny you coverage for any reason unless you cease 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: Thomson Reuters

-What can I do to ensure that I am insured adequately?

Posted by Admin Posted on Mar 29 2019

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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  

-What amount of life insurance should I have?

Posted by Admin Posted on Mar 29 2019

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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

-Why should I have life insurance? Do I really need it?

Posted by Admin Posted on Mar 29 2019

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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

-Foreign Income

Posted by Admin Posted on Mar 15 2019

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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.

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

If you have any questions regarding 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

Refund, Where's My Refund?

Posted by Admin Posted on Mar 15 2019

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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

How much is it possible to save by comparison shopping?

Posted by Admin Posted on Mar 12 2019

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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

Should I keep collision coverage on my old car?

Posted by Admin Posted on Mar 12 2019

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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

-How can I keep my car insurance costs low?

Posted by Admin Posted on Mar 12 2019

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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

-Car Donations

Posted by Admin Posted on Mar 12 2019

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The IRS reminds taxpayers that specific rules apply for taking a tax deduction for donating cars to charities. If the claimed value of the donated motor vehicle, boat or plane exceeds $500, you can deduct the smaller of the vehicle's FMV on the date of the contribution or the gross proceeds received from the sale of the vehicle.

People who want to take a deduction for the donation of their vehicle on their tax return should take quite a few steps, but here is the most obvious:

Check that the Organization is Qualified.

Taxpayers must make certain that they contribute their car to an eligible organization; otherwise, their donation will not be tax deductible. Taxpayers can search Exempt Organizations Select Check online tool to check that an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified.  Please contact us if you're considering a car donation for your tax return!

If you have any questions regarding accounting, domestic taxation, 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

-ROTH IRA Contributions

Posted by Admin Posted on Mar 12 2019

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Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules:

  1. Income To contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses). Your modified adjusted gross income must be less than:
    • $196,000 — Married Filing Jointly.
    • $10,000 — Married Filing Separately (and you lived with your spouse at any time during the year).
    • $133,000 — Single, Head of Household, or Married Filing Separately (and you did not live with your spouse during the year).
  2. Age There is no age limitation for Roth IRA contributions. Unlike traditional IRAs, you can be any age and still qualify to contribute to a Roth IRA.
  3. Contribution Limits In general, if your only IRA is a Roth IRA, the maximum current year contribution limit is the lesser of your taxable compensation or $5,500 ($6,500 for those age 50 or over). The maximum contribution limit phases out if your modified adjusted gross income is within these limits:
    • $186,000-$196,000 — Married Filing Jointly or Qualifying widow(er)
    • $0-$10,000 — Married Filing Separately (and you lived with your spouse at any time during the year)
    • $118,000-$133,000 — Single, Head of Household, or Married Filing Separately (and you did not live with your spouse)
  4. Contributions to Spousal Roth IRA You can make contributions to a Roth IRA for your spouse provided you meet the income requirements.

* Note - threshold amounts listed above are for tax year 2017.

 

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

-Selling Your Home

Posted by Admin Posted on Mar 12 2019

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If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years.

To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale. You also must not have excluded gain on another home sold during the two years before the current sale.

If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualify for the exclusion. But both of you would have to meet the use test to claim the $500,000 maximum amount.

To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before the sale. The two years may consist of 24 full months or 730 days. Short absences, such as for a summer vacation, count as periods of use. Longer breaks, such as a one-year sabbatical, do not.

If you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home due to health, a change in place of employment, or certain unforeseen circumstances. Unforeseen circumstances include, for example, divorce or legal separation, natural or man-made disaster resulting in a casualty to your home, or an involuntary conversion of your home.  Send us a message for more!

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

Source: Thomson Reuters

How do I file an auto insurance claim?

Posted by Admin Posted on Mar 12 2019

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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

-Refinancing Your Home

Posted by Admin Posted on Mar 12 2019

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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 12 2019

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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

What are the advantages of prepaying a mortgage, and should I if I can?

Posted by Admin Posted on Mar 11 2019

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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

-IRA Contributions

Posted by Admin Posted on Mar 11 2019

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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

-Credit for the Elderly or Disabled

Posted by Admin Posted on Feb 22 2019

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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

Electric Vehicles save you tax money

Posted by Admin Posted on Feb 22 2019

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For vehicles acquired after December 31, 2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.

The credit is available only to the original purchaser of a new qualifying vehicle, and the vehicle must be placed in service in the same year the credit is being claimed on the return. If the qualifying vehicle is leased the credit is available only to the leasing company. Also, the vehicle must be used primarily in the United States.

Additional conditions regarding qualified manufacturers and phase out rules may also apply in determining credit eligibility. To find out whether your car qualifies for the Qualified Plug-in Electric Drive Motor Vehicle tax credit, you can go to the IRS.gov website and search for "plug-in vehicles" or contact us for more information.

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

Source: Thomson Reuters

-Deductible Home Offices

Posted by Admin Posted on Feb 22 2019

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Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

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

Source: Thomson Reuters

-Gift Giving

Posted by Admin Posted on Feb 22 2019

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If you gave any one person gifts valued at more than $15,000, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift.

The person who received your gift does not have to report the gift to the IRS or pay either gift or income tax on its value.

You make a gift when you give property, including money, or the use of or income from property, without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift.

There are some exceptions to the tax rules on gifts. The following gifts do not count against the annual limit:

  • Tuition or medical expenses that you pay directly to an educational or medical institution for someone's benefit
  • Gifts to your spouse
  • Gifts to a political organization for its use
  • Gifts to charities

If you are married, both you and your spouse can give separate gifts of up to the annual limit to the same person without making a taxable gift. Please contact us for more!

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

Source: Thomson Reuters

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

Posted by Admin Posted on Feb 22 2019

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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

-CHANGES IN TAX LAW AND EFFECTS ON YOU AND YOUR BUSINESS

Posted by Admin Posted on Feb 22 2019

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

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

Individuals

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

 

Businesses

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

More to consider

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

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

 

2018 Tax Rates

2018 Tax Rates Schedule X - Single

IF TAXABLE INCOME IS OVER

BUT NOT OVER

THE TAX IS

$0

$9,525

10% of the taxable amount

$9,525

$38,700

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

$38,700

$82,500

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

$82,500

$157,500

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

$157,500

$200,000

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

$200,000

$500,000

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

Over $500,000

no limit

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

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

IF TAXABLE INCOME IS OVER

BUT NOT OVER

THE TAX IS

$0

$19,050

10% of the taxable amount

$19,050

$77,400

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

$77,400

$165,000

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

$165,000

$315,000

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

$315,000

$400,000

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

$400,000

$600,000

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

$600,000

no limit

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

2018 Tax Rates Schedule Y-2 - Married Filing Separately

IF TAXABLE INCOME IS OVER

BUT NOT OVER

THE TAX IS

$0

$9,525

10% of the taxable amount

$9,525

$38,700

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

$38,700

$82,500

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

$82,500

$157,500

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

$157,500

$200,000

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

$200,000

$300,000

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

Over $300,000

no limit

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

2018 Tax Rates Schedule Z - Head of Household

IF TAXABLE INCOME IS OVER

BUT NOT OVER

THE TAX IS

$0

$13,600

10% of the taxable amount

$13,600

$51,800

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

$51,800

$82,500

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

$82,500

$157,500

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

$157,500

$200,000

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

$200,000

$500,000

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

$500,000

no limit

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

2018 Tax Rates Estates & Trusts

IF TAXABLE INCOME IS OVER

BUT NOT OVER

THE TAX IS

$0

$2,550

10% of the taxable income

$2,550

$9,150

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

$9,150

$12,500

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

$12,500

no limit

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

Social Security 2018 Tax Rates

Base Salary

$128,400

Social Security Tax Rate

6.2%

Maximum Social Security Tax

$7,960.80

Medicare Base Salary

unlimited

Medicare Tax Rate

1.45%

Additional Medicare 2018 Tax Rates

Additional Medicare Tax

0.9%

Filing status

Compensation over

Married filing jointly

$250,000

Married filing separate

$125,000

Single

$200,000

Head of household (with qualifying person)

$200,000

Qualifying widow(er) with dependent child

$200,000

Education 2018 Credit and Deduction Limits

American Opportunity Tax Credit (Hope)

$2,500

Lifetime Learning Credit

$2,000

Student Loan Interest Deduction

$2,500

Coverdell Education Savings Contribution

$2,000

Miscellaneous 2018 Tax Rates

Standard Deduction:

 
  • Married filing jointly or Qualifying Widow(er)

$24,000

  • Head of household

$18,000

  • Sinlge or Married filling separately

$12,000

Business Equipment Expense Deduction

$1,000,000

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

110% of your 2017 tax liability

Standard mileage rate for business driving

54.5 cents

Standard mileage rate for medical/moving driving

18 cents

Standard mileage rate for charitable driving

14 cents

Child Tax Credit

$2,000 per qualifying child

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

0%

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

15%

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

20%

Capital gains tax rate for unrecaptured Sec. 1250 gains

25%

Capital gains tax rate on collectibles and qualified small business stock

28%

Maximum contribution for Traditional/Roth IRA

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

Maximum employee contribution to SIMPLE IRA

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

Maximum Contribution to SEP IRA

25% of compensation up to $55,000

401(k) maximum employee contribution limit

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

Self-employed health insurance deduction

100%

Estate tax exemption

$11,180,000

Annual Exclusion for Gifts

$15,000

Foreign Earned Income Exclusion

$104,100

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Tips and Taxes

Posted by Admin Posted on Feb 21 2019

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Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income, advises the IRS.

As taxable income, these tips are subject to federal income, Social Security and Medicare taxes, and may be subject to state income tax as well.

You must keep a running daily log of all your tip income and tips paid out. This includes cash that you receive directly from customers, tips from credit card charges from customers that your employer pays you, the value of any non-cash tips such as tickets or passes that you receive, and the amount of tips you paid out to other employees through tip pools or tip splitting and the names of those employees.

You can use IRS Publication 1244, Employee's Daily Record of Tips and Report of Tips to Employer, to record your tip income. For a free copy of Publication 1244, call the IRS toll free at 1-800-TAX-FORM (1-800-829-3676).

If you receive $20 or more in tips in any one month, you should report all your tips to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes and to report the correct amount of your earnings to the Social Security Administration (which will affect your benefits when you retire or if you become disabled, or your family's benefits if you die).  Contact us so your wages are properly reported!

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

Coverdell Savings Accounts

Posted by Admin Posted on Feb 21 2019

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A Coverdell Education Savings Account (ESA) is a savings account created as an incentive to help parents and students save for education expenses.

The total contributions for the beneficiary (who is under age 18 or is a special needs beneficiary) of this account in any year cannot be more than $2,000, no matter how many accounts have been established. The beneficiary will not owe tax on the distributions if, for a year, the distributions from an account are not more than a beneficiary's qualified education expenses at an eligible education institution. This benefit applies to higher education expenses as well as to elementary and secondary education expenses.

Generally, any individual (including the beneficiary) can contribute to a Coverdell ESA if the individual's modified adjusted gross (MAGI) income is less than an annual, constantly changing maximum. Usually, MAGI for the purpose of determining your maximum contribution limit is the adjusted gross income (AGI) shown on your tax return increased by the following exclusion from your income: foreign earned income of U.S. citizens or residents living abroad, housing costs of U.S. citizens or residents living abroad, and income from sources within Puerto Rico or American Samoa. Contributions to a Coverdell ESA may be made until the due date of the contributor's return, without extensions.

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

Where’s My Refund? tool lets taxpayers check status of their refund

Posted by Admin Posted on Feb 14 2019

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The best way for taxpayers to check the status of their refund is to use the Where's My Refund? tool on IRS.gov. This tool gives taxpayers access to their tax return and refund status anytime. All they need is internet access and three pieces of information:

  • Their Social Security number
  • Theirfiling status
  • The exact whole dollar amount of their refund

Taxpayers can start checking on the status of their return within 24 hours after the IRS received their e-filed return, or four weeks after they mail a paper return. Where’s My Refund? includes a tracker that displays progress through three stages: the IRS receives the tax return, then approves the refund, and sends the refund.

Where’s My Refund? Updates once a day, so taxpayers don’t need to check more often.

Taxpayers on the go can track their return and refund status on their mobile devices using the free IRS2Go app. Those who file an amended return should check out the Where’s My Amended Return? tool. 

Generally, the IRS issues most refunds in less than 21 days, but some may take longer. IRS phone and walk-in representatives can research the status of refunds only if it's been 21 days or more since a taxpayer filed electronically, or more than six weeks since they mailed a paper return. Taxpayers can also contact the IRS if Where's My Refund? directs them to do so.

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

Individuals can find answers to their questions about tax reform on IRS.gov

Posted by Admin Posted on Feb 13 2019

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The December 2017 Tax reform legislation affects almost every taxpayer. The IRS is working closely with partners in the tax return preparation and tax software industries to prepare for tax reform affecting tax year 2018. This ongoing collaboration ensures that taxpayers can continue to rely on the IRS, tax professionals and tax software programs when it’s time to file their returns.

As people prepare to file their 2018 tax returns this year, they can visit IRS.gov for answers to their questions about tax reform. Here are several of the resources that will help taxpayers find out how this law affects them:

Tax reform provisions that affect individuals

This is the main tax reform page with information for individual taxpayers. It includes dozens of links to more information on topics from withholding and tax credits to deductions and savings plans.

Tax reform basics for individuals and families

This publication provides information to help individual taxpayers understand the Tax Cuts and Jobs Act and how to comply with federal tax return filing requirements.

Tax reform resources

On this page, taxpayers can find helpful products including news releases, tax reform tax tips, revenue procedures, fact sheets, FAQs and drop-in articles.

Steps to take now to get a jump on next year’s taxes

This page has dozens of resources and tools that people can visit now or any time before they file their 2018 tax returns.

Paycheck Checkup

This page has information for people doing a Paycheck Checkup to see if they’re withholding the right amount of tax from their paychecks. Taxpayers can perform a Paycheck Checkup at the beginning of 2019 to make sure their withholding is correct for the rest of the year.

IRS Withholding Calculator

One way taxpayers can do a Paycheck Checkup is to use the Withholding Calculator. Checking withholding can help taxpayers protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time.

Taxpayer Advocate

The Taxpayer Advocate Service’s Tax Reform Changes website, available in English and Spanish, explains what is changing and what is not this year for individuals. Its interactive information can be reviewed by tax topic or line by line using a Form 1040 example and is updated to show the new 2018 Form 1040 references.

Tax reform

The main tax reform webpage on IRS.gov features information for individuals, but also takes users directly to info for people who are self-employed. It is also a great resource for anyone who does taxes or accounting for a business or charity

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

Source: IRS

IRS: DON'T BE VICTIM TO A `GOSHT´ TAX RETURN PREPARER

Posted by Admin Posted on Feb 11 2019

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Today, towards the end of the second full week of the 2019 tax filing season, the Internal Revenue Service warned taxpayers to avoid unethical tax return preparers, known as ghost preparers.

By law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number, or PTIN. Paid preparers must sign the return and include their PTIN.

But ‘ghost’ preparers do not sign the return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS. Or, for e-filed returns, they prepare but refuse to digitally sign it as the paid preparer.

According to the IRS, similar to other tax preparation schemes, dishonest and unscrupulous ghost tax return preparers look to make a fast buck by promising a big refund or charging fees based on a percentage of the refund. These scammers hurt honest taxpayers who are simply trying to do the right thing and file a legitimate tax return.

Ghost tax return preparers may also:

  • Require payment in cash only and not provide a receipt.
  • Invent income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds.
  • Direct refunds into their own bank account rather than the taxpayer’s account.
  •  

The IRS urges taxpayers to review their tax return carefully before signing and ask questions if something is not clear. And for any direct deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct.

The IRS offers tips to help taxpayers choose a tax return preparer wisely. The Choosing a Tax Professional page 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.

Taxpayers can report abusive tax preparers to the IRS. Use Form 14157, Complaint: Tax Return Preparer. 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.

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

Find out how tax reform affects your business's bottom line at IRS.gov

Posted by Admin Posted on Feb 11 2019

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Businesses may find they have questions about how 2017’s tax reform legislation affects their organization and their bottom line. IRS.gov is a great place to find answers. Here are several resources on the IRS website that address tax reform.

Tax reform provisions that affect businesses

This is the main page for businesses. Users can link from this page out to more resources with additional information, which is organized in sections by topic. These sections include a plain language description and links to news releases, notices and other technical guidance. Here are a few of the main tax topics on this page and the subtopics highlighted in each section:

  • Income: taxation of foreign income, carried interest, and like-kind exchanges
  • Deductions and depreciation: fringe benefits, moving expenses, standard mileage rates, deduction for passthrough businesses, and business interest expenses
  • Credits: employer credit for paid family and medical leave, and the rehabilitation tax credit
  • Taxes: blended federal income tax and withholding
  • Accountingmethodchanges
  • Opportunityzones

This page also includes information for specific industries, such as farming, insurance companies, and aircraft management services.

Tax Reform Small Business Initiative

This one-stop shop highlights important tax reform topics for small businesses. From this page, users can link to several additional resources.

Tax reform resources

From this page, people can link to helpful products including news releases, tax reform tax tips, revenue procedures, fact sheets, FAQs and drop-in articles. Organizations can share these materials including the drop-in articles with employees, customers and volunteers to help them better understand tax reform.

Tax Cuts and Jobs Act: A comparison for businesses

This side-by-side comparison can help businesses understand the changes the new law made to previous law. It will help businesses then make decisions and plan accordingly. It covers changes to deductions, depreciation, expensing, tax credits, and other tax items that affect businesses.

Tax reform: What’s new for your business

This electronic publication covers many of the TCJA provisions that are important for small and medium-sized businesses, their owners, and tax professionals to understand. Thisconcisepublicationincludessectionsabout:

  • Qualifiedbusinessincomededuction
  • Depreciation: Section 168 and 179 modifications 
  • Business-related losses, exclusions and deductions
  • Business credits
  • Corporatetaxprovisions
  • S corporations
  • Farmprovisions

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.

SourceIRS

401 (K) CONTRIBUTION LIMIT INCREASES TO $19.000 FOR 2019; IRA LIMIT INCREASES TO $6.000

Posted by Admin Posted on Feb 07 2019

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The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019.  The IRS today issued technical guidance detailing these items in Notice 2018-83.

Highlights of Changes for 2019

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 $18,500 to $19,000.

The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $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.

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 2019.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or their 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 their 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 2019:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $64,000 to $74,000, up from $63,000 to $73,000.
     
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $103,000 to $123,000, up from $101,000 to $121,000.
     
  • 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 $193,000 and $203,000, up from $189,000 and $199,000.
     
  • 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 $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. 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 $64,000 for married couples filing jointly, up from $63,000; $48,000 for heads of household, up from $47,250; and $32,000 for singles and married individuals filing separately, up from $31,500.

Highlights of Limitations that Remain Unchanged from 2018

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000.

Detailed Description of Adjusted and Unchanged Limitations

Section 415 of the Internal Revenue Code (Code) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost of living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under Section 415. Under Section 415(d), the adjustments are to be made following adjustment procedures similar to those used to adjust benefit amounts under Section 215(i)(2)(A) of the Social Security Act.

Effective Jan. 1, 2019, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $220,000 to $225,000. For a participant who separated from service before Jan. 1, 2019, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2018, by 1.0264.

The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2019 from $55,000 to $56,000.

The Code provides that various other dollar amounts are to be adjusted at the same time and in the same manner as the dollar limitation of Section 415(b)(1)(A). After taking into account the applicable rounding rules, the amounts for 2019 are as follows:

  • The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) is increased from $18,500 to $19,000.
     
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $275,000 to $280,000.
     
  • The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan is increased from $175,000 to $180,000.
     
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five year distribution period is increased from $1,105,000 to $1,130,000, while the dollar amount used to determine the lengthening of the five year distribution period is increased from $220,000 to $225,000.

The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $120,000 to $125,000.

The dollar limitation under Section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $6,000. The dollar limitation under Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $3,000.

The annual compensation limitation under Section 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed cost of living adjustments to the compensation limitation under the plan under Section 401(a)(17) to be taken into account, is increased from $405,000 to $415,000.

The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $600.
The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,500 to $13,000.
The limitation on deferrals under Section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $18,500 to $19,000.

The limitation under Section 664(g)(7) concerning the qualified gratuitous transfer of qualified employer securities to an employee stock ownership plan remains unchanged at $50,000.

The compensation amount under Section 1.61 21(f)(5)(i) of the Income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation remains unchanged at $110,000. The compensation amount under Section 1.61 21(f)(5)(iii) is increased from $220,000 to $225,000.

The dollar limitation on premiums paid with respect to a qualifying longevity annuity contract under Section 1.401(a)(9)-6, A-17(b)(2)(i) of the Income Tax Regulations remains unchanged at $130,000.

The Code provides that the $1,000,000,000 threshold used to determine whether a multiemployer plan is a systemically important plan under Section 432(e)(9)(H)(v)(III)(aa) is adjusted using the cost-of-living adjustment provided under Section 432(e)(9)(H)(v)(III)(bb). After taking the applicable rounding rule into account, the threshold used to determine whether a multiemployer plan is a systemically important plan under Section 432(e)(9)(H)(v)(III)(aa) is increased for 2019 from $1,087,000,000 to $1,097,000,000.

The Code also provides that several retirement-related amounts are to be adjusted using the cost-of-living adjustment under Section 1(f)(3). After taking the applicable rounding rules into account, the amounts for 2019 are as follows:

  • The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $38,000 to $38,500; the limitation under Section 25B(b)(1)(B) is increased from $41,000 to $41,500; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $63,000 to $64,000.
     
  • The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the Retirement Savings Contribution Credit for taxpayers filing as head of household is increased from $28,500 to $28,875; the limitation under Section 25B(b)(1)(B) is increased from $30,750 to $31,125; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $47,250 to $48,000.
     
  • The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the Retirement Savings Contribution Credit for all other taxpayers is increased from $19,000 to $19,250; the limitation under Section 25B(b)(1)(B) is increased from $20,500 to $20,750; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $31,500 to $32,000.
     
  • The deductible amount under Section 219(b)(5)(A) for an individual making qualified retirement contributions is increased from $5,500 to $6,000.

The applicable dollar amount under Section 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) increased from $101,000 to $103,000. The applicable dollar amount under Section 219(g)(3)(B)(ii) for all other taxpayers who are active participants (other than married taxpayers filing separate returns) increased from $63,000 to $64,000. If an individual or the individual’s spouse is an active participant, the applicable dollar amount under Section 219(g)(3)(B)(iii) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0. The applicable dollar amount under Section 219(g)(7)(A) for a taxpayer who is not an active participant but whose spouse is an active participant is increased from $189,000 to $193,000.

The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(I) for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $189,000 to $193,000. The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $120,000 to $122,000. The applicable dollar amount under Section 408A(c)(3)(B)(ii)(III) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.

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

MULTISTATE RESIDENT? WATCH OUT FOR DOUBLE TAXATION

Posted by Admin Posted on Feb 07 2019

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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

IRS ACTIVITIES FOLLOWING THE SHUTDOWN

Posted by Admin Posted on Feb 07 2019

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The IRS has reopened following the end of the government shutdown, and IRS employees are working hard to resume normal operations and help taxpayers as much as possible.

As the IRS resumes operations, there are some important pieces of information for taxpayers and tax professionals to keep in mind in several areas:

Audits. For taxpayers and tax professionals with questions about examinations affected by the shutdown, we have Frequently Asked Questions.

Collections. For taxpayers and tax professionals with a collection issue affected by the shutdown, visit the Frequently Asked Questions.  This section includes information related to liens, levies, notices of deficiency, penalties, passports and private debt collection.

Appeals. Important information for taxpayers and tax professionals with cases in Appeals affected by the shutdown.

Tax Filing for individuals. The IRS successfully opened the 2019 filing season for taxpayers on Jan. 28. The IRS will be doing everything it can to have a smooth tax season and minimize the impact on taxpayers.

Tax Court. Important updated information  for taxpayers and tax professionals with Tax Court cases, including mail being returned and issues with court petitions not being processed.

Taxpayer Advocate Service. All TAS offices are now open. As always, the Taxpayer Advocate Service  is committed to helping taxpayers. All cases matter greatly to us and we need to make sure we are addressing the most serious cases first. Due to the prolonged government shutdown, we will need some time to sort through all of our cases, calls and faxes so that we can address the most critical emergencies first.

Please be aware that if you call our offices your call may go to voicemail. We encourage you to leave your name, phone number, case number (if applicable) and detailed information about your case. Your case is important to us and we will get back to you as soon as we are able to do so. While our response times will be longer than usual, we thank you for your patience.

TE/GE: Determination Letter and Voluntary Compliance Statement applications for retirement plans. The IRS has resumed processing these applications for retirement plans. We’re working to minimize the delays in processing these applications due to the government shutdown. Please visit Tax Information for Retirement Plans for additional information. 

TE/GE: Determination Letter applications for tax-exempt status. The IRS has resumed processing applications for tax-exempt status. We’re working to minimize the delays that organizations have experienced due to the government shutdown. Please see IRS processing of exemption applications for any actions that you may need to take while you wait for the IRS to issue a determination.

TE/GE: Credit Payments to Qualified Bonds Issuers. The IRS has resumed processing Forms 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds, for refundable credit payments on direct pay bonds. We’re working to minimize the delays in processing these forms due to the government shutdown

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

JAN 2019 LAYING THE GROUNDWORK FOR YOUR 2018 TAX RETURN & INSTALLMENT SALES: A VIABLE OPTION FOR TRANSFERRING ASSETS

Posted by Admin Posted on Feb 07 2019

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The Tax Cuts and Jobs Act (TCJA) made many changes to tax breaks for individuals. Let’s look at some specific areas to review as you lay the groundwork for filing your 2018 return.

Personal exemptions

For 2018 through 2025, the TCJA suspends personal exemptions. This will substantially increase taxable income for large families. However, enhancements to the standard deduction and child credit, combined with lower tax rates, might mitigate this increase.

Standard deduction

Taxpayers can choose to itemize certain deductions on Schedule A or take the standard deduction based on their filing status instead. Itemizing deductions when the total will be larger than the standard deduction saves tax, but it makes filing more complicated.

The TCJA nearly doubles the standard deduction for 2018 to $12,000 for singles and separate filers, $18,000 for heads of households, and $24,000 for joint filers. (These amounts will be adjusted for inflation for 2019 through 2025.)

For some taxpayers, the increased standard deduction could compensate for the elimination of the exemptions, and perhaps even provide some additional tax savings. But for those with many dependents or who itemize deductions, these changes might result in a higher tax bill — depending in part on the extent to which they can benefit from enhancements to the child credit.

Child credit

Credits can be more powerful than exemptions and deductions because they reduce taxes dollar-for-dollar, rather than just reducing the amount of income subject to tax. For 2018 through 2025, the TCJA doubles the child credit to $2,000 per child under age 17.

The new law also makes the child credit available to more families than in the past. For 2018 through 2025, the credit doesn’t begin to phase out until adjusted gross income exceeds $400,000 for joint filers or $200,000 for all other filers, compared with the 2017 phaseout thresholds of $110,000 for joint filers, $75,000 for singles and heads of households, and $55,000 for marrieds filing separately. The TCJA also includes, for 2018 through 2025, a $500 tax credit for qualifying dependents other than qualifying children.

Assessing the impact

Many factors will influence the impact of the TCJA on your tax liability for 2018 and beyond. For help assessing the impact on your situation, contact us.

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

Source: Thomson Reuters

FEWER TAXPAYERS TO QUALIFY FOR HOME OFFICE DEDUCTION

Posted by Admin Posted on Feb 07 2019

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Working from home has become commonplace for people in many jobs. But just because you have a home office space doesn’t mean you can deduct expenses associated with it. Beginning with the 2018 tax year, fewer taxpayers will qualify for the home office deduction. Here’s why.

Changes under the TCJA

For employees, home office expenses used to be a miscellaneous itemized deduction. Way back in 2017, this meant one could enjoy a tax benefit only if these expenses plus other miscellaneous itemized expenses (such as unreimbursed work-related travel, certain professional fees and investment expenses) exceeded 2% of adjusted gross income.

Starting in 2018 and continuing through 2025, however, employees can’t deduct any home office expenses. Why? The Tax Cuts and Jobs Act (TCJA) suspends miscellaneous itemized deductions subject to the 2% floor for this period.

Note: If you’re self-employed, you can still deduct eligible home office expenses against your self-employment income during the 2018 through 2025 period.

Other eligibility requirements

If you’re self-employed, generally your home office must be your principal place of business, though there are exceptions.

Whether you’re an employee or self-employed, the space must be used regularly (not just occasionally) and exclusively for business purposes. If, for example, your home office is also a guest bedroom, or your children do their homework there, you can’t deduct the expenses associated with that space.

Deduction options

If eligible, you have two options for claiming the home office deduction. First, you can deduct a portion of your mortgage interest, property taxes, insurance, utilities and certain other expenses, as well as the depreciation allocable to the office space. This requires calculating, allocating and substantiating actual expenses.

A second approach is to use the simplified option. Here, only one simple calculation is necessary: $5 multiplied by the number of square feet of the office space. The simplified deduction is capped at $1,500 per year, based on a maximum of 300 square feet.

More rules and limits

Be aware that we’ve covered only a few of the rules and limits here. If you think you may qualify for the home office deduction on your 2018 return or would like to know if there’s anything additional you need to do to become eligible, contact us.

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

Source: Thomson Reuters

YOUR APPEAL RIGHTS

Posted by Admin Posted on Feb 04 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 conference are informal meetings. The local Appeals Office, which s 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 accounting, domestic taxation, international 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 ISSUES STANDARD MILEAGE RATES FOR 2019

Posted by Admin Posted on Feb 04 2019

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The Internal Revenue Service today issued the 2019 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 58 cents per mile driven for business use, up 3.5 cents from the rate for 2018,
     
  • 20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018, and
     
  • 14 cents per mile driven in service of charitable organizations.

The business mileage rate increased 3.5 cents for business travel driven and 2 cents for medical and certain moving expense from the rates for 2018. The charitable rate is set by statute and remains unchanged.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Notice-2019-02.

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

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

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. These and other limitations are described in section 4.05 of Rev. Proc. 2010-51.

Notice 2019-02, posted today on IRS.gov, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

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

Source: IRS

IMPORTANT REMINDERS

Posted by Admin Posted on Feb 01 2019

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  • Your ITIN may expire before you file a tax return in 2019. All ITINs not used on a federal tax return at least once in the last three years will expire on December 31, 2018. Additionally, all ITINs issued before 2013 with middle digits of 73, 74, 75, 76, 77, 81, or 82 (Example: (9XX-73-XXXX) will also expire at the end of the year.
  • If you need to file a tax return in 2019, IRS recommends you submit a Form W-7, Application for IRS Individual Taxpayer Identification Number, or Form W-7(SP), Solicitud de Número del Identificación Personal del Contribuyente del Servicio de Impuestos Internos, now to renew your ITIN. As a reminder, ITINs with middle digits 70, 71, 72, 78, 79 or 80 that expired in 2016 & 2017 can also be renewed.
  • See the ITIN Fact Sheet for more information
  • Along with your Form W-7, you will need to: 
    • attach your original identification documents or certified copies by the issuing agency and any other required attachments. 
    • select the reason for needing the ITIN as outlined in the Form W-7 and W-7(SP) instructions. 

      Note: A tax return is not required with a renewal application.

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

Source: IRS

IRS KICKS OFF 2019 TAX-FILING SEASON AS TAX AGENCY REOPENS; USE IRS.GOV TO AVOID PHONE DELAYS

Posted by Admin Posted on Feb 01 2019

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IR-2019-07, January 28, 2019

WASHINGTON ― The Internal Revenue Service successfully opened the 2019 tax-filing season today as the agency started accepting and processing federal tax returns for tax year 2018. Despite the major tax law changes made by the Tax Cuts and Jobs Act, the IRS was able to open this year’s tax-filing season one day earlier than the 2018 tax-filing season.

More than 150 million individual tax returns for the 2018 tax year are expected to be filed, with the vast majority of those coming before the April tax deadline. Through mid-day Monday, the IRS had already received several million tax returns during the busy opening hours.

"I am extremely proud of the entire IRS workforce. The dedicated IRS employees have worked tirelessly to successfully implement the biggest tax law changes in 30 years and launch tax season for the nation," said IRS Commissioner Chuck Rettig. “Although we face various near- and longer-term challenges, our employees are committed to doing everything we can to help taxpayers and get refunds out quickly."

Following the government shutdown, the IRS is working to promptly resume normal operations.

“The IRS will be doing everything it can to have a smooth filing season,” Rettig said. “Taxpayers can minimize errors and speed refunds by using e-file and IRS Free File along with direct deposit.”

The IRS expects the first refunds to go out in the first week of February and many refunds to be paid by mid- to late February like previous years. The IRS reminds taxpayers to check “Where’s My Refund?" for updates. Demand on IRS phones during the early weeks of tax season is traditionally heavy, so taxpayers are encouraged to use IRS.gov to find answers before they call.

April deadline; help for taxpayers through e-file

The filing deadline to submit 2018 tax returns is Monday, April 15, 2019, for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17 to file their returns.
With major changes made by the Tax Cuts and Jobs Act, the IRS encouraged taxpayers seeking more information on tax reform to consult two online resources: Publication 5307, Tax Reform: Basics for Individuals and Families, and Publication 5318; Tax Reform What’s New for Your Business. For other tips and resources, visit IRS.gov/taxreform or check out the Get Ready page on IRS.gov.

The IRS expects about 90 percent of returns to be filed electronically. Choosing e-file and direct deposit remains the fastest and safest way to file an accurate income tax return and receive a refund.

Most refunds sent in less than 21 days; EITC/ACTC refunds starting Feb. 27

The IRS expects to issue more than nine out of 10 refunds in less than 21 days. However, it’s possible a tax return may require additional review and take longer. “Where’s My Refund?” has the most up to date information available about refunds. The tool is updated only once a day, so taxpayers don’t need to check more often.
The IRS also notes that refunds, by law, cannot be issued before Feb. 15 for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. This applies to the entire refund — even the portion not associated with the EITC and ACTC. While the IRS will process the EITC and ACTC returns when received, these refunds cannot be issued before Feb. 15. Similar to last year, the IRS expects the earliest EITC/ACTC related refunds to actually be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2019, if they chose direct deposit and there are no other issues with the tax return.

“Where’s My Refund?” ‎on IRS.gov and the IRS2Go mobile app remain the best way to check the status of a refund. “Where’s My Refund?” will be updated with projected deposit dates for most early EITC and ACTC refund filers on Feb. 23, so those filers will not see a refund date on “Where's My Refund?” ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so these filers should not contact or call about refunds before the end of February.

This law was changed to give the IRS more time to detect and prevent fraud. Even with the EITC and ACTC refunds and the additional security safeguards, the IRS still expects to issue more than nine out of 10 refunds in less than 21 days. However, it’s possible a particular tax return may require additional review and a refund could take longer. Even so, taxpayers and tax return preparers should file when they’re ready. For those who usually file early in the year and are ready to file a complete and accurate return, there is no need to wait to file.

New Form 1040

Form 1040 has been redesigned for tax year 2018. The revised form consolidates Forms 1040, 1040A and 1040-EZ into one form that all individual taxpayers will use to file their 2018 federal income tax return.

The new form uses a “building block” approach that can be supplemented with additional schedules as needed. Taxpayers with straightforward tax situations will only need to file the Form 1040 with no additional schedules. People who use tax software will still follow the steps they’re familiar with from previous years. Since nearly 90 percent of taxpayers now use tax software, the IRS expects the change to Form 1040 and its schedules to be seamless for those who e-file.

Filing assistance

No matter who prepares a federal tax return, by signing the return, the taxpayer becomes legally responsible for the accuracy of all information included. IRS.gov offers a number of tips about selecting a preparer and information about national tax professional groups.

The IRS urges all taxpayers to make sure they have all their year-end statements in hand before filing. This includes Forms W-2 from employers and Forms 1099 from banks and other payers. Doing so will help avoid refund delays and the need to file an amended return.

Online tools

The IRS reminds taxpayers they have a variety of options to get help filing and preparing their tax returns on IRS.gov, the official IRS website. Taxpayers can find answers to their tax questions and resolve tax issues online. The Let Us Help You page helps answer most tax questions, and the IRS Services Guide links to these and other IRS services.

Taxpayers can go to View Your Account Information to securely access information about their federal tax account. They can view the amount they owe, pay online or set up an online payment agreement; access their tax records online; review the past 18 months of payment history; and view key tax return information for the current year as filed. Visit IRS.gov/secureaccess to review the required identity authentication process.

The IRS urges taxpayers to take advantage of the many tools and other resources available on IRS.gov.

The IRS continues to work with state tax agencies and the private-sector tax industry to address tax-related identity theft and refund fraud. As part of the Security Summit effort, stronger protections for taxpayers and the nation’s tax system are in effect for the 2019 tax filing season.

The new measures attack tax-related identity theft from multiple sides. Many changes will be invisible to taxpayers but will help the IRS, states and the tax industry provide additional protections, and tighter security requirements will better protect tax software accounts and personal information.

Renew ITIN to avoid refund delays

Many Individual Taxpayer Identification Numbers (ITINs) expired on Dec. 31, 2018. This includes any ITIN not used on a tax return at least once in the past three years. Also, any ITIN with middle digits of 73, 74, 75, 76, 77, 81 and 82 (Example: 9NN-73-NNNN) is now expired. ITINs that have middle digits 70, 71, 72 or 80 expired Dec. 31, 2017, but taxpayers can still renew them. Affected taxpayers should act soon to avoid refund delays and possible loss of eligibility for some key tax benefits until the ITIN is renewed. An ITIN is used by anyone who has tax-filing or payment obligations under U.S. tax law but is not eligible for a Social Security number.

It can take up to 11 weeks to process a complete and accurate ITIN renewal application. For that reason, the IRS urges anyone with an expired ITIN needing to file a tax return this tax season to submit their ITIN renewal application soon.

Sign and validate electronically filed tax returns

All taxpayers should keep a copy of their tax return. Some taxpayers using a tax filing software product for the first time may need their adjusted gross income (AGI) amount from their prior-year tax return to verify their identity.

Taxpayers using the same tax software they used last year will not need to enter their prior year information to electronically sign their 2017 tax return. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

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

Source: IRS

-Laying the Groundwork for Your 2018 Tax Return & Installment Sales: A Viable Option for Transferring Assets

Posted by Admin Posted on Jan 24 2019

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The Tax Cuts and Jobs Act (TCJA) made many changes to tax breaks for individuals. Let’s look at some specific areas to review as you lay the groundwork for filing your 2018 return.

Personal exemptions

For 2018 through 2025, the TCJA suspends personal exemptions. This will substantially increase taxable income for large families. However, enhancements to the standard deduction and child credit, combined with lower tax rates, might mitigate this increase.

Standard deduction

Taxpayers can choose to itemize certain deductions on Schedule A or take the standard deduction based on their filing status instead. Itemizing deductions when the total will be larger than the standard deduction saves tax, but it makes filing more complicated.

The TCJA nearly doubles the standard deduction for 2018 to $12,000 for singles and separate filers, $18,000 for heads of households, and $24,000 for joint filers. (These amounts will be adjusted for inflation for 2019 through 2025.)

For some taxpayers, the increased standard deduction could compensate for the elimination of the exemptions, and perhaps even provide some additional tax savings. But for those with many dependents or who itemize deductions, these changes might result in a higher tax bill — depending in part on the extent to which they can benefit from enhancements to the child credit.

Child credit

Credits can be more powerful than exemptions and deductions because they reduce taxes dollar-for-dollar, rather than just reducing the amount of income subject to tax. For 2018 through 2025, the TCJA doubles the child credit to $2,000 per child under age 17.

The new law also makes the child credit available to more families than in the past. For 2018 through 2025, the credit doesn’t begin to phase out until adjusted gross income exceeds $400,000 for joint filers or $200,000 for all other filers, compared with the 2017 phaseout thresholds of $110,000 for joint filers, $75,000 for singles and heads of households, and $55,000 for marrieds filing separately. The TCJA also includes, for 2018 through 2025, a $500 tax credit for qualifying dependents other than qualifying children.

Assessing the impact

Many factors will influence the impact of the TCJA on your tax liability for 2018 and beyond. For help assessing the impact on your situation, contact us.

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

Source: Thomson Reuters

-IRS waives penalty for many whose tax withholding and estimated tax payments fell short in 2018

Posted by Admin Posted on Jan 23 2019

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The Internal Revenue Service announced today that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.

The waiver computation announced today will be integrated into commercially-available tax software and reflected in the forthcoming revision of Form 2210 and instructions.

This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act (TCJA), the far-reaching tax reform law enacted in December 2017. 

“We realize there were many changes that affected people last year, and this penalty waiver will help taxpayers who inadvertently didn’t have enough tax withheld,” said IRS Commissioner Chuck Rettig. “We urge people to check their withholding again this year to make sure they are having the right amount of tax withheld for 2019.”

The updated federal tax withholding tables, released in early 2018, largely reflected the lower tax rates and the increased standard deduction brought about by the new law. This generally meant taxpayers had less tax withheld in 2018 and saw more in their paychecks. 

However, the withholding tables couldn’t fully factor in other changes, such as the suspension of dependency exemptions and reduced itemized deductions. As a result, some taxpayers could have paid too little tax during the year, if they did not submit a properly-revised W-4 withholding form to their employer or increase their estimated tax payments. The IRS and partner groups conducted an extensive outreach and education campaign throughout 2018 to encourage taxpayers to do a “Paycheck Checkup” to avoid a situation where they had too much or too little tax withheld when they file their tax returns. 

Although most 2018 tax filers are still expected to get refunds, some taxpayers will unexpectedly owe additional tax when they file their returns.

Additional Information

Because the U.S. tax system is pay-as-you-go, taxpayers are required, by law, to pay most of their tax obligation during the year, rather than at the end of the year. This can be done by either having tax withheld from paychecks or pension payments, or by making estimated tax payments.

Usually, a penalty applies at tax filing if too little is paid during the year. Normally, the penalty would not apply for 2018 if tax payments during the year met one of the following tests: 

  • The person’s tax payments were at least 90 percent of the tax liability for 2018 or
  • The person’s tax payments were at least 100 percent of the prior year’s tax liability, in this case from 2017. However, the 100 percent threshold is increased to 110 percent if a taxpayer’s adjusted gross income is more than $150,000, or $75,000 if married and filing a separate return. 

For waiver purposes only, today’s relief lowers the 90 percent threshold to 85 percent. This means that a taxpayer will not owe a penalty if they paid at least 85 percent of their total 2018 tax liability. If the taxpayer paid less than 85 percent, then they are not eligible for the waiver and the penalty will be calculated as it normally would be, using the 90 percent threshold. For further details, see Notice 2019-11, posted today on IRS.gov.

Like last year, the IRS urges everyone to check their withholding for 2019. This is especially important for anyone now facing an unexpected tax bill when they file. This is also an important step for those who made withholding adjustments in 2018 or had a major life change to ensure the right tax is still being withheld. Those most at risk of having too little tax withheld from their pay include taxpayers who itemized in the past but now take the increased standard deduction, as well as two-wage-earner households, employees with nonwage sources of income and those with complex tax situations.

To help taxpayers get their withholding right in 2019, an updated version of the agency’s online Withholding Calculator is now available on IRS.gov.With tax season starting Jan. 28, the IRS reminds taxpayers it’s never too early to get ready for the tax-filing season ahead. While it’s a good idea any year, starting early in 2019 is particularly important as most tax filers adjust to the revised tax rates, deductions and credits. 

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

Source: IRS

-Treasury, IRS issue final regulations, other guidance on new qualified business income deduction; Safe harbor enables many rental real estate owners to claim deduction

Posted by Admin Posted on Jan 22 2019

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Today the Treasury Department and the Internal Revenue Service issued final regulations and three related pieces of guidance, implementing the new qualified business income (QBI) deduction (section 199A deduction).

The new QBI deduction, created by the 2017 Tax Cuts and Jobs Act (TCJA) allows many owners of sole proprietorships, partnerships, S corporations, trusts, or estates to deduct up to 20 percent of their qualified business income.  Eligible taxpayers can also deduct up to 20 percent of their qualified real estate investment trust (REIT) dividends and publicly traded partnership income.  

The QBI deduction is available in tax years beginning after Dec. 31, 2017, meaning eligible taxpayers will be able to claim it for the first time on their 2018 Form 1040.

The guidance, released today includes:

  • A set of regulations, finalizing proposed regulations issued last summer, A new set of proposed regulations providing guidance on several aspects of the QBI deduction, including qualified REIT dividends received by regulated investment companies
  • revenue procedure providing guidance on determining W-2 wages for QBI deduction purposes,
  • notice on a proposed revenue procedure providing a safe harbor for certain real estate enterprises that may be treated as a trade or business for purposes of the QBI deduction

The proposed revenue procedure, included in Notice 2019-07, allows individuals and entities who own rental real estate directly or through a disregarded entity to treat a rental real estate enterprise as a trade or business for purposes of the QBI deduction if certain requirements are met. Taxpayers can rely on this safe harbor until a final revenue procedure is issued. 

The QBI deduction is generally available to eligible taxpayers with 2018 taxable income at or below $315,000 for joint returns and $157,500 for other filers. Those with incomes above these levels, are still eligible for the deduction but are subject to limitations, such as the type of trade or business, the amount of W-2 wages paid in the trade or business and the unadjusted basis immediately after acquisition of qualified property. These limitations are fully described in the final regulations.

The QBI deduction is not available for wage income or for business income earned by a C corporation.

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

Source: IRS

-IRS Operations During the Appropriations Lapse

Posted by Admin Posted on Jan 21 2019

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Due to the lapse in appropriations, most IRS operations are closed during the shutdown. An IRS-wide furlough began on December 22, 2018, that affects many operations.

During this period, the IRS reminds taxpayers that the underlying tax laws remain in effect, and all taxpayers should continue to meet their tax obligations as normal. Individuals and businesses should keep filing their tax returns and making payments and deposits with the IRS, as they are required to do by law.

2019 Filing Season: Key Information for Taxpayers

The IRS has announced that the 2019 filing season will begin on Jan. 28, 2019, for individual taxpayers. The IRS began accepting business tax returns (non-1040 series) on Jan. 8.

Taxpayers should keep several things in mind during this challenging period:

  • File electronically. The IRS will accept paper and electronic tax returns, but taxpayers are urged to file electronically to speed processing and refunds.
  • Tax refunds. Refunds will be paid, but the IRS cautions that returns will continue to be subject to refund fraud, identity theft and other internal reviews as in prior years. Taxpayers should use e-file or Free File with direct deposit to help speed refunds.
  • Tax filing. Taxpayers can go ahead and start working on their returns in advance of the Jan. 28 opening. Both tax software and tax professionals will be available and working in advance of IRS systems opening. Software companies and tax professionals will then submit the returns when the IRS systems open. The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds.

​Limited Operations During the Appropriations Lapse

Automated applicationsIRS.gov and many automated applications remain available, including such things as Where’s My Refund, the IRS2go phone app and online payment agreements.

Telephones. No live telephone customer service assistance is currently available, although the IRS will be adding staff to answer some of the telephone lines in the coming days. Due to the heavier call volume, taxpayers should be prepared for longer wait times. Most automated toll-free telephone applications will remain operational. The IRS encourages people to use IRS.govfor information.

In-person service. IRS walk-in taxpayer assistance centers (TACs) are closed. That means those offices are unable to handle large cash payments or assist identity theft victims required to visit an IRS office to establish their identity. In-person assistance will not be available for taxpayers experiencing a hardship.

Taxpayer appointments. While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date, when the IRS reopens.

Taxpayer correspondence. While able to receive mail, the IRS will be responding to paper correspondence to only a very limited degree during this lapse period. Taxpayers who mail in correspondence to the IRS  during this period should expect a lengthy delay for a response after the IRS reopens due to a growing correspondence backlog.

Tax-exempt groups. The IRS will not be processing applications or determinations for tax-exempt status or pension plans.

Enforcement activity. During this period, the IRS will not be conducting audits, but automated initial contact letters will continue to be mailed. No collection activity will generally occur except for automated collection activity. For example, automated IRS collection notices will continue to be mailed. Criminal Investigation work, however, continues during this period.

Passports. The IRS will not be certifying for the State Department any individuals for passport eligibility.

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

-MARRIAGE OR DIVORCE

Posted by Admin Posted on Jan 14 2019

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Newlyweds and the recently divorced should make sure that names on their tax returns match those registered with the Social Security Administration (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could cause your tax return to be rejected by the IRS.

For newlyweds, the tax scenario can begin when the bride says "I do" and takes her husband's surname, but doesn't tell the SSA about the name change. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the SSN.

Similarly, after a divorce, a woman who had taken her husband's name and had made that change known to the SSA should contact the SSA if she reassumes a previous name.

It's easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency's Web site, www.ssa.gov, by calling toll free 1-800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices.  Alternatively, please contact us as we can be of even greater assistance with your spousal situation.

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

Source: Thomson Reuters

-Ten Ways to Avoid Problems at Tax Time

Posted by Admin Posted on Jan 14 2019

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Looking for ways to avoid the last-minute rush for doing your taxes? The IRS offers these tips:

  1. Don't Procrastinate. Resist the temptation to put off your taxes until the last minute. Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.
  2. Organize Your Tax Records. Tax preparation time can be significantly reduced if you develop a system for organizing your records and receipts. Start with the income, deduction or tax credit items that were on last year's return.
  3. Visit the IRS Online. Millions of taxpayers visited the IRS Web site last year, downloading nearly 600 million forms, publications and a variety of topic-oriented tax information. Anyone with Internet access can find tax law information and answers to frequently asked tax questions.
  4. Take Advantage of Free Assistance. The IRS offers about 150 tax topics through its website at www.irs.gov/taxtopics. It also offers federal tax forms and publications at 1-800-TAX-FORM (1-800-829-3676). Some libraries, post offices, and banks carry the most widely requested forms and instructions. Libraries may also have reference sets of IRS publications. The IRS also staffs a tax Help Line for Individuals at 1-800-829-1040. Help for small businesses, corporations, partnerships and trusts which need information or assistance preparing business returns is available at 1-800-829-4933. Both lines are staffed on weekdays from 7 a.m. to 7 p.m. your local time (Alaska & Hawaii follow Pacific Time). Hearing-impaired individuals with access to TTY/TDD equipment may call 1-800-829-4059 to ask questions or to order forms and publications.
  5. Use IRS Taxpayer Assistance Centers and Vounteer Programs. Free tax help is available at IRS offices nationwide. Also, check your newspaper or local IRS office to find locations for Volunteer Income Tax Assistance or Tax Counseling for the Elderly sites. To obtain the location, dates, and hours of the VITA or TCE volunteer site closest to you, call the IRS toll-free Tax Help Line for Individuals at 1-800-829-1040 or on the IRS website.
  6. Have your accountant Double-Check Your Math and Data Entries. Review your return for possible math errors and make sure you have provided the names and correct (and legibly written) Social Security or other identification numbers for yourself, your spouse and your dependents.
  7. Have Your Refund Deposited Directly to Your Bank Account. Another way to speed up your refund and reduce the chance of theft is to have the amount deposited directly to your bank account. Check the tax instructions for details on entering the routing and account numbers on your tax return. Make sure the numbers you enter are correct. Wrong numbers can cause your refund to be misdirected or delayed.
  8. Don't Panic if You Can't Pay. If you can't immediately pay the taxes you owe, consider some stress-reducing alternatives. You can apply for an IRS installment agreement, suggesting your own monthly payment amount and due date, and getting a reduced late payment penalty rate. You also have various options for charging your balance on a credit card, either as part of an electronic return or directly through a processing agent, either by phone or online. Electronic filers with a balance due can file early and authorize the government's financial agent to take the money directly from their checking or savings account on the April 15 due date, with no fee. Note that if you file your tax return or a request for a filing extension on time, even if you can't pay, you avoid potential late filing penalties.
  9. Have Your Accountant Request an Extension of Time to File — But Pay on Time. If the clock runs out, you can get an automatic six-month extension of time to file, to October 15. An extension of time to file does not give you an extension of time to pay, however. You can e-file a Form 4868, Application for Automatic Extension of Time to File, that is included in most tax preparation software, or send a paper Form 4868 to the IRS to request the extension. You will need the adjusted gross income and total tax amounts from last year's return if you request the extension by electronic filing. You may also get an extension by charging your expected balance on a credit card at Official Payments Corporation or Link2Gov Corporation. There is no IRS fee for credit card payments, but the processors charge a convenience fee.
  10. Contact Us!

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

Source: Thomson Reuters

-THE TAX ADVOCATE SERVICE, PROVIDED BY THE IRS

Posted by Admin Posted on Jan 14 2019

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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

-FILING AN EXTENSION

Posted by Admin Posted on Jan 14 2019

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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

-IRS Confirms Tax Filing Season to Begin January 28

Posted by Admin Posted on Jan 09 2019

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Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.
 
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig.
 
Congress directed the payment of all tax refunds through a permanent, indefinite appropriation (31 U.S.C. 1324), and the IRS has consistently been of the view that it has authority to pay refunds despite a lapse in annual appropriations. Although in 2011 the Office of Management and Budget (OMB) directed the IRS not to pay refunds during a lapse, OMB has reviewed the relevant law at Treasury’s request and concluded that IRS may pay tax refunds during a lapse.

The IRS will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, to work. Additional details for the IRS filing season will be included in an updated FY2019 Lapsed Appropriations Contingency Plan to be released publicly in the coming days.
 
“IRS employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years,” said Rettig.
 
As in past years, the IRS will begin accepting and processing individual tax returns once the filing season begins. For taxpayers who usually file early in the year and have all of the needed documentation, there is no need to wait to file. They should file when they are ready to submit a complete and accurate tax return.
 
The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.
 
Software companies and tax professionals will be accepting and preparing tax returns before Jan. 28 and then will submit the returns when the IRS systems open later this month. The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds.

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

-LAYING THE GROUNDWORK FOR YOUR 2018 TAX RETURN

Posted by Admin Posted on Jan 03 2019

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The Tax Cuts and Jobs Act (TCJA) made many changes to tax breaks for individuals. Let’s look at some specific areas to review as you lay the groundwork for filing your 2018 return.

Personal exemptions

For 2018 through 2025, the TCJA suspends personal exemptions. This will substantially increase taxable income for large families. However, enhancements to the standard deduction and child credit, combined with lower tax rates, might mitigate this increase.

Standard deduction

Taxpayers can choose to itemize certain deductions on Schedule A or take the standard deduction based on their filing status instead. Itemizing deductions when the total will be larger than the standard deduction saves tax, but it makes filing more complicated.

The TCJA nearly doubles the standard deduction for 2018 to $12,000 for singles and separate filers, $18,000 for heads of households, and $24,000 for joint filers. (These amounts will be adjusted for inflation for 2019 through 2025.)

For some taxpayers, the increased standard deduction could compensate for the elimination of the exemptions, and perhaps even provide some additional tax savings. But for those with many dependents or who itemize deductions, these changes might result in a higher tax bill — depending in part on the extent to which they can benefit from enhancements to the child credit.

Child credit

Credits can be more powerful than exemptions and deductions because they reduce taxes dollar-for-dollar, rather than just reducing the amount of income subject to tax. For 2018 through 2025, the TCJA doubles the child credit to $2,000 per child under age 17.

The new law also makes the child credit available to more families than in the past. For 2018 through 2025, the credit doesn’t begin to phase out until adjusted gross income exceeds $400,000 for joint filers or $200,000 for all other filers, compared with the 2017 phaseout thresholds of $110,000 for joint filers, $75,000 for singles and heads of households, and $55,000 for marrieds filing separately. The TCJA also includes, for 2018 through 2025, a $500 tax credit for qualifying dependents other than qualifying children.

Assessing the impact

Many factors will influence the impact of the TCJA on your tax liability for 2018 and beyond. For help assessing the impact on your situation, 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

-TAX SAVING TECHNIQUE

Posted by Admin Posted on Jan 03 2019

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-INSTALLMENT SALES: A VIABLE OPTION FOR TRANSFERRING ASSETS

Posted by Admin Posted on Jan 03 2019

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Are you considering transferring real estate, a family business or other assets you expect to appreciate dramatically in the future? If so, an installment sale may be a viable option. Its benefits include the ability to freeze asset values for estate tax purposes and remove future appreciation from your taxable estate.

Giving away vs. selling

From an estate planning perspective, if you have a taxable estate it’s usually more advantageous to give property to your children than to sell it to them. By gifting the asset you’ll be depleting your estate and thereby reducing potential estate tax liability, whereas in a sale the proceeds generally will be included in your taxable estate.

But an installment sale may be desirable if you’ve already used up your $11.18 million (for 2018) lifetime gift tax exemption or if your cash flow needs preclude you from giving the property away outright. When you sell property at fair market value to your children or other loved ones rather than gifting it, you avoid gift taxes on the transfer and freeze the property’s value for estate tax purposes as of the sale date. All future appreciation benefits the buyer and won’t be included in your taxable estate.

Because the transaction is structured as a sale rather than a gift, your buyer must have the financial resources to buy the property. But by using an installment note, the buyer can make the payments over time. Ideally, the purchased property will generate enough income to fund these payments.

Advantages and disadvantages

An advantage of an installment sale is that it gives you the flexibility to design a payment schedule that corresponds with the property’s cash flow, as well as with your and your buyer’s financial needs. You can arrange for the payments to increase or decrease over time, or even provide for interest-only payments with an end-of-term balloon payment of the principal.

One disadvantage of an installment sale over strategies that involve gifted property is that you’ll be subject to tax on any capital gains you recognize from the sale. Fortunately, you can spread this tax liability over the term of the installment note. As of this writing, the long-term capital gains rates are 0%, 15% or 20%, depending on the amount of your net long-term capital gains plus your ordinary income.

Also, you’ll have to charge interest on the note and pay ordinary income tax on the interest payments. IRS guidelines provide for a minimum rate of interest that must be paid on the note. On the bright side, any capital gains and ordinary income tax you pay further reduces the size of your taxable estate.

Simple technique, big benefits

An installment sale is an approach worth exploring for business owners, real estate investors and others who have gathered high-value assets. It can help keep a family-owned business in the family or otherwise play an important role in your estate plan.

Bear in mind, however, that this simple technique isn’t right for everyone. Our firm can review your situation and help you determine whether an installment sale is a wise move 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

-Organizational and Start Up Costs

Posted by Admin Posted on Jan 02 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

TAXABLE VS. TAX-ADVANTAGED: WHERE TO HOLD INVESTMENTS

Posted by Admin Posted on Dec 27 2018

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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

-BUSINESS OR HOBBY

Posted by Admin Posted on Dec 27 2018

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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:

  1. You carry on the activity in a business-like manner,
  2. The time and effort you put into the activity indicate you intend to make it profitable,
  3. You depend on income from the activity for your livelihood,
  4. Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business),
  5. You change your methods of operation in an attempt to improve profitability,
  6. You, or your advisors, have the knowledge needed to carry on the activity as a successful business,
  7. You were successful in making a profit in similar activities in the past,
  8. The activity makes a profit in some years, and
  9. You can expect to make a future profit from the appreciation of the assets used in the activity.

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 Dec 27 2018

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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

-ACCELERATING YOUR PROPERTY TAX DEDUCTION TO REDUCE YOUR TAX BILL

Posted by Admin Posted on Dec 27 2018

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Smart timing of deductible expenses can reduce your tax liability, and poor timing can increase it unnecessarily. One deductible expense you may be able to control to your advantage is your property tax payment.

You can prepay (by December 31) property taxes that relate to 2018 (the taxes must be assessed in 2018) but that are due in 2019, and deduct the payment on your return for this year. But you generally can’t prepay property taxes that relate to 2019 (they must be assessed in 2019) and deduct the payment on this year’s return. Also, beware of the dollar-amount limitation discussed below.

A big decision

Accelerating deductible expenses such as property tax payments is typically beneficial. Prepaying your property tax may be especially advantageous if your tax rate under the Tax Cuts and Jobs Act (TCJA) is expected to decrease in the next year. Deductions save more tax when tax rates are higher.

But not every tax rate has dropped for the 2018 tax year under the TCJA — the very lowest rate, 10%, has been retained, as well as the 35% rate (though the income brackets for these rates have changed). So, some taxpayers may not save any more by prepaying. Also, taxpayers who expect to substantially increase their income next year, pushing them into a higher tax bracket, may benefit by not prepaying their property tax bill.

Another important point is that, under the TCJA, for tax years 2018 through 2025 the itemized deduction for all state and local taxes is limited to $10,000 ($5,000 for married filing separately).

More considerations

Property tax isn’t deductible for purposes of the alternative minimum tax (AMT). So, if you’re subject to the AMT this year, a prepayment may hurt you because you’ll lose the benefit of the deduction. Before prepaying your property tax, make sure you aren’t at AMT risk for 2018.

Also, don’t forget that, for 2018 to 2025, the TCJA suspends personal itemized exemptions but roughly doubles the standard deduction amounts (for 2018) to $12,000 for singles and separate filers, $18,000 for heads of households, and $24,000 for joint filers. This may affect your decision on whether to prepay.

Specific strategies

Not sure whether you should prepay your property tax bill or what other deductions you might be able to accelerate into 2018 (or should consider deferring to 2019)? Contact us. We can help you determine your optimal year-end tax planning strategies.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IS NOW THE TIME FOR SOME LIFE INSURANCE?

Posted by Admin Posted on Dec 19 2018

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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

-Business or Hobby?

Posted by Admin Posted on Dec 19 2018

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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

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

Posted by Admin Posted on Dec 19 2018

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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

-USE CAPITAL LOSSES TO OFFSET CAPITAL GAINS

Posted by Admin Posted on Dec 19 2018

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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

-YOUR APPEAL RIGHTS

Posted by Admin Posted on Dec 14 2018

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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

-IS NOW THE TIME FOR SOME LIFE INSURANCE?

Posted by Admin Posted on Dec 14 2018

TEST

 

Many people reach a point in life when buying some life insurance is highly advisable. Once you determine that you need it, the next step is calculating how much you should get and what kind.

Careful calculations

If the coverage is to replace income and support your family, this starts with tallying the costs that would need to be covered, such as housing and transportation, child care, and education — and for how long. For many families, this will be only until the youngest children are on their own.

Next, identify income available to your family from Social Security, investments, retirement savings and any other sources. Insurance can help bridge any gaps between the expenses to be covered and the income available.

If you’re purchasing life insurance for another reason, the purpose will dictate how much you need:

  • Funeral costs. An average funeral bill can top $7,000. Gravesite costs typically add thousands more to this number.
  • Mortgage payoff. You may need coverage equal to the amount of your outstanding mortgage balance.
  • Estate planning. If the goal is to pay estate taxes, you’ll need to estimate your estate tax liability. If it’s to equalize inheritances, you’ll need to estimate the value of business interests going to each child active in your business and purchase enough coverage to provide equal inheritances to the inactive children.

Term vs. permanent

The next question is what type of policy to purchase. Life insurance policies generally fall into two broad categories: term or permanent.

Term insurance is for a specific period. If you die during the policy’s term, it pays out to the beneficiaries you’ve named. If you don’t die during the term, it doesn’t pay out. It’s typically much less expensive than permanent life insurance, at least if purchased while you’re relatively young and healthy.

Permanent life insurance policies last until you die, so long as you’ve paid the premiums. Most permanent policies build up a cash value that you may be able to borrow against. Over time, the cash value also may reduce the premiums.

Because the premiums are typically higher for permanent insurance, you need to consider whether the extra cost is worth the benefits. It might not be if, for example, you may not require much life insurance after your children are grown.

But permanent life insurance may make sense if you’re concerned that you could become uninsurable, if you’re providing for special-needs children who will never be self-sufficient, or if the coverage is to pay estate taxes or equalize inheritances.

Some comfort

No one likes to think about leaving loved ones behind. But you’ll no doubt find some comfort in having a life insurance policy that helps cover your family’s financial needs and plays an important role in your estate plan. Let us help you work out the details.

For more information on the appeals process, please contact us!

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-Earned Income Tax Credit for Certain Workers

Posted by Admin Posted on Dec 14 2018

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Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

The IRS estimates that 25 percent of people who qualify don't claim the credit and at the same time, there are millions of Americans who have claimed the credit in error, many of whom simply don't understand the criteria.

EITC is based on the amount of your earned income and the number of qualifying children in your household. If you have children, they must meet the relationship, age and residency requirements. And, you must file a tax return to claim the credit.

It's easier than ever to find out if you qualify for EITC using the online tool, EITC Assistant. Please contact us for more information!

Are you eligible for any of these tax credits?

Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns, advises the IRS. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Below are some of the credits taxpayers could be eligible to claim:

  • Earned Income Tax Credit This is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the EITC. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. For more information, see IRS Publication 596, Earned Income Credit (EIC).
  • Child Tax Credit This credit is for people who have a qualifying child. The maximum amount of the credit is $2,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see Pub. 972, Child Tax Credit.
  • Child and Dependent Care Credit This is for expenses paid for the care of children under age 13, or for a disabled spouse or dependent, to enable the taxpayer to work. There is a limit to the amount of qualifying expenses. The credit is a percentage of those qualifying expenses. For more information, see Pub. 503, Child and Dependent Care Expenses.
  • Adoption Credit Adoptive parents can take a tax credit of up to $13,460 for 2016 and $13,570 for 2017 for qualifying expenses paid to adopt an eligible child. For more information, see Form 8839, Qualified Adoption Expenses.
  • Credit for the Elderly and Disabled This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are citizens or residents. There are income limitations. For more information, see Pub.524, Credit for the Elderly or the Disabled.
  • Education Credits There are two credits available, the American Opportunity Credit (formerly called the Hope Credit) and the Lifetime Learning Credit, for people who pay higher education costs. The American Opportunity Credit is for the payment of the first four years of tuition and related expenses for an eligible student for whom the taxpayer claims an exemption on the tax return. The Lifetime Learning Credit is available for all post-secondary education for an unlimited number of years. A taxpayer cannot claim both credits for the same student in one year. For more information, see Publication 970, Tax Benefits for Education.
  • Retirement Savings Contribution Credit Eligible individuals may be able to claim a credit for a percentage of their qualified retirement savings contributions, such as contributions to a traditional or Roth IRA or salary reduction contributions to a SEP or SIMPLE plan. To be eligible, you must be at least age 18 at the end of the year and not a full-time student or an individual for whom someone else claims a personal exemption. Also, your adjusted gross income (AGI) must be below a certain amount. For more information, see chapter three in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

There are other credits available to eligible taxpayers.  Please contact us so we may realize your specific situation, and offer advice.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.                                   

Source: Thomson Reuters

NAME MISMATCH = POSSIBLE TAX RETURN REJECTION

Posted by Admin Posted on Dec 14 2018

MARRIAGE OR DIVORCE

 

Newlyweds and the recently divorced should make sure that names on their tax returns match those registered with the Social Security Administration (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could cause your tax return to be rejected by the IRS.

For newlyweds, the tax scenario can begin when the bride says "I do" and takes her husband's surname, but doesn't tell the SSA about the name change. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the SSN.

Similarly, after a divorce, a woman who had taken her husband's name and had made that change known to the SSA should contact the SSA if she reassumes a previous name.

It's easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency's Web site, www.ssa.gov, by calling toll free 1-800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices.  Alternatively, please contact us as we can be of even greater assistance with your spousal situation.

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

CHANGES IN TAX LAW AND EFFECTS ON YOU AND YOUR BUSINESS

Posted by Admin Posted on Nov 20 2018

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

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

Individuals

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

 

Businesses

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

More to consider

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

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

 

2018 Tax Rates

2018 Tax Rates Schedule X - Single

If taxable income is over

But not over

The tax is

$0

$9,525

10% of the taxable amount

$9,525

$38,700

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

$38,700

$82,500

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

$82,500

$157,500

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

$157,500

$200,000

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

$200,000

$500,000

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

Over $500,000

no limit

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

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

If taxable income is over

But not over

The tax is

$0

$19,050

10% of the taxable amount

$19,050

$77,400

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

$77,400

$165,000

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

$165,000

$315,000

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

$315,000

$400,000

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

$400,000

$600,000

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

$600,000

no limit

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

2018 Tax Rates Schedule Y-2 - Married Filing Separately

If taxable income is over

But not over

The tax is

$0

$9,525

10% of the taxable amount

$9,525

$38,700

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

$38,700

$82,500

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

$82,500

$157,500

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

$157,500

$200,000

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

$200,000

$300,000

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

Over $300,000

no limit

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

2018 Tax Rates Schedule Z - Head of Household

If taxable income is over

But not over

The tax is

$0

$13,600

10% of the taxable amount

$13,600

$51,800

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

$51,800

$82,500

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

$82,500

$157,500

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

$157,500

$200,000

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

$200,000

$500,000

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

$500,000

no limit

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

2018 Tax Rates Estates & Trusts

If taxable income is over

But not over

The tax is

$0

$2,550

10% of the taxable income

$2,550

$9,150

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

$9,150

$12,500

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

$12,500

no limit

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

Social Security 2018 Tax Rates

Base Salary

$128,400

Social Security Tax Rate

6.2%

Maximum Social Security Tax

$7,960.80

Medicare Base Salary

unlimited

Medicare Tax Rate

1.45%

Additional Medicare 2018 Tax Rates

Additional Medicare Tax

0.9%

Filing status

Compensation over

Married filing jointly

$250,000

Married filing separate

$125,000

Single

$200,000

Head of household (with qualifying person)

$200,000

Qualifying widow(er) with dependent child

$200,000

Education 2018 Credit and Deduction Limits

American Opportunity Tax Credit (Hope)

$2,500

Lifetime Learning Credit

$2,000

Student Loan Interest Deduction

$2,500

Coverdell Education Savings Contribution

$2,000

Miscellaneous 2018 Tax Rates

Standard Deduction:

 
  • Married filing jointly or Qualifying Widow(er)

$24,000

  • Head of household

$18,000

  • Sinlge or Married filling separately

$12,000

Business Equipment Expense Deduction

$1,000,000

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

110% of your 2017 tax liability

Standard mileage rate for business driving

54.5 cents

Standard mileage rate for medical/moving driving

18 cents

Standard mileage rate for charitable driving

14 cents

Child Tax Credit

$2,000 per qualifying child

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

0%

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

15%

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

20%

Capital gains tax rate for unrecaptured Sec. 1250 gains

25%

Capital gains tax rate on collectibles and qualified small business stock

28%

Maximum contribution for Traditional/Roth IRA

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

Maximum employee contribution to SIMPLE IRA

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

Maximum Contribution to SEP IRA

25% of compensation up to $55,000

401(k) maximum employee contribution limit

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

Self-employed health insurance deduction

100%

Estate tax exemption

$11,180,000

Annual Exclusion for Gifts

$15,000

Foreign Earned Income Exclusion

$104,100

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-SPECIAL CIRCUMSTANCES

Posted by Admin Posted on Nov 15 2018

TEST

 

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-PERSONAL DOCUMENTS

Posted by Admin Posted on Nov 15 2018

TEST

 

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

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

 

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

 

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

Personal Documents To Keep For One Year

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

Personal Documents To Keep For Three Years

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

Personal Documents To Keep For Six Years

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

Personal Records To Keep Forever

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-WHAT ARE THE POSSIBLE IMPLICATIONS IF I CO-SIGN FOR A LOAN?

Posted by Admin Posted on Nov 15 2018

TEST

 

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-BUSINESS DOCUMENTS

Posted by Admin Posted on Nov 15 2018

TEST

 

Business Documents To Keep For One Year

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

Business Documents To Keep For Three Years

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

Business Documents To Keep For Six Years

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

Business Records To Keep Forever

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-SHOULD I REFINANCE?

Posted by Admin Posted on Nov 15 2018

TEST

 

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-TAX SAVING TECHNIQUES

Posted by Admin Posted on Nov 15 2018

TEST

 

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

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

Posted by Admin Posted on Nov 15 2018

TEST

 

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

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

  • Have you invested at least 25% or 50% of savings or personal equity into the business for the loan you are requesting? (Keep in mind that 100% of your business will not be financed by an investor.)
  • Do your work history, your credit report and letters of recommendation show a healthy record of credit worthiness? This is a key factor.
  • Do you have the training and experience necessary to operate a successful business?
  • Do your loan proposal and business plan document your knowledge of and dedication to the success of the business?
  • Is the cash flow of the business sufficient to make the monthly payments on the requested loan?

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-DEDUCTING MORTGAGE INTEREST

Posted by Admin Posted on Nov 15 2018

Deduct

 

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

DEDUCTIBLE TAXES

Posted by Admin Posted on Nov 09 2018

DEDUCTIBLE TAXES

 

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

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

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

AMENDED RETURNS

Posted by Admin Posted on Nov 09 2018

TEST

 

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

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

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

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

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

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

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

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

 

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

FOR BUSINESS FINANCING, WHAT KINDS OF LOANS EXIST?

Posted by Admin Posted on Nov 09 2018

TEST

 

You must know the exact amount of money that you need, what your purpose is and how you will repay it in order to be successful in getting a loan. You must convince the lender in a written proposal that you are a good credit risk.

There are two basic kinds of loans, although terms vary by lender:

Short-term and long-term, maturity periods of up to one year are generally short-term, which include accounts receivable loans, working capital loans and lines of credit.

Maturities greater than a year and less than seven years is a typical long-term loan. Equipment and real estate loans can have maturity up to 25 years. Major business expenses such as purchasing real estate and facilities, durable equipment, construction, vehicles, furniture and fixtures, etc. are a few purposes for long-term loans.

                                                                                    

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

FOREIGN-INCOME

Posted by Admin Posted on Nov 09 2018

TEST

 

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

FILING AN EXTENSION

Posted by Admin Posted on Nov 01 2018

FILING AN EXTENSION

 

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

TIPS FOR EARLY PREPARATION

Posted by Admin Posted on Oct 31 2018

TEST

 

 

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

CHECK WITHHOLDING TO AVOID A TAX SURPRISE

Posted by Admin Posted on Oct 30 2018

NEW LAW=TAX SURPRISES

 

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

INFORMATION ABOUT IRS NOTICES

Posted by Admin Posted on Oct 29 2018

INFORMATION ABOUT IRS NOTICES

 

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

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

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

CHARITABLE CONTRIBUTIONS

Posted by Admin Posted on Oct 23 2018

CHARITY

 

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

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

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

Organizations can tell you if they are qualified and if donations to them are deductible. IRS.gov has an Exempt Organizations Select Check online tool to help you see if an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified. Alternatively, contact us for more information!

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

DEDUCTIBLE HOME OFFICE

Posted by Admin Posted on Oct 23 2018

TEST

 

Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

GETTING MARRIED? NEW TAX IMPLICATIONS!

Posted by Admin Posted on Oct 22 2018

Getting married? New tax implications!!

 

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

LEGAL ISSUES DURING A DIVORCE

Posted by Admin Posted on Oct 22 2018

LEGAL ISSUES DURING A DIVORCE

 

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

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

  • If there are important issues with regards to child custody, alimony or assets, find your own attorney.
  • Use referrals from other professionals, trusted friends or the American Academy of Matrimonial Lawyers (www.aaml.org) to find a good matrimonial lawyer.
  • Verify that the agreement of divorce approaches all topics such as insurance coverage, life health and auto.
  • On IRA accounts, life insurance policies, pension plans, 401(k) plans, and other retirement accounts make sure to modify the beneficiaries.
  • Update your will.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

 Source: Thomson Reuters

4 QUESTIONS TO ASK BEFORE HIRING HOUSEHOLD

Posted by Admin Posted on Oct 18 2018

HIRING HOUSEHOLD HELP MEANS TAX OBLIGATIONS!

 

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

1. Who’s considered a household employee?

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

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

2. When do I pay employment taxes?

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

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

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

3. Are there exceptions?

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

4. How do I make tax payments?

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How does legal treatment differ between married and unmarried couples?

Posted by Admin Posted on Oct 18 2018

The difference between married and unmarried!!

 

Unmarried couples don't:

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

 

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHICH IS BETTER, BUYING OR LEASING MY NEXT CAR?

Posted by Admin Posted on Oct 18 2018

Is it better to lease or to buy?

 

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

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

•             Beginning costs

•             Continual costs

•             Total costs

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

•             How important is it to have ownership of the car

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

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

Posted by Admin Posted on Oct 17 2018

Help your parents while avoiding the gift tax.

 

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Tax Incentives for Higher Edcuation

Posted by Admin Posted on Oct 12 2018

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811. 

Source: Thomson Reuters 

THIS MIGHT GET YOU INTO A LOT OF TROUBLE

Posted by Admin Posted on Oct 12 2018

Audit Triggers

 

 

Not Reporting all Taxable Income

Data Entry Errors

Participation in a Tax Shelter

Rental Losses

Failure to properly pay household help

Large travel and entertainment expense

Discrepancy Between Individual Taxpayers and Corporation Filings Associated to Taxpayer

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

Large charitable contributions

Home office deductions

Not Hiring a Reputable Tax Preparer

Claiming 100% business use of a vehicle

 

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: IRS

IRS ALGORITHMS COULD DETECT FRAUD AND INACCURACIES IN TAX RETURNS

Posted by Admin Posted on Oct 12 2018

TAX AUDIT RED FLAGS: BEWARE

 

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

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

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

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at 305-274-5811.

Source: IRS

IRS issues guidance on Tax Cuts and Jobs Act changes on business expense deductions for meals, entertainment.

Posted by Admin Posted on Oct 11 2018

Dramatic changes for entertainment, amusement and recreation expenses.

 

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

 

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

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

 

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

 

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

 

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

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

Source: IRS

 

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

Posted by Admin Posted on Oct 11 2018

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

 

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

 

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

 

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

 

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

 

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

 

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

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

Source: IRS

IRS alerts taxpayers: How fake donation scams work.

Posted by Admin Posted on Oct 05 2018

IRS alerts taxpayers: How fake donation scams work.

 

Special serie Part 3

 

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

 

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

Fake charity donation requests

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

 

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

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

Source: IRS

IRS ALERTS TAXPAYERS: HOW EMAIL SCAMS WORK.

Posted by Admin Posted on Oct 05 2018

IRS alerts taxpayers: How email scams work.

 

Special serie Part 2                     

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

 

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

Phishing emails

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

 

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

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

Source: IRS

IRS ALERTS TAXPAYERS: HOW TELEPHONE SCAMS WORK.

Posted by Admin Posted on Oct 04 2018

How telephone scams work.

 

Special serie Part 1

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

 

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

 

Telephone scams

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

 

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

 

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

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

Source: IRS

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

Posted by Admin Posted on Sept 26 2018

Is it the IRS calling?

 

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

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

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

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

Note that the IRS does not:                                       

  • Demand that you use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for your debit or credit card numbers over the phone.
  • Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. Generally, the IRS will first mail you a bill if you owe any taxes. You should also be advised of your rights as a taxpayer.
  • Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If you owe taxes:

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

Here is what the IRS will do:

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

Collection

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

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


Audits

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

Criminal Investigations

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

Beware of Impersonations

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

Know Who to Contact

  • Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
  • Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.
  • Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov

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

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

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

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

Revenue Officer Visits

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

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

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

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

Audit Contacts

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

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

Source: IRS

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

Posted by Admin Posted on Sept 23 2018

benefits and under

 

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) state that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. This applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

The August, 2013 ruling implements federal tax aspects of the June 26, 2013 Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act. Under the ruling, same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.

Other agencies may provide guidance on other federal programs that they administer that are affected by the Code. Revenue Ruling 2013-17, along with updated Frequently Asked Questions for same-sex couples and updated FAQs for registered domestic partners and individuals in civil unions, are available today on IRS.gov. See also Publication 555, Community Property.

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

Source: IRS

—WHICH BUSINESS TRAVEL EXPENSES CAN YOU DEDUCT?

Posted by Admin Posted on Sept 23 2018

which business travel expenses

 

Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Generally, employees deduct these expenses by using Form 2106 (PDF), Employee Business Expenses, or Form 2106-EZ (PDF), Unreimbursed Employee Business Expenses, and Form 1040, Schedule A (PDF), Itemized Deductions. You cannot deduct expenses that are lavish or extravagant, or that are for personal purposes.

You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.

You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you cannot deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you will work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes. For an exception to the 1-year rule for federal crime investigations or prosecutions, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

You may deduct travel expenses, including meals and lodging you incurred in looking for a new job in your present trade or business. You may not deduct these expenses if you had them while looking for work in a new trade or business or while looking for work for the first time. If you are unemployed and there is a substantial break between the time of your past work and your looking for new work, you may not deduct these expenses, even if the new work is in the same trade or business as your previous work. Refer to Publication 529, Miscellaneous Deductions.

Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

Deductible travel expenses while away from home include, but are not limited to the costs of:

-Travel by airplane, train, bus or car between your home and your business  destination. (If you are provided with a ticket or you are riding free as a result of a  frequent traveler or similar program, your cost is zero.)

-Fares for taxis or other types of transportation between the airport or train station and  your hotel, the hotel and the work location, and from one customer to another, or  from  one place of business to another.

-Shipping of baggage, and sample or display material between your regular and  temporary work locations.

-Using your car while at your business destination. You can deduct actual expenses or  the standard mileage rate, as well as business-related tolls and parking fees. If you  rent a car, you can deduct only the business-use portion for the expenses.

-Meals and lodging.

-Dry cleaning and laundry.

-Business calls while on your business trip. (This includes business communications by  fax  machine or other communication devices.)

-Tips you pay for services related to any of these expenses.

-Other similar ordinary and necessary expenses related to  your business travel.  (These  expenses might include transportation to and from a business  meal, public  stenographer's  fees, computer rental fees, and operating and maintaining a  house  trailer.)

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.

If you are an employee, your allowable travel expenses are figured on Form 2106 or Form 2106-EZ. Your allowable unreimbursed expenses are carried from Form 2106 or Form 2106-EZ to Form 1040, Schedule A (PDF), and are subject to a limit based on 2% of adjusted gross income. Refer to Topic 508 for information on the 2% limit. If you do not itemize your deductions, you cannot deduct these expenses. If you are self-employed, you can deduct travel expenses on Form 1040, Schedule C (PDF), Profit or Loss From Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit From Business (Sole Proprietorship), or if you are a farmer, on Form 1040, Schedule F (PDF), Profit or Loss From Farming.

If you are a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income rather than an itemized deduction on Form 1040, Schedule A This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Claim these expenses on Form 2106 or Form 2106-EZ and carry them to the appropriate line on Form 1040. Expenses in excess of the limit can be claimed only as an itemized deduction on Form 1040, Schedule A.

Good records are essential. Refer to Topic 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

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

Source: IRS

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

Posted by Admin Posted on Sept 23 2018

are you sure you want

 

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

Pros and cons

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

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

- There’s minimal paperwork,

- Interest rates are low, and

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

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

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

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

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

Hardship withdrawals

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

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

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

The right move

Generally, you should borrow or take hardship withdrawals from a 401(k) only in emergencies or when no other financing options exist (and your job is secure).

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

Source: Thomson Reuters

—MARRIED FILERS, THE CHOICE IS YOURS

Posted by Admin Posted on Sept 23 2018

married filers

 

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

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

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

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

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

Source: Thomson Reuters

—HAVE A PENSION? BE SURE TO PLAN CAREFULLY

Posted by Admin Posted on Sept 23 2018

have a pension

 

The traditional pension may seem like a thing of the past. But many workers are still counting on payouts from one of these “defined benefit” plans in retirement. If you’re among this group, it’s important to start thinking now about how you’ll receive the money from your pension.

Making a choice

Some defined benefit plans give retirees a choice between receiving payouts in the form of a lump sum or an annuity. Taking a lump sum distribution allows you to invest the money as you please. Plus, if you manage and invest the funds wisely, you may be able to achieve better returns than those provided by an annuity.

On the other hand, if you’re concerned about the risks associated with investing your pension benefits (you could lose principal) — or don’t want the responsibility — an annuity offers guaranteed income for life. (Bear in mind that guarantees are subject to the claims-paying ability of the issuing company.)

Choosing yet again

If you choose to receive your pension benefits in the form of an annuity — or if your plan doesn’t offer a lump sum option — your plan likely will require you to choose between a single-life or joint-life annuity. A single-life annuity provides you with monthly benefits for life. The joint-life option (also referred to as “joint and survivor”) provides a smaller monthly benefit, but the payments continue over the joint lifetimes of both you and your spouse.

Deciding between the two annuity options requires some educated guesswork. To determine the option that will provide the greatest overall financial benefit, you’ll need to consider several factors — including your and your spouse’s actuarial life expectancies as well as factors that may affect your actual life expectancies, such as current health conditions and family medical histories.

You might choose the single-life option, for example, if you and your spouse have comparable life expectancies or if you expect to live longer. Under those circumstances, the higher monthly payment will maximize your overall benefits.

But there’s a risk, too: Because the payments will stop at your death, if you die prematurely and your spouse outlives you, the overall financial benefit may be smaller than if you’d chosen the joint-life option. The difference could be substantial if your spouse outlives you by many years.

Your overall financial situation — that is, your expenses and your other assets and income sources — also play a major role. Even if you expect a joint-life annuity to yield the greatest total benefit over time, you may want to consider a single-life annuity if you need additional liquidity in the short term.

Managing this asset

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

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

Source: Thomson Reuters

—Capital Gains and Losses

Posted by Admin Posted on Sept 23 2018

capital gains

 

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

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

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

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

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

Source: Thomson Reuters

—CONSOLIDATE ACCOUNTS AND SIMPLIFY YOUR FINANCIAL LIFE

Posted by Admin Posted on Sept 23 2018

accounts consolidate

 

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

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

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

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

Source: Thomson Reuters

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

Posted by Admin Posted on Sept 23 2018

many benefits of a h

 

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

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

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

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

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

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

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

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

—Why am I going to have an Audit?

Posted by Admin Posted on Sept 23 2018

why am i going to have audit

 

RED FLAGS

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

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

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

AUDIT TRIGGERS

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

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

 

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

Posted by Admin Posted on Aug 28 2018

got a big tax refund use irs

 

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

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

Tax reform has big impact

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

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

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

Do a ‘paycheck checkup’ soon

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

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

Using the Withholding Calculator

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

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

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

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

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

Adjusting withholding

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

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

Taxpayers with high incomes, complex returns: Check withholding soon

Posted by Admin Posted on Aug 28 2018

taxpayers with high incomes complex returns

 

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

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

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

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

Changes that affect high-income taxpayers

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

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

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

Do a ‘paycheck checkup’ soon

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

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

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

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

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

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

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

People with more complex situations may need to use Publication 505

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

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

Adjusting withholding

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

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

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

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

Additional information

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

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

Key tax change affects taxpayers with dependents

Posted by Admin Posted on Aug 27 2018

key tax change affects taxpayers with dependents

 

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

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

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

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

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

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

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

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

Using the Withholding Calculator 

To use the Withholding Calculator, taxpayers should have their 2017 tax returns and most recent paystubs available to determine their proper withholding for 2018.   

Calculator results depend on the accuracy of information entered. If a taxpayer’s personal circumstances change during the year, they should return to the calculator to check whether their withholding should be changed. 

Employees can use the results from the Withholding Calculator to determine if they should complete a new Form W-4 and, if so, what information to enter on that form.

The Withholding Calculator does not request personally-identifiable information, such as name, Social Security number, address or bank account number. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the Withholding Calculator or the information entered on it.

Adjusting withholding 

The Withholding Calculator will recommend how to complete new Forms W-4. If a taxpayer is at risk of being under-withheld, the calculator will recommend an additional amount of tax withholding for each job. The taxpayer can enter these amounts on their respective Forms W-4. 

Employees who need to complete a new Form W-4 should submit it to their employers as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances must submit a new Form W-4 with corrected withholding allowances to their employer within 10 days of the change.

Certain taxpayers – including those who don’t have enough income tax withheld by their employer – may have to pay estimated taxes. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state's department of revenue to learn more.

Do a ‘Paycheck Checkup’ now, avoid a surprise year-end tax bill

Posted by Admin Posted on Aug 27 2018

do a paycheck checkup now avoid a surprise year end tax bill

 

The Internal Revenue Service urges anyone working in the sharing economy to perform a Paycheck Checkup now to avoid an unexpected tax bill when they file their return next year.

Many people working in the sharing economy are employees, in which case their employers should be withholding taxes from their wages. Many others are not working as employees, so they need to make sure they pay their taxes either through withholding from other jobs they may have, or through estimated taxes.

Either way, because of the far-reaching tax changes taking effect this year, IRS urges taxpayers, including those in the sharing economy, to perform a Paycheck Checkup now. The easiest way for most employees to check their withholding is through the Withholding Calculator available on IRS.gov.

The U.S. tax system operates on a pay-as-you-go basis, so taxes must be paid as income is received rather than at the end of the year. This includes anyone involved in the sharing economy.

People who participate in the sharing economy but do not have an employer, usually need to make quarterly estimated tax payments to cover their tax obligation. In this case Publication 505, Tax Withholding and Estimated Tax, and the worksheet in  Form 1040-ES, Estimated Tax for Individuals, can help people check their withholding and figure their payments correctly. IRS Direct Pay is the fastest and easiest way to pay.

In recent years, the IRS has seen the number of taxpayers who paid the estimated tax penalty jump from 7.2 million in 2010 to 10 million in 2015, an increase of nearly 40 percent. Using the Withholding Calculator or Publication 505 and following the recommended steps can help avoid this underpayment penalty.

Sharing Economy Tax Center and other resources

The IRS has created the Sharing Economy Tax Center to help people quickly find answers to tax questions and forms for the sharing economy. The Center features:

The IRS’s Pay As You Go web page and Publication 505 can help people understand withholding and estimated payments.

People with more complex situations may need to use Publication 505

Taxpayers with more complex situations might need to use Publication 505 instead of the Withholding Calculator. This includes employees who owe self-employment tax, the alternative minimum tax or tax on unearned income from dependents. It can also help those who receive non-wage income such as dividends, capital gains, rents and royalties. The publication includes worksheets and examples to guide taxpayers through these special situations.

In some of these situations, a household may make estimated tax payments but also have tax withheld by an employer. It’s important to account for both amounts when figuring how much tax to have an employer withhold. Publication 505 helps taxpayers include estimated tax payments; the Withholding Calculator does not. 

Do a ‘Paycheck Checkup’ soon

Taxpayers need to adjust their withholding as soon as possible for an even, consistent amount of withholding throughout the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax – so more tax will have to be withheld from each remaining paycheck.

Whether someone uses the Withholding Calculator or Publication 505, it’s helpful to have their completed 2017 tax return handy to help estimate the amount of income, deductions, adjustments and credits to enter. They’ll also need their most recent pay stubs to help compute their withholding to date.

Employees can use the results from the Withholding Calculator or Publication 505 to help determine if they should complete a new Form W-4, Employee’s Withholding Allowance Certificate, and what information to include on the form.

Though primarily designed for employees who receive wages, the Withholding Calculator can also be helpful to some taxpayers receiving pension and annuity income. Recipients of pensions and annuities can change their withholding by completing Form W-4P and submitting it to their payer.

All taxpayers should remember that if their personal circumstances change during the year, they should re-check their withholding.

Taxpayers who change their withholding for 2018 should recheck their withholding at the start of 2019. This is especially important for taxpayers who reduce their withholding sometime during 2018. A mid-year withholding change in 2018 may have a different full-year impact in 2019. If taxpayers don’t submit a new Form W-4 for 2019, their withholding might be higher or lower than intended. To help protect against having too little withheld in 2019, taxpayers should check their withholding again early in 2019.

Adjusting withholding

If an employee determines they should adjust their withholding, they should complete a new Form W-4 and submit it to their employer as soon as possible. Some employers have an electronic method to update a Form W-4.

If an employee has a change in personal circumstances that reduces the number of withholding allowances they can claim, they must submit a new Form W-4 within 10 days of the change with the correct number of allowances.

As a general rule, the fewer withholding allowances an employee enters on the Form W-4, the higher their tax withholding will be. Entering “0” or “1” on line 5 of the Form W-4 means more tax will be withheld. Entering a bigger number means less tax withholding, resulting in a smaller tax refund or potentially a tax bill or penalty.

Employees may also need to determine if they should make adjustments to their state or local withholding. Contact the state's department of revenue to learn more.

Additional information

The Withholding Calculator does not request personally identifiable information such as name, Social Security number, address or bank account numbers. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the calculator or the information entered in it.

The IRS also reminds taxpayers needing advice regarding the new tax law and their personal situation should consider consulting a trusted tax professional.

Taxpayers can get more information on these topics at www.irs.gov/withholding. Additionally, IRS.gov/getready has information about steps taxpayers can take now to get a jump on next year’s taxes, including how the new tax law may affect them.

Treasury, IRS issue proposed regulations on charitable contributions and state and local tax credits

Posted by Admin Posted on Aug 27 2018

treasury irs issue proposed regulaions on charitable contributions and state and state

 

Today the U.S. Department of the Treasury and the Internal Revenue Service issued proposed regulations providing rules on the availability of charitable contribution deductions when the taxpayer receives or expects to receive a corresponding state or local tax credit.

The proposed regulations issued today are designed to clarify the relationship between state and local tax credits and the federal tax rules for charitable contribution deductions. The proposed regulations are available in the Federal Register.

Under the proposed regulations, a taxpayer who makes payments or transfers property to an entity eligible to receive tax deductible contributions must reduce their charitable deduction by the amount of any state or local tax credit the taxpayer receives or expects to receive.

For example, if a state grants a 70 percent state tax credit and the taxpayer pays $1,000 to an eligible entity, the taxpayer receives a $700 state tax credit. The taxpayer must reduce the $1,000 contribution by the $700 state tax credit, leaving an allowable contribution deduction of $300 on the taxpayer’s federal income tax return. The proposed regulations also apply to payments made by trusts or decedents’ estates in determining the amount of their contribution deduction.

The proposed regulations provide exceptions for dollar-for-dollar state tax deductions and for tax credits of no more than 15 percent of the payment amount or of the fair market value of the property transferred. A taxpayer who makes a $1,000 contribution to an eligible entity is not required to reduce the $1,000 deduction on the taxpayer’s federal income tax return if the state or local tax credit received or expected to be received is no more than $150.

Treasury and IRS welcome public comments on these proposed regulations. For details on submitting comments, see the proposed regulations.

New law makes clear: Combat-zone contract workers qualify for foreign earned income exclusion

Posted by Admin Posted on Aug 27 2018

new law makes clearcombat zone contract workers qualify for foreign

 

Certain U.S. citizens or resident aliens, specifically contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones, may now qualify for the foreign earned income exclusion.

The Bipartisan Budget Act of 2018, enacted in February, changed the tax home requirement for eligible taxpayers, enabling them to claim the foreign earned income exclusion even if their “abode” is in the United States. The new law applies for tax year 2018 and subsequent years.

This means that these taxpayers, if eligible, will be able to claim the foreign earned income exclusion on their income tax return for 2018 when they file. Under the exclusion, taxpayers can choose to exclude their foreign earned income from gross income, up to a certain dollar amount. For tax year 2018, that dollar amount limit is $103,900.

The foreign earned income exclusion is not automatic. Eligible taxpayers must file a U.S. income tax return each year with either a Form 2555 or Form 2555-EZ attached. These forms, instructions and Publication 54,Tax Guide for U.S. Citizens and Resident Aliens Abroad, will be revised later this year to reflect this clarification.

Foreign earned income is the income a taxpayer receives for performing personal services in a foreign country or countries during a period in which he or she meets both of the following requirements:

  • His or her tax home is in a foreign country, and
  • He or she meets either the bona fide residence test or the physical presence test.

Full details on these tests can be found in Publication 54.

Under prior law, many otherwise eligible taxpayers who lived and worked in designated combat zones failed to qualify because they had an abode in the United States. The new law makes it clear that contractors or employees of contractors providing support to U.S. Armed Forces in designated combat zones are eligible to claim the foreign earned income exclusion.

Taxpayers choosing the foreign earned income exclusion cannot take advantage of any other exclusion, deduction or credit related to the excluded income. This includes any expenses, losses or other items that would have been deductible had the exclusion not been claimed.

As in the past, the foreign earned income exclusion is not available to federal employees or members of the military. But service members in combat zones continue to qualify for the combat pay exclusion. 

-ASSESSING YOUR EXPOSURE TO THE ESTATE TAX AND GIFT TAX

Posted by Admin Posted on Aug 27 2018

assesing your exposure to the estate tax and gift tax

 

When Congress was debating tax law reform last year, there was talk of repealing the federal estate and gift taxes. As it turned out, rumors of their demise were highly exaggerated. Both still exist and every taxpayer with a high degree of wealth shouldn’t let either take their heirs by surprise.

Exclusions and exemptions

For 2018, the lifetime gift and estate tax exemption is $11.18 million per taxpayer. (The exemption is annually indexed for inflation.) If your estate doesn’t exceed your available exemption at your death, no federal estate tax will be due.

Any gift tax exemption you use during life does reduce the amount of estate tax exemption available at your death. But not every gift you make will use up part of your lifetime exemption. For example:

  • Gifts to your U.S. citizen spouse are tax-free under the marital deduction, as are transfers at death (bequests).
  • Gifts and bequests to qualified charities aren’t subject to gift and estate taxes.
  • Payments of another person’s health care or tuition expenses aren’t subject to gift tax if paid directly to the provider.
  • Each year you can make gifts up to the annual exclusion amount ($15,000 per recipient for 2018) tax-free without using up any of your lifetime exemption.

It’s important to be aware of these exceptions as you pass along wealth to your loved ones.

A simple projection

Here’s a simplified way to help project your estate tax exposure. Take the value of your estate, net of any debts. Also subtract any assets that will pass to charity on your death.

Then, if you’re married and your spouse is a U.S. citizen, subtract any assets you’ll pass to him or her. (But keep in mind that there could be estate tax exposure on your surviving spouse’s death, depending on the size of his or her estate.) The net number represents your taxable estate.

You can then apply the exemption amount you expect to have available at death. Remember, any gift tax exemption amount you use during your life must be subtracted. But if your spouse predeceases you, then his or her unused estate tax exemption, if any, may be added to yours (provided the applicable requirements are met).

If your taxable estate is equal to or less than your available estate tax exemption, no federal estate tax will be due at your death. But if your taxable estate exceeds this amount, the excess will be subject to federal estate tax.

Be aware that many states impose estate tax at a lower threshold than the federal government does. So, you could have state estate tax exposure even if you don’t need to worry about federal estate tax.

Strategies to consider

If you’re not sure whether you’re at risk for the estate tax, or if you’d like to learn about gift and estate planning strategies to reduce your potential liability, please contact us.

- WHAT ARE THE BIGGEST MISTAKES INVESTORS MAKE?

Posted by Admin Posted on Aug 05 2018

what are the biggest mistakes investors make

 

The biggest mistakes that investors make are:

1- Starting Too Late

The time to start is now. The power of compound interest is astounding - the earlier you take advantage the more it will work for you. If you start out earlier, you can start with less, invest less and still end up making more than if you started out later.

2- Paying High Fees

Broker's commissions can negate all of the hard-earned interest that you have accumulated. Don't let this happen to you - pay attention to what you are being charged. The more you pay, the less you keep.

3- Investing Emotionally

Successful investing consists of planning and reason. Once emotion gets involved, it can ruin all of the planning and reason that you had used to construct your investment strategy. Keep using the strategies that have consistently made people rich over the years, don't look to follow the new and exciting strategies that haven't yet stood the test of time.

4- Using a One-Size-Fits-All Plan

Your individual needs should trump any ideas of blindly following any plan. Keep an account of how much risk you are willing to take, and what your time frame is. Your portfolio should match your needs.

5- Not Taking Taxes Into Consideration

The net profits from stocks are taxable as capital gains. Being in a tax-deferred investment account will stop this from eating away at your savings.

6- Overly Risky Investing

Being extremely risky can pay off big time, but it can also leave you with a diminished nest egg it you gamble wrong. There are many great investments that offer decent returns without putting your funds in excessive danger.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- TAX RULES ON RENTAL PROPERTY

Posted by Admin Posted on Aug 05 2018

tax rules on rental property

 

Buying or selling income property has definite tax consequences. A taxpayer should clearly understand them, whether he or she intends to acquire a property or put one on the market. 

 

A sale of income property incurs either a capital gain or loss. If you profit from the sale of income property, that profit is considered fully taxable by the Internal Revenue Service. Fortunately, if you have owned that property for at least a year, you will pay only capital gains tax on those profits rather than income tax.1

Your capital gain is determined by subtracting the adjusted basis of the property (i.e., the price you paid for it, plus the total of any renovations, closing costs, and eligible legal fees) from the sale price. For most taxpayers, the capital gains rate is but 15%. If you sell an investment property for a capital gain of $30,000 and your capital gains rate is 15%, you will pay $4,500 of capital gains tax from the sale.1

Depreciation can factor into this. If the market turns south and you can deduct $20,000 in depreciation within your ownership period, then your capital gain from the sale is $10,000 instead of $30,000.2

Should you happen to sell one investment property at a gain and another at a loss in the same year, you can subtract your capital loss from your capital gain, resulting in a net capital gain or loss for that tax year.1

Should you buy & hold, you could qualify for the homeowner exclusion. If you live in an investment property for two or more years during a five-year period, the I.R.S. will consider that investment property to be your primary residence, whether you do or not. You are, thereby, eligible for the federal homeowner exclusion when you sell such property, which enables you to shield up to $250,000 of capital gains from tax. Joint filers may exclude up to $500,000 of capital gains from tax through this break.1,3

Income property investors may also qualify for some federal tax deductions. If you happen to utilize an investment property (or even a vacation home) for your personal use, you may be able to take advantage of property tax deductions, the mortgage interest deduction, even the home office deduction. The size of a deduction typically corresponds to how frequently you use the property. For example, you can deduct property management fees, insurance premiums, and certain other costs only when you use the property for longer than 14 days or 10% of the total days it is rented or leased.4

This article is simply an overview of the tax rules on rental property. To fully explore the tax implications of a sale or purchase and the deductions and exclusions you may qualify to receive, speak to a qualified tax, real estate, or financial professional today.

Eyal " Alan " Galinsky, ChFC® may be reached at (561) 368-6388 or admin@archfg.com| www.archfg.com   

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. 

Citations.

1 - finance.zacks.com/tax-liability-selling-investment-property-5957.html [3/28/17]

2 - investopedia.com/articles/mortgages-real-estate/08/rental-property.asp [2/22/17]

3 - irs.gov/taxtopics/tc701.html [1/7/17]

4 - ajc.com/business/personal-finance/these-tax-breaks-can-help-make-homeownership-more-affordable/1rauoRXHzDmeWZVgbfmsoI [3/16/17]

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

 

- REFINANCING YOUR HOME?

Posted by Admin Posted on Aug 05 2018

refinancing your home

 

Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans.

Generally, for taxpayers who itemize, the “points” paid to obtain a home mortgage may be deductible as mortgage interest. Points paid to obtain an original home mortgage can be, depending on circumstances, fully deductible in the year paid. However, points paid solely to refinance a home mortgage usually must be deducted over the life of the loan.

For a refinanced mortgage, the interest deduction for points is determined by dividing the points paid by the number of payments to be made over the life of the loan. This information is usually available from lenders. Taxpayers may deduct points only for those payments made in the tax year. For example, a homeowner who paid $2,000 in points and who would make 360 payments on a 30-year mortgage could deduct $5.56 per monthly payment, or a total of $66.72 if he or she made 12 payments in one year.

However, if part of the refinanced mortgage money was used to finance improvements to the home and if the taxpayer meets certain other requirements, the points associated with the home improvements may be fully deductible in the year the points were paid. Also, if a homeowner is refinancing a mortgage for a second time, the balance of points paid for the first refinanced mortgage may be fully deductible at pay off.

Other closing costs — such as appraisal fees and other non-interest fees — generally are not deductible. Additionally, the amount of Adjusted Gross Income can affect the amount of deductions that can be taken.  Please contact us if you've recently refinanced, and we can be a big help!

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- FIVE TAX TIPS ON UNEMPLOYMENT BENEFITS

Posted by Admin Posted on Aug 05 2018

five tax tips on unemployment benefits

 

Taxpayers who received unemployment benefits need to remember that it may be taxable. Here are five key facts about unemployment:

Unemployment is Taxable. Include all unemployment compensation as income for the year. Taxpayers should receive a Form 1099-G, Certain Government Payments, by Jan. 31. This form shows the amount received and the amount of any federal income tax withheld.

There are Different Types. Unemployment compensation includes amounts paid under federal law or state law as well as railroad, trade readjustment and airline deregulation laws. Even some forms of disability payments can count. For more information, see IRS Publication 525.

Union Benefits May be Taxable. Benefits received from regular union dues as income might be taxable. Other rules may apply if a taxpayer contributed to a special union fund and those contributions to the fund are not deductible. In this case, report only income exceeding the amount of contributions made.

Tax May be Withheld. Those who receive unemployment can choose to have federal income tax withheld by using Form W-4V, Voluntary Withholding Request. Those choosing not to have tax withheld may need to make estimated tax payments during the year.

Visit IRS.gov for Help. Taxpayers facing financial difficulties should visit the IRS.gov page: “What Ifs” for Struggling Taxpayers. This page explains the tax effect of various life events such as job loss. For those who owe federal taxes and can’t pay, the Payments tab on IRS.gov provides some options. In many cases, the IRS can take steps to help ease financial burden.

Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.  

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- GET CREDIT FOR MAKING A HOME ENERGY EFFICIENT

Posted by Admin Posted on Aug 05 2018

get credit for making a home energy efficient

 

Taxpayers who made certain energy efficient improvements to their home last year may qualify for a tax credit this year. Here are some key facts to know about home energy tax credits:

Non-Business Energy Property Credit

Part of this credit is worth 10 percent of the cost of certain qualified energy-saving items added to a taxpayer’s main home last year. Qualified improvements include adding insulation, energy-efficient exterior windows and doors, and certain roofs. Do not include the cost to install these items.

The other part of the credit is not a percentage of the cost. It includes the installation costs of certain high-efficiency heating and air-conditioning systems, high-efficiency water heaters and stoves that burn biomass fuel. The credit amount for each type of property has a different dollar limit.

This credit has a maximum lifetime limit of $500. Taxpayers may only use $200 of this limit for windows.

A taxpayer’s main home must be located in the U.S. to qualify for the credit. The non-business energy property credit is only available for existing homes.

Be sure to have the written certification from the manufacturer that their product qualifies for this tax credit. They usually post it on their website or include it with the product’s packaging. Taxpayers can use this to claim the credit. Do not attach it to a tax return. Keep it with tax records.

Taxpayers may claim the credit on their 2016 tax return if they didn’t reach the lifetime limit in past years. Under current law, Dec. 31, 2016, was the deadline for qualifying improvements to the taxpayer’s main U. S. home.

Residential Energy Efficient Property Credit

This tax credit is 30 percent of the cost of alternative energy equipment installed on or in a home. This includes the cost of installation.

Qualified equipment includes solar hot water heaters, solar electric equipment, wind turbines and fuel cell property.

There is no dollar limit on the credit for most types of property. If the credit is more than the tax owed, carry forward the unused portion of this credit to next year’s tax return.

The home must be in the U.S. It does not have to be a taxpayer’s main home, unless the alternative energy equipment is qualified fuel cell property. The residential energy efficient property credit is available for both existing homes and homes under construction.

This credit is available through 2016.

Use Form 5695, Residential Energy Credits, to claim these credits. For more information on this topic, refer to the form’s instructions. Get IRS forms anytime on IRS.gov/forms.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- DEBT CANCELLATION MAY BE TAXABLE

Posted by Admin Posted on Aug 05 2018

debt cancellation may be taxable

 

If a lender cancels part or all of a debt, a taxpayer must generally consider this as income. However, the law allows an exclusion that may apply to homeowners who had their mortgage debt canceled in 2016.

Here are 10 tips about debt cancellation:

1- Main Home. If the canceled debt was a loan on a taxpayer’s main home, they may be  able to exclude the canceled amount from their income. They must have used the loan to buy, build or substantially improve their main home to qualify. Their main home must also secure the mortgage. 

2- Loan Modification. If a taxpayer’s lender canceled or reduced part of their mortgage balance through a loan modification or ‘workout,’ the taxpayer may be able to exclude that amount from their income. They may also be able to exclude debt discharged as part of the Home Affordable Modification Program, or HAMP. The exclusion may also apply to the amount of debt canceled in a foreclosure.

3- Refinanced Mortgage. The exclusion may apply to amounts canceled on a refinanced mortgage. This applies only if the taxpayer used proceeds from the refinancing to buy, build or substantially improve their main home and only up to the amount of the old mortgage principal just before refinancing. Amounts used for other purposes do not qualify.

4- Other Canceled Debt. Other types of canceled debt such as second homes, rental and business property, credit card debt or car loans do not qualify for this special exclusion. On the other hand, there are other rules that may allow those types of canceled debts to be nontaxable.

5- Form 1099-C. If a lender reduced or canceled at least $600 of a taxpayer’s debt, the taxpayer should receive Form 1099-C, Cancellation of Debt, by Feb. 1. This form shows the amount of canceled debt and other information. 

6- Form 982. If a taxpayer qualifies, report the excluded debt on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. They should file the form with their income tax return.

7- IRS.gov Tool. Taxpayers should use the Interactive Tax Assistant tool - Do I Have Cancellation of Debt Income on My Personal Residence? - on IRS.gov to find out if their canceled mortgage debt is taxable.

8- Exclusion Extended. The law that authorized the exclusion of cancelled debt from income was extended through Dec. 31, 2016.

9- IRS Free File.  IRS e-file is fastest, safest and easiest way to file. Taxpayers can use IRS Free File to e-file their tax return for free. If they earned $64,000 or less, they can use brand name tax software. The software does the math and completes the right forms for them. If they earned more than $64,000, they can use Free File Fillable Forms. This option uses electronic versions of IRS paper forms. It is best for those who are used to doing their own taxes. Free File is available only on IRS.gov/freefile.

10- More Information. For more on this topic see Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- FRIVOLOUS TAX ARGUMENTS CAN COST YOU THOUSANDS

Posted by Admin Posted on Aug 05 2018

frivolous tax arguments can cost you thousands

 

Frivolous Tax Arguments: Don’t use frivolous tax arguments in an effort to avoid paying tax. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims Even though they are wrong and have been repeatedly thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes. The penalty for filing a frivolous tax return is $5,000. (IR-2016-27)

WASHINGTON – The Internal Revenue Service is warning taxpayers against using frivolous tax arguments to avoid paying their taxes.

Also, the IRS released the 2016 version of “The Truth about Frivolous Tax Arguments.” The document describes and responds to some of the common frivolous tax arguments made by those who oppose compliance with federal tax laws. Examples include contentions that taxpayers can refuse to pay taxes on religious or moral grounds by invoking the First Amendment. Other examples mentioned also include contentions that the only “employees” subject to federal income tax are employees of the federal government; and that only foreign-source income is taxable. The cases cited in the document demonstrate how frivolous arguments are treated by the IRS and the courts.

"The IRS and the courts hear many outlandish arguments from people trying to avoid their legal filing and tax obligations," said IRS Commissioner John Koskinen. "Taxpayers should avoid unscrupulous promoters of false tax-avoidance arguments because taxpayers end up paying what they owe plus potential penalties and interest mandated by law."

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.

Perpetrators of illegal scams may be subject to significant penalties and interest as well as possible criminal rosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shut down scams and prosecute the criminals behind them.

Debunking Frivolous Tax Arguments

“The Truth about Frivolous Tax Arguments” describes and responds to some of the common frivolous tax arguments made by those who oppose compliance with federal tax laws. The 2016 version includes numerous recently-decided cases hat demonstrate that the courts continue to regard such arguments as illegitimate.

Don’t Get Talked into Using a Frivolous Argument

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. These arguments are wrong and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes..

The penalty for filing a frivolous tax return is $5,000. The penalty applies to anyone who submits a purported tax return or other specified submission, if any portion of the submission is based on a position the IRS identified as frivolous in Notice 2010-33, 2010-17 I.R.B. 609, or reflects a desire to delay or impede administration of the tax laws.

Those who promote or adopt frivolous positions also risk a variety of other penalties.  For example, taxpayers could be responsible for an accuracy-related penalty, a civil fraud penalty, an erroneous refund claim penalty, or a failure to file penalty.  The Tax Court may also impose a penalty against taxpayers who make frivolous arguments in court.   

Taxpayers who rely on frivolous arguments and schemes may also face criminal prosecution for attempting to evade or defeat tax. Similarly, taxpayers may be convicted of a felony for willfully making and signing under penalties of perjury any return, statement, or other document that the person does not believe to be true and correct as to every material matter.  Persons who promote frivolous arguments and those who assist taxpayers in claiming tax benefits based on frivolous arguments may be prosecuted for a felony.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- WHAT CAN I DO TO RAISE MONEY FOR MY SMALL BUSINESS?

Posted by Admin Posted on Aug 05 2018

what can i do to raise money for my small business

 

Although the process is complex and frustrating, raising capital is the most basic of all business activities. When looking for financing, there are various sources to consider. For most new businesses, the main source of capital comes from savings and other forms of personal resources. There are better options available than credit cards that are often used for financing, even a small business loan.

When beginning, entrepreneurs usually look to private sources like friends and family. Generally, the money is loaned at a low interest rate or interest free, which is very beneficial at the beginning.

The most common source of funding, not including personal resources, are credit unions and banks who will provide a loan if it is possible to show that your offer is worthwhile. Other sources are venture capital firms that aid businesses in exchange for partial or equity ownership.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- CHECK OUT THESE TAX BENEFITS FOR PARENTS

Posted by Admin Posted on Aug 05 2018

tax benefits for parents

 

Taxpayers with children may qualify for certain tax benefits. Parents should consider child-related tax benefits when filing their federal tax return:

Dependent. Most of the time, taxpayers can claim their child as a dependent. Use the Interactive Tax Assistant to help determine who can be claimed as a dependent. Taxpayers can generally deduct $4,050 for each qualified dependent. If the taxpayer’s income is above a certain limit, this amount may be reduced. For more on these rules, see Publication 501, Exemptions, Standard Deduction and Filing Information.

Child Tax Credit.  Generally, taxpayers can claim the Child Tax Credit for each qualifying child under the age of 17. The maximum credit is $1,000 per child. Taxpayers who get less than the full amount of the credit may qualify for the Additional Child Tax Credit. Use the Interactive Tax Assistant to determine if a child qualifies for the Child Tax Credit. For more information, see Schedule 8812 and Publication 972, Child Tax Credit.

Child and Dependent Care Credit. Taxpayers may be able to claim this credit if they paid for the care of one or more qualifying persons. Dependent children under age 13 are among those who qualify. Taxpayers must have paid for care so that they could work or look for work. Use the Interactive Tax Assistant to determine if a child qualifies for the Child Tax Credit. See Publication 503, Child and Dependent Care Expenses, for more on this credit.

Earned Income Tax Credit. Taxpayers who worked but earned less than $53,505 last year should look into the EITC. They can get up to $6,269 in EITC. Taxpayers may qualify with or without children. Use the 2016 EITC Assistant tool at IRS.gov or see Publication 596, Earned Income Tax Credit, to learn more.

EITC and ACTC Refunds. Because of new tax-law change, the IRS cannot issue refunds before Feb. 15 returns that claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). This applies to the entire refund, even the portion not associated with these credits. The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS expects the earliest of these refunds to be available in bank accounts or debit cards during the week of Feb. 27, as long as there are no processing issues with the tax return and the taxpayer chose direct deposit. Read more about refund timing for early EITC/ACTC filers.

Adoption Credit. It is possible to claim a tax credit for certain costs paid to adopt a child. For details, see Form 8839, Qualified Adoption Expenses.

Education Tax Credits. An education credit can help with the cost of higher education. Two credits are available: the American Opportunity Tax Credit and the Lifetime Learning Credit. These credits may reduce the amount of tax owed. If the credit cuts a taxpayer’s tax to less than zero, it could mean a refund. Taxpayers may qualify even if they owe no tax. Complete Form 8863, Education Credits, and file a return to claim these credits. Taxpayers can use the Interactive Tax Assistant tool on IRS.gov to see if they can claim them. Visit the IRS’s Education Credits web page to learn more on this topic. Also, see Publication 970, Tax Benefits for Education.  

Student Loan Interest. Taxpayers may be able to deduct interest paid on a qualified student loan. They can claim this benefit even if they do not itemize deductions. Use the Interactive Tax Assistant to determine if interest paid on a student or educational loan is deductible. For more information, see Publication 970.

Self-employed Health Insurance Deduction. Taxpayers who were self-employed and paid for health insurance may be able to deduct premiums paid during the year. See Publication 535, Business Expenses, for details.   

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- AGE 50 OR OLDER? CATCH-UP CONTRIBUTIONS ARE FOR YOU

Posted by Admin Posted on Aug 05 2018

age 50 or older catch up contributions are for

 

Are you in your 50s or 60s and thinking more about retirement? If so, and you’re still not completely comfortable with the size of your nest egg, don’t forget about “catch-up” contributions. These are additional amounts beyond the regular annual limits that workers age 50 or older can contribute to certain retirement accounts.

Catch-up contributions give you the chance to take maximum advantage of the potential for tax-deferred or, in the case of Roth accounts, tax-free growth.

401(k) feature

Under 2016 401(k) limits, if you’re age 50 or older, after you’ve reached the $18,000 maximum limit for all employees, you can contribute an extra $6,000, for a total of $24,000. If your employer offers a Savings Incentive Match Plan for Employees (SIMPLE) instead, your regular contribution maxes out at $12,500 in 2016. If you’re 50 or older, you’re allowed to contribute an additional $3,000 — or $15,500 in total for the year.

But, check with your employer because, while most 401(k) plans and SIMPLEs offer catch-up contributions, not all do.

IRA benefits

Another way to save more after age 50 is through a traditional IRA or a Roth IRA. With either plan, those 50 or older generally can contribute another $1,000 above the $5,500 limit for 2016. Plus, you can make 2016 IRA contributions as late as April 18, 2017.

The benefits of making the additional contribution differ depending on which account you’re considering. With a traditional IRA, contributions may be tax deductible, providing you with immediate tax savings. (The deductibility phases out at higher income levels if you or your spouse is covered by an employer retirement plan.)

Roth contributions are made with after-tax dollars, but qualified withdrawals are tax-free. By contributing to a Roth IRA and taking the tax hit up front, you won’t lose any of the income to taxes at withdrawal, provided you’re at least 59½ and have held a Roth IRA at least five years. However, be aware that the ability to contribute to a Roth IRA is phased out based on income level.

Another option if you’d like to enjoy tax-free withdrawals is to convert some or all of your traditional IRA to a Roth IRA — but you’ll also take an up-front tax hit.

Self-employed limits

If you’re self-employed, retirement plans such as an individual 401(k) — or solo 401(k) — also allow catch-up contributions. A solo 401(k) is a plan for those with no other employees. You can defer 100% of your self-employment income or compensation, up to the regular yearly deferral limit of $18,000, plus a $6,000 catch-up contribution in 2016. But that’s just the employee salary deferral portion of the contribution.

You can also make an “employer” contribution of up to 20% of self-employment income or 25% of compensation. The total combined employee-employer contribution is limited to $53,000, plus the $6,000 catch-up contribution.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

-JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

Posted by Admin Posted on Aug 05 2018

juggling wealth family management is no trick

 

Preserving and managing family wealth requires addressing a number of major issues. These include saving for your children’s education and funding your own retirement. Juggling these competing demands is no trick. Rather, it requires a carefully devised and maintained family wealth management plan.

Start with the basics

First, a good estate plan can help ensure that, in the event of your death, your children will be taken care of and, if your estate is large, that they won’t lose a substantial portion of their inheritances to estate taxes. It can also guarantee that your assets will be passed along to your heirs according to your wishes.

Second, life insurance is essential. The right coverage can provide the liquidity needed to repay debts, support your children and others who depend on you financially, and pay estate taxes.

Prepare for the challenge

Most families face two long-term wealth management challenges: funding retirement and paying for college education. While both issues can be daunting, don’t sacrifice saving for your own retirement to finance your child’s education. Scholarships, grants, loans and work-study may help pay for college — but only you can fund your retirement.

Uncle Sam has provided several education incentives that are worth checking out, including tax credits and deductions for qualifying expenses and tax-advantaged savings opportunities such as 529 plans and Education Savings Accounts (ESAs). Because of income limits and phaseouts, many higher-income families won’t benefit from some of these tax breaks. But, your children (or your parents, in the case of contributing to an ESA) may be able to take advantage of them.

Give assets wisely

Giving money, investments or other assets to your children or other family members can save future income tax and be a sound estate planning strategy as well. You can currently give up to $14,000 per year per individual ($28,000 if married) without incurring gift tax or using your lifetime gift tax exemption. Depending on the number of children and grandchildren you have, and how many years you continue this gifting program, it can really add up.

By gifting assets that produce income or that you expect to appreciate, you not only remove assets from your taxable estate, but also shift income and future appreciation to people who may be in lower tax brackets.

Also consider using trusts to facilitate your gifting plan. The benefit of trusts is that they can ensure funds are used in the manner you intended and can protect the assets from your loved ones’ creditors.

Overcome the complexities

Creating a comprehensive plan for family wealth management and following through with it may not be simple — but you owe it to yourself and your family. We can help you overcome the complexities and manage your tax burden.

Sidebar: Charitable giving’s place in family wealth management

Do charitable gifts have a place in family wealth management? Absolutely. Properly made gifts can avoid gift and estate taxes, while possibly qualifying for an income tax deduction. Consider a charitable trust that allows you to give income-producing assets to charity, but keep the income for life — or for the charity to receive the earnings and the assets to later pass to your heirs. These are just two examples; there are more ways to use trusts to accomplish your charitable goals.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- ASSESSING YOUR EXPOSURE TO THE ESTATE TAX AND GIFT TAX

Posted by Admin Posted on Aug 05 2018

assesing your exposure to the estate tax and gift tax

 

When Congress was debating tax law reform last year, there was talk of repealing the federal estate and gift taxes. As it turned out, rumors of their demise were highly exaggerated. Both still exist and every taxpayer with a high degree of wealth shouldn’t let either take their heirs by surprise.

Exclusions and exemptions

For 2018, the lifetime gift and estate tax exemption is $11.18 million per taxpayer. (The exemption is annually indexed for inflation.) If your estate doesn’t exceed your available exemption at your death, no federal estate tax will be due.

Any gift tax exemption you use during life does reduce the amount of estate tax exemption available at your death. But not every gift you make will use up part of your lifetime exemption. For example:

  • Gifts to your U.S. citizen spouse are tax-free under the marital deduction, as are transfers at death (bequests).
  • Gifts and bequests to qualified charities aren’t subject to gift and estate taxes.
  • Payments of another person’s health care or tuition expenses aren’t subject to gift tax if paid directly to the provider.
  • Each year you can make gifts up to the annual exclusion amount ($15,000 per recipient for 2018) tax-free without using up any of your lifetime exemption.

It’s important to be aware of these exceptions as you pass along wealth to your loved ones.

A simple projection

Here’s a simplified way to help project your estate tax exposure. Take the value of your estate, net of any debts. Also subtract any assets that will pass to charity on your death.

Then, if you’re married and your spouse is a U.S. citizen, subtract any assets you’ll pass to him or her. (But keep in mind that there could be estate tax exposure on your surviving spouse’s death, depending on the size of his or her estate.) The net number represents your taxable estate.

You can then apply the exemption amount you expect to have available at death. Remember, any gift tax exemption amount you use during your life must be subtracted. But if your spouse predeceases you, then his or her unused estate tax exemption, if any, may be added to yours (provided the applicable requirements are met).

If your taxable estate is equal to or less than your available estate tax exemption, no federal estate tax will be due at your death. But if your taxable estate exceeds this amount, the excess will be subject to federal estate tax.

Be aware that many states impose estate tax at a lower threshold than the federal government does. So, you could have state estate tax exposure even if you don’t need to worry about federal estate tax.

Strategies to consider

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

TAKE NOTE OF THE DISTINCTIVE FEATURES OF ROTH IRAS

Posted by Admin Posted on Aug 05 2018

take note of the distinctive features of roth iras

 

For some people, Roth IRAs can offer income and estate tax benefits that are preferable to those offered by traditional IRAs. However, it’s important to take note of just what the distinctive features of a Roth IRA are before making the choice.

Traditional vs. Roth

The biggest difference between traditional and Roth IRAs is how taxes affect contributions and distributions. Contributions to traditional IRAs generally are made with pretax dollars, reducing your current taxable income and lowering your current tax bill. You pay taxes on the funds when you make withdrawals. As a result, if your current tax bracket is higher than what you expect it will be after you retire, a traditional IRA can be advantageous.

In contrast, contributions to Roth IRAs are made with after-tax funds. You pay taxes on the funds now, and your withdrawals won’t be taxed (provided you meet certain requirements). This can be advantageous if you expect to be in a higher tax bracket in retirement or if tax rates increase.

Roth distributions differ from traditional IRA distributions in yet another way. Withdrawals aren’t counted when calculating the taxable portion of your Social Security benefits.

Additional advantages

A Roth IRA may offer a greater opportunity to build up tax-advantaged funds. Your contributions can continue after you reach age 70½ as long as you’re earning income, and the entire balance can remain in the account until your death. In contrast, beginning with the year you reach age 70½, you can’t contribute to a traditional IRA — even if you do have earned income. Further, you must start taking required minimum distributions (RMDs) from a traditional IRA no later than April 1 of the year following the year you reach age 70½.

Avoiding RMDs can be a valuable benefit if you don’t need your IRA funds to live on during retirement. Your Roth IRA can continue to grow tax-free over your lifetime. When your heirs inherit the account, they’ll be required to take distributions — but spread out over their own lifetimes, allowing a continued opportunity for tax-free growth on assets remaining in the account. Further, the distributions they receive from the Roth IRA won’t be subject to income tax.

Many vehicles

As you begin planning for retirement (or reviewing your current plans), it’s important to consider all retirement planning vehicles. A Roth IRA may or may not be one of them. Please contact our firm for individualized help in determining whether it’s a beneficial choice.

Sidebar: TCJA eliminated option to recharacterize Roth IRAs

The passage of the Tax Cuts and Jobs Act late last year had a marked impact on Roth IRAs: to wit, taxpayers who wish to convert a pretax traditional IRA into a post-tax Roth IRA can no longer “recharacterize” (that is, reverse) the conversion for 2018 and later years.

The IRS recently clarified in FAQs on its website that, if you converted a traditional IRA into a Roth account in 2017, you can still reverse the conversion as long as it’s done by October 15, 2018. (This deadline applies regardless of whether you extend the deadline for filing your 2017 federal income tax return to October 15.)

Also, recharacterization is still an option for other types of contributions. For example, you can still make a contribution to a Roth IRA and subsequently recharacterize it as a contribution to a traditional IRA (before the applicable deadline).

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

— CONTRIBUYENTES DEBEN REVISAR LA RETENCIÓN DE IMPUESTOS FEDERALES DE SU PAGA

Posted by Admin Posted on July 29 2018

-- CONTRIBUYENTES DEBEN REVISAR LA RETENCIÓN DE IMPUESTOS FEDERALES DE SU PAGA

 

El Servicio de Impuestos Internos, IRS, animó a los contribuyentes a que consideren una revisión de sus retenciones, tomando en cuenta varios factores que podrían afectar su reembolso potencial o la cantidad que puedan adeudar en 2018.

Al revisar la cantidad de retención de impuestos, los contribuyentes podrán evitar que se les retenga demasiado o muy poco de sus cheques de nómina. La retención de la cantidad adecuada puede ayudar a saldar cualquier balance tributario a fines de año, lo que significa quedar sin deuda ni reembolso al presentar la declaración de impuestos.

A veces durante el año pueden ocurrir cambios en la vida de un contribuyente, tales como un cambio en su estado civil que pueda tener un impacto sobre las exenciones, ajustes o créditos que se reclaman en la declaración de impuestos. Cuando esto sucede, tiene que entregar a su empleador un nuevo Formulario W-4, Certificado de Exención de Retenciones del Empleado, para cambiar sus retenciones o el número de descuentos en la retención.

Los empleadores usan el formulario para calcular la cantidad de impuesto federal que debe retenerse de la paga de los empleados. Hacer estos cambios a finales de verano o principios de otoño puede darle suficiente tiempo para ajustar sus retenciones antes de que finalice el año tributario en diciembre.

La revisión de las retenciones es de mayor importancia ahora que la ley federal requiere que el IRS retenga los rembolsos durante varias semanas para algunas personas que presentan la declaración temprano y reclaman el Crédito Tributario por Ingreso del Trabajo y el Crédito Adicional por Hijos. Además, los pasos tomados por el IRS y los administradores de las agencias tributarias estatales para fortalecer las protecciones ante el robo de identidad y fraude de reembolsos significa que algunos reembolsos podrían someterse a revisiones adicionales el próximo año.

En lo que va de año, el IRS ha emitido más de 106 millones de reembolsos tributarios de las 142 millones de declaraciones procesadas. El promedio de los reembolsos es de más de $2,700. Históricamente, las cantidades de los reembolso han aumentado a través del tiempo.

Cómo ajustar la retención de impuestos

En muchos casos, un nuevo Formulario W-4, Certificado de exención de retenciones del empleado, es lo único requerido para hacer un ajuste. Los contribuyentes deben presentarlo a su empleador y el empleador usa el formulario para calcular la cantidad de impuesto federal que debe retenerse de la paga de sus empleados.

El IRS ofrece varios recursos en línea para ayudar a los contribuyentes a lograr que el impuesto pagado esté más cerca de la cantidad adeudada. Estos recursos están disponibles a cualquier hora en IRS.gov e incluyen:

La Calculadora de Retención del IRS– Una herramienta en línea que le permite determinar la cantidad correcta de impuestos que debe retenerse de su paga.

Publicación 505 del IRS – Retenciones y el impuesto estimado (en inglés).

Retenciones de impuestos – Información completa acerca de las retenciones, impuestos calculados, preguntas frecuentes, y más.

Los contribuyentes que trabajan por cuenta propia, incluso aquellos involucrados en la economía compartida (en inglés), pueden usar la hoja de trabajo del Formulario 1040-ES para calcular correctamente los pagos tributarios estimados. Si también trabajan para un empleador, pueden eliminar la necesidad de hacer pagos trimestrales al retener más impuesto de su paga.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

— SOLICITUD ELECTRÓNICA PARA EL ACUERDO DE PAGOS A PLAZOS

Posted by Admin Posted on July 29 2018

-- SOLICITUD ELECTRÓNICA PARA EL ACUERDO DE PAGOS A PLAZOS

 

Esta solicitud le permite a usted o a su representante autorizado (por Poder Legal) la oportunidad de evitar largas esperas telefónicas o la necesidad para escribir a, o visitar una oficina del IRS para solicitar un plan de pagos a plazos. Al completar el proceso por Internet, recibirá notificación inmediata de la aprobación o denegación del acuerdo solicitado.

También puede usar los enlaces a continuación para “solicitar” la mayoría de las revisiones a un Plan de Pagos ya establecido (en inglés) o modificar sus datos de seguridad para la autenticación electrónica.

Cargos Administrativos y Disponibilidad del Sistema

Si aprobamos su plan de pagos, uno de los siguientes cargos se le añadirá a su deuda tributaria:

- $31 por un plan de pagos a plazos por débito directo establecido a través del Acuerdo de Pagos a Plazos por internet (OPA)

- $149 por un plan de pagos establecido a través del OPA pero sin débito directo desde su cuenta bancaria

- $107 por un plan de pagos a plazos por débito directo que no fue establecido a través del OPA

- $225 por un plan de pagos a plazos sin débito directo desde su cuenta bancaria y que no fue establecido a través del OPA

- $43 si su ingreso está por debajo de cierto nivel ($31 por un plan de pagos a plazos por débito directo asegurado a través del OPA)

- No habrá cargo administrativo si califica para un acuerdo a corto plazo (120 días o menos)

Disponibilidad del Sistema

- Lunes a viernes 6 a.m. a las 12:30 a.m. Horario del este

- Sábado, 6 a.m. a las 10 p.m. Horario del este

- Domingo, 6 p.m. a la medianoche. Horario del este

Individuos

¿Reúne usted los requisitos?

Usted adeuda $50,000 o menos en impuestos, multas e intereses y presentó todas las declaraciones requeridas. También puede calificar para un acuerdo de pago a corto plazo si su deuda es menor de $100,000.

¿Qué necesita para solicitar?

- Nombre

- Dirección de correo electrónico válida

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Fecha de nacimiento

- Estado civil para efectos de la declaración

- Su número de Seguro Social (o de su cónyuge si presentaron un declaración conjunta) o el de identificación de contribuyente individual (ITIN). Si su estado civil para efectos de la declaración es de casado que presenta conjuntamente, la solicitud por Internet para un Plan de Pagos solo aceptará el primer Número de Seguro Social (SSN, por sus siglas en inglés) que aparece en su declaración de impuestos. Si su SSN aparece en segundo lugar, usted debe llamar al número que aparece en su factura o aviso, o seguir las instrucciones en nuestra página de información sobre los acuerdos de planes de pagos.

Poder Legal para un individuo

¿Está solicitando un Poder Legal (POA) para una persona física? Usted necesita:

- El número de Seguro Social (SSN) del contribuyente o el Número de identificación de contribuyente individual (ITIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

- El ingreso ajustado bruto del año anterior (AGI) (si recientemente presentó el del 2016, utilice el AGI del 2015)

Negocios

¿Reúne usted los requisitos?

Usted adeuda $25,000 o menos en impuestos, multas e intereses para el año actual o el año anterior, y presentó todas las declaraciones requeridas.

¿Qué necesita para solicitar?

- Su Número de identificación de empleador (EIN)

- Fecha en que se asignó su EIN (mes y año)

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Su número de identificación de llamada en el Aviso

- Poder Legal

- ¿Está solicitando un Poder Legal (POA) para un negocio? Usted necesita:

- Su Número de identificación de empleador (EIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

Basado en el tipo de acuerdo solicitado, puede que también necesite:

- Domicilio del negocio según mostrado en la declaración de impuesto que presentó más recientemente

- Formulario de impuestos que presentó o que fue examinado

- Periodo de impuestos que presentó o que fue examinado

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

- 5 THINGS TO KNOW ABOUT SUBSTANTIATING DONATIONS

Posted by Admin Posted on July 29 2018

- 5 THINGS TO KNOW ABOUT SUBSTANTIATING DONATIONS

 

There are virtually countless charitable organizations to which you might donate. You may choose to give cash or to contribute noncash items such as books, sporting goods, or computers or other tech gear. In either case, once you do the good deed, you owe it to yourself to properly claim a tax deduction.

No matter what you donate, you’ll need documentation. And precisely what you’ll need depends on the type and value of your donation. Here are five things to know:

1. Cash contributions of less than $250 are the easiest to substantiate. A canceled check or credit card statement is sufficient. Alternatively, you can obtain a receipt from the recipient organization showing its name, as well as the date, place and amount of the contribution. Bear in mind that unsubstantiated contributions aren’t deductible anymore. So you must have a receipt or bank record.

2. Noncash donations of less than $250 require a bit more. You’ll need a receipt from the charity. Plus, you typically must estimate a reasonable value for the donated item(s). Organizations that regularly accept noncash donations typically will provide you a form for doing so. Keep in mind that, for donations of clothing and household items to be deductible, the items generally must be in at least good condition.

3. Bigger cash donations mean more paperwork. If you donate $250 or more in cash, a canceled check or credit card statement won’t be sufficient. You’ll need a contemporaneous written acknowledgment from the recipient organization that meets IRS guidelines.

Among other things, a contemporaneous written acknowledgment must be received on or before the earlier of the date you file your return for the year in which you made the donation or the due date (including an extension) for filing the return. In addition, it must include a disclosure of whether the charity provided anything in exchange. If it did, the organization must provide a description and good-faith estimate of the exchanged item or service. You can deduct only the difference between the amount donated and the value of the item or service.

4. Noncash donations valued at $250 or more and up to $5,000 require still more. You must get a contemporaneous written acknowledgment plus written evidence that supports the item’s acquisition date, cost and fair market value. The written acknowledgment also must include a description of the item.

5. Noncash donations valued at more than $5,000 are the most complicated. Generally, both a contemporaneous written acknowledgment and a qualified appraisal are required — unless the donation is publicly traded securities. In some cases additional requirements might apply.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- NEWLY MARRIED COUPLES SHOULD REPORT MARRIAGE TO MARKETPLACE

Posted by Admin Posted on July 29 2018

- NEWLY MARRIED COUPLES SHOULD REPORT MARRIAGE TO MARKETPLACE

 

If you’re recently married, you probably have a list of things to do.  There’s one other thing you should add to that list: a health insurance review. This is particularly important if you enrolled in coverage through a Health Insurance Marketplace and you receive premium assistance in the form of advance payments of the premium tax credit.

When you apply for assistance to help pay the premiums for health coverage through the Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year using information you provide. This information includes details about your family composition and your projected household income.

It is important for you to report life changes – known as changes in circumstances – to your Marketplace to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace. Be sure to report all changes directly to that Marketplace because they can affect both your coverage and your final credit when you file your federal tax return.

Other changes you should report to the Marketplace include:

Birth or adoption

Marriage or divorce

Moving to a different address

Increases or decreases in your household income

These changes may also open the door for the Marketplace special enrollment period that permits health care plan changes. In most cases, the special enrollment period for Marketplace coverage is open for 60 days from the date of the life event.

The Premium Tax Credit Change Estimator can help you estimate how your premium tax credit will change if your income or family size changes during the year. This estimator tool does not report changes in circumstances to your Marketplace. Because these tools provide only an estimate, you should not rely upon them as an accurate calculation of the information you will report on your tax return. You should use these estimators only as a guide to assist you in making decisions regarding your tax situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

— HOW IDENTITY THEFT CAN AFFECT YOUR TAXES

Posted by Admin Posted on July 29 2018

-- HOW IDENTITY THEFT CAN AFFECT YOUR TAXES

 

Tax-related identity theft normally occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Many people first find out about it when they do their taxes.

The IRS is working hard to stop identity theft with a strategy of prevention, detection and victim assistance. Here are nine key points:

- Taxes. Security. Together. The IRS, the states and the tax industry need your help. We can’t fight identity theft alone. The Taxes. Security. Together. awareness campaign is an effort to better inform you about the need to protect your personal, tax and financial data online and at home.

- Protect your Records. Keep your Social Security card at home and not in your wallet or purse. Only provide your Social Security number if it’s absolutely necessary. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for internet accounts.

- Don’t Fall for Scams.  Criminals often try to impersonate your bank, your credit card company, even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts. Also, the IRS will not call you threatening a lawsuit, arrest or to demand an immediate tax payment. Normal correspondence is a letter in the mail. Beware of threatening phone calls from someone claiming to be from the IRS.

- Report Tax-Related ID Theft to the IRS. If you cannot e-file your return because a tax return already was filed using your SSN, consider the following steps: • File your taxes by paper and pay any taxes owed. • File an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper return. • File a report with the Federal Trade Commission using the FTC Complaint Assistant; • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on your account;

- IRS Letters. If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.

- IP PIN. If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-file your tax return. Each year, you will receive an IRS letter with a new IP PIN.

- Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

- Combating ID Theft.  In 2015, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft returns. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- TOP 5 TAX SAVING TECHNIQUES!!!

Posted by Admin Posted on July 29 2018

TOP 5 TAX SAVING TECHNIQUES!!!

 

Following are some generally recognized financial planning tools that may help you reduce your tax bill.

5- Charitable Giving: Instead of selling your appreciated long-term securities, donate the stock instead and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.

4-   Health Savings Accounts (HSAs): If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.

3-   Municipal Bonds: Interest earned on these types of investments is tax-exempt.

2- Own a home: Most of the cost of this type of investment is financed and the interest (on mortgages up to $1,000,000) is tax deductible. When the property is sold, individuals may exclude up to $250,000 ($500,000 if married jointly) of the gain.

1- Retirement Plans: Participate in your employer sponsored retirement plan, especially if there is a matching component. You will receive a current tax deduction and the tax-deferred compounding can add up to a large retirement savings.

- BONUS - 

ROTH IRAs: Contributions to a ROTH IRA are not tax deductible but the qualified distributions, including earnings are tax-free.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial Statements, please give us a call at 305-274-5811

Source: Thomson Reuters.

- WHICH IS BETTER? BUYING OR LEASING MY NEXT CAR?

Posted by Admin Posted on July 29 2018

WHICH IS BETTER? BUYING OR LEASING MY NEXT CAR?

 

It depends on factors such as 1) what kind of deal you can make with the dealership, 2) the typical mileage you put on your car, 3) how much you wear down a car, and 4) the primary use for the car.

To determine whether leasing or buying is best, compare the costs and other issues involved in a lease or purchase. The following factors should be considered:

Beginning costs

Continual costs

Total costs

Is there a possibility of deduction of any of the costs due to the car being used for business?

How important is it to have ownership of the car?

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

— 5 KEYS TO DISASTER PLANNING FOR INDIVIDUALS

Posted by Admin Posted on July 29 2018

5 keys to disaster plannig for individuals-

 

Disaster planning is usually associated with businesses. But individuals need to prepare for worst-case scenarios, as well. Unfortunately, the topic can seem a little overwhelming. To help simplify matters, here are five keys to disaster planning that everyone should consider:

1. Insurance. Start with your homeowners’ coverage. Make sure your policy covers flood, wind and other damage possible in your region and that its dollar amount is adequate to cover replacement costs. Also review your life and disability insurance.

2. Asset documentation. Create a list of your bank accounts, titles, deeds, mortgages, home equity loans, investments and tax records. Inventory physical assets not only in writing (including brand names and model and serial numbers), but also by photographing or videoing them.

3. Document storage. Keep copies of financial and personal documents somewhere other than your home, such as a safe deposit box or the distant home of a trusted friend or relative. Also consider “cloud computing” — storing digital files with a secure Web-based provider.

4. Cash. You may not receive insurance money right away. A good rule of thumb is to set aside three to six months’ worth of living expenses in a savings or money market account. Also maintain a cash reserve in your home in a durable, fireproof safe.

5. An emergency plan. Establish a family emergency plan that includes evacuation routes, methods of getting in touch and a safe place to meet. Because a disaster might require you to stay in your home, stock a supply kit with water, nonperishable food, batteries and a first aid kit.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- BONOS DE AHORROS

Posted by Admin Posted on July 29 2018

bonos de ahorros 1

 

Si va a recibir un cheque de reembolso este año, deje que su reembolso trabaje por usted.

Usted puede comprar hasta cinco mil dólares cada año en bonos de la serie “I” de los Estados Unidos en incrementos de 50 dólares cada vez que presenta su declaración federal de impuestos. Consígalos para usted u  otros, como un niño o cualquier otra persona  que usted guste y gane intereses hasta por  30 años. 

Cuando presente su declaración de impuestos anexe el formulario 8888  para comprar los bonos.  Si usted  declara con e-file, su software tributario le  preguntará si usted desea dividir su reembolso, usted tiene la opción de  comprar sus bonos  de  la serie “I” en ese momento. 

También puede  elegir el depósito directo o un cheque de papel por  el correo si hay un monto restante de su reembolso que no usó para comprar bonos.

Ahorre fácilmente con los bonos de los Estados Unidos.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

- UN ALIVIO PARA EL CÓNYUGE INOCENTE

Posted by Admin Posted on July 29 2018

UN ALIVIO PARA EL CONYUGE INOCENTE

 

-Si usted califica para el alivio del cónyuge inocente… el IRS ha efectuado un cambio importante que le puede ayudar.

De ahora en adelante, el plazo de dos años ha sido eliminado  para ciertas solicitudes de cónyuge inocente.

Este es el tipo de solicitud que es comunmente conocida como el alivio equitativo, la clase de alivio que a menudo es considerado cuando las personas se encuentran en situaciones difíciles o intimidantes.   

Por ejemplo, esto puede que aplique a víctimas de abuso doméstico.

Si califica para el alivio equitativo, usted ya no tiene una fecha límite de dos años para pedir esa solicitud. 

Además de futuras solicitudes, este cambio aplica a solicitudes que estamos considerando actualmente, y si usted ha sido rechazado en el pasado basado únicamente en el plazo de dos años, usted puede volver a solicitar para el alivio usando el formulario 8857, esta es la solicitud de alivio para el cónyuge inocente.

Pero si su caso está actualmente suspendido, usted no tiene que volver a solicitar porque nosotros le daremos automáticamente otro vistazo a su caso.

Ahora le recomendamos tener cuidado.
 
También debe saber que el plazo de dos años sigue vigente a otros tipos de solicitudes de cónyuge inocente, y otras restricciones y fechas límites establecidas por la ley aplican a cualquier solicitud de cónyuge inocente.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

- ORGANIZING YOUR FINANCIAL RECORDS FOR BEST RESULTS

Posted by Admin Posted on July 29 2018

ORGANIZING YOUR FINANCIAL RECORDS BEST RESULTS

 

Throwing all your important documents into a drawer won’t help much when an emergency occurs and you (or a family member) need to find a certain piece of paper.

Make a list

Of course, emergencies aren’t the only reason to organize your records. For example, you may need to be able to access relevant personal records if you’re ever audited or a victim of theft. Or your home could be damaged in a storm or fire. Or you may need proof to cash in investments or claim insurance benefits.

To get started, make a list of important records. These include items related to:

Bank and investment accounts,

Real estate and homeownership,

Insurance policies,

Credit card accounts,

Health care benefits and medical history, and

Marriage and your estate.

Grouping the items into broad categories such as these will make them easier to file and find later.

Establish your approach

With your list in hand, it’s time to start organizing and storing your records. Here are some tips for streamlining the process:

Create a central filing system. The ideal storage medium for personal documents is a fire-, water- and impact-resistant security cabinet or safe. Create a master list of the cabinet contents and provide a copy of the key to your executor or a trusted family member.

Designate a second storage location. Maintain a duplicate set of the records in another location, such as a bank safety deposit box, and provide access to a trusted individual (preferably not the same individual with access to the original documents). Consider keeping originals of your important legal documents, such as your will, with your attorney.

Back up records electronically. It also makes sense to store copies of records electronically. Simply scan your documents and save them to a trustworthy external storage device. If opting for a cloud-based backup system, choose your provider carefully to ensure its security measures are as stringent as possible.

Follow the ritual

Make organizing your records an annual ritual and not just a one-time event. Need assistance? We can help you identify the specific documents pertinent to your situation and organize them appropriately.

Sidebar: Create an emergency checklist to cope with calamity

Having an emergency checklist of important personal records handy is essential in the event you must evacuate your home. In a crisis, you’ll likely be able to take only what you can easily carry with you. That means storing the bare essentials in a portable container. Include these items:

Driver’s license, passport and Social Security card,

Credit cards,

Vital medical condition and medication information,

Health insurance cards, and

Emergency family and physician contacts.

Also set up an “In Case of Emergency” (ICE) directory in your cell phone. In your phone directory, simply type in “ICE” before each contact (ICE-1 Jane Smith, ICE-2 Dr. John Smith, etc.). Also consider storing and carrying electronic copies of key personal records on a USB flash drive.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- IRS WARNS OF BACK-TO-SCHOOL SCAMS!!!

Posted by Admin Posted on July 29 2018

IRS WARNS OF BACK TO SCHOOL SCAMS

 

The Internal Revenue Service warned taxpayers against telephone scammers targeting students and parents during the back-to-school season and demanding payments for non-existent taxes, such as the “Federal Student Tax.”

People should be on the lookout for IRS impersonators calling students and demanding that they wire money immediately to pay a fake “federal student tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested. As schools around the nation prepare to re-open, it is important for taxpayers to be particularly aware of this scheme going after students and parents.    

“Although variations of the IRS impersonation scam continue year-round, they tend to peak when scammers find prime opportunities to strike”, said IRS Commissioner John Koskinen. “As students and parents enter the new school year, they should remain alert to bogus calls, including those demanding fake tax payments from students.”

The IRS encourages college and school communities to share this information so that students, parents and their families are aware of these scams.

Scammers are constantly identifying new tactics to carry out their crimes in new and unsuspecting ways. This year, the IRS has seen scammers use a variety of schemes to fool taxpayers into paying money or giving up personal information. Some of these include:

Altering the caller ID on incoming phone calls in a “spoofing” attempt to make it seem like the IRS, the local police or another agency is calling

Imitating software providers to trick tax professionals--IR-2016-103

Demanding fake tax payments using iTunes gift cards--IR-2016-99

Soliciting W-2 information from payroll and human resources professionals--IR-2016-34

“Verifying” tax return information over the phone--IR-2016-40

Pretending to be from the tax preparation industry--IR-2016-28

If you receive an unexpected call from someone claiming to be from the IRS, here are some of the telltale signs to help protect yourself.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

— FIVE FACTS ABOUT THE SMALL BUSINESS HEALTH CARE TAX CREDIT

Posted by Admin Posted on July 29 2018

facts five about the small business health care tax credit

 

If you are a small employer, there is a tax credit that can put money in your pocket. The small business health care tax credit benefits employers that:

- Offer coverage through the small business health options program, also known as the SHOP marketplace

- Have fewer than 25 full-time equivalent employees

- Pay an average wage of less than $50,000 a year

- Pay at least half of employee health insurance premiums

Here are five facts about this credit:

- The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers. 

- To be eligible for the credit, you must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace, or qualify for an exception to this requirement.

- The credit is available to eligible employers for two consecutive taxable years beginning in 2014 or later. You may be able to amend prior year tax returns to claim the credit for tax years 2010 through 2013 in addition to claiming this credit for those two consecutive years.

- You can carry the credit back or forward to other tax years if you do not owe tax during the year.

- You may get both a credit and a deduction for employee premium payments. Since the amount of your health insurance premium payments will be more than the total credit, if you are eligible, you can still claim a business expense deduction for the premiums in excess of the credit.    For more information, see the small business health care tax credit page on IRS.gov. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

-WHAT WILL I NEED IF A MEMBER OF THE FAMILY DIES?

Posted by Admin Posted on July 29 2018

What will i need if a member of the family dies

 

-The following is a list of papers that will be necessary:

Copies of all insurance policies.

Marriage Certificate (if the deceased's spouse will be requesting benefits). You may obtain copies at the Office of the County Clerk where the marriage license was issued.

Certified copies of the death certificate (a minimum of 10). These can be bought from the funeral director or from the Health Department in your county.

Birth Certificates of dependent children. These may be obtained at either the County or State Public Health offices where the child was born.

Social Security numbers of the spouse, deceased and any dependent children.

Military discharge, if the deceased was a veteran. Write to The Department of Defense if you are unable to find copies.

A complete list of all property, including stocks, savings accounts, real estate, and personal property of the deceased.

Will, which will more than likely be with the lawyer of the deceased.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- WHICH BUSINESS TRAVEL EXPENSES CAN YOU DEDUCT?

Posted by Admin Posted on July 26 2018

WHICH BUSINESS TRAVEL EXPENSES CAN YOU DEDUCT?

 

Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Generally, employees deduct these expenses by using Form 2106 (PDF), Employee Business Expenses, or Form 2106-EZ (PDF), Unreimbursed Employee Business Expenses, and Form 1040, Schedule A (PDF), Itemized Deductions. You cannot deduct expenses that are lavish or extravagant, or that are for personal purposes.

You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.

You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you cannot deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you will work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes. For an exception to the 1-year rule for federal crime investigations or prosecutions, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

You may deduct travel expenses, including meals and lodging you incurred in looking for a new job in your present trade or business. You may not deduct these expenses if you had them while looking for work in a new trade or business or while looking for work for the first time. If you are unemployed and there is a substantial break between the time of your past work and your looking for new work, you may not deduct these expenses, even if the new work is in the same trade or business as your previous work. Refer to Publication 529, Miscellaneous Deductions.

Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

Deductible travel expenses while away from home include, but are not limited to the costs of:

-Travel by airplane, train, bus or car between your home and your business  destination. (If you are provided with a ticket or you are riding free as a result of a  frequent traveler or similar program, your cost is zero.)

-Fares for taxis or other types of transportation between the airport or train station and  your hotel, the hotel and the work location, and from one customer to another, or  from  one place of business to another.

-Shipping of baggage, and sample or display material between your regular and  temporary work locations.

-Using your car while at your business destination. You can deduct actual expenses or  the standard mileage rate, as well as business-related tolls and parking fees. If you  rent a car, you can deduct only the business-use portion for the expenses.

-Meals and lodging.

-Dry cleaning and laundry.

-Business calls while on your business trip. (This includes business communications by  fax  machine or other communication devices.)

-Tips you pay for services related to any of these expenses.

-Other similar ordinary and necessary expenses related to  your business travel.  (These  expenses might include transportation to and from a business  meal, public  stenographer's  fees, computer rental fees, and operating and maintaining a  house  trailer.)

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.

If you are an employee, your allowable travel expenses are figured on Form 2106 or Form 2106-EZ. Your allowable unreimbursed expenses are carried from Form 2106 or Form 2106-EZ to Form 1040, Schedule A (PDF), and are subject to a limit based on 2% of adjusted gross income. Refer to Topic 508 for information on the 2% limit. If you do not itemize your deductions, you cannot deduct these expenses. If you are self-employed, you can deduct travel expenses on Form 1040, Schedule C (PDF), Profit or Loss From Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit From Business (Sole Proprietorship), or if you are a farmer, on Form 1040, Schedule F (PDF), Profit or Loss From Farming.

If you are a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income rather than an itemized deduction on Form 1040, Schedule A This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Claim these expenses on Form 2106 or Form 2106-EZ and carry them to the appropriate line on Form 1040. Expenses in excess of the limit can be claimed only as an itemized deduction on Form 1040, Schedule A.

Good records are essential. Refer to Topic 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- Capital Gains and Losses

Posted by Admin Posted on July 25 2018

Capital Gains and Losses

 

Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. The IRS says when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property.

While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property. A “paper loss” — a drop in an investment's value below its purchase price — does not qualify for the deduction. The loss must be realized through the capital asset's sale or exchange.

Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term. For more information on the tax rates, refer to IRS Publication 544, Sales and Other Dispositions of Assets. If your capital losses exceed your capital gains, the excess is subtracted from other income on your tax return, up to an annual limit of $3,000 ($1,500 if you are married filing separately). Unused capital losses can be carried over indefinitely to future years to net against capital gains, however the annual limit still applies.

Capital gains and losses are reported on Form 8949, Sales and Other Dispositions of Capital Assets, summarized on Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040. Accounting and planning for the sale and purchase of capital assets is usually a very complicated matter, so please contact us so that you may receive the professional advice you deserve.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

— ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN?

Posted by Admin Posted on July 23 2018

are you sure want to take that loan

 

With summer headed toward its inevitable close, you may be tempted to splurge on a pricey “last hurrah” trip. Or perhaps you’d like to buy a brand new convertible to feel the warm breeze in your hair. Whatever the temptation may be, if you’ve pondered dipping into your 401(k) account for the money, make sure you’re aware of the consequences before you take out the loan.

Pros and cons

Many 401(k) plans allow participants to borrow as much as 50% of their vested account balances, up to $50,000. These loans are attractive because:

- They’re easy to get (no income or credit score requirements),

- There’s minimal paperwork,

- Interest rates are low, and

- You pay interest back into your 401(k) rather than to a bank.

Yet, despite their appeal, 401(k) loans present significant risks. Although you pay the interest to yourself, you lose the benefits of tax-deferred compounding on the money you borrow.

You may have to reduce or eliminate 401(k) contributions during the loan term, either because you can’t afford to contribute or because your plan prohibits contributions while a loan is outstanding. Either way, you lose any future earnings and employer matches you would have enjoyed on those contributions.

Loans, unless used for a personal residence, must be repaid within five years. Generally, the loan terms must include level amortization, which consists of principal and interest, and payments must be made no less frequently than quarterly.

Additionally, if you’re laid off, you’ll have to pay the outstanding balance quickly — typically within 30 to 90 days. Otherwise, the amount you owe will be treated as a distribution subject to income taxes and, if you’re under age 59½, a 10% early withdrawal penalty.

Hardship withdrawals

If you need the money for emergency purposes, rather than recreational ones, determine whether your plan offers a hardship withdrawal. Some plans allow these to pay certain expenses related to medical care, college, funerals and home ownership — such as first-time home purchase costs and expenses necessary to avoid eviction or mortgage foreclosure.

Even if your plan allows such withdrawals, you may have to show that you’ve exhausted all other resources. Also, the amounts you withdraw will be subject to income taxes and, except for certain medical expenses or if you’re over age 59½, a 10% early withdrawal penalty.

Like plan loans, hardship withdrawals are costly. In addition to owing taxes and possibly penalties, you lose future tax-deferred earnings on the withdrawn amounts. But, unlike a loan, hardship withdrawals need not be paid back. And you won’t risk any unpleasant tax surprises should you lose your job.

The right move

Generally, you should borrow or take hardship withdrawals from a 401(k) only in emergencies or when no other financing options exist (and your job is secure).

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

MARRIED FILERS, THE CHOICE IS YOURS

Posted by Admin Posted on July 23 2018

MARRIED FILERS, THE CHOICE IS YOURS

 

Some married couples assume they have to file their tax returns jointly. Others may know they have a choice but not want to rock the boat by filing separately. The truth is that there’s no harm in at least considering your options every year.

Granted, married taxpayers who file jointly can take advantage of certain credits not available to separate filers. They’re also more likely to be able to make deductible IRA contributions and less likely to be subject to the alternative minimum tax.

But there are circumstances under which filing separately may be a good idea. For example, filing separately can save tax when one spouse’s income is much higher than the others, and the spouse with lower income has miscellaneous itemized deductions exceeding 2% of his or her adjusted gross income (AGI) or medical expenses exceeding 10% of his or her AGI — but jointly the couple’s expenses wouldn’t exceed the applicable floor for their joint AGI. However, in community property states, income and expenses generally must be split equally unless they’re attributable to separate funds.

Many factors play into the joint vs. separate filing decision. If you’re interested in learning more, please give us a call.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

THE MANY BENEFITS OF A HEALTH SAVINGS ACCOUNT (HSA)

Posted by Admin Posted on July 22 2018

THE MANY BENEFITS OF A HEALTH SAVINGS ACCOUNT (HSA)

 

A Health Savings Account (HSA) represents an opportunity for eligible individuals to lower their out-of-pocket health care costs and federal tax bill. Since most of us would like to take advantage of every available tax break, now might be a good time to consider an HSA, if eligible.

An HSA operates somewhat like a Flexible Spending Account (FSA) that employers offer to their eligible employees. An FSA permits eligible employees to defer a portion of their pay, on a pretax basis, which is used later to reimburse out-of-pocket medical expenses. However, unlike an FSA, whatever remains in the HSA at year end can be carried over to the next year and beyond. In addition, there are no income phaseout rules, so HSAs are available to high-earners and low-earners alike.

Naturally, there are a few requirements for obtaining the benefits of an HSA. The most significant requirement is that an HSA is only available to an individual who carries health insurance coverage with a relatively high annual deductible. For 2015, the individual's health insurance coverage must come with at least a $1,300 deductible for single coverage or $2,600 for family coverage. For many self-employed individuals, small business owners, and employees of small and large companies alike, these thresholds won't be a problem. In addition, it's okay if the insurance plan doesn't impose any deductible for preventive care (such as annual checkups). Other requirements for setting up an HSA are that an individual can't be eligible for Medicare benefits or claimed as a dependent on another person's tax return.

Individuals who meet these requirements can make tax-deductible HSA contributions in 2015 of up to $3,350 for single coverage or $6,650 for family coverage. The contribution for a particular tax year can be made as late as April 15 of the following year. The deduction is claimed in arriving at adjusted gross income (the number at the bottom of page 1 on your return). Thus, eligible individuals can benefit whether they itemize or not. Unfortunately, however, the deduction doesn't reduce a self-employed person's self-employment tax bill.

When an employer contributes to an employee's HSA, the contributions are exempt from federal income, Social Security, Medicare, and unemployment taxes.

An account beneficiary who is age 55 or older by the end of the tax year for which the HSA contribution is made may make a larger deductible (or excludible) contribution. Specifically, the annual tax-deductible contribution limit is increased by $1,000.

An HSA can generally be set up at a bank, insurance company, or other institution the IRS deems suitable. The HSA must be established exclusively for the purpose of paying the account beneficiary's qualified medical expenses. These include uninsured medical costs incurred for the account beneficiary, spouse, and dependents. However, for HSA purposes, health insurance premiums don't qualify.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Why am I going to have an Audit?

Posted by Admin Posted on July 22 2018

Why am I going to have an Audit?

 

RED FLAGS

According to the IRS, returns are chosen for examination by computer scoring, information received from third party documentation (W-2, 1099 questionable treatment of an item), information received from other sources on potential non compliance (newspapers, public records and individuals). 

A computer program called the Discriminant Inventory Function System (DIF) assigns a numeric score to each individual and some corporate tax returns after they have been processed. If your return is selected because of a high score under the DIF system, the potential is high that an examination of your return will result in a change to your income tax liability.

Your return may also be selected for examination on the basis of information received from third-party documentation, such as Forms 1099 and W-2, that do not match the information reported on your return.

AUDIT TRIGGERS

  • Not Reporting all Taxable Income
  • Data Entry Errors
  • Participation in a Tax Shelter
  • Rental Losses
  • Failure to properly pay household help
  • Large travel and entertainment expense
  • Discrepancy Between Individual Taxpayers and Corporation Filings Associated to Taxpayer
  • Self Employed (not reporting profit in 3 out of 5 years)
  • Large charitable contributions
  • Home office deductions
  • Not Hiring a Reputable Tax Preparer
  • Claiming 100% business use of a vehicle

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: LBCPA

- EMPLEADOS POR CUENTA PROPIA Y SUS OBLIGACIONES TRIBUTARIAS

Posted by Admin Posted on July 22 2018

empleados por cuenta propia y sus obligaciones tributarias

 

Generalmente, usted es un empleado por cuenta propia si alguna de las siguientes situaciones le aplica:

         1- Usted ejerce un oficio u opera un negocio como empresario por cuenta propia (en inglés) o como un contratista independiente.

        2- Usted en un miembro de una sociedad colectiva (en inglés) que ejerce u opera un oficio o negocio (en inglés).

            3- Usted de otra manera está en negocios por usted mismo (incluyendo un negocio a tiempo parcial (en inglés)).

¿Cuáles son mis obligaciones tributarias como empleado por cuenta propia?

Como empleado por cuenta propia, generalmente usted está en la obligación de presentar una declaración anual y pagar trimestralmente impuestos estimados.

Las personas que tr por cuenta propia generalmente tienen que pagar el impuesto sobre el trabajo por cuenta propia (impuesto SE, por sus siglas en inglés) como también el impuesto sobre el ingreso. El impuesto SE es principalmente el impuesto del Seguro Social y Medicare para individuos que trabajan para ellos mismos. Es similar al impuesto retenido de la paga de quienes devengan un salario, por concepto de impuestos del Seguro Social y Medicare. En general, en cualquier momento en que se utiliza la expresión  “impuesto sobre el trabajo por cuenta propia”, solo se refiere al impuesto del Seguro Social y Medicare, y no a cualquier otro tipo de impuesto (como el impuesto sobre el ingreso).

Antes de que usted pueda determinar si está sujeto al impuesto sobre el trabajo por cuenta propia y al impuesto sobre el ingreso, debe calcular el neto del ingreso o el neto de la pérdida de su negocio. Usted determina esto cuando le resta a sus ingresos del negocio, los gastos del mismo. Si sus gastos son menores que sus ingresos, la diferencia es la ganancia neta y forma parte de su ingreso en la página 1 del Formulario 1040. Si sus gastos son mayores que sus ingresos, la diferencia es una pérdida neta. Usualmente, usted puede deducir del ingreso bruto su pérdida en la página 1 del Formulario 1040. Pero en algunas situaciones su pérdida es limitada. Para más información, vea la Publicación 334, Guía tributaria para pequeños negocios (para individuos que utilizan el Anexo C o C-EZ (Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) (en inglés).

Usted tiene que presentar una declaración del impuesto sobre el ingreso si sus ganancias netas provenientes de su trabajo por cuenta propia son de $400 o más. Si sus ganancias netas provenientes de su trabajo por cuenta propia son menos de $400, usted todavía tiene que presentar una declaración del impuesto sobre el ingreso si usted reúne cualquiera de los requisitos para declarar según listados en las Instrucciones para el Formulario 1040 (Form 1040 Instructions) (en inglés) (PDF).

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

 

- ¿PASATIEMPO O NEGOCIO?

Posted by Admin Posted on July 22 2018

pasatiempo o negocio

 

Millones de personas gozan de pasatiempos que son también una fuente de ingresos. Desde el servicio de catering al hornear pastelitos, de crear joyería casera al soplado de vidrio – no importa cuál sea la pasión de una persona, el IRS ofrece algunos consejos acerca de pasatiempos.

Los contribuyentes deben declarar los ingresos que reciben de sus pasatiempos, en sus declaraciones de impuestos. Las reglas sobre cómo declarar los ingresos y gastos dependen de si la actividad es un pasatiempo o un negocio. Hay reglas y límites especiales sobre las deducciones que los contribuyentes pueden reclamar para los pasatiempos. Tenga en cuenta estos cinco consejos tributarios:

1- ¿Es un pasatiempo o un negocio? Una característica clave de un negocio es que la gente lo hace para recibir una ganancia. Las personas participan en un pasatiempo por deporte o recreación, no para recibir una ganancia. Considere los nueve factores (en inglés) al determinar si la actividad es un pasatiempo. Asegúrese de basar la determinación en todos los datos y circunstancias. Para obtener más información acerca de las reglas sobre las actividades “sin fines de lucro”, vea la Publicación 535, Gastos de negocio (en inglés).

2- Deducciones permitidas de los pasatiempos. Dentro de ciertos límites, los contribuyentes pueden usualmente deducir los gastos necesarios y ordinarios de los pasatiempos. Un gasto ordinario es aquel que es común y aceptado para la actividad. Un gasto necesario es aquel que es apropiado para la actividad.

3- Límite sobre los gastos de pasatiempos. Los contribuyentes pueden generalmente deducir los gastos de pasatiempos hasta la cantidad de ingresos de los mismos. Si los gastos de pasatiempos son más que sus ingresos, los contribuyentes han recibido una pérdida de la actividad. Sin embargo, una pérdida de pasatiempo no la puede deducir de otros ingresos.

4- Cómo deducir los gastos de pasatiempos. Los contribuyentes deben detallar las deducciones en sus declaraciones de impuestos, para deducir los gastos de pasatiempos. Los gastos pueden pertenecer a tres clases de deducciones y existen reglas especiales que se aplican a cada clase. Vea la Publicación 535 para las reglas sobre cómo reclamarlos en el Anexo A, Deducciones detalladas (en inglés).

5- Utilice Free File del IRS. Las reglas sobre los pasatiempos pueden ser complicadas y Free File del IRS puede hacer más fácil el presentar una declaración de impuestos. Free File del IRS está disponible hasta el 16 de octubre. Los contribuyentes que ganan $64,000 o menos, pueden utilizar el software tributario de marca. Aquellos que ganan más, pueden utilizar los Formularios Interactivos de Free File, que son las versiones electrónicas de los formularios del IRS en papel. Free File está disponible únicamente en la página web del IRS, en www.irs.gov/espanol.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

- BENEFITS AND PROTECTIONS UNDER FEDERAL TAX LAW FOR SAME-SEX MARRIED COUPLES

Posted by Admin Posted on July 22 2018

benefits and protections under federal tax law for same sex married couples

 

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) state that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. This applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

The August, 2013 ruling implements federal tax aspects of the June 26, 2013 Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act. Under the ruling, same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.

Other agencies may provide guidance on other federal programs that they administer that are affected by the Code. Revenue Ruling 2013-17, along with updated Frequently Asked Questions for same-sex couples and updated FAQs for registered domestic partners and individuals in civil unions, are available today on IRS.gov. See also Publication 555, Community Property.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Posted by Admin Posted on July 22 2018

- HAVE A PENSION? BE SURE TO PLAN CAREFULLY

Posted by Admin Posted on July 22 2018

Have a pension be sure to plan carefully

 

The traditional pension may seem like a thing of the past. But many workers are still counting on payouts from one of these “defined benefit” plans in retirement. If you’re among this group, it’s important to start thinking now about how you’ll receive the money from your pension.

Making a choice

Some defined benefit plans give retirees a choice between receiving payouts in the form of a lump sum or an annuity. Taking a lump sum distribution allows you to invest the money as you please. Plus, if you manage and invest the funds wisely, you may be able to achieve better returns than those provided by an annuity.

On the other hand, if you’re concerned about the risks associated with investing your pension benefits (you could lose principal) — or don’t want the responsibility — an annuity offers guaranteed income for life. (Bear in mind that guarantees are subject to the claims-paying ability of the issuing company.)

Choosing yet again

If you choose to receive your pension benefits in the form of an annuity — or if your plan doesn’t offer a lump sum option — your plan likely will require you to choose between a single-life or joint-life annuity. A single-life annuity provides you with monthly benefits for life. The joint-life option (also referred to as “joint and survivor”) provides a smaller monthly benefit, but the payments continue over the joint lifetimes of both you and your spouse.

Deciding between the two annuity options requires some educated guesswork. To determine the option that will provide the greatest overall financial benefit, you’ll need to consider several factors — including your and your spouse’s actuarial life expectancies as well as factors that may affect your actual life expectancies, such as current health conditions and family medical histories.

You might choose the single-life option, for example, if you and your spouse have comparable life expectancies or if you expect to live longer. Under those circumstances, the higher monthly payment will maximize your overall benefits.

But there’s a risk, too: Because the payments will stop at your death, if you die prematurely and your spouse outlives you, the overall financial benefit may be smaller than if you’d chosen the joint-life option. The difference could be substantial if your spouse outlives you by many years.

Your overall financial situation — that is, your expenses and your other assets and income sources — also play a major role. Even if you expect a joint-life annuity to yield the greatest total benefit over time, you may want to consider a single-life annuity if you need additional liquidity in the short term.

Managing this asset

Although increasingly uncommon, these defined benefit plans can be a highly valuable asset. Please contact us for help managing yours appropriately.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- CONSOLIDATE ACCOUNTS AND SIMPLIFY YOUR FINANCIAL LIFE

Posted by Admin Posted on July 22 2018

consolidate accounts and simplify your financial lif

 

If you’ve accumulated many bank, investment and other financial accounts over the years, you might consider consolidating some of them. Having multiple accounts requires you to spend more time tracking and reconciling financial activities and can make it harder to keep a handle on how much you have and whether your money is being invested advantageously.

Start by identifying the accounts that offer you the best combination of excellent customer service, convenience, lower fees and higher returns. Hold on to these and consider closing the rest, keeping in mind the bank account amounts you’ll be consolidating. The Federal Deposit Insurance Corporation generally insures $250,000 per depositor, per insured bank. So if consolidation means that your balance might exceed that amount, it’s better to keep multiple accounts. You should also keep accounts with different beneficiaries separate.

When closing accounts, make sure you stop automatic payments or deposits and destroy checks and cards associated with them. To prevent any future disputes, obtain letters from the financial institutions stating that your accounts have been closed. Closing an account generally takes several weeks.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

If you’ve accumulated many bank, investment and other financial accounts over the years, you might consider consolidating some of them. Having multiple accounts requires you to spend more time tracking and reconciling financial activities and can make it harder to keep a handle on how much you have and whether your money is being invested advantageously.

Start by identifying the accounts that offer you the best combination of excellent customer service, convenience, lower fees and higher returns. Hold on to these and consider closing the rest, keeping in mind the bank account amounts you’ll be consolidating. The Federal Deposit Insurance Corporation generally insures $250,000 per depositor, per insured bank. So if consolidation means that your balance might exceed that amount, it’s better to keep multiple accounts. You should also keep accounts with different beneficiaries separate.

When closing accounts, make sure you stop automatic payments or deposits and destroy checks and cards associated with them. To prevent any future disputes, obtain letters from the financial institutions stating that your accounts have been closed. Closing an account generally takes several weeks.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- MIDYEAR TAX PLANNING IDEAS

Posted by Admin Posted on July 16 2018

MIDYEAR TAX PLANNING IDEAS

 

Tax planning is a year-round process, so now is a good time to think about the following:

Are you considering making a cash gift to a relative? If so, consider making the gift in conjunction with the overall revamping of your stocks and mutual funds held in taxable brokerage accounts to achieve better tax results. Don’t gift loser shares (currently worth less than you paid for them). Instead, sell these shares, recognize the capital loss on your tax return, and then gift the cash proceeds to a relative. However, do gift winner shares to lower tax bracket relatives (unless they are under age 24 and subject to the Kiddie Tax). The 2014 annual gift tax exclusion is $14,000.

Are you considering making a contribution to a favorite charity? The previous strategies will also work well for contributions to qualified charities. Sell loser shares, recognize the loss on your tax return, and then give the cash proceeds to the charity and claim the resulting charitable contribution (if you itemize). Donate winner shares to the charity and deduct the full current fair market value at the time of the gift (without being taxed on the capital gain). The tax-exempt organization can sell your donated shares without owing tax.

Are you self-employed? Consider employing your child in the business (but pay a reasonable wage for their age and work skills). This practice can shift income (which is not subject to the Kiddie Tax) to the child who is normally in a lower tax bracket, decrease payroll taxes, and enable the child to contribute to an IRA.

Is your estate plan current? If you already have an estate plan, it may need updating to reflect the current estate and gift tax rules. For 2014, the unified federal gift and estate tax exemption is a generous $5.34 million, and the rate is 40%. Furthermore, the impact of the Supreme Court’s Windsor decision and resulting IRS changes in the federal definition of marriage mean that legally married same-sex couples need to revise their estate plan. Plus, there may be nontax reasons to update your estate plan.

Please contact us to discuss any tax planning strategies you are interested in implementing.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- WHAT IS A BOND?

Posted by Admin Posted on July 16 2018

WHAT IS A BOND?

 

A bond is simply a certificate which the borrower promises to repay within a certain time period. For the privilege of using the money, the government entity, municipality or company will agree to pay a certain amount of interest per year, usually an exact percentage of the amount loaned.

Bondholders do not own any part of the companies they lend to - they do not receive the benefits of dividends or the privilege to vote on company matters as stockholders would, and the success of the investment isn't related to that company's record in the market either. A bondholder is entitled to receive the amount that was agreed upon, as well as the principal of the bond.

Corporate bonds are generally issued in the denominations of $1000. This price is referred to as the face value of the bond - this is the amount that is agreed to be paid by the company at the time that it matures. Bond prices can differ from their face values, because the prices of the bonds are correlated to the current market rates. When these rates change, the value of the bond will as well. If one were to sell the bond before the time that it matures, the bond may be worth less than was initially paid. A callable bond is one that the issuer may choose to buy back at full face value before the maturity date.

There are three major features of bonds:

Issuing Organization

Maturity

Quality

Short Term Bonds mature in two years or less and long term bonds mature in ten or more. Intermediate is between two and ten years.

 

▼ What is bond quality?

Bond quality is the rating of the creditworthiness of an issuing organization. There are organizations that specialize in judging bond quality. The higher the rating, the lower the risk of the investment. The rating system uses letters A through D. The only bond considered to be risk free is the U.S. Treasury Bond.

▼ How does the bond rating system work?

Highest Quality

Moody's

Standard & Poor's

High Quality

Aaa

AAA

Good Quality

Aa

AA

Medium Quality

Baa

BBB

Speculative Elements

Ba

BB

Speculative

B

B

More Speculative

Caa

CCC

Highly Speculative

Ca

CC

In Default

-

D

Not Rated

N

N

▼ How do interest rates affect bond prices?

Generally bond prices and interest rates have an inverse relationship - as interest rates drop, bond prices rise and vice versa.

▼ How does maturity affect bond prices?

Bond prices are heavily influenced by maturity - the longer the maturity, the greater the change in price for a change in interest rates. If interest rates rise, it would make a larger difference in the 20 year bond, as opposed to a 10 year bond. Because of this, bond fund managers will attempt to change the fund's average maturity to anticipate changes in interest rates.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Posted by Admin Posted on July 16 2018

- Veterans owed refunds for overpayments attributable to disability severance payments should file amended returns to claim tax refunds

Posted by Admin Posted on July 16 2018

Veterans owed refunds for overpayments attributable to disability severance payments should file amended returns to claim tax refunds

 

The Internal Revenue Service today is advising certain veterans who received disability severance payments after January 17, 1991, and included that payment as income that they should file Form 1040X, Amended U.S. Individual Income Tax Return, to claim a credit or refund of the overpayment attributable to the disability severance payment.

This is a result of the Combat-Injured Veterans Tax Fairness Act passed in 2016.

Most veterans who received a one-time lump-sum disability severance payment when they separated from their military service will receive a letter from the Department of Defense with information explaining how to claim tax refunds they are entitled to; the letters include an explanation of a simplified method for making the claim. The IRS has worked closely with the DoD to produce these letters, explaining how veterans should claim the related tax refunds.

Statute of Limitations

The amount of time for claiming these tax refunds is limited. However, the law grants veterans an alternative timeframe – one year from the date of the letter from DoD. Veterans making these claims have the normal limitations period for claiming a refund or one year from the date of their letter from the DoD, whichever expires later. As taxpayers can usually only claim tax refunds within 3 years from the due date of the return, this alternative time frame is especially important since some of the claims may be for refunds of taxes paid as far back as 1991.

Amount to Claim

Veterans can submit a claim based on the actual amount of their disability severance payment by completing Form 1040X, carefully following the instructions. However, there is a simplified method. Veterans can choose instead to claim a standard refund amount based on the calendar year (an individual’s tax year) in which they received the severance payment. Write “Disability Severance Payment” on line 15 of Form 1040X and enter on lines 15 and 22 the standard refund amount listed below that applies:

  • $1,750 for tax years 1991 – 2005
  • $2,400 for tax years 2006 – 2010
  • $3,200 for tax years 2011 – 2016

Claiming the standard refund amount is the easiest way for veterans to claim a refund, because they do not need to access the original tax return from the year of their lump-sum disability severance payment.

Special Instructions

All veterans claiming refunds for overpayments attributable to their lump-sum disability severance payments should write either “Veteran Disability Severance” or “St. Clair Claim” across the top of the front page of the Form 1040X that they file. Because all amended returns are filed on paper, veterans should mail their completed Form 1040X, with a copy of the DoD letter, to:

Internal Revenue Service
333 W. Pershing Street, Stop 6503, P5
Kansas City, MO  64108

Veterans eligible for a refund who did not receive a letter from DoD may still file Form 1040X to claim a refund but must include both of the following to verify the disability severance payment:

  • A copy of documentation showing the exact amount of and reason for the disability severance payment, such as a letter from the Defense Finance and Accounting Services (DFAS) explaining the severance payment at the time of the payment or a Form DD-214, and
  • A copy of either the VA determination letter confirming the veteran’s disability or a determination that the veteran’s injury or sickness was either incurred as a direct result of armed conflict, while in extra-hazardous service, or in simulated war exercises, or was caused by an instrumentality of war.

Veterans who did not receive the DoD letter and who do not have the required documentation showing the exact amount of and reason for their disability severance payment will need to obtain the necessary proof by contacting the Defense Finance and Accounting Services (DFAS)

Source: IRS

Preparing for a Disaster: Taxpayers and Businesses

Posted by Admin Posted on July 16 2018

Preparing for a Disaster: Taxpeyers and businesses

 

Planning what to do in case of a disaster is an important part of being prepared. The Internal Revenue Service encourages taxpayers to safeguard their records. Some simple steps can help taxpayers and businesses protect financial and tax records in case of disasters.

Listed below are tips for individuals and businesses on preparing for a disaster.

Take Advantage of Paperless Recordkeeping for Financial and Tax Records

Many people receive bank statements and documents by e-mail. This method is an outstanding way to secure financial records. Important tax records such as W-2s, tax returns and other paper documents can be scanned onto an electronic format.

Be sure you back up your electronic files and store them in a safe place. Making duplicates and keeping them in a separate location is a good business practice. Other options include copying files onto a CD or DVD. Also, many retail stores sell computer software packages that you can use for recordkeeping.

When choosing a place to keep your important records, convenience to your home should not be your primary concern. Remember, a disaster that strikes your home is also likely to affect other facilities nearby, making quick retrieval of your records difficult and maybe even impossible.

Document Valuables and Business Equipment

The IRS has disaster loss workbooks for individuals ( Publication 584, Casualty, Disaster, and Theft Loss Workbook) and businesses ( Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook) that can help you compile a room-by-room list of your belongings or business equipment. This will help you recall and prove the market value of items for insurance and casualty loss claims.

One option is to photograph or videotape the contents of your home and/or business, especially items of greater value. You should store the photos with a friend or family member who lives away from the geographic area at risk.

Check on Fiduciary Bonds

Employers who use payroll service providers should ask the provider if they have a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

Continuity of Operations Planning for Businesses

How quickly your company can get back to business after a disaster often depends on emergency planning done today. Start planning now to improve the likelihood that your company will survive and recover. Review your emergency plans annually. Just as your business changes over time, so do your preparedness needs. When you hire new employees or when there are changes in how your company functions, you should update your plans and inform your people.

There are real benefits to being prepared for disasters. The following preparedness strategies are common to all disasters. You plan only once, and are able to apply your plan to all types of hazards.

  • Get informed about hazards and emergencies and learn what to do for specific hazards.
  • Develop an emergency plan.
  • Learn where to seek shelter from all types of hazards.
  • Back up your computer data systems regularly.
  • Decide how you will communicate with employees, customers and others.
  • Use cell phones, walkie-talkies, or other devices that do not rely on electricity as a backup to your telecommunications system.
  • Collect and assemble a disaster supplies kit. Include a portable generator.
  • Identify the community warning systems and evacuation routes.
  • Include required information from community and school plans.
  • Practice and maintain your plan.

Update Emergency Plans

Emergency plans should be reviewed annually. Personal and business situations change over time and so do preparedness needs. Individual taxpayers should make sure they are saving documents everybody should keep including such things as W-2s, home closing statements and insurance records. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

Make sure you have a means of receiving severe weather information; if you have a NOAA Weather Radio, put fresh batteries in it. Make sure you know what you should do if threatening weather approaches.

Count on the IRS

Immediately after a casualty, you can request a copy of a return and all attachments (including Form W-2) by using Form 4506, Request for Copy of Tax Return (PDF).

If you just need information from your return, you can order a free transcript by calling (800) 829-1040 or using Form 4506-T, Request for Transcript of Tax Return (PDF). Requests for Transcripts are also available using the online and mail options found on the Get Transcript page. Transcripts are available for the current year and returns processed in the three prior years. IRS.gov is an indispensable resource as you prepare for and recover from disaster.

Source: IRS

- BLINDA TU IDENTIDAD CON EL IP PIN

Posted by Admin Posted on July 15 2018

blinda tu identidad con el ip pin

 

A los aspirantes a contribuyentes se les asigna un número de 6 dígitos llamado IP PIN, el cual te ayuda a prevenir el uso indebido de sus números de Seguro Social  en  cualquier declaración fraudulenta del impuesto federal sobre los ingresos.

Después de haber obtenido tu IP PIN no puedes renunciar a él. Este número deberá ser utilizado cada vez que realices una declaración de impuesto federal, ya sea del presente año o en años posteriores para poder verificar su identidad.

A través del portal web de IRS podrás solicitar tu IP PIN.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

- CONSEJOS PARA AGRICULTORES EN LOS ESTADOS UNIDOS

Posted by Admin Posted on July 15 2018

consejos para agricultores en los estados unidos

 

Si eres agricultor: Estos 10 tips te facilitarán el pago de impuestos

1. Seguro de cosecha.  Los pagos que recibe del seguro por daños a la cosecha cuentan como ingreso. Generalmente, debe reportar estos pagos el año que los recibe.

2. Venta de artículos comprados para reventa.  Ya sea ganado u otros artículos que se van a revender, deben declararse.

3. Ventas relacionadas al clima.  El mal tiempo como una sequía o una inundación puede forzarlo a vender más ganado de lo normal para ese año. De ser así, podría retrasar la declaración de las ganancias por vender los animales adicionales.

4. Gastos de granja.  Puedes deducir gastos ordinarios y necesarios  que hayas pagado por tu negocio.

5. Salarios de empleados.  Puede deducir los sueldos razonables que haya pagado a trabajadores en su granja de tiempo completo y tiempo parcial. Debe retener el Seguro Social, Medicare e impuestos federales de los salarios.

6. Pago de préstamos. Se pueden deducir los intereses que pagó por un préstamo si éste se utilizó para su negocio agrícola, no personales.

7. Pérdidas netas de operación. Si sus gastos son mayores que sus ingresos para ese año, es posible que tenga una pérdida neta de operación. Puede aplicar la pérdida a otros años y entonces deducirla. Podría obtener un reembolso por una fracción o el monto total de los impuestos que pagó en años anteriores. También podría reducir sus impuestos en años futuros.

8. Promedio de ingresos agrícolas.  Es posible que pueda promediar  todos o algunos de los ingresos agrícolas del año en curso con la distribución a lo largo de los últimos tres años. Esto puede reducir sus impuestos si su ingreso agrícola es alto en el año en curso y bajo en uno o más en los últimos tres años.

9. Crédito o reembolso tributario. Es posible que pueda reclamar un crédito tributario o el reembolso de los impuestos por el costo del combustible usado en las actividades de su granja.

10. Guía tributaria para granjeros.  Para más detalles sobre este tema, vea la Publicación 225 (en inglés) Guía Tributaria para Granjeros. Se puede conseguir en IRS.gov/forms en cualquier momento.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

- ¿QUÉ REGISTROS PODRÍA PEDIRTE EL IRS EN UNA AUDITORÍA?

Posted by Admin Posted on July 15 2018

que registros podria pedirte el irs en una auditoria

 

El IRS te pedirá llevar ciertos documentos para comprobar los ingresos, créditos o deducciones que usted reclamó en su declaración de impuestos. Se supone que usted contó con todos estos documentos para preparar la declaración, por eso, la solicitud de los mismos no debería acarrear otra preparación.

Recuerde que nunca debe enviar los registros originales. Envíe copias. Para mayor rapidez organice los registros por año y clase de ingreso o gasto, e incluya un resumen de las transacciones.

Registros que podrían solicitar:

- Recibos: Presente los recibos por fecha, con notas que indican para qué fueron y qué tiene que ver el recibo con su negocio. Además de indicar los dólares pagados o recibidos por un servicio o producto.

- Facturas:  Incluya el nombre de la persona u organización que recibe el pago, la clase de servicio y las fechas en  que pagó las facturas.

- Cheques cancelados: Agrupe los cheques con copias de las facturas que pagaron, y con cualquier reintegro aplicable recibido del empleador.

- Papeles legales: Incluya una descripción del asunto bajo juicio, y cuándo ocurrió y qué tiene que ver con el negocio, el crédito o la deducción. Ejemplos incluyen:  

- Decretos de divorcio que incluyen acuerdos de custodia de hijos.

- Papeles de defensa criminal o civil.

- Adquisición de propiedad

- Preparación de impuestos o asesoramiento

- Contratos de préstamo: Incluya una copia del préstamo original, junto con los siguientes:

- Nombres de los prestatarios

- Ubicación de la propiedad

- Institución financiera prestataria

- Cantidad prestada

- Términos (el número de meses permitidos para el pago)

- Hoja de liquidación: Si el préstamo fue prestado por una institución, incluya un estado del final del año tributario que muestra los intereses pagados.

Si el préstamo fue realizado por una institución, incluya una declaración del beneficiario que indica los intereses pagados ese año además de la dirección y número de Seguro Social del beneficiario.

- Libros o diarios: Estos pueden mostrar las fechas y destinos de sus viajes del negocio, además del propósito de negocio y las millas recorridas en las mismas. También podrían mostrar las ganancias o pérdidas de juegos de azar, y las fechas y lugares de los mismos. También podrían mostrar actividades y gastos de buscar trabajo.

- Boletos: Escriba en los boletos de viaje el propósito de negocio del viaje, y agrúpelos con otros recibos del mismo viaje. Boletos de lotería ayudan a comprobar las ganancias o pérdidas.

- Registros médicos y dentales.

- Estados de sus cuentas de ahorros médicos

- Copia de  una guía u otro estado, que muestre las políticas de beneficio y reintegro.

- Declaraciones de los médicos.

- Registros de mejoras de capital por propósitos médicos, inclusive tasación de propiedad antes y después de las mejoras.

- Contrato del cuidado de un asistente médico.

- Documentos de robo o pérdida.

- Informes del seguro que detallan la naturaleza de la pérdida o el daño. Si no tiene seguro, copias de los informes de policía o bomberos sobre el robo, pérdida o accidente.

- Fotos o video que muestra la gravedad de los daños (si los hay).

- Formulario de tasación de un perito calificado que muestra el valor justo del mercado de la propiedad antes y después, además de un estimado de los daños.

- Documentos de empleo: Pueden incluir políticas sobre uniformes o de vestimenta, requisitos de educación continua, estados de reintegro o políticas del W-2.

- Anexos K-1: Estos se usan para declarar la parte correspondiente a cada accionista de los ingresos, pérdidas, deducciones, y créditos cuando una sociedad anónima de tipo S presenta su declaración anual de impuestos.

Cuestionarios

Si el IRS practica su auditoría por correo, también pueden solicitarles que rellenen un cuestionario. Estos son algunos de los formularios más comunes, todos en inglés.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

- SOLICITUD ELECTRÓNICA PARA EL ACUERDO DE PAGOS A PLAZOS

Posted by Admin Posted on July 15 2018

solicitud electronica para el acuerdo de pagos a plazos

 

Esta solicitud le permite a usted o a su representante autorizado (por Poder Legal) la oportunidad de evitar largas esperas telefónicas o la necesidad para escribir a, o visitar una oficina del IRS para solicitar un plan de pagos a plazos. Al completar el proceso por Internet, recibirá notificación inmediata de la aprobación o denegación del acuerdo solicitado.

También puede usar los enlaces a continuación para “solicitar” la mayoría de las revisiones a un Plan de Pagos ya establecido (en inglés) o modificar sus datos de seguridad para la autenticación electrónica.

Cargos Administrativos y Disponibilidad del Sistema

Si aprobamos su plan de pagos, uno de los siguientes cargos se le añadirá a su deuda tributaria:

- $31 por un plan de pagos a plazos por débito directo establecido a través del Acuerdo de Pagos a Plazos por internet (OPA)

- $149 por un plan de pagos establecido a través del OPA pero sin débito directo desde su cuenta bancaria

- $107 por un plan de pagos a plazos por débito directo que no fue establecido a través del OPA

- $225 por un plan de pagos a plazos sin débito directo desde su cuenta bancaria y que no fue establecido a través del OPA

- $43 si su ingreso está por debajo de cierto nivel ($31 por un plan de pagos a plazos por débito directo asegurado a través del OPA)

- No habrá cargo administrativo si califica para un acuerdo a corto plazo (120 días o menos)

Disponibilidad del Sistema

- Lunes a viernes 6 a.m. a las 12:30 a.m. Horario del este

- Sábado, 6 a.m. a las 10 p.m. Horario del este

- Domingo, 6 p.m. a la medianoche. Horario del este

Individuos

¿Reúne usted los requisitos?

Usted adeuda $50,000 o menos en impuestos, multas e intereses y presentó todas las declaraciones requeridas. También puede calificar para un acuerdo de pago a corto plazo si su deuda es menor de $100,000.

¿Qué necesita para solicitar?

- Nombre

- Dirección de correo electrónico válida

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Fecha de nacimiento

- Estado civil para efectos de la declaración

- Su número de Seguro Social (o de su cónyuge si presentaron un declaración conjunta) o el de identificación de contribuyente individual (ITIN). Si su estado civil para efectos de la declaración es de casado que presenta conjuntamente, la solicitud por Internet para un Plan de Pagos solo aceptará el primer Número de Seguro Social (SSN, por sus siglas en inglés) que aparece en su declaración de impuestos. Si su SSN aparece en segundo lugar, usted debe llamar al número que aparece en su factura o aviso, o seguir las instrucciones en nuestra página de información sobre los acuerdos de planes de pagos.

Poder Legal para un individuo

¿Está solicitando un Poder Legal (POA) para una persona física? Usted necesita:

- El número de Seguro Social (SSN) del contribuyente o el Número de identificación de contribuyente individual (ITIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

- El ingreso ajustado bruto del año anterior (AGI) (si recientemente presentó el del 2016, utilice el AGI del 2015)

Negocios

¿Reúne usted los requisitos?

Usted adeuda $25,000 o menos en impuestos, multas e intereses para el año actual o el año anterior, y presentó todas las declaraciones requeridas.

¿Qué necesita para solicitar?

- Su Número de identificación de empleador (EIN)

- Fecha en que se asignó su EIN (mes y año)

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Su número de identificación de llamada en el Aviso

- Poder Legal

- ¿Está solicitando un Poder Legal (POA) para un negocio? Usted necesita:

- Su Número de identificación de empleador (EIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

Basado en el tipo de acuerdo solicitado, puede que también necesite:

- Domicilio del negocio según mostrado en la declaración de impuesto que presentó más recientemente

- Formulario de impuestos que presentó o que fue examinado

- Periodo de impuestos que presentó o que fue examinado

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

- FACING THE TAX CHALLENGES OF SELF-EMPLOYMENT & PHASEOUTS AND REDUCTIONS

Posted by Admin Posted on July 15 2018

Facing the Tax Challenges of self- exployment

 

Today’s technology makes self-employment easier than ever. But if you work for yourself, you’ll face some distinctive challenges when it comes to your taxes. Here are some important steps to take:

Learn your liability. Self-employed individuals are liable for self-employment tax, which means they must pay both the employee and employer portions of FICA taxes. The good news is that you may deduct the employer portion of these taxes. Plus, you might be able to make significantly larger retirement contributions than you would as an employee.

However, you’ll likely be required to make quarterly estimated tax payments, because income taxes aren’t withheld from your self-employment income as they are from wages. If you fail to fully make these payments, you could face an unexpectedly high tax bill and underpayment penalties.

Distinguish what’s deductible. Under IRS rules, deductible business expenses for the self-employed must be “ordinary” and “necessary.” Basically, these are costs that are commonly incurred by businesses similar to yours and readily justifiable as needed to run your operations.

The tax agency stipulates, “An expense does not have to be indispensable to be considered necessary.” But pushing this grey area too far can trigger an audit. Common examples of deductible business expenses for the self-employed include licenses, accounting fees, equipment, supplies, legal expenses and business-related software.

Don’t forget your home office! You may deduct many direct expenses (such as business-only phone and data lines, as well as office supplies) and indirect expenses (such as real estate taxes and maintenance) associated with your home office. The tax break for indirect expenses is based on just how much of your home is used for business purposes, which you can generally determine by either measuring the square footage of your workspace as a percentage of the home’s total area or using a fraction based on the number of rooms.

The IRS typically looks at two questions to determine whether a taxpayer qualifies for the home office deduction:

1. Is the specific area of the home that’s used for business purposes used only for business purposes, not personal ones?

2. Is the space used regularly and continuously for business?

If you can answer in the affirmative to these questions, you’ll likely qualify. But please contact our firm for specific assistance with the home office deduction or any other aspect of filing your taxes as a self-employed individual.

- AVOID IDENTITY THEFT; LEARN HOW TO RECOGNIZE PHISHING SCAMS

Posted by Admin Posted on July 15 2018

avoid identity theft learn how pishing scams

 

Simply ask for it. That’s the easiest way for an identity thief to steal your personal information.

Each day, people fall victim to phishing scams through emails, texts or phone calls and mistakenly turn over important data. In turn, cybercriminals try to use that data to file fraudulent tax returns or commit other crimes.

The Internal Revenue Service, state tax agencies and the tax industry -- all partners in the fight against identity theft -- urge you to learn to recognize and avoid phishing scams.

We need your help in the fight against identity theft. That’s why, as part of the Security Summit effort, we launched a public awareness campaign that we call Taxes. Security. Together. We’ve launched a series of security awareness tips that can help protect you from cybercriminals.

It’s called “phishing” because thieves attempt to lure you into the scam mainly through impersonations. The scam may claim to be from a friend, a company with whom you do business, a prize award – anything to get you to open the email or text.

A good general rule: Don’t give out personal information based on an unsolicited email request.

Here are a few basic tips to recognize and avoid a phishing email:

It contains a link. Scammers often pose as the IRS, financial institutions, credit card companies or even tax companies or software providers. They may claim they need you to update your account or ask you to change a password. The email offers a link to a spoofing site that may look similar to the legitimate official website. Do not click on the link. If in doubt, go directly to the legitimate website and access your account.

It contains an attachment. Another option for scammers is to include an attachment to the email. This attachment may be infected with malware that can download malicious software onto your computer without your knowledge. If it’s spyware, it can track your keystrokes to obtain information about your passwords, Social Security number, credit cards or other sensitive data. Do not open attachments from sources unknown to you.

It’s from a government agency. Scammers attempt to frighten people into opening email links by posing as government agencies. Thieves often try to imitate the IRS and other government agencies.

It’s an “off” email from a friend. Scammers also hack email accounts and try to leverage the stolen email addresses. You may receive an email from a “friend” that just doesn’t seem right. It may be missing a subject for the subject line or contain odd requests or language. If it seems off, avoid it and do not click on any links.

It has a lookalike URL. The questionable email may try to trick you with the URL. For example, instead of www.irs.gov, it may be a false lookalike such as www.irs.gov.maliciousname.com. You can place your cursor over the text to view a pop-up of the real URL.

Use security features. Your browser and email provider generally will have anti-spam and phishing features. Make sure you use all of your security software features.

Opening a phishing email and clicking on the link or attachment is one of the most common ways thieves are able not just steal your identity or personal information but also to enter into computer networks and create other mischief.

Learning to recognize and avoid phishing emails – and sharing that knowledge with your family members – is critical to combating identity theft and data loss. Businesses should educate employees about the dangers. 

The IRS, state tax agencies and the tax industry joined as the Security Summit to enact a series of initiatives to help protect you from tax-related identity theft in 2017. You can help by taking these basic steps.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- HOW IDENTITY THEFT CAN AFFECT YOUR TAXES

Posted by Admin Posted on July 15 2018

how identity theft can affect your taxes

 

Tax-related identity theft normally occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Many people first find out about it when they do their taxes.

The IRS is working hard to stop identity theft with a strategy of prevention, detection and victim assistance. Here are nine key points:

- Taxes. Security. Together. The IRS, the states and the tax industry need your help. We can’t fight identity theft alone. The Taxes. Security. Together. awareness campaign is an effort to better inform you about the need to protect your personal, tax and financial data online and at home.

- Protect your Records. Keep your Social Security card at home and not in your wallet or purse. Only provide your Social Security number if it’s absolutely necessary. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for internet accounts.

- Don’t Fall for Scams.  Criminals often try to impersonate your bank, your credit card company, even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts. Also, the IRS will not call you threatening a lawsuit, arrest or to demand an immediate tax payment. Normal correspondence is a letter in the mail. Beware of threatening phone calls from someone claiming to be from the IRS.

- Report Tax-Related ID Theft to the IRS. If you cannot e-file your return because a tax return already was filed using your SSN, consider the following steps: • File your taxes by paper and pay any taxes owed. • File an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper return. • File a report with the Federal Trade Commission using the FTC Complaint Assistant; • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on your account;

- IRS Letters. If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.

- IP PIN. If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-file your tax return. Each year, you will receive an IRS letter with a new IP PIN.

- Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

- Combating ID Theft.  In 2015, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft returns. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- DON'T MISS THIS!!! ARE YOU GETTING MARRIED THIS SUMMER?

Posted by Admin Posted on July 15 2018

are you getting married this summer

 

Getting married this summer? Congratulations! You’ve tied the knot and cut the cake. Soon, you’ll be filing your first joint income tax return. Here are some simple steps to make this event less stressful.

Step 1: Marriage can mean a change in name. Make sure that the names you enter on your first tax return match the names and Social Security numbers on file with the Social Security Administration. For example, if you are taking your spouse’s surname, you should notify SSA of the change in your name.

Step 2: No matter when you get married, even on Dec. 31, the IRS considers you to have been married for the entire year for tax purposes. To make sure you are having enough taxes taken out of your paychecks, check your withholding. If both you and your spouse work, your combined income may place you in a higher tax bracket.

The IRS Withholding Calculator will help you figure the correct amount of withholding for a married couple. Making a change to your withholding now can eliminate or reduce a tax bill when it’s time to file your tax return. Use Form W-4, Employee’s Withholding Allowance Certificate, to make the needed adjustments and give the form to your employer.

Step 3: Let the IRS know your new address by completing Form 8822, Change of Address. Mail the completed change of address form to the address listed on Page 2 of the form.

Step 4: The U.S. postmaster will also want to make sure the post office has your correct address. So, don’t forget to notify the U.S. Postal Service when you move, so it can forward any IRS correspondence or refunds.

Step 5: Just in case you forgot to invite your employer to the wedding, make sure you let them know about any name and address changes. This will ensure that you receive your Form W-2, Wage and Tax Statement, after the end of the year. Make sure banks or other payers that may send you year-end tax statements have your updated name and address as well.

Step 6: If you receive advance payments of the premium tax credit, you should report changes in circumstances, such as your marriage, to your Health Insurance Marketplace. Other changes that you should report include a change in your income or family size. Advance payments of the Premium Tax Credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

If one or both of you received the benefit of advance credit payments for the year, you may be eligible to use an alternative calculation to determine your excess advance credit payments. The alternative calculation can be used to reduce excess advance credit payments, but not to increase your net premium tax credit. See the instructions for Form 8962, Premium Tax Credit, for eligibility. If you’re eligible, you need to complete Form 8962, Part 5, Alternative Calculation of Year of Marriage.

 Step 7: Select the right tax form. Choosing the right individual income tax form can help save money. Newly married taxpayers may find that they now have enough deductions to itemize on their tax returns. You must claim itemized deductions on a Form 1040, U.S. Individual Income Tax Return, not a Form 1040A or Form 1040EZ. Step

8: Choose the best filing status. A person’s marital status on Dec. 31 determines whether the person is considered married for that year. Generally, the tax law allows married couples to choose to file their federal income tax return either jointly or separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but usually filing jointly is more beneficial. When it comes to wedding planning, details are important. Why not take these steps now to be sure your first tax season as a married couple goes smoothly.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- SAVING FOR RETIREMENT WHEN YOU BELONG TO MULTIPLE RETIREMENT PLANS

Posted by Admin Posted on July 15 2018

saving for retirement when you belong to multiple retirement plans

 

The most you can contribute from your wages to retirement plans each calendar year is your individual contribution limit. Although your limit is affected by the plan terms, it generally doesn’t depend on how many plans you participate in or on the type of employer who is sponsoring those plans. If you exceed your individual contribution limit and the excess isn’t returned by April 15 (sooner for a 457(b) plan) of the next year, you could be subject to double taxation:

• once in the year you deferred your salary, and

• again when you receive a distribution. Limits

• General limit for 2016 — You may contribute a total of $18,000 in pre-tax or designated Roth contributions to all your plans (not counting 457(b) plans).

• Age-50 catch-up contributions — If you are age 50 or older by the end of 2016, you may be able contribute an additional $6,000 in total to your 401(k), 403(b) or governmental 457(b) plan.

• 403(b) plans’ 15-year catch-up contribution — If you have at least 15 years of service with your employer, you may be able to contribute up to an additional $3,000 to your 403(b) plan.

• 457(b) plans’ separate contribution limit — A separate individual contribution level for 457(b) plans and additional catch-up amounts depend on whether the plan sponsor is a state or local government, or some other tax-exempt organization. Check your plan documents for the amount you can contribute to the plan, and make sure you don’t exceed your limit.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- IF YOU MISSED THE TAX DEADLINE, THESE TIPS CAN HELP

Posted by Admin Posted on July 15 2018

if you missed the tax dedline these tips can help

 

The tax filing deadline has come and gone. If you didn’t file a tax return or an extension, but should have, you need to take action now. Here are some tips to help you.

• File as soon as you can. If you owe taxes, you should file and pay as soon as you can. This will stop the interest and penalties that you’ll owe. IRS Direct Pay offers a free, secure and easy way to pay your tax directly from your checking or savings account. There is no penalty for filing a late return if you are due a refund. The sooner you file, the sooner you’ll get it.

• Use IRS e-file to do your taxes. No matter who prepares your tax return, you can use IRS e-file through Oct. 17. E-file is the easiest, safest and most accurate way to file your taxes. The IRS will confirm that it received your tax return. The IRS issues more than nine out of 10 refunds in less than 21 days.

• E-file using IRS Free File, if you qualify. Nearly everyone can use IRS Free File to e-file their federal taxes for free. If your income was $62,000 or less, you can use free brand-name tax software. If you made more than $62,000, use Free File Fillable Forms to e-file. This program uses electronic versions of IRS paper forms. It does some of the math, and it works best for those who are used to doing their own taxes. Either way, you have a free option that you can only access on IRS.gov. It’s available at least through the Oct. 17 extension period.

• Pay as much as you can. If you owe tax but can’t pay it in full, you should pay as much as you can when you file your tax return. IRS electronic payment options are the quickest and easiest way to pay your taxes. Pay the rest of the tax you still owe as soon as possible. Doing so will reduce future penalties and interest.

• Use the IRS.gov tool to pay over time. If you need more time to pay your tax, you can apply for an installment agreement with the IRS. The best way to apply is to use the IRS Online Payment Agreement tool. You can use the IRS.gov tool to set up a direct debit agreement. You don’t need to write and mail a check each month with a direct debit plan. If you don’t use the tool, you can use Form 9465, Installment Agreement Request, to apply. You can get the form on the IRS.gov Forms and Publications page at any time.

• A refund may be waiting. If you are due a refund, you should file as soon as possible to get it. Even if you are not required to file, you may still get a refund. This could apply if you had taxes withheld from your wages or you qualify for certain tax credits. If you do not file your return within three years, you could lose your right to the refund.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- CONSEJOS SOBRE PROPINAS QUE DEBES TENER EN CUENTA

Posted by Admin Posted on July 08 2018

consejos sobre propinas para tener en cuenta

 

¿Sabías que todo lo que recibas en propinas es tributable? Toma en cuenta lo siguiente:

1.- Usa el Asistente Tributario Interactivo. El Asistente Tributario Interactivo es un recurso de ley tributaria que hace a los contribuyentes una serie de preguntas y proporciona respuestas.

2.- Declarar todas las propinas en la declaración de impuestos. Usa el Formulario 4137 (en inglés), Impuesto al Seguro Social y al Medicare sobre los ingresos de propinas no declaradas, para declarar la cantidad de todo ingreso de propinas no declaradas, para incluirlas como salarios adicionales. Esto incluye el valor de artículos no monetarios que alguien recibe como propina, tales como entradas o boletos a un evento.

3.- Declara todo tipo de propinas. Como contribuyente debes pagar impuestos sobre todas las propinas que recibas durante el año, incluyendo las que recibas:

- Directamente de los clientes.

- Agregadas a las tarjetas de crédito.

- De un acuerdo de compartir las propinas con otros empleados.

4.- Declara las propinas a tu jefe. Si recibes $20 o más en propinas en cualquier mes, debes informar a tu jefe las propinas para ese mes, a más tardar el 10º día del mes siguiente, incluyendo las propinas recibidas en efectivo, cheque y tarjeta de crédito. Pues como empleador éste debe retener el impuesto federal sobre los ingresos y los impuestos al Seguro Social y al Medicare sobre las propinas declaradas.

5.- Lleva un registro diario de propinas. Usa la Publicación 1244(PR), Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informa al Patrono, para registrar las propinas. Esto ayudará a declarar la cantidad correcta de propinas en una declaración de impuestos.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

- ¿SABES QUÉ ES EL PHISHING?

Posted by Admin Posted on July 08 2018

que es el phishing w

 

Ten en cuenta que los correos no solicitados que dicen ser del IRS o de alguno de sus programas, deberá reportarse a la dirección phishing@irs.gov, pues se han reportado casos en que el Sistema de Pago Electrónico de impuestos federales (EFTPS) es utilizado para atraer a víctimas.

Cabe destacar que, si experimentas pérdidas financieras debido a un incidente relacionado con el IRS debe reportarlo al Inspector General del Tesoro para la Administración Tributaria y presentar una queja con la Comisión Federal de Comercio a través del Asistente de Quejas.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

 

Fuente: IRS

- ASÍ PROTEGE TU IDENTIDAD EL IRS

Posted by Admin Posted on July 08 2018

asi protege tu identidad el irs

 

El robo de identidad representa un problema para sus víctimas y todo un desafío para los negocios, organizaciones y agencias gubernamentales, incluyendo al IRS. El IRS combate el robo de identidad relacionado a los impuestos por medio de una estrategia estricta de prevención, detección y asistencia a las víctimas. Aunque se ha ido progresando en la lucha contra este crimen, continúa siendo una de sus principales prioridades.

El robo de identidad relacionado a los impuestos, sucede cuando alguien utiliza su número de Seguro Social robado y presenta una declaración de impuestos reclamando un reembolso fraudulento. Si llegas a ser una víctima de este crimen, el IRS está comprometido a ayudarte a resolver tu caso lo más pronto posible.

Cumbre de Seguridad

El IRS, los estados y la industria privada de impuestos trabajan juntos para identificar nuevas medidas de seguridad para proteger de manera más efectiva a los contribuyentes y combatir el robo de identidad. Pero necesitan tu ayuda.

Recuerda: el IRS no se comunica con los contribuyentes por correo electrónico para solicitar información personal o financiera. Esto incluye cualquier tipo de comunicación electrónica, tales  como mensajes de texto y redes sociales. El IRS no llama a los contribuyentes con amenazas de demandas o detenciones.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

- 6 TIPS PARA USAR TUS TARJETAS DE CRÉDITO

Posted by Admin Posted on July 08 2018

6 tips para usar tus tarjetas de credito

 

1- Realiza los consumos posteriores a tu fecha de corte.

2- Apréndete los datos básicos:  conoce la fecha de corte, fecha de pago y el límite de crédito.

3- Trata de pagar antes de la fecha indicada para que te cataloguen como responsable.

4- Te recomendamos tener un máximo de 3 tarjetas y utilizarlas de la siguiente manera: una para tus gastos comunes, otra como herramienta de crédito para adquirir activos o gastos necesarios, ejemplo comprar un electrodoméstico. Por último, ten una tarjeta de crédito para emergencias, por cualquier gasto imprevisto.

5- Cuando vayas a realizar el pago, trata de abonar más del mínimo requerido para que vean que tienes facilidad de pago.

6- Recuerda que los bancos evaluarán qué tan disciplinado eres con ellas para aumentar los límites, necesitas ganarse su confianza.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: instituto-finanzas

- WHAT EVERY STUDENT SHOULD KNOW ABOUT SUMMER JOBS AND TAXES

Posted by Admin Posted on July 08 2018

WHAT EVERY STUDENT SHOULD KNOW ABOUT SUMMER JOBS AN TAXES

 

Many students take a job in the summer after school lets out. If it’s your first job, it gives you a chance to learn about the working world. That includes taxes we pay to support the place we live, our state and our nation. Here are eight things you should know about taxes:

1. Don’t be surprised when your employer withholds taxes from your paychecks. That’s how you pay your taxes when you’re an employee. If you’re selfemployed, you may have to pay estimated taxes directly to the IRS on certain dates during the year. This is how our pay-as-you-go tax system works.

2. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use it to figure how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on IRS.gov can help you fill out the form.

3. Keep in mind that all tip income is taxable. If you get tips, you must keep a daily log so you can report them. You must report $20 or more in cash tips in any one month to your employer, and you must report all of your yearly tips on your tax return.

4. Money you earn doing work for others is taxable. Some work you do may count as self-employment. This can include jobs like baby-sitting and lawn mowing. Keep good records of expenses related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction may help lower your taxes.

5. If you’re in ROTC, your active duty pay, such as pay you get for summer camp, is taxable. A subsistence (living) allowance you get while in advanced training isn’t taxable.

6. You may not earn enough from your summer job to owe income tax, but your employer usually must withhold Social Security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count toward your coverage under the Social Security system.

7. If you’re a newspaper carrier or distributor, special rules apply. If you meet certain conditions, you’re considered self-employed. If you don’t meet those conditions and are under age 18, you are usually exempt from Social Security and Medicare taxes.

8. You may not earn enough money from your summer job to be required to file a tax return. Even if that’s true, you may still want to file. For example, if your employer withheld income tax from your pay, you’ll have to file a return to get your taxes refunded. You can prepare and e-file your tax return for free using IRS Free File. It’s available exclusively on IRS.gov

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Posted by Admin Posted on July 08 2018

- FIVE TAX TIPS ABOUT HOBBIES THAT EARN INCOME

Posted by Admin Posted on July 08 2018

five tax tips about hobbies that earn income

 

Millions of people enjoy hobbies. Hobbies can also be a source of income. Some of these types of hobbies include stamp or coin collecting, craft making and horse breeding. You must report any income you get from a hobby on your tax return. How you report the income from hobbies is different from how you report income from a business. There are special rules and limits for deductions you can claim for a hobby. Here are five basic tax tips you should know if you get income from your hobby:

Business versus Hobby. There are nine factors to consider to determine if you are conducting business or participating in a hobby. Make sure to base your decision on all the facts and circumstances of your situation.

- Allowable Hobby Deductions. You may be able to deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is helpful or appropriate.

- Limits on Expenses. As a general rule, you can only deduct your hobby expenses up to the amount of your hobby income. If your expenses are more than your income, you have a loss from the activity. You can’t deduct that loss from your other income.

- How to Deduct Expenses. You must itemize deductions on your tax return in order to deduct hobby expenses. Your costs may fall into three types of expenses. Special rules apply to each type. See Publication 535 for how you should report them on Schedule A, Itemized Deductions.

- Use IRS Free File. Hobby rules can be complex. IRS Free File can make filing your tax return easier. IRS Free File is available until Oct. 17. If you make $62,000 or less, you can use brand-name tax software. If you earn more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. You can only access Free File through IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- COLLEGE FOR THE KIDS OR RETIREMENT

Posted by Admin Posted on July 08 2018

COLLEGE FOR THE KIDS AND RETIREMENT

 

JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

Family Wealth Management & Amending Your Tax Return
JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK
Preserving and managing family wealth requires addressing a number of major issues. These include saving for your children’s education and funding your own retirement. Juggling these competing demands is no trick. Rather, it requires a carefully devised and maintained family wealth management plan.

Start with the basics

First, a good estate plan can help ensure that, in the event of your death, your children will be taken care of and, if your estate is large, that they won’t lose a substantial portion of their inheritances to estate taxes. It can also guarantee that your assets will be passed along to your heirs according to your wishes.

Second, life insurance is essential. The right coverage can provide the liquidity needed to repay debts, support your children and others who depend on you financially, and pay estate taxes.

Prepare for the challenge

Most families face two long-term wealth management challenges: funding retirement and paying for college education. While both issues can be daunting, don’t sacrifice saving for your own retirement to finance your child’s education. Scholarships, grants, loans and work-study may help pay for college — but only you can fund your retirement.

Uncle Sam has provided several education incentives that are worth checking out, including tax credits and deductions for qualifying expenses and tax-advantaged savings pportunities such as 529 plans and Education Savings Accounts (ESAs). Because of income limits and phaseouts, many higher-income families won’t benefit from some of these tax breaks. But, your children (or your parents, in the case of contributing to an ESA) may be able to take advantage of them.

Give assets wisely

Giving money, investments or other assets to your children or other family members can save future income tax and be a sound estate planning strategy as well. You can currently give up to $14,000 per year per individual ($28,000 if married) without incurring gift tax or using your lifetime gift tax exemption. Depending on the number of children and grandchildren you have, and how many years you continue this gifting program, it can really add up.

By gifting assets that produce income or that you expect to appreciate, you not only remove assets from your taxable estate, but also shift income and future appreciation to people who may be in lower tax brackets.

Also consider using trusts to facilitate your gifting plan. The benefit of trusts is that they can ensure funds are used in the manner you intended and can protect the assets from your loved ones’ creditors.

Overcome the complexities

Creating a comprehensive plan for family wealth management and following through with it may not be simple — but you owe it to yourself and your family. We can help you overcome the complexities and manage your tax burden.

Sidebar: Charitable giving’s place in family wealth management

Do charitable gifts have a place in family wealth anagement? absolutely. Properly made gifts can avoid gift and estate taxes, while possibly qualifying for an income tax deduction. Consider a charitable trust that allows you to give income-producing assets to charity, but keep the income for life — or for the charity to receive the earnings and the assets to later pass to your heirs. These are just two examples; there are more ways to use trusts to accomplish your charitable goals.


NEED A DO-OVER? AMEND YOUR TAX RETURN
Like many taxpayers, you probably feel a sense of relief after filing your tax return. But that feeling can change if, soon after, you realize you’ve overlooked a key detail or received additional information that should have been considered. In such instances, you may want (or need) to amend your return.

Typically, an amended return — Form 1040X, to be exact — must be filed within three years from the date you filed the original tax return or within two years of the date the applicable tax was paid (whichever is later). Your choice of timing should depend on whether you expect a refund or a bill.

If claiming an additional refund, you should typically wait until you’ve received your original refund. Then cash or deposit the first refund check while waiting for the second. If you owe additional dollars, file the amended return and pay the tax immediately to minimize interest and penalties.

Bear in mind that, as of this writing, the IRS doesn’t offer amended returns via e-file. You can, however, track your amended return electronically. The IRS now offers an automated status-tracking tool called “Where’s My Amended Return?” at https://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1.

If you have any questions, please do not hesitate to call me at (305) 274-5811, our firm has a network of professionals that includes International Tax Attorneys, Real Estate Attorneys and Immigration Attorneys that will assist you and your clients to ensure that the whole process of buying, holding and selling real estate in the United States is smooth.  

Source: PDI Global, Inc.

-FIVE FACTS ABOUT THE SMALL BUSINESS HEALTH CARE TAX CREDIT

Posted by Admin Posted on July 08 2018

five facts about small business healt care tax credit

 

If you are a small employer, there is a tax credit that can put money in your pocket. The small business health care tax credit benefits employers that:

- Offer coverage through the small business health options program, also known as the SHOP marketplace

- Have fewer than 25 full-time equivalent employees

- Pay an average wage of less than $50,000 a year

- Pay at least half of employee health insurance premiums

Here are five facts about this credit:

- The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers. 

- To be eligible for the credit, you must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace, or qualify for an exception to this requirement.

- The credit is available to eligible employers for two consecutive taxable years beginning in 2014 or later. You may be able to amend prior year tax returns to claim the credit for tax years 2010 through 2013 in addition to claiming this credit for those two consecutive years.

- You can carry the credit back or forward to other tax years if you do not owe tax during the year.

- You may get both a credit and a deduction for employee premium payments. Since the amount of your health insurance premium payments will be more than the total credit, if you are eligible, you can still claim a business expense deduction for the premiums in excess of the credit.    For more information, see the small business health care tax credit page on IRS.gov. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- STORING TAX RECORDS: HOW LONG IS LONG ENOUGH?

Posted by Admin Posted on July 08 2018

storing tax records how long is long enough

 

April 18 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), it may go back six years in an audit. If there is any indication of fraud, or you do not file a return, no period of limitation exists.To be safe, use the following guidelines.

Business Records To Keep...

Personal Records To Keep...

1 Year

1 Year

3 Years

3 Years

6 Years

6 Years

Forever

Forever

Special Circumstances

 Business Documents To Keep For One Year

Correspondence with Customers and Vendors

Duplicate Deposit Slips

Purchase Orders (other than Purchasing Department copy)

Receiving Sheets

Requisitions

Stenographer's Notebooks

Stockroom Withdrawal Forms

 Business Documents To Keep For Three Years

Employee Personnel Records (after termination)

Employment Applications

Expired Insurance Policies

General Correspondence

Internal Audit Reports

Internal Reports

Petty Cash Vouchers

Physical Inventory Tags

Savings Bond Registration Records of Employees

Time Cards For Hourly Employees

 Business Documents To Keep For Six Years

Accident Reports, Claims

Accounts Payable Ledgers and Schedules

Accounts Receivable Ledgers and Schedules

Bank Statements and Reconciliations

Cancelled Checks

Cancelled Stock and Bond Certificates

Employment Tax Records

Expense Analysis and Expense Distribution Schedules

Expired Contracts, Leases

Expired Option Records

Inventories of Products, Materials, Supplies

Invoices to Customers

Notes Receivable Ledgers, Schedules

Payroll Records and Summaries, including payment to pensioners

Plant Cost Ledgers

Purchasing Department Copies of Purchase Orders

Sales Records

Subsidiary Ledgers

Time Books

Travel and Entertainment Records

Vouchers for Payments to Vendors, Employees, etc.

Voucher Register, Schedules

 Business Records To Keep Forever

While federal guidelines do not require you to keep tax Records "forever," in many cases there will be other reasons you'll want to retain these documents indefinitely.

Audit Reports from CPAs/Accountants

Cancelled Checks for Important Payments (especially tax payments)

Cash Books, Charts of Accounts

Contracts, Leases Currently in Effect

Corporate Documents (incorporation, charter, by-laws, etc.)

Documents substantiating fixed asset additions

Deeds

Depreciation Schedules

Financial Statements (Year End)

General and Private Ledgers, Year End Trial Balances

Insurance Records, Current Accident Reports, Claims, Policies

Investment Trade Confirmations

IRS Revenue Agent Reports

Journals

Legal Records, Correspondence and Other Important Matters

Minutes Books of Directors and Stockholders

Mortgages, Bills of Sale

Property Appraisals by Outside Appraisers

Property Records

Retirement and Pension Records

Tax Returns and Worksheets

Trademark and Patent Registrations

 Personal Documents To Keep For One Year

While it's important to keep year-end mutual fund and IRA contribution statements forever, you don't have to save monthly and quarterly statements once the year-end statement has arrived.

 Personal Documents To Keep For Three Years

Credit Card Statements

Medical Bills (in case of insurance disputes)

Utility Records

Expired Insurance Policies

 Personal Documents To Keep For Six Years

Supporting Documents For Tax Returns

Accident Reports and Claims

Medical Bills (if tax-related)

Sales Receipts

Wage Garnishments

Other Tax-Related Bills

 Personal Records To Keep Forever

CPA Audit Reports

Legal Records

Important Correspondence

Income Tax Returns

Income Tax Payment Checks

Property Records / Improvement Receipts (or six years after property sold)

Investment Trade Confirmations

Retirement and Pension Records (Forms 5448, 1099-R and 8606 until all distributions are made from your IRA or other qualified plan)

 Special Circumstances

Car Records (keep until the car is sold)

Credit Card Receipts (keep until verified on your statement)

Insurance Policies (keep for the life of the policy)

Mortgages / Deeds / Leases (keep 6 years beyond the agreement)

Pay Stubs (keep until reconciled with your W-2)

Sales Receipts (keep for life of the warranty)

Stock and Bond Records (keep for 6 years beyond selling)

Warranties and Instructions (keep for the life of the product)

Other Bills (keep until payment is verified on the next bill)

Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial Statements, please give us a call at 305-274-5811.

 

Source: Thomson Reuters

- WHY SHOULD I HAVE LIFE INSURANCE?

Posted by Admin Posted on July 08 2018

why should i have life insurance

 

The main reason that people purchase life insurance is to know that in the event of their passing, their children and loved ones will be taken care of. Life insurance can also help with the distribution of your estate. Your payout could go to family, charity, or wherever you choose to distribute it.

The main reasons to buy life insurance would be because you have dependents that would be put in a tough position without you providing for them. For example, if you have a spouse, a child, or a parent who is dependent on your income, you should have life insurance.

If you have a spouse and young children, you will need more insurance than someone with older children, because they will be dependents for a longer amount of time than older children. If you are in a position where you and your spouse both earn for the family, then you should both be insured in proportion to the incomes that you garner.

If you have a spouse and older children or no children, you will still want to have life insurance, but you won't need the same level of insurance as in the first example, just enough to ensure that your spouse will be provided for, to cover your burial expenses, and to settle the debts that you have accumulated.

If you don't have children or a spouse, you will only need enough insurance to make sure that your burial expenses are covered, unless you would like to have an insurance policy in order to help in the distribution of your estate.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- Tax Saving Techniques

Posted by Admin Posted on July 02 2018

Tax Saving Techniques

 

Following are some generally recognized financial planning tools that may help you reduce your tax bill.

Charitable Giving - Instead of selling your appreciated long-term securities, donate the stock instead and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.

Health Savings Accounts (HSAs) - If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.

ROTH IRAs - Contributions to a ROTH IRA are not tax deductible but the qualified distributions, including earnings are tax-free.

Municipal Bonds - Interest earned on these types of investments is tax-exempt.

Own a home - most of the cost of this type of investment is financed and the interest (on mortgages up to $1,000,000) is tax deductible. When the property is sold, individuals may exclude up to $250,000 ($500,000 if married jointly) of the gain.

Retirement Plans - Participate in your employer sponsored retirement plan, especially if there is a matching component. You will receive a current tax deduction and the tax-deferred compounding can add up to a large retirement savings.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811
 

Source: Thomson Reuters

Posted by Admin Posted on July 02 2018

- Combined business and vacation travel

Posted by Admin Posted on July 01 2018

Combined business and vacation travel

 

If you go on a business trip within the U.S. and add on some vacation days, you know you can deduct some of your expenses. The question is how much.

First, let’s cover just the pure transportation expenses. Transportation costs to and from the scene of your business activity are 100% deductible as long as the primary reason for the trip is business rather than pleasure. On the other hand, if vacation is the primary reason for your travel, then generally none of your transportation expenses are deductible. Transportation costs include travel to and from your departure airport, the airfare itself, baggage fees and tips, cabs, and so forth. Costs for rail travel or driving your personal car also fit into this category.

The number of days spent on business vs. pleasure is the key factor in determining if the primary reason for domestic travel is business. Your travel days count as business days, as do weekends and holidays if they fall between days devoted to business, and it would be impractical to return home. Standby days (days when your physical presence is required) also count as business days, even if you are not called upon to work on those days. Any other day principally devoted to business activities during normal business hours is also counted as a business day, and so are days when you intended to work, but could not due to reasons beyond your control (local transportation difficulties, power failure, etc.).

You should be able to claim business was the primary reason for a domestic trip whenever the business days exceed the personal days. Be sure to accumulate proof and keep it with your tax records. For example, if your trip is made to attend client meetings, log everything on your daily planner and copy the pages for your tax file. If you attend a convention or training seminar, keep the program and take some notes to show you attended the sessions.

Once at the destination, your out-of-pocket expenses for business days are fully deductible. Out-of-pocket expenses include lodging, hotel tips, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. Expenses for personal days are nondeductible.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811
 

Source: Thomson Reuters

Posted by Admin Posted on July 01 2018

Which type of mortage loan meets your needs?

Posted by Admin Posted on July 01 2018

Which type of mortage loan meets your needs

 

Few purchases during your lifetime will be as expensive as buying a home. Whether it’s your primary residence, a vacation home or an investment property, how you choose to pay for it can have a significant impact on your financial situation over time. If you’re considering a mortgage loan, understanding the main categories of mortgages — fixed-rate and adjustable-rate — and the situations they’re best designed for will help you match the right type for your needs.

Fixed-rate loans offer stability

A fixed-rate mortgage, as its name suggests, is a loan whose interest rate remains constant for the life of the loan — typically 15 or 30 years. One of the primary benefits of a fixed-rate loan is that it provides a measure of certainty about one of the biggest expenses in your monthly budget. With interest rates likely to rise after an extended period of historically low rates, you won’t have to worry about potentially higher payments in the future if you select a fixed-rate loan.

That said, if interest rates were to fall again, your fixed-rate loan would leave you unable to take advantage of the shift unless you refinance, which might involve fees. You’re also paying a premium for the stability offered by a fixed-rate mortgage. You could consider a 15-year fixed-rate loan, which would charge a lower rate than a 30-year loan, but the tradeoff will be higher monthly payments.

ARMs provide flexibility

Adjustable-rate mortgages (ARMs) typically offer a fixed interest rate for an initial period of years. This rate, which is usually lower than that of a comparable fixed-rate mortgage, resets periodically based on a benchmark interest rate. For example, a 5/1 ARM means that your interest rate is fixed for the first five years and then will adjust every year after that.

Paying less interest in the beginning frees your cash for other investments. You might also take advantage of an ARM if you’re confident that you’ll have more money in the future than you do today, or if you plan on selling your house before or soon after the initial fixed-rate period expires. When considering an ARM, you’ll need to assess your ability to keep up with potentially higher payments — say, if the initial period expires, your rate goes up and you’re unable to sell the home, or if your income changes.

The best for you

The right loan type depends, naturally, on your financial position. But whether you’re buying a primary residence, vacation home or investment property also plays a role. Regardless of which type of home you’re purchasing, having a basic knowledge of the loan types can help ease the buying process. Let our firm assist you in evaluating the best mortgage for your needs.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811


Source: Thomson Reuters

4 QUESTIONS TO ASK BEFORE HIRING HOUSEHOLD HELP

Posted by Admin Posted on July 01 2018

4 questions to ask before hiring household help

 

When you hire someone to work in your home, you may become an employer. Thus, you may have specific tax obligations, such as withholding and paying Social Security and Medicare (FICA) taxes and possibly federal and state unemployment insurance. Here are four questions to ask before you say, “You’re hired.”

1. Who’s considered a household employee?

A household worker is someone you hire to care for your children or other live-in family members, clean your house, cook meals, do yard work or provide similar domestic services. But not everyone who works in your home is an employee.

For example, some workers are classified as independent contractors. These self-employed individuals typically provide their own tools, set their own hours, offer their services to other customers and are responsible for their own taxes. To avoid the risk of misclassifying employees, however, you may want to assume that a worker is an employee unless your tax advisor tells you otherwise.

2. When do I pay employment taxes?

You’re required to fulfill certain state and federal tax obligations for any person you pay $2,100 or more annually (in 2018) to do work in or around your house. (The threshold is adjusted annually for inflation.)

In addition, you’re required to pay the employer’s half of FICA (Social Security and Medicare) taxes (7.65% of cash wages) and to withhold the employee’s half. For employees who earn $1,000 or more in a calendar quarter, you must also pay federal unemployment taxes (FUTA) equal to 6% of the first $7,000 in cash wages. And, depending on your resident state, you may be required to make state unemployment contributions, but you’ll receive a FUTA credit for those contributions, up to 5.4% of wages.

You don’t have to withhold federal (and, in most cases, state) income taxes, unless you and your employees agree to a withholding arrangement. But regardless of whether you withhold income taxes, you’re required to report employees’ wages on Form W-2.

3. Are there exceptions?

Yes. You aren’t required to pay employment taxes on wages you pay to your spouse, your child under age 21, your parent (unless an exception is met) or an employee who is under age 18 at any time during the year, providing that performing household work isn’t the employee’s principal occupation. If the employee is a student, providing household work isn’t considered his or her principal occupation.

4. How do I make tax payments?

You pay any federal employment and withholding taxes by attaching Schedule H to your Form 1040. You may have to pay state taxes separately and more frequently (usually quarterly). Keep in mind that this may increase your own tax liability at filing, though the Schedule H tax isn’t subject to estimated tax penalties.

If you owe FICA or FUTA taxes or if you withhold income tax from your employee’s wages, you need an employer identification number (EIN).

There’s no statute of limitations on the failure to report and remit federal payroll taxes. You can be audited by the IRS at any time and be required to pay back taxes, penalties and interest charges. Our firm can help ensure you comply with all the requirements.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

                                     

Source: Thomson Reuters

5 Tips For Early Preparation

Posted by Admin Posted on June 30 2018

5 tips early preparation

 

Earlier is better when it comes to working on your taxes. The IRS encourages everyone to get a head start on tax preparation. Not only do you avoid the last-minute rush, early filers also get a faster refund.

There are five easy ways to get a good jump on your taxes long before the April 15 deadline rolls around:

  1. Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don't forget to save a copy for your files.
  2. Get the right forms. They're available around the clock on IRS.gov in the Forms and Publications section.
  3. Take your time. Don't forget to leave room for a coffee break when filling out your tax return. Rushing can mean making a mistake — and that can be expensive!
  4. Double-check your math and Social Security number. These are among the most common errors on tax returns. Taking care on these reduces your chances of hearing from the IRS.
  5. Get the fastest refund. When you file early, you get your refund faster. Using e-filing with direct deposit gets you a refund in half the time as paper filing.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811
 


Source: Thomson Reuters

Top 3 Summer Scams

Posted by Admin Posted on June 30 2018

Top 3 Summer Scams

 

With tax season completed, the Internal Revenue Service warned taxpayers to remain vigilant for phishing emails and telephone scams. Summertime tends to be a favorite period for scammers because many taxpayers have recently filed a return and may be waiting for a response from the IRS.

The IRS and its Security Summit partners – the state tax agencies and the tax industry – urge taxpayers to remain alert to tax scams year-round, especially immediately after the tax filing season ends. Even after the April deadline passes, the tax scam season doesn’t end.

While many of the scams are variations on a theme and tend to evolve over time, taxpayers should be on the lookout for any attempt to get them to disclose personal information like Social Security numbers, account information or passwords. If in doubt, don’t give it out. Those receiving such calls should hang up and initiate correspondence with the agency that is purportedly inquiring about their account using a well-known phone number or email address. Clicking on links provided in emails or calling back unfamiliar phone numbers is not recommended.

Phone scams

The IRS does not call and leave pre-recorded, urgent messages asking for a call back. In this tactic, the victim is told if they do not call back, a warrant will be issued for their arrest. Other variations may include threat of other law-enforcement agency intervention, deportation or revocation of licenses.

Criminals are able to fake or “spoof” caller ID numbers to appear to be anywhere in the country, including from an IRS office. This prevents taxpayers from being able to verify the true call number. Fraudsters also have spoofed local sheriff’s offices, state Department of Motor Vehicles, federal agencies and others to convince taxpayers the call is legitimate.

Email phishing scams

If a taxpayer receives an unsolicited email that appears to be from either the IRS or a program closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov. Learn more by going to the Report Phishing and Online Scamspage.

The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Telltale signs of a scam

The IRS (and its authorized private collection agencies) will never:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.Ask for credit or debit card numbers over the phone.

For anyone who doesn’t owe taxes and has no reason to think they do:

Do not give out any information. Hang up immediately.Contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page.Report the caller ID and/or callback number to the IRS by sending it to phishing@irs.gov(Subject: IRS Phone Scam).Report it to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. Add "IRS Telephone Scam" in the notes.

For anyone who owes tax or thinks they do:

View tax account information online at IRS.gov to see the actual amount owed. Taxpayers can then also review their payment options.Call the number on the billing notice, orCall the IRS at 800-829-1040. IRS workers can help.

The IRS does not use text messages or social media to discuss personal tax issues, such as those involving bills or refunds. For more information, visit the Tax Scams and Consumer Alerts page on IRS.gov. Additional information about tax scams is also available on IRS social media sites, including YouTube videos.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811



Source: IRS

 

¿Factura tributaria este año? Verifique la retención pronto, evite otra el próximo año

Posted by Admin Posted on June 30 2018

¿Factura tributaria este año? Verifique la retención pronto, evite otra el próximo año

 

Los contribuyentes que adeudaban impuestos adicionales cuando presentaron su declaración de impuestos federales de 2017 a principios de este año, pueden evitar otra factura tributaria posiblemente mayor el próximo año si hacen una "revisión de su cheque de pago" tan pronto como sea posible, según el Servicio de Impuestos Internos (IRS).

La Ley de Empleos y Reducción de Impuestos, la legislación de reforma tributaria aprobada en diciembre, introdujo cambios importantes en la ley tributaria, que incluyen el aumento de la deducción estándar, eliminación de exenciones personales, aumento del crédito tributario por hijos, limitación o descontinuación de ciertas deducciones, y cambios en las tasas y categorías tributarias.

Estos cambios de largo alcance podrían tener un gran impacto en el reembolso de impuestos o en la factura adeudada en la declaración de impuestos que los contribuyentes presentarán el próximo año. El IRS alienta a cada empleado a hacer una "revisión de su cheque de pago" pronto para verificar que se les retenga la cantidad correcta de impuestos de su sueldo.

Verificar y ajustar la retención ahora puede evitar una factura tributaria inesperada, así como multas el próximo año. La Calculadora de Retención del IRS y la Publicación 505, Retención de impuestos e impuestos estimados (en inglés), pueden ayudar.

El IRS anima a los contribuyentes a ser proactivos:

Haga una 'revisión de su cheque de pago' pronto

La Calculadora de Retención puede ayudar a los contribuyentes a aplicar la nueva ley a su situación financiera específica, y a tomar una decisión informada acerca de si cambiar su retención este año.

Los contribuyentes deben ajustar su retención tan pronto como sea posible para una cantidad uniforme y consistente de retención durante el resto del año.

Los contribuyentes con situaciones más complejas pueden necesitar la Publicación 505. La publicación es más útil para empleados que adeudan impuestos sobre el trabajo por cuenta propia, el impuesto mínimo alternativo o el impuesto sobre el ingreso no derivado del trabajo de dependientes. También puede ayudar a quienes reciben ingresos no salariales, como dividendos, ganancias de capital, rentas y regalías. La Publicación 505 incluye hojas de trabajo y ejemplos para guiar a los contribuyentes a través de sus situaciones particulares.


Multas por pago insuficiente

Los contribuyentes pueden evitar una multa por impuestos estimados al asegurarse de que se les retienen suficientes impuestos de sus cheques, y de pagos de impuestos estimados apropiados. Por lo general, los contribuyentes pueden evitar esta multa al pagar al menos el 90 por ciento de sus impuestos durante el año.

En general, los contribuyentes deben hacer pagos de impuestos estimados si esperan adeudar al menos $1,000 en impuestos después de restar la retención y los créditos reembolsables.

Uso de la Calculadora de Retención o la Publicación 505

Los contribuyentes deben tener a la mano su declaración de impuestos de 2017 completa para ayudar a estimar la cantidad de ingresos, deducciones, ajustes y créditos a ingresar. También necesitarán sus comprobantes de pago más recientes para ayudar a calcular su retención hasta la fecha este año. Los resultados de estas herramientas dependen de la precisión de la información que proporciona el contribuyente.

Los empleados pueden usar los resultados de la Calculadora de Retención o la Publicación 505 para ayudar a determinar si deben completar un nuevo Formulario W-4, Certificado de Retención del Empleado y, de ser así, qué información incluir.

La calculadora también puede ser útil para los beneficiarios de ingresos de pensión y anualidades. Estos destinatarios pueden cambiar su retención al completar el Form W-4P y entregárselo o a su pagador.

Si las circunstancias personales de un contribuyente cambian durante el año, debe verificar su retención nuevamente.

Ajuste de la retención

Si un empleado determina que debe ajustar su retención, debe completar un nuevo Formulario W-4 y enviarlo a su empleador lo antes posible.

Algunos empleadores tienen un método electrónico para actualizar un Formulario W-4.

Los contribuyentes que cambien su retención para 2018 deben volver a verificar su retención al inicio de 2019. Un cambio de retención a mitad de año en 2018 puede tener un impacto anual diferente en 2019. Por lo tanto, si los contribuyentes no presentan un nuevo Formulario W-4 para 2019, su retención podría ser mayor o menor de lo previsto.

Si un empleado tiene un cambio en las circunstancias personales que reduce el número de retenciones que puede reclamar, debe presentar un nuevo Formulario W-4 dentro de los 10 días del cambio.

Mientras menos descuentos de retención ingrese un empleado en el Formulario W-4, mayor será su retención de impuestos. Ingresar "0" o "1" en la línea 5 del Formulario W-4 significa que se retendrán más impuestos. Ingresar un número mayor significa menos retención de impuestos.

Información adicional

La Calculadora de Retención no solicita información de identificación personal como nombre, número de seguro social, dirección o números de cuentas bancarias. El IRS no almacena ni graba la información ingresada en la calculadora. Como siempre, los contribuyentes deben tener cuidado con las estafas tributarias, especialmente por correo electrónico o por teléfono, y estar alertas a los delincuentes cibernéticos que se hacen pasar por el IRS. El IRS no envía correos electrónicos relacionados con la calculadora o la información ingresada en ésta.

La calculadora y la Publicación 505 no son herramientas de planificación tributaria. Los contribuyentes que necesiten asesoramiento con respecto a la nueva ley tributaria y su situación personal deben consultar a un profesional de impuestos de confianza.

Los contribuyentes pueden obtener más información acerca de estos temas en www.irs.gov/retención. Además, al visitar IRS.gov/getready y luego seleccionar Español, los contribuyentes pueden encontrar información acerca de los pasos que pueden tomar ahora para lograr un buen inicio en los impuestos del próximo año, incluida la manera en que la nueva ley tributaria puede afectarlos.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.
 


Fuente: IRS

5 consejos para la preparación temprana de impuestos

Posted by Admin Posted on June 30 2018

5 consejos para la preparacion temprana de impuestos

 

Cuando se trata de trabajar en tus impuestos, mientras más pronto los hagas: ¡MEJOR!  El IRS alienta a todos a adelantarse en la preparación de impuestos. No solo evitas las prisas de último momento, los primeros contribuyentes también obtienen un reembolso más rápido.

Aquí te decimos 5 maneras que te ayudarán a prepararte para el próximo 15 de abril:

1. Recopila tus registros por adelantado. Asegúrate de tener todos los registros que necesita, incluidos W-2 y 1099. No olvides guardar una copia para tus archivos.

2. Obtenga los formularios correctos. Están disponibles en nuestro sitio web (www.lbcpa.com) y el el portal web  del  IRS, en la sección de Formularios y Publicaciones.

3. Tómate tu tiempo... y un café al momento de completar tu declaración de impuestos. Correr puede significar cometer un error, ¡Y eso puede ser costoso!

4. Verifica nuevamente tus cuentas y  tu número de Seguridad Social. Estos se encuentran entre los errores más comunes en las declaraciones de impuestos. Cuidar de estos detalles reduce tus posibilidades de recibir una visita inesperada del IRS.

5. Obten tu reembolso más rápido. El preparar tus impuestos anticipadamente, es altamente probable que recibas tu reembolso más rápido. El uso de la herramienta “declarar electrónicamente”, con depósito directo, te devuelve un reembolso en la mitad del tiempo que cuando se presenta en papel.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.


Fuente: Thomson Reuters

¿Cómo efectúo mis pagos de impuestos trimestrales?

Posted by Admin Posted on June 30 2018

Como efectuo mis pagos de impuestos trimestrales

 

El impuesto estimado es un método utilizado para pagar el impuesto del Seguro Social, Medicare y el impuesto sobre el ingreso, debido a que no tiene un empleador que haga las debidas retenciones para estos impuestos por usted. El Formulario 1040-ES, Impuesto estimado para individuos (Form 1040-ES, Estimated Tax for Individuals) (en inglés) (PDF), es utilizado para calcular estos impuestos. El Formulario 1040-ES contiene una hoja de trabajo que es similar a la que está en el Formulario 1040. Usted necesitará su declaración de impuestos del año anterior para poder llenar el Formulario 1040-ES.

Utilice la hoja de trabajo que se encuentra en el Formulario 1040-ES, Impuesto estimado para individuos (en inglés), para determinar si usted está obligado a presentar trimestralmente el impuesto estimado.

El Formulario 1040-ES también contiene cupones en blanco que puede utilizar cuando envíe su pago del impuesto estimado por correo, o puede emitir sus pagos electrónicamente utilizando el Sistema de pago electrónico federal. Si éste es el primer año en el cual usted es un empleado por cuenta propia, tendrá que estimar la cantidad del ingreso que espera ganar para el año. Si sobrestimó sus ingresos, simplemente complete otra hoja de trabajo del Formulario 1040-ES para recalcular su impuesto estimado para el próximo trimestre. Si subestimó sus ingresos, complete nuevamente otra hoja de trabajo del Formulario 1040-ES para recalcular su impuesto estimado para el próximo trimestre.

Refiérase a la página Impuestos estimados (en inglés), para más información. La página del impuesto sobre el trabajo por cuenta propia (en inglés), tiene más información sobre los impuestos del Seguro Social y Medicare.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.


Fuente: IRS

 

¿Cómo notificar al IRS sobre un cambio de dirección?

Posted by Admin Posted on June 30 2018

Como notificar al IRS un cambio de direccion

 

Si su dirección cambió, necesita notificárselo al IRS para asegurarse de recibir toda correspondencia o reembolso de parte del IRS. Hay varias maneras de notificar al IRS sobre un cambio de dirección.

Al presentar su declaración de impuestos

Si usted cambia su dirección antes de presentar la declaración, escriba la nueva dirección en la declaración cuando la presente. Al tramitar su declaración, actualizaremos sus registros. Cerciórese de notificar también al encargado de preparar su declaración.

Notificar en la oficina de correo

Si cambia su dirección después de presentar la declaración, deberá notificárselo a la oficina de correos que entrega correo en su antiguo domicilio. Como no todas las oficinas de correo reenvían cheques del gobierno, notificarle el cambio de dirección a la oficina de correo que entrega el correo en su antiguo domicilio garantiza que su correspondencia será reenviada, pero no necesariamente su cheque de reembolso.

Por formulario

Para cambiar su dirección con el IRS, puede completar el Formulario 8822 (PDF), Change of Address (For Individual, Gift, Estate, or Generation-Skipping Transfer Tax Returns) (Cambio de dirección (Para las declaraciones de personas físicas, donativos, patrimonios o de transferencia a generaciones subsiguientes)), en inglés, y/o el  Formulario 8822-B (PDF), Change of Address or Responsible Party — Business (Cambio de dirección o parte responsable ― comercial), en inglés, y enviarlos a la dirección indicada en dichos formularios. Para obtener información sobre el cambio de la “parte responsable”, véase el Formulario 8822-B. Puede descargar o imprimir los Formularios 8822 y 8822-B que se pueden llenar en línea o los puede pedir llamando al 800-TAX-FORM (800-829-3676).

Por escrito

También, puede escribir para informarnos de su cambio de dirección. Si nos escribe, necesitamos su:

nombre completodirección anterior y la nuevanúmero de seguro social, número de identificación de contribuyente individual o número de identificación del empleador y firma.

Declaraciones conjuntas - Si presentó una declaración conjunta, debe proveer la información y las firmas para ambos cónyuges. Envíe la información acerca del cambio de su dirección por escrito a la dirección regional indicada en las instrucciones de los formularios de impuestos que presentó.

Cónyuges separados - Si presentó una declaración conjunta y ahora tienen residencias separadas, cada uno de ustedes debe notificarnos sus nuevas direcciones por separado.

Declaraciones de impuestos sobre nómina

Si el cambio de dirección corresponde a una declaración de impuestos sobre nómina, el IRSemitirá notificaciones de confirmación (Notificaciones 148A y 148B, en inglés) del cambio tanto a la dirección anterior como a la nueva.

Procesamiento

El procesamiento completo de una solicitud de cambio de dirección puede demorar entre cuatro y seis semanas.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.


Fuente: IRS
 

Venta de una empresa

Posted by Admin Posted on June 27 2018

Venta de una empresa

 

Al momento de vender un negocio, debes tomar en cuenta que no es la venta de un solo activo. Por el contrario, se tienen que vender todos los activos de la empresa. Cuando esto sucede, cada activo se trata por separado para determinar el tratamiento de ganancia o pérdida.

Las empresas generalmente tienen muchos activos. Si se venden, los activos deben clasificarse como: activos de capital, activos depreciables, propiedad real utilizada en el negocio o propiedad mantenida para la venta a los clientes, como inventario o existencias en el comercio. Es importante destacar que la ganancia o pérdida de cada activo se calcula por separado.

La venta de los activos de capital, resulta en ganancia o pérdida de capital. La venta de bienes inmuebles o propiedad depreciable utilizada en la empresa y que se mantiene por más de un año da como resultado una ganancia o pérdida de una transacción de la sección 1231. La venta del inventario da como resultado un ingreso ordinario o una pérdida.

Con información de IRS

Los contribuyentes cuentan con protección de sus derechos civiles

Posted by Admin Posted on June 27 2018

Los contribuyentes cuentan con protección de sus derechos civiles

 

El IRS no tolera cualquier tipo de discriminación hacia las personas debido a su color de piel, edad, discapacidad, raza, religión, orientación sexual, ideología, dominio del inglés, entre otros

Esta postura del Servicio de Impuestos Internos también se extiende a quien cumpla función de voluntario o trabaje con contribuyentes como parte de cualquier programa con asistencia federal o cualquier programa dirigido a nivel federal. A su vez, se incluye la interacción con empleados del IRS o actividades patrocinadas por el IRS o los centros de asistencia comunitaria:  

  • Clínicas de impuestos de bajos ingresos
  • Asistencia Voluntaria al Impuesto sobre la Renta o
  • Asesoramiento fiscal para personas mayores

A solicitud de un contribuyente, los empleados del IRS y el personal / voluntarios en uno de los sitios del programa asistido, éstos proporcionarán un alojamiento razonable o asistencia con el idioma.

Con información de IRS

Conéctate con el IRS desde tu teléfono

Posted by Admin Posted on June 27 2018

Conéctate con el IRS desde tu teléfono

 

Los contribuyentes que tengan dudas sobre impuestos, pueden consultarlas de manera inmediata a través de su teléfono inteligente mediante la aplicación IRS2Go, que se encuentra disponible para dispositivos con sistema operativo iOS y Android totalmente gratis. La aplicación puede ser utilizada para:

 

  • Verifica el estado de su reembolso. Luego de que el IRS reciba su reembolso, los contribuyentes podrán verificar el estado de su reembolso dentro de las 24 horas siguientes. 
     
  • Realizar un pago. Esta aplicación te brinda acceso a opciones de pago optimizadas como IRS Direct PAy a través de los dispositivos móviles. Asimismo, los usuarios también pueden pagar con tarjeta de crédito o débito mediante un procesador de pagos aprobado. 
     
  • Encuentre asistencia de preparación de impuestos gratis. Los contribuyentes que apliquen pueden preparar y presentar su declaración, a su vez, pueden obtener sus reembolsos mediante la aplicación.
     
  • Obtenga consejos e información útil. Las personas puedes vincularse a las cuentas del IRS en las redes sociales a través de esta aplicación para ver videos útiles y obtener todo tipo de información necesaria sobre los impuestos. Los contribuyentes también pueden usarla para suscribirse para recibir sugerencias por correo electrónico.
     
  • Mantente seguro. Los usuarios pueden usar IRS2Go para crear códigos de seguridad  de inicio de sesión para ciertos servicios en línea del IRS y también recuperarlos en caso de haberlo olvidado. 

IRS2Go se encuentra disponible en inglés y español.

Con información de IRS

Conoce los requisitos de presentación para organizaciones políticas

Posted by Admin Posted on June 27 2018

Conoce los requisitos de presentación para organizaciones políticas

 

Toda organización con fines políticos como partidos, comités de campaña para candidatos a cargos federales, estatales o locales, están sujetos a impuestos.

En la mayoría de los casos, se les exige a dichas organizaciones que presenten uno o mas de los siguientes requisitos:

1.     Un aviso inicial

2.     Informes periódicos sobre contribuciones y gastos

3.     Declaraciones de impuestos anuales 

4.     Devoluciones de información anual

Es importante destacar que toda organización política debe poseer su propio número de identificación patronal (EIN), así no tenga ningún empleado.

Asimismo, generalmente las organizaciones políticas deben presentar electrónicamente sus informes periódicos. Es necesario que posea un nombre de usuario y contraseña para presentar estos informes electrónicamente, los cuales serán otorgados después de presentar su notificación inicial

Fuente: IRS

Pasos a seguir si tu empresa ha sido víctima de violación de datos

Posted by Admin Posted on June 27 2018

Pasos a seguir si tu empresa ha sido víctima de violación de datos

 

Cuando se tiene un negocio, generalmente se recauda y se mantiene información personal de los clientes, incluyendo nombres, direcciones, números de seguridad social, entre otros. En el caso que esta información se extravíe o se hurte, se podría poner en riesgo de robo de identidad a estas personas.

A continuación, se indican los tres pasos importantes que debe seguir su empresa tras ser víctima de tal delito.

  • Notificar a la policía: llame de inmediato al departamento de policía local. Notifique su situación y el riesgo potencial de robo de identidad.
  • Notificar a las empresas afectadas: otras empresas también pueden resultar afectadas, como bancos o emisores de crédito. Comuníquese con las oficinas de crédito principales si los nombres y números de Seguro Social han sido robados.
  • Notificar a las personas: se puede mitigar el uso indebido de la información de las personas si se realiza una notificación temprana a éstas. 

Fuente: IRS

Información que necesitas para determinar si tus gastos de salud son deducibles

Posted by Admin Posted on June 25 2018

Información que necesitas para determinar si tus gastos de salud son deducibles

 

El IRS te brinda la opción de llenar un cuestionario que te permite verificar si tus gastos médicos y dentales son deducibles. Al momento de realizar la entrevista, es importante que tengas a la mano la siguiente información:

  • Estado civil.
  • Tipo y monto de los gastos pagados.
  • Especificar el año en que se pagaron los gastos.
  • Su ingreso bruto ajustado.
  • Si recibió un reembolso o si los gastos se pagaron de una cuenta de ahorros de salud o una cuenta de ahorros médicos de Archer.

El cuestionario está disponible en la pagina web del IRS y fue diseñado para los contribuyentes ciudadanos estadounidenses o extranjeros durante el año fiscal que están verificando. En el caso de estar casado, el cónyuge también debe haber sido residente o ciudadano estadounidense durante todo ese año fiscal. 

FUENTE: IRS

Acciones que debes tomar en cuenta para recuperar tu EIN

Posted by Admin Posted on June 19 2018

Acciones que debes tomar en cuenta  para recuperar tu EIN

 

Si habías solicitado y recibido un EIN para tu negocio, pero lo perdiste o lo traspapelaste, puedes  tomar las siguientes para localizar el número:

  • Debes buscar el aviso impreso que te envió el IRS cuando solicitaste tu EIN. Este aviso es expedido como confirmación de su solicitud y además representa un acuse de recibo del EIN.
  • Es importante que se comunique con el banco o agencia donde utilizó su EIN al momento de abrir su cuenta bancaria, o para solicitar cualquier tipo de licencia estatal o local y así obtener nuevamente su EIN.
  • Ubica tu EIN en  una declaración de impuestos realizada previamente para la entidad existente,  de la cual lo has perdido o traspapelado.
  • Solicítale al IRS que haga una búsqueda de tu EIN llamando a la Línea de Negocios e Impuestos Especializados, al (800) 829-4933.

Con información de IRS

 

Cómo selecciono mi estado civil tributario

Posted by Admin Posted on June 19 2018

Como selecciono mi estado civil tributario

 

Al presentar tu declaración de impuestos, es importante que utilices el estado civil tributario correcto, porque podría afectar la cantidad de impuestos adeudada durante el año. También podría hasta determinar si deben o no presentar una declaración. Los contribuyentes deben recordar que su estado civil al 31 de diciembre determina el estado civil tributario para todo el año.

Los cinco estados civiles tributarios son:

1.     Soltero. Normalmente este estado civil se le designa a los contribuyentes que no están casados, que están divorciados, o legalmente separados bajo las leyes estatales.

2.     Casado declarando en conjunto. Si los contribuyentes están casados, pueden declarar en conjunto. Si un cónyuge falleció en 2016, frecuentemente, el viudo/a puede declarar en conjunto ese año.

3.     Casado declarando por separado. Una pareja casada puede decidir presentar dos declaraciones de impuestos por separado. Esto puede beneficiarle, si resulta en menos impuestos adeudados que si declaran en conjunto. Los contribuyentes podrían preparar sus impuestos de ambas formas antes de seleccionar el estado civil que prefieren utilizar. También pueden utilizar este estado civil tributario si cada uno desea ser responsable solamente de su propia declaración de impuestos.

4.     Jefe de familia. En la mayoría de los casos, este estado civil aplica a un contribuyente que no está casado, pero tiene ciertas reglas. Por ejemplo, el contribuyente debe haber pagado más de la mitad para mantener el hogar para sí mismo y para otra persona calificada. No seleccione este estado civil erróneamente. Asegúrese de verificar todas las reglas relacionadas.

5.     Viudo/a calificado con hijo dependiente. Este estado puede aplicarle a un contribuyente si su cónyuge falleció durante 2014 o 2015 y tienen un hijo dependiente.

Con información de IRS

 

Conoce los impuestos sobre el empleo

Posted by Admin Posted on June 19 2018

Conoce los impuestos sobre el empleo

 

Por ley, los patronos están en la obligación de retener impuestos patronales de sus empleados. Estos incluyen:

  • Retención de impuestos federales
  • Contribuciones al Seguro Social y Medicare

Los impuestos sobre ingresos son “se pagan conforme se devengan”.  Se debe pagar impuestos según va recibiendo ingresos durante el año. Para la mayoría de los empleados, esto se hace mediante la retención de impuestos de su cheque salarial. Las personas que poseen negocio propio también están obligadas a efectuar el pago de impuestos estimados durante el año.

 El sistema de pago de impuestos conforme se devengan los ingresos fue diseñado para asegurar que los contribuyentes puedan cumplir con sus obligaciones contributivas a tiempo.

Las contribuciones al seguro social y Medicare se usan para pagar los beneficios que los trabajadores y sus familias reciben bajo la Ley de la Contribución Federal al Seguro Social (Federal InsuranceContributionsAct, o FICA, por sus siglas en inglés).  Las contribuciones al seguro social pagan beneficios para personas de edad avanzada, a sobrevivientes, y parte del seguro por discapacidad de FICA. Las contribuciones al Medicare pagan beneficios de hospitalización.  Cada empleado aporta parte de estos impuestos y el patrono aporta una cantidad igual. 

Los contribuyentes con negocio propio también tienen la obligación de pagar las contribuciones al Seguro Social y Medicare, pagando impuestos sobre su ingreso por cuenta propia. 

Los programas que reciben fondos de impuestos patronales proveen beneficios esenciales a muchos trabajadores. La importancia de estos programas continuará creciendo conforme más trabajadores se acerquen a la edad de jubilación. La contribución bajo la Ley Federal de Impuestos De Contribución para el Desempleo (Federal UnemploymentTaxAct, o FUTA, por sus siglas en inglés), junto con los sistemas de desempleo estatales, provee el pago de compensación por concepto de desempleo a trabajadores que han perdido sus empleos.

Con información de IRS

 

Posted by Admin Posted on June 19 2018

Lo que debes saber sobre la evasión del impuesto sobre la nómina

Posted by Admin Posted on June 19 2018

Lo que debes saber sobre la evasion del impuesto sobre la nomina

 

1.- Planes de Evasión del Impuesto sobre la Nómina

Hay varios planes de evasión de los impuestos sobre la nómina. Algunos de estas maneras incluyen estafas de pirámide; la subcontratación de empleados, el pago a los empleados en efectivo, el presentar declaraciones del impuesto sobre la nómina falsas, o el no presentar declaración del impuesto sobre la nómina.

2.- Monopolio Financiero Piramidal

El “Monopolio financiero piramidal” del impuesto sobre la nómina ocurre cuando un negocio retiene el impuesto sobre la nómina de los sueldos de sus empleados, pero intencionalmente rehúsa remitir los impuestos al IRS. Los negocios involucrados en esta actividad frecuentemente se declaran en bancarrota y de esa manera se desligan de la responsabilidad financiera y empiezan un nuevo negocio bajo otro nombre y ponen en marcha un nuevo plan abusivo.

3.- Subcontratación de Empleados

La subcontratación de empleados es un método utilizado por algunos negocios para contratar personal que desempeñe los trabajos administrativos, de personal, y de nómina para sus empleados. En algunos casos, las compañías de subcontratación de empleados no le pagan al IRS ninguna porción de los impuestos sobre la nómina que les retuvieron a sus empleados.

Estos impuestos frecuentemente son gastados por los dueños para saldar gastos del negocio o gastos personales. Generalmente, la compañía se disuelve, dejando millones de dólares en impuestos sobre la nómina sin pagar.

4.- Pagos a Empleados en Efectivo

Un método común para evadir los impuestos es pagar a los empleados parcial o totalmente en efectivo, el cual tiene como resultado grandes pérdidas de ingreso al gobierno, a la vez que genera una pérdida o reducción en los beneficios futuros del Seguro Social y Medicare del empleado.

5.- Presentación de declaraciones de nómina falsas o incumplimiento del requisito de presentar declaraciones de impuestos de nómina

El preparar declaraciones de impuestos de nómina falsas, representando una cantidad reducida de  salarios sujetos a impuestos y el no presentar declaraciones del impuesto sobre la nómina son métodos comunes utilizados para evadir el pago de impuestos sobre la nómina.

Con información de IRS

 

¿Cuánto es la multa por pago insuficiente del Impuesto Estimado?

Posted by Admin Posted on June 19 2018

¿Cuánto es la multa por pago insuficiente del Impuesto Estimado?

 

Si no realizó el pago suficiente de impuestos durante todo el año, ya sea a través de la retención o efectuando pagos del impuesto estimado, puede tener que pagar una multa por el pago insuficiente del impuesto estimado.

Por lo general, la mayoría de los contribuyentes evitarán esta multa si adeudan menos de $1,000 en impuestos después de restar sus retenciones y créditos, o si pagaron al menos el 90% del impuesto para el año en curso, o el 100% del impuesto mostrado en la declaración para el año anterior, lo que sea menor.

Sin embargo, si recibió sus ingresos de forma desigual durante el año, puede evitar o reducir la multa al anualizar sus ingresos y efectuar pagos desiguales. La exención de la multa puede ser posible si:

El incumplimiento de efectuar los pagos estimados fue a causa de un hecho fortuito, desastre, u otra circunstancia inusual y sería injusto imponer la multa.

Usted se jubiló (después de cumplir los 62 años de edad) o se discapacitó durante el año tributario para el cual se le requerían efectuar los pagos estimados o en el año tributario anterior, y el pago insuficiente tuvo una causa razonable y no a negligencia intencional.

Con información de IRS

Proteja datos de contribuyentes asegurando su oficina

Posted by Admin Posted on June 18 2018

Proteja datos de contribuyentes asegurando su oficina

 

Echando un vistazo a sus oficinas, los profesionales de impuestos pueden ayudar a proteger los datos de los contribuyentes. Asegurar sus instalaciones es tan importante como asegurar sus computadoras. 

Al evaluar la seguridad de su oficina, considere las siguientes preguntas:

¿Están protegidos todos los lugares en la oficina en donde se almacena la información de los contribuyentes contra los accesos no autorizados, y de amenazas potenciales, tales como robo, inundaciones y tornados?  

¿Tiene procedimientos por escrito que describen cómo prevenir accesos y trámites no autorizados?

¿Se deja la información del contribuyente, inclusive los datos guardados en su hardware y en otros medios, inseguros? Verifique sobre escritorios o fotocopiadoras, dentro de buzones de correo, vehículos y recipientes de basura?Que tal en salas en la oficina o casa, donde podría suceder un acceso no autorizado?

¿Quién autoriza y/o controla la entrega y eliminación de la información de los contribuyentes, incluso la almacenada en su hardware y medios de comunicación?

¿Están cerradas con llave las puertas a la sala de archivos y/o la sala de computadoras?

¿Proporciona usted servicio de destrucción segura de la información del contribuyente, tal como triturador, receptáculo para quemar registros (burn boxes), o un área designada para archivar información temporeramente hasta que pueda destruirla de forma segura?

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

For new tax on some private colleges, stepped-up basis may apply to property sold at a gain; new basis rule may limit tax impact

Posted by Admin Posted on June 11 2018

For new tax on some private colleges, stepped-up basis may apply to property sold at a gain; new basis rule may limit tax impact

 

A private college or university, subject to the new 1.4 percent excise tax on net investment income, that sells property at a gain generally may use the property’s fair market value at the end of 2017 as its basis for figuring the tax on any resulting gain, the Internal Revenue Service said today. In many instances, this new stepped-up basis rule will reduce the amount of gain subject to the new tax. Normal basis rules will continue to apply for calculating any loss.

In Notice 2018-55, posted today on IRS.gov, the Treasury Department and the IRS said they plan to issue proposed regulations addressing this and other matters relating to the new excise tax. In the meantime, affected taxpayers may rely on the special basis step-up rule described in the notice. The notice also requests public comment on other issues addressed in the notice, as well as any other matters that should be addressed in future guidance. See the notice for details on submitting comments.
 
The excise tax was included in the Tax Cuts and Jobs Act (TCJA), tax reform legislation enacted in December. The tax applies to any private college or university with at least 500 full-time tuition-paying students, more than half of whom are located in the United States, that has an endowment of at least $500,000 per student. An estimated 40 or fewer institutions are affected.

According to the notice, the basis of property held on Dec. 31, 2017, that is later sold at a gain will be not less than its fair market value on Dec. 31, 2017, plus or minus subsequent normal basis adjustments. Similarly, Treasury and IRS intend to propose regulations under which losses may offset gains to the extent of gains, but no capital loss carryovers or carrybacks will be allowed. Proposed regulations also may permit losses from property sales by related organizations to offset gains realized by other related organizations.

Updates on the implementation of this and other TCJA provisions can be found on the Tax Reform page of IRS.gov.

 

June 15 tax filing deadline approaches for taxpayers living and working abroad; Check withholding for 2018

Posted by Admin Posted on June 11 2018

June 15 tax filing deadline approaches for taxpayers living and working abroad

 

The Internal Revenue Service today reminded taxpayers living and working out of the country that they must file their 2017 federal income tax return by Friday, June 15.

The special June 15 deadline is available to both U.S. citizens and resident aliens abroad, including those with dual citizenship. An extension of time is available for those who cannot meet it. 

Some key points to keep in mind:

Most people abroad need to file

An income tax filing requirement generally applies even if a taxpayer qualifies for tax benefits, such as the Foreign Earned Income exclusion or the Foreign Tax credit, which substantially reduce or eliminate U.S. tax liability. These tax benefits are only available if an eligible taxpayer files a U.S. income tax return.

A taxpayer qualifies for the special June 15 filing deadline if both their tax home and abode are outside the United States and Puerto Rico. Those serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return also qualify for the extension to June 15. Be sure to attach a statement indicating which of these two situations applies.

Interest, currently at the rate of five percent per year, compounded daily, still applies to any tax payment received after the original April 18 deadline. For details, see the “When to File and Pay” section in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

The IRS is offering penalty and filing relief to many of those subject to the new transition tax on foreign earnings. See IR-2018-131 for details.

Special income tax return reporting for foreign accounts and assets

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.

In addition, certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. See the instructions for this form for details.

Deadline for reporting foreign accounts

Separate from reporting foreign financial accounts on their tax return, taxpayers with an interest in, or signature or other authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2017, must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is only available through the BSA E-filing System website.

The deadline for filing the annual Report of Foreign Bank and Financial Accounts (FBAR) is now the same as for a federal income tax return. This means that the 2017 FBAR, Form 114, was normally required to be filed electronically with the Financial Crimes Enforcement Network (FinCEN) by April 18, 2018. But FinCEN is granting filers missing the original deadline an automatic extension until Oct. 15, 2018, to file the FBAR. Specific extension requests are not required.

Choose Free File

U.S. citizens and resident aliens living abroad can use IRS Free File to prepare and electronically file their returns for free. This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes (AGI) of $66,000 or less can use brand-name software to prepare their tax returns and then e-file them for free. A limited number of companies provide tax software that can accommodate foreign addresses. A second option, Free File Fillable Forms, the electronic version of IRS paper forms, has no income limit and is best suited to people who are comfortable preparing their own tax return.

Both the e-file and Free File electronic filing options are available until Oct. 15, 2018, for anyone filing a 2017 tax return. Check out the e-file link on IRS.gov for details on the various electronic filing options. Free File is not available to non-resident aliens required to file Form 1040NR.

Automatic extensions available

Taxpayers abroad who can’t meet the June 15 deadline can still get more time to file, but they need to ask for it. Their extension request must be filed by June 15. Automatic extensions give people until Oct. 15, 2018, to file; however, this does not extend the time to pay tax.

An easy way to get the extra time to file is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an extension on Form 4868. To get the extension, taxpayers must estimate their tax liability on this form and pay any amount due.

Another option for taxpayers is to pay electronically and get an extension of time to file. IRS will automatically process an extension when taxpayers select Form 4868 and they are making a full or partial federal tax payment using Direct Pay, the Electronic Federal Tax Payment System (EFTPS) or a debit or credit card. There is no need to file a separate Form 4868 when making an electronic payment and indicating it is for an extension. Electronic payment options are available at IRS.gov/payments.  International taxpayers who do not have a U.S. bank account should refer to the Foreign Electronic Payments section on IRS.gov for more payment options and information.

Combat zone taxpayers get more time without having to ask for it

Members of the military and eligible support personnel serving in a combat zone have at least 180 days after they leave the combat zone to file their tax returns and pay any taxes due. This includes those serving in Iraq, Afghanistan and other combat zones. A complete list of designated combat zones can be found in Publication 3, Armed Forces’ Tax Guide, available on IRS.gov.

Various circumstances affect the exact length of the extension available to any given taxpayer. Details, including examples illustrating how these extensions are calculated, can be found in the Extensions of Deadlines section in Publication 3.

Report in U.S. dollars

Any income received or deductible expenses paid in foreign currency must be reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must be made in U.S. dollars.

Both Forms 114 and 8938 require the use of a Dec. 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign Currency and Currency Exchange Rates.

Expatriate reporting

Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents of the United States during 2017 must file a dual-status alien tax return, attaching Form 8854, Initial and Annual Expatriation Statement. A copy of the Form 8854 must also be filed with Internal Revenue Service, Philadelphia, PA 19255-0049, by the due date of the tax return (including extensions). See the instructions for this form and Notice 2009-85, Guidance for Expatriates Under Section 877A, for further details.

Check withholding

Taxpayers who owe tax for 2017 can avoid having the same problem for 2018 by increasing the amount of tax withheld from their paychecks. For help determining the right amount to withhold, use the Withholding Calculator on IRS.gov.

More information available

Any U.S. taxpayer living abroad with tax questions can refer to International Taxpayers page on IRS.gov and use the IRS Tax Map and the International Tax Topic Index to get answers.

Taxpayers who are looking for tax return preparers abroad should visit the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

To help avoid delays with tax refunds, taxpayers living abroad should visit the Helpful Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad page.

More information on the tax rules that apply to U.S. citizens and resident aliens living abroad can be found in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, available on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

Interest rates remain the same in the third quarter of 2018

Posted by Admin Posted on June 11 2018

Interest rates remain the same in the third quarter of 2018

 

The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning July 1, 2018, as they were in the quarter that began on April 1. The rates will be:

5 percent for overpayments, 4 percent in the case of a corporation;

2.5 percent for the portion of a corporate overpayment exceeding $10,000;

5 percent for underpayments; and

7 percent for large corporate underpayments. 

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus 0.5 of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during April 2018 to take effect May 1, 2018, based on daily compounding.

Revenue Ruling 2018-18, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2018-26, dated June 25, 2018.

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

Three common types of IRS tax penalties

Posted by Admin Posted on June 11 2018

Three common types of IRS tax penalties

 

Around this time of year, many people have filed and forgotten about their 2017 tax returns. But you could get an abrupt reminder in the form of an IRS penalty. Here are three common types and how you might seek relief:

1. Failure-to-file and failure-to-pay. The IRS will consider any reason that establishes that you were unable to meet your federal tax obligations despite using “all ordinary business care and prudence” to do so. Frequently cited reasons include fire, casualty, natural disaster or other disturbances. The agency may also accept death, serious illness, incapacitation or unavoidable absence of the taxpayer or an immediate family member.

If you don’t have a good reason for filing or paying late, you may be able to apply for a first-time penalty abatement (FTA) waiver. To qualify for relief, you must have: 1) received no penalties (other than estimated tax penalties) for the three tax years preceding the tax year in which you received a penalty, 2) filed all required returns or filed a valid extension of time to file, and 3) paid, or arranged to pay, any tax due. Despite the expression “first-time,” you can receive FTA relief more than once, so long as at least three years have elapsed.

2. Estimated tax miscalculation. It’s possible, but unlikely, to obtain relief from estimated tax penalties on grounds of casualty, disaster or other unusual circumstances. You’re more likely to get these penalties abated if you can prove that the IRS made an error, such as crediting a payment to the wrong tax period, or that calculating the penalty using a different method (such as the annualized income installment method) would reduce or eliminate the penalty.

3. Tax-filing inaccuracy. These penalties may be imposed, for example, if the IRS finds that your return was prepared negligently or that there’s a substantial understatement of tax. You can obtain relief from these penalties if you can demonstrate that you properly disclosed your tax position in your return and that you had a reasonable basis for taking that position.

Generally, you have a reasonable basis if your chances of withstanding an IRS challenge are greater than 50%. Reliance on a competent tax advisor greatly improves your odds of obtaining penalty relief. Other possible grounds for relief include computational errors and reliance on an inaccurate W-2, 1099 or other information statement.

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

Deducting home equity interest under the tax cuts and jobs act

Posted by Admin Posted on June 11 2018

Deducting home equity interest under the tax cuts and jobs act

 

Passage of the Tax Cuts and Jobs Act (TCJA) in December 2017 has led to confusion over some longstanding deductions. In response, the IRS recently issued a statement clarifying that the interest on home equity loans, home equity lines of credit and second mortgages will, in many cases, remain deductible.

How it used to be

Under prior tax law, a taxpayer could deduct “qualified residence interest” on a loan of up to $1 million secured by a qualified residence, plus interest on a home equity loan (other than debt used to acquire a home) up to $100,000. The home equity debt couldn’t exceed the fair market value of the home reduced by the debt used to acquire the home.

For tax purposes, a qualified residence is the taxpayer’s principal residence and a second residence, which can be a house, condominium, cooperative, mobile home, house trailer or boat. The principal residence is where the taxpayer resides most of the time; the second residence is any other residence the taxpayer owns and treats as a second home. Taxpayers aren’t required to use the second home during the year to claim the deduction. If the second home is rented to others, though, the taxpayer also must use it as a home during the year for the greater of 14 days or 10% of the number of days it’s rented.

In the past, interest on qualifying home equity debt was deductible regardless of how the loan proceeds were used. A taxpayer could, for example, use the proceeds to pay for medical bills, tuition, vacations, vehicles and other personal expenses and still claim the itemized interest deduction.

What’s deductible now

The TCJA limits the amount of the mortgage interest deduction for taxpayers who itemize through 2025. Beginning in 2018, for new home purchases, a taxpayer can deduct interest only on acquisition mortgage debt of $750,000.

On February 21, the IRS issued a release (IR 2018-32) explaining that the law suspends the deduction only for interest on home equity loans and lines of credit that aren’t used to buy, build or substantially improve the taxpayer’s home that secures the loan. In other words, the interest isn’t deductible if the loan proceeds are used for certain personal expenses, but it is deductible if the proceeds go toward, for example, a new roof on the home that secures the loan. The IRS further stated that the deduction limits apply to the combined amount of mortgage and home equity acquisition loans — home equity debt is no longer capped at $100,000 for purposes of the deduction.

Further clarifications

As a relatively comprehensive new tax law, the TCJA will likely be subject to a variety of clarifications before it settles in. Please contact our firm for help better understanding this provision or any other.

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

Así la ley del cuidado de salud podría afectar tus impuestos

Posted by Admin Posted on June 10 2018

Así la ley del cuidado de salud podría afectar tus impuestos

 

La Ley de cuidado de salud podría afectarte dependiendo de tu estado laboral, si participaste o no en un plan de seguro médico favorecido por los impuestos y su edad.

1.      Estado Laboral

- Tu empleador puede reportar el valor del seguro médico proporcionado a usted en su W-2 en la casilla 12 con el código DD. Sin embargo, no está sujeto a impuestos.

Si trabajas por cuenta propia, puedes deducir el costo de las primas de seguro médico, dentro de los límites, en su declaración de impuestos.

2.      Plan de Seguro Médico favorecido por los impuestos

-Si tienes un acuerdo flexible para gastos médicos (FSA, por sus siglas en inglés) a través de tu empleo, el dinero que pone normalmente reduce tus ingresos sujetos a impuestos.

-Si tienes una cuenta de ahorros de salud (HSA, por sus siglas en inglés) a través de tu empleo, el dinero que su empleador añade, dentro de los límites, no está sujeto a impuestos.

-El dinero que pones en una HSA generalmente se considera una deducción detallada por gastos médicos y puede reducir tus impuestos.

-El dinero que extraes de una HSA para gastos médicos calificados no es un ingreso sujeto a impuestos; sin embargo, los retiros para otros propósitos son gravables e inclusive pueden estar sujetos a un impuesto adicional.

-Si tienes un acuerdo de reembolso de salud (HRA, por sus siglas en inglés) a través de su empleo, el dinero que recibes del acuerdo generalmente no está sujeto a impuestos.

3.      Edad

Si tienes 65 años o más, el umbral para deducciones médicas detalladas permanece en 7.5 por ciento de tu ingreso bruto ajustado (AGI) hasta el 2017; para otros el umbral aumentó a 10 por ciento del AGI en el 2013. Su AGI aparece en su Formulario de Impuestos 1040.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

¿Conoces el departamento de apelaciones?

Posted by Admin Posted on June 10 2018

¿Conoces el departamento de apelaciones?

 

El IRS generalmente es responsables de tomar decisiones en cuanto a cómo aplicar la ley tributaria ante problemas de los contribuyentes. A veces no es posible llegar a un acuerdo sobre estas decisiones o determinaciones debido a que el contribuyente no está de acuerdo con la determinación.

Es por tal motivo que el IRS cuenta con el departamento de Apelaciones que es totalmente independiente de cualquier otra oficina del IRS y sirve de foro administrativo informal para los contribuyentes que no estén de acuerdo con una decisión.

El departamento de Apelaciones es la sede donde se puede resolver los desacuerdos sobre la aplicación de la ley tributaria, de manera justa e imparcial tanto para el contribuyente como para el gobierno. Su misión es resolver disputas tributarias sin tener que pasar por los tribunales ni por juicio formal.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Lo que debes saber sobre las estafas por email

Posted by Admin Posted on June 10 2018

Lo que debes saber sobre las estafas por email

 

Por razones de seguridad, el Servicio de Impuestos Internos (IRS), las agencias tributarias estatales y la industria de impuestos siempre han advertido sobre estafas por correo electrónico tipo phishing a los profesionales de impuestos y a los contribuyentes para evitar que sean víctima de este delito.

Con el pasar del tiempo, estas estafas han ido aumentando y por eso es de preocuparse. El IRS instó a todos los contribuyentes a estar muy atentos ante cualquier actividad sospechosa.

Los delincuentes cibernéticos se encuentran en constante evolución y hacen uso de sus habilidades para estafar y engañar a las personas a que divulguen información confidencial.

Una de las estafas que se presentan con mayor frecuencia es la de un contribuyente pidiendo a su preparador de impuestos que haga un cambio de último minuto a su destino de reembolso, a menudo a una tarjeta de débito prepagada. Es por ello que  los preparadores de impuestos deben reconfirmar verbalmente la información con el cliente si reciben una solicitud por correo electrónico de último momento para cambiar una dirección o una cuenta de depósito para reembolsos.

Es importante que los profesionales de impuestos cambien y fortalezcan sus contraseñas de correo electrónico para blindar de manera más efectiva sus cuentas de correo electrónico utilizadas para intercambiar datos confidenciales con los clientes.

En el caso que los contribuyentes reciban un correo electrónico sospechoso, haciéndose pasar por un proveedor de impuestos o del IRS, deben reportarlo a la dirección de correo electrónico a phishing@irs.gov. Recuerde nunca abrir archivos adjuntos o enlaces desde una fuente desconocida.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Víctimas de desastres: esto es lo que necesitas para reconstruir tus archivos.

Posted by Admin Posted on June 10 2018

Víctimas de desastres: esto es lo que necesitas para reconstruir tus archivos.

 

Si eres víctima de un desastre es posible que necesites reconstruir tus archivos para comprobar tu pérdida. Puedes tomar en cuenta estas sugerencias:

- Puedes obtener transcripciones de tus declaraciones de impuestos gratuitamente con la herramienta Ordenar Transcripción en IRS.gov. También pueden llamar al 800-908-9946 para ordenarla por teléfono.

- Para establecer la extensión de los daños, debes tomar fotografías o videos tan pronto sea posible después del desastre.

- Puedes comunicarte con la compañía de título, con la compañía de depósito de garantía, o con el banco que manejó la compra de su casa para obtener las copias de los documentos apropiados.

- Los dueños de casa deben revisar su póliza de seguro ya que la misma usualmente tiene el valor de la estructura para así establecer una cantidad base (mínima) a ser reemplazada.

- Los contribuyentes que hicieron mejoras a su casa deben ponerse en contacto con los contratistas que realizaron el trabajo para así verificar si existen archivos disponibles. Si es posible, el dueño de la casa debe obtener los estados de cuenta de los contratistas para verificar el trabajo y el costo. También pueden obtener testimonios escritos de amigos o parientes que vieron la casa antes y después de cualquier mejora.

- Para propiedad heredada, los contribuyentes pueden revisar los archivos de la corte para obtener valores de sucesiones. Si existió un fideicomiso o patrimonio, el contribuyente puede comunicarse con el abogado que manejó el patrimonio.

- Si no existen otros archivos, el contribuyente puede verificar con el asesor del condado si existen archivos previos que se refieran al valor de la propiedad.

- Existen varios recursos que pueden ayudarle a alguien a determinar el valor actual y justo del mercado de la mayoría de los autos. Los recursos están disponibles en línea o en la biblioteca.

1.- Kelley’s Blue Book

2.- National Automobile Dealers Association

3.- Edmunds

- Pueden buscar fotos en su teléfono móvil que muestren la propiedad antes del desastre.

- Los contribuyentes pueden apoyar el valor de la propiedad con fotografías, vídeos, cheques cancelados, recibos u otra evidencia.

- Si compraron artículos con una tarjeta de crédito o débito deben comunicarse con la compañía de tarjeta de crédito o con el banco para obtener sus estados de cuenta pasados.

- Si un contribuyente no tiene fotografías o vídeos de su propiedad, un método simple para recordar los artículos perdidos es hacer un dibujo de cada habitación afectada.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Consejos para contratar a un profesional de seguridad cibernética

Posted by Admin Posted on June 10 2018

Consejos para contratar a un profesional de seguridad cibernética

 

Si eres preparador de impuestos deberías contratar un profesional de seguridad cibernética para proteger tu negocio y los datos de tus clientes.

Ten en cuenta esto:


1.- En última instancia, un preparador tendrá que seleccionar a la persona en la que más confía. Deben elegir a alguien con quien se sientan cómodos hablando de la seguridad de sus negocios y sus clientes.

2.- Debes formular preguntas a los candidatos para conocer cuánta experiencia tienen en la protección de datos. Estas son 6 preguntas que puedes hacerles:

- ¿Cómo funciona el ransomware y qué podemos hacer para proteger nuestros sistemas?

- ¿Cuáles son las mejores opciones para respaldar de forma segura los datos y por qué son las mejores opciones

- ¿Tiene algunas sugerencias acerca de lo siguiente: la encriptación de datos, malware, firewalls, herramientas de recuperación tras un desastre y de acceso remoto?

- ¿Ha creado alguna vez un plan de seguridad para un negocio similar?

- ¿Puede evaluar mis sistemas y procesos para encontrar vulnerabilidades o debilidades? Si es así, ¿me proporcionará recomendaciones para fortalecer la seguridad?

- ¿Proporcionará vigilancia continua de mis sistemas a medida que evolucionen las amenazas de seguridad? Si es así, ¿con qué frecuencia recomienda los cambios?

3.- Debes obtener un acuerdo o carta de compromiso para asegurar que ambas partes entienden los términos del acuerdo.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Medidas que deben tomar los preparadores de impuestos

Posted by Admin Posted on June 04 2018

Medidas que deben tomar los preparadores de impuestos

 

El Servicio de Impuestos Internos insta a todos los preparadores de declaraciones de impuestos a realizar un análisis exhaustivo de seguridad de sus unidades y dispositivos informáticos.

El IRS les recomienda que tomen las siguientes medidas de manera inmediata:

Asegúrete de que tú y tus empleados tengan software efectivo con programas de seguridad que ayuden a bloquear cualquier virus y que se mantenga encendido y activo a todo momento.

Utilice la función "análisis en profundidad" para recorrer completamente todas las unidades de las computadoras y archivos para cualquier tipo de virus. Estos virus se pueden esconder en lugares que un "análisis rápido" no busca. Es importante realizar periódicamente un análisis profundo.

Asegúrese de que el software de seguridad se actualice automáticamente para que esté siempre al día y en guardia contra nuevos y emergentes virus.

Revise el plan de seguridad para su oficina y sus operaciones.

Eduque a sus empleados sobre los peligros de “phishing”, correos electrónicos y otras estafas que podrían infectar a su computadora con un virus. Un correo electrónico de “phishing” puede resultar en que todas las computadoras de la oficina sean “hackeadas” de información privada.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Consejos tributarios para estudiantes y padres

Posted by Admin Posted on June 04 2018

Consejos tributarios para estudiantes y padres

 

El retorno a la universidad causa estrés a los padres y estudiantes. De manera útil, el IRS te brinda consejos de beneficios tributarios de educación que te pueden ayudar a reducir gastos y a quitarte preocupaciones.

Crédito Tributario de la Oportunidad Americana. Este crédito puede ser de hasta $2,500 por estudiante aspirante y está disponible para los primeros cuatro años de educación post-secundaria. El cuarenta por ciento del crédito es reembolsable. Esto significa que usted puede recibir hasta $1,000, aunque no deba impuestos. Los gastos calificados incluyen matrícula, cuotas, libros, suministros y equipo.

Crédito Perpetuo por Aprendizaje. Con el Crédito Perpetuo por Aprendizaje, podría reclamar hasta $2,000 para gastos calificados de educación en su declaración federal de impuestos. No hay límite en el número de años que puede reclamar el Crédito Perpetuo por Aprendizaje para un estudiante que aplique.

Se puede reclamar un solo crédito por estudiante en la declaración de impuestos federales, pero si pagas gastos universitarios por mas de un estudiante en el mismo año, podría optar por tomar créditos en función de cada estudiante.

Deducción de intereses de préstamos estudiantiles.  Generalmente no puede deducir el interés que paga, a menos que sea el interés hipotecario. Sin embargo, puede deducir el interés pagado sobre un préstamo estudiantil calificado. La deducción puede reducir la cantidad de ingresos tasables por hasta $2,500. 

Dependiendo de sus ingresos, estos beneficios educativos están sujetos a limitaciones de ingresos, y pueden ser reducidos o eliminados.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

¿Cómo crear una sociedad anónima?

Posted by Admin Posted on June 03 2018

¿Cómo crear una sociedad anónima?

 

Cuando creas una sociedad anónima, los accionistas potenciales intercambian dinero, propiedad, o ambos, para el capital social de la sociedad anónima. Por lo general se toman las mismas deducciones que un dueño único para calcular sus ingresos tributables.

A su vez, también puede generar deducciones especiales. Teniendo en cuenta el impuesto federal sobre los ingresos, una sociedad anónima de tipo C se reconoce como una entidad contribuyente separada. Una sociedad anónima lleva a cabo operaciones, realiza ingresos o pérdidas netas, paga impuestos y distribuye las ganancias a los accionistas.

Los impuestos sobre la ganancia de una sociedad anónima se imponen al momento de percibir la ganancia, y luego el impuesto se impone a los accionistas cuando es distribuida como dividendos. Esto resulta en un impuesto doble. La sociedad anónima no recibe una deducción tributaria al distribuir los dividendos a los accionistas. Los accionistas no pueden deducir ninguna pérdida de la sociedad anónima.

Cabe destacar que las sociedades anónimas que poseen activos de $10 millones o más y presentan al menos 250 declaraciones anualmente, están obligadas a presentar electrónicamente sus Formularios 1120 y 1120S para los años tributarios que terminan el 31 de diciembre de 2007 o posteriores. 

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Lo que debes tener para solicitar el Crédito Tributario por Ingreso del Trabajo

Posted by Admin Posted on June 03 2018

Lo que debes tener para solicitar el Crédito Tributario por Ingreso del Trabajo

 

Para recibir el Crédito Tributario por Ingreso de Trabajo (EITC) debes presentar una declaración del impuesto federal para reclamarlo.

Debes tener en cuenta que si reclamas el Crédito Tributario por Ingreso del Trabajo (EITC) o el Crédito Tributario Adicional por Hijos (ACTC) en tu declaración de impuestos, el IRS está obligado a aguantar tu reembolso hasta mediados de febrero – incluyendo la porción no asociada con el EITC o el ACTC.

Documentos a recuperar antes de empezar a preparar tu declaración de impuestos:

 

   - Tarjetas de Seguro Social, una carta de verificación del número de Seguro Social, u otro documento del gobierno del EE.UU. para toda persona que usted nombre en su declaración.

   - Fechas de nacimiento para toda persona que nombre en su declaración.

    -Copias de las declaraciones federales y estatales del año pasado, si las tienes.

   - Toda declaración de sus ingresos: los Formularios W-2 y 1099; declaraciones del Seguro Social, de compensación por desempleo; y otras declaraciones, tales como las de su pensión, su cuenta de acciones, de intereses, u otro documento que muestra los impuestos retenidos. Si usted es dueño de u opera un negocio o granja, mantenga registros de todos sus gastos.

   - Registros de todos tus gastos, tales como matrículas, intereses hipotecarios o impuestos sobre los bienes raíces. Si eres dueño u operas un negocio o granja, lleva registros de todos tus gastos.

    -Todos los formularios para reportar información tales como el Formulario 1095-A (PDF), Formulario 1095-B (PDF) o el Formulario 1095-C (PDF).

   - Los números de ruta y de tu cuenta bancaria para que cualquier reembolso sea depositado directamente a esa cuenta.

    -Información sobre servicios de guardería para los hijos dependientes: nombre y dirección de la entidad a quien pagó y el número de Seguro Social u otro número de identificación tributario del mismo.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

¿Cómo evitar un embargo?

Posted by Admin Posted on June 03 2018

¿Cómo evitar un embargo?

 

Un embargo se puede evitar al presentar las declaraciones a tiempo y pagar los impuestos cuando vencen. Si quieres más tiempo para presentar, tienes la opción de solicitar una prórroga. Si no puedes pagar lo que adeuda, debe pagar todo lo que puedas por el momento y trabajar de la mano con el IRS para terminar con el saldo pendiente.

Es posible que se pueda establecer un plan de pagos a plazos, liquidar tu deuda tributaria por menos de la cantidad pendiente completa, o tal vez tengas otras opciones para pagar tus impuestos.

El IRS podría embargar tu propiedad si no respondes a los avisos de cobro de IRS, y no trabajas para resolver su deuda tributaria. Aunque creas que no debes los impuestos citados, igual debes comunicarte con el IRS.

Si recibes una factura del IRS titulada Aviso Final de la Intención de Embargo y Sus Derechos a una Audiencia, comunícate con el IRS de inmediato. Llama al número de teléfono anotado en su aviso, o si es individual, puede llamar al IRS al 1-800-829-1040.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

IRS warns tax pros of new scam posing as professional associations

Posted by Admin Posted on May 28 2018

IRS warns tax pros of new scam posing as professional associations

 

The IRS and its state and industry Security Summit partners today warned tax practitioners to beware of phishing emails posing as state accounting and professional associations.

This week, the IRS received reports from tax professionals who received fake emails that were trying to trick them into disclosing their email usernames and passwords.

Cybercriminals specifically targeted tax professionals in Iowa, Illinois, New Jersey and North Carolina. The IRS also received reports about a Canadian accounting association.

The awkwardly worded phishing email states: “We kindly request that you follow this link HERE and sign in with your email to view this information from (name of accounting association) to all active members. This announcement has been updated for your kind information through our secure information sharing portal which is linked to your email server.”

Tax practitioners nationwide should be on guard because cybercriminals can easily change their tactics, using other association names or making other adjustments in their scam attempts.

Tax practitioners who are members of professional associations should go directly to those associations’ websites rather than open any links or attachments. Tax practitioners who receive suspicious emails related to taxes or the IRS, or phishing attempts to gain access to practitioner databases, should forward those emails to phishing@irs.gov.

This scam serves as a reminder to all tax professionals that cybercriminals are targeting their offices in an attempt to steal client data.

To assist tax professionals with safeguards, the Security Summit partners urge practitioners to follow these minimal security steps:

Learn to recognize phishing emails, especially those pretending to be from the IRS, e-Services, a tax software provider or cloud storage provider. Never open a link or any attachment from a suspicious email. Remember: The IRS never initiates initial contact with a tax pro via email.

Create a data security plan using IRS Publication 4557, Safeguarding Taxpayer Data, and Small Business Information Security – The Fundamentals, by the National Institute of Standards and Technology.

Review internal controls:

Install anti-malware/anti-virus security software on all devices (laptops, desktops, routers, tablets and phones) and keep software set to automatically update.

Create passwords of at least eight characters; longer is better. Use different passwords for each account, use special and alphanumeric characters and phrases. Password protect wireless devices and consider a password manager program.

Encrypt all sensitive files/emails and use strong password protections.

Back up sensitive data to a safe and secure external source not connected fulltime to a network.

Wipe clean or destroy old computer hard drives and printers that contain sensitive data.

Limit access to taxpayer data to individuals who need to know.

Check IRS e-Services account weekly for number of returns filed with EFIN.

Report any data theft or data loss to the appropriate IRS Stakeholder Liaison.

Stay connected to the IRS through subscriptions to e-News for Tax ProfessionalsQuick Alerts and Social Media.

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

New law gives individuals and businesses more time to challenge a wrongful IRS levy

Posted by Admin Posted on May 28 2018

New law gives individuals and businesses more time to challenge a wrongful IRS levy

 

 Individuals and businesses have additional time to file an administrative claim or to bring a civil action for wrongful levy or seizure, according to the Internal Revenue Service.

An IRS levy permits the legal seizure and sale of property including wages, money in bank or other financial accounts, vehicles, real estate and other personal assets to satisfy a tax debt.

The Tax Cuts and Jobs Act of 2017, the tax reform law enacted in December, extended the time limit for filing an administrative claim and for bringing a suit for wrongful levy from nine months to two years. If an administrative claim for return of the property is made within the two-year period, the two-year period for bringing suit is extended for 12 months from the date of filing of the claim or for six months from the disallowance of the claim, whichever is shorter. The change in law applies to levies made after Dec. 22, 2017, and on or before that date, if the previous nine-month period hadn’t yet expired.

The timeframes apply when the IRS has already sold the property it levied. As under prior law, there is no time limit for the administrative claim if the IRS still has the property it levied. Also, as under prior law, taxpayers may not file a wrongful levy claim or bring a wrongful levy suit as the law only applies to those other than the taxpayer. Usually, wrongful levy claims involve situations where an individual or business believes that either the property belongs to them, or they have a superior claim to the property that the IRS is not recognizing.

Anyone who receives an IRS bill titled, Final Notice of Intent to Levy and Notice of Your Right to A Hearing, should immediately contact the IRS. By doing so, a taxpayer may be able to make arrangements to pay the liability, instead of having the IRS proceed with the levy.

It’s also important that those who receive a levy for their employees, vendors, customers or other third parties comply with the levy. Failure to do so may subject the party receiving the levy to personal liability. For more information, see the What is a Levy?page on IRS.gov.

To file an administrative wrongful levy claim, send a letter to the IRS Advisory Group for the area where the levy was made. For a list of Advisory Group offices, see Publication 4235, Collection Advisory Group Numbers and Addresses, available on IRS.gov. For more information on wrongful levy claims, including details on what information to include in the letter, see newly-revised Publication 4528, Making an Administrative Wrongful Levy Claim Under Internal Revenue Code Section 6343(b), also available on IRS.gov.

If, following a claim, the IRS determines it has wrongfully levied property, it will return one of the following:

the property,

an amount of money equal to the amount of money levied upon, or

an amount of money equal to the money received from the sale of the property.

Anyone whose wrongful levy claim is denied by the IRS has the right to appeal through the agency’s Collection Appeals Program. For more information about these appeal rights, see Publication 1660, Collection Appeal Rights.

The right to appeal an IRS decision in an independent forum is one of many rights taxpayers have when dealing with the IRS. These rights have been grouped into 10 broad categories as the Taxpayer Bill of Rights. For more information, see Publication 1, Your Rights as a Taxpayer, available on IRS.gov.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

Law change affects moving, mileage and travel expenses

Posted by Admin Posted on May 28 2018

Law change affects moving, mileage and travel expenses

 

The Internal Revenue Service today provided information to taxpayers and employers about changes from the Tax Cuts and Jobs Act that affect:

Move related vehicle expenses

Un-reimbursed employee expenses

Vehicle expensing

Changes to the deduction for move-related vehicle expenses

The Tax Cuts and Jobs Act suspends the deduction for moving expenses for tax years beginning after Dec. 31, 2017, and goes through Jan. 1, 2026. Thus, during the suspension no deduction is allowed for use of an automobile as part of a move using the mileage rate listed in Notice 2018-03. This suspension does not apply to members of the Armed Forces of the United States on active duty who move pursuant to a military order related to a permanent change of station.

Changes to the deduction for un-reimbursed employee expenses

The Tax Cuts and Jobs Act also suspends all miscellaneous itemized deductions that are subject to the 2 percent of adjusted gross income floor. This change affects un-reimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel.

Thus, the business standard mileage rate listed in Notice 2018-03, which was issued before the Tax Cuts and Jobs Act passed, cannot be used to claim an itemized deduction for un-reimbursed employee travel expenses in taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2026. The IRS issued revised guidance today in Notice 2018-42.

Standard mileage rates for 2018

As mentioned in Notice 2018-03, the standard mileage rates for the use of a car, van, pickup or panel truck for 2018 remain:

54.5 cents for every mile of business travel driven, a 1 cent increase from 2017.

18 cents per mile driven for medical purposes, a 1 cent increase from 2017.

14 cents per mile driven in service of charitable organizations, which is set by statute and remains unchanged.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
Increased depreciation limits

The Tax Cuts and Jobs Act increases the depreciation limitations for passenger automobiles placed in service after Dec. 31, 2017, for purposes of computing the allowance under a fixed and variable rate plan. The maximum standard automobile cost may not exceed $50,000 for passenger automobiles, trucks and vans placed in service after Dec. 31, 2017. Previously, the maximum standard automobile cost was $27,300 for passenger automobiles and $31,000 for trucks and vans.

More information

Notice 2018-42 is posted on IRS.gov and contains information about the update to the standard mileage rates, including the details about the suspension of the deduction for operating a vehicle for moving purposes.

 

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

Beneficios de la aplicación móvil IRS2Go

Posted by Admin Posted on May 28 2018

Beneficios de la aplicación móvil IRS2Go

 

1.- Estado de su reembolso: Chequea el estado de tu reembolso de impuestos federales usando IRS2Go. Se puede comprobar el estado de tu reembolso 24 horas después de que el IRS hayas recibido la declaración electrónica, o al menos cuatro (4) semanas después que enviaste tu declaración en papel.

2.- Hacer un Pago: Podrás acceder de manera fácil a opciones de pago compatibles con tu dispositivo móvil, tales como Direct Pay (Pago Directo), que te ofrece una manera gratis y segura de pagar directamente desde tu cuenta bancaria. También puedes hacer un pago por tarjeta de crédito o débito, a través de un tramitador de pagos aprobado.

3.- Ayuda tributaria gratuita: Puedes acceder desde tu dispositivo móvil a software GRATIS para rápidamente preparar y presentar tu declaración de impuestos y obtener un reembolso. O, si usted prefiere recibir ayuda en persona, puede buscar un sitio del Programa de Ayuda Voluntaria a los Contribuyentes (VITA, por sus siglas en inglés) o el Programa de Asesoramiento Tributario para Personas Mayores (TCE, por sus siglas en inglés)..

Código de Seguridad

El IRS2Go puede generar códigos de seguridad para iniciar sesiones de ciertos servicios electrónicos del IRS, lo cual te permite recibir tus códigos a través del IRS2Go en vez de por mensaje de texto. 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Consigue la información tributaria del año anterior

Posted by Admin Posted on May 28 2018

Consigue la información tributaria del año anterior

 

Es importante conservar tus archivos tributarios durante un mínimo de tres años.

-Usa una declaración de impuestos para verificar la identidad

Los contribuyentes que usen por primera vez un producto de software tributario para presentar los impuestos, pueden necesitar su ingreso bruto ajustado (AGI, en inglés) de la declaración de impuestos del año anterior para verificar su identidad.

Aquellos que necesitan una copia de su declaración de impuestos, deben consultar primero con su proveedor de software o con el preparador de impuestos, ya que las copias de declaraciones de impuestos de años anteriores están disponibles en el IRS por una cuota. 

Ordenar una transcripción

Los contribuyentes que no pueden obtener una copia de una declaración de un año anterior, pueden ordenar una transcripción de impuestos del IRS. Una transcripción resume la información de la declaración de impuestos e incluye el AGI. Son gratis y están disponibles para el año tributario más reciente después de que el IRS haya tramitado la declaración. También pueden solicitarlas para los últimos tres años.

Esto debe ser planificarlo con anticipación, ya que el plazo de entrega para pedidos en línea y por teléfono generalmente tarda de 5 a 10 días a partir del día en que el IRS recibe la solicitud. Los contribuyentes que ordenen por correo, deben dejar pasar 30 días para recibir transcripciones y 75 días para recibir declaraciones de impuestos. 

Hay tres maneras en que los contribuyentes pueden solicitar una transcripción:

En línea a través de Ordenar Transcripción. Puede usar Ordenar Transcripción en línea, en Irs.gov/espanol, para ver, imprimir o descargar una copia de todo tipo de transcripción.

Por teléfono. El número es 800-908-9946.

Por correo. Los contribuyentes pueden completar y enviar al IRS el Formulario 4506-T, o el Formulario 4506T-EZ(SP), para recibirla por correo. Se usa el Formulario 4506-T para solicitar otros archivos tributarios: transcripción de la cuenta tributaria, registro de la cuenta, salarios e ingresos y la verificación de la no presentación. Estos formularios están disponibles en la página Formularios, Instrucciones y Publicaciones (en inglés) en IRS.gov.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Contribuyentes deben informar cambio de nombre

Posted by Admin Posted on May 28 2018

Contribuyentes deben informar cambio de nombre

 

Los nombres en la declaración de impuestos de un contribuyente deben concordar con los registros de la Administración de Seguro Social. Una falta de concordancia del nombre puede demorar un reembolso de impuestos. 

Los contribuyentes que deben informar a la Administración de Seguro Social un cambio de nombre incluyen:

Los contribuyentes que se han casado y utilizan el apellido del cónyuge.

Los contribuyentes casados recientemente que ahora utilizan un apellido con guion.

Los contribuyentes divorciados que ahora utilizan su apellido anterior. 

A su vez, los contribuyentes deben informar a la Administración de Seguro Social si el nombre de un dependiente cambió. Esto incluye el hijo adoptado que ahora tienen un nuevo apellido.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Consejos al momento de alquilar tu casa en vacaciones

Posted by Admin Posted on May 28 2018

Consejos al momento de alquilar tu casa en vacaciones

 

Resulta muy frecuente que los contribuyentes en la época del verano alquilen su propiedad con fines recreacionales. Pero los dueños deben tener presente las implicaciones tributarias de los alquileres residenciales y casas de vacaciones para no incurrir en ningún delito.

En el caso que esto suceda, por lo general tendrán que informar los ingresos de alquiler en una declaración de impuestos.

Casa de vacaciones: puede ser una casa, un apartamento, un condominio, una casa móvil, un barco, una casa de vacaciones o una propiedad similar. Es posible usar más de una vivienda como residencia durante el año.

 

Uso como vivienda: cuando la propiedad se usa como una vivienda, la deducción de los gastos de alquiler es limitada. Esto significa que los gastos de alquiler no pueden ser más que el alquiler recibido.

 

Uso personal: el uso personal significa el uso por el dueño, la familia del dueño, los amigos, otros dueños y sus familias. El uso personal incluye a cualquiera que pague menos de un precio justo de alquiler.

Divida los gastos: generalmente, las reglas especiales se aplican a los gastos de alquiler de una propiedad que el contribuyente usa como residencia durante el año tributable. Por lo general, es necesario declarar los ingresos de alquiler en su totalidad y dividir todos los gastos entre los propósitos personales y de negocio.

 

Cómo declarar: los contribuyentes usan el Anexo E en el IRS para declarar los ingresos y gastos de alquiler. Los ingresos de alquiler podrían también estar sujetos al Impuesto sobre los ingresos netos de inversión.

Reglas especiales: si se alquila la vivienda por menos de 15 días durante el año, no hay que declarar ninguna parte de los ingresos de alquiler y no puede deducir ninguno de los gastos de alquiler.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

¿Para qué sirve la calculadora de retención?

Posted by Admin Posted on May 28 2018

¿Para qué sirve la calculadora de retención?

 

La Calculadora de Retención es el medio efectivo para determinar la cantidad correcta de retención, te permite hacerlo de manera fácil y precisa. A través de ella puedes incluir ingresos múltiples de trabajo de dos cónyuges empleados.  También es garantía que los contribuyentes apliquen sus deducciones, ajustes y créditos tributarios de 2018 solo una vez y no varias veces con distintos empleadores.

Si una pareja o un contribuyente corre el riesgo de que se les retengan muy pocos impuestos, la calculadora recomendará una cantidad adicional de retención de impuestos para cada trabajo.

Es necesario que los contribuyentes tengan sus declaraciones de impuestos del año 2017 y los comprobantes de pago más recientes para poder utilizar la Calculadora de Retención. 

Esta herramienta no solicita información de identificación personal, como nombre, número de seguro social, dirección o números de cuentas bancarias. Los datos que han sido ingresados en la calculadora, no los guarda ni los registra el IRS. Es importante que los contribuyentes estén siempre atentos a los fraudes de impuestos y alerta a los delincuentes cibernéticos que buscar robar tu información. El IRS no envía correos electrónicos con la información ingresada o relacionados con la calculadora. 

Los datos que se ingresan deben ser precisos porque sus resultados dependerán de la exactitud de la información suministrada.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Taxpayers who usually itemize deductions should check their withholding to avoid tax surprises

Posted by Admin Posted on May 20 2018

Taxpayers who usually itemize deductions should check their withholding to avoid tax surprises

 

The Internal Revenue Service encourages taxpayers who typically itemized their deductions on Schedule A of the Form 1040 to use the Withholding Calculator this year to perform a “paycheck checkup.”

People who have itemized before may be affected by changes from the Tax Cuts and Jobs Act. Taxpayers who itemize should use the IRS Withholding Calculator to make sure their employers are withholding the appropriate amount of tax from their paychecks for their financial situation.

The law changes are effective in 2018 and affect the tax returns taxpayers will file in 2019. The new law makes a number of major changes, including:

Limiting the deductions for state and local taxes

Limiting the deduction for home mortgage interest in certain cases (see IR-2018-32 for more information)

Excluding deductions for employee business expenses, tax preparation fees and investment expenses, including investment management fees, safe deposit box fees and investment expenses from pass-through entities

The Tax Cuts and Jobs Act nearly doubled standard deductions and changed several itemized deductions. Some individuals who formerly itemized may now find it more beneficial to take the standard deduction, and this could affect how much a taxpayer needs to have their employer withhold from their pay. Also, even those who continue to itemize deductions should check their withholding because of changes made by the new tax law.

The IRS urges taxpayers to complete their “paycheck checkup” as early as possible so that if a withholding amount adjustment is necessary, there’s more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to make the tax changes – which could have a bigger impact on each paycheck.

Having too little tax withheld could result in an unexpected tax bill or penalty at tax time in 2019. Adjusting withholding after a “paycheck checkup” can also prevent employees from having too much tax withheld. With the average refund topping $2,800, some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.

Using the Withholding Calculator

When taxpayers use the Withholding Calculator, they can indicate whether they are taking the standard deduction or itemizing their deductions. If they are itemizing, they’ll enter estimates of their deductions. The Withholding Calculator applies the new law to these amounts when figuring the user’s withholding.

It’s helpful if taxpayers have their completed 2017 tax return when using the Withholding Calculator. It can help them estimate the amount of income, deductions, adjustments and credits to enter. They’ll also need their most recent pay stubs. These help the calculator compute the employee’s withholding so far this year.

Calculator results depend on the accuracy of information entered. If a taxpayer’s personal circumstances change during the year, they should return to the calculator to check whether their withholding should be changed.

Employees can use the results from the Withholding Calculator to help determine if they should complete a new Form W-4 and, if so, what information to put on a new Form W-4.

The Withholding Calculator does not request personally-identifiable information, such as name, Social Security number, address or bank account numbers. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the Withholding Calculator or the information entered.

Adjusting withholding

Employees who need to complete a new Form W-4 should submit it to their employers as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances must submit a new Form W-4 with corrected withholding allowances to their employer within 10 days of the change.

As a general rule, the fewer withholding allowances an employee enters on the Form W-4, the higher their tax withholding will be. Entering “0” or “1” on line 5 of the W-4 means more tax will be withheld. Entering a bigger number means less tax withholding, resulting in a smaller tax refund or potentially a tax bill or penalty.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

 

IRS accepting applications for 2019 Low Income Taxpayer Clinic grants

Posted by Admin Posted on May 20 2018

IRS accepting applications for 2019 Low Income Taxpayer Clinic grants

 

The Internal Revenue Service today announced that the application period for Low Income Taxpayer Clinic (LITC) grants for calendar year 2019 will run from May 16, 2018, to June 27, 2018.

The LITC program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, led by the National Taxpayer Advocate, Nina E. Olson. Under the program, the IRS awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or maintain an LITC.  An LITC must provide services for free or for no more than a nominal fee.

For calendar year 2018, the IRS awarded just over $11.8 million in matching grants to 134 organizations across the country for the development, expansion or continuation of LITCs. A listing of the 2018 LITC grant recipients is available on IRS.gov.

The mission of LITCs is to ensure the fairness and integrity of the tax system for taxpayers who are low income or speak English as a second language:

By providing pro bono representation on their behalf in tax disputes with the IRS;

By educating them about their rights and responsibilities as taxpayers; and

By identifying and advocating for issues that impact low income taxpayers.

LITC grants come from appropriated funds. The clinics, their employees and their volunteers operate independently from the IRS. Examples of qualifying organizations include:

Clinical programs at accredited law, business or accounting schools whose students represent low income taxpayers in tax disputes with the IRS; and

Organizations exempt from tax under Internal Revenue Code Section 501(a) that provide representation to low income taxpayers in tax disputes with the IRS and may also make referrals to qualified volunteers to provide representation.

The IRS welcomes all applications and will ensure that each application receives full consideration. The IRS is committed to achieving maximum access to representation for low income taxpayers under the terms of the LITC program. Thus, in awarding LITC grants for calendar year 2019, the IRS will continue to work toward the following program goals:

Obtaining coverage for the states of Hawaii, North Dakota, and the territory of Puerto Rico to ensure that each state (plus the District of Columbia and Puerto Rico) has at least one clinic;

Expanding coverage to counties in the following areas that are currently not being served by an LITC:  mid-Florida, northeast Arizona, northern Pennsylvania, and southeast New York (not including boroughs of New York City); and

Ensuring that grant recipients demonstrate they are serving geographic areas that have sizable populations eligible for and requiring LITC services.

The IRS is authorized to award a multi-year grant not to exceed three years. For an organization not currently receiving a grant for 2018, an organization that received a single-year grant for 2018 or an organization whose multi-year grant ends in 2018, the organization must submit a full grant application electronically at www.grants.gov. For an organization currently receiving a grant for 2018 that is requesting funding for the second or third year of a multi-year grant, the organization must submit the non-competing continuation request electronically at www.grantsolutions.gov. All organizations must use the funding number of TREAS-GRANTS-052019-001, and applications and funding requests must be submitted by 11:59 p.m. EDT on June 27, 2018.

The complete program requirements and application instructions can be found in Publication 3319 on www.irs.gov.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

 

Crédito para primas de seguros médicos… ¿Calificas?

Posted by Admin Posted on May 20 2018

Crédito para primas de seguros médicos… ¿Calificas?

 

El crédito tributario de prima (PTC, por sus siglas en inglés), es un crédito reembolsable que ayuda a personas y familias elegibles a cubrir las primas de un seguro médico comprado a través del Mercado de Seguros Médicos. Para obtener este crédito, debes cumplir con ciertos requisitos y presentar una declaración de impuestos.

¿Quién califica?

Quienes cumplan con todos los siguientes requisitos:

1.- Tienes un ingreso familiar que se encuentra dentro de ciertos límites.

2.- No presentas una declaración de impuestos bajo el estado civil tributario de Casado presentando por separado. Hay una excepción a esta regla que permite a ciertas víctimas de abuso doméstico y abandono conyugal reclamar el crédito mediante el estado civil tributario de Casado presentando por separado.

3.- Otra persona no puede reclamarlo como dependiente.

4.- Cumple con estos requisitos adicionales: usted o un miembro de su familia:

-Tienen cobertura a través de un Mercado de Seguros Médicos.

-No pueden obtener una cobertura accesible a través de un plan elegible patrocinado por un empleador que proporciona un valor mínimo.

- No son elegibles para cobertura a través de un programa de gobierno, como Medicaid, Medicare, CHIP o TRICARE.

- Pagan la cuota de las primas no cubiertas por los pagos adelantados del crédito.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Carta de Derechos del Contribuyente en EEUU.

Posted by Admin Posted on May 20 2018

Carta de Derechos del Contribuyente en EEUU.

 

Los contribuyentes de los Estados Unidos están protegidos cada vez que tienen alguna interacción con el IRS, mediante 10 derechos que derivan de la Carta de Derechos del Contribuyente.

El derecho de estar informado.

El derecho de un servicio de calidad.

El derecho de pagar no más de la cantidad correcta de impuestos.

El derecho de cuestionar la posición del IRS y de ser escuchado.

El derecho de apelar una decisión del IRS en un foro independiente.

El derecho de llegar a una resolución.

El derecho de privacidad.

El derecho de confidencialidad.

El derecho de contratar a un representante.

El derecho de tener un sistema de impuestos que sea justo y adecuado.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Tipos de reembolso de los impuestos federales individuales

Posted by Admin Posted on May 20 2018

Tipos de reembolso de los impuestos federales individuales

 

Estas son las opciones para recibir tu reembolso de los impuestos federales individuales sobre los ingresos.

1.- Depósito directo: La manera más rápida es por depósito directo a tu cuenta corriente o de ahorros, incluyendo una cuenta de jubilación individual (IRA, por sus siglas en inglés).

2.- Depositar a una cuenta en línea de TreasuryDirect, para la compra de valores negociables y bonos de ahorros del Tesoro de los Estados Unidos.

3.- IRA Tradicional, Roth o SEP: Deposita directamente todo o parte de tu reembolso en un IRA Tradicional, un Roth IRA, o un SEP-IRA, pero no en un IRA sencillo. Tiene que tener ya una cuenta IRA antes de presentar tu declaración y tu número de ruta y número de cuenta.

4.- Bonos de Ahorros: Para la compra de Bonos de Ahorro de la Serie I de los EE.UU de hasta $5,000 (en inglés);

5.- Cuenta de Ahorros para Gastos Médicos (HSA, por sus siglas en inglés);

Cuenta Archer MSA.

6.- Cuenta de Ahorros para Estudios Coverdell (ESA, por sus siglas en inglés).

7.- Cheque impreso: Por cheque impreso enviado a la dirección indicada en su declaración de impuestos.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

La razón por la que no debes esconder tus ingresos en el extranjero

Posted by Admin Posted on May 20 2018

La razón por la que no debes esconder tus ingresos en el extranjero

 

Durante muchos años, una gran cantidad de personas han sido identificadas por evadir impuestos en los Estados Unidos, pretendiendo ocultar su dinero en bancos en el extranjero mediante el uso de tarjetas de débito, crédito y transferencias para acceder a sus fondos.

El IRS ha podido ubicar a los contribuyentes con cuentas no declaradas mediante la información obtenida en rigurosas investigaciones, lo mismo sucede con los bancos y los banqueros sospechosos de ayudar a sus clientes a ocultar activos en el extranjero. Es importante destacar que el IRS trabaja en estrecha colaboración con el Departamento de Justicia para procesar casos de evasión tributaria.

Mantener cuentas en el extranjero no necesariamente tiene que ser un delito, solo que existen una serie de requisitos de reporte que deben cumplirse. Los contribuyentes estadounidenses que no cumplen con los requisitos de reporte están violando la ley y se arriesgan a recibir sanciones y multas significativas, así como la posibilidad de procesamiento criminal.

Desde el 2009, decenas de miles de personas se han presentado voluntariamente para divulgar sus cuentas financieras en el extranjero, aprovechando oportunidades especiales para cumplir al sistema de impuestos de los Estados Unidos y resolver sus obligaciones tributarias. Y, con los nuevos requisitos de presentación de informes de cuentas extranjeras estableciéndose progresivamente en los próximos años, el esconder ingresos en el extranjero es cada vez más difícil.

A principios del 2012, el IRS abrió nuevamente el Programa de divulgación voluntaria de cuentas extranjeras (OVDP, por sus siglas en inglés) (en inglés) continuando el afanoso interés por parte de los contribuyentes y los profesionales de impuestos después de la clausura de los programas del 2011 y 2009. Este programa estará abierto por un período indefinido hasta nuevo aviso.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Tu actividad económica es… ¿Negocio o pasatiempo?

Posted by Admin Posted on May 20 2018

Tu actividad económica es… ¿Negocio o pasatiempo?

 

El Servicio de Impuestos Internos te recuerda que como contribuyente debes cumplir con ciertos reglamentos para determinar si tu actividad es un negocio o sólo un pasatiempo, y no una actividad de la que se espera recibir ganancias.

El IRS con la finalidad de educar al contribuyente sobre sus obligaciones de presentar su declaración, explica los requisitos para determinar si una actividad califica como negocio, y qué limitaciones son aplicables si la actividad no es un negocio. En la actualidad según datos obtenidos por el IRS, cerca de $30 mil millones en impuestos no son pagados, debido a reclamos, enmiendas, deducciones, exenciones y créditos excesivos. El deducir incorrectamente gastos de pasatiempo representa un porcentaje de las deducciones incorrectas.

Generalmente, el contribuyente puede deducir gastos ordinarios y necesarios para el manejo de su negocio.  Un gasto ordinario es un gasto que es común y aceptable en el negocio o empresa del contribuyente.  Un gasto necesario es uno que es apropiado para el negocio.  Normalmente, una actividad califica como negocio si ésta se maneja con una expectativa razonable de obtener ganancias.

Se considera que una actividad es un negocio si reditúa ganancias durante un período de tres años dentro de los últimos cinco años de la actividad, incluyendo el año en curso y durante por lo menos dos años de los últimos siete si la actividad consiste primordialmente en criar, exhibir, adiestrar o correr caballos.

Si la actividad no es con el fin de obtener ganancias, las pérdidas que ésta produzca no pueden utilizarse para contrarrestar otros ingresos. Cuando los gastos exceden los ingresos, se podría decir que la actividad está produciendo pérdida.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Cómo solicitar el número de Identificación del Empleador

Posted by Admin Posted on May 20 2018

Cómo solicitar el número de Identificación del Empleador

 

- En Línea

El método preferido es tramitar la solicitud para el EIN por Internet (en inglés). Tras completar la solicitud durante la sección en línea, la información es validada y un EIN es expedido inmediatamente.

Dicho proceso está disponible para todas las entidades cuyo negocio principal, agencia u oficina, o residencia legal (en el caso de un individuo) está localizada en los Estados Unidos o Territorios de los Estados Unidos.

Por FAX

Los contribuyentes pueden enviar por FAX el Formulario SS-4, luego de verificar que el mismo contenga toda la información necesaria, al número de FAX que les corresponde Si se determina que la entidad necesita un nuevo EIN, te asignarán uno utilizando los procedimientos adecuados para el tipo de entidad. Si el contribuyente nos provee su número de fax, le enviarán el EIN por fax dentro de cuatro (4) días laborables.

Por Correo

El periodo de tiempo para el procesamiento de una solicitud para el EIN que se recibe por correo es de cuatro semanas. Asegúrate de que el Formulario SS-4 contenga toda la información necesaria.

Si determinan que la entidad necesita un nuevo EIN, uno será asignado utilizando los procedimientos adecuados para el tipo de entidad y enviado al contribuyente a vuelta de correo.

Por Teléfono (Internacional).

Los solicitantes internacionales pueden obtener un EIN llamado al número 267-941-1099 (que no es un número de teléfono libre de cargos) entre las 6 a.m. y 11 p.m. (horario del este) de lunes a viernes.

La persona que hace la llamada tiene que estar autorizada a recibir el EIN y a contestar preguntas relacionadas al Formulario SS-4, Solicitud para el Número de Identificación del Empleador.

Debes completar la sección para la Designación de un Tercero, solamente si quieres autorizar al individuo nombrado en ésta a contestar preguntas para completar el Formulario SS-4, y a recibir el EIN de la entidad. Debes firmar en el área designada para la firma para que dicha autorización sea válida.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

- Tax credit can help employers hiring new workers; key certification requirement applies

Posted by Admin Posted on May 13 2018

- Tax credit can help employers hiring new workers; key certification requirement applies

 

With many businesses facing a tight job market, the Internal Revenue Service reminds employers to check out a valuable tax credit available to them for hiring long-term unemployment recipients and other categories of workers with employment barriers.

During National Small Business Week — April 29 to May 5 — the Internal Revenue Service is highlighting tax benefits and resources designed to help new and existing small businesses.

The Work Opportunity Tax Credit (WOTC) is a long-standing income tax benefit that encourages employers to hire designated categories of workers who face significant barriers to employment. For any employer considering this option, the WOTC may be able to help.
For those who haven’t claimed the WOTC in a while, the IRS noted that legislation enacted in recent years has both expanded and modified the credit. For example, legislation effective Jan. 1, 2016, added a new category for long-term unemployment recipients who had been unemployed for a period of at least 27 weeks and received state or federal unemployment benefits during part or all of that time.

Here’s how it works.

The credit, usually claimed on Form 5884, Work Opportunity Credit, is generally based on wages paid to eligible workers during the first two years of employment. To qualify for the credit, an employer must first request certification by filing IRS Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, with the state workforce agency within 28 days after the eligible worker begins work. Other requirements and further details can be found in the instructions to Form 8850.

There are now 10 categories of WOTC-eligible workers. Besides long-term unemployment recipients, the other categories include certain veterans and recipients of various kinds of public assistance, among others.

The 10 categories are:

Qualified IV-A Temporary Assistance for Needy Families (TANF) recipients

Unemployed veterans, including disabled veterans

Ex-felons

Designated community residents living in Empowerment Zones or Rural Renewal Counties

Vocational rehabilitation referrals

Summer youth employees living in Empowerment Zones

Food stamp (SNAP) recipients

Supplemental Security Income (SSI) recipients

Long-term family assistance recipients

Qualified long-term unemployment recipients.

Eligible businesses claim the WOTC on their income tax return. The credit is first figured on Form 5884 and then becomes a part of the general business credit claimed on Form 3800, General Business Credit.

Though the credit is not available to tax-exempt organizations for most categories of new hires, a special rule allows them to get the WOTC for hiring qualified veterans. These organizations claim the credit on Form 5884-C, Work Opportunity Credit for Qualified Tax Exempt Organizations Hiring Qualified Veterans. Visit the WOTC page on IRS.gov for more information.

 

Many tax-exempt organizations must file information returns by May 15

Posted by Admin Posted on May 13 2018

TAX EXEMPT ORGANIZATIONS MUST FILE BY MAY 15

 

Many tax-exempt organizations must file information returns by May 15; do not include Social Security numbers or personal data

The Internal Revenue Service reminded certain tax-exempt organizations that the Tuesday, May 15 filing deadline for Form 990-series information returns is fast approaching.

Form 990-series information returns and notices are normally due on the 15th day of the fifth month after an organization’s tax-year ends. Many organizations use the calendar year as their tax year, making May 15, 2018 the deadline to file for 2017.

No Social Security numbers on Forms 990

The IRS generally does not ask organizations for Social Security Numbers and cautions filers not to provide them on Form 990. By law, both the IRS and most tax-exempt organizations are required to publicly disclose most parts of Form 990 filings, including schedules and attachments. Public release of SSNs and other personally identifiable information about donors, clients or benefactors could give rise to identity theft. More information on this can be found in the “general instructions” section of the Instructions for Form 990, Return of Organization Exempt from Income Tax.

The IRS also urges tax-exempt organizations to file forms electronically to reduce the risk of inadvertently including SSNs or other unnecessary personal information. Electronic filing also provides acknowledgement that the IRS has received the return and reduces normal processing time, making compliance with reporting and disclosure requirements easier.

Tax-exempt forms that must be made public by the IRS are clearly marked “Open to Public Inspection” in the top right corner of the first page. These include Form 990, Form 990-EZ, Form 990-PF and others.

Forms to file

Small tax-exempt organizations with average annual gross receipts of $50,000 or less may file an electronic notice called a Form 990-N (e-Postcard). This form requires only a few basic pieces of information. Tax-exempt organizations with average annual gross receipts above $50,000 must file a Form 990 or 990-EZ, depending on their receipts and assets. Private foundations must file Form 990-PF.

Organizations that need additional time to file a Form 990, 990-EZ or 990-PF may obtain an automatic six-month extension. Use Form 8868, Application for Extension of Time to File an Exempt Organization Return, to request an extension. The request must be filed by the due date of the return. Note that no extension is available for filing the Form 990-N (e-Postcard).

Many organizations risk loss of tax-exempt status

By law, organizations that fail to file annual reports for three consecutive years will see their federal tax exemptions automatically revoked as of the due date of the third year for which they are required to file an annual report. The Pension Protection Act of 2006 mandates that most tax-exempt organizations file annual Form 990-series information returns or notices with the IRS. The law, which went into effect at the beginning of 2007, also imposed a new annual filing requirement for small organizations. Churches and church-related organizations are not required to file annual reports.

Check tax-exempt status online

The IRS publishes a list of organizations identified as having automatically lost tax-exempt status for failing to file annual reports for three consecutive years. Organizations that have had their exemptions automatically revoked can apply for reinstatement of their tax-exempt status and pay the appropriate user fee.

The IRS now offers an enhanced, mobile friendly search tool, called Tax Exempt Organization Search (TEOS). TEOS provides easy access to publicly available information about exempt organizations. Users can find key information about the federal tax status and filings of certain tax-exempt organizations, including whether organizations have had their federal tax exemptions automatically revoked and if an organization is eligible to receive tax-deductible contributions.

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

 

Estas son tus obligaciones tributarias si eres trabajador por cuenta propia

Posted by Admin Posted on May 13 2018

Estas son tus obligaciones tributarias si eres trabajador por cuenta propia

 

1.- Debes presentar una declaración anual y pagar los impuestos estimados trimestralmente

2.- Deben pagar el impuesto al trabajo por cuenta propia (impuesto SE) así como el impuesto a las ganancias.

3.- Antes de poder determinar si está sujeto al impuesto sobre la renta y el impuesto a la renta por cuenta propia, debe calcular su ganancia neta o la pérdida neta de su negocio. Esto lo hace restando los gastos de su negocio a los ingresos de su negocio.

4.- Debe presentar una declaración de impuestos si sus ganancias netas del trabajo por cuenta propia fueron de $ 400 o más. Si sus ganancias netas de trabajo por cuenta propia fueron menos de $ 400, deberá presentar la declaración solo si cumple cualquier otro requisito el formulario 1040 del IRS.

Fuente: IRS

Datos sobre el ITIN para estudiantes extranjeros

Posted by Admin Posted on May 12 2018

Datos sobre el ITIN para estudiantes extranjeros

 

En la mayoría de los casos, los extranjeros pueden solicitar un Número de Seguridad Social o un Número de Identificación Personal del Contribuyente para utilizarlos en trámites relacionados con impuestos.  

Normalmente, la mayoría de los extranjeros que ingresan a los Estados Unidos en un estado migratorio que les permite trabajar, bajo las leyes de inmigración del país, pueden pedir un Número de Seguridad Social (SSN).

Los  estudiantes y académicos extranjeros en estatus no inmigrante F-1, J-1, M-1, Q-1 y Q-2 pueden aspirar a ser empleados en los Estados Unidos, por lo que son candidatos para optar por un Número de Seguro Social.

En el caso que no puedan aspirar al SSN, pueden solicitar un Número de Identificación de Contribuyente Individual (ITIN) del Servicio de Impuestos Internos si tienen una razón de peso para necesitar un ITIN.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Beneficios fiscales especiales de los miembros de las Fuerzas Armadas

Posted by Admin Posted on May 12 2018

Beneficios fiscales especiales de los miembros de las Fuerzas Armadas

 

¿Sabías que los miembros del ejército pueden calificar para exenciones de impuestos y beneficios? Aquí te decimos quiénes califican.

1.- Combat Pay Exclusion. Si alguien presta servicios en una zona de combate o brinda apoyo directo, parte o incluso la totalidad de su paga de combate está libre de impuestos. Sin embargo, hay limitaciones para los oficiales comisionados. Vea el Crédito Tributario por Ingreso del Trabajo a continuación para obtener información importante.

2.- Extensiones de fecha límite. Algunos miembros del ejército, como los que sirven en una zona de combate, pueden posponer la mayoría de las fechas límite de impuestos. Aquellos que califiquen pueden obtener extensiones automáticas de tiempo para presentar y pagar sus impuestos.

3.- Deducciones especiales:

- Viajes de reservistas. Los reservistas cuyos deberes los llevan a más de 100 millas de su hogar pueden deducir sus gastos de viaje no reembolsados ​​en el Formulario 2106, incluso si no detallan sus deducciones.

- Gastos de mudanza. Los contribuyentes que prestan servicios pueden deducir algunos de sus costos de mudanza no reembolsados ​​en la Forma 3903. Esto normalmente se aplica si la mudanza se debe a un cambio permanente de la estación.

- Uniforme. Los militares pueden deducir el costo y el mantenimiento de su uniforme, pero solo si las reglas dicen que no pueden usarlo fuera de servicio. Además, deben reducir su deducción por cualquier asignación uniforme que reciban por esos costos.

4.- Crédito Tributario por Ingreso del Trabajo o EITC. Si los servidores reciben un pago por combate no tributable, pueden optar por incluirlo en su ingreso sujeto a impuestos para aumentar la cantidad de EITC. Eso significa que podrían deber menos impuestos y obtener un reembolso mayor. Para el año fiscal 2016, el crédito máximo para los contribuyentes es $ 6,269. Lo mejor es calcular el crédito en ambos sentidos para descubrir cuál funciona mejor.

5.- Firma de Devoluciones Conjuntas. Ambos cónyuges normalmente deben firmar una declaración conjunta de impuestos. Si el servicio militar lo impide, uno de los cónyuges puede firmar por el otro u obtener un poder.

6.- Permisos ROTC. Algunas cantidades pagadas a los estudiantes del ROTC en capacitación avanzada no están sujetas a impuestos. Esto se aplica a las asignaciones para educación y subsistencia. El pago ROTC activo está sujeto a impuestos. Por ejemplo, pagar por el campamento avanzado de verano es imponible.

7.- Separación y transición a la vida civil. Si los miembros del servicio abandonan el ejército y buscan trabajo, es posible que puedan deducir algunos gastos de búsqueda de empleo, incluidos los gastos de viaje, reanudación y colocación laboral.

8.- Ayuda impositiva. La mayoría de las bases militares ofrecen preparación gratuita de impuestos y asistencia para la presentación de impuestos durante la temporada de declaración de impuestos.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

¿Cómo consigo mi declaración de impuestos enmendada?

Posted by Admin Posted on May 12 2018

¿Cómo consigo mi declaración de impuestos enmendada?

 

El IRS te deja conocer el estado de tu declaración enmendada (Formulario 1040X) del año en curso y de hasta tres años anteriores.

- La declaración enmendada tarda hasta 3 semanas a partir de la fecha de envío para ser registrada en su sistema.

-  El trámite de la misma puede tardar hasta 16 semanas

-Necesitas: Número de Seguro Social, fecha de nacimiento y código postal.

- Halla en el buscador del IRS tu declaración enmendada, donde debes llenar los datos indicados.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Blinda tu identidad con el IP PIN

Posted by Admin Posted on May 12 2018

Blinda tu identidad con el IP PIN

 

A los aspirantes a contribuyentes se les asigna un número de 6 dígitos llamado IP PIN, el cual te ayuda a prevenir el uso indebido de sus números de Seguro Social  en  cualquier declaración fraudulenta del impuesto federal sobre los ingresos.

Después de haber obtenido tu IP PIN no puedes renunciar a él. Este número deberá ser utilizado cada vez que realices una declaración de impuesto federal, ya sea del presente año o en años posteriores para poder verificar su identidad.

A través del portal web de IRS podrás solicitar tu IP PIN.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: IRS

Small Business and Self-Employed: Self-Paying Yourself

Posted by Admin Posted on May 06 2018

Small Business and Self-Employed: Self-Paying Yourself

 

The procedures for compensating yourself for your efforts in carrying on a trade or business will depend on the type of business structure you elect. Below are topics that frequently arise when new business owners ask the Internal Revenue Service questions about paying themselves.

Corporate officers

An officer of a corporation is generally an employee, but an officer who performs no services or only minor services, and who neither receives nor is entitled to receive any pay, is not considered an employee. Refer to "Who Are Employees?" in Publication 15-A, Employer's Supplemental Tax Guide (PDF).

Partners

Partners are not employees and should not be issued a Form W-2 in lieu of Form 1065, Schedule K-1, for distributions or guaranteed payments from the partnership. Refer to partnerships for more information.

Dividend distributions

Any distribution to shareholders from earnings and profits is generally a dividend. However, a distribution is not a taxable dividend if it is a return of capital to the shareholder. Most distributions are in money, but they may also be in stock or other property. For information on shareholder reporting of dividends and other distributions, refer to Publication 550, Investment Income and Expenses.

Form 1099-MISC or Form W-2

You cannot designate a worker, including yourself, as an employee or independent contractor solely by the issuance of Form W-2 or Form 1099-MISC. It does not matter whether the person works full time or part time. You use Form 1099-MISC, Miscellaneous Income (PDF) to report payments to others who are not your employees. You use Form W-2 to report wages, car allowance, and other compensation for employees.

Treating employees as nonemployees

You will be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold them because you treat an employee as a nonemployee, including yourself if you are a corporate officer, and you may be liable for a  trust fund recovery penalty. Refer to Publication 15, Circular E, Employer's Tax Guide for details about the trust fund recovery penalty or Independent Contractor for more information on employee classification.

Shareholder loan or officer's compensation?

A loan by a corporation to a corporate officer should include the characteristics of a loan made at arm's length. That is, there should be a contract with a stated interest rate, a specified length of time for repayment, and a consequence for failure to repay the loan. Collateral would also be an indication of a loan. A below-market loan is a loan which provides for no interest or interest at a rate below the federal rate that applies. If a corporation issues you, as a shareholder or an employee, a below-market loan, the lender's payment to the borrower is treated as a gift, dividend, contribution to capital, payment of wages, or other payment, depending on the substance of the transaction.

See "Below-market interest rate loans" under Employees' Pay / Kinds of Pay / Loans or Advances in Publication 535, Business Expenses for more information.

Reasonable compensation

Because an officer of a corporation is generally an employee with wages subject to withholding, corporate officers may question what is considered reasonable compensation for the efforts they contribute to conducting their trade or business. Wages paid to you as an officer of a corporation should generally be commensurate with your duties. Refer to "Employee's Pay, Tests for Deducting Pay" in Publication 535, Business Expenses for more information. Public libraries may have reference sources that provide averages of compensation paid for various types of services. The Internal Revenue Service may determine that adjustments must be made to the income and expenses of tax returns for both the corporation and an individual shareholder if the officer is substantially underpaid for services provided.

Draw account

If you are a sole proprietor  or partner in a partnership, the money or other forms of payment you take from your business should be accounted for in a draw account. This helps you know what amount of benefits you have taken from the business during the year. You cannot deduct the sole proprietor s own salary or any personal withdrawals made from the business.

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

FOREIGN ACCOUNTS CALL FOR SPECIFIC REPORTING REQUIREMENTS

Posted by Admin Posted on May 06 2018

FOREIGN ACCOUNTS CALL FOR SPECIFIC REPORTING REQUIREMENTS

 

In an increasingly globalized society, many people choose to open offshore accounts to deposit a portion of their wealth. When doing so, it’s important to follow the IRS’s strict foreign accounts reporting requirements. In a nutshell, if you have a financial interest in or signature authority over any foreign accounts, including bank accounts, brokerage accounts, mutual funds or trusts, you must disclose those accounts to the IRS and you may have additional reporting requirements.

To do so, your tax preparer will check the box on line 7a of Schedule B (“Interest and Ordinary Dividends”) of Form 1040 — regardless of the account value. If the total value of your foreign financial assets exceeds $50,000 ($100,000 for joint filers) at the end of the tax year or exceeds $75,000 ($150,000 for joint filers) at any time during the tax year, you must provide account details on Form 8938 (“Statement of Specified Foreign Financial Assets”) and attach it to your tax return.

Finally, if the aggregate value of your foreign accounts is $10,000 or more during the calendar year, file FinCEN (Financial Crimes Enforcement Network) Form 114 — “Report of Foreign Bank and Financial Accounts (FBAR).” The current deadline for filing the form electronically with FinCEN is April 15, 2018, with an automatic extension to October 15.

Failure to disclose an offshore account could result in substantial IRS penalties, including collecting three to six years’ worth of back taxes, interest, a 20% to 40% accuracy-related penalty and, in some cases, a 75% fraud penalty. For further information, contact us.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: Thomson Reuters

 

GET AN EARLY TAX "REFUND" BY ADJUSTING YOUR WITHHOLDING

Posted by Admin Posted on May 06 2018

 

 

Each year, millions of taxpayers claim an income tax refund. To be sure, receiving a payment from the IRS for a few thousand dollars can be a pleasant influx of cash. But it means you were essentially giving the government an interest-free loan for close to a year, which isn’t the best use of your money.

Fortunately, there’s a way to begin collecting your 2018 refund now: You can review the amounts you’re having withheld and/or what estimated tax payments you’re making, and adjust them to keep more money in your pocket during the year.

Choosing to adjust

It’s particularly important to check your withholding and/or estimated tax payments if:

You received an especially large 2017 refund,

You’ve gotten married or divorced or added a dependent,

You’ve bought a home,

You’ve started or lost a job, or

Your investment income has changed significantly.

Even if you haven’t encountered any major life changes during the past year, changes in the tax law may affect withholding levels, making it worthwhile to double-check your withholding or estimated tax payments.

Making a change

You can modify your withholding at any time during the year, or even more than once within a year. To do so, you simply submit a new Form W-4 to your employer. Changes typically will go into effect several weeks after the new Form W-4 is submitted. For estimated tax payments, you can make adjustments each time quarterly payments are due.

While reducing withholdings or estimated tax payments will, indeed, put more money in your pocket now, you also need to be careful that you don’t reduce them too much. If you don’t pay enough tax throughout the year on a timely basis, you could end up owing interest and penalties when you file your return, even if you pay your outstanding tax liability by the April 2019 deadline.

Getting help

One timely reason to consider adjusting your withholding is the passage of the Tax Cuts and Jobs Act late last year. In fact, the IRS had to revise its withholding tables to account for the increase to the standard deduction, suspension of personal exemptions, and changes in tax rates and brackets. If you’d like help determining what your withholding or estimated tax payments should be for the rest of the year, please contact us.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: Thomson Reuters

6 Tips para usar tus tarjetas de crédito

Posted by Admin Posted on May 06 2018

6 tips para usar tus tarjetas de crédito

 

1- Realiza los consumos posteriores a tu fecha de corte.

2- Apréndete los datos básicos:  conoce la fecha de corte, fecha de pago y el límite de crédito.

3- Trata de pagar antes de la fecha indicada para que te cataloguen como responsable.

4- Te recomendamos tener un máximo de 3 tarjetas y utilizarlas de la siguiente manera: una para tus gastos comunes, otra como herramienta de crédito para adquirir activos o gastos necesarios, ejemplo comprar un electrodoméstico. Por último, ten una tarjeta de crédito para emergencias, por cualquier gasto imprevisto.

5- Cuando vayas a realizar el pago, trata de abonar más del mínimo requerido para que vean que tienes facilidad de pago.

6- Recuerda que los bancos evaluarán qué tan disciplinado eres con ellas para aumentar los límites, necesitas ganarse su confianza.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Con información de: instituto-finanzas

¿Sabes qué es el Phishing?

Posted by Admin Posted on May 06 2018

¿Sabías qué es el Phishing?

 

Phishing es una práctica fraudulenta realizada a través de correos electrónicos no solicitados y/o sitios web que se presentan como sitios legítimos, logrando convencer a las personas para que revelen su información personal y financiera.

Ten en cuenta que los correos no solicitados que dicen ser del IRS o de alguno de sus programas, deberá reportarse a la dirección phishing@irs.gov, pues se han reportado casos en que el Sistema de Pago Electrónico de impuestos federales (EFTPS) es utilizado para atraer a víctimas.

Cabe destacar que, si experimentas pérdidas financieras debido a un incidente relacionado con el IRS debe reportarlo al Inspector General del Tesoro para la Administración Tributaria y presentar una queja con la Comisión Federal de Comercio a través del Asistente de Quejas.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Así protege tu identidad el IRS

Posted by Admin Posted on May 06 2018

Así protege tu identidad el IRS

 

El robo de identidad representa un problema para sus víctimas y todo un desafío para los negocios, organizaciones y agencias gubernamentales, incluyendo al IRS. El IRS combate el robo de identidad relacionado a los impuestos por medio de una estrategia estricta de prevención, detección y asistencia a las víctimas. Aunque se ha ido progresando en la lucha contra este crimen, continúa siendo una de sus principales prioridades.

El robo de identidad relacionado a los impuestos, sucede cuando alguien utiliza su número de Seguro Social robado y presenta una declaración de impuestos reclamando un reembolso fraudulento. Si llegas a ser una víctima de este crimen, el IRS está comprometido a ayudarte a resolver tu caso lo más pronto posible.

Cumbre de Seguridad

El IRS, los estados y la industria privada de impuestos trabajan juntos para identificar nuevas medidas de seguridad para proteger de manera más efectiva a los contribuyentes y combatir el robo de identidad. Pero necesitan tu ayuda.

Recuerda: el IRS no se comunica con los contribuyentes por correo electrónico para solicitar información personal o financiera. Esto incluye cualquier tipo de comunicación electrónica, tales  como mensajes de texto y redes sociales. El IRS no llama a los contribuyentes con amenazas de demandas o detenciones.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Consejos para Agricultores en los Estados Unidos

Posted by Admin Posted on May 06 2018

Consejos para Agricultores en los Estados Unidos

 

Si eres agricultor: Estos 10 tips te facilitarán el pago de impuestos

1. Seguro de cosecha.  Los pagos que recibe del seguro por daños a la cosecha cuentan como ingreso. Generalmente, debe reportar estos pagos el año que los recibe.

2. Venta de artículos comprados para reventa.  Ya sea ganado u otros artículos que se van a revender, deben declararse.

3. Ventas relacionadas al clima.  El mal tiempo como una sequía o una inundación puede forzarlo a vender más ganado de lo normal para ese año. De ser así, podría retrasar la declaración de las ganancias por vender los animales adicionales.

4. Gastos de granja.  Puedes deducir gastos ordinarios y necesarios  que hayas pagado por tu negocio.

5. Salarios de empleados.  Puede deducir los sueldos razonables que haya pagado a trabajadores en su granja de tiempo completo y tiempo parcial. Debe retener el Seguro Social, Medicare e impuestos federales de los salarios.

6. Pago de préstamos. Se pueden deducir los intereses que pagó por un préstamo si éste se utilizó para su negocio agrícola, no personales.

7. Pérdidas netas de operación. Si sus gastos son mayores que sus ingresos para ese año, es posible que tenga una pérdida neta de operación. Puede aplicar la pérdida a otros años y entonces deducirla. Podría obtener un reembolso por una fracción o el monto total de los impuestos que pagó en años anteriores. También podría reducir sus impuestos en años futuros.

8. Promedio de ingresos agrícolas.  Es posible que pueda promediar  todos o algunos de los ingresos agrícolas del año en curso con la distribución a lo largo de los últimos tres años. Esto puede reducir sus impuestos si su ingreso agrícola es alto en el año en curso y bajo en uno o más en los últimos tres años.

9. Crédito o reembolso tributario. Es posible que pueda reclamar un crédito tributario o el reembolso de los impuestos por el costo del combustible usado en las actividades de su granja.

10. Guía tributaria para granjeros.  Para más detalles sobre este tema, vea la Publicación 225 (en inglés) Guía Tributaria para Granjeros. Se puede conseguir en IRS.gov/forms en cualquier momento.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

 

Consejos sobre propinas que debes tener en cuenta

Posted by Admin Posted on May 06 2018

Consejos sobre propinas que debes tener en cuenta

¿Sabías que todo lo que recibas en propinas es tributable? Toma en cuenta lo siguiente:

1.- Usa el Asistente Tributario Interactivo. El Asistente Tributario Interactivo es un recurso de ley tributaria que hace a los contribuyentes una serie de preguntas y proporciona respuestas.

2.- Declarar todas las propinas en la declaración de impuestos. Usa el Formulario 4137 (en inglés), Impuesto al Seguro Social y al Medicare sobre los ingresos de propinas no declaradas, para declarar la cantidad de todo ingreso de propinas no declaradas, para incluirlas como salarios adicionales. Esto incluye el valor de artículos no monetarios que alguien recibe como propina, tales como entradas o boletos a un evento.

3.- Declara todo tipo de propinas. Como contribuyente debes pagar impuestos sobre todas las propinas que recibas durante el año, incluyendo las que recibas:

- Directamente de los clientes.

- Agregadas a las tarjetas de crédito.

- De un acuerdo de compartir las propinas con otros empleados.

4.- Declara las propinas a tu jefe. Si recibes $20 o más en propinas en cualquier mes, debes informar a tu jefe las propinas para ese mes, a más tardar el 10º día del mes siguiente, incluyendo las propinas recibidas en efectivo, cheque y tarjeta de crédito. Pues como empleador éste debe retener el impuesto federal sobre los ingresos y los impuestos al Seguro Social y al Medicare sobre las propinas declaradas.

5.- Lleva un registro diario de propinas. Usa la Publicación 1244(PR), Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informa al Patrono, para registrar las propinas. Esto ayudará a declarar la cantidad correcta de propinas en una declaración de impuestos.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

¿Qué registros podría pedirte el IRS en una auditoría?

Posted by Admin Posted on Apr 29 2018

¿Qué registros podría pedirte el IRS en una auditoría?

 

El IRS te pedirá llevar ciertos documentos para comprobar los ingresos, créditos o deducciones que usted reclamó en su declaración de impuestos. Se supone que usted contó con todos estos documentos para preparar la declaración, por eso, la solicitud de los mismos no debería acarrear otra preparación.

Recuerde que nunca debe enviar los registros originales. Envíe copias. Para mayor rapidez organice los registros por año y clase de ingreso o gasto, e incluya un resumen de las transacciones.

Registros que podrían solicitar:

- Recibos: Presente los recibos por fecha, con notas que indican para qué fueron y qué tiene que ver el recibo con su negocio. Además de indicar los dólares pagados o recibidos por un servicio o producto.

- Facturas:  Incluya el nombre de la persona u organización que recibe el pago, la clase de servicio y las fechas en  que pagó las facturas.

- Cheques cancelados: Agrupe los cheques con copias de las facturas que pagaron, y con cualquier reintegro aplicable recibido del empleador.

- Papeles legales: Incluya una descripción del asunto bajo juicio, y cuándo ocurrió y qué tiene que ver con el negocio, el crédito o la deducción. Ejemplos incluyen:  

- Decretos de divorcio que incluyen acuerdos de custodia de hijos.

- Papeles de defensa criminal o civil.

- Adquisición de propiedad

- Preparación de impuestos o asesoramiento

- Contratos de préstamo: Incluya una copia del préstamo original, junto con los siguientes:

- Nombres de los prestatarios

- Ubicación de la propiedad

- Institución financiera prestataria

- Cantidad prestada

- Términos (el número de meses permitidos para el pago)

- Hoja de liquidación: Si el préstamo fue prestado por una institución, incluya un estado del final del año tributario que muestra los intereses pagados.

Si el préstamo fue realizado por una institución, incluya una declaración del beneficiario que indica los intereses pagados ese año además de la dirección y número de Seguro Social del beneficiario.

- Libros o diarios: Estos pueden mostrar las fechas y destinos de sus viajes del negocio, además del propósito de negocio y las millas recorridas en las mismas. También podrían mostrar las ganancias o pérdidas de juegos de azar, y las fechas y lugares de los mismos. También podrían mostrar actividades y gastos de buscar trabajo.

- Boletos: Escriba en los boletos de viaje el propósito de negocio del viaje, y agrúpelos con otros recibos del mismo viaje. Boletos de lotería ayudan a comprobar las ganancias o pérdidas.

- Registros médicos y dentales.

- Estados de sus cuentas de ahorros médicos

- Copia de  una guía u otro estado, que muestre las políticas de beneficio y reintegro.

- Declaraciones de los médicos.

- Registros de mejoras de capital por propósitos médicos, inclusive tasación de propiedad antes y después de las mejoras.

- Contrato del cuidado de un asistente médico.

- Documentos de robo o pérdida.

- Informes del seguro que detallan la naturaleza de la pérdida o el daño. Si no tiene seguro, copias de los informes de policía o bomberos sobre el robo, pérdida o accidente.

- Fotos o video que muestra la gravedad de los daños (si los hay).

- Formulario de tasación de un perito calificado que muestra el valor justo del mercado de la propiedad antes y después, además de un estimado de los daños.

- Documentos de empleo: Pueden incluir políticas sobre uniformes o de vestimenta, requisitos de educación continua, estados de reintegro o políticas del W-2.

- Anexos K-1: Estos se usan para declarar la parte correspondiente a cada accionista de los ingresos, pérdidas, deducciones, y créditos cuando una sociedad anónima de tipo S presenta su declaración anual de impuestos.

Cuestionarios

Si el IRS practica su auditoría por correo, también pueden solicitarles que rellenen un cuestionario. Estos son algunos de los formularios más comunes, todos en inglés.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Report foreign bank and financial accounts each April

Posted by Admin Posted on Apr 22 2018

Report Foreign bank and financial accounts each April

 

In a global economy, many people in the United States have foreign financial accounts. The law requires owners of foreign financial accounts to report their accounts to the U.S Treasury Department, even if the accounts don’t generate any taxable income. Account owners need to report accounts by the April due date following the calendar year that they own a foreign financial account.

The U.S. government requires individuals to report foreign financial accounts because foreign financial institutions may not be subject to the same reporting requirements as domestic ones.

Who needs to report

Since 1970, the Bank Secrecy Act requires U.S. persons who own a foreign bank account, brokerage account, mutual fund, unit trust or other financial account to file a Report of Foreign Bank and Financial Accounts (FBAR) if they have:

Financial interest in, signature authority or other authority over one or more accounts in a foreign country, and

The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

A U.S. person is a citizen or resident of the United States or any domestic legal entity such as a partnership, corporation, limited liability company, estate or trust.

A foreign country includes any area outside the United States or outside these U.S. territories and possessions:

Northern Mariana Islands,

District of Columbia,

American Samoa,

Guam,

Puerto Rico,

United States Virgin Islands,

Trust Territories of the Pacific Islands and

Indian lands, as defined in the Indian Gaming Regulatory Act.

How to report

Those required to report their foreign accounts should file the FBAR electronically using the BSA E-Filing System. The FBAR is due April 15. If April 15 falls on a Saturday, Sunday or legal holiday, the FBAR is due the next business day. Taxpayers don’t file the FBAR with individual, business, trust or estate tax returns.

Jointly-owned accounts. If two people jointly keep a foreign financial account or if several people each own a partial interest in an account, then each person has a financial interest in that account. Each person must report the entire value of the account on an FBAR.

Spouses. Spouses don’t need to file separate FBARs if they complete and sign Form 114a, Record of Authorization to Electronically File FBARs, and: 

All reportable financial accounts are jointly owned with the filing spouse, and

The filing spouse reports the jointly-owned accounts on a timely-filed FBAR.

Otherwise, both spouses must file separate FBARs, and each spouse must report the entire value of the jointly-owned accounts.

The e-filing system will not allow both spouses’ signatures on the same electronic form. Spouses need to complete Form 114a to designate which one will file the FBAR. The Form 114a is not submitted with the FBAR, it should be kept with other financial and tax records.

Children. Generally, a child is responsible for filing their own FBAR. If a child can’t file their own FBAR for any reason, such as age, the child's parent or guardian must file it for them. If the child can’t sign their FBAR, a parent or guardian must sign it.

Accounts not reported on FBAR

Individuals don’t report individual retirement accounts and tax-qualified retirement plans described in Internal Revenue Code Sections 401(a), 403(a) or 403(b) on the FBAR. The FBAR instructions list other exceptions.

How to figure the greatest account value of foreign financial accounts

Those filing the FBAR need to reasonably figure and report the greatest value of currency or non-monetary assets in their accounts during the calendar year. They may rely on their periodic account statements if the statements fairly show the greatest account value during the year.

Filers figure the greatest value in the currency of the account, then they convert that value into U.S. dollars using the exchange rate on the last day of the calendar year. They may use another valid exchange rate and give the source of the rate, if there’s no Treasury Financial Management Service rate available. For example, someone would typically value an account located in Japan in yen. They would figure the greatest value of the account in yen and then convert it into U.S. dollars.

The IRS FBAR Reference Guide has other examples of how to report account value. The Financial Crimes Enforcement Network (FinCEN) website has steps for Reporting Maximum Account Value.

Comparison of Form 8938 and FBAR requirements

Certain U.S. taxpayers file Form 8938, Statement of Specified Foreign Financial Assets, as part of their tax return, but these accounts often need to be reported on the FBAR, too. Unlike the FBAR, taxpayers file Form 8938 with their income tax returns.

Filing Form 8938 doesn’t relieve taxpayers of the separate requirement to file the FBAR. Depending on a taxpayer’s situation, they may need to file Form 8938 or the FBAR or both forms, and they may need to report certain foreign accounts on both forms. Taxpayers can find a comparison of Form 8938 and FBAR requirements on IRS.gov.

Extended due date for filing the FBAR

Those who didn’t meet the April 15 due date must file by Oct. 15, the automatically extended due date for the FBAR. They don’t need to request the extension. If they don’t have all their information to file by the extended due date, they should file as complete a return as possible and amend the report when they have more information.

Amending an FBAR

Those who used the BSA E-Filing system to file their original FBAR but later need to change it, must complete a new FBAR and check the “Amend” box in Item 1. They’ll need to give their Prior Report BSA Identifier. Filers receive this identifier by email or secure message from the BSA E-Filing System when they file. For those who don’t know their identifier, they should enter 00000000000000 in the Prior Report BSA Identifier field.

Filing late FBARs

If a person learns that they should have filed an FBAR for a previous year, they should electronically file the late FBAR as soon as possible. The BSA E-Filing System allows them to enter the calendar year they’re reporting, including past years. It also offers them an option to explain the reason for the late filing or show if it’s part of an IRS compliance program.

Penalties for failure to file an FBAR

Individuals who don’t file an FBAR when required may be subject to civil and criminal penalties. The largest civil penalty for a willful violation of the FBAR requirements is the greater of $124,588 or 50 percent of the balance in the account at the time of the violation. Non-willful violations can result in a penalty as high as $12,459 for each violation. Criminal violations of FBAR rules can result in a fine and/or five years in prison. The government adjusts the penalty amounts annually for inflation. The penalties section of the IRS FBAR Reference Guide has more details about penalties.

The IRS will not penalize those individuals who properly report foreign financial account on a late-filed FBAR, and the IRS finds they have reasonable cause for late filing.

Recordkeeping

Generally, individuals filing an FBAR should keep records of accounts that need reporting for five years from the due date of the report. They should keep the:

Name on each account,

Account number or other designation,

Name and address of the foreign bank or other person who keeps the account,

Type of account, and

Greatest value of each account during the reporting period.

They should also keep copies of their filed FBARs. However, officers or employees who file an FBAR to report control over an employer’s foreign financial account don’t need to personally keep records on their employer’s accounts.

FBAR help

For help completing the FBAR, call 866-270-0733 (toll-free inside the U.S.) or 313-234-6146 (not toll-free, for callers outside the U.S.) Monday through Friday, 8 a.m. to 4:30 p.m. Eastern Time. Taxpayers can also email questions to FBARquestions@irs.gov.

For help with electronic filing, email questions to BSAEFilingHelp@fincen.gov or call the BSA E-Filing Help Desk at 866-346-9478. It’s open Monday through Friday from 8 a.m. to 6 p.m. Eastern Time.

For answers to questions about BSA regulations or to discuss acceptable alternatives to electronic filing, contact FinCEN’s Regulatory Helpline at 800-949-2732. Callers from outside the United States can contact the helpline at 703-905-3975.

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

NO KIDDING: CHILD CREDIT TO GET EVEN MORE VALUABLE

Posted by Admin Posted on Apr 22 2018

CHILD CREDIT

 

The child credit has long been a valuable tax break. But, with the passage of the Tax Cuts and Jobs Act (TCJA) late last year, it’s now even better — at least for a while. Here are some details that every family should know.

Amount and limitations

For the 2017 tax year, the child credit may help reduce federal income tax liability dollar-for-dollar by up to $1,000 for each qualifying child under age 17. So if you haven’t yet filed your personal return or you might consider amending it, bear this in mind.

The credit is, however, subject to income limitations that may reduce or even eliminate eligibility for it depending on your filing status and modified adjusted gross income (MAGI). For 2017, the limits are $110,000 for married couples filing jointly, and $55,000 for married taxpayers filing separately. (Singles, heads of households, and qualifying widows and widowers are limited to $75,000 in MAGI.)

Exciting changes

Now the good news: Under the TCJA, the credit will double to $2,000 per child under age 17 starting in 2018. The maximum amount refundable (because a taxpayer’s credits exceed his or her tax liability) will be limited to $1,400 per child.

The TCJA also makes the child credit available to more families than in the past. That’s because, beginning in 2018, the credit won’t begin to phase out until MAGI exceeds $400,000 for married couples or $200,000 for all other filers, compared with the 2017 phaseouts of $110,000 and $75,000. The phaseout thresholds won’t be indexed for inflation, though, meaning the credit will lose value over time.

In addition, the TCJA includes (starting in 2018) a $500 nonrefundable credit for qualifying dependents other than qualifying children (for example, a taxpayer’s 17-year-old child, parent, sibling, niece or nephew, or aunt or uncle). Importantly, these provisions expire after 2025.

Qualifications to consider

Along with the income limitations, there are other qualification requirements for claiming the child credit. As you might have noticed, a qualifying child must be under the age of 17 at the end of the tax year in question. But the child also must be a U.S. citizen, national or resident alien, and a dependent claimed on the parents’ federal tax return who’s their own legal son, daughter, stepchild, foster child or adoptee. (A qualifying child may also include a grandchild, niece or nephew.)

As a child gets older, other circumstances may affect a family’s ability to claim the credit. For instance, the child needs to have lived with his or her parents for more than half of the tax year.

Powerful tool

Tax credits can serve as powerful tools to help you manage your tax liability. So if you may qualify for the child credit in 2017, or in years ahead, please contact our firm to discuss the full details of how to go about claiming it 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

THE NEW DEAL ON EMPLOYEE MEALS (AND ENTERTAINMENT)

Posted by Admin Posted on Apr 22 2018

THE NEW DEAL ON EMPLOYEE MEALS (AND ENTERTAINMENT)

 

Years and years ago, the notion of having a company cafeteria or regularly catered meals was generally feasible for only the biggest of businesses. But, more recently, employers providing meals to employees has become somewhat common for many midsize to large companies. A recent tax law change, however, may curtail the practice.

As you’re likely aware, in late December 2017 Congress passed and the President signed the Tax Cuts and Jobs Act. The law will phase in a wide variety of changes to the way businesses calculate their tax liabilities — some beneficial, some detrimental. Revisions to the treatment of employee meals and entertainment expenses fall in the latter category.

Before the Tax Cuts and Jobs Act, taxpayers generally could deduct 50% of expenses for business-related meals and entertainment. But meals provided to an employee for the convenience of the employer on the employer’s business premises were 100% deductible by the employer and tax-free to the recipient employee. Various other employer-provided fringe benefits were also deductible by the employer and tax-free to the recipient employee.

Under the new law, for amounts paid or incurred after December 31, 2017, deductions for business-related entertainment expenses are disallowed. Meal expenses incurred while traveling on business are still 50% deductible, but the 50% disallowance rule now also applies to meals provided via an on-premises cafeteria or otherwise on the employer’s premises for the convenience of the employer. After 2025, the cost of meals provided through an on-premises cafeteria or otherwise on the employer’s premises will be completely nondeductible.

If your business regularly provides meals to employees, let us assist you in anticipating the changing tax impact.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: Thomson Reuters

Tax Time Guide: Taxpayers who owe taxes have multiple options

Posted by Admin Posted on Apr 05 2018

Tax Time Guide: Taxpayers who owe taxes have multiple options

 

The Internal Revenue Service today reminded taxpayers that there are several easy options to pay taxes electronically. For those unable to pay on time, the IRS offers a variety of ways to take care of a tax liability.

This is the fifth in a series of nine IRS news releases called the Tax Time Guide, designed to help taxpayers navigate common tax issues.

This year’s tax-filing deadline is April 17. Taxpayers who owe taxes can choose among the following quick and easy electronic payment options:

Electronic Funds Withdrawal (EFW). This option allows taxpayers to e-file and pay from their bank account when using tax preparation software or a tax professional. EFW is only available when electronically filing a tax return.
 

Direct Pay. Available at IRS.gov/directpay, this free online tool allows taxpayers to securely pay their taxes directly from checking or savings accounts without any fees or preregistration. Taxpayers can schedule payments up to 30 days in advance. Those using the tool will receive immediate confirmation when they submit their payment. Taxpayers can opt in to receive email notifications about their payments each time they use Direct Pay.
 

Credit or Debit Card. Pay online, by phone or with a mobile device through any of the authorized debit and credit card processors. The processor charges a fee. The IRS doesn’t receive or charge any fees for payments made with a debit or credit card. Go to https://www.irs.gov/payments for authorized card processors and phone numbers.
 

IRS2Go. The IRS2Go mobile app is free and offers taxpayers the option to make a payment with Direct Pay for free or by debit or credit card through an approved payment processor for a fee. Download IRS2Go free from Google Play, the Apple App Store or the Amazon App Store.
 

Electronic Federal Tax Payment System. This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll and for more information, call 800-555-4477, or visit eftps.gov. Both business and individual taxpayers can opt in to receive email notifications about their payments.
 

Cash. Taxpayers paying with cash can use the PayNearMe option. Payments are limited to $1,000 per day, and a $3.99 fee applies to each payment. The IRS urges taxpayers choosing this option to start early, because PayNearMe involves a four-step process. Initiating a payment well ahead of the tax deadline will help taxpayers avoid interest and penalty charges. The IRS offers this option in cooperation with OfficialPayments.com/fed and participating 7-Eleven stores in 34 states. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.
 

Same-Day Wire Payments. Taxpayers may be able to do a same-day wire transfer from their financial institution. Contact the financial institution for availability, cost and cut-off times. Download and complete the Same-Day Taxpayer Worksheetand take it to the desired financial institution. If paying for more than one tax form or period, complete a separate worksheet for each payment.    

Taxpayers must file their 2017 tax returns by April 17, 2018, or request a six-month extension. Extensions can be requested using Free File, by filing Form 4868 or by paying all or part of  the estimated income tax due and indicating that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS) or a credit or debit card. Taxpayers do not have to file a separate extension form and they receive a confirmation number for their records.

Taxpayers who choose to pay by check or money order should make the payment out to the “United States Treasury.” To help ensure that the payment gets credited promptly, also enclose a Form 1040-V payment voucher. Also, print on the front of the check or money order: “2017 Form 1040”; name; address; daytime phone number; and Social Security number.

Taxpayers can go to IRS.gov/account to securely access information about their federal tax account. They can view the amount they owe, pay online or set up an online payment agreement; access their tax records online; review the past 18 months of payment history; and view key tax return information for the current year as filed. Visit IRS.gov/secureaccess to review the required identity authentication process.

Taxpayers who owe, but cannot pay the balance in full, do have options. Often, they qualify for one of several relief programs, including:

Payment Plans, Installment Agreements -- Most individuals can set up a payment plan, including an installment agreement, with the IRS using the Online Payment Agreement application in a matter of minutes. If you owe $50,000 or less in combined tax, penalties and interest you may qualify for a long-term payment plan of up to 72 months. If you owe less than $100,000 in combined tax, penalties and interest, you may qualify for a short-term payment plan of up to 120 days. With the Online Payment Agreement, no paperwork is required, there is no need to call, write or visit the IRS. Alternatively, for a long-term payment plan, taxpayers can request an installment agreement by filing Form 9465. Download the form from IRS.gov and mail it along with a tax return, IRS bill or notice.

Offer in Compromise -- Some taxpayers may qualify for an offer in compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. To help determine eligibility, individual taxpayers may use the Offer in Compromise Pre-Qualifier, a free online tool available on IRS.gov.

Taxpayers can find answers to tax questions, tax forms and instructions and easy-to-use tools online at IRS.gov 24 hours a day, seven days a week. No appointments needed and no waiting on hold.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

Tax Time Guide: Guard personal, financial, tax information thoroughly

Posted by Admin Posted on Apr 04 2018

Tax Time Guide: Guard personal, financial, tax information thoroughly

 

The Internal Revenue Service today urged taxpayers to remain vigilant in protecting their personal and tax information. Scams and schemes using the IRS as a lure can take on many variations, so practicing personal information security is vital.

The IRS also reminds taxpayers to help protect themselves against identity theft by reviewing safety tips offered by the Security Summit, a collaborative effort between the IRS, states and the private-sector tax community.

This is the fourth in a series of nine IRS news releases called the Tax Time Guide, designed to help taxpayers navigate common tax issues. This year’s tax-filing deadline is April 17.

Protect Personal Information

Treat personal information like cash – don’t hand it out to just anyone. Social Security numbers, credit card numbers, bank and even utility account numbers can be used to help steal a person’s money or open new accounts. Every time a taxpayer receives a request for personal information, they should think about whether the request is truly necessary. Scammers will do everything they can to appear trustworthy and legitimate.

Avoid Phishing Scams

The easiest way for criminals to steal sensitive data is simply to ask for it. Learn to recognize phishing emails, calls or texts that pose as familiar organizations such as banks, credit card companies or even the IRS. These ruses generally urge taxpayers to give up sensitive data such as passwords, Social Security numbers and bank account or credit card numbers. They are called phishing scams because they attempt to lure the receiver into taking the bait.

Also, don’t assume internet advertisements, pop-up ads or emails are from reputable companies. If an ad or offer looks too good to be true, take a moment to check out the company behind it. Type the company or product name into a search engine with terms like “review,” “complaint” or “scam.”

The IRS urges people to never download “security” software from a pop-up ad. A pervasive ploy is a pop-up ad that indicates it has detected a virus on the computer. Don’t fall for it. The download most likely will install some type of malware on the victim’s computer. Reputable security software companies do not advertise in this manner.

Safeguard Personal Data in Daily, Online Activity

Taxpayers should safeguard their Social Security number. Provide it only when necessary. Occasionally businesses will request it when it is not essential.

Provide personal information over encrypted websites only. Shopping or banking online should be done only on sites that use encryption. People should look for “https” at the beginning of a web address (the “s” stands for secure) and be sure “https” is on every page of the site.

Use Strong Passwords

The longer the password, the tougher it is to crack. Use at least 10 characters; 12 is ideal for most home users. Mix letters, numbers and special characters. Try to be unpredictable – don’t use names, birthdates or common words. Don’t use the same password for many accounts and don’t share them on the phone, in texts or by email. Legitimate companies will not send messages asking for passwords. Receiving such a message probably means it’s a scam. Keep passwords in a secure place.

Set password and encryption protections for wireless networks. If a home or business Wi-Fi is unsecured, it allows any computer within range to access the wireless network and potentially steal information from connected devices.

Use Security Software

A good broad-based anti-malware program should provide protection from viruses, Trojans, spyware and adware. The IRS urges people, especially tax professionals, to use an anti-malware program and always keep it up to date.

Set security software to update automatically so it can be upgraded as threats emerge. Also, make sure the security software is “on” at all times. Invest in encryption software to prevent unauthorized access by hackers or identity thieves. Educate children about the threats of opening suspicious web pages, emails or documents.

Back Up Files

No system is completely secure. Copy important files, including federal and state tax returns, onto a removable disc or a back-up drive, and store it in a safe place. Save tax returns and records. Federal and state tax returns are important financial documents. People need them from time to time for home mortgages or college financial aid applications. These steps also can help taxpayers more easily prepare next year’s tax return. If storing sensitive tax and financial records on a personal computer, use a file encryption program to add an additional layer of security.

The IRS, state tax agencies and the tax industry recently launched a public awareness campaign called Taxes. Security. Together. It provides additional safety tips for taxpayers. Also, see Publication 4524, Security Awareness for Taxpayers.

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov 24 hours a day, seven days a week. No appointments required and no waiting on hold.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

Tax Time Guide: Request online extension, get 6 more months to file

Posted by Admin Posted on Apr 02 2018

Tax Time Guide: Request online extension, get 6 more months to file

 

The Internal Revenue Service reminds taxpayers who may have trouble meeting the April 17 tax filing deadline that Free File provides an easy, online option to get more time. Taxpayers submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, will automatically be granted a six-month filing extension. By using Free File on IRS.gov, the process is free, simple and fast.

This is the seventh in a series of nine IRS news releases called the Tax Time Guide, designed to help taxpayers navigate common tax issues.

The IRS offers the extra time to file, automatically, to all taxpayers requesting it. A filing extension allows taxpayers until Oct. 15 to gather, prepare and file their taxes with the IRS. However, it does not extend the time to pay any tax due.

Applying for an extension requires answering a few questions on Form 4868. Part I of the form asks personal information such as name, address and Social Security number. Part II is tax related and asks about estimated tax liability, payments and residency. By going through Free File on IRS.gov, taxpayers can make the request electronically for free. Besides Free File, taxpayers can request an extension through a paid tax preparer, tax-preparation software or by mailing in a paper Form 4868. Tax forms can be downloaded from IRS.gov/forms.

Other fast, free and easy ways to get an extension include using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card. There is no need to file a separate Form 4868 extension request when making an electronic payment and indicating it is for an extension. The IRS will automatically count it as an extension.

Direct Pay is available online and on the IRS2Go app. It’s free, does not require preregistration and gives instant confirmation when taxpayers submit a payment. It also provides the option of scheduling a payment up to 30 days in advance. Taxpayers using a credit or debit card can pay online, by phone or with the IRS2Go app. The IRS does not charge any fees for this service but the card processor does.

The IRS emphasizes that a request for an extension provides extra time to file a tax return, but not extra time to pay any taxes owed. Payments are still due by the original deadline. Taxpayers should file even if they can’t pay the full amount. By filing either a regular return or requesting an extension by the April 17 filing deadline, they will avoid the late-filing penalty, which can be 10 times as costly as the penalty for not paying.

Taxpayers who pay as much as they can by the due date reduce the overall amount subject to penalty and interest charges. The interest rate is currently five percent per year, compounded daily. The late-filing penalty is typically five percent per month and the late-payment penalty is normally 0.5 percent per month.

Other options to pay such as getting a loan or paying by credit card may help resolve a tax debt. Most people can set up an installment agreement with the IRS using the Online Payment Agreement tool on IRS.gov.

Other taxpayers who get more time to file without having to ask for extensions include:

U.S. citizens and resident aliens living and working abroad have until June 15 to file their tax returns. However, interest is still charged on any tax payments made after April 17.

Disaster victims, including those in American Samoa, Puerto Rico and the Virgin Islands, have until June 29, 2018 to file and pay. Similarly, taxpayers in parts of California have until April 30, 2018 to file and pay. For information about this and other disaster relief, see the disaster relief page on IRS.gov.

Members of the military on duty outside the United States and Puerto Rico receive an automatic two-month extension to file. Those serving in combat zones have 180 days after they leave the combat zone to file tax returns and pay any taxes due. Details are available in the Armed Forces’ Tax Guide Publication 3.

In addition to having payment options, taxpayers who find that they can’t pay what they owe should know that the IRS will work with them. Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov anytime. No appointments needed and no waiting on hold.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

Tax Time Guide: Where's my refund?

Posted by Admin Posted on Mar 30 2018

Tax Time Guide: Where's my refund?

 

The Internal Revenue Service today said that most tax refunds are issued in less than 21 days, although some may take longer. As of March 16, the IRS had already issued more than 61 million refunds averaging $2,960. Taxpayers can check the status of their refund online at IRS.gov by visiting the “Where’s My Refund?” tool or through the IRS2Go mobile app.

This is the last in a series of nine IRS tips called the Tax Time Guide. The guide is designed to help taxpayers as they near the April 17 tax filing deadline.

There are many factors that can affect the timing of a tax refund. Some tax returns take longer to process because the return includes errors or is incomplete, is affected by identity theft or fraud or, in general, needs further review. The IRS will contact taxpayers by mail if more information is needed to process a return. Once a refund has been approved the time it takes a bank to post the refund to an account can also have an impact. If requesting a paper refund check, taxpayers should also take into consideration the time it takes for it to arrive in the mail.

Taxpayers can use “Where’s My Refund?” to start checking on the status of their return within 24 hours after the IRS receives an e-filed return or four weeks after the taxpayers mailed a paper return. The tool has a tracker that displays progress through three phases: (1) Return Received; (2) Refund Approved; and (3) Refund Sent.

Those who use “Where’s My Refund?” on IRS.gov or the IRS2Go app must have information from their current tax return to access their information.

The IRS updates “Where’s My Refund?” once a day, usually overnight. Rather than calling the IRS and waiting on hold or ordering a tax transcript, taxpayers are encouraged to visit the website and use the tool. The information available online is the same information available to IRS telephone assistors.

Some taxpayers believe they can learn about the status of their refund by ordering a tax transcript. The IRS notes that the information on a transcript does not necessarily reflect the amount or timing of a refund. While taxpayers can use a transcript for help with tax preparation and to validate past income and tax filing status for certain loan applications, they should use the “Where’s My Refund?” tool to check the status of their refund.

The use of e-file and direct deposit continue to be the fastest and safest way to file an accurate return and receive a tax refund. More than four out of five tax returns are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit.

The IRS Free File program offers free brand-name software to those with incomes of $66,000 or less. Seventy percent of the nation’s taxpayers are eligible for IRS Free File. All taxpayers, regardless of income, can use Free File fillable forms, which provide electronic versions of IRS paper forms to complete and file. Both options are available only through IRS.gov.

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov anytime. No appointment required and no waiting on hold.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

IRS reminds taxpayers to report virtual currency transactions

Posted by Admin Posted on Mar 28 2018

IRS reminds taxpayers to report virtual currency transactions

 

The Internal Revenue Service today reminded taxpayers that income from virtual currency transactions is reportable on their income tax returns.

Virtual currency transactions are taxable by law just like transactions in any other property. The IRS has issued guidance in IRS Notice 2014-21 for use by taxpayers and their return preparers that addresses transactions in virtual currency, also known as digital currency.

Taxpayers who do not properly report the income tax consequences of virtual currency transactions can be audited for those transactions and, when appropriate, can be liable for penalties and interest.

In more extreme situations, taxpayers could be subject to criminal prosecution for failing to properly report the income tax consequences of virtual currency transactions. Criminal charges could include tax evasion and filing a false tax return. Anyone convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Anyone convicted of filing a false return is subject to a prison term of up to three years and a fine of up to $250,000.

Virtual currency, as generally defined, is a digital representation of value that functions in the same manner as a country’s traditional currency. There are currently more than 1,500 known virtual currencies. Because transactions in virtual currencies can be difficult to trace and have an inherently pseudo-anonymous aspect, some taxpayers may be tempted to hide taxable income from the IRS.

Notice 2014-21 provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that:

A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.

Payments using virtual currency made to independent contractors and other service providers are taxable, and self-employment tax rules generally apply.  Normally, payers must issue Form 1099-MISC.

Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2 and are subject to federal income tax withholding and payroll taxes.

Certain third parties who settle payments made in virtual currency on behalf of merchants that accept virtual currency from their customers are required to report payments to those merchants on Form 1099-K, Payment Card and Third Party Network Transactions.

The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

IRS encourages ‘Paycheck Checkup’ for taxpayers to check their withholding

Posted by Admin Posted on Mar 28 2018

IRS encourages ‘Paycheck Checkup’ for taxpayers to check their withholding

 

Launching a special week of activities, the Internal Revenue Service today continued its effort to encourage taxpayers to do a “paycheck checkup” to make sure they have the right amount of tax taken out of their paychecks for their personal situation.

To help taxpayers understand the implications of the Tax Cuts and Jobs Act, the IRS unveiled several new features to help people navigate the issues affecting withholding in their paychecks. The effort includes a new series of plain language Tax Tips, a YouTube video series and other special efforts to help people understand the importance of checking their withholding as soon as possible.

“The IRS is taking special steps to help taxpayers understand these tax law changes,” said Acting IRS Commissioner David Kautter. “We encourage people to do a paycheck checkup to help make sure they’re having the right amount of tax withheld for their unique personal situation. To help with this, the IRS has added and updated a variety of tools and information to help taxpayers.”

The new tax law could affect how much tax someone should have their employer withhold from their paycheck. To help with this, the IRS urged taxpayers to visit the Withholding Calculator on IRS.gov. The Withholding Calculator can help prevent employees from having too little or too much tax withheld from their paycheck. Having too little tax withheld can mean an unexpected tax bill or potentially a penalty at tax time in 2019. And with the average refund topping $2,800, some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.

Taxpayers can use the Withholding Calculator to estimate their 2018 income tax. The Withholding Calculator compares that estimate to the taxpayer’s current tax withholding and can help them decide if they need to change their withholding with their employer.  When using the calculator, it’s helpful to have a completed 2017 tax return available. 

Taxpayers who need to adjust their withholding will need to submit a new Form W-4, Employee’s Withholding Allowance Certificate, to their employer. If an employee needs to adjust their withholding, doing so as quickly as possible means there’s more time for tax withholding to take place evenly during the rest of the year. But waiting until later in the year means there are fewer pay periods to make the tax changes – which could have a bigger impact on each paycheck.

Information on “Paycheck Checkup” Available in Several Ways

The IRS is launching a sweeping effort to advise taxpayers about the importance of doing a “paycheck checkup” as soon as possible. In addition to updating the Withholding Calculator and issuing a new Form W-4, the agency is collaborating with tax professionals, partner organizations, employers, community groups and the tax and payroll industries to educate employers and employees about the importance of checking their withholding.

The IRS is also taking additional steps this week:

Launching a series of Tax Reform Tax Tips, an addition to the IRS’s Tax Tips email-subscription program. These tips will begin this week and continue through 2018. Written in plain language, they can help taxpayers learn about major tax reform topics in understandable terms. The special series begins this week with daily tips covering withholding topics. The series will highlight other law changes in the weeks and months ahead, and taxpayers can subscribe on IRS.gov.

Issuing a special news release series. During the series, the IRS will focus on some of those groups most likely to be affected by the withholding changes and how the new law may affect their tax situation.

Sharing new YouTube videos to walk taxpayers through what they need to know about withholding, the Withholding Calculator and filling out a new Form W-4, if needed.

Using social media to spread the word about #PaycheckCheckup.

Who Needs a Paycheck Checkup

The IRS always recommends employees check their withholding at the beginning of each year or when their personal circumstances change to make sure they’re having the right amount of tax withheld from their paychecks. With the new tax law changes, it’s especially important for certain people to use the Withholding Calculator on IRS.gov to make sure they have the right amount of withholding.

The IRS always recommends employees check their withholding at the beginning of each year or when their personal circumstances change to make sure they’re having the right amount of tax withheld from their paychecks. With the new tax law changes, it’s especially important for certain people to use the Withholding Calculator on IRS.gov to make sure they have the right amount of withholding.

Among the groups who should check their withholding are:

Two-income families.

People working two or more jobs or who only work for part of the year.

People with children who claim credits such as the Child Tax Credit.

People with older dependents, including children age 17 or older.

People who itemized deductions in 2017.

People with high incomes and more complex tax returns.

People with large tax refunds or large tax bills for 2017.

The law increased the standard deduction, removed personal exemptions, increased the child tax credit, limited or discontinued certain deductions and changed the tax rates and brackets.

When personal circumstances change that reduce withholding allowances they are entitled to claim, including divorce, starting a second job, or a child no longer being a dependent, an employee has 10 days to submit a new Form W-4 to their employer claiming the proper number of withholding allowances.

After Using the Withholding Calculator, Change Withholding by Submitting New Form W-4

Taxpayers can use the results from the Withholding Calculator to determine if they should complete a new Form W-4, Employee’s Withholding Allowance Certificate, and, if so, what information to put on it.

If changes to withholding should be made, the Withholding Calculator gives employees the information they need to fill out a new Form W-4. Employees will submit the completed Form W-4 to their employer.

For more details on withholding issues, taxpayers are encouraged to visit IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

2018 ‘Dirty Dozen’ list of tax scams

Posted by Admin Posted on Mar 23 2018

2018 ‘Dirty Dozen’ list of tax scams

 

The Internal Revenue Service today concluded its annual "Dirty Dozen" list of tax scams with a warning to taxpayers to remain vigilant about these aggressive and evolving schemes throughout the year.

This year's “Dirty Dozen” list highlights a wide variety of schemes that taxpayers may encounter throughout the year, many of which peak during tax-filing season. The schemes can run the gamut from simple refund inflation scams to technical tax shelter deals. A common theme throughout these: Scams put taxpayers at risk.

Taxpayers need to guard against ploys to steal their personal information. And they should be wary of shady promoters trying to scam them out of money or talk them into engaging in questionable tax schemes.

The IRS reminds people that participating in illegal schemes can lead to significant fines and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice to shut down scams and prosecute the criminals behind them.

Taxpayers should always keep in mind that they are legally responsible for what is on their tax return even if it is prepared by someone else. Consumers can help protect themselves by choosing a reputable tax preparer. For more see the Choosing a Tax Professional page.

2018 "Dirty Dozen" scams:

Phishing: Taxpayers should be alert to potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill or tax refund. Don’t click on one claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information. 

Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. 

Identity Theft: Taxpayers should be alert to tactics aimed at stealing their identities, not just during the tax filing season, but all year long. The IRS, working in the Security Summit partnership with the states and the tax industry, has made major improvements in detecting tax return related identity theft during the last two years. But the agency reminds taxpayers that they can help in preventing this crime. The IRS continues to aggressively pursue criminals that file fraudulent tax returns using someone else’s Social Security number.

Return Preparer Fraud: Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest, high-quality service. There are some dishonest preparers who operate each filing season to scam clients, perpetuating refund fraud, identity theft and other scams that hurt taxpayers. 

Fake Charities: Groups masquerading as charitable organizations solicit donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally-known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. 

Inflated Refund Claims: Taxpayers should take note of anyone promising inflated tax refunds. Those preparers who ask clients to sign a blank return, promise a big refund before looking at taxpayer records or charge fees based on a percentage of the refund are probably up to no good. To find victims, fraudsters may use flyers, phony storefronts or word of mouth via community groups where trust is high. 

Excessive Claims for Business Credits: Avoid improperly claiming the fuel tax credit, a tax benefit generally not available to most taxpayers. The credit is usually limited to off-highway business use, including use in farming. Taxpayers should also avoid misuse of the research credit. Improper claims often involve failures to participate in or substantiate qualified research activities or satisfy the requirements related to qualified research expenses. 

Falsely Padding Deductions on Returns: Taxpayers should avoid the temptation to falsely inflate deductions or expenses on their tax returns to pay less than what they owe or potentially receive larger refunds. Think twice before overstating deductions, such as charitable contributions and business expenses, or improperly claiming credits, such as the Earned Income Tax Credit or Child Tax Credit.

Falsifying Income to Claim Credits: Con artists may convince unsuspecting taxpayers to invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. Taxpayers should file the most accurate tax return possible because they are legally responsible for what is on their return. This scam can lead to taxpayers facing large bills to pay back taxes, interest and penalties.

Frivolous Tax Arguments: Frivolous tax arguments may be used to avoid paying tax. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims about the legality of paying taxes despite being repeatedly thrown out in court. The penalty for filing a frivolous tax return is $5,000. 

Abusive Tax Shelters: Abusive tax structures are sometimes used to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. 

Offshore Tax Avoidance: Successful enforcement actions against offshore cheating show it’s a bad bet to hide money and income offshore. People involved in offshore tax avoidance are best served by coming in voluntarily and getting caught up on their tax-filing responsibilities. 

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

COMBINED BUSINESS AND VACATION TRAVEL

Posted by Admin Posted on Mar 22 2018

COMBINED BUSINESS AND VACATION TRAVEL

 

If you go on a business trip within the U.S. and add on some vacation days, you know you can deduct some of your expenses. The question is how much.

First, let’s cover just the pure transportation expenses. Transportation costs to and from the scene of your business activity are 100% deductible as long as the primary reason for the trip is business rather than pleasure. On the other hand, if vacation is the primary reason for your travel, then generally none of your transportation expenses are deductible. Transportation costs include travel to and from your departure airport, the airfare itself, baggage fees and tips, cabs, and so forth. Costs for rail travel or driving your personal car also fit into this category.

The number of days spent on business vs. pleasure is the key factor in determining if the primary reason for domestic travel is business. Your travel days count as business days, as do weekends and holidays if they fall between days devoted to business, and it would be impractical to return home. Standby days (days when your physical presence is required) also count as business days, even if you are not called upon to work on those days. Any other day principally devoted to business activities during normal business hours is also counted as a business day, and so are days when you intended to work, but could not due to reasons beyond your control (local transportation difficulties, power failure, etc.).

You should be able to claim business was the primary reason for a domestic trip whenever the business days exceed the personal days. Be sure to accumulate proof and keep it with your tax records. For example, if your trip is made to attend client meetings, log everything on your daily planner and copy the pages for your tax file. If you attend a convention or training seminar, keep the program and take some notes to show you attended the sessions.

Once at the destination, your out-of-pocket expenses for business days are fully deductible. Out-of-pocket expenses include lodging, hotel tips, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. Expenses for personal days are nondeductible.

 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: Thomson Reuters

BUSINESS OWNERS: BRUSH UP ON BONUS DEPRECIATION

Posted by Admin Posted on Mar 21 2018

BUSINESS OWNERS: BRUSH UP ON BONUS DEPRECIATION

 

Every company needs to upgrade its assets occasionally, whether desks and chairs or a huge piece of complex machinery. But before you go shopping this year, be sure to brush up on the enhanced bonus depreciation tax breaks created under the Tax Cuts and Jobs Act (TCJA) passed late last year.

Old law

Qualified new — not used — assets that your business placed in service before September 28, 2017, fall under pre-TCJA law. For these items, you can claim a 50% first-year bonus depreciation deduction. This tax break is available for the cost of new computer systems, purchased software, vehicles, machinery, equipment, office furniture and so forth.

In addition, 50% bonus depreciation can be claimed for qualified improvement property, which means any qualified improvement to the interior portion of a nonresidential building if the improvement is placed in service after the date the building is placed in service. But qualified improvement costs don’t include expenditures for the enlargement of a building, an elevator or escalator, or the internal structural framework of a building.

New law

Bonus depreciation improves significantly under the TCJA. For qualified property placed in service from September 28, 2017, through December 31, 2022 (or by December 31, 2023, for certain property with longer production periods), the first-year bonus depreciation percentage is increased to 100%. In addition, the 100% deduction is allowed for both new and used qualifying property.

The new law also allows 100% bonus depreciation for qualified film, television and live theatrical productions placed in service on or after September 28, 2017. Productions are considered placed in service at the time of the initial release, broadcast or live commercial performance.

In later years, bonus depreciation is scheduled to be reduced to 80% for property placed in service in 2023, 60% for property placed in service in 2024, 40% for property placed in service in 2025 and 20% for property placed in service in 2026.

Important: For certain property with longer production periods, the preceding reductions are delayed by one year. For example, 80% bonus depreciation will apply to long-production-period property placed in service in 2024.

More details

If bonus depreciation isn’t available to your company, a similar tax break — the Section 179 deduction — may be able to provide comparable benefits. Please contact our firm for more details on how either might help your business.

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

HELP PREVENT TAX IDENTITY THEFT BY FILING EARLY

Posted by Admin Posted on Mar 20 2018

HELP PREVENT TAX IDENTITY THEFT BY FILING EARLY

 

If you’re like many Americans, you might not start thinking about filing your tax return until close to this year’s April 17 deadline. You might even want to file for an extension so you don’t have to send your return to the IRS until October 15.

But there’s another date you should keep in mind: the day the IRS begins accepting 2017 returns (usually in late January). Filing as close to this date as possible could protect you from tax identity theft.

Why it helps

In an increasingly common scam, thieves use victims’ personal information to file fraudulent tax returns electronically and claim bogus refunds. This is usually done early in the tax filing season. When the real taxpayers file, they’re notified that they’re attempting to file duplicate returns.

A victim typically discovers the fraud after he or she files a tax return and is informed by the IRS that the return has been rejected because one with the same Social Security number has already been filed for the same tax year. The IRS then must determine who the legitimate taxpayer is.

Tax identity theft can cause major complications to straighten out and significantly delay legitimate refunds. But if you file first, it will be the tax return filed by a potential thief that will be rejected — not yours.

What to look for

Of course, in order to file your tax return, you’ll need to have your W-2s and 1099s. So another key date to be aware of is January 31 — the deadline for employers to issue 2017 W-2s to employees and, generally, for businesses to issue 1099s to recipients of any 2017 interest, dividend or reportable miscellaneous income payments. So be sure to keep an eye on your mailbox or your employer’s internal website.

Additional bonus

An additional bonus: If you’ll be getting a refund, filing early will generally enable you to receive and enjoy that money sooner. (Bear in mind, however, that a law requires the IRS to hold until mid-February refunds on returns claiming the earned income tax credit or additional child tax credit.) Let us know if you have questions about tax identity theft or would like help filing your 2017 return early.

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

DYNASTY TRUSTS ARE MORE VALUABLE THAN EVER

Posted by Admin Posted on Mar 19 2018

DYNASTY TRUSTS ARE MORE VALUABLE THAN EVER

 

The Tax Cuts and Jobs Act (TCJA), signed into law this past December, affects more than just income taxes. It’s brought great changes to estate planning and, in doing so, bolstered the potential value of dynasty trusts.

Exemption changes

Let’s start with the TCJA. It doesn’t repeal the estate tax, as had been discussed before its passage. The tax was retained in the final version of the law. For the estates of persons dying, and gifts made, after December 31, 2017, and before January 1, 2026, the gift and estate tax exemption and the generation-skipping transfer tax exemption amounts have been increased to an inflation-adjusted $10 million, or $20 million for married couples (expected to be $11.2 million and $22.4 million, respectively, for 2018).

Absent further congressional action, the exemptions will revert to their 2017 levels (adjusted for inflation) beginning January 1, 2026. The marginal tax rate for all three taxes remains at 40%.

GST avoidance

Now let’s turn to dynasty trusts. These irrevocable arrangements allow substantial amounts of wealth to grow free of federal gift, estate and generation-skipping transfer (GST) taxes, largely because of their lengthy terms. The specific longevity of a dynasty trust depends on the law of the state in which it’s established. Some states allow trusts to last for hundreds of years or even in perpetuity.

Where the TCJA and dynasty trusts come together is in the potential to avoid the GST tax. It levies an additional 40% tax on transfers to grandchildren or others that skip a generation, potentially consuming substantial amounts of wealth. The key to avoiding the tax is to leverage your GST tax exemption, which, under the TCJA, will be higher than ever starting in 2018.

Assuming you haven’t yet used any of your gift and estate tax exemption, you can transfer $10 million to a properly structured dynasty trust. There’s no gift tax on the transaction because it’s within your unused exemption amount. And the funds, plus future appreciation, are removed from your taxable estate.

Most important, by allocating your GST tax exemption to your trust contributions, you ensure that any future distributions or other transfers of trust assets to your grandchildren or subsequent generations will avoid GST taxes. This is true even if the value of the assets grows well beyond the exemption amount or the exemption is reduced in the future.

Best interests

Naturally, setting up a dynasty trust is neither simple nor quick. You’ll need to choose a structure, allocate assets (such as securities, real estate, life insurance policies and business interests), and name a trustee. Our firm can work with your attorney to maximize the tax benefits and help ensure the trust is in the best interests of your estate.

Sidebar: Nontax reasons to set up a dynasty trust

Regardless of the tax implications, there are valid nontax reasons to set up a dynasty trust. First, you can designate the beneficiaries of the trust assets spanning multiple generations. Typically, you might provide for the assets to follow a line of descendants, such as children, grandchildren, great-grandchildren, etc. You can also impose certain restrictions, such as limiting access to funds until a beneficiary earns a college degree.

Second, by placing assets in a properly structured trust, those assets can be protected from the reach of a beneficiary’s creditors, including claims based on divorce, a failed business or traffic accidents.

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

HIGHLIGHTS OF THE NEW TAX REFORM LAW

Posted by Admin Posted on Feb 27 2018

HIGHLIGHTS OF THE NEW TAX REFORM LAW

 

The new tax reform law, commonly called the “Tax Cuts and Jobs Act” (TCJA), is the biggest federal tax law overhaul in 31 years, and it has both good and bad news for taxpayers.

Below are highlights of some of the most significant changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017.

Individuals

Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025

Near doubling of the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) — through 2025

Elimination of personal exemptions — through 2025

Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit — through 2025

Elimination of the individual mandate under the Affordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty — effective for months beginning after December 31, 2018

Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT purposes — for 2017 and 2018

New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) — through 2025

Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions — through 2025

Elimination of the deduction for interest on home equity debt — through 2025

Elimination of the personal casualty and theft loss deduction (with an exception for federally declared disasters) — through 2025

Elimination of miscellaneous itemized deductions subject to the 2% floor (such as certain investment expenses, professional fees and unreimbursed employee business expenses) — through 2025

Elimination of the AGI-based reduction of certain itemized deductions — through 2025

Elimination of the moving expense deduction (with an exception for members of the military in certain circumstances) — through 2025

Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year

AMT exemption increase, to $109,400 for joint filers, $70,300 for singles and heads of households, and $54,700 for separate filers — through 2025

Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 million for 2018 with inflation indexing) — through 2025

Businesses

Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of 21%

Repeal of the 20% corporate AMT

New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships — through 2025

Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets — effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023

Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million

Other enhancements to depreciation-related deductions

New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply)

New limits on net operating loss (NOL) deductions

Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers

New rule limiting like-kind exchanges to real property that is not held primarily for sale

New tax credit for employer-paid family and medical leave — through 2019

New limitations on excessive employee compensation

New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation

More to consider

This is just a brief overview of some of the most significant TCJA provisions. There are additional rules and limits that apply, and the law includes many additional provisions. Contact your tax advisor to learn more about how these and other tax law changes will affect you in 2018 and beyond.

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

MAKING 2017 RETIREMENT PLAN CONTRIBUTIONS IN 2018

Posted by Admin Posted on Feb 21 2018

MAKING 2017 RETIREMENT PLAN CONTRIBUTIONS IN 2018

 

The clock is ticking down to the tax filing deadline. The good news is that you still may be able to save on your impending 2017 tax bill by making contributions to certain retirement plans.

For example, if you qualify, you can make a deductible contribution to a traditional IRA right up until the April 17, 2018, filing date and still benefit from the resulting tax savings on your 2017 return. You also have until April 17 to make a contribution to a Roth IRA.

And if you happen to be a small business owner, you can set up and contribute to a Simplified Employee Pension (SEP) plan up until the due date for your company’s tax return, including extensions.

Deadlines and limits

Let’s look at some specifics. For IRA and Roth IRA contributions, the maximum regular contribution is $5,500. Plus, if you were at least age 50 on December 31, 2017, you are eligible for an additional $1,000 “catch-up” contribution.

There are also age limits. You must have been under age 70½ on December 31, 2017, to contribute to a traditional IRA. Contributions to a Roth can be made regardless of age, if you meet the other requirements.

For a SEP, the maximum contribution is $54,000, and must be made by the April 17th date, or by the extended due date (up to Monday, October 15, 2018) if you file a valid extension. (There’s no SEP catch-up amount.)

Phase-out ranges

If not covered by an employer’s retirement plan, your contributions to a traditional IRA are not affected by your modified adjusted gross income (MAGI). Otherwise, when you (or a spouse, if married) are active in an employer’s plan, available contributions begin to phase out within certain MAGI ranges.

For married couples filing jointly, the MAGI range is $99,000 to $119,000. For singles or heads of household, it’s $62,000 to $72,000. For those married but filing separately, the MAGI range is $0 to $10,000, if you lived with your spouse at any time during the year. A phase-out occurs between AGI of $186,000 and $196,000 if a spouse participates in an employer-sponsored plan.

Contributions to Roth IRAs phase out at mostly different ranges. For married couples filing jointly, the MAGI range is $186,000 to $196,000. For singles or heads of household, it’s $118,000 to $133,000. But for those married but filing separately, the phase-out range is the same: $0 to $10,000, if you lived with your spouse at any time during the year.

Essential security

Saving for retirement is essential for financial security. What’s more, the federal government provides tax incentives for doing so. Best of all, as mentioned, you still have time to contribute to an IRA, Roth IRA or SEP plan for the 2017 tax year. Please contact our firm for further details and a personalized approach to determining how to best contribute to your retirement plan or plans.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: Thomson Reuters

When an Elderly Parent Might Qualify as Your Dependent

Posted by Admin Posted on Feb 20 2018

When an Elderly Parent Might Qualify as Your Dependent

 

It’s not uncommon for adult children to help support their aging parents. If you’re in this position, you might qualify for an adult-dependent exemption to deduct up to $4,050 for each person claimed on your 2017 return.

Basic qualifications

For you to qualify for the adult-dependent exemption, in most cases your parent must have less gross income for the tax year than the exemption amount. (Exceptions may apply if your parent is permanently and totally disabled.) Social Security is generally excluded, but payments from dividends, interest and retirement plans are included.

In addition, you must have contributed more than 50% of your parent’s financial support. If you shared caregiving duties with one or more siblings and your combined support exceeded 50%, the exemption can be claimed even though no one individually provided more than 50%. However, only one of you can claim the exemption in this situation.

Important factors

Although Social Security payments can usually be excluded from the adult dependent’s income, they can still affect your ability to qualify. Why? If your parent is using Social Security money to pay for medicine or other expenses, you may find that you aren’t meeting the 50% test.

Also, if your parent lives with you, the amount of support you claim under the 50% test can include the fair market rental value of part of your residence. If the parent lives elsewhere — in his or her own residence or in an assisted-living facility or nursing home — any amount of financial support you contribute to that housing expense counts toward the 50% test.

Easing the burden

An adult-dependent exemption is just one tax break that you may be able to employ on your 2017 tax return to ease the burden of caring for an elderly parent. Contact us for more information on qualifying for this break or others.

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

BUSINESS OWNER: DID YOU KNOW...

Posted by Admin Posted on Jan 22 2018

- ENGLISH VERSION

 

Essential Business Accounting

 

 

- SPANISH VERSION

 

Contabilidad Esencial Para Negocios

 

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: Lord Breakspeare Callaghan LLC. Certified Public Accountants

Eight Steps to Keep Online Data Safe

Posted by Admin Posted on Dec 21 2017

Eight Steps to Keep Online Data Safe

 

During the holiday shopping season, shoppers are looking for the perfect gifts. At the same time, criminals are looking for sensitive data. This data includes credit card numbers, financial accounts and Social Security numbers. Cybercriminals can use this information to file a fraudulent tax return.

This tip is part of National Tax Security Awareness Week. The IRS is partnering with state tax agencies, the tax industry and groups across the country to remind people about the importance of data protection.

Anyone with an online presence can do a few simple things to protect their identity and personal information. Following these eight steps can also help taxpayers protect their tax return and refund in 2018:

- Shop at familiar online retailers. Generally, sites with an “s” in “https” at the start of the URL are secure. Users can also look for the “lock” icon in your browser’s URL bar. That said, some criminals may get a security certificate, so the “s” may not always mean a site is legitimate.

- Avoid unprotected Wi-Fi. Users should not do online financial transactions when using unprotected public Wi-Fi. Unprotected public Wi-Fi hotspots may allow thieves to view transactions.

- Learn to recognize and avoid phishing emails that pose as a trusted source. These emails can come from a source that looks like a legitimate bank or even the IRS. These emails may include a link that takes the user to a fake website. From there, the thieves can steal usernames and passwords.

- Keep a clean machine. This includes computers, phones and tablets. Users should install security software to protect against malware that may steal data. This software also protects against viruses that may damage files.

- Use passwords that are strong, long and unique. Experts suggest a minimum of 10 characters. Use a combination of letters, numbers and special characters. Use a different password for each account.

- Use multi-factor authentication when available. Some financial institutions, email providers and social media sites allow users to set their accounts for multi-factor authentication. This means users may need a security code, usually sent as a text to their mobile phone, in addition to a username and password.

- Sign up for account alerts. Some financial institutions will send email or text alerts to an account holder when there is a withdrawal or change to their accounts. Generally, people can check their account profile to see what added protections may be available.

- Encrypt sensitive data and protect it with a password. People who keep financial records, tax returns or any personal information on their computer should protect this data. Users should also back up important data to an external source. When disposing of a computer, mobile phone or tablet, people should make sure they wipe the hard drive of all information before trashing.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

Get Ready for Taxes: Filing Electronically a Safe, Easy Way to File

Posted by Admin Posted on Dec 20 2017

Get Ready for Taxes: Filing Electronically a Safe, Easy Way to File

 

The Internal Revenue Service said today that it expects more than 90 percent of all 2017 individual tax returns to be prepared using tax software. The majority of those will be e-filed. Since 1986 when the IRS started accepting electronically filed tax returns, more than 1.8 billion have been securely processed.

The IRS urges taxpayers to wait until they have all the forms and documents needed before preparing a tax return. Most documents arrive before the end of January. This includes Forms W-2 from employers and Forms 1099 from banks and other payers. Those claiming the Premium Tax Credit need Form 1095-A from the Marketplace. Not having all required documents may cause a return to have an error that delays processing and therefore, delays the refund.

Taxpayers have options to prepare and e-file a return:

IRS Free File, free brand-name software for taxpayers with incomes below $66,000

Commercial tax preparation software,

Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs, sites with IRS-certified volunteers, or

Tax professionals. Tips for choosing a return preparer and details about national tax professional groups are available on IRS.gov.

The IRS2Go Mobile App can help find free tax preparation assistance, check a refund status and more.

Taxpayers should keep copies of their most recent tax returns. Taxpayers using a software product for the first time may need their Adjusted Gross Income amount from their prior-year return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Taxpayers concerned about identify theft should know the IRS continues to work with state tax authorities and the tax industry to increase security protections as part of the Security Summit. Summit efforts have led to a nearly 50 percent decline in the number of new reports of stolen identities on federal tax returns. While working to stop fraudulent refunds, the IRS remains focused on releasing legitimate refunds as quickly as possible in 2018.

Faster Refunds with Direct Deposit

Choosing e-file remains the safest way to file an accurate income tax return and combining it with direct deposit is the fastest way to receive a refund. In 2017, more than 88 million tax refunds worth over $260 billion were directly deposited into taxpayer’s bank accounts.

In 2018, the IRS again expects to issue more than nine out of 10 refunds in less than 21 days. However, by law the IRS cannot issue refunds if the return claims the Earned Income Tax Credit or Additional Child Tax Credit before mid-February. The change applies to the entire refund and helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent tax fraud.

 

Standard Mileage Rates for 2018

Posted by Admin Posted on Dec 19 2017

Standard Mileage Rates for 2018

 

The Internal Revenue Service today issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.

18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.

14 cents per mile driven in service of charitable organizations.

The business mileage rate and the medical and moving expense rates each increased 1 cent per mile from the rates for 2017. The charitable rate is set by statute and remains unchanged.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. These and other requirements are described in Rev. Proc. 2010-51.

Notice 2018-03, posted today on IRS.gov, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please. give us a call at 305-274-5811

Source: IRS

Federal Tax Reform Legislation May Be Imminent Impact to 2018 Payroll Calculations May Be Delayed

Posted by Admin Posted on Dec 19 2017

Federal Tax Reform Legislation May Be Imminent Impact to 2018 Payroll Calculations May Be Delayed

 

Different versions of H.R. 1, the Tax Cuts and Jobs Act, were enacted by the House and Senate, and a Conference Committee has been established to reconcile the differences. Any revised legislation from the conference committee would need to be presented to both the House and Senate for approval, and signed by the President. Congressional leadership and the White House have targeted December 22 for enactment.

While the legislation provides that the revised tax rates will take effect on January 1, ADP has already spoken with the Internal Revenue Service (IRS) about implementation and possible transition measures. On December 7, the IRS indicated that they would delay guidance until the legislation is finalized.

IRS guidance, which is typically released in advance of each new tax year – including withholding tables,

Form W-4, Employee’s Withholding Allowance Certifi cate; Circular E, Employer’s Tax Guide (Publication 15), and others – will not be issued for some time. Further, since the IRS and Treasury will need to analyze the legislation and develop new withholding tables and related guidance, employers should continue using 2017 withholding calculations and 2017 Forms W-4 until revised IRS forms, withholding calculations, and other guidance is released.

On December 13, the IRS released the following statement:

“The IRS is continuing to closely monitor the pending legislation in Congress, and we are taking the initial steps to prepare guidance on withholding for 2018. We anticipate issuing the initial withholding guidance (Notice 1036) in January refl ecting the new legislation, which would allow taxpayers to begin seeing the benefi ts of the change as early as February. The IRS will be working closely with the nation’s payroll and tax professional community during this process.”

Historical Perspective

The American Recovery and Reinvestment Act of 2009 (Public Law 111-5), was enacted on February 17, 2009, but effective January 1, 2009. The IRS issued revised withholding tables within days of enactment, announcing that the new tables should be implemented “as soon as possible, but not later than April 1.” 

White House press release related to the ARRA, April 15, 2009:

“According to ADP, the nation’s largest payroll service provider, more than 80% of workers paid through ADP received the Making Work Pay tax credit in paychecks dated March 1 or later, and virtually all of their clients began using the new withholding tables by March 6th.”

 

Form W-4 Expected to Be Substantially Revised

Both the House and Senate versions eliminated personal exemptions, which are currently key factors in withholding calculations. Employees typically establish withholding allowances on Forms W-4, based in part on the number of personal exemptions that they expect to report on income tax returns. It seems likely that Forms W-4 may need to be substantially revised and reissued by the IRS, which could take a number of weeks or months. In the meantime, the IRS expects to issue guidance permitting employers to continue relying on existing Forms W-4, and will permit a reasonable transition period when the revised Form W-4 is issued.

The IRS spokesman noted that, “For example, if you have employees who claim exemption from

withholding and are therefore required to provide you a new Form W-4 each year, we’ll allow them to do that with a 2017 Form W-4, as long as it is newly completed, signed and dated.”

Some employees may ask questions about the effect of the legislation, or may submit revised Forms W-4 to modify their withholding allowances for 2018. Employers should be prepared to accept revised Forms W-4, but may wish to advise employees that a revised Form W-4 will be issued later in 2018, and that the employee may need to complete a revised form at that time.

Both versions of the proposed Tax Cuts and Jobs Act would change the tax treatment of various employee benefi ts. Once the legislation is enacted, a separate Eye on Washington will discuss these changes in detail.

ADP Compliance Resources

ADP maintains a staff of dedicated professionals who carefully monitor federal and state legislative and regulatory measures affecting employment-related human resource, payroll, tax and benefi ts administration, and help ensure that ADP systems are updated as relevant laws evolve. For the latest on how federal and state tax law changes may impact your business, visit the ADP Eye on Washington

Web page located at www.adp.com/regulatorynews.

ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly evolving legislation. Our goal is to help minimize your administrative burden across the entire spectrum of employment-related payroll, tax, HR and benefits, so that you can focus on running your business. This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available. ADP encourages readers to consult with appropriate legal and/or tax advisors. Please be advised that calls to and from ADP may be monitored or recorded.

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: ADP

How to Renew an ITIN?

Posted by Admin Posted on Dec 11 2017

How to Renew an ITIN?

 

The Internal Revenue Service reminds taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) to submit their renewal applications as soon as possible. Failing to renew them by the end of the year will cause refund and processing delays in 2018.

The IRS mailed letters over the summer to more than 1 million taxpayers  whose ITINs are set to expire at the end of the year – those with middle digits 70, 71, 72 or 80. In addition, any ITIN that has not been used on a federal tax return at least once in the last three consecutive years will also expire at the end of the year. Affected taxpayers who expect to file a tax return in 2018 must submit a renewal application by the deadline.

Who Should Renew an ITIN?

- Taxpayers with ITINs set to expire at the end of the year and who need to file a tax return in 2018 must submit a renewal application. Others do not need to take any action.

- ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-NNNN) need to be renewed if the taxpayer will have a filing requirement in 2018.

- Taxpayers whose ITINs expired due to lack of use should only renew their ITIN if they will have a filing requirement in 2018.

- Taxpayers who are eligible for, or who have, an SSN should not renew their ITIN, but should notify IRS both of their SSN and previous ITIN, so that their accounts can be merged.

- Taxpayers whose ITINs have middle digits 78 or 79 that had already expired and were never renewed should renew their ITIN if they will have a filing requirement in 2018.

How to Renew an ITIN

To renew an ITIN, taxpayers must complete a Form W-7 and submit all required documentation. Although a Form W-7 is usually attached to the tax return, a taxpayer is not required to attach a federal tax return to their ITIN renewal application.

There are three ways to submit the W-7 application package:

1- Mail the Form W-7, along with original identification documents or copies certified by the issuing agency, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.

2- Taxpayers have the option to work with Certified Acceptance Agents (CAAs)authorized by the IRS to help them apply for an ITIN. CAAs can certify all identification documents for primary and secondary taxpayers and certify that an ITIN application is correct before submitting it to the IRS for processing. A CAA can also certify passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.

3- In advance, taxpayers can call and make an appointment at a designated IRS Taxpayer Assistance Center instead of mailing original identification documents to the IRS. When making an appointment, be sure to indicate that this involves an ITIN renewal application.

The ITIN renewal requirement is part of a series of provisions established by the Protecting Americans from Tax Hikes (PATH) Act enacted by Congress in December 2015. These provisions are outlined in IRS Notice 2016-48.

The IRS has a special page on IRS.gov with steps to take now for the 2018 tax filing season.

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

Earned Income Tax Credit for Certain Workers

Posted by Admin Posted on Dec 07 2017

 

 

Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

The IRS estimates that 25 percent of people who qualify don't claim the credit and at the same time, there are millions of Americans who have claimed the credit in error, many of whom simply don't understand the criteria.

EITC is based on the amount of your earned income and the number of qualifying children in your household. If you have children, they must meet the relationship, age and residency requirements. And, you must file a tax return to claim the credit.

It'’s easier than ever to find out if you qualify for EITC using the online tool, EITC Assistant. Please contact us for more information!

Are you eligible for any of these tax credits?

Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns, advises the IRS. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Below are some of the credits taxpayers could be eligible to claim:

- Earned Income Tax Credit. This is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the EITC. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. For more information, see IRS Publication 596, Earned Income Credit (EIC).

- Child Tax Credit. This credit is for people who have a qualifying child. The maximum amount of the credit is $1,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see Pub. 972, Child Tax Credit.

- Child and Dependent Care Credit. This is for expenses paid for the care of children under age 13, or for a disabled spouse or dependent, to enable the taxpayer to work. There is a limit to the amount of qualifying expenses. The credit is a percentage of those qualifying expenses. For more information, see Pub. 503, Child and Dependent Care Expenses.

- Adoption Credit. Adoptive parents can take a tax credit of up to $13,460 for 2016 and $13,570 for 2017 for qualifying expenses paid to adopt an eligible child. For more information, see Form 8839, Qualified Adoption Expenses.

- Credit for the Elderly and Disabled. This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are citizens or residents. There are income limitations. For more information, see Pub.524, Credit for the Elderly or the Disabled.

- Education Credits. There are two credits available, the American Opportunity Credit (formerly called the Hope Credit) and the Lifetime Learning Credit, for people who pay higher education costs. The American Opportunity Credit is for the payment of the first four years of tuition and related expenses for an eligible student for whom the taxpayer claims an exemption on the tax return. The Lifetime Learning Credit is available for all post-secondary education for an unlimited number of years. A taxpayer cannot claim both credits for the same student in one year. For more information, see Publication 970, Tax Benefits for Education.

- Retirement Savings Contribution Credit. Eligible individuals may be able to claim a credit for a percentage of their qualified retirement savings contributions, such as contributions to a traditional or Roth IRA or salary reduction contributions to a SEP or SIMPLE plan. To be eligible, you must be at least age 18 at the end of the year and not a full-time student or an individual for whom someone else claims a personal exemption. Also, your adjusted gross income (AGI) must be below a certain amount. For more information, see chapter three in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

There are other credits available to eligible taxpayers.  Please contact us so we may realize your specific situation, and offer advice.

If you have any questions regarding accounting, domestic taxation, international 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

ENSURING YOUR YEAR-END DONATIONS ARE TAX-DEDUCTIBLE

Posted by Admin Posted on Dec 06 2017

ENSURING YOUR YEAR-END DONATIONS ARE TAX-DEDUCTIBLE

 

Many people make donations at the end of the year. To be deductible on your 2017 return, a charitable donation must be made by December 31, 2017. According to the IRS, a donation generally is “made” at the time of its “unconditional delivery.” But what does this mean?

Is it the date you write a check or charge an online gift to your credit card? Or is it the date the charity actually receives the funds? In practice, the delivery date depends in part on what you donate and how you donate it. Here are a few common examples:

Checks. The date you mail it.

Credit cards. The date you make the charge.

Pay-by-phone accounts. The date the financial institution pays the amount.

Stock certificates. The date you mail the properly endorsed stock certificate to the charity.

To be deductible, a donation must be made to a “qualified charity” — one that’s eligible to receive tax-deductible contributions. The IRS’s online search tool, “Exempt Organizations (EO) Select Check,” can help you more easily find out whether an organization is eligible to receive tax-deductible charitable contributions. You can access it at https://www.irs.gov/charities-non-profits/exempt-organizations-select-check. Information about organizations eligible to receive deductible contributions is updated monthly.

Many additional rules apply to the charitable donation deduction, so please contact us if you have questions about the deductibility of a gift you’ve made or are considering making. But act soon — you don’t have much time left to make donations that will reduce your 2017 tax bill.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please. give us a call at 305-274-5811

Source: Thomson Reuters

5 Common Mistakes When Applying For Financial Aid

Posted by Admin Posted on Dec 06 2017

5 Common Mistakes When Applying For Financial Aid

 

Given the astronomical cost of college, even well-off parents should consider applying for financial aid. A single misstep, however, can harm your child’s eligibility. Here are five common mistakes to avoid:

1. Presuming you don’t qualify. It’s difficult to predict whether you’ll qualify for aid, so apply even if you think your net worth is too high. Keep in mind that, generally, the value of your principal residence or any qualified retirement assets isn’t included in your net worth for financial aid purposes.

2. Filing the wrong forms. Most colleges and universities, and many states, require you to submit the Free Application for Federal Student Aid (FAFSA) for need-based aid. Some schools also require it for merit-based aid. In addition, a number of institutions require the CSS/Financial Aid PROFILE®, and specific types of aid may have their own paperwork requirements.

3. Missing deadlines. Filing deadlines vary by state and institution, so note the requirements for each school to which your child applies. Some schools provide financial aid to eligible students on a first-come, first-served basis until funding runs out, so the earlier you apply, the better. This may require you to complete your income tax return early.

4. Picking favorites. The FAFSA allows you to designate up to 10 schools with which your application will be shared. Some families list these schools in order of preference, but there’s a risk that schools may use this information against you. Schools at the top of the list may conclude that they can offer less aid because your child is eager to attend. To avoid this result, consider listing schools in alphabetical order.

5. Mistaking who’s responsible. If you’re divorced or separated, the FAFSA should be completed by the parent with whom your child lived for the majority of the 12-month period ending on the date the application is filed. This is true regardless of which parent claims the child as a dependent on his or her tax return.

The rule provides a significant planning opportunity if one spouse is substantially wealthier than the other. For example, if the child lives with the less affluent spouse for 183 days and with the other spouse for 182 days, the less affluent spouse would file the FAFSA, improving eligibility for financial aid.

These are just a few examples of financial aid pitfalls. Let us help you navigate the process and explore other ways to finance college.

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

Should I hire an attorney?

Posted by Admin Posted on Nov 28 2017

Should I hire an attorney

 

It is necessary to hire an attorney for some disputes that require a lot of time. Having an attorney makes you more prepared, but you may also hire one for a significant business transaction. If there is a problem where the court is concerned, it is advisable to hire an attorney.

The following should be considered when determining if an attorney is necessary:

Is this a difficult legal dispute or will I end up in court? What is involved in terms of money, property, or time? Positive answers demonstrate the need for an attorney.

Does a book exist that will be able to help me so I don't have to hire an attorney? Some problems can be resolved with little help.

Have you looked for non-Lawyer legal resources to help?

Certain disputes can be solved without needing an attorney. For example, a living will can be prepared by a non-legal organization such as the American Association of Retired Persons. There are several organizations that can aid in the process of obtaining a living will form from the state along with information for filling it out.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please. give us a call at 305-274-5811

Source: Thomson Reuters

What can I do to prepare my small business for the generation to come?

Posted by Admin Posted on Nov 27 2017

WHAT CAN I DO TO PREPARE MY SMALL BUSINESS FOR THE GENERATION TO COME?

 

The process of passing a family business onto the second generation is so difficult that not even a third of them survive. Beyond that, roughly half make it to a third generation. In a normal day in the U.S., 40 percent of businesses are confronted with a change of owners. Those who have founded the companies are struggling to find remedies, but there aren't many options.

Here are a few possible remedies to this problem:

- Sell off the company.

- End the business.

- Remain as the owner, but contract others to manage.

- Keep ownership and management within the family.

- The most common causes for failure of the transition of the small business are as follows:

- There is no strategy.

- The business is missing energy.

- The owner lacks the motivation to change the business.

- The coming generations are not interested in working with the business.

- The main reason for closure is not having a strategy. If planned properly, the business has no reason to worry.

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

May I refuse inherited property in order to reduce taxes?

Posted by Admin Posted on Nov 09 2017

May I refuse inherited property in order to reduce taxes?

 

To refuse all or part of the property that is being passed on to you by a will, intestacy laws or the operation of law, you should make use of the disclaimer. The property is passed to the next beneficiary in line with an effective disclaimer.

By the property passing directly from the decedent to the next beneficiary, it could possible save thousands of dollars in estate taxes. The wise use of the a disclaimer and the condition for a disclaimer in a will permits the shifting of assets and income to maximize the estate tax marital deduction, unified credit and the lower income tax brackets.

To provide for financial contingencies, disclaimers may also come in handy. For instance, if someone needs funds, you can disclaim an interest to them.

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

- During a divorce, what are the legal issues that must be handled?

Posted by Admin Posted on Nov 08 2017

During a divorce what are the legal issues that must be handled

 

Make an agreement with your spouse to plan for the legal issues that will be dealt with in the future, such as division of property, alimony or support payments and child custody. The amount of time and money that will be spent trying to reach a legal solution will be lessened dramatically if this can be done, either with the help of lawyers or court.

The following are general tips to face the legal aspects of divorce:

If there are important issues with regards to child custody, alimony or assets, find your own attorney.

Use referrals from other professionals, trusted friends or the American Academy of Matrimonial Lawyers (www.aaml.org) to find a good matrimonial lawyer.

Verify that the agreement of divorce approaches all topics such as insurance coverage, life health and auto.

On IRA accounts, life insurance policies, pension plans, 401(k) plans, and other retirement accounts make sure to modify the beneficiaries.

Update your will.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- When buying a car, how can I get the "best buy"?

Posted by Admin Posted on Nov 08 2017

When buying a car, how can I get the

 

You first need to decide on the type, size and options of the car you would like (such as manual, automatic windows, airbags).

You then need to decide what the car dealer has to pay for the car of your choice - the "invoice cost". The difference between the sticker price and the invoice price can be negotiated.

You can obtain this information two different ways. The best way is to look at an auto pricing service supplied by a consumer group or an auto magazine. For instance, Consumer Reports New Car Price Service (http://www.consumerreports.org/cro/car-prices-build-buy-service/index.htm), will give you details of the invoice price and the sticker price that can be adjusted for options or rebates as well as tell you how to use the data for negotiating. This is the best way because it gives you the most recent information.

Another way is to use pricing guides that can be found on the Internet. Two popular sites are Intellichoice (www.intellichoice.com) or Edmund's New Car Prices (www.edmunds.com). You may also be able to obtain these books at the library and they will give you an idea about the information that you need instead of exact data.

If you have a trade-in, you will want to find the value of that car too. You can use the N.A.D.A. Official Used Car Guide (check your local library or www.nada.org) to look up your used car.

Now it's time to begin negotiating with dealers. Because you know the invoice price, you can use that information to bargain for the lowest mark-up from the dealer's cost.

An amount like $300 to $500 above the dealer's cost is a sensible mark-up, unless the car you want to buy is either difficult to get or very popular.

Any attempts by the dealership to sell you rustproofing, undercoating, or other extras should be refused. You may want to invest in an extended warranty, depending on the model's repair history.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Foreign Income

Posted by Admin Posted on Nov 08 2017

Foreign Income

 

With more and more United States citizens earning money from foreign sources, the IRS reminds people that they must report all such income on their tax return, unless it is exempt under federal law. U.S. citizens are taxed on their worldwide income.

This applies whether a person lives inside or outside the United States. The foreign income rule also applies regardless of whether or not the person receives a Form W-2, Wage and Tax Statement, or a Form 1099 (information return).

Foreign source income includes earned income, such as wages and tips, and unearned income, such as interest, dividends, capital gains, pensions, rents and royalties.

An important point to remember is that citizens living outside the U.S. may be able to exclude up to $101,300 for 2016 and $102,100 for 2017, of their foreign source income if they meet certain requirements. However, the exclusion does not apply to payments made by the U.S. government to its civilian or military employees living outside the U.S. Please contact us if you feel you may have earned foreign income to learn more!

If you have any questions regarding accounting, domestic taxation, international 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

MUTUAL FUNDS AND TAXES

Posted by Admin Posted on Nov 07 2017

MUTUAL FUNDS AND TAXES

 

Many people overlook taxes when planning their mutual fund investments. But you’ve got to handle these valuable assets with care. Here are some tips to consider.

Avoid year-end investments

Typically, mutual funds distribute accumulated dividends and capital gains toward the end of the year. But don’t fall for the common misconception that investing in a fund just before a distribution date is like getting “free money.”

True, you’ll receive a year’s worth of income right after you invest. But the value of your shares will immediately drop by the same amount, so you won’t be any better off. Plus, you’ll be liable for taxes on the distribution as if you had owned your shares all year.

You can get a general idea of when a particular fund anticipates making a distribution by checking its website periodically. Also make a note of the “record date” — investors who own fund shares on that date will participate in the distribution.

Invest in tax-efficient funds

Actively managed funds tend to be less tax efficient. They buy and sell securities more frequently, generating a greater amount of capital gain, much of it short-term gain taxable at ordinary income rates rather than the lower, long-term capital gains rates.

Consider investing in tax-efficient funds instead. For example, index funds generally have lower turnover rates. And “passively managed” funds (sometimes described as “tax managed” funds) are designed to minimize taxable distributions.

Another option is exchange-traded funds (ETFs). Unlike mutual funds, which generally redeem shares by selling securities, ETFs are often able to redeem securities “in kind” — that is, to swap them for other securities. This limits an ETF’s recognition of capital gains, making it more tax efficient.

This isn’t to say that tax-inefficient funds don’t have a place in your portfolio. In some cases, actively managed funds may offer benefits, such as above-market returns, that outweigh their tax costs.

Watch out for reinvested distributions

Many investors elect to have their distributions automatically reinvested in their funds. Be aware that those distributions are taxable regardless of whether they’re reinvested or paid out in cash.

Reinvested distributions increase your tax basis in a fund, so track your basis carefully. If you fail to account for these distributions, you’ll end up paying tax on them twice — once when they’re paid and again when you sell your shares in the fund.

Fortunately, under current rules, mutual fund companies are required to track your basis for you. But you still may need to track your basis in funds you owned before 2012 when this requirement took effect, or if you purchased units in the fund outside of the current broker holding your units.

Do your due

Tax considerations should never be the primary driver of your investment decisions. Yet it’s important to do your due diligence on the potential tax consequences of funds you’re considering — particularly for your taxable accounts.

Sidebar: Directing tax-inefficient funds into nontaxable accounts

If you invest in actively managed or other tax-inefficient funds, ideally you should put these holdings in nontaxable accounts, such as a traditional IRA or 401(k). Because earnings in these accounts are tax-deferred, distributions from funds they hold won’t have any tax consequences until you withdraw them. And if the funds are held in a Roth account, those distributions will escape taxation altogether.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

ARE FREQUENT FLYER MILES EVER TAXABLE?

Posted by Admin Posted on Nov 07 2017

ARE FREQUENT FLYER MILES EVER TAXABLE?

 

If you recently redeemed frequent flyer miles to treat the family to a fun summer vacation or to take your spouse on a romantic getaway, you might assume that there are no tax implications involved. And you’re probably right — but there is a chance your miles could be taxable.

Generally, miles awarded by airlines for flying with them are considered nontaxable rebates, as are miles awarded for using a credit or debit card. The IRS even addressed the issue in Announcement 2002-18, where it said:

Consistent with prior practice, the IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travel.

There are, however, some types of miles awards the IRS might view as taxable. Examples include miles awarded as a prize in a sweepstakes and miles awarded as a promotion.

For instance, in the 2014 case of Shankar v. Commissioner, the U.S. Tax Court sided with the IRS in finding that airline miles awarded in conjunction with opening a bank account were indeed taxable. Part of the evidence of taxability was the fact that the bank had issued Forms 1099 MISC to customers who’d redeemed rewards points to buy airline tickets.

The value of the miles for tax purposes generally is their estimated retail value. If you’re concerned you’ve received miles awards that could be taxable, please contact us.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Are there certain legal standards that will affect my home based business?

Posted by Admin Posted on Nov 03 2017

Are there certain legal standards that will affect my home based business

 

A home based business is affected by many of the same laws that apply to normal companies. You need to speak with a lawyer and the state department of labor to learn which of these laws and regulations will come into play. You will need to know your city's zoning regulations as well as knowing which products may not be produced from home.

Explosives, fireworks, toys, drugs, sanitary or medical products, and poisons are normally outlawed for production based at home. Other states will not allow the production of drink, food or clothing from home.

You may be required to obtain a business bank account, a separate business telephone, a work certificate or license from the state, and a sales tax number for registration and accounting standards.

If you have employees, you will be held responsible for social security taxes and withholding their income as well as observing the employee health and safety laws and minimum wage.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- What can I do to develop a better business cash flow?

Posted by Admin Posted on Nov 02 2017

What can I do to develop a better business cash flow?

 

 There are several options for increasing cash reserves:

- Accounts receivables: Properly control your accounts receivables and retrieve overdue accounts as quickly as possible. If you are not aggressive with collection, profits are lost.

- Having stricter credit standards: With the tightening of credit and terms, more clients are paying for their purchases in cash, which leads to more cash on hand and lowering the bad-debt expense. Although this is beneficial in the short term, it may not be as appealing in the long term. Less strict credit policies permit more clients to purchase the products or services.

- Take advantage of the market: A common problem is many small businesses price their products lower than the market and do not make a profit. You should research the product's market, distribution costs and the competition before deciding on prices. Constantly keep an eye on the aspects that play a role on pricing and make adjustments when necessary.

- Make use of short-term loans: Taking a loan from a financial institution can solve short-term cash flow problems. The common forms of credit used in these circumstances are revolving credit lines and equity loans.

- Boost sales: One way to increase the cash flow is to boost sales. Take into account, when a large amount of your sales are credit sales, sales are boosted (as well as accounts receivable), but not cash on hand. This causes your inventory to diminish. Due to receivables not being collected until 30 days after the sale, a significant increase in credit sales will diminish the company's cash reserves fast.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- What should the business strategy contain?

Posted by Admin Posted on Nov 02 2017

- What should the business strategy contain?

 

A business strategy, when applied to your company, should include an introduction, details about marketing, financial management, operations of the company, and a closing statement.

IN THE INTRODUCTION OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

This segment of the business strategy should contain information about the company and its objectives. Detail the experience within your company and the structure of management and legal status. State what your business has to get ahead of the competition.

IN THE MARKETING PORTION OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

This is where you should state the products or services being offered and their demand in the market. It should also detail the market and its particular location and size.

IN THE FINANCIAL MANAGEMENT SEGMENT OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

You should outline the source and amount of the initial equity capital. You also should create a monthly operating budget for the beginning years, as well as expected return on investment (or ROI) and monthly cash flow for these years. After that, present the balance sheets and income statements for the first 2 years and state the break-even point. Discuss your own balance sheet and ways of compensation. Explain who will be in charge of accounting affairs and how they will be maintained. Lastly, think through the possible problems that may arise and develop solutions.

IN THE OPERATIONS SEGMENT OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

This is where the explanation of the management of the daily activities will be. It should include insurance coverage, lease or rent agreements and the processes related to the staff and employment. It should also detail what is necessary to produce the products/services and the processes of production and delivery.

IN THE CLOSING STATEMENT OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

You should restate the company's objectives and purposes and explain the dedication you have to make your company succeed. Be sure to include the methods you plan to use to reach your objectives.

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

Ten Ways to Avoid Problems at Tax Time

Posted by Admin Posted on Nov 01 2017

Ten Ways To Avoid Problems at Tax Time

 

Looking for ways to avoid the last-minute rush for doing your taxes? The IRS offers these tips:

1- Don't Procrastinate. Resist the temptation to put off your taxes until the last minute. Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.

2- Organize Your Tax Records. Tax preparation time can be significantly reduced if you develop a system for organizing your records and receipts. Start with the income, deduction or tax credit items that were on last year's return.

3- Visit the IRS Online. Millions of taxpayers visited the IRS Web site last year, downloading nearly 600 million forms, publications and a variety of topic-oriented tax information. Anyone with Internet access can find tax law information and answers to frequently asked tax questions.

4- Take Advantage of Free Assistance. The IRS offers about 150 tax topics through its website at www.irs.gov/taxtopics. It also offers federal tax forms and publications at 1-800-TAX-FORM (1-800-829-3676). Some libraries, post offices, and banks carry the most widely requested forms and instructions. Libraries may also have reference sets of IRS publications. The IRS also staffs a tax Help Line for Individuals at 1-800-829-1040. Help for small businesses, corporations, partnerships and trusts which need information or assistance preparing business returns is available at 1-800-829-4933. Both lines are staffed on weekdays from 7 a.m. to 7 p.m. your local time (Alaska & Hawaii follow Pacific Time). Hearing-impaired individuals with access to TTY/TDD equipment may call 1-800-829-4059 to ask questions or to order forms and publications.

5- Use IRS Taxpayer Assistance Centers and Vounteer Programs. Free tax help is available at IRS offices nationwide. Also, check your newspaper or local IRS office to find locations for Volunteer Income Tax Assistance or Tax Counseling for the Elderly sites. To obtain the location, dates, and hours of the VITA or TCE volunteer site closest to you, call the IRS toll-free Tax Help Line for Individuals at 1-800-829-1040 or on the IRS website.

6- Have your accountant Double-Check Your Math and Data Entries. Review your return for possible math errors and make sure you have provided the names and correct (and legibly written) Social Security or other identification numbers for yourself, your spouse and your dependents.

7- Have Your Refund Deposited Directly to Your Bank Account. Another way to speed up your refund and reduce the chance of theft is to have the amount deposited directly to your bank account. Check the tax instructions for details on entering the routing and account numbers on your tax return. Make sure the numbers you enter are correct. Wrong numbers can cause your refund to be misdirected or delayed.

8- Don't Panic if You Can't Pay. If you can't immediately pay the taxes you owe, consider some stress-reducing alternatives. You can apply for an IRS installment agreement, suggesting your own monthly payment amount and due date, and getting a reduced late payment penalty rate. You also have various options for charging your balance on a credit card, either as part of an electronic return or directly through a processing agent, either by phone or online. Electronic filers with a balance due can file early and authorize the government's financial agent to take the money directly from their checking or savings account on the April 15 due date, with no fee. Note that if you file your tax return or a request for a filing extension on time, even if you can't pay, you avoid potential late filing penalties.

9- Have Your Accountant Request an Extension of Time to File — But Pay on Time. If the clock runs out, you can get an automatic six-month extension of time to file, to October 15. An extension of time to file does not give you an extension of time to pay, however. You can e-file a Form 4868, Application for Automatic Extension of Time to File, that is included in most tax preparation software, or send a paper Form 4868 to the IRS to request the extension. You will need the adjusted gross income and total tax amounts from last year's return if you request the extension by electronic filing. You may also get an extension by charging your expected balance on a credit card at Official Payments Corporation or Link2Gov Corporation. There is no IRS fee for credit card payments, but the processors charge a convenience fee.

10- Contact Us!

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Credit for the Elderly or Disabled

Posted by Admin Posted on Nov 01 2017

Credit for the Elderly or Disabled

 

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, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Deducting Mortgage Interest

Posted by Admin Posted on Nov 01 2017

Deducting Mortgage Interest

 

If you own a home, and you itemize your deductions on Schedule A, you can claim a deduction for the interest paid. To be deductible, the interest you pay must be on a loan secured by your main home or a second home (including a second home that is also rented out for part of the year, so long as the personal use requirement is met). The loan can be a first or second mortgage, a home improvement loan, or a home equity loan. To be deductible, the loan must be secured by your home but the proceeds can be used for other than home improvements. You can refinance and use the proceeds to pay off credit card debt, go on vacation or buy a car and the interest will remain deductible. There are other financial reasons for not wanting to do this but it will not disqualify the deduction.

The interest deduction for home acquisition debt (that is, a loan taken out after October 13, 1987 to buy, build, or substantially improve a qualified home) is limited to debt of $1 million ($500,000 if married filing separately). The interest deduction from your home equity loan is also not unlimited. You can generally deduct interest you pay on the first $100,000 of a home equity loan. Debt which you incurred to buy, build or substantially improve your home that is in excess of the $1 million home acquisition debt limit may also qualify as home equity debt.

In addition to the deduction for mortgage interest, points paid on the original purchase of your residence are also generally deductible. Taxpayers who are required to pay mortgage insurance premiums may also be able to deduct this amount subject to certain income limits. For more information about the mortgage interest deduction, see IRS Publication 936.

If you have any questions regarding accounting, domestic taxation, international 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 the division of property in a divorce work?

Posted by Admin Posted on Oct 31 2017

How does the division of property in a divorce work?

 

Each state has their own laws regarding the division of property between ex-spouses. When it comes to applying those laws, matrimonial judges have a great amount of flexibility.

Whether or not an attorney represents you, you should make sure to have done the following:

- Learn how the laws of your state function with respect to property division.

- Make sure to have the papers to confirm that property owned separately during the marriage has been kept separate.

- Be prepared to report any non-financial contributions to the marriage that you have made - such as any non-financial contributions to his/her financial success or spousal support while he/she went to school.

- Be willing to report any need for alimony or child support.

- Consider having the divorce agreement supply you with funds if you have not worked outside of the home during the marriage.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Tax Saving Techniques!!!

Posted by Admin Posted on Oct 30 2017

TAX SAVING TECHNIQUES

 

Following are some generally recognized financial planning tools that may help you reduce your tax bill.

Charitable Giving - Instead of selling your appreciated long-term securities, donate the stock instead and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.

Health Savings Accounts (HSAs) - If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.

ROTH IRAs - Contributions to a ROTH IRA are not tax deductible but the qualified distributions, including earnings are tax-free.

Municipal Bonds - Interest earned on these types of investments is tax-exempt.

Own a home - most of the cost of this type of investment is financed and the interest (on mortgages up to $1,000,000) is tax deductible. When the property is sold, individuals may exclude up to $250,000 ($500,000 if married jointly) of the gain.

Retirement Plans - Participate in your employer sponsored retirement plan, especially if there is a matching component. You will receive a current tax deduction and the tax-deferred compounding can add up to a large retirement savings.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Car Donations

Posted by Admin Posted on Oct 27 2017

Car Donations

 

The IRS reminds taxpayers that specific rules apply for taking a tax deduction for donating cars to charities. If the claimed value of the donated motor vehicle, boat or plane exceeds $500, you can deduct the smaller of the vehicle's FMV on the date of the contribution or the gross proceeds received from the sale of the vehicle.

People who want to take a deduction for the donation of their vehicle on their tax return should take quite a few steps, but here is the most obvious:

Check that the Organization is Qualified.

Taxpayers must make certain that they contribute their car to an eligible organization; otherwise, their donation will not be tax deductible. Taxpayers can search Exempt Organizations Select Check online tool to check that an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified.  Please contact us if you're considering a car donation for your tax return!

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Are You Selling Your Home?

Posted by Admin Posted on Oct 26 2017

Are You Selling Your Home

 

If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years.

To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale. You also must not have excluded gain on another home sold during the two years before the current sale.

If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualify for the exclusion. But both of you would have to meet the use test to claim the $500,000 maximum amount.

To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before the sale. The two years may consist of 24 full months or 730 days. Short absences, such as for a summer vacation, count as periods of use. Longer breaks, such as a one-year sabbatical, do not.

If you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home due to health, a change in place of employment, or certain unforeseen circumstances. Unforeseen circumstances include, for example, divorce or legal separation, natural or man-made disaster resulting in a casualty to your home, or an involuntary conversion of your home.  Send us a message for more!

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Has Options to Help Small Business Owners

Posted by Admin Posted on Oct 26 2017

IRS Has Options to Help Small Business Owners

 

Small business owners often have a running list of things to do. These include deadlines, sales calls, employee issues, banking, advertising – and taxes. The IRS can help with the last one.

Here are seven resources to help small businesses owners with common topics:

Looking at the Big Picture: The Small Business and Self-Employed Tax Center brings information on IRS.gov to one common place.

Organizing Tasks: The IRS Tax Calendar for Businesses and Self-Employed helps  owners stay organized. It includes tax due dates and actions for each month. Users can subscribe to calendar reminders or import the calendar to their desktop or calendar on their mobile device.

Searching for Topics: The A-to-Z Index for Business helps people easily find small business topics on IRS.gov.

Getting Information by Email: Small business owners can sign up for e-News for Small Businesses. The free, electronic service gives subscribers information on deadlines, emerging issues, tips, news and more. 

Watching Videos: The IRS Video Portal  offers learning events and informational videos on many business topics.

Finding Forms: The Small Business Forms and Publications page helps business owners find the documents they need for the type of business they own. It lists tax forms, instructions, desk guides and more.

Meeting in Person or Online: Small business workshops, seminars and meetings are held throughout the country. They’re sponsored by IRS partners that specialize in federal tax topics. Topics vary from overviews to more specific topics such as retirement plans and recordkeeping.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

 Source: IRS

Tax Incentives for Higher Education

Posted by Admin Posted on Oct 25 2017

Tax Incentives for Higher Education

 

The tax code provides a variety of tax incentives for families who are paying higher education costs or are repaying student loans. You may be able to claim an American Opportunity Credit (formerly called the Hope Credit) or Lifetime Learning Credit for the qualified tuition and related expenses of the students in your family (i.e. you, your spouse, or dependent) who are enrolled in eligible educational institutions. Different rules apply to each credit and the ability to claim the credit phases out at higher income levels.

If you don't qualify for the credit, you may be able to claim the "tuition & fees deduction" for qualified educational expenses. You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. This deduction phases out at higher income levels.

You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income so you do not have to itemize your deductions on Schedule A Form 1040. However, this deduction is also phased out at higher income levels.

If you have any questions regarding accounting, domestic taxation, international 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

Domestic Production Deduction

Posted by Admin Posted on Oct 25 2017

Domestic Production Deduction

 

 If your business is engaged in a qualifying production activity you may be able to take a tax deduction for your U.S. based business activities. The deduction is limited to income arising from qualified production activities in whole or in part based in the United States. The following are qualified production activities.

Manufacturing based in the United States,

Selling, leasing, or licensing items that have been manufactured in the United States,

Selling, leasing, or licensing motion pictures that have been produced in the United States,

Construction services in the United States, including building and renovation of residential and commercial properties,

Engineering and architectural services relating to a US-based construction project,

Software development in the United States, including the development of video games.

If you have a business that falls into any of these categories and you are not looking at this deduction, you could be missing out on a valuable tax break. Contact us to see if this deduction is for you.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

5 KEYS TO DISASTER PLANNING FOR INDIVIDUALS

Posted by Admin Posted on Oct 23 2017

5 KEYS TO DISASTER PLANNING FOR INDIVIDUALS

 

Disaster planning is usually associated with businesses. But individuals need to prepare for worst-case scenarios, as well. Unfortunately, the topic can seem a little overwhelming. To help simplify matters, here are five keys to disaster planning that everyone should consider:

1. Insurance. Start with your homeowners’ coverage. Make sure your policy covers flood, wind and other damage possible in your region and that its dollar amount is adequate to cover replacement costs. Also review your life and disability insurance.

2. Asset documentation. Create a list of your bank accounts, titles, deeds, mortgages, home equity loans, investments and tax records. Inventory physical assets not only in writing (including brand names and model and serial numbers), but also by photographing or videoing them.

3. Document storage. Keep copies of financial and personal documents somewhere other than your home, such as a safe deposit box or the distant home of a trusted friend or relative. Also consider “cloud computing” — storing digital files with a secure Web-based provider.

4. Cash. You may not receive insurance money right away. A good rule of thumb is to set aside three to six months’ worth of living expenses in a savings or money market account. Also maintain a cash reserve in your home in a durable, fireproof safe.

5. An emergency plan. Establish a family emergency plan that includes evacuation routes, methods of getting in touch and a safe place to meet. Because a disaster might require you to stay in your home, stock a supply kit with water, nonperishable food, batteries and a first aid kit.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

UNDERSTANDING THE DIFFERENCES BETWEEN HEALTH CARE ACCOUNTS

Posted by Admin Posted on Oct 23 2017

UNDERSTANDING THE DIFFERENCES BETWEEN HEALTH CARE ACCOUNTS

 

Health care costs continue to be in the news and on everyone’s mind. As a result, tax-friendly ways to pay for these expenses are very much in play for many people. The three primary players, so to speak, are Health Savings Accounts (HSAs), Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs).

All provide opportunities for tax-advantaged funding of health care expenses. But what’s the difference between these three types of accounts? Here’s an overview of each one:

HSAs. If you’re covered by a qualified high-deductible health plan (HDHP), you can contribute pretax income to an employer-sponsored HSA — or make deductible contributions to an HSA you set up yourself — up to $3,400 for self-only coverage and $6,750 for family coverage for 2017. Plus, if you’re age 55 or older, you may contribute an additional $1,000.

You own the account, which can bear interest or be invested, growing tax-deferred similar to an IRA. Withdrawals for qualified medical expenses are tax-free, and you can carry over a balance from year to year.

FSAs. Regardless of whether you have an HDHP, you can redirect pretax income to an employer-sponsored FSA up to an employer-determined limit — not to exceed $2,600 in 2017. The plan pays or reimburses you for qualified medical expenses.

What you don’t use by the plan year’s end, you generally lose — though your plan might allow you to roll over up to $500 to the next year. Or it might give you a 2½-month grace period to incur expenses to use up the previous year’s contribution. If you have an HSA, your FSA is limited to funding certain “permitted” expenses.

HRAs. An HRA is an employer-sponsored arrangement that reimburses you for medical expenses. Unlike an HSA, no HDHP is required. Unlike an FSA, any unused portion typically can be carried forward to the next year. And there’s no government-set limit on HRA contributions. But only your employer can contribute to an HRA; employees aren’t allowed to contribute.

Please bear in mind that these plans could be affected by health care or tax legislation. Contact our firm for the latest information, as well as to discuss these and other ways to save taxes in relation to your health care expenses.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Tax Saving Techniques

Posted by Admin Posted on Oct 19 2017

Tax Saving Techniques

 

Following are some generally recognized financial planning tools that may help you reduce your tax bill.

Charitable Giving - Instead of selling your appreciated long-term securities, donate the stock instead and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.

Health Savings Accounts (HSAs) - If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.

ROTH IRAs - Contributions to a ROTH IRA are not tax deductible but the qualified distributions, including earnings are tax-free.

Municipal Bonds - Interest earned on these types of investments is tax-exempt.

Own a home - most of the cost of this type of investment is financed and the interest (on mortgages up to $1,000,000) is tax deductible. When the property is sold, individuals may exclude up to $250,000 ($500,000 if married jointly) of the gain.

Retirement Plans - Participate in your employer sponsored retirement plan, especially if there is a matching component. You will receive a current tax deduction and the tax-deferred compounding can add up to a large retirement savings.

3 Strategies for Handling Estimated Tax Payments

Posted by Admin Posted on Oct 18 2017

3 Strategies for Handling Estimated Tax Payments

 

In today’s economy, many individuals are self-employed. Others generate income from interest, rent or dividends. If these circumstances sound familiar, you might be at risk of penalties if you don’t pay enough tax during the year through estimated tax payments and withholding. Here are three strategies to help avoid underpayment penalties:

1. Know the minimum payment rules. For you to avoid penalties, your estimated payments and withholding must equal at least:

90% of your tax liability for the year,

110% of your tax for the previous year, or

100% of your tax for the previous year if your adjusted gross income for the previous year was $150,000 or less ($75,000 or less if married filing separately).

 

2. Use the annualized income installment method. This method often benefits taxpayers who have large variability in income by month due to bonuses, investment gains and losses, or seasonal income — especially if it’s skewed toward year end. Annualizing calculates the tax due based on income, gains, losses and deductions through each “quarterly” estimated tax period.

3. Estimate your tax liability and increase withholding. If, as year end approaches, you determine you’ve underpaid, consider having the tax shortfall withheld from your salary or year-end bonus by December 31. Because withholding is considered to have been paid ratably throughout the year, this is often a better strategy than making up the difference with an increased quarterly tax payment, which may trigger penalties for earlier quarters.

Finally, beware that you also could incur interest and penalties if you’re subject to the additional 0.9% Medicare tax and it isn’t withheld from your pay and you don’t make sufficient estimated tax payments. Please contact us for help with this tricky tax task.

Wills and Living Trusts

Posted by Admin Posted on Oct 18 2017

Wills and Living Trusts

 

WILLS AND LIVING TRUSTS: ESTATE PLANNING IMPERATIVES

Well-crafted, up-to-date estate planning documents are an imperative for everyone. They also can help ease the burdens on your family during a difficult time. Two important examples: wills and living trusts.

The will

A will is a legal document that arranges for the distribution of your property after you die and allows you to designate a guardian for minor children or other dependents. It should name the executor or personal representative who’ll be responsible for overseeing your estate as it goes through probate. (Probate is the court-supervised process of paying any debts and taxes and distributing your property after you die.) To be valid, a will must meet the legal requirements in your state.

If you die without a will (that is, “intestate”), the state will appoint an administrator to determine how to distribute your property based on state law. The administrator also will decide who will assume guardianship of any minor children or other dependents. Bottom line? Your assets may be distributed — and your dependents provided for — in ways that differ from what you would have wanted.

The living trust

Because probate can be time-consuming, expensive and public, you may prefer to avoid it. A living trust can help. It’s a legal entity to which you, as the grantor, transfer title to your property. During your life, you can act as the trustee, maintaining control over the property in the trust. On your death, the person (such as a family member or advisor) or institution (such as a bank or trust company) you’ve named as the successor trustee distributes the trust assets to the beneficiaries you’ve named.

Assets held in a living trust avoid probate — with very limited exceptions. Another benefit is that the successor trustee can take over management of the trust assets should you become incapacitated.

Having a living trust doesn’t eliminate the need for a will. For example, you can’t name a guardian for minor children or other dependents in a trust. However, a “pour over” will can direct that assets you own outside the living trust be transferred to it on your death.

Other documents

There are other documents that can complement a will and living trust. A “letter of instruction,” for example, provides information that your family will need after your death. In it, you can express your desires for the memorial service, as well as the contact information for your employer, accountant and any other important advisors. (Note: It’s not a legal document.)

Also consider powers of attorney. A durable power of attorney for property allows you to appoint someone to act on your behalf on financial matters should you become incapacitated. A power of attorney for health care covers medical decisions and also takes effect if you become incapacitated. The person to whom you’ve transferred this power — your health care agent — can make medical decisions on your behalf.

Foundational elements

These are just a few of the foundational elements of a strong estate plan. We can work with you and your attorney to address the tax issues involved.

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

Solicitud Electrónica para el Acuerdo de Pagos a Plazos

Posted by Admin Posted on Oct 17 2017

Solicitud Electrónica para el Acuerdo de Pagos a Plazos

 

Esta solicitud le permite a usted o a su representante autorizado (por Poder Legal) la oportunidad de evitar largas esperas telefónicas o la necesidad para escribir a, o visitar una oficina del IRS para solicitar un plan de pagos a plazos. Al completar el proceso por Internet, recibirá notificación inmediata de la aprobación o denegación del acuerdo solicitado.

También puede usar los enlaces a continuación para “solicitar” la mayoría de las revisiones a un Plan de Pagos ya establecido (en inglés) o modificar sus datos de seguridad para la autenticación electrónica.

Cargos Administrativos y Disponibilidad del Sistema

Si aprobamos su plan de pagos, uno de los siguientes cargos se le añadirá a su deuda tributaria:

- $31 por un plan de pagos a plazos por débito directo establecido a través del Acuerdo de Pagos a Plazos por internet (OPA)

- $149 por un plan de pagos establecido a través del OPA pero sin débito directo desde su cuenta bancaria

- $107 por un plan de pagos a plazos por débito directo que no fue establecido a través del OPA

- $225 por un plan de pagos a plazos sin débito directo desde su cuenta bancaria y que no fue establecido a través del OPA

- $43 si su ingreso está por debajo de cierto nivel ($31 por un plan de pagos a plazos por débito directo asegurado a través del OPA)

- No habrá cargo administrativo si califica para un acuerdo a corto plazo (120 días o menos)

Disponibilidad del Sistema

- Lunes a viernes 6 a.m. a las 12:30 a.m. Horario del este

- Sábado, 6 a.m. a las 10 p.m. Horario del este

- Domingo, 6 p.m. a la medianoche. Horario del este

Individuos

¿Reúne usted los requisitos?

Usted adeuda $50,000 o menos en impuestos, multas e intereses y presentó todas las declaraciones requeridas. También puede calificar para un acuerdo de pago a corto plazo si su deuda es menor de $100,000.

¿Qué necesita para solicitar?

- Nombre

- Dirección de correo electrónico válida

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Fecha de nacimiento

- Estado civil para efectos de la declaración

- Su número de Seguro Social (o de su cónyuge si presentaron un declaración conjunta) o el de identificación de contribuyente individual (ITIN). Si su estado civil para efectos de la declaración es de casado que presenta conjuntamente, la solicitud por Internet para un Plan de Pagos solo aceptará el primer Número de Seguro Social (SSN, por sus siglas en inglés) que aparece en su declaración de impuestos. Si su SSN aparece en segundo lugar, usted debe llamar al número que aparece en su factura o aviso, o seguir las instrucciones en nuestra página de información sobre los acuerdos de planes de pagos.

Poder Legal para un individuo

¿Está solicitando un Poder Legal (POA) para una persona física? Usted necesita:

- El número de Seguro Social (SSN) del contribuyente o el Número de identificación de contribuyente individual (ITIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

- El ingreso ajustado bruto del año anterior (AGI) (si recientemente presentó el del 2016, utilice el AGI del 2015)

Negocios

¿Reúne usted los requisitos?

Usted adeuda $25,000 o menos en impuestos, multas e intereses para el año actual o el año anterior, y presentó todas las declaraciones requeridas.

¿Qué necesita para solicitar?

- Su Número de identificación de empleador (EIN)

- Fecha en que se asignó su EIN (mes y año)

- Dirección utilizada en la declaración de impuestos tramitada más recientemente

- Su número de identificación de llamada en el Aviso

- Poder Legal

- ¿Está solicitando un Poder Legal (POA) para un negocio? Usted necesita:

- Su Número de identificación de empleador (EIN)

- Su número registrado en el Archivo Central de Autorizaciones (CAF)

- Número de identificación de llamada en el Aviso o la fecha de la firma del POA en el Formulario 2848(SP)

Basado en el tipo de acuerdo solicitado, puede que también necesite:

- Domicilio del negocio según mostrado en la declaración de impuesto que presentó más recientemente

- Formulario de impuestos que presentó o que fue examinado

- Periodo de impuestos que presentó o que fue examinado

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Gifts to Charity: Six Facts About Written Acknowledgements

Posted by Admin Posted on Oct 16 2017

Gifts to Charity: Six Facts About Written Acknowledgements

 

Throughout the year, many taxpayers contribute money or gifts to qualified organizations eligible to receive tax-deductible charitable contributions. Taxpayers who plan to claim a charitable deduction on their tax return must do two things:

Have a bank record or written communication from a charity for any monetary contributions.

Get a written acknowledgment from the charity for any single donation of $250 or more.

Here are six things for taxpayers to remember about these donations and written acknowledgements:

1- Taxpayers who make single donations of $250 or more to a charity must have one of the following:

A separate acknowledgment from the organization for each donation of $250 or more.

One acknowledgment from the organization listing the amount and date of each contribution of $250 or more.

2- The $250 threshold doesn’t mean a taxpayer adds up separate contributions of less than $250 throughout the year.

For example, if someone gave a $25 offering to their church each week, they don’t need an acknowledgement from the church, even though their contributions for the year are more than $250.

3- Contributions made by payroll deduction are treated as separate contributions for each pay period.

4- If a taxpayer makes a payment that is partly for goods and services, their deductible contribution is the amount of the payment that is more than the value of those goods and services.

5- A taxpayer must get the acknowledgement on or before the earlier of these two dates:

The date they file their return for the year in which they make the contribution.

The due date, including extensions, for filing the return.

6- If the acknowledgment doesn't show the date of the contribution, the taxpayers must also have a bank record or receipt that does show the date.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tips for Individuals Who Need to Reconstruct Records After a Disaster

Posted by Admin Posted on Oct 10 2017

Reconstruct Records After a Disaster

 

Taxpayers who are victims of a disaster might need to reconstruct records to prove their loss. Doing this may be essential for tax purposes, getting federal assistance, or insurance reimbursement.

Here are 12 things taxpayers can do to help reconstruct their records after a disaster:

Taxpayers can get free tax return transcripts by using the Get Transcript tool on IRS.gov. They can also call 800-908-9946 to order them by phone.

To establish the extent of the damage, taxpayers should take photographs or videos as soon after the disaster as possible.

Taxpayers can contact the title company, escrow company, or bank that handled the purchase of their home to get copies of appropriate documents.

Home owners should review their insurance policy as the policy usually lists the value of a building to establish a base figure for replacement.

Taxpayers who made improvements to their home should contact the contractors who did the work to see if records are available. If possible, the home owner should get statements from the contractors to verify the work and cost. They can also get written accounts from friends and relatives who saw the house before and after any improvements.

For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, the taxpayer can contact the attorney who handled the trust.

When no other records are available, taxpayers can check the county assessor’s office for old records that might address the value of the property.

There are several resources that can help someone determine the current fair-market value of most cars on the road. These resources are all available online and at most libraries:

Kelley’s Blue Book

National Automobile Dealers Association

Edmunds

Taxpayers can look on their mobile phone for pictures that show the damaged property before the disaster.

Taxpayers can support the valuation of property with photographs, videos, canceled checks, receipts, or other evidence.

If they bought items using a credit card or debit card, they should contact their credit card company or bank for past statements.

If a taxpayer doesn’t have photographs or videos of their property, a simple method to help them remember what items they lost is to sketch pictures of each room that was impacted.

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

Extension Filers Should Review Tax Credits Before Filing

Posted by Admin Posted on Oct 05 2017

Extension Filers Should Review Tax Credits Before Filing

 

Taxpayers who requested an extension of time to file their federal tax returns have until Oct.16 to double-check their returns for tax benefits that people often overlook. These taxpayers still have time to see if they can benefit from these four credits.

Earned Income Tax Credit

The Earned Income Tax Credit – also known as EITC and EIC –  benefits people who work and who have low-to-moderate incomes. This credit reduces the amount of tax owed and may result in a refund. To qualify for this credit, a person must meet certain requirements. They must also file a tax return.

Child Tax Credit

This is a credit of up to $1,000 per qualifying child. Taxpayers who claim this credit – but who do not qualify for the full amount – may also be able to take the additional child tax credit.

Saver’s Credit

This credit helps low-to-moderate-income workers save for retirement. It is also known as the Retirement Savings Contributions Credit.

American Opportunity Credit

A credit for tuition, enrollment fees, and class material for the first four years of higher education. The amount of this credit is up to $2,500 per eligible student per year.

Taxpayers should check IRS.gov/credits-deductions to learn more about other credits they may be qualified to claim when they file. Taxpayers who must file their 2016 taxes by October 16 should consider filing electronically using IRS e-file or the Free File system.

Additional filing information for taxpayers in disaster areas and combat zones:

Although Oct. 16 is the last day for most people to file, some still have more time. This includes taxpayers in places recently hit by hurricanes that are federally-declared disaster areas. It also includes members of the military and others serving in a combat zone who have at least 180 days after they leave the combat zone to file returns and pay their taxes due.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Can I negotiate my checking account fees with my current bank?

Posted by Admin Posted on Oct 03 2017

Can I negotiate my checking account fees with my current bank?

 

Yes. Here are some tips on how to approach this:

See what your fees and charges have been over the past 3 years.

Write down your checking needs, i.e. how many checks you write a month, how many ATM visits, how many deposits, how many times you have overdrawn, how often you go below the minimum balance.

Take this info and do some research into other banks in the area. Compare their rates and fees to your bank.

Go to your bank and ask to speak to a manager. Tell them you want to reduce your banking costs. If they don't negotiate, bring up their competition. If they don't want to lose your business they will negotiate. Also ask them other ways to cut costs.

Keep in mind that many banks offer free checking to seniors, students, and the disabled.

Don't rule out smaller banks as they may be more willing to cut your costs just to get your business.

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

October Due Dates

Posted by Admin Posted on Oct 03 2017

October Due Dates

 

All due dates assume that the date falls on a business day. If the due date falls on a holiday or weekend, the due date will be the next business day.

October 10

Employees who work for tips - If you received $20 or more in tips during September, report them to your employer. You can use Form 4070 Employee's Report of Tips to Employer.

October 15

Individuals - If you have an automatic 6-month extension to file your income tax return, file Form 1040, 1040A, 1040EZ, FBAR Form 114, or 709 and pay any tax, interest, and penalties due.

Corporations - File Form 1120 or 1120-A and pay any tax due. This due date applies only if you timely requested an automatic 6-month extension. Otherwise, see April 15.

Employers - Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in September.

Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in September.

October 31

Employers - Social Security, Medicare, and withheld income tax. File form 941 for the third quarter of the current year. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until November 10 to file the return.

Employers - Federal Unemployment Tax. Deposit the tax owed through September if more than $500.

Employers - Income Tax Withholding. Ask employees whose withholding allowances will be different in the next calendar year to fill out a new Form W-4.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What type of lease is a "maintenance lease"?

Posted by Admin Posted on Sept 28 2017

What type of lease is a maintenance lease?

 

The dealer bears the maintenance expenses in a maintenance lease. The opposite is true in a non-maintenance lease. If the dealer provides repair and maintenance, you will need to bring the car to the dealership in line with the suggested schedule by the manufacturer to maintain the warranty coverage. (You will typically have to obey the manufacturer's scheduled maintenance in order to guarantee warranty coverage, even if you have to pay for the repairs.)

You pay the dealer a set amount for maintenance each month in what is called a budget maintenance provision. The dealer subtracts maintenance expenses that are incurred from your maintenance account. When the lease ends, you will make up the difference or receive a refund if more was deposited than used.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IRS Offers Help to Hurricane Victims

Posted by Admin Posted on Sept 27 2017

IRS Offers Help to Hurricane Victims

 

A Recap of Key Tax Relief Provisions Available Following Harvey, Irma and Maria

The Internal Revenue Service today offered a rundown of key tax relief that has been made available to victims of Hurricanes Harvey, Irma and Maria.

In general, the IRS is now providing relief to individuals and businesses anywhere in Florida, Georgia, Puerto Rico and the Virgin Islands, as well as parts of Texas. Because this relief postpones various tax deadlines, individuals and businesses will have until Jan. 31, 2018 to file any returns and pay any taxes due. Those eligible for the extra time include:

Individual filers whose tax-filing extension runs out on Oct. 16, 2017. Because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

Business filers, such as calendar-year partnerships, whose extensions ran out on Sept. 15, 2017.

Quarterly estimated tax payments due on Sept. 15, 2017 and Jan. 16, 2018.

Quarterly payroll and excise tax returns due on Oct. 31, 2017.

Calendar-year tax-exempt organizations   whose 2016 extensions run out on Nov. 15, 2017.

A variety of other returns, payments and tax-related actions also qualify for additional time. See the disaster relief page on IRS.gov for details on these and offer relief the IRS has offered since these hurricanes began hitting in August. The IRS also continues to closely monitor the aftermath of these storms, and additional updates for taxpayers and tax professionals will be posted to IRS.gov

Besides extra time to file and pay, the IRS offers other special assistance to disaster-area taxpayers. This includes the following:

Special relief helps employer-sponsored leave-based donation programs aid hurricane victims. Under these programs, employees may forgo their vacation, sick or personal leave in exchange for cash payments the employer makes, before Jan. 1, 2019, to charities providing relief. Donated leave is not included in the employee’s income, and employers may deduct these cash payments to charity as a business expense.

401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to hurricane victims and members of their families. Under this broad-based relief, a retirement plan can allow a hurricane victim to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or dependent who lived or worked in the disaster area. Hardship withdrawals must be made by Jan. 31, 2018.

The IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due during the first 15 days of the disaster period. Check out the disaster relief page for the time periods that apply to each jurisdiction.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What if my ATM card is lost or stolen?

Posted by Admin Posted on Sept 26 2017

What if my ATM card is lost or stolen?

 

It's important to note the difference in how you will be reimbursed for credit cards vs. ATM or debit cards. For a credit card your loss is limited to $50.

However, for an ATM or debit card the loss is limited to $50 if you notify your institution within 2 business days after the card is lost or stolen.

Keep in mind that the loss could be up to $500 if you do not tell your bank within two business days of the loss or theft.

If you do not report unauthorized transfers within 60 days of your statement being mailed to you, you run the risk of having unlimited loss on transfers made after the 60 days.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What kinds of loans exist for business financing?

Posted by Admin Posted on Sept 22 2017

What kinds of loans exist for business financing?

 

You must know the exact amount of money that you need, what your purpose is and how you will repay it in order to be successful in getting a loan. You must convince the lender in a written proposal that you are a good credit risk.

There are two basic kinds of loans, although terms vary by lender:

Short-term and long-term, maturity periods of up to one year are generally short-term, which include accounts receivable loans, working capital loans and lines of credit.

Maturities greater than a year and less than seven years is a typical long-term loan. Equipment and real estate loans can have maturity up to 25 years. Major business expenses such as purchasing real estate and facilities, durable equipment, construction, vehicles, furniture and fixtures, etc. are a few purposes for long-term loans.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Are you a Hurricane Irma Victim? The IRS wants you to know this!

Posted by Admin Posted on Sept 18 2017

Are you a Hurricane Irma Victim? The IRS wants you to know this!

 

Extension Filers Have Until Jan. 31 to File

Hurricane Irma victims in Florida have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.This includes an additional filing extension for taxpayers with valid extensions that run out on Oct. 16, and businesses with extensions that run out on Sept. 15.

The IRS is now offering this expanded relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for either individual assistance or public assistance in Florida.

The tax relief postpones various tax filing and payment deadlines that occurred starting on Sept. 4, 2017 in Florida. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes that were originally due during this period.

This includes the Sept. 15, 2017 and Jan. 16, 2018 deadlines for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

A variety of business tax deadlines are also affected including the Oct. 31 deadline for quarterly payroll and excise tax returns. Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2016 extensions run out on Sept. 15, 2017 and calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017. The disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due during the first 15 days of the disaster period. Check out the disaster relief page for the time periods that apply to each jurisdiction.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or the return for the prior year (2016). 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

September Due Dates

Posted by Admin Posted on Sept 05 2017

September Due Dates

 

September 10

Employees who work for tips - If you received $20 or more in tips during August, report them to your employer. You can use Form 4070 Employee's Report of Tips to Employer.

September 15

Individuals - Make a payment of your current year estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the third installment date for estimated tax in the current year.

Partnerships - File Form 1065. This due date applies only if you were given an additional 6-month extension. Provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute K-1.

Electing large partnerships - File Form 1065-B. This due date applies only if you were given an additional 6-month extension. See March 15 for the due date for furnishing the Schedules K-1 to the partners.

S Corporations - File Form 1120S and pay any tax due. This due date applies only if you timely requested an automatic 6-month extension. Otherwise, see March 15. Provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1.

Corporations - Deposit the third installment of your estimated income tax. A worksheet, Form 1120-W, is available to help you make an estimate of your tax for the year.

Employers - Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in August.

Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in August.

September 30

Trusts and Estates - File Form 1041. This due date applies only if you were given an additional 5-month extension. Otherwise, see April 15.

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

Beware of Fake Charity Scams Relating to Hurricane Harvey

Posted by Admin Posted on Aug 30 2017

Beware of Fake Charity Scams Relating to Hurricane Harvey

 

WASHINGTON ― The Internal Revenue Service today issued a warning about possible fake charity scams emerging due to Hurricane Harvey and encouraged taxpayers to seek out recognized charitable groups for their donations.

While there has been an enormous wave of support across the country for the victims of Hurricane Harvey, people should be aware of criminals who look to take advantage of this generosity by impersonating charities to get money or private information from well-meaning taxpayers. Such fraudulent schemes may involve contact by telephone, social media, e-mail or in-person solicitations.

Criminals often send emails that steer recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities in order to persuade people to send money or provide personal financial information that can be used to steal identities or financial resources.

IRS.gov has the tools people need to quickly and easily check the status of charitable organizations.

The IRS cautions people wishing to make disaster-related charitable donations to avoid scam artists by following these tips:

Be sure to donate to recognized charities.

Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. The IRS website at IRS.gov has a search feature, Exempt Organizations Select Check, through which people may find qualified charities; donations to these charities may be tax-deductible.

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. Scam artists may use this information to steal a donor’s identity and money.

Never give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the donation.

Consult IRS Publication 526, Charitable Contributions, available on IRS.gov. This free booklet describes the tax rules that apply to making legitimate tax-deductible donations. Among other things, it also provides complete details on what records to keep.

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.” Details on available relief can be found on the disaster relief page on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Business Travel Expenses

Posted by Admin Posted on Aug 28 2017

Business Travel Expenses

 

Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Generally, employees deduct these expenses by using Form 2106 (PDF), Employee Business Expenses, or Form 2106-EZ (PDF), Unreimbursed Employee Business Expenses, and Form 1040, Schedule A (PDF), Itemized Deductions. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes.

You're traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that's your tax home. Your travel on weekends to your family home in Chicago isn't for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.

You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you can't deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you'll work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes. For an exception to the 1-year rule for federal crime investigations or prosecutions, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

You may deduct travel expenses, including meals and lodging you incurred in looking for a new job in your present trade or business. You may not deduct these expenses if you had them while looking for work in a new trade or business or while looking for work for the first time. If you're unemployed and there's a substantial break between the time of your past work and your looking for new work, you may not deduct these expenses, even if the new work is in the same trade or business as your previous work. Refer to Publication 529, Miscellaneous Deductions.

Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

Deductible travel expenses while away from home include, but aren't limited to, the costs of:

Travel by airplane, train, bus or car between your home and your business destination. (If you're provided with a ticket or you're riding free as a result of a frequent traveler or similar program, your cost is zero.)

Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another.

Shipping of baggage, and sample or display material between your regular and temporary work locations.

Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.

Meals and lodging.

Dry cleaning and laundry.

Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)

Tips you pay for services related to any of these expenses.

Other similar ordinary and necessary expenses related to your business travel. (These expenses might include transportation to and from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer.)

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.

If you're an employee, your allowable travel expenses are figured on Form 2106 or Form 2106-EZ. Your allowable unreimbursed expenses are carried from Form 2106 or Form 2106-EZ to Form 1040, Schedule A (PDF), and are subject to a limit based on 2% of adjusted gross income. Refer to Topic 508 for information on the 2% limit. If you don't itemize your deductions, you can't deduct these expenses. If you're self-employed, you can deduct travel expenses on Form 1040, Schedule C (PDF), Profit or Loss From Business (Sole Proprietorship), orForm 1040, Schedule C-EZ (PDF), Net Profit From Business (Sole Proprietorship), or if you're a farmer, on Form 1040, Schedule F (PDF), Profit or Loss From Farming.

If you're a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income rather than an itemized deduction on Form 1040, Schedule A. This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Claim these expenses on Form 2106 or Form 2106-EZ and carry them to the appropriate line on Form 1040. Expenses in excess of the limit can be claimed only as an itemized deduction on Form 1040, Schedule A.

Good records are essential. Refer to Topic 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Can married couples hold property?

Posted by Admin Posted on Aug 25 2017

Can married couples hold property?

 

Yes. After marriage, there are many ways of owning property. They differ from state to state.

Sole tenancy, which is when one individual has ownership. The property is passed on in accordance with the will at death.

Joint tenancy, with the privilege of survivorship. Two or more people have equal ownership. The property is passed to the joint owner upon death. This should be used to effectively avoid probate.

Tenancy in common, property has joint ownership with the privilege of survivorship. The property is passed on according to your will upon death.

Tenancy by the entirety, like joint tenancy, with privilege of survivorship. This doesn't allow a spouse to get rid of the property without the other's consent and is only possible for spouses.

Community property, property that is gained through marriage that has equal ownership. States such as AZ, CA, ID, LA, NV, NM, TX, WA, and WI allow community property.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How does an auto lease function?

Posted by Admin Posted on Aug 23 2017

How does an auto lease function?

 

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, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How do I know if a business based at home is good for me?

Posted by Admin Posted on Aug 23 2017

How do I know if a business based at home is good for me?

 

You have to base your decision to start your own business on something other than the desire to be your own boss, such as: knowing beforehand what it is going to take, a thorough evaluation of your personality, and willingness to go the extra mile.

You must be able to make plans and continually make the necessary changes and developments as you go. You will want to set up an environment that is devoted to the professional aspects of your life and even consider a separate office within your home.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How does the division of property in a divorce work?

Posted by Admin Posted on Aug 22 2017

How does the division of property in a divorce work?

 

Each state has their own laws regarding the division of property between ex-spouses. When it comes to applying those laws, matrimonial judges have a great amount of flexibility.

Whether or not an attorney represents you, you should make sure to have done the following:

Learn how the laws of your state function with respect to property division.

Make sure to have the papers to confirm that property owned separately during the marriage has been kept separate.

Be prepared to report any non-financial contributions to the marriage that you have made - such as any non-financial contributions to his/her financial success or spousal support while he/she went to school.

Be willing to report any need for alimony or child support.

Consider having the divorce agreement supply you with funds if you have not worked outside of the home during the marriage.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

The different types of medical plans for employees

Posted by Admin Posted on Aug 21 2017

The different types of medical plans for employees

 

There are two options: a fee-for-service plan, or a pre-paid plan (commonly referred to as a Health Maintenance Organization, or HMO).

An indemnity plan or insurance permits each employee to decide their own doctor. The employee will pay for the medical care and then file a claim with the insurance company for reimbursement. There are deductibles and coinsurance as well. Deductibles vary from $100 to $1000 a year.

With coinsurance, a percentage of the medical expenses are paid by the employee and the remaining are covered by the plan. 20 percent is the normal coinsurance amount to be paid by the employee - the remaining 80 percent is paid by the plan.

There are three common indemnity plans that give health care to groups of employees: 1) a basic health insurance plan that will cover hospitalization and surgery as well as physician's care in the hospital; 2) an insurance plan that will supplement the basic plan by reimbursing the charges not paid by that plan; and 3) a comprehensive plan that (with one common deductible and coinsurance features) will cover both hospital and medical care.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What can I do to develop a better business cash flow?

Posted by Admin Posted on Aug 21 2017

What can I do to develop a better business cash flow?

 

There are several options for increasing cash reserves:

Accounts receivables: Properly control your accounts receivables and retrieve overdue accounts as quickly as possible. If you are not aggressive with collection, profits are lost.

Having stricter credit standards: With the tightening of credit and terms, more clients are paying for their purchases in cash, which leads to more cash on hand and lowering the bad-debt expense. Although this is beneficial in the short term, it may not be as appealing in the long term. Less strict credit policies permit more clients to purchase the products or services.

Take advantage of the market: A common problem is many small businesses price their products lower than the market and do not make a profit. You should research the product's market, distribution costs and the competition before deciding on prices. Constantly keep an eye on the aspects that play a role on pricing and make adjustments when necessary.

Make use of short-term loans: Taking a loan from a financial institution can solve short-term cash flow problems. The common forms of credit used in these circumstances are revolving credit lines and equity loans.

Boost sales: One way to increase the cash flow is to boost sales. Take into account, when a large amount of your sales are credit sales, sales are boosted (as well as accounts receivable), but not cash on hand. This causes your inventory to diminish. Due to receivables not being collected until 30 days after the sale, a significant increase in credit sales will diminish the company's cash reserves fast.

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

Where to File Addresses for Taxpayers and Tax Professionals in FLORIDA

Posted by Admin Posted on Aug 17 2017

Where to File Addresses for Taxpayers and Tax Professionals in FLORIDA

 

These Where to File addresses are to be used ONLY by TAXPAYERS AND TAX PROFESSIONALS filing individual federal tax returns in Florida during Calendar Year 2017.

 

Filing FORM

Use this address IF YOU ARE  NOT ENCLOSING A PAYMENT...

Use this address IF YOU ARE ENCLOSING A PAYMENT...

1040

Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0002

Internal Revenue Service
P.O. Box 1214
Charlotte, NC 28201-1214

1040A

Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0015

Internal Revenue Service
P.O. Box 1214
Charlotte, NC 28201-1214

1040EZ

Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0014

Internal Revenue Service
P.O. Box  1214
Charlotte, NC 28201-1214

1040-ES

N/A

Internal Revenue Service
P.O. Box 1300
Charlotte, NC 28201-1300

1040-ES(NR)

N/A

Internal Revenue Service
P.O. Box 1300
Charlotte, NC 28201-1300

1040V

N/A

Internal Revenue Service
P.O. Box 1214
Charlotte, NC 28201-1214

1040-X

Department of the Treasury
Internal Revenue Service
Austin, TX 73301

Department of the Treasury
Internal Revenue Service
Austin, TX  73301

4868

Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0045

Internal Revenue Service
P.O. Box 1302
Charlotte, NC 28201-1302

 

 

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

 

Watch Out for the W-2 Email Scam

Posted by Admin Posted on Aug 16 2017

Watch Out for the W-2 Email Scam

 

WASHINGTON – The IRS, state tax agencies and the tax industry today urged tax professionals and businesses to beware of a recent increase in email scams targeting employee Forms W-2.

The W-2 scam – called a business email compromise or BEC – is one of the most dangerous phishing email schemes trending nationwide from a tax administration perspective. The IRS saw a sharp increase in the number of incidents and victims during the 2017 filing season.

Increasing awareness about business email compromises is part of the “Don’t Take the Bait” campaign, a 10-part series aimed at tax professionals. The IRS, state tax agencies and the tax industry, working together as the Security Summit, urge practitioners to learn to protect themselves and their clients from BEC scams. This is part of the ongoing Protect Your Clients; Protect Yourselfeffort.

A business email compromise occurs when a cybercriminal is able to “spoof” or impersonate a company or organization executive’s email address and target a payroll, financial or human resources employee with a request. For example, fraudsters will try to trick an employee to transfer funds into a specified account or request a list of all employees and their Forms W-2.

“These are incredibly tricky schemes that can be devastating to a tax professional or business,” said IRS Commissioner John Koskinen. “Cybercriminals target people with access to sensitive information, and they cleverly disguise their effort through an official-looking email request.”

The Federal Bureau of Investigation reported earlier this year that there has been a 1,300 percent increase in identified losses – with more than $3 billion in wire transfers – since January 2015. The FBI found that the culprits behind these scams are national and international organized crime groups who have targeted businesses and organizations in all 50 states and 100 countries worldwide.

During the 2016 filing season, the IRS first warned businesses that the scam had migrated to tax administration and scammers were using business email compromise tactics to obtain employees’ Forms W-2. The criminals were immediately filing fraudulent tax returns that could mirror the actual income received by employees – making the fraud more difficult to detect.

In 2017, the IRS saw the number of businesses, public schools, universities, tribal governments and nonprofits victimized by the W-2 scam increase to 200 from 50 in 2016. Those 200 victims translated into several hundred thousand employees whose sensitive data was stolen. In some cases, the criminals requested both the W-2 information and a wire transfer.

The Form W-2 contains the employee’s name, address, Social Security number, income and withholdings. That information was used to file fraudulent tax returns, and it can be posted for sale on the Dark Net, where criminals also seek to profit from these thefts.

If the business or organization victimized by these attacks notifies the IRS, the IRS can take steps to help prevent employees from being victims of tax-related identity theft. However, because of the nature of these scams, many businesses and organizations did not realize for days, weeks or months that they had been scammed.

The IRS established a special email notification address specifically for businesses and organizations to report W-2 thefts: dataloss@irs.gov. Be sure to include “W-2 scam” in the subject line and information about a point of contact in the body of the email. Businesses and organizations that receive a suspect email but do not fall victim to the scam can forward it to the BEC to phishing@irs.gov, again with “W-2 scam” in the subject line.

Protecting Clients and Businesses from BECs

The IRS urges tax professionals to both beware of business email compromises as a threat to their own systems and to educate their clients about the existence of BEC scams. Employers, including tax practitioners, should review their policies for sending sensitive data such as W-2s or making wire transfers based solely on an email request.

Tax professionals should consider taking these steps:

Confirm requests for Forms W-2, wire transfers or any sensitive data exchanges verbally, using previously-known telephone numbers, not telephone numbers listed in the email.

Verify requests for location changes in vendor payments and require a secondary sign-off by company personnel.

Educate employees about this scam, particularly those with access to sensitive data such as W-2s or with authorization to make wire transfers.

Consult with an IT professional and follow these FBI recommended safeguards:

Create intrusion detection system rules that flag e-mails with extensions that are similar to company email. For example, legitimate e-mail of abc_company.com would flag fraudulent email of abc-company.com.

Create an email rule to flag email communications where the “reply” email address is different from the “from” email address shown.

Color code virtual correspondence so emails from employee/internal accounts are one color and emails from non-employee/external accounts are another.

If a BEC incident occurs, notify the IRS. File a complaint with the FBI at the Internet Crime Complaint Center (IC3.)

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Identity Protection Tips

Posted by Admin Posted on Aug 15 2017

Identity Protection Tips

 

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. You may be unaware you are a victim until you receive an IRS notice or you file your return, but it is rejected because your SSN already has been used. It's important that you take steps to protect all of your personally identifiable information.

Don't fall for common scams

An unexpected email purporting to be from the IRS is always a scam. The IRS does not initiate contact with taxpayers by email or social media to request personal or financial information. If you receive a scam email claiming to be from the IRS, forward the email to phishing@irs.gov.

An unexpected phone call from someone claiming to be an IRS agent, either threatening you with arrest or deportation if you fail to pay immediately, is a scam. In another variation, the caller requests your financial information in order to send you a refund. Report these calls and other IRS impersonation schemes to the Treasury Inspector General for Tax Administration at 1-800-366-4484 or online at IRS Impersonation Scam Reporting.

If you discover a website that claims to be the IRS but does not begin with 'www.irs.gov,' forward the link to phishing@irs.gov.

Tips to protect your SSN and identifiable information

Keep your card and any other document that shows your Social Security number in a safe place; DO NOT routinely carry your card or other documents that display your number.

Be careful about sharing your number, even when you are asked for it; ONLY share your SSN when absolutely necessary.

Protect your personal financial information at home and on your computer.

Check your credit report annually.

Check your Social Security Administration earnings statement annually,

Protect your personal computers by using firewalls, anti-spam/virus software, update security patches and change passwords for Internet accounts.

Protect your personally identifiable information; keep it private. Only provide your SSN when YOU initiate the contact or you are sure who you know is asking.

About data breaches

Not all data breaches or computer hacks result in identity theft and not all identity theft is tax-related identity theft. It's important to know what type of personally identifiable information was stolen. For example, did a data breach compromise your credit card or did it compromise your SSN?

If you've been a victim of a data breach, keep in touch with the company to learn what it is doing to protect you. Follow the steps recommended by the Federal Trade Commission's www.identitytheft.gov site.

If your SSN was compromised, follow the steps outlined in the Taxpayer Guide to Identity Theft.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Be Alert to Scammers Who Pose as the IRS

Posted by Admin Posted on Aug 15 2017

Be Alert to Scammers Who Pose as the IRS

 

Scammers pretending to be from the IRS continue to target taxpayers. These scams take many different forms. Among the most common are phone calls and fake emails. Thieves use the IRS name, logo or a fake website to try and steal money from taxpayers. Identity theft can also happen with such scams.

Taxpayers need to be cautious of phone calls or automated messages from scammers who claim to be from the IRS. These criminals often say the taxpayer owes money. They also demand immediate payment. Scammers also lie to taxpayers and say they are due a refund. They do this to lure their victims into giving their bank account information over the phone. The IRS warns taxpayers not to fall for these scams.

Below are tips that will help avoid becoming a victim during the summer months and throughout the year:

The IRS will NOT:

Call to demand immediate payment using specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS first mails a bill to taxpayers who owe taxes. If the IRS assigns a case to a Private Debt Collector (PCA), both the IRS and the authorized collection agency send a letter to the taxpayer. Payment is always to the United States Treasury.

Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.

Demand payment of taxes without giving the taxpayer the opportunity to question or appeal the amount owed.

Ask for credit or debit card numbers over the phone.

If a taxpayer does not owe any tax, they should:

Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.

Report the incident to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" to the comments of your report.

If a taxpayer is not sure whether they owe any tax, they can view their tax account information on IRS.gov to find out.

Taxpayers should also watch out for emails and websites looking to steal personal information. An IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. Criminals often use fake refunds, phony tax bills or threats of an audit. Some emails link to fake websites that look real. The scammers’ goal is to lure victims to give up their personal and financial information. If they’re successful, they use it to steal a victim’s money and their identity.

For  taxpayers who get a ‘phishing’ email, the IRS offers this advice:

Don’t reply to the message.

Don’t give out personal or financial information.

Forward the email to phishing@irs.gov. Then delete it.

Do not open any attachments or click on any links. They may have malicious code that will infect your computer.

More information on how to report phishing or phone scams is available on IRS.gov/phishing.

Avoid scams. The IRS does not initiate contact using social media or text message. The first contact normally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Reminds Truckers: Highway Use Tax Return Is Due Aug. 31

Posted by Admin Posted on Aug 11 2017

IRS Reminds Truckers Highway Use Tax Return Is Due Aug 31

 

WASHINGTON — The Internal Revenue Service today reminded truckers and other owners of heavy highway vehicles that, in most cases, their next federal highway use tax return is due Thursday, Aug. 31, 2017.

The deadline generally applies to Form 2290  and the accompanying tax payment for the tax year that begins July 1, 2017, and ends June 30, 2018. Returns must be filed and tax payments made by Aug. 31 for vehicles used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.

Though some taxpayers have the option of filing Form 2290 on paper, the IRS encourages all taxpayers to take advantage of the speed and convenience of filing this form electronically  and paying any tax due electronically. Taxpayers reporting 25 or more taxed vehicles must e-file. Tax-suspended vehicles don’t count toward the 25-or-more taxed vehicle threshold. Visit IRS.gov for a list of IRS-approved  e-file providers.

The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. This generally includes trucks, truck tractors and buses. Ordinarily, vans, pickups and panel trucks are not taxable because they fall below the 55,000-pound threshold. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply, explained in the instructions to Form 2290.

Truckers do not need to visit an IRS office to e-file Form 2290 . The form can be filed online and any required tax payment can also be made online. Find an approved provider for Form 2290 on the 2290 e-file partner’s page.

Generally, e-filers receive their IRS-stamped Schedule 1 electronically minutes after filing. They can then print the Schedule 1 and provide it to their state department of motor vehicles, without visiting an IRS office. For those who choose to visit, note that the agency’s taxpayer assistance centers now operate on a “by-appointment” basis. See the Taxpayer Assistance Center Office Locator  on IRS.gov for 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: IRS

- Which banking fees should I watch for with a new bank account?

Posted by Admin Posted on Aug 10 2017

Which banking fees should I watch for with a new bank account?

 

Keep in mind that banks are always required to notify you of the fees for their accounts. The best account to choose is usually the one with the lowest fees, regardless of the interest rate.

Keep an eye out for potential extra charges when shopping for checking accounts. Ask about monthly fees, check processing fees, and ATM fees. Also be wary of cost-free checking accounts, as the bank may charge you if your balance drops below a certain amount. Also, the charges for printing new checks can often be much higher at your bank than through an outside printing provider.

In this day and age, it doesn't really benefit you to put money into an old fashioned "passbook" savings account. Often monthly account fees overshadow the small amount of interest you will earn. Instead, put your money into a checking account. If it is a larger sum, look into a money market account. In this type of account you will earn more interest than in a savings account, but watch out for additional charges if your balance drops too low.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Don’t Take the Bait! Prevent Remote Access Takeover Attacks

Posted by Admin Posted on Aug 09 2017

DON’T TAKE THE BAIT! PREVENT REMOTE ACCESS TAKEOVER ATTACKS

 

WASHINGTON — The Internal Revenue Service, state tax agencies and the tax industry today reminded tax professionals that their entire digital network could be at risk for remote takeover by cybercriminals. Such a takeover could lead to fraudulent tax filings and damage to their clients.

Multiple incidents have been reported to the IRS in the past year as tax professionals’ systems have been secretly infiltrated. The criminals accessed client tax returns, completed those returns, e-filed them and secretly directed refunds to their own accounts.

Increasing awareness about remote takeovers is part of the “Don’t Take the Bait” campaign, a 10-part series aimed at tax professionals. The IRS, state tax agencies and the tax industry, working together as the Security Summit, urge practitioners to learn to protect themselves from remote takeovers. This is part of the ongoing Protect Your Clients; Protect Yourself effort.

“This is another emerging threat to tax professionals that the IRS has seen on the rise,” IRS Commissioner John Koskinen said. “A remote takeover can be devastating to practitioners’ business as well as to the taxpayers they serve. It’s critical for people to take steps to understand and prevent these security threats before it’s too late.”

A remote attack targets an individual computer or network as the cybercriminal exploits weaknesses in security settings to access the devices. Another line of attack uses malware to download malicious code that gives the criminals access to the network. Especially vulnerable are wireless networks, including mobile phones, modems and router devices, printers, fax machines and televisions that retain their factory-issued password settings. Sometimes, these devices have no protection at all.

There are multiple ways that cybercriminals can gain control of computers and other devices. Phishing emails with attachments can easily download malware that, when opened, give the criminal remote control of a computer.

Cybercriminals also can deploy certain tools that allow them to identify the location of and get access to unprotected wireless devices. For example, a printer with a factory-issued password can easily be accessed, and the criminals can see tax return information stored in its memory.

The IRS urges tax professionals to take the following steps to help protect themselves from remote takeovers:

Educate staff members about the dangers of phishing scams, which can be in the form of emails, texts and calls, as well as the threat posed by remote access attacks;

Use strong security software, set it to update automatically and run a periodic security “deep scan” to search for viruses and malware;

Identify and assess wireless devices connected to the network, including mobile phones, computers, printers, fax machines, routers, modems and televisions. Replace factory password settings with strong passwords.

Strengthen passwords for devices and for software access. Make sure passwords are a minimum of eight digits (more is better) with a mix of numbers, letters and special characters;

Be alert for phishing scams: do not click on links or open attachments from unknown, unsolicited or suspicious senders;

Review any software that employees use to remotely access the network as well as those used by IT support vendors to remotely troubleshoot technical problems. Remote access software is a potential target for bad actors to gain entry and take control of a machine. Disable remote access software until it is needed.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Begins Issuing Notices to Taxpayers whose ITINs Expire by End of 2017

Posted by Admin Posted on Aug 09 2017

IRS Begins Issuing Notices to Taxpayers whose ITINs Expire by End of 2017

 

WASHINGTON — The Internal Revenue Service began mailing letters this month to more than 1 million taxpayers with expiring Individual Taxpayer ‎Identification Numbers and urges recipients to renew them as quickly as possible to avoid tax refund and processing delays.

ITINs with middle digits 70, 71, 72 or 80 are set to expire at the end of 2017. The notice being mailed -- CP-48 Notices, You must renew your Individual Taxpayer Identification Number (ITIN) to file your U.S. tax return -- explains the steps taxpayers need to take to renew the ITIN if it will be included on a U.S. tax return filed in 2018.

The notices will be issued over a five-week period beginning in early August. Taxpayers who receive the notice but have acted to renew their ITIN do not need to take further steps unless another family member is affected.

“We urge people who receive this letter to renew their ITIN as quickly as possible to avoid tax refund and processing delays next year,” said IRS Commissioner John Koskinen. “Taking steps now and renewing early will make things go much more smoothly for ITIN holders when it comes time to file their taxes.”

Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years will expire Dec. 31, 2017, and as mentioned above, ITINs with middle digits 70, 71, 72 or 80 will also expire at the end of the year. Affected taxpayers who expect to file a tax return in 2018 must submit a renewal application.

As a reminder, ITINs with middle digits 78 and 79 that expired at the end of last year can be renewed at any time.

Who Needs an ITIN?

ITINs are used by people who have tax filing or income reporting obligations under U.S. law but are not eligible for a Social Security number (SSN). ITIN holders should visit the ITIN information page on IRS.gov and take a few minutes to understand the guidelines.

Who Should Renew an ITIN?

Taxpayers with ITINs set to expire and who need to file a tax return in 2018 must submit a renewal application. Others do not need to take any action.

ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-NNNN) need to be renewed if the taxpayer will have a filing requirement in 2018.

Taxpayers whose ITINs expired due to lack of use should only renew their ITIN if they will have a filing requirement in 2018.

Taxpayers who are eligible for, or who have, an SSN should not renew their ITIN, but should notify IRS both of their SSN and previous ITIN, so that their accounts can be merged.

Taxpayers whose ITINs have middle digits 78 or 79 that have expired should renew their ITIN if they will have a filing requirement in 2018.

Family Option Remains Available

Taxpayers with an ITIN with middle digits 70, 71, 72, 78, 79 or 80 have the option to renew ITINs for their entire family at the same time. Those who have received a renewal letter from the IRS can choose to renew the family’s ITINs together even if family members have an ITIN with middle digits other than 70, 71, 72, 78, 79 or 80. Family members include the tax filer, spouse and any dependents claimed on the tax return.

How to Renew an ITIN

To renew an ITIN, taxpayers must complete a Form W-7 and submit all required documentation; taxpayers are not required to attach a federal tax return

The IRS is currently accepting ITIN renewals. There are three ways to submit the W-7 application package:

Mail the Form W-7, along with original identification documents or copies certified by the issuing agency, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.

Taxpayers have the option to work with Certified Acceptance Agents  (CAAs) authorized by the IRS to help them apply for an ITIN. CAAs can certify all identification documents for primary and secondary taxpayers and certify that an ITIN application is correct before submitting it to the IRS for processing. A CAA can also certify passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.

In advance, taxpayers can call and make an appointment at a designated IRS Taxpayer Assistance Center  instead of mailing original identification documents to the IRS.

Avoid Common Errors Now; Prevent Delays Next Year

Several common errors can delay some ITIN renewal applications. The mistakes generally center on missing information and/or insufficient supporting documentation. Here are a few examples of mistakes taxpayers should avoid:

Filing with an expired ITIN. Federal returns that are submitted in 2018 with an expired ITIN will be processed. However, exemptions and/or certain tax credits will be disallowed. Taxpayers will receive a notice in the mail advising them of the change to their tax return and their need to renew their ITIN. Once the ITIN is renewed, any applicable exemptions and credits will be restored and any refunds will be issued.

Missing a reason for applying. A reason for needing the ITIN must be selected on the Form W-7.

Missing a complete foreign address. When renewing an ITIN, if Reason B (non-resident alien) is marked, the taxpayer must include a complete foreign address on their Form W-7.

Mailing incorrect identification documents. Taxpayers mailing their ITIN renewal applications must include original identification documents or certified copies by the issuing agency and any other required attachments. They must also include the ITIN assigned to them and the name under which it was issued in 6e-f.

Taxpayers should review the Form W-7 instructions for detailed information and carefully check their package before submitting it.

As a reminder, the IRS no longer accepts passports that do not have a date of entry into the U.S. as a stand-alone identification document for dependents from a country other than Canada or Mexico, or dependents of U.S. military personnel overseas. The dependent’s passport must have a date of entry stamp, otherwise the following additional documents to prove U.S. residency are required:

U.S. medical records for dependents under age 6,

U.S. school records for dependents under age 18, and

U.S. school records (if a student), rental statements, bank statements or utility bills listing the applicant’s name and U.S. address, if over age 18

IRS Encourages More Applicants for the Acceptance Agent Program to Expand ITIN Services

To increase the availability of ITIN services nationwide, particularly in communities with high ITIN usage, the IRS is actively recruiting Certified Acceptance Agents. Applications are now accepted year-round. Interested individuals, community outreach partners and volunteers at tax preparation sites are encouraged to review program changes and requirements.

The IRS continues to work with partner groups and others in the ITIN community to share information about these important changes. To assist taxpayers, the IRS has a variety of informational materials, including flyers and fact sheets available in several languages on the ITIN information page on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

After marriage, what are the tax implications?

Posted by Admin Posted on Aug 08 2017

After marriage, what are the tax implications?

 

You are entitled to file a joint income tax return upon marriage. Although this simplifies the filing process, you will more than likely discover that your tax bill is either higher or lower than when you were single. It's higher when you file together, as more of your income is taxed in the higher tax brackets. This is commonly known as the marriage tax penalty. In 2003, a tax law that intended to reduce the marriage penalty went into effect, but this law didn't get rid of the penalty for higher bracket taxpayers.

Once married, you may not file separately in an attempt to avoid the marriage penalty. Actually, filing as married filing separately can raise your taxes. For the optimal filing status for your situation you should speak with your tax advisor.

If you have any questions regarding accounting, domestic taxation, international 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 Aug 08 2017

What is included in the initial costs of leasing a car?

 

Paws Up and pay attention to this!!!

Learn what the total initial costs will be when determining if you want to lease or buy. Smart cats like me, 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, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Mr. Meowney Thomson Reuters

What can I do to reduce the cost of my phone bill?

Posted by Admin Posted on Aug 08 2017

What can I do to reduce the cost of my phone bill?

 

There are many opportunities due to today's cost-cutting competition among phone service providers, such as:

Verify that your long-distance charges are competitively priced. Research which long-distance carrier will give you the best rate and switch if you are not with that carrier.

Use the phone book instead of dialing "Information."

If you have children at home, block all "900" numbers.

Stay in touch with relatives and friends through e-mail.

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

August Due Dates

Posted by Admin Posted on Aug 03 2017

August Due Dates

 

August 10

Employers - File Form 941 for the second quarter. This due date applies only if you deposited the tax for the quarter in full and on time.

Employees who work for tips - If you received $20 or more in tips during July, report them to your employer. You can use Form 4070 Employee's Report of Tips to Employer.

August 15

Employers - Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in July.

Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in July.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What coverage is essential for my auto policy?

Posted by Admin Posted on Aug 03 2017

What coverage is essential for my auto policy?

 

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, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

The Top 7 Questions You Should Ask to Your Possible Lawyer

Posted by Admin Posted on Aug 01 2017

The Top 7 Questions You Should Ask to Your Possible Lawyer

 

Before beginning a consultation, the following questions should be asked:

1- Is the first consultation free?

2- How long have you been an attorney?

3- Do you have a lot of cases that are like mine? (Try to find an attorney that has experience in your problem area.)

4- Are there references, such as trust officers in banks or other attorneys that I can contact?

5- Are there any clients or special-interest groups that you work for that may cause a conflict of interest?

6- Can we make a fee agreement? May we discuss the fees?

7- Is there anything in particular that I should bring to the first consultation?

Make sure to consult with at least two of the attorneys from your list. There is no need to be embarrassed about choosing the best attorney or changing appointments with an attorney after all investigation is complete.

It is now time to interview the possible attorneys. Make sure to have a brief summary of the case at hand as well as general questions to ask the attorney. There are two objectives for meeting with the attorney: 1) to see if the attorney has the talent needed to represent you, and 2) to see if you are comfortable with the attorney and the fee agreement.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What should the business strategy contain?

Posted by Admin Posted on Aug 01 2017

What should the business strategy contain?

 

A business strategy, when applied to your company, should include an introduction, details about marketing, financial management, operations of the company, and a closing statement.

IN THE INTRODUCTION OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

This segment of the business strategy should contain information about the company and its objectives. Detail the experience within your company and the structure of management and legal status. State what your business has to get ahead of the competition.

IN THE MARKETING PORTION OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

This is where you should state the products or services being offered and their demand in the market. It should also detail the market and its particular location and size.

IN THE FINANCIAL MANAGEMENT SEGMENT OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

You should outline the source and amount of the initial equity capital. You also should create a monthly operating budget for the beginning years, as well as expected return on investment (or ROI) and monthly cash flow for these years. After that, present the balance sheets and income statements for the first 2 years and state the break-even point. Discuss your own balance sheet and ways of compensation. Explain who will be in charge of accounting affairs and how they will be maintained. Lastly, think through the possible problems that may arise and develop solutions.

IN THE OPERATIONS SEGMENT OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

This is where the explanation of the management of the daily activities will be. It should include insurance coverage, lease or rent agreements and the processes related to the staff and employment. It should also detail what is necessary to produce the products/services and the processes of production and delivery.

IN THE CLOSING STATEMENT OF THE BUSINESS STRATEGY, WHAT SHOULD I INCORPORATE?

You should restate the company's objectives and purposes and explain the dedication you have to make your company succeed. Be sure to include the methods you plan to use to reach your objectives.

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

With a divorce, what are the tax implications?

Posted by Admin Posted on July 31 2017

With a divorce, what are the tax implications?

 

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, international 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 cut my utility costs?

Posted by Admin Posted on July 31 2017

What can I do to cut my utility costs?

 

These are a few tips to remember to help save money with utility costs:

See if your utility has a subsidizing program to make your home more energy-efficient. If that turns up nothing, you can still caulk your windows and check the insulation to make sure it has a high enough "R" factor.

Use fluorescent lights instead of incandescent bulbs for lights that are constantly on.

Maintain the thermostat at the highest and lowest temperature for comfort in the summer and winter, respectively.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Are surviving family members entitled to Social Security benefits?

Posted by Admin Posted on July 28 2017

Are surviving family members entitled to Social Security benefits?

 

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, international 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

Do I have what it takes to own and manage my own business?

Posted by Admin Posted on July 28 2017

Do I have what it takes to own and manage my own business?

 

First, think about why you want to start your own business and make a list. The thrill of being self-employed, the need for independence both financially and professionally, and the desire to use the most of your intelligence and talents are a few of the most frequent motivations.

You also need to make sure you have the desire to put in the time to make a successful business. To decide what type of business fits you the best, you should think about what you find enjoyment in doing and what talents you have. Ask others for their thoughts, and see if any of your everyday activities can be made profitable.

At this point, you will need to investigate what will be the exact niche for your company. Determine what it is you want to put on the market, what the competition is like, and how to get ahead of the competition. The most important consideration is the demand for your product or service.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What investment pitfalls should I be on the lookout for?

Posted by Admin Posted on July 28 2017

What investment pitfalls should I be on the lookout for?

 

Don't invest emotionally. It is better to keep a moderate controlled approach to investing as opposed to constantly chasing the jackpot which can be dangerous.

Don't trust tips. If you aren't the head of a large investment firm, by the time a tip reaches you, it is probably too late.

Pay attention to your investments. Stay involved with what your investments are doing, don't rely solely on others helping you.

Reevaluate. Your financial situation may change over the course of time, be sure that all of your investments are still appropriate.

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

SHIFTING CAPITAL GAINS TO YOUR CHILDREN

Posted by Admin Posted on July 27 2017

SHIFTING CAPITAL GAINS TO YOUR CHILDREN

 

If you’re an investor looking to save tax dollars, your kids might be able to help you out. Giving appreciated stock or other investments to your children can minimize the impact of capital gains taxes.

For this strategy to work best, however, your child must not be subject to the “kiddie tax.” This tax applies your marginal rate to unearned income in excess of a specified threshold ($2,100 in 2017) received by your child who at the end of the tax year was either: 1) under 18, 2) 18 (but not older) and whose earned income didn’t exceed one-half of his or her own support for the year (excluding scholarships if a full-time student), or 3) a full-time student age 19 to 23 who had earned income that didn’t exceed half of his or her own support (excluding scholarships).

Here’s how it works: Say Bill, who’s in the top tax bracket, wants to help his daughter, Molly, buy a new car. Molly is 22 years old, just out of college, and currently looking for a job — and, for purposes of the example, won’t be considered a dependent for 2017.

Even if she finds a job soon, she’ll likely be in the 10% or 15% tax bracket this year. To finance the car, Bill plans to sell $20,000 of stock that he originally purchased for $2,000. If he sells the stock, he’ll have to pay $3,600 in capital gains tax (20% of $18,000), plus the 3.8% net investment income tax, leaving $15,716 for Molly. But if Bill gives the stock to Molly, she can sell it tax-free and use the entire $20,000 to buy a car. (The capital gains rate for the two lowest tax brackets is generally 0%.)

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Contribuyentes deben revisar la retención de impuestos federales de su paga

Posted by Admin Posted on July 24 2017

Contribuyentes deben revisar la retención de impuestos federales de su paga

 

El Servicio de Impuestos Internos, IRS, animó a los contribuyentes a que consideren una revisión de sus retenciones, tomando en cuenta varios factores que podrían afectar su reembolso potencial o la cantidad que puedan adeudar en 2018.

Al revisar la cantidad de retención de impuestos, los contribuyentes podrán evitar que se les retenga demasiado o muy poco de sus cheques de nómina. La retención de la cantidad adecuada puede ayudar a saldar cualquier balance tributario a fines de año, lo que significa quedar sin deuda ni reembolso al presentar la declaración de impuestos.

A veces durante el año pueden ocurrir cambios en la vida de un contribuyente, tales como un cambio en su estado civil que pueda tener un impacto sobre las exenciones, ajustes o créditos que se reclaman en la declaración de impuestos. Cuando esto sucede, tiene que entregar a su empleador un nuevo Formulario W-4, Certificado de Exención de Retenciones del Empleado, para cambiar sus retenciones o el número de descuentos en la retención.

Los empleadores usan el formulario para calcular la cantidad de impuesto federal que debe retenerse de la paga de los empleados. Hacer estos cambios a finales de verano o principios de otoño puede darle suficiente tiempo para ajustar sus retenciones antes de que finalice el año tributario en diciembre.

La revisión de las retenciones es de mayor importancia ahora que la ley federal requiere que el IRS retenga los rembolsos durante varias semanas para algunas personas que presentan la declaración temprano y reclaman el Crédito Tributario por Ingreso del Trabajo y el Crédito Adicional por Hijos. Además, los pasos tomados por el IRS y los administradores de las agencias tributarias estatales para fortalecer las protecciones ante el robo de identidad y fraude de reembolsos significa que algunos reembolsos podrían someterse a revisiones adicionales el próximo año.

En lo que va de año, el IRS ha emitido más de 106 millones de reembolsos tributarios de las 142 millones de declaraciones procesadas. El promedio de los reembolsos es de más de $2,700. Históricamente, las cantidades de los reembolso han aumentado a través del tiempo.

Cómo ajustar la retención de impuestos

En muchos casos, un nuevo Formulario W-4, Certificado de exención de retenciones del empleado, es lo único requerido para hacer un ajuste. Los contribuyentes deben presentarlo a su empleador y el empleador usa el formulario para calcular la cantidad de impuesto federal que debe retenerse de la paga de sus empleados.

El IRS ofrece varios recursos en línea para ayudar a los contribuyentes a lograr que el impuesto pagado esté más cerca de la cantidad adeudada. Estos recursos están disponibles a cualquier hora en IRS.gov e incluyen:

La Calculadora de Retención del IRS– Una herramienta en línea que le permite determinar la cantidad correcta de impuestos que debe retenerse de su paga.

Publicación 505 del IRS – Retenciones y el impuesto estimado (en inglés).

Retenciones de impuestos – Información completa acerca de las retenciones, impuestos calculados, preguntas frecuentes, y más.

Los contribuyentes que trabajan por cuenta propia, incluso aquellos involucrados en la economía compartida (en inglés), pueden usar la hoja de trabajo del Formulario 1040-ES para calcular correctamente los pagos tributarios estimados. Si también trabajan para un empleador, pueden eliminar la necesidad de hacer pagos trimestrales al retener más impuesto de su paga.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Avoid Having Too Much or Too Little Federal Income Tax Withheld

Posted by Admin Posted on July 21 2017

Avoid Having Too Much or Too Little Federal Income Tax Withheld

 

WASHINGTON — The Internal Revenue Service today encouraged taxpayers to consider checking their tax withholding, keeping in mind several factors that could affect potential refunds or taxes they may owe in 2018.

Reviewing the amount of taxes withheld can help taxpayers avoid having too much or too little federal income tax taken from their paychecks. Having the correct amount taken out helps to move taxpayers closer to a zero balance at the end of the year when they file their tax return, which means no taxes owed or refund due.

During the year, changes sometimes occur in a taxpayer’s life, such as in their marital status, that impacts exemptions, adjustments or credits that they will claim on their tax return. When this happens, they need to give their employer a new Form W-4, Employee’s Withholding Allowance Certificate, to change their withholding status or number of allowances.

Employers use the form to figure the amount of federal income tax to be withheld from pay. Making these changes in the late summer or early fall can give taxpayers enough time to adjust their withholdings before the tax year ends in December.

The withholding review takes on even more importance now that federal law requires the IRS to hold refunds a few weeks for some early filers claiming the Earned Income Tax Credit and the Additional Child Tax Credit. In addition, the steps the IRS and state tax administrators are now taking to strengthen protections against identity theft and refund fraud mean some tax returns could face additional review time next year.

So far in 2017, the IRS has issued more than 106 million tax refunds out of the 142 million total individual tax returns processed, with the average refund well over $2,700. Historically, refund dollar amounts have increased over time.

 Making a Withholding Adjustment

In many cases, a new Form W-4, Employee’s Withholding Allowance Certificate, is all that is needed to make an adjustment. Taxpayers submit it to their employer, and the employer uses the form to figure the amount of federal income tax to be withheld from their employee’s pay.

The IRS offers several online resources to help taxpayers bring taxes paid closer to what they owe. They are available anytime on IRS.gov. They include:

IRS Withholding Calculator – Online tool helps determine the correct amount of tax to withhold.

IRS Publication 505 – Tax Withholding and Estimated Tax.

Tax Withholding – Complete information on withholding, estimated taxes, FAQs, and more.

Self-employed taxpayers, including those involved in the sharing economy, can use the Form 1040-ES worksheet to correctly figure their estimated tax payments. If they also work for an employer, they can often forgo making these quarterly payments by instead having more tax taken out of their pay.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

How can I ensure that I get the best possible rates on my loans?

Posted by Admin Posted on July 20 2017

How Can I Ensure That I Get The Best Possible Rates On My Loans

 

Be careful when signing up for a home equity loan or line of credit - the disclosed APR does not reflect the total fees that are associated with the loan, such as closing costs and others. Do not forget to compare this cost, as well as the APR, across multiple lenders.

The vast majority of home equity plans will utilize variable interest rates instead of fixed. A variable rate reflects the current prices of a publically available index, like the prime rate, or the U.S. Treasury Bill rate, and the rate of your loan will oscillate accordingly.

Generally a lender will offer a discounted introductory rate, often referred to as a "teaser rate". Take caution - these rates can sometimes fluctuate unless it is stated that there is a fixed rate. Sometimes the lender will give you a great introductory rate that is variable and can change with time to a rate much higher than you originally agreed to.

Since the rate is linked to an index rate, find out which one it is and how much their margin is. Some companies will have a cap on how much your rate can vary within a particular period of time.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Weddings Mean Tax Changes

Posted by Admin Posted on July 19 2017

Weddings Mean Tax Changes

 

It may not be as high on the wedding plan checklist as the venue, invitations and attire, but there are important tax issues created by a marriage that warrant some prompt attention following the wedding.

Name change. Anytime names are changed, it should be reported to the Social Security Administration (SSA). The name associated with an individual’s Social Security Number (SSN) should match the name on the tax return. To change a name with the SSA, file Form SS-5, “Application for a Social Security Card.” The form is available from www.ssa.gov, by calling (800) 772-1213, or from the local SSA office.

Address change. Let the IRS know about an address change by filing Form 8822, “Change of Address.” Also notify the U.S. Postal Service at www.usps.com to forward mail. You may also report the change at your local post office.

Change tax withholding. A change in marital status requires that a new Form W-4, “Employee’s Withholding Allowance Certificate,” be furnished to the employer(s). Combined incomes may move the taxpayers into a higher tax bracket. Search www.irs.gov for the IRS Withholding Calculator tool for help completing the new Form W-4.

Change in filing status. Marital status is determined as of December 31 each year. Spouses can choose to file jointly or separately each year. We can help you make that determination by calculating your tax liability both ways.

Change in circumstances. Taxpayers receiving an advance payment of the health care premium tax credit in 2014 should report changes in circumstances, such as a change in income or family size, to the Health Insurance Marketplace. Also, the Marketplace should be notified when you move out of the area covered by your current Marketplace to ensure you get the proper type and amount of financial assistance.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Simple Tax Savings Techniques for Security Gains

Posted by Admin Posted on July 19 2017

Simple Tax Savings Techniques for Security Gains

 

The market swings over the last several years may have you wondering whether it’s time to capitalize on some market gains. While taxes should not be the main consideration in this decision, they certainly need to be considered, as they can make a significant impact on your investment return.

With that in mind, here are a couple of tax-smart strategies to consider as you analyze your investment opportunities and decide what to do about recent gains.

Should you wait to sell until the stock qualifies for long-term capital gains treatment?

If the stock sale qualifies for long-term capital gains treatment, it will be taxed at a maximum tax rate of 23.8%. Otherwise it will be taxed at your ordinary-income tax rate, which can be as high as 43.4%.

Clearly, you’ll pay less taxes (and keep more of your gains) if the stock sale qualifies for long-term capital gains treatment. The amount of taxes you’ll save depends on your ordinary-income tax bracket.

To qualify for the preferential long-term capital gains rates, you must hold the stock for more than 12 months. The holding period generally begins the day after you purchase the stock and runs through (and includes) the date you sell it. These rules must be followed exactly, because missing the required holding period by even one day prevents you from using the preferential rates.

The question then becomes: "Are the tax savings that would be realized by holding the asset for the long-term period worth the investment risk that the asset’s value will fall during the same time period? " If you think the value will fall significantly, liquidating quickly- regardless of tax consequences- may be the better option. Otherwise, the potential risk of holding an asset should be weighed against the tax benefit of qualifying for a reduced tax rate.

Comparing the risk of a price decline to the potential tax benefit of holding an investment for a certain time is not an exact science. We’d be glad to help you weigh your options.

Use "specific ID method" to minimize taxes

If you are considering selling less than your entire interest in a security that you purchased at various times for various prices, you have a couple of options for identifying the particular shares sold:

(1) The first-in, first-out (FIFO) method and

(2) The specific ID method.

FIFO is used if you do not (or cannot) specifically identify which shares of stock are sold, so the oldest securities are assumed to be sold first. Alternatively, you can use the specific ID method to select the particular shares you wish to sell. This is typically the preferred method, as it allows you at least some level of control over the amount and character of the gain (or loss) realized on the sale, which can lead to tax-savings opportunities.

The specific ID method requires that you adequately identify the specific stock to be sold. This can be accomplished by delivering the specific shares to be sold to the broker selling the stock. Alternatively, if the securities are held by your broker, IRS regulations say you should notify your broker regarding which shares you want to sell and the broker should then issue you a written confirmation of your instructions.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

HOW WORKING IMPACTS SOCIAL SECURITY BENEFITS

Posted by Admin Posted on July 18 2017

How Working Impacts Social Security Benefits

 

Continuing to work while receiving Social Security benefits may cause the benefit to be reduced below the anticipated amount. If you are under the full retirement age (currently 66), an earnings test determines whether your Social Security retirement benefits will be reduced because you earned more from a job or business than an annual exempt amount.

As a general rule, the earnings test is based on income earned during the year as a whole, without regard to the amount you earned each month. However, in the first year, benefits you receive are not reduced for any month in which you earn less than one-twelfth of the annual exempt amount.

For 2015, Social Security beneficiaries under the full benefit retirement age who have earnings in excess of the annual exempt amount are subject to a $1 reduction in benefits for each $2 earned over the exempt amount ($15,720 in 2015) for each year before the year during which they reach the full benefit retirement age. However, in the year beneficiaries reach their full benefit retirement age, earnings above a different annual exempt amount ($41,880 in 2015) are subject to a $1 reduction in benefits for each $3 earned over the exempt amount. Social Security benefits are not affected by earned income beginning with the month the beneficiary reaches full benefit retirement age.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

CONSOLIDATE ACCOUNTS AND SIMPLIFY YOUR FINANCIAL LIFE

Posted by Admin Posted on July 18 2017

consolidate accounts and simplify your financial life

 

If you’ve accumulated many bank, investment and other financial accounts over the years, you might consider consolidating some of them. Having multiple accounts requires you to spend more time tracking and reconciling financial activities and can make it harder to keep a handle on how much you have and whether your money is being invested advantageously.

Start by identifying the accounts that offer you the best combination of excellent customer service, convenience, lower fees and higher returns. Hold on to these and consider closing the rest, keeping in mind the bank account amounts you’ll be consolidating. The Federal Deposit Insurance Corporation generally insures $250,000 per depositor, per insured bank. So if consolidation means that your balance might exceed that amount, it’s better to keep multiple accounts. You should also keep accounts with different beneficiaries separate.

When closing accounts, make sure you stop automatic payments or deposits and destroy checks and cards associated with them. To prevent any future disputes, obtain letters from the financial institutions stating that your accounts have been closed. Closing an account generally takes several weeks.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Plan Ahead for Tax Time When Renting Out Residential or Vacation Property

Posted by Admin Posted on July 17 2017

Plan Ahead for Tax Time When Renting Out Residential or Vacation Property

 

Summertime is a time of year when people rent out their property. In addition to the standard clean up and maintenance, owners need to be aware of the tax implications of residential and vacation home rentals.

Receiving money for the use of a dwelling also used as a taxpayer’s personal residence generally requires reporting the rental income on a tax return. It also means certain expenses become deductible to reduce the total amount of rental income that's subject to tax.

Dwelling Unit.  This may be a house, an apartment, condominium, mobile home, boat, vacation home or similar property. It's possible to use more than one dwelling unit as a residence during the year.

Used as a Home.  The dwelling unit is considered to be used as a residence if the taxpayer uses it for personal purposes during the tax year for more than the greater of: 14 days   or 10% of the total days rented to others at a fair rental price. Rental expenses cannot be more than the rent received.

Personal Use.  Personal use means use by the owner, owner’s family, friends, other property owners and their families. Personal use includes anyone paying less than a fair rental price.

Divide Expenses. Special rules generally apply to the rental of a home, apartment or other dwelling unit that is used by the taxpayer as a residence during the taxable year. Usually, rental income must be reported in full, and any expenses need to be divided between personal and business purposes. Special deduction limits apply.

How to Report. Use Schedule E to report rental income and rental expenses on Supplemental Income and Loss. Rental income may also be subject to Net Investment Income Tax. Use Schedule A to report deductible expenses for personal use on Itemized Deductions. This includes such costs as mortgage interest, property taxes and casualty losses.

Special Rules.  If the dwelling unit is rented out fewer than 15 days during the year, none of the rental income is reportable and none of the rental expenses are deductible. Find out more about these rules; see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).

Use IRS Free File.  Renting a vacation home can be complicated and IRS Free File can make filing a tax return easier. IRS Free File is available until Oct. 16. Taxpayers earning $64,000 or less can use brand-name tax software. Those earning more can use Free File Fillable Forms, an electronic version of IRS paper forms. Free File is available only through the IRS.gov website. You can get forms and publications on IRS.gov/forms at any time.

Avoid scams. The IRS will never initiate contact using social media or text message. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Can a Home Equity Line of Credit be beneficial?

Posted by Admin Posted on July 14 2017

Can a home equity line of credit be benefiicial?

 

A home equity line of credit is a form of credit which allows you to borrow and use your home as collateral. Since for many, a home is their greatest asset, they tend to use these sorts of credit lines for large things like a college education for their children, medical expenses or for large unexpected bills as opposed to luxuries or day to day expenses.

After receiving a home equity line, one is approved for an amount of credit, or a maximum that may be borrowed at any given time for the duration of the plan.

On many occasions a lender will set a credit limit on a home equity loan by setting a percentage, after considering the amount of the appraised value of the home and the amount owed on the home.

After the line of credit is approved, you will be able to borrow up to the set limit, usually in the form of checks. In some instances a borrower may be given credit cards to utilize, sometimes with minimum spending requirements.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Avoid Spear Phishing Emails

Posted by Admin Posted on July 12 2017

Avoid Spear Phishing Emails

 

WASHINGTON — The IRS, state tax agencies and the tax industry today warned tax professionals to beware of spear phishing emails, a common tactic used by cybercriminals to target practitioners.

Spear phishing emails, often tailored to individual practitioners, result in stolen taxpayer data and fraudulent tax returns filed in the names of individual and business clients.

Information about spear phishing kicks off a new “Don’t Take the Bait” awareness campaign aimed at tax professionals. This is the first of a special 10-part series that will run each week through mid-September.

“We are seeing repeated instances of cybercriminals targeting tax professionals and obtaining sensitive client information that can be used to file fraudulent tax returns. Spear phishing emails are a common way to target tax professionals,” said IRS Commissioner John Koskinen. “We urge practitioners to review this information and take steps to protect themselves and their clients.”

The IRS, state tax agencies and the tax industry, working together as the Security Summit, urge practitioners to learn to recognize and avoid spear phishing emails. See Protect Your Clients; Protect Yourself for more information.

Phishing emails target a broad group of users in hopes of catching a few victims. Spear phishing emails pose as familiar entities, and the cybercriminals have done extensive research and homework in order to target a specific audience. Tax professionals and taxpayers are among the groups that regularly receive phishing emails.

The security software firm Trend Micro reports that 91 percent of all cyberattacks and resulting data breaches begin with a spear phishing email. The email, disguised as being from a trusted source, may seek to have victims voluntarily disclose sensitive information such as passwords. Or, it may encourage people to open a link or attachment that actually downloads malware onto the computer.

Here’s an example of a spear phishing email that targeted a tax professional during the 2017 filing season. Note the use of “Tax return” in the subject line to bait the tax preparer as the sender impersonates a prospective client:

 

Note that the sender has done their research, obtaining the name and email address of the tax pro. And, the email is conversational but ungrammatical and oddly constructed: “hope your (sic) doing good (sic) and actively involved in the tax filing season.” This is potentially a sign that English is a second language. Finally, note the hyperlink using a “tiny” URL is used to mask the true destination – this is another red flag.

There are several other versions of spear phishing emails in which the criminal poses as a potential client. In one version, the prospective “client” directs the tax professional to open an attachment to see the 2016 tax information needed to prepare a return. However, the attachment in reality downloads malware that tracks each keystroke made by the tax professional so that the criminal can steal passwords and sensitive data.

Most spear phishing emails have a “call to action” as part of their tactics, an effort to encourage the receiver into opening a link or attachment. The example above asks the preparer to review their tax information and provide a cost estimate.

Other spear phishing emails impersonate the IRS, such as the IRS e-Services tools for tax professionals, or in some instances a private-sector tax software provider. In those examples, preparers are warned that they must immediately update their account information or suffer some consequence. The link may go to a website that has been disguised by the thieves to look like the login pages for IRS e-Services or a tax software provider.

Cybercriminals are endlessly creative. This year, some identity thieves hacked individuals’ emails accounts. Noticing that the individuals had been in email contact with tax preparers, the criminals used the individual’s email address to send a note to their preparer asking that the direct deposit refund account number be changed. The scam prompted an IRS alert to preparers about last-minute refund changes. See IR-2017-64.

Protecting Your Clients and Your Business from Spear Phishing

There is no one action to protect your clients or your business from spear phishing. It requires a series of defensive steps. Tax professionals should consider these basic steps:

Educate all employees about phishing in general and spear phishing in particular.

Use strong, unique passwords. Better yet, use a phrase instead of a word. Use different passwords for each account. Use a mix of letters, numbers and special characters.

Never take an email from a familiar source at face value; example: an email from “IRS e-Services.” If it asks you to open a link or attachment, or includes a threat to close your account, think twice. Visit the e-Services website for confirmation.

If an email contains a link, hover your cursor over the link to see the web address (URL) destination. If it’s not a URL you recognize or if it’s an abbreviated URL, don’t open it.

Consider a verbal confirmation by phone if you receive an email from a new client sending you tax information or a client requesting last-minute changes to their refund destination.

Use security software to help defend against malware, viruses and known phishing sites and update the software automatically.

Use the security options that come with your tax preparation software.

Send suspicious tax-related phishing emails to phishing@irs.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Early Withdrawals from Retirement Plans

Posted by Admin Posted on July 11 2017

Early Withdrawals from Retirement Plans

 

Many people find it necessary to take out money early from their IRA or retirement plan. Doing so, however, can trigger an additional tax on top of income tax taxpayers may have to pay. Here are a few key points to know about taking an early distribution:

Early Withdrawals. An early withdrawal normally is taking cash out of a retirement plan before the taxpayer is 59½ years old.

Additional Tax. If a taxpayer took an early withdrawal from a plan last year, they must report it to the IRS. They may have to pay income tax on the amount taken out. If it was an early withdrawal, they may have to pay an additional 10 percent tax.

Nontaxable Withdrawals. The additional 10 percent tax does not apply to nontaxable withdrawals. These include withdrawals of contributions that taxpayers paid tax on before they put them into the plan. A rollover is a form of nontaxable withdrawal. A rollover occurs when people take cash or other assets from one plan and put the money in another plan. They normally have 60 days to complete a rollover to make it tax-free.

Check Exceptions. There are many exceptions to the additional 10 percent tax. Some of the rules for retirement plans are different from the rules for IRAs.

File Form 5329. If someone took an early withdrawal last year, they may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return. Form 5329 has more details.

Use IRS e-file. Early withdrawal rules can be complex. IRS e-file is the easiest and most accurate way to file a tax return. The tax software that taxpayers use to e-file will pick the right tax forms, do the math and help get the tax benefits they are due. Seven out of 10 taxpayers qualify to use IRS Free File tax software. Free File is only available through the IRS website at IRS.gov/freefile.

More information on this topic is available on IRS.gov.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Bonos de Ahorros

Posted by Admin Posted on July 10 2017

Bonos de Ahorros

 

¿Va a recibir un cheque de reembolso este año? Si es así… ¡deje que su reembolso trabaje por usted! 

Usted puede comprar hasta cinco mil dólares cada año en bonos de la serie “I” de los Estados Unidos en incrementos de 50 dólares cada vez que presenta su declaración federal de impuestos. Consígalos para usted u  otros, como un niño o cualquier otra persona  que usted guste y gane intereses hasta por  30 años. 

Cuando presente su declaración de impuestos anexe el formulario 8888  para comprar los bonos.  Si usted  declara con e-file, su software tributario le  preguntará si usted desea dividir su reembolso, usted tiene la opción de  comprar sus bonos  de  la serie “I” en ese momento. 

También puede  elegir el depósito directo o un cheque de papel por  el correo si hay un monto restante de su reembolso que no usó para comprar bonos.

Ahorre fácilmente con los bonos de los Estados Unidos.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

NEED TO SELL REAL PROPERTY? TRY AN INSTALLMENT SALE

Posted by Admin Posted on July 06 2017

NEED TO SELL REAL PROPERTY TRY AN INSTALLMENT SALE

 

If your company owns real property, or you do so individually, you may not always be able to dispose of it as quickly as you'd like. One avenue for perhaps finding a buyer a little sooner is an installment sale.

Benefits and risks

An installment sale occurs when you transfer property in exchange for a promissory note and receive at least one payment after the tax year of the sale. Doing so allows you to receive interest on the full amount of the promissory note, often at a higher rate than you could earn from other investments, while deferring taxes and improving cash flow.

But there may be some disadvantages for sellers. For instance, the buyer may not make all payments and you may have to deal with foreclosure.

Methodology

You generally must report an installment sale on your tax return under the "installment method." Each installment payment typically consists of interest income, return of your adjusted basis in the property and gain on the sale. For every taxable year in which you receive an installment payment, you must report as income the interest and gain components.

Calculating taxable gain involves multiplying the amount of payments, excluding interest, received in the taxable year by the gross profit ratio for the sale. The gross profit ratio is equal to the gross profit (the selling price less your adjusted basis) divided by the total contract price (the selling price less any qualifying indebtedness — mortgages, debts and other liabilities assumed or taken by the buyer — that doesn't exceed your basis).

The selling price includes the money and the fair market value of any other property you received for the sale of the property, selling expenses paid by the buyer and existing debt encumbering the property (regardless of whether the buyer assumes personal liability for it).

You may be considered to have received a taxable payment even if the buyer doesn't pay you directly. If the buyer assumes or pays any of your debts or expenses, it could be deemed a payment in the year of the sale. In many cases, though, the buyer's assumption of your debt is treated as a recovery of your basis, rather than a payment.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- How and when do I collect my annuity?

Posted by Admin Posted on July 06 2017

How and when do I collect my annuity

 

There are a few choices that you have when choosing to collect your annuity. Some people opt for a lump sum, even though it negates one of the major features of the annuity: payments until death.

The amount of the monthly payments that you receive depends on:

The amount of money in your annuity contract

The life expectancy of the annuitant

The size of the minimum required payments (if any)

Whether the payments continue after death or not

There are various different settlement options. Be absolutely sure when you choose, because the decision will be final when you make it.

Fixed Amount. With a fixed amount option, you will choose a monthly amount that you will receive until your annuity runs out. There is a possibility that your money may run out before you pass on, and also the chance that you may die before your money runs out. In that case, your beneficiary will receive your payments.

Fixed Period. The company will pay you for a fixed amount of time. If you are waiting for a retirement payment from another investment, it may be a good idea to get this fixed money until you start to receive payment from another investment. Again, if you are to pass before the money is fully paid, the remainder will go to your beneficiary.

Lifetime Or Straight Life. This plan will continue to pay you money until you die. This is the safest option to ensure that you receive payment until the day you die. Conversely, if you die early, there will be no payments to the beneficiary.

Life With Period Certain. With this plan you will receive payments until death - and for a period afterwards, your beneficiary will receive payments too. The longer the period, the lower the monthly payment.

Installment. This guarantees that if you die before you have exhausted your funds, the rest will be distributed to the beneficiary.

Joint And Survivor. In this option the payments are made to the joint annuitants. In the event of one's passing, the other will continue to receive a lesser amount.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- WHAT SHOULD I TAKE INTO ACCOUNT WHEN I START INVESTING?

Posted by Admin Posted on July 05 2017

investing

 

► Risk vs. Return

The first step in the investment process is to figure out what sort of Return on Investment (ROI) that you are seeking...

► Asset Allocation

Asset Allocation is the selection of assets from across the asset classes...

► Diversification

Diversification is similar to asset allocation, but within the asset class...

► Monitoring Progress

You can start by examining your trading records and ensuring that all of the trades went through at the prices that you instructed...

Keep tabs on how your assets are performing. If they seem to be underperforming, you may want to change your investments to some that may be more lucrative. You may want to also check to make sure that the investments that you own are in line with your current investment strategy. Your strategy may change over time. Be sure to compare your investments to your current situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Simple guidelines to follow towards a comfortable retirement

Posted by Admin Posted on July 05 2017

Simple guidelines to follow towards a comfortable retirement

 

Someone starting their savings in their early 20s can save 10% of their income and have a sufficient nest egg, while someone starting in their 40s may have to bump that number up more towards 20%. This is all dependent on the time of your life that you choose to start, the size of your current nest egg, and the amount of money that you will need to retire comfortably.

It is always a good idea to contribute as much as possible to retirement plans, to take advantage of tax deferral and employer matches.

Generally people need around 80% of their pre-retirement income after they have retired for the first few years and then learn how to live on less. This will greatly depend on the expenses that you plan on having:

Is the mortgage already paid off?

Do you have car payments?

Are you sending your children through school?

Another strategy worth following is to always have an emergency fund of at least 6 months of expenses. Considering your situation and the situations of the people that you depend on or depend on you, you can adjust the number of months accordingly, but 6 is a good ballpark number. This will also depend on how many bills you need to pay.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

2017 Summertime Tax Tip Program

Posted by Admin Posted on July 05 2017

2017 Summertime Tax Tip Program

 

More than 719,000 taxpayers received plain-language Tax Tips directly to their email inbox during this past tax filing season and got the information they needed to help them file their taxes.

Because taxes are year-round for many taxpayers, and many taxable situations arise during the summer months, the Internal Revenue Service offers a Summertime Tax Tip program that begins July 3. The IRS is encouraging taxpayers to sign up now for this email service to help them get a jump-start on their taxes and learn about the tax implications of events that often occur during the summer months.

The Summertime Tax Tip series, which offers helpful consumer tips written in plain language, covers a wide range of important subjects.

Some of the 2017 Summertime Tax Tip topics include:

Tax scams don’t take vacation; what’s out there now

Teens and summer jobs

Vacation home rentals – tax implications

Getting married? Tax implications you need to know

IRS notices – What you could receive in the mail from the IRS

The IRS Tax Tips email service is available in English and Spanish. It provides new IRS Tax Tips via e-mail three times a week during the months of July and August. Subscribers will also receive a Tax Tip each day of the week during the tax filing season and Special Edition Tax Tips that are issued for “hot topics” that arise throughout the year.

Taxpayers can sign up to receive IRS Tax Tips automatically for free on www.irs.gov. From the Subscriptions link on the top right of the IRS website, choose “IRS Tax Tips” on the drop-down menu, and then click on “Subscribe.” Click on “more,” on the drop-down menu, to subscribe to the IRS Tax Tips in Spanish.

The IRS also has a number of other e-subscriptions to which taxpayers, tax professionals and others may subscribe to receive tax information via email from the IRS during the tax-filing season and the rest of the year.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Know Your Tax Hand When it Comes to Gambling

Posted by Admin Posted on July 03 2017

Know Your Tax Hand When it Comes to Gambling

 

A royal flush can be quite a rush. But the IRS casts a wide net when defining gambling income. It includes winnings from casinos, horse races, lotteries and raffles, as well as any cash or prizes (appraised at fair market value) from contests. If you participate in any of these activities, you must report such winnings as income on your federal return.

If you’re a casual gambler, report your winnings as “Other income” on Form 1040. You may also take an itemized deduction for gambling losses, but the deduction is limited to the amount of winnings.

In some cases, casinos and other payers provide IRS Form W-2G, “Certain Gambling Winnings” — particularly if the entity in question withholds federal income tax from winnings. The information from these forms needs to be included on your tax return.

If you gamble often and actively, you might qualify as a professional gambler, which comes with tax benefits: It allows you to deduct not only losses, but also wagering-related business expenses — such as transportation, meals and entertainment, tournament and casino admissions, and applicable website and magazine subscriptions.

To qualify as a professional, you must be able to demonstrate to the IRS that a “profit motive” exists. The agency looks at a list of nonexclusive factors when making this determination, including:

  • Whether the taxpayer conducts the gambling activity in a “businesslike” manner,
  • The quantity of time spent gambling, and
  • How much income is earned from nongambling activities.

But don’t “go pro” for the tax benefits, since doing so is a major financial risk. If you enjoy the occasional game of chance, or particularly if you’re considering gambling as a profession, please contact our firm. We can help you manage the tax impact.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Which Type of Mortgage Loan Meets Your Needs?

Posted by Admin Posted on June 30 2017

Which Type of Mortgage Loan Meets Your Needs

 

Few purchases during your lifetime will be as expensive as buying a home. Whether it’s your primary residence, a vacation home or an investment property, how you choose to pay for it can have a significant impact on your financial situation over time. If you’re considering a mortgage loan, understanding the main categories of mortgages — fixed-rate and adjustable-rate — and the situations they’re best designed for will help you match the right type for your needs.

Fixed-rate loans offer stability

A fixed-rate mortgage, as its name suggests, is a loan whose interest rate remains constant for the life of the loan — typically 15 or 30 years. One of the primary benefits of a fixed-rate loan is that it provides a measure of certainty about one of the biggest expenses in your monthly budget. With interest rates likely to rise after an extended period of historically low rates, you won’t have to worry about potentially higher payments in the future if you select a fixed-rate loan.

That said, if interest rates were to fall again, your fixed-rate loan would leave you unable to take advantage of the shift unless you refinance, which might involve fees. You’re also paying a premium for the stability offered by a fixed-rate mortgage. You could consider a 15-year fixed-rate loan, which would charge a lower rate than a 30-year loan, but the tradeoff will be higher monthly payments.

ARMs provide flexibility

Adjustable-rate mortgages (ARMs) typically offer a fixed interest rate for an initial period of years. This rate, which is usually lower than that of a comparable fixed-rate mortgage, resets periodically based on a benchmark interest rate. For example, a 5/1 ARM means that your interest rate is fixed for the first five years and then will adjust every year after that.

Paying less interest in the beginning frees your cash for other investments. You might also take advantage of an ARM if you’re confident that you’ll have more money in the future than you do today, or if you plan on selling your house before or soon after the initial fixed-rate period expires. When considering an ARM, you’ll need to assess your ability to keep up with potentially higher payments — say, if the initial period expires, your rate goes up and you’re unable to sell the home, or if your income changes.

The best for you

The right loan type depends, naturally, on your financial position. But whether you’re buying a primary residence, vacation home or investment property also plays a role. Regardless of which type of home you’re purchasing, having a basic knowledge of the loan types can help ease the buying process. Let our firm assist you in evaluating the best mortgage for your needs.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

[INFOGRAPHIC] How much will I be charged at the end of an auto lease?

Posted by Admin Posted on June 29 2017

How much will I be charged at the end of an auto lease?

 

[TEXT VERSION]

At the end of the lease period, the federal Consumer Leasing Act (CLA) puts a limit on how much the dealer can collect. The dealer cannot collect more than three times the average monthly payment.

For the following reasons, a dealer may collect a higher amount:

- The miles are higher than stated in the lease or the vehicle has unreasonable wear and tear.

- There was an agreement to pay an amount greater than what is stated in the original contract.

- The Lessor wins a lawsuit for a higher amount.

At the end of the term of the lease, the dealer may opt to sell the car. If the car is sold for less than the residual value specified in the leasing contract, you may be obligated to pay as much as three monthly payments to make up the difference.

You may want to negotiate to have the right to approve the final sales price as part of the lease agreement, so the dealer does not sell the leased car for less than the residual value just to get the car off the lot.

A few other things to keep in mind:

You do not get a refund if you stay under the mileage limit.

You probably won't have to pay for excess mileage if you purchase the car at the end of a closed-end lease and you exceed the mileage allowance.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

[INFOGRAPHIC]

HOW MUCH WILL I BE CHARGED AT THE END OF AN AUTO LEASE

IRS Cautions Taxpayers to Watch for Summertime Scams

Posted by Admin Posted on June 29 2017

IRS Cautions Taxpayers to Watch for Summertime Scams

 

WASHINGTON – The Internal Revenue Service today issued a warning that tax-related scams continue across the nation even though the tax filing season has ended for most taxpayers. People should remain on alert to new and emerging schemes involving the tax system that continue to claim victims.

“We continue to urge people to watch out for new and evolving schemes this summer,” said IRS Commissioner John Koskinen. “Many of these are variations of a theme, involving fictitious tax bills and demands to pay by purchasing and transferring information involving a gift card or iTunes card. Taxpayers can avoid these and other tricky financial scams by taking a few minutes to review the tell-tale signs of these schemes.”

EFTPS Scam

A new scam which is linked to the Electronic Federal Tax Payment System (EFTPS) has been reported nationwide. In this ruse, con artists call to demand immediate tax payment. The caller claims to be from the IRS and says that two certified letters mailed to the taxpayer were returned as undeliverable. The scammer then threatens arrest if a payment is not made immediately by a specific prepaid debit card. Victims are told that the debit card is linked to the EFTPS when, in reality, it is controlled entirely by the scammer. Victims are warned not to talk to their tax preparer, attorney or the local IRS office until after the payment is made.

“Robo-call” Messages

The IRS does not call and leave prerecorded, urgent messages asking for a call back. In this tactic, scammers tell victims that if they do not call back, a warrant will be issued for their arrest. Those who do respond are told they must make immediate payment either by a specific prepaid debit card or by wire transfer.

Private Debt Collection Scams

The IRS recently began sending letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies. Taxpayers should be on the lookout for scammers posing as private collection firms. The IRS-authorized firms will only be calling about a tax debt the person has had – and has been aware of – for years. The IRS would have previously contacted taxpayers about their tax debt.

Scams Targeting People with Limited English Proficiency

Taxpayers with limited English proficiency have been recent targets of phone scams and email phishing schemes that continue to occur across the country. Con artists often approach victims in their native language, threaten them with deportation, police arrest and license revocation among other things. They tell their victims they owe the IRS money and must pay it promptly through a preloaded debit card, gift card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls” or via a phishing email.

Tell Tale Signs of a Scam:

The IRS (and its authorized private collection agencies) will never:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. The IRS will usually first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.

Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.

Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

Ask for credit or debit card numbers over the phone.

For anyone who doesn’t owe taxes and has no reason to think they do:

Do not give out any information. Hang up immediately.

Contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.

Report it to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. Please add "IRS Telephone Scam" in the notes.

For anyone who owes tax or thinks they do:

View tax account information online at IRS.gov to see the actual amount you owe. Then review payment options.

Call the number on the billing notice, or

Call the IRS at 800-829-1040. IRS workers can help

How to Know It’s Really the IRS Calling or Knocking

The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are special circumstances in which the IRS will call or come to a home or business, such as:

when a taxpayer has an overdue tax bill,

to secure a delinquent tax return or a delinquent employment tax payment, or,

to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail. For more information, visit “How to know it’s really the IRS calling or knocking on your door” on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

COULD YOUR DEBT RELIEF TURN INTO A TAX DEFEAT?

Posted by Admin Posted on June 28 2017

COULD YOUR DEBT RELIEF TURN INTO A TAX DEFEAT?

 

Restructuring debt has become a common approach to personal financial management. But many people fail to realize that there’s often a tax impact to debt relief. And if you don’t anticipate it, a winning tax return may turn into a losing one.

Less debt, more income

Income tax applies to all forms of income — including what’s referred to as “cancellation-of-debt” (COD) income. Think of it this way: If a creditor forgives a debt, you avoid the expense of making the payments, which increases your net income.

Debt forgiveness isn’t the only way to generate a tax liability, though. You can have COD income if a creditor reduces the interest rate or gives you more time to pay. Calculating the amount of income can be complex but, essentially, by making it easier for you to repay the debt, the creditor confers a taxable economic benefit.

Mortgage matters

You can also have COD income in connection with a mortgage foreclosure, including a short sale or deed in lieu of foreclosure. Here, the tax consequences depend on which of the following two categories the mortgage falls into:

  1. Nonrecourse. Here the lender’s sole remedy in the event of default is to take possession of the home. In other words, you’re not personally liable if the foreclosure proceeds are less than your outstanding loan balance. Foreclosure on a nonrecourse mortgage doesn’t produce COD income.

  2. Recourse. This type of foreclosure can trigger COD tax liability if the lender forgives the portion of the loan that’s not satisfied. In a short sale, the lender permits you to sell the property for less than the amount you owe and accepts the sale proceeds in satisfaction of your mortgage. A deed in lieu of foreclosure means you convey the property to the lender in satisfaction of your debt. In either case, if the lender agrees to cancel the excess debt, the transaction is treated like a foreclosure for tax purposes — that is, a recourse mortgage may generate COD income.

Keep in mind that COD income is taxable as ordinary income, even if the debt is related to long-term capital gains property. And, in some cases, foreclosure can trigger both COD income and a capital gain or loss (depending on your tax basis in the property and the property’s market value).

Exceptions vs. exclusions

Several types of canceled debt are considered nontaxable “exceptions” — for example, debt cancellation that’s considered a gift (such as forgiveness of a family loan). Certain student loans are also considered exceptions — as long as they’re canceled in exchange for the recipient’s commitment to public service.

Other types of canceled debt qualify as “exclusions.” For instance, homeowners can exclude up to $2 million in COD income in connection with qualified principal residence indebtedness. A recent tax law change extended this exclusion through 2016, modifying it to apply to mortgage forgiveness that occurs in 2017 as long as it’s granted pursuant to a written agreement entered into in 2016. Other exclusions include certain canceled debts relating to bankruptcy and insolvency.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Alivio para el Cónyuge Inocente

Posted by Admin Posted on June 27 2017

Alivio para el cónyugue inocente

 

Si usted califica para el alivio del cónyuge inocente… el IRS ha efectuado un cambio importante que le puede ayudar.

De ahora en adelante, el plazo de dos años ha sido eliminado  para ciertas solicitudes de cónyuge inocente.

Este es el tipo de solicitud que es comunmente conocida como el alivio equitativo, la clase de alivio que a menudo es considerado cuando las personas se encuentran en situaciones difíciles o intimidantes.   

Por ejemplo, esto puede que aplique a víctimas de abuso doméstico.

Si califica para el alivio equitativo, usted ya no tiene una fecha límite de dos años para pedir esa solicitud. 

Además de futuras solicitudes, este cambio aplica a solicitudes que estamos considerando actualmente, y si usted ha sido rechazado en el pasado basado únicamente en el plazo de dos años, usted puede volver a solicitar para el alivio usando el formulario 8857, esta es la solicitud de alivio para el cónyuge inocente.

Pero si su caso está actualmente suspendido, usted no tiene que volver a solicitar porque nosotros le daremos automáticamente otro vistazo a su caso.

Ahora le recomendamos tener cuidado.
 
También debe saber que el plazo de dos años sigue vigente a otros tipos de solicitudes de cónyuge inocente, y otras restricciones y fechas límites establecidas por la ley aplican a cualquier solicitud de cónyuge inocente.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Fuente: IRS

Security Summit Warns of New Phishing Email Email Targeting Tax Pros

Posted by Admin Posted on June 26 2017

Security Summit Warns of New Phishing Email

 

The IRS, state tax agencies and the tax industry today warned tax professionals to beware of phishing emails purporting to be from a tax software education provider and seeking extensive amounts of sensitive preparer data.

The email’s origin is unknown but likely issued by cybercriminals who could be operating from the U.S. or abroad. The email is unusual for the amount of sensitive preparer data that it seeks. This preparer information will enable the thieves to steal client data and file fraudulent tax returns.

The IRS reminds all tax professionals that legitimate businesses and organizations never ask for usernames, passwords or sensitive data via email. Nor should a preparer ever provide such sensitive information via email if asked.

All tax professionals should be aware that their e-Services credentials, the Electronic Filing Information Number (EFIN), the Preparer Tax Identification Number (PTIN) and their Centralized Authorization File (CAF) number are extremely valuable to identity thieves. Anyone handling taxpayer information has a legal obligation to protect that data.

Because the IRS, state tax agencies and the tax industry, acting in partnership as the Security Summit, are making inroads on individual tax-related identity theft, cybercriminals increasingly target tax professionals. Thieves are looking for real client data so they can better impersonate the taxpayer when filing fraudulent returns for refunds.

The fake email uses the name of a real U.S.-based preparer education firm. Here’s the text as it appears in phishing emails being sent to tax professionals:

In our database, there is a failure, we need your information about your account.

In addition, we need a photo of the driver's license, send all the data to the letter. Please do it as soon as possible, this will help us to revive the account.

*Company Name *

*EServices Username *

*EServices Password *

*EServices Pin *

*CAF number*

*Answers to a secret question*

*EIN Number *

*Business Name

*Owner/Principal Name *

*Owner/Principal DOB *

*Owner/Principal SSN *

*Prior Years AGI

Mother's Maiden Name

If you received or fell victim to the scam email, forward a copy to phishing@irs.gov. If you disclosed any credential information, contact the e-Services Help Desk to reset your password. If you disclosed information and taxpayer data was stolen, contact your local stakeholder liaison. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Capital Gains and Losses

Posted by Admin Posted on June 21 2017

Capital Gain and Losses

 

Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. The IRS says when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property.

While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property. A “paper loss” — a drop in an investment's value below its purchase price — does not qualify for the deduction. The loss must be realized through the capital asset's sale or exchange.

Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term. For more information on the tax rates, refer to IRS Publication 544, Sales and Other Dispositions of Assets. If your capital losses exceed your capital gains, the excess is subtracted from other income on your tax return, up to an annual limit of $3,000 ($1,500 if you are married filing separately). Unused capital losses can be carried over indefinitely to future years to net against capital gains, however the annual limit still applies.

Capital gains and losses are reported on Form 8949, Sales and Other Dispositions of Capital Assets, summarized on Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040. Accounting and planning for the sale and purchase of capital assets is usually a very complicated matter, so please contact us so that you may receive the professional advice you deserve.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHY YOUR HEALTH INSURANCE COMPANY MAY ASK FOR YOUR SOCIAL SECURITY NUMBER

Posted by Admin Posted on June 19 2017

HEALTH INSURANCE COMPANY MAY ASK FOR YOUR SOCIAL SECURITY NUMBER

 

Your health insurance company may request that you provide the Social Security Numbers (SSNs) for you, your spouse, and your children covered by your policy. This is because the Affordable Care Act requires every provider of minimum essential coverage to report that coverage by filing an information return with the IRS and furnishing a statement to covered individuals. The information is used by the IRS to administer — and by individuals to show compliance with — the health care law.

Health coverage providers will file an information return (Form 1095-B, “Health Coverage”) with the IRS and will furnish statements to you in 2016 to report coverage information from calendar year 2015. The law requires coverage providers to list SSNs on this form. If you don’t provide your SSN and the SSNs of all covered individuals to the sponsor of the coverage, the IRS may not be able to match the Form 1095-B with the individuals to determine that they have complied with the individual shared responsibility provision.

Your health insurance company may mail you a letter that discusses these new rules and requests SSNs for all family members covered under your policy. The IRS has not designated a specific form for your health insurance company to request this information. However, it should be a written request that is mailed to you through the U.S. Postal Service, not emailed to you. If you receive an email request, it could be a phishing attempt by a hacker who is aware of this requirement, so be cautious and take precautions to protect yourself. Don’t respond directly to the email. Instead, call the insurance company at its main number (not any number contained in the email) or go directly to the insurance company’s website (not from the link or to an address contained in the email) to verify the request.

The Form 1095-B will provide information for your income tax return that shows you, your spouse, and individuals you claim as dependents had qualifying health coverage for some or all months during the year. You do not have to attach Form 1095-B to your tax return. However, it is important to keep it with your other important tax documents.

Anyone on your return who does not have minimum essential coverage, and who does not qualify for an exemption, may be liable for the individual shared responsibility payment.

The information received by the IRS will be used to verify information on your individual income tax return. If you refuse to provide this information to your health insurance company, the IRS cannot verify the information you provide on your tax return, and you may receive an inquiry from the IRS. You also may receive a notice from the IRS indicating that you are liable for the individual shared responsibility payment.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Warns of New Phone Scam

Posted by Admin Posted on June 16 2017

IRS WARNS OF NEW PHONE SCAM

 

The Internal Revenue Service today warned people to beware of a new scam linked to the Electronic Federal Tax Payment System (EFTPS), where fraudsters call to demand an immediate tax payment through a prepaid debit card. This scam is being reported across the country, so taxpayers should be alert to the details.

In the latest twist, the scammer claims to be from the IRS and tells the victim about two certified letters purportedly sent to the taxpayer in the mail but returned as undeliverable. The scam artist then threatens arrest if a payment is not made through a prepaid debit card. The scammer also tells the victim that the card is linked to the EFTPS system when, in fact, it is entirely controlled by the scammer. The victim is also warned not to contact their tax preparer, an attorney or their local IRS office until after the tax payment is made.

“This is a new twist to an old scam,” said IRS Commissioner John Koskinen. “Just because tax season is over, scams and schemes do not take the summer off. People should stay vigilant against IRS impersonation scams. People should remember that the first contact they receive from IRS will not be through a random, threatening phone call.”

EFTPS is an automated system for paying federal taxes electronically using the Internet or by phone using the EFTPS Voice Response System. EFTPS is offered free by the U.S. Department of Treasury and does not require the purchase of a prepaid debit card. Since EFTPS is an automated system, taxpayers won’t receive a call from the IRS. In addition, taxpayers have several options for paying a real tax bill and are not required to use a specific one.

Tell Tale Signs of a Scam:

The IRS (and its authorized private collection agencies) will never:

- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.

- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.

- Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

- Ask for credit or debit card numbers over the phone.

For anyone who doesn’t owe taxes and has no reason to think they do:

- Do not give out any information. Hang up immediately.

- Contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.

- Report it to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. Please add "IRS Telephone Scam" in the notes.

For anyone who owes tax or thinks they do:

- View your tax account information online at IRS.gov to see the actual amount you owe. You can then also review your payment options.

- Call the number on the billing notice, or

- Call the IRS at 800-829-1040. IRS workers can help.

- The IRS does not use email, text messages or social media to discuss personal tax issues, such as those involving bills or refunds. For more information, visit the “Tax Scams and Consumer Alerts” page on IRS.gov. Additional information about tax scams is available on IRS social media sites, including YouTube videos.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Adds New Features to Taxpayers Online Account

Posted by Admin Posted on June 15 2017

IRS Adds New Features to Taxpayers Online Account

 

WASHINGTON — The Internal Revenue Service announced today the addition of several new features to the online account tool first introduced late last year as part of the IRS’s commitment to improve and expand taxpayer services.

The online account allows individual taxpayers to access the latest information available about their federal tax account through a secure and convenient tool on IRS.gov. When it first launched in December 2016, the tool assisted taxpayers with basic account inquiries such as information about their balance due and access to the various IRS payment options. Since then, the IRS has added new features allowing taxpayers to:

View up to 18 months of tax payment history

View payoff amounts and tax balance due for each tax year

Obtain online transcripts of various Form 1040-series through Get Transcript

Give feedback on their experience with their online account and make suggestions for improvements

“We are constantly looking for ways to improve taxpayers’ interactions with the IRS and adding these new features to the taxpayer’s online account is an important step in that direction,” said IRS Commissioner John Koskinen. “The IRS is committed to serving taxpayers in multiple ways and now taxpayers who want to interact digitally with us in a secure environment have access to even more helpful features.”

Before accessing the tool, taxpayers must authenticate their identities through the rigorous Secure Access process. This is a two-step authentication process, which means returning users must have their credentials (username and password) plus a security code sent as a text to their mobile phones.

Taxpayers who have registered using Secure Access for Get Transcript Online or Get an IP PIN may use their same username and password. To register for the first time, taxpayers must have their personal and financial information including: Social Security number, specific financial information, such as a credit card number or loan numbers, email address and a text-enabled mobile phone in the user's name. Taxpayers may review the Secure Access  process prior to starting registration.

As part of the security process to authenticate taxpayers, the IRS will send verification, activation or security codes via email and text. The IRS warns taxpayers that it will not initiate contact via text or email asking for log-in information or personal data. The IRS texts and emails will only contain one-time codes.

In addition to the online account, the IRS continues to provide several self-service tools and helpful resources available on IRS.gov for individuals, businesses and tax professionals.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Contribuyentes en el extranjero: deben presentar su declaración de impuestos para el 15 de junio

Posted by Admin Posted on June 14 2017

Contribuyentes en el extranjero: deben presentar su declaración de impuestos para el 15 de junio

 

El Servicio de Impuestos Internos (IRS) recordó hoy a los contribuyentes que viven y trabajan en el extranjero que deben presentar su declaración de impuestos de 2016 para el jueves, 15 de junio.

La fecha límite especial del 15 de junio está disponible tanto para ciudadanos estadounidenses como para extranjeros residentes en el extranjero, incluidos los que tienen doble nacionalidad. Para aquellos que no pueden cumplir con la fecha límite del 15 de junio, las prórrogas están disponibles e incluso se pueden solicitar electrónicamente. Además, un nuevo plazo de presentación ahora se aplica a cualquier persona con una cuenta bancaria o financiera en el extranjero que tenga el requisito de presentar un informe anual para estas cuentas, mejor conocido como FBAR.

A continuación, un resumen de los puntos claves a tener en mente. La mayoría de las personas en el extranjero deben presentar:

Un requisito para declarar impuestos generalmente aplica incluso si un contribuyente califica para beneficios tributarios, como la exclusión de Ingreso Ganado en el Extranjero o el Crédito de Impuesto Extranjero, que reducen o eliminan sustancialmente la responsabilidad tributaria en los Estados Unidos. Estos beneficios tributarios solo están disponibles si un contribuyente elegible presenta una declaración de impuestos en los EE. UU.

Un contribuyente califica para la fecha límite especial de presentación del 15 de junio si ambos, domicilio tributario y residencia, están fuera de los EE. UU. y Puerto Rico. Aquellos que sirven en el ejército fuera de los EE. UU. y Puerto Rico también califican para la extensión al 15 de junio.

Asegúrese de adjuntar una declaración en la que indique cuál de estas dos situaciones aplica. Los intereses, actualmente al cuatro por ciento por año, compuestos diariamente, todavía se aplican a cualquier pago de impuestos recibido después de la fecha límite original del 18 de abril. Para obtener más información, consulte la sección Cuando presentar y pagar en la Publicación 54, Guía de impuestos para ciudadanos estadounidenses y extranjeros residentes en el extranjero (en inglés).

Reporte especial de declaración de impuestos para cuentas y activos extranjeros

La ley federal requiere que los ciudadanos de los EE. UU. y residentes extranjeros presenten cualquier ingreso mundial, incluyendo ingresos de fideicomisos extranjeros y cuentas de bancos y valores extranjeros. En la mayoría de los casos, los contribuyentes afectados necesitan completar y adjuntar el Anexo B a su declaración de impuestos. La Parte III del Anexo B pregunta acerca de la existencia de cuentas extranjeras, tales como cuentas bancarias y de valores, y normalmente requiere que los ciudadanos de los EE. UU. reporten el país donde se encuentra cada cuenta.

Además, ciertos contribuyentes también pueden tener que llenar y adjuntar a su declaración el Formulario 8938, Estado de Activos Financieros Extranjeros (en inglés). En general, los ciudadanos estadounidenses, los extranjeros residentes y ciertos extranjeros no residentes deben informar activos financieros extranjeros especificados en este formulario si el valor agregado de esos activos excede ciertos umbrales. Consulte las instrucciones de este formulario para detalles

Escoja Free File

Los ciudadanos de los EE. UU. y los extranjeros residentes que viven en el extranjero pueden usar Free File del IRS para preparar y presentar  electrónicamente sus declaraciones de forma gratuita. Esto significa que tanto los ciudadanos estadounidenses como los extranjeros residentes que viven en el extranjero con ingresos brutos ajustados (AGI) de $64,000 o menos pueden usar software de marca para preparar sus declaraciones y luego presentarlas de forma gratuita. Un número limitado de empresas ofrece software que acepta direcciones extranjeras.

Una segunda opción, los formularios interactivos de Free File, la versión electrónica de los formularios de papel del IRS, no tiene límite de ingresos y se adapta mejor a las personas que se sienten cómodas preparando su propia declaración de impuestos.

Tanto la presentación electrónica como las opciones de presentación electrónica de Free File están disponibles hasta el 16 de octubre de 2017, para cualquier persona que presente una declaración de 2016. Eche un vistazo al enlace de presentación electrónica en IRS.gov para obtener detalles acerca de las diversas opciones de presentación electrónica. Free File no está disponible para los extranjeros no residentes requeridos a presentar el Formulario 1040NR

Prórrogas automáticas disponibles

Los contribuyentes en el extranjero que no pueden cumplir con la fecha límite del 15 de junio pueden tener más tiempo para presentar, pero necesitan pedirlo. Su solicitud de prórroga debe presentarse antes del 15 de junio.

Las prórrogas automáticas proveen a las personas hasta el 16 de octubre de 2017 para presentar; sin embargo, esto no extiende el tiempo para pagar impuestos. Una forma fácil de obtener tiempo adicional para presentar es a través del enlace de Free File en IRS.gov. En cuestión de minutos, cualquier persona, independientemente de sus ingresos, puede usar este servicio gratuito para solicitar electrónicamente una prórroga en el Formulario 4868. Para obtener la prórroga, los contribuyentes deben calcular su obligación tributaria en este formulario y pagar cualquier deuda.

Otra opción para los contribuyentes es pagar electrónicamente y obtener una prórroga de tiempo para presentar. El IRS procesará automáticamente una prórroga cuando los contribuyentes seleccionen el Formulario 4868, hagan un pago total o parcial de impuestos federales a través de Direct Pay, el Sistema Electrónico de Pago de Impuestos Federales (EFTPS) o una tarjeta de débito o crédito. No es necesario presentar un Formulario 4868 por separado al hacer un pago electrónico e indicar que es para una prórroga. Las opciones de pago electrónico están disponibles en IRS.gov/pagos. Aquellos contribuyentes internacionales que no tienen cuenta bancaria en los EE. UU. Deben referirse a la sección de Pagos electrónicos extranjeros en IRS.gov para más opciones de pago e información.

Contribuyentes en zonas de combate obtienen más tiempo si la necesidad de 

Los miembros del ejército y el personal de apoyo elegible que sirve en una zona de combate tienen al menos 180 días luego de abandonar la zona de combate para presentar sus declaraciones de impuestos y pagar los impuestos adeudados. Esto incluye a los que sirven en Irak, Afganistán y otras zonas de combate. Un listado completo de las localidades designadas como zonas de combate puede encontrarse en la Publicación 3, Guía de impuestos para las fuerzas armadas (en inglés), disponible en IRS.gov

Diversas circunstancias afectan la duración exacta de la prórroga disponible para cualquier contribuyente dado. Detalles, que incluyen ejemplos que ilustran cómo se calculan estas prórrogas, se encuentran en la sección de Prórrogas en la Publicación 3

Nueva fecha límite para reportar cuentas extranjeras

A partir de este año, la fecha límite para presentar el Informe Anual de Cuentas Bancarias y Financieras en el Extranjero (FBAR) (en inglés), es ahora la misma que para una declaración federal de impuestos. Esto significa que el Formulario 114 del FBAR de 2016, debía presentarse electrónicamente con la Red de Cumplimiento de Crímenes Financieros (FinCEN) antes del 18 de abril de 2017. Sin embargo, FinCEN está concediendo a los contribuyentes que no puedan cumplir con el plazo original una prórroga automática hasta el 16 de octubre de 2017 para presentar el FBAR. No se requieren solicitudes específicas de prórrogas. Anteriormente, la fecha límite del FBAR era el 30 de junio y no había prórrogas disponibles.

En general, el requisito de presentación de FBAR se aplica a cualquier persona que tenía un interés en, o firma u otra autoridad, sobre cuentas financieras extranjeras cuyo valor agregado excedió $10,000 en cualquier momento durante 2016. Debido a este umbral, el IRS alienta a los contribuyentes con activos extranjeros, incluso aquellos relativamente pequeños, verificar si este requisito de presentación les aplica. El formulario sólo está disponible a través de la página web del Sistema de presentación electrónica de BSA.

Reporte en dólares americanos

Todos los ingresos recibidos o gastos deducibles pagados en moneda extranjera deben reportarse en una declaración de impuestos de EE.UU. en dólares americanos. Asimismo, los pagos de impuestos deben hacerse en dólares americanos.

Ambos formularios 114 y 8938 requieren el uso de una tasa de cambio del 31 de diciembre para todas las transacciones, independientemente de la tasa de cambio corriente para la fecha de la transacción. En general, el IRS acepta cualquier tipo de tasa de cambio publicada que se use consistentemente. Para obtener más información acerca de las tasas de cambio, consulte las Tasas de cambio de monedas y monedas extranjeras

Reportes de expatriados

Los contribuyentes que renunciaron a su ciudadanía estadounidense o dejaron de ser residentes legales permanentes de los EE. UU. durante 2016 deben presentar una declaración de extranjero de doble estatus, adjuntando el Formulario 8854, Declaración inicial y anual de expatriación (en inglés). También debe presentarse una copia del Formulario 8854 con el IRS de Philadelphia, PA 19255-0049, antes de la fecha de vencimiento de la declaración de impuestos (incluyendo prórrogas). Vea las instrucciones para este formulario y el Aviso 2009-85, Guía para expatriados bajo la Sección 877A (en inglés), para más detalles

Más información disponible  

Cualquier contribuyente estadounidense aquí o en el extranjero con preguntas de impuestos puede consultar la página principal de Contribuyentes internacionales (en inglés) y usar el Mapa tributario del IRS (en inglés) y el Índice de Temas Tributarios Internacionales para obtener respuestas. Estas herramientas en línea agrupan formularios, publicaciones y páginas web del IRS por tema y proporcionan a los usuarios un único punto de entrada para encontrar información tributaria.

Los contribuyentes que buscan preparadores de impuestos en el extranjero deben visitar el Directorio de preparadores de impuestos federales con credenciales y calificaciones selectas (en inglés).

Para evitar retrasos en los reembolsos de impuestos, los contribuyentes que viven en el extranjero deben visitar la página de Consejos útiles para recibir efectivamente un reembolso, para contribuyentes que viven en el extranjero (en inglés).

Más información acerca de las reglas tributarias que se aplican a los ciudadanos de los EE.UU. y extranjeros residentes que viven en el extranjero se puede encontrar en la Publicación 54, Guía tributaria para ciudadanos estadounidenses y extranjeros residentes que viven en el extranjero (en inglés),disponible en IRS.gov.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

New Deadline for Reporting Foreign Accounts

Posted by Admin Posted on June 13 2017

New Deadline for Reporting Foreign Accounts

 

Starting this year, the deadline for filing the annual Report of Foreign Bank and Financial Accounts (FBAR) is now the same as for a federal income tax return (June 15). This means that the 2016 FBAR, Form 114, was normally required to be filed electronically with the Financial Crimes Enforcement Network (FinCEN) by April 18, 2017. But FinCEN is granting filers missing the original deadline an automatic extension until Oct. 16, 2017 to file the FBAR. Specific extension requests are not required. In the past, the FBAR deadline was June 30 and no extensions were available. In general, the FBAR filing requirement applies to anyone who had an interest in, or signature or other authority, over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2016. Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is only available through the BSA E-filing System website. Report in U.S. Dollars Any income received or deductible expenses paid in foreign currency must be reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must be made in U.S. dollars.

Both Forms 114 and 8938 require the use of a Dec. 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign Currency and Currency Exchange Rates.

Expatriate Reporting

Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents of the United States during 2016 must file a dual-status alien return, attaching Form 8854, Initial and Annual Expatriation Statement. A copy of the Form 8854 must also be filed with Internal Revenue Service Philadelphia, PA 19255-0049, by the due date of the tax return (including extensions). See the instructions for this form and Notice 2009-85, Guidance for Expatriates Under Section 877A, for further details.

More Information Available Any U.S. taxpayer here or abroad with tax questions can refer to the International Taxpayers landing page and use the online IRS Tax Map and the International Tax Topic Index to get answers. These online tools group IRS forms, publications and web pages by subject and provide users with a single entry point to find tax information. Taxpayers who are looking for return preparers abroad should visit the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

To help avoid delays with tax refunds, taxpayers living abroad should visit the Helpful Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad page.

More information on the tax rules that apply to U.S. citizens and resident aliens living abroad can be found in, Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, available on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tax Payers Abroad: Can’t file for June 15? Learn about your options

Posted by Admin Posted on June 13 2017

Tax Payers Abroad Can’t file for June 15 Learn about your options

 

Automatic Extensions Available Taxpayers abroad who can’t meet the June 15 deadline can still get more time to file, but they need to ask for it. Their extension request must be filed by June 15. Automatic extensions give people until Oct. 16, 2017, to file; however, this does not extend the time to pay tax. An easy way to get the extra time to file is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an extension on Form 4868. To get the extension, taxpayers must estimate their tax liability on this form and pay any amount due. Another option for taxpayers is to pay electronically and get an extension of time to file. IRS will automatically process an extension when taxpayers select Form 4868 and they are making a full or partial federal tax payment using Direct Pay, the Electronic Federal Tax Payment System (EFTPS) or a debit or credit card. There is no need to file a separate Form 4868 when making an electronic payment and indicating it is for an extension. Electronic payment options are available at IRS.gov/payments. International taxpayers who do not have a U.S. bank account should refer to the Foreign Electronic Payments section on IRS.gov for more payment options and information. Combat Zone Taxpayers get More Time Without Having to Ask for it Members of the military and eligible support personnel serving in a combat zone have at least 180 days after they leave the combat zone to file their tax returns and pay any taxes due. This includes those serving in Iraq, Afghanistan and other combat zone localities. A complete list of designated combat zone localities can be found in Publication 3, Armed Forces’ Tax Guide, available on IRS.gov. Various circumstances affect the exact length of the extension available to any given taxpayer. Details, including examples illustrating how these extensions are calculated, can be found in the Extensions of Deadlines section in Publication 3.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Taxpayers Abroad: Must File by June 15

Posted by Admin Posted on June 13 2017

Taxpayers Abroad Must File by June 15

 

The Internal Revenue Service today reminded taxpayers living and working abroad that they must file their 2016 federal income tax return by Thursday, June 15.

The special June 15 deadline is available to both U.S. citizens and resident aliens abroad, including those with dual citizenship. For those who can’t meet the June 15 deadline, tax-filing extensions are available and they can even be requested electronically. In addition, a new filing deadline now applies to anyone with a foreign bank or financial account required to file an annual report for these accounts, often referred to as an FBAR.

Here is a rundown of key points to keep in mind:

Most People Abroad Need to File An income tax filing requirement generally applies even if a taxpayer qualifies for tax benefits, such as the Foreign Earned Income exclusion or the Foreign Tax credit, which substantially reduce or eliminate U.S. tax liability. These tax benefits are only available if an eligible taxpayer files a U.S. income tax return. A taxpayer qualifies for the special June 15 filing deadline if both their tax home and abode are outside the United States and Puerto Rico. Those serving in the military outside the U.S. and Puerto Rico also qualify for the extension to June 15.

Be sure to attach a statement indicating which of these two situations applies. Interest, currently at the rate of four percent per year, compounded daily, still applies to any tax payment received after the original April 18 deadline. For details, see the When To File and Pay section in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. Special Income Tax Return Reporting for Foreign Accounts and Assets

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.

In addition, certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. See the instructions for this form for details.

Choose Free File

U.S. citizens and resident aliens living abroad can use IRS Free File to prepare and electronically file their returns for free. This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes (AGI) of $64,000 or less can use brand-name software to prepare their returns and then e-file them for free. A limited number of companies provide software that can accommodate foreign addresses.

A second option, Free File Fillable Forms, the electronic version of IRS paper forms, has no income limit and is best suited to people who are comfortable preparing their own tax return. 

Both the e-file and Free File electronic filing options are available until Oct. 16, 2017, for anyone filing a 2016 return. Check out the e-file link on IRS.gov for details on the various electronic filing options. Free File is not available to nonresident aliens required to file Form 1040NR.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN?

Posted by Admin Posted on June 12 2017

ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN

 

With summer headed toward its inevitable close, you may be tempted to splurge on a pricey “last hurrah” trip. Or perhaps you’d like to buy a brand new convertible to feel the warm breeze in your hair. Whatever the temptation may be, if you’ve pondered dipping into your 401(k) account for the money, make sure you’re aware of the consequences before you take out the loan.

Pros and cons

Many 401(k) plans allow participants to borrow as much as 50% of their vested account balances, up to $50,000. These loans are attractive because:

They’re easy to get (no income or credit score requirements),

There’s minimal paperwork,

Interest rates are low, and

You pay interest back into your 401(k) rather than to a bank.

Yet, despite their appeal, 401(k) loans present significant risks. Although you pay the interest to yourself, you lose the benefits of tax-deferred compounding on the money you borrow.

You may have to reduce or eliminate 401(k) contributions during the loan term, either because you can’t afford to contribute or because your plan prohibits contributions while a loan is outstanding. Either way, you lose any future earnings and employer matches you would have enjoyed on those contributions.

Loans, unless used for a personal residence, must be repaid within five years. Generally, the loan terms must include level amortization, which consists of principal and interest, and payments must be made no less frequently than quarterly.

Additionally, if you’re laid off, you’ll have to pay the outstanding balance quickly — typically within 30 to 90 days. Otherwise, the amount you owe will be treated as a distribution subject to income taxes and, if you’re under age 59½, a 10% early withdrawal penalty.

Hardship withdrawals

If you need the money for emergency purposes, rather than recreational ones, determine whether your plan offers a hardship withdrawal. Some plans allow these to pay certain expenses related to medical care, college, funerals and home ownership — such as first-time home purchase costs and expenses necessary to avoid eviction or mortgage foreclosure.

Even if your plan allows such withdrawals, you may have to show that you’ve exhausted all other resources. Also, the amounts you withdraw will be subject to income taxes and, except for certain medical expenses or if you’re over age 59½, a 10% early withdrawal penalty.

Like plan loans, hardship withdrawals are costly. In addition to owing taxes and possibly penalties, you lose future tax-deferred earnings on the withdrawn amounts. But, unlike a loan, hardship withdrawals need not be paid back. And you won’t risk any unpleasant tax surprises should you lose your job.

The right move

Generally, you should borrow or take hardship withdrawals from a 401(k) only in emergencies or when no other financing options exist (and your job is secure). For help deciding whether such a loan would be right for you, please call us.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- HOW TO ASSESS THE IMPACT OF A CHILD'S INVESTMENT INCOME

Posted by Admin Posted on June 12 2017

child investment income

 

When they’re old enough to understand the concepts, some children start investing in the markets. If you’re helping a child learn the risks and benefits of investments, be sure you learn about the tax impact first.

Potential danger

For the 2016 tax year, if a child’s interest, dividends and other unearned income total more than $2,100, part of that income is taxed based on the parent’s tax rate. This is a critical point because, as joint filers, many married couples’ tax rate is much higher than the rate at which the child would be taxed.

Generally, a child’s $1,050 standard deduction for unearned income eliminates liability on the first half of that $2,100. Then, unearned income between $1,050 and $2,100 is taxed at the child’s lower rate.

But it’s here that potential danger sets in. A child’s unearned income exceeding $2,100 may be taxed at the parent’s higher tax rate if the child is under age 19 or a full-time student age 19–23, but not if the child is over age 17 and has earned income exceeding half of his support. (Other stipulations may apply.)

Simplified approach

In many cases, parents take a simplified approach to their child’s investment income. They choose to include their son’s or daughter’s investment income on their own return rather than have him or her file a return of their own.

Basically, if a child’s interest and dividend income (including capital gains distributions) total more than $1,500 and less than $10,500, parents may make this election. But a variety of other requirements apply. For example, the unearned income in question must come from only interest and dividends.

Many lessons

Investing can teach kids about the time value of money, the importance of patience, and the rise and fall of business success. But it can also deliver a harsh lesson to parents who aren’t fully prepared for the tax impact. We can help you determine how your child’s investment activities apply to your specific situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Interest Rates Remain the Same for the Third Quarter of 2017

Posted by Admin Posted on June 12 2017

Interest Rates Remain the Same for the Third Quarter of 2017

 

The Internal Revenue Service announced that interest rates will remain the same for the calendar quarter beginning July 1, 2017.  The rates will be:

four (4) percent for overpayments (three (3) percent in the case of a corporation);

1 and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000;

four (4) percent for underpayments; and

six (6) percent for large corporate underpayments. 

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. 

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during April 2017 to take effect May 1, 2017, based on daily compounding.

Revenue Ruling 2017-13, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2017-26, dated June 26, 2017.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

- JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

Posted by Admin Posted on June 08 2017

JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

 

Preserving and managing family wealth requires addressing a number of major issues. These include saving for your children’s education and funding your own retirement. Juggling these competing demands is no trick. Rather, it requires a carefully devised and maintained family wealth management plan.

Start with the basics

First, a good estate plan can help ensure that, in the event of your death, your children will be taken care of and, if your estate is large, that they won’t lose a substantial portion of their inheritances to estate taxes. It can also guarantee that your assets will be passed along to your heirs according to your wishes.

Second, life insurance is essential. The right coverage can provide the liquidity needed to repay debts, support your children and others who depend on you financially, and pay estate taxes.

Prepare for the challenge

Most families face two long-term wealth management challenges: funding retirement and paying for college education. While both issues can be daunting, don’t sacrifice saving for your own retirement to finance your child’s education. Scholarships, grants, loans and work-study may help pay for college — but only you can fund your retirement.

Uncle Sam has provided several education incentives that are worth checking out, including tax credits and deductions for qualifying expenses and tax-advantaged savings opportunities such as 529 plans and Education Savings Accounts (ESAs). Because of income limits and phaseouts, many higher-income families won’t benefit from some of these tax breaks. But, your children (or your parents, in the case of contributing to an ESA) may be able to take advantage of them.

Give assets wisely

Giving money, investments or other assets to your children or other family members can save future income tax and be a sound estate planning strategy as well. You can currently give up to $14,000 per year per individual ($28,000 if married) without incurring gift tax or using your lifetime gift tax exemption. Depending on the number of children and grandchildren you have, and how many years you continue this gifting program, it can really add up.

By gifting assets that produce income or that you expect to appreciate, you not only remove assets from your taxable estate, but also shift income and future appreciation to people who may be in lower tax brackets.

Also consider using trusts to facilitate your gifting plan. The benefit of trusts is that they can ensure funds are used in the manner you intended and can protect the assets from your loved ones’ creditors.

Overcome the complexities

Creating a comprehensive plan for family wealth management and following through with it may not be simple — but you owe it to yourself and your family. We can help you overcome the complexities and manage your tax burden.

Sidebar: Charitable giving’s place in family wealth management

Do charitable gifts have a place in family wealth management? Absolutely. Properly made gifts can avoid gift and estate taxes, while possibly qualifying for an income tax deduction. Consider a charitable trust that allows you to give income-producing assets to charity, but keep the income for life — or for the charity to receive the earnings and the assets to later pass to your heirs. These are just two examples; there are more ways to use trusts to accomplish your charitable goals.

NEED A DO-OVER? AMEND YOUR TAX RETURN

Like many taxpayers, you probably feel a sense of relief after filing your tax return. But that feeling can change if, soon after, you realize you’ve overlooked a key detail or received additional information that should have been considered. In such instances, you may want (or need) to amend your return.

Typically, an amended return — Form 1040X, to be exact — must be filed within three years from the date you filed the original tax return or within two years of the date the applicable tax was paid (whichever is later). Your choice of timing should depend on whether you expect a refund or a bill.

If claiming an additional refund, you should typically wait until you’ve received your original refund. Then cash or deposit the first refund check while waiting for the second. If you owe additional dollars, file the amended return and pay the tax immediately to minimize interest and penalties.

Bear in mind that, as of this writing, the IRS doesn’t offer amended returns via e-file. You can, however, track your amended return electronically. The IRS now offers an automated status-tracking tool called “Where’s My Amended Return?” at https://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

2017 Standard Mileage Rates for Business, Medical and Moving Announced

Posted by Admin Posted on June 08 2017

2017 Standard Mileage Rates for Business, Medical and Moving Announced

 

The Internal Revenue Service issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

53.5 cents per mile for business miles driven, down from 54 cents for 2016

17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016

14 cents per mile driven in service of charitable organizations

The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

These and other requirements are described in Rev. Proc. 2010-51. Notice 2016-79, posted today on IRS.gov, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

During a divorce, what are the legal issues that must be handled?

Posted by Admin Posted on June 08 2017

During a divorce, what are the legal issues that must be handled

 

Make an agreement with your spouse to plan for the legal issues that will be dealt with in the future, such as division of property, alimony or support payments and child custody. The amount of time and money that will be spent trying to reach a legal solution will be lessened dramatically if this can be done, either with the help of lawyers or court.

The following are general tips to face the legal aspects of divorce:

If there are important issues with regards to child custody, alimony or assets, find your own attorney.

Use referrals from other professionals, trusted friends or the American Academy of Matrimonial Lawyers (www.aaml.org) to find a good matrimonial lawyer.

Verify that the agreement of divorce approaches all topics such as insurance coverage, life health and auto.

On IRA accounts, life insurance policies, pension plans, 401(k) plans, and other retirement accounts make sure to modify the beneficiaries.

Update your will.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Which banking fees should I watch for with a new bank account?

Posted by Admin Posted on June 07 2017

Which banking fees should I watch for with a new bank account?

 

Keep in mind that banks are always required to notify you of the fees for their accounts. The best account to choose is usually the one with the lowest fees, regardless of the interest rate.

Keep an eye out for potential extra charges when shopping for checking accounts. Ask about monthly fees, check processing fees, and ATM fees. Also be wary of cost-free checking accounts, as the bank may charge you if your balance drops below a certain amount. Also, the charges for printing new checks can often be much higher at your bank than through an outside printing provider.

In this day and age, it doesn't really benefit you to put money into an old fashioned "passbook" savings account. Often monthly account fees overshadow the small amount of interest you will earn. Instead, put your money into a checking account. If it is a larger sum, look into a money market account. In this type of account you will earn more interest than in a savings account, but watch out for additional charges if your balance drops too low.

▼ What are the different types of bank accounts I can choose from?

CHECKING ACCOUNTS

Checking accounts provide you with quick, convenient access to your funds. You are able to make deposits as often as you wish, and most banks provide you with an ATM card to access your funds, or to charge debits at stores. Of course, you can also use the conventional method of writing checks.

Some checking accounts pay interest. These are called negotiable order of withdrawal (NOW) accounts. The more commonly used type, a demand deposit account, does not pay interest.

There are several fees that are associated with checking accounts, other than the check printing fees. These will vary depending on the bank you choose. Some will charge a monthly maintenance fee regardless of your balance, others will charge a monthly fee if your balance drops below a certain point. Further, some institutions charge you based on the transactions you make, such as each ATM withdrawal, or each check you write.

MONEY MARKET DEPOSIT ACCOUNTS (MMDA)

An MMDA is basically an account that accumulates interest. You can also write checks from it. The rate of interest is usually higher than that of checking or savings accounts. However, they require a higher minimum balance in order to earn that interest. The higher your balance becomes, the higher your interest rate may rise.

However, it is less convenient to withdraw money from an MMDA than it is from a checking account. You are limited to six transfers from the account a month, and only three of these can be through writing a check. Also, there are usually transaction fees associated with these accounts.

SAVINGS ACCOUNTS

You may make withdrawals from savings accounts, but there is less flexibility than with a checking account. Like an MMDA, the number of withdrawals or transfers may be limited.

There are a few different types of savings accounts. The two most common are passbook and statement. Passbook accounts involve a record book that tracks all deposits and withdrawals and must be presented upon making these transactions. With a statement savings account, you are mailed a statement showing all withdrawals and deposits.

Minimum balance fees may also be charged on savings accounts.

CREDIT UNION ACCOUNTS

These accounts are similar to those of banks, but with a different title. In a credit union, you would have a share draft account (a checking account), a share account (savings account), or a share certificate account (certificate of deposit account).

The great thing about credit unions is that they usually charge less for banking services than banks do. If you have access to one, use it!

CERTIFICATES OF DEPOSIT (CD)

CDs are time deposits. They offer a guaranteed rate of interest for a specified term which can be as short as a few days or as long as several years.

When you pick the term you generally can't withdraw your money until the term expires. In some cases the bank will let you withdraw the interest you have earned on the CD. Because CDs are for a set amount of time, the rate of return is usually higher - and the longer the term, the higher the annual percentage yield.

A penalty can be issued if you withdraw your funds before the maturity of your term. Sometimes the penalty can be quite high, eating into your interest earned as well as your principal investment.

Your bank will notify you before your CD matures, but often CDs renew automatically. You should keep track of your maturity date if you would like to take out your funds before the CD rolls over into a new term.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

Electronic Payment of User Fees Starts June 15; Replaces Paying by Check

Posted by Admin Posted on June 07 2017

Electronic Payment of User Fees Starts June 15; Replaces Paying by Check

 

Beginning June 15, taxpayers requesting letter rulings, closing agreements and certain other rulings from the Internal Revenue Service will need to make user fee payments electronically using the federal government’s Pay.gov system.

Pay.gov allows people to pay for a variety of government services online using a credit card, debit card or via direct debit or electronic funds withdrawal from a checking or savings account. In the past, ruling requesters could only make required user fee payments by check or money order. During a two-month transition period, June 15 to Aug. 15, requesters can choose to make user fee payments either through Pay.gov or by check or money order. After Aug. 15, 2017, Pay.gov will become the only permissible payment method.

Rulings described in Revenue Procedure 2017-1 and sent to the Docket, Records and User Fee Branch of the Legal Processing Division of the Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DRU) are affected by this change. These include private letter rulings, closing agreements, and rulings using Form 1128, 2553, 3115 or 8716. Determination letters are not affected because they are sent to other offices as described in the revenue procedure.

A letter ruling is a written determination issued to a taxpayer by IRS Chief Counsel in response to the taxpayer’s written inquiry, submitted prior to the filing of returns or reports required under federal law. In general, it concerns the requester's status for tax purposes or the tax effects of its acts or transactions. Letter rulings and other similar ruling requests interpret the tax laws and apply them to the taxpayer’s specific set of facts. User fees range from $200 to $28,300, depending upon the type of ruling being sought.

Pay.gov is used to accept payments only. The original, signed ruling request and supporting materials must still be submitted by mail or hand delivery to the IRS.

To submit a user fee, visit www.pay.gov and use the IRS Chief Counsel User Fees (or Supplemental User Fees) for Form 1128, Form 2553, Form 3115, Form 8716, Private Letter Rulings and Closing Agreements form. This form can be found by entering “IRS Chief Counsel User Fees” in the “Search the Forms” box or by clicking on the “Agency List” link under “What Federal Agencies Can I Pay?” and choosing Internal Revenue Service.

Once payment is made, print a copy of the completed form and the receipt and include these with the  letter ruling request. Then submit the complete package by mail or hand delivery: 

Mail to:
Internal Revenue Service
CC:PA:LPD:DRU
P.O. Box 7604
Ben Franklin Station
Washington, DC  20044;

or

Hand deliver, or if using a private courier service, to:

Internal Revenue Service
CC:PA:LPD:DRU
1111 Constitution Avenue, NW
Room 5336
Washington, DC  20224

In addition, for the fastest processing, please Efax a copy of the pay.gov receipt, the completed form and the ruling request to this eFax line, 877-773-4950.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

SUMMER CAMP COSTS MAY BRIGHTEN YOUR TAX RETURN

Posted by Admin Posted on June 06 2017

SUMMER CAMP COSTS MAY BRIGHTEN YOUR TAX RETURN

 

Day camp is a qualified expense under the child and dependent care credit. This tax break is worth 20% of qualifying expenses, subject to a cap — and could be worth even more if your adjusted gross income is less than $43,000. For 2016, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more.

Be aware, however, that overnight camp costs don’t qualify for the credit, nor do expenses related to summer school tutoring. In addition, certain types of child care are ineligible. These include care provided by a spouse and care provided by a child who’s under age 19 at the end of the year.

A variety of additional rules may apply. For example, eligible costs for care must be work-related. In other words, parents need to pay for the care so that they can work (or look for work). If you think you might qualify for the child and dependent care credit, please contact us. We can help you determine whether you’re eligible and then properly claim this potentially valuable tax break.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What can I do to resolve a consumer complaint?

Posted by Admin Posted on June 06 2017

What Can I do to Resolve a Consumer Complaint

 

You should first approach the seller of the item. Then, get in touch with the relevant consumer agency. If neither of the previous provides adequate results, a lawsuit can be filed or you may use arbitration.

Approach the Seller

1- Compile all necessary evidence such as canceled checks, receipt, photographs showing the issue, a warranty, bill of sale or contract.

2- Determine your goal. Would you like the product replaced? Would you like a refund? Are you just looking for an apology?

3- Schedule a meeting with the manager, customer service representative or other appropriate person by calling the store or service provider. In this meeting with the individual, describe as clearly as possible the nature of the issue and what your goal is. If you can only speak by phone, write a letter as follow-up and keep detailed notes of the dates and with whom you spoke with. It is important to note that if there is a valid warranty for the product, it is best to follow-up with the manufacturer and not the merchant.

4- Take the issue to a higher level, if this doesn't find a solution. This could be the corporate president or supervisor. At this point, you should put your complaint in writing if you have yet to do so. This letter should detail your name, phone numbers, address, and account number (if applicable). Include the date and place of purchase as well as the model and serial number if a product is involved. Concisely describe the issue at hand and the process you have gone through so far to reach a solution. Lastly, you should include what outcome you want and state a deadline for this outcome. Keep a copy of the letter for yourself and include relevant copies of documents. Make sure you keep the originals and retain copies of any correspondence you receive from the company.

Get in touch with an agency

If your desired goal has yet to be reached, you will want to look in the phone book or online for a consumer complaint agency, such as the county, city or state consumer protection office or the Better Business Bureau.

Another option is to go with the trade association method. There are industry trade associations that will offer to aid in mediating issues with regards to their members.

You may want to get in touch with the appropriate state-banking regulator if your issue deals with a bank. If an insurer is involved, you will want to get in touch with the state insurance regulator, for a securities problem contact the securities regulator or for utilities problems contact the public utilities commission.

Call the state-licensing department if you the issue deals with a state-licensed trade, such as a plumber.

Research the lemon laws of your state, unless you reside in Arkansas or South Dakota, by getting in touch with your state consumer protections agency in the event that you purchased a bad used car.

Get in contact with your area postal inspector, whose information can be located in the U.S. government section of the telephone book, for issues that pertain to mail order or mail fraud.

Look into finding a local television news program hotline for resolving consumer complaints.

Filing a lawsuit

When there are no more options, you will want to file a court case in either small claims court, if the amount is small (usually less than $5000) or if not, a regular lawsuit.

More than likely speaking with an attorney and having them draft a letter to the merchant or service provider giving the details about the lawsuit will resolve the issue.

You probably won't need to hire a lawyer if a small claims case is involved. If the case is bigger than small claims, you will want to hire a lawyer.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHAT CAN I DO TO AVOID OVERPAYING FOR A FUNERAL OF A MEMBER OF MY FAMILY?

Posted by Admin Posted on June 06 2017

AVOID OVERPAYING FOR A FUNERAL OF A MEMBER OF MY FAMILY

 

Planning ahead is the best way to avoid overpaying for a family member's funeral. You should know about the Federal Rule or the regulation of the Federal Trade Commission (FTC) dealing with practices of the funeral industry. It provides that:

You must be given, over the phone, price and other relevant information by the funeral provider to answer your questions.

You must be given 1) a disclosure of important legal rights, 2) a general price list, and 3) information about caskets for cremation, embalming and required purchases by the funeral provider.

You must be given, in writing, any service fees for the payment of goods or services such as flowers, obituary notices, and pallbearers, on your behalf by the funeral provider. Some funeral providers add a service fee to the cost, while other charge you only the cost of the item. You must also be given any information from the funeral provider about refunds, discounts or rebates from the supplier.

You must be given by the funeral provider, in writing, information regarding your right to purchase and what is available to you - an unfinished wood box, a type of casket, or an alternative for direct cremation.

In getting the products and services that you do want, you are not obligated to buy unwanted goods or services or pay any additional fees. You only need to pay for the goods and services you selected or that the state law requires in addition to the fee for the services of the funeral director and staff.

You must be given an itemized list of the total cost of the funeral goods and services selected by you. It must inform you of any cemetery, legal, or crematory requirements that you must meet to buy any funeral goods or services.

You are not allowed to be told that a certain funeral item or service can preserve the deceased's body for an indefinite time in the grave or claim that funeral goods (caskets or vaults) will not allow dirt, water, or other gravesite substances to enter.

Contact your federal, state or local consumer protection agencies, the Conference of Funeral Examining Boards (www.theconferenceonline.org), or the Funeral Service Consumer Assistance Program (FSCAP) (www.funeralservicefoundation.org) if you are having a funeral problem that cannot be resolved with the funeral director.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What are the possible implications if I co-sign for a loan?

Posted by Admin Posted on June 02 2017

What are the possible implications if I co-sign for a loan?

 

The co-signer enters an agreement to be responsible for the repayment of the loan if the borrower defaults. A lender will usually not go after the co-signer until the borrower defaults, but they can lawfully go after the co-signer at any time.

It has been stated by finance companies that in the case of a default most co-signers actually pay off the loans that they have co-signed for including the legal and late fees that end up being tacked on. Clearly this can be a large financial burden, and it can also reflect negatively on the co-signer's credit.

If you do agree to co-sign on a loan for someone, you can request that the financial institution agrees that it will refrain from collecting from you unless the primary borrower defaults. Also, make sure that your liability is limited to the unpaid principal and not any late or legal fees.

Upon co-signing you may have to brandish financial documents to the lender just as the primary borrower would have to.

Co-signing for a loan gives you the same legal responsibility for the repayment of the debt as the borrower. If there are late payments, this will affect your credit as well.

If you are asked to co-sign for someone, you may want to provide another option and suggest that they get a secured credit card. This way, they can build up their own credit history and not open themselves up to the possibility of taking on a debt too large, placing themselves, and you, in financial danger.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

RENTING OUT YOUR VACATION HOME? ANTICIPATE THE TAX IMPACT

Posted by Admin Posted on June 02 2017

Tax Impact Renting Out Vacation Home

 

When buying a vacation home, the primary objective is usually to provide a place for many years of happy memories. But you might also view the property as an income-producing investment and choose to rent it out when you’re not using it. Let’s take a look at how the IRS generally treats income and expenses associated with a vacation home.

Mostly personal use

You can generally deduct interest up to $1 million in combined acquisition debt on your main residence and a second residence, such as a vacation home. In addition, you can also deduct property taxes on any number of residences.

If you (or your immediate family) use the home for more than 14 days and rent it out for less than 15 days during the year, the IRS will consider the property a “pure” personal residence, and you don’t have to report the rental income. But any expenses associated with the rental — such as advertising or cleaning — aren’t deductible.

More rental use

If you rent out the home for more than 14 days and you (or your immediate family) occupy the home for more than 14 days or 10% of the days you rent the property — whichever is greater — the IRS will still classify the home as a personal residence (in other words, vacation home), but you will have to report the rental income.

In this situation, you can deduct the personal portion of mortgage interest, property taxes and casualty losses as itemized deductions. In addition, the rental portion of your expenses is deductible up to the amount of rental income. If your rental expenses are greater than your rental income, you may not deduct the loss against other income.

If you (or your immediate family) use the vacation home for 14 days or less, or under 10% of the days you rent out the property, whichever is greater, the IRS will classify the home as a rental property. In this instance, while the personal portion of mortgage interest isn’t deductible, you may report as an itemized deduction the personal portion of property taxes. You must report the rental income and may deduct all rental expenses, including depreciation, subject to the passive activity loss rules.

Brief examination

This has been just a brief examination of some of the tax issues related to a vacation home. Please contact our firm for a comprehensive assessment of your situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

THE TOP 6 BIGGEST MISTAKES THAT INVESTORS MAKE

Posted by Admin Posted on June 01 2017

THE TOP 6 BIGGEST MISTAKES THAT INVESTORS MAKE

 

You should think twice before it is too late for you and your money!

6- Starting Too Late

The time to start is now. The power of compound interest is astounding - the earlier you take advantage the more it will work for you. If you start out earlier, you can start with less, invest less and still end up making more than if you started out later.

5- Paying High Fees

Broker's commissions can negate all of the hard-earned interest that you have accumulated. Don't let this happen to you - pay attention to what you are being charged. The more you pay, the less you keep.

 4- Investing Emotionally

Successful investing consists of planning and reason. Once emotion gets involved, it can ruin all of the planning and reason that you had used to construct your investment strategy. Keep using the strategies that have consistently made people rich over the years, don't look to follow the new and exciting strategies that haven't yet stood the test of time.

3- Using a One-Size-Fits-All Plan

Your individual needs should trump any ideas of blindly following any plan. Keep an account of how much risk you are willing to take, and what your time frame is. Your portfolio should match your needs.

2- Not Taking Taxes Into Consideration

The net profits from stocks are taxable as capital gains. Being in a tax-deferred investment account will stop this from eating away at your savings.

1- Overly Risky Investing

Being extremely risky can pay off big time, but it can also leave you with a diminished nest egg it you gamble wrong. There are many great investments that offer decent returns without putting your funds in excessive danger.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

WHEN CONSIDERING A LOAN REQUEST, WHAT DO BANKS LOOK FOR?

Posted by Admin Posted on May 31 2017

WHEN CONSIDERING A LOAN REQUEST, WHAT DO BANKS LOOK FOR?

 

The bank official who reviews the loan request is focused on repayment. Most loan officers request a copy of your business credit report to determine your ability to repay.

The lending officer will consider the following issues while using the information you provided and the credit report:

Have you invested at least 25% or 50% of savings or personal equity into the business for the loan you are requesting? (Keep in mind that 100% of your business will not be financed by an investor.)

Do your work history, your credit report and letters of recommendation show a healthy record of credit worthiness? This is a key factor.

Do you have the training and experience necessary to operate a successful business?

Do your loan proposal and business plan document your knowledge of and dedication to the success of the business?

Is the cash flow of the business sufficient to make the monthly payments on the requested loan?

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

- Is more insurance necessary for married couples?

Posted by Admin Posted on May 31 2017

s Is more insurance necessary for married couples?

 

[TEXT VERSION]

In the case of death, life insurance will provide a form of income for your dependents, children or whoever is your beneficiary. Because of this, married couples usually require more life insurance than singles.

Having someone dependent on your income will determine if you need to have life insurance. If someone such as a child, parent, spouse or other individual is dependent on your income, you should have life insurance. The following are situations where life insurance is necessary:

Single parents or families with young children or other dependents. The younger your children, the more insurance is necessary. Insurance should be in proportion to the amount earned. If both spouses are working, they should both be insured. If both earners cannot afford to be insured, the primary wage earner should be the first to be insured and the secondary will follow. To fill the insurance gap, a less expensive term policy may be used. Insurance should be bought to cover the absence of services such as childcare, bookkeeping, housekeeping, which are provided by the spouse that works within the home. The insurance that covers the non-wage earner is secondary to the insurance that covers the wage earner's life, if funds are scarce.

Adults that have no children or other dependents. You will need less insurance than people in the previous situation if your spouse can live comfortably without income. However, some form of life insurance is still necessary. You will want at least enough to cover burial expenses, to pay off any debts you may have acquired, and to provide an easy transition for the surviving spouse. You may want to buy more insurance if you think your spouse would go through financial hardship without your income or if your savings aren't adequate. This depends on your salary level as well as the amount of your spouse's, the amount of savings you have and the amount of debt incurred.

Single adults without dependents. Unless you would like to use insurance for the purposes of estate planning, you will only need insurance to cover expenses for burial and debts.

Children. Typically, children only need life insurance to cover burial expenses and medical debts. An insurance policy could also be used as a long-term savings instrument, in some instances.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Which type of life insurance fits me best?

Posted by Admin Posted on May 30 2017

Which type of life insurance fits me best?

 

There are 7 major types of life insurance:

Term

Term insurance is best described as a policy for which you pay over a specific amount of time. In the event that you die within that period of time, your beneficiaries will receive a payoff.

People that are under the age of 40 will find this package less costly than a whole life policy. These policies generally do not build in cash value. However, they can convert over to a whole life policy without a mandatory physical.

Renewable

The policy which is bought most frequently is the Renewable Term Policy. This policy renews every year without you having to do anything, and there is no need to input any new information or take physicals. This can continue every year until you are in your 70s. The policy will increase incrementally every year, along with your age.

Re-entry

With this life insurance policy, you will have to periodically take physicals for the company to judge your rate of risk. If you don't, you will be subject to paying an extra premium.

Level

In the Level Term policies, you will be locked into a given rate of premium and you will stay there during a certain period (although not necessarily during the entire period of coverage).

Decreasing

A Decreasing policy is one which decreases in face value with time while the premium remains the same.

Whole Life

Whole Life is the most traditional policy given; this has a cash-value build up, sometimes offers dividends, and provides death benefits. This is not a policy that needs to be renewed constantly, as long as the payments are made, the policy will continue until death.

Universal Life

This policy is similar to the whole life policy. However, it offers more flexibility in many ways; you will have different options in cash value growth and the payment of premiums.

Variable Universal

Variable Universal policies will give you the option to choose the investments for your cash value. This is more risky, but simultaneously gives you more control over where this money is invested.

Variable Whole Life

This is the same as the previous in regards to control over the investments that are made. The difference between these two is the same as the difference between Whole Life and Variable.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What is a Bond?

Posted by Admin Posted on May 30 2017

WHAT IS A BOND?

 

A bond is simply a certificate which the borrower promises to repay within a certain time period. For the privilege of using the money, the government entity, municipality or company will agree to pay a certain amount of interest per year, usually an exact percentage of the amount loaned.

Bondholders do not own any part of the companies they lend to - they do not receive the benefits of dividends or the privilege to vote on company matters as stockholders would, and the success of the investment isn't related to that company's record in the market either. A bondholder is entitled to receive the amount that was agreed upon, as well as the principal of the bond.

Corporate bonds are generally issued in the denominations of $1000. This price is referred to as the face value of the bond - this is the amount that is agreed to be paid by the company at the time that it matures. Bond prices can differ from their face values, because the prices of the bonds are correlated to the current market rates. When these rates change, the value of the bond will as well. If one were to sell the bond before the time that it matures, the bond may be worth less than was initially paid. A callable bond is one that the issuer may choose to buy back at full face value before the maturity date.

There are three major features of bonds:

Issuing Organization

Maturity

Quality

Short Term Bonds mature in two years or less and long term bonds mature in ten or more. Intermediate is between two and ten years.

 

▼ What is bond quality?

Bond quality is the rating of the creditworthiness of an issuing organization. There are organizations that specialize in judging bond quality. The higher the rating, the lower the risk of the investment. The rating system uses letters A through D. The only bond considered to be risk free is the U.S. Treasury Bond.

▼ How does the bond rating system work?

Highest Quality

Moody's

Standard & Poor's

High Quality

Aaa

AAA

Good Quality

Aa

AA

Medium Quality

Baa

BBB

Speculative Elements

Ba

BB

Speculative

B

B

More Speculative

Caa

CCC

Highly Speculative

Ca

CC

In Default

-

D

Not Rated

N

N

▼ How do interest rates affect bond prices?

Generally bond prices and interest rates have an inverse relationship - as interest rates drop, bond prices rise and vice versa.

▼ How does maturity affect bond prices?

Bond prices are heavily influenced by maturity - the longer the maturity, the greater the change in price for a change in interest rates. If interest rates rise, it would make a larger difference in the 20 year bond, as opposed to a 10 year bond. Because of this, bond fund managers will attempt to change the fund's average maturity to anticipate changes in interest rates.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How do I create a successful strategy for passing on my family business?

Posted by Admin Posted on May 26 2017

How do I create a successful strategy for passing on my family business?

 

The family must do the following to attempt to have a worthwhile transition:

- Formulate a strategy focused on the family.

- Formulate a strategy focused on the business.

- Make a Succession Plan, which includes setting dates for retirement and the training for who will follow.

- Make an Estate Plan.

These are the four key points to a successful business transfer. They basically guarantee a transition for years to come within your family when implemented correctly.

WHAT IS A STRATEGY FOCUSED ON THE FAMILY?

The purpose of the family strategy is to keep a well-functioning business. The policies for the role of the family in relation to the company are set in this strategy. There may be policies for entering and exiting the workforce of the business. It should incorporate the basic guidelines as well as a mission statement that explains what is important to the family. The strategy needs to take into consideration who in the family would like to have significant roles in the business and who would like less responsibility.

WHAT IS A STRATEGY FOCUSED ON THE BUSINESS?

A strategy focused on the business permits each new member of the family to establish their own future for the company. To make sure that everyone has the same idea as to where the business is headed, there is a need to formulate goals. The strategy should concentrate on the future of the company at a particular date.

WHAT IS INVOLVED IN A SUCCESSION PLAN?

The purpose of the succession plan is to aid those who founded or are in control of the company through the transition. It should explain the details of how to know when the next generation is ready to take over and the process for that transition.

WHAT IS CONTAINED IN AN ESTATE PLAN?

The plan for the estate is vital for the company and family. In the end, without a strategy, there will be higher estate taxes than needed, which in turns gives less to the successors. This plan should be in accordance with the succession plan to ensure the transition of the business is done in the most tax effective way.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What should I take into account when I start investing?

Posted by Admin Posted on May 26 2017

What Should I Take Into Account When I Start Investing?

 

Risk vs. Return

The first step in the investment process is to figure out what sort of Return on Investment (ROI) that you are seeking and to determine what level of risk that you are willing to take.

The risk that you are willing to take and the size of the ROI that you receive are correlated. In order to take a higher risk, you must have a reasonable chance of a higher return. The size of the risk will be affected by many factors in the market, and it is recommended that you consult trusted professionals.

These professionals will have ideas and recommendations for your investment portfolios, but never invest more aggressively than you feel comfortable with.

 Asset Allocation

Asset Allocation is the selection of assets from across the asset classes: stocks, bonds, and mutual funds. This is a way to minimize risk. It ensures that if one of these groups takes a drastic downturn, you still have investments in the other sections and hopefully won't take large losses. It is recommended to allocate through at least 5 types of classes.

 Diversification

Diversification is similar to asset allocation, but within the asset class. For instance, diversification would be buying 15 or 20 different stocks, with the same purpose in mind as asset allocation, to minimize risk and to make sure that if something tanks, it doesn't take your entire portfolio down with it.

 Monitoring Progress

You can start by examining your trading records and ensuring that all of the trades went through at the prices that you instructed and with the correct commissions. Make sure to keep a good paper trail of all the transactions that occur in your portfolio just in case you ever need to contest anything.

Keep tabs on how your assets are performing. If they seem to be underperforming, you may want to change your investments to some that may be more lucrative. You may want to also check to make sure that the investments that you own are in line with your current investment strategy. Your strategy may change over time. Be sure to compare your investments to your current situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How should unmarried couples protect their estate and financial holdings?

Posted by Admin Posted on May 25 2017

UNMARRIED COUPLES PROTECT THEIR FINANCES

 

[TEXT VERSION]

Here are some important steps to take for couples that are unmarried:

Draft wills. The chances of the intentions being followed through with after a death are greater if both partners make wills. Without wills, the probability of the unmarried surviving partner having no rights is more likely.

Think about owning property together. This is a way to guarantee that property will pass to the other joint owner at the time of the other's death due to the right of survivorship.

Make a durable power of attorney. This will permit the partner to sign papers and checks and take care of other financial issues on his/her behalf should one become incapacitated.

Make a health care proxy. Also known as a medical power of attorney, this permits the partner to talk on your behalf to make medical decisions, should you become injured.

Have a living will. This lets your wishes regarding artificial feeding and other measures to prolong your life be known.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Midyear Tax Planning Ideas

Posted by Admin Posted on May 25 2017

Midyear Tax Planning Ideas

 

Tax planning is a year-round process, so now is a good time to think about the following:

Are you considering making a cash gift to a relative? If so, consider making the gift in conjunction with the overall revamping of your stocks and mutual funds held in taxable brokerage accounts to achieve better tax results. Don’t gift loser shares (currently worth less than you paid for them). Instead, sell these shares, recognize the capital loss on your tax return, and then gift the cash proceeds to a relative. However, do gift winner shares to lower tax bracket relatives (unless they are under age 24 and subject to the Kiddie Tax). The 2014 annual gift tax exclusion is $14,000.

Are you considering making a contribution to a favorite charity? The previous strategies will also work well for contributions to qualified charities. Sell loser shares, recognize the loss on your tax return, and then give the cash proceeds to the charity and claim the resulting charitable contribution (if you itemize). Donate winner shares to the charity and deduct the full current fair market value at the time of the gift (without being taxed on the capital gain). The tax-exempt organization can sell your donated shares without owing tax.

Are you self-employed? Consider employing your child in the business (but pay a reasonable wage for their age and work skills). This practice can shift income (which is not subject to the Kiddie Tax) to the child who is normally in a lower tax bracket, decrease payroll taxes, and enable the child to contribute to an IRA.

Is your estate plan current? If you already have an estate plan, it may need updating to reflect the current estate and gift tax rules. For 2014, the unified federal gift and estate tax exemption is a generous $5.34 million, and the rate is 40%. Furthermore, the impact of the Supreme Court’s Windsor decision and resulting IRS changes in the federal definition of marriage mean that legally married same-sex couples need to revise their estate plan. Plus, there may be nontax reasons to update your estate plan.

Please contact us to discuss any tax planning strategies you are interested in implementing.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IRD Issues When Inheriting Assets & Reviewing the Innocent Spouse Relief Rules

Posted by Admin Posted on May 25 2017

IRD ISSUES WHEN INHERITING

 

Once a relatively obscure concept, income in respect of a decedent (IRD) can create a surprisingly high tax bill for those who inherit certain types of property, such as IRAs or other retirement plans. Fortunately, there are ways to minimize or even eliminate the IRD tax bite.

How it works

Most inherited property is free from income taxes, but IRD assets are an exception. IRD is income a person was entitled to but hadn’t yet received at the time of his or her death. It includes:

Distributions from tax-deferred retirement accounts, such as 401(k)s and IRAs,

Deferred compensation benefits and stock option plans,

Unpaid bonuses, fees and commissions, and

Uncollected salaries, wages, and vacation and sick pay.

IRD isn’t reported on the deceased’s final income tax return, but it’s included in his or her taxable estate, which may generate estate tax liability if the deceased’s estate exceeds the $5.49 million (for 2017) estate tax exemption, less any gift tax exemption used during life. (Be aware that President Trump and congressional Republicans have proposed an estate tax repeal. It hasn’t been passed as of this writing, but check back with us for the latest information.)

Then it’s taxed — potentially a second time — as income to the beneficiaries who receive it. This income retains the character it would have had in the deceased’s hands. So, for example, income the deceased would have reported as long-term capital gains is taxed to the beneficiary as long-term capital gains.

What can be done

When IRD generates estate tax liability, the combination of estate and income taxes can devour an inheritance. The tax code alleviates this double taxation by allowing beneficiaries to claim an itemized deduction for estate taxes attributable to amounts reported as IRD. (The deduction isn’t subject to the 2% floor for miscellaneous itemized deductions.)

The estate tax attributable to IRD is equal to the difference between the actual estate tax paid by the estate and the estate tax that would have been payable if the IRD’s net value had been excluded from the estate.

Suppose, for instance, that you’re the beneficiary of an estate that includes a taxable IRA. If the estate tax is $150,000 with the retirement account and $100,000 without, the estate tax attributable to the IRD income is $50,000. But be careful, because any deductions in respect of a decedent must also be included when calculating the estate tax impact.

When multiple IRD assets and multiple beneficiaries are involved, complex calculations are necessary to properly allocate the income and deductions. Similarly, when a beneficiary receives IRD over a period of years — IRA distributions, for example — the deduction must be prorated based on the amounts distributed each year.

We can help

If you inherit property that could be considered IRD, please consult our firm for assistance in managing the tax consequences. With proper planning, you can keep the cost to a minimum.

REVIEWING THE INNOCENT SPOUSE RELIEF RULES

Married couples don’t always agree — and taxes are no exception. In certain cases, an “innocent” spouse can apply for relief from the responsibility of paying tax, interest and penalties arising from a spouse’s (or former spouse’s) improperly handled tax return. Although it isn’t easy to qualify, potentially affected taxpayers should review the rules.

Applicants may qualify for various forms of relief if they can meet the applicable IRS conditions. One factor that’s considered is whether the applicant received any significant direct or indirect benefit from the tax understatement. For instance, an applicant’s case could be weakened if he or she had used unreported income to pay extraordinary household expenses.

The IRS will also look at the distinctive aspects of the case. The fact that a spouse applying for relief has already divorced his or her partner is significant. Whether the applicant was abused physically or mentally will also play a role, as will whether he or she was in poor mental or physical health when the return(s) in question was signed. In addition, the IRS will consider whether the applicant would experience economic hardship without relief from a significant tax debt.

Generally, an applicant must request innocent spouse relief no later than two years after the date the IRS first attempted to collect the tax. But other forms of relief may still be available thereafter. Please contact our firm for more information.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

IRS Accepting Applications for 2018 Low Income Taxpayer Clinic Grants

Posted by Admin Posted on May 24 2017

IRS Accepting Applications for 2018 Low Income Taxpayer Clinic Grants

 

The Internal Revenue Service today announced that the application period for Low Income Taxpayer Clinic (LITC) grants for calendar year 2018 will run from May 1 to June 20, 2017.

The LITC program is a federal grant program administered by the Office of the Taxpayer Advocate at the IRS, led by the National Taxpayer Advocate, Nina E. Olson. The LITC program awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand or maintain an LITC.  An LITC must provide services for free or for no more than a nominal fee.

The mission of LITCs is to ensure the fairness and integrity of the tax system for taxpayers who are low income or speak English as a second language:

By providing pro bono representation on their behalf in tax disputes with the IRS;

By educating them about their rights and responsibilities as taxpayers; and

By identifying and advocating for issues that impact low-income taxpayers.

LITC grants come from appropriated funds.  The clinics, their employees and their volunteers operate independently from the IRS. Examples of qualifying organizations include:

Clinical programs at accredited law, business or accounting schools whose students represent low-income taxpayers in tax disputes with the IRS; and

Organizations exempt from tax under Internal Revenue Code Section 501(a) whose employees and volunteers represent low income taxpayers in tax disputes with the IRS.

The IRS welcomes all applications and will ensure that each application receives full consideration. The IRS is committed to achieving maximum access to representation for low income taxpayers under the terms of the LITC program. Thus, in awarding LITC grants for calendar year 2018, the IRS will continue to work toward the following program goals:

Ensuring that each state (plus the District of Columbia and Puerto Rico) is served by at least one clinic;

Expanding coverage in areas identified as underserved; and

Ensuring that grant recipients demonstrate they are serving geographic areas that have sizable populations eligible for and requiring LITC services.

Copies of the 2018 Grant Application Package and Guidelines, IRS Publication 3319, can be downloaded from IRS.gov or ordered by calling the IRS toll-free at 800-TAX-FORM (800-829-3676).

The IRS is authorized to award a multi-year grant not to exceed three years. For an organization not currently receiving a grant for 2017an organization that received a single-year grant for 2017, or an organization whose multi-year grant ends in 2017, the organization must submit the application electronically at www.grants.gov. For an organization currently receiving a grant for 2017 that is requesting funding for the second or third year of a multi-year grant, the organization must submit the funding request electronically at www.grantsolutions.gov. All organizations must use the funding number of TREAS-GRANTS-052018-001, and applications and funding requests must be submitted by June 20, 2017.

Questions about the LITC Program or grant application process can be addressed to the LITC Program Office at 202-317-4700 (not a toll-free call) or by email at LITCProgramOffice@irs.gov.

More information about LITCs and the work they do to represent and educate, as well as advocate on behalf of, low income and English as a second language taxpayers is available in the LITC Program Report, IRS Publication 5066.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

When buying a car, how can I get the "best buy"?

Posted by Admin Posted on May 24 2017

When buying a car how can I get the best buy

 

[TEXT VERSION]

You first need to decide on the type, size and options of the car you would like (such as manual, automatic windows, airbags).

You then need to decide what the car dealer has to pay for the car of your choice - the "invoice cost". The difference between the sticker price and the invoice price can be negotiated.

You can obtain this information two different ways. The best way is to look at an auto pricing service supplied by a consumer group or an auto magazine. For instance, Consumer Reports New Car Price Service (http://www.consumerreports.org/cro/car-prices-build-buy-service/index.htm), will give you details of the invoice price and the sticker price that can be adjusted for options or rebates as well as tell you how to use the data for negotiating. This is the best way because it gives you the most recent information.

Another way is to use pricing guides that can be found on the Internet. Two popular sites are Intellichoice (www.intellichoice.com) or Edmund's New Car Prices (www.edmunds.com). You may also be able to obtain these books at the library and they will give you an idea about the information that you need instead of exact data.

If you have a trade-in, you will want to find the value of that car too. You can use the N.A.D.A. Official Used Car Guide (check your local library or www.nada.org) to look up your used car.

Now it's time to begin negotiating with dealers. Because you know the invoice price, you can use that information to bargain for the lowest mark-up from the dealer's cost.

An amount like $300 to $500 above the dealer's cost is a sensible mark-up, unless the car you want to buy is either difficult to get or very popular.

Any attempts by the dealership to sell you rustproofing, undercoating, or other extras should be refused. You may want to invest in an extended warranty, depending on the model's repair history.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

How to know it’s really the IRS calling or knocking on your door

Posted by Admin Posted on May 23 2017

How to know it's the IRS calling or knocking on your door

 

Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee.

The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail.

Note that the IRS does not:

- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.

- Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.

- Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

If you owe taxes:

The IRS instructs taxpayers to make payments to the “United States Treasury.” The IRS provides specific guidelines on how you can make a tax payment at irs.gov/payments.

Here is what the IRS will do:

- If an IRS representative visits you, he or she will always provide two forms of official credentials called a pocket commission and a HSPD-12 card. HSPD-12 is a government-wide standard for secure and reliable forms of identification for Federal employees and contractors. You have the right to see these credentials. 

Collection

IRS collection employees may call or come to a home or business unannounced to collect a tax debt. They will not demand that you make an immediate payment to a source other than the U.S. Treasury.

The IRS can assign certain cases to private debt collectors but only after giving the taxpayer and his or her representative, if one is appointed, written notice. Private collection agencies will not ask for payment on a prepaid debit card or gift card. Taxpayers can learn about the IRS payment options on IRS.gov/payments. Payment by check should be payable to the U.S. Treasury and sent directly to the IRS, not the private collection agency. 

Audits

IRS employees conducting audits may call taxpayers to set up appointments or to discuss items with the taxpayers, but not without having first attempted to notify them by mail. After mailing an official notification of an audit, an auditor/tax examiner may call to discuss items pertaining to the audit. 

Criminal Investigations

IRS criminal investigators may visit a taxpayer’s home or business unannounced while conducting an investigation. However, these are federal law enforcement agents and they will not demand any sort of payment. 

Beware of Impersonations

Scams take many shapes and forms, such as phone calls, letters and emails. Many IRS impersonators use threats to intimidate and bully people into paying a fabricated tax bill. They may even threaten to arrest or deport their would-be victim if the victim doesn’t comply.

Know Who to Contact

- Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.

- Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.

- Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Is more insurance necessary for married couples?

Posted by Admin Posted on May 23 2017

Is more insurance necessary for married couples?

 

In the case of death, life insurance will provide a form of income for your dependents, children or whoever is your beneficiary. Because of this, married couples usually require more life insurance than singles.

Having someone dependent on your income will determine if you need to have life insurance. If someone such as a child, parent, spouse or other individual is dependent on your income, you should have life insurance. The following are situations where life insurance is necessary:

Single parents or families with young children or other dependents. The younger your children, the more insurance is necessary. Insurance should be in proportion to the amount earned. If both spouses are working, they should both be insured. If both earners cannot afford to be insured, the primary wage earner should be the first to be insured and the secondary will follow. To fill the insurance gap, a less expensive term policy may be used. Insurance should be bought to cover the absence of services such as childcare, bookkeeping, housekeeping, which are provided by the spouse that works within the home. The insurance that covers the non-wage earner is secondary to the insurance that covers the wage earner's life, if funds are scarce.

Adults that have no children or other dependents, you will need less insurance than people in the previous situation if your spouse can live comfortably without income. However, some form of life insurance is still necessary. You will want at least enough to cover burial expenses, to pay off any debts you may have acquired, and to provide an easy transition for the surviving spouse. You may want to buy more insurance if you think your spouse would go through financial hardship without your income or if your savings aren't adequate. This depends on your salary level as well as the amount of your spouse's, the amount of savings you have and the amount of debt incurred.

Single adults without dependents. Unless you would like to use insurance for the purposes of estate planning, you will only need insurance to cover expenses for burial and debts.

Children. Typically, children only need life insurance to cover burial expenses and medical debts. An insurance policy could also be used as a long-term savings instrument, in some instances.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

What do I need to include in a good loan proposal?

Posted by Admin Posted on May 22 2017

What do I need to include in a good loan proposal?

 

[TEXT VERSION]

The following main points should be contained in a good loan proposal:

GENERAL INFORMATION

Reason for the loan: the exact purpose of the loan and why it is necessary.

Amount needed: the specific amount needed to reach your goal.

Business name and address, names of officers and their social security numbers.

DESCRIPTION OF BUSINESS

Describe the type of business you have, its age, current business assets, and number of employees.

Structure of ownership: describe the legal structure of the company.

MANAGEMENT PROFILE

Prepare a short statement that is focused on each principal in your business; give details about education, background, accomplishments and skills.

MARKET INFORMATION

State clearly the products of your company as well as its markets. Name the competition and explain how you plan to compete in the market. Describe what the business will do to satisfy the needs of its customers.

FINANCIAL INFORMATION

Submit your own personal financial statements as well as those of the principal business owners.

Financial statements: the income statements and balance sheets for the past three years. If you have a new business, provide the projected balance sheet and income statement.

Specify the collateral that you are able and willing to give as security for the loan.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

How and when do I collect my annuity?

Posted by Admin Posted on May 22 2017

 

How and when do I collect my annuity?

There are a few choices that you have when choosing to collect your annuity. Some people opt for a lump sum, even though it negates one of the major features of the annuity: payments until death.

The amount of the monthly payments that you receive depends on:

The amount of money in your annuity contract

The life expectancy of the annuitant

The size of the minimum required payments (if any)

Whether the payments continue after death or not

There are various different settlement options. Be absolutely sure when you choose, because the decision will be final when you make it.

Fixed Amount. With a fixed amount option, you will choose a monthly amount that you will receive until your annuity runs out. There is a possibility that your money may run out before you pass on, and also the chance that you may die before your money runs out. In that case, your beneficiary will receive your payments.

Fixed Period. The company will pay you for a fixed amount of time. If you are waiting for a retirement payment from another investment, it may be a good idea to get this fixed money until you start to receive payment from another investment. Again, if you are to pass before the money is fully paid, the remainder will go to your beneficiary.

Lifetime Or Straight Life. This plan will continue to pay you money until you die. This is the safest option to ensure that you receive payment until the day you die. Conversely, if you die early, there will be no payments to the beneficiary.

Life With Period Certain. With this plan you will receive payments until death - and for a period afterwards, your beneficiary will receive payments too. The longer the period, the lower the monthly payment.

Installment. This guarantees that if you die before you have exhausted your funds, the rest will be distributed to the beneficiary.

Joint And Survivor. In this option the payments are made to the joint annuitants. In the event of one's passing, the other will continue to receive a lesser amount.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

New Members for Advisory Committee on Tax Exempt and Government Entities

Posted by Admin Posted on May 18 2017

New Members for Advisory Committee on Tax Exempt and Government Entities

 

The Internal Revenue Service announced today the appointment of three new members of the Advisory Committee on Tax Exempt and Government Entities (ACT). ACT presents reports and recommendations to IRS leadership at a June 7 public meeting.

The committee includes external stakeholders and representatives who deal with employee retirement plans; tax-exempt organizations; tax-exempt bonds; federal, state, local and Indian tribal governments.

New members will begin three-year terms and join seven returning members. ACT advises the IRS on operational policy and procedural improvements.

ACT was established under the Federal Advisory Committee Act to provide an organized public forum for discussion of relevant issues affecting the tax exempt and government entities communities. At the public meeting, three ACT project teams will present reports that include recommendations pertaining to the following areas:

Federal Insurance Contributions Act (FICA) Replacement Plans: Recommendations Regarding FICA Replacement Plan Requirements.

Future of the Advisory Committee on Tax Exempt and Government Entities: Recommendations Regarding Changes Made to the ACT.

Online Accounts: Recommendations Regarding Expansion of Online Accounts for Tax Exempt Entities.

The public meeting is scheduled to begin at 2 p.m. Eastern Time on June 7, at IRS headquarters. The address is 1111 Constitution Ave. NW, Washington, D.C. 20224. Reports presented will be available on IRS.gov.

Due to limited seating and security requirements, members of the public interested in attending the meeting should email their attendance request to tege.advisory@irs.gov by May 31. Attendees must have photo identification and are encouraged to arrive at least 30 minutes before the session begins. 

The three new ACT members are:

Michael Engle, Kansas City, Mo.

Michael has extensive experience working with exempt organizations and governmental entities on various tax issues including employment tax. He has direct experience working with non-profit hospitals and colleges and universities. He has written a number of technical articles and has been a presenter for conferences and webinars. He is a Certified Public Accountant and actively involved with the AICPA. He serves on the BKD, LLP non-profit committee and is the leader of their health care committee. He is involved with the AICPA and Missouri Society of CPAs.

Andrew Lipkin, New York, N.Y.

Andrew is an attorney and now Senior Tax Counsel for New York City and has management responsibility for other attorneys. He provides counsel to his employer, and is familiar with issues affecting federal, state and local governments.

Jean Swift, Mashantucket, Conn.

Jean is a tribal leader with diverse experience in business management, administration and establishing strategic partnerships. She is a CPA in Connecticut and a Certified Credit Union Financial Counselor. She is currently Treasurer of the first Mashantucket Pequot Tribal Council.

These three will serve on the committee with the following ACT members, who will continue on the committee through June 2018:

Susan Bernstein, Schulte Roth & Zabel LLP

Judith Boyette, Hanson Bridgett LLP

Natasha Cavanaugh, Bill & Melinda Gates Foundation

David Danenfelzer, Texas State Affordable Housing Corporation

Marcelino Gomez, Private Practice

William Johnson, First Southwest Asset Management

Cindy Lott, Columbia University’s School of Professional Studies

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Empleados por cuenta propia y sus obligaciones tributarias

Posted by Admin Posted on May 18 2017

Empleados por cuenta propia y sus obligaciones tributarias

 

Generalmente, usted es un empleado por cuenta propia si alguna de las siguientes situaciones le aplica:

         1- Usted ejerce un oficio u opera un negocio como empresario por cuenta propia (en inglés) o como un contratista independiente.

        2- Usted en un miembro de una sociedad colectiva (en inglés) que ejerce u opera un oficio o negocio (en inglés).

            3- Usted de otra manera está en negocios por usted mismo (incluyendo un negocio a tiempo parcial (en inglés)).

¿Cuáles son mis obligaciones tributarias como empleado por cuenta propia?

Como empleado por cuenta propia, generalmente usted está en la obligación de presentar una declaración anual y pagar trimestralmente impuestos estimados.

Las personas que tr por cuenta propia generalmente tienen que pagar el impuesto sobre el trabajo por cuenta propia (impuesto SE, por sus siglas en inglés) como también el impuesto sobre el ingreso. El impuesto SE es principalmente el impuesto del Seguro Social y Medicare para individuos que trabajan para ellos mismos. Es similar al impuesto retenido de la paga de quienes devengan un salario, por concepto de impuestos del Seguro Social y Medicare. En general, en cualquier momento en que se utiliza la expresión  “impuesto sobre el trabajo por cuenta propia”, solo se refiere al impuesto del Seguro Social y Medicare, y no a cualquier otro tipo de impuesto (como el impuesto sobre el ingreso).

Antes de que usted pueda determinar si está sujeto al impuesto sobre el trabajo por cuenta propia y al impuesto sobre el ingreso, debe calcular el neto del ingreso o el neto de la pérdida de su negocio. Usted determina esto cuando le resta a sus ingresos del negocio, los gastos del mismo. Si sus gastos son menores que sus ingresos, la diferencia es la ganancia neta y forma parte de su ingreso en la página 1 del Formulario 1040. Si sus gastos son mayores que sus ingresos, la diferencia es una pérdida neta. Usualmente, usted puede deducir del ingreso bruto su pérdida en la página 1 del Formulario 1040. Pero en algunas situaciones su pérdida es limitada. Para más información, vea la Publicación 334, Guía tributaria para pequeños negocios (para individuos que utilizan el Anexo C o C-EZ (Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) (en inglés).

Usted tiene que presentar una declaración del impuesto sobre el ingreso si sus ganancias netas provenientes de su trabajo por cuenta propia son de $400 o más. Si sus ganancias netas provenientes de su trabajo por cuenta propia son menos de $400, usted todavía tiene que presentar una declaración del impuesto sobre el ingreso si usted reúne cualquiera de los requisitos para declarar según listados en las Instrucciones para el Formulario 1040 (Form 1040 Instructions) (en inglés) (PDF).

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

Is it possible to financially prepare for divorce?

Posted by Admin Posted on May 18 2017

Is it possible to financially prepare for divorce?

 

[TEXT VERSION]

A plan for the termination of the financial partnership of the marriage is crucial if you are thinking of divorce. All financial assets and liabilities that have been acquired during the years of marriage will need to be divided. If children play a role, the support that will be paid to the custodial parent in the future should be taken into account.

The time put into organizing this will be worth it in the long run. The following are a few steps to consider:

Prepare an inventory of your financial situation that will help you in two ways:

It will aid in determining how debts accumulated during the marriage will be paid off. (It is best to try and get all the joint debt (credit card debt) paid off before the divorce. To come to an agreement as to the method for paying them off, it is smart to make a list of the debts.)

It will give you an introductory look at the information needed to divide the property.

Prepare a list of all assets, whether joint or separate, that includes:

Your residence(s)

The value of any brokerage accounts

Your valuable antiques, jewelry, luxury items, collections, and furnishings

The current balance in all bank accounts

Your autos

The value of investments, including any IRAs

Locate copies of the last two or three years' tax returns. These will be beneficial later.

Know the exact quantity of salary and miscellaneous income brought home by your spouse and you.

Obtain all papers regarding insurance, life, health, pension, and other retirement benefits.

Make a list of debts that are owed both separately and jointly, including mortgage, credit card debt, auto loans and other liabilities.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

Are you on track for a secure retirement?

Posted by Admin Posted on May 16 2017

Are you on track for a secure retirement?

 

America Saves Week is a reminder to give your finances a checkup.

Are your savings on track? Just like your car needs an occasional tune-up, your finances may need a checkup, too. America Saves Week (February 27- March 4) is a national effort to set a savings goal, make a savings plan, and start saving  automatically, and it serves as an annual reminder for savers like you to assess your financial goals and ensure that you’re putting money away for all the right things – like your retirement.

Take this opportunity to evaluate your current savings plan by completing the America Saves Week savings assessment. If you'd like to start saving – or start saving more – but aren't sure where to begin, consider myRA®, a simple, safe, and affordable starter retirement savings option from the U.S. Treasury.

With no fees and no risk of losing money, myRA makes it easy to get started on the path to saving. It’s designed for individuals who don’t have access to retirement savings plans at work, or who lack other options to save. In the event of unforeseen expenses, savers can withdraw the money they contribute to myRA tax-free and without penalty.

Make saving automatic and watch your account grow
Are you saving automatically? Automatic saving is a key component of America Saves Week’s mission, and it makes growing your retirement savings even easier. Consider setting up recurring contributions to your myRA from your paycheck or your checking or savings account. Since myRA is a flexible savings option with no minimum balance or contribution requirements, you can deposit any amount that fits your budget. Access the myRA savings calculators to see how your contributions can add up over time.

Take advantage of tax refunds

If you’re anticipating receiving a tax refund this filing season, factor it into your plan to meet your savings goal. Consider putting it toward your retirement by depositing a portion of your refund in a myRA – it’s easy to do right when you file your taxes. Visit myRA.gov/tax to learn how.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: MYRA (Department of the Treasury)

¿Empleado o contratista independiente? Conozca las reglas

Posted by Admin Posted on May 16 2017

¿Empleado o contratista independiente? Conozca las reglas

 

El IRS anima a todos las empresas y dueños de empresas a conocer las reglas cuando se trata de clasificar a un trabajador, como un empleado o un contratista independiente.

Un empleador debe retener impuestos sobre los ingresos y pagar los impuestos al Seguro Social, Medicare y desempleo, sobre los salarios que paga a un empleado. Los empleadores normalmente no tienen que retener o pagar cualquier impuesto sobre los pagos a contratistas independientes.

Los siguientes son dos puntos claves que los dueños de pequeñas empresas deben tener en cuenta cuando se trata de clasificar los trabajadores:

1- Control. La relación entre un trabajador y un negocio es importante. Si el negocio controla qué trabajo se hace y dirige cómo se hace, ejerce el control de la conducta. Si el negocio dirige o controla aspectos financieros y ciertos relevantes al trabajo de un trabajador, ejerce el control financiero. Esto incluye:

La medida en que el trabajador incurre en gastos de negocio no reembolsados

La medida en que el trabajador invierte en las instalaciones o herramientas que utiliza en la prestación de servicios

La medida en que el trabajador hace sus servicios disponibles para el mercado aplicable  

La manera en que el negocio paga al trabajador y

La medida en que el trabajador puede obtener una ganancia o incurrir en una pérdida

2- Relación. La manera en que el empleador y el trabajador perciben su relación es también importante para determinar el estatus del trabajador. Los temas claves para considerar incluyen:

Contratos por escrito que describen la relación que las partes pretenden crear

Si el negocio proporciona al trabajador los beneficios para empleados, tales como el seguro, un plan de pensión para el retiro, pago de vacaciones o por enfermedad

La permanencia de la relación y

La medida en que los servicios realizados por el trabajador son un aspecto clave de la actividad habitual de la compañía.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

¿Pasatiempo o negocio? El IRS ofrece consejos para decidir

Posted by Admin Posted on May 16 2017

Pasatiempo o negocio El IRS ofrece consejos para decidir

 

Millones de personas gozan de pasatiempos que son también una fuente de ingresos. Desde el servicio de catering al hornear pastelitos, de crear joyería casera al soplado de vidrio – no importa cuál sea la pasión de una persona, el IRS ofrece algunos consejos acerca de pasatiempos.

Los contribuyentes deben declarar los ingresos que reciben de sus pasatiempos, en sus declaraciones de impuestos. Las reglas sobre cómo declarar los ingresos y gastos dependen de si la actividad es un pasatiempo o un negocio. Hay reglas y límites especiales sobre las deducciones que los contribuyentes pueden reclamar para los pasatiempos. Tenga en cuenta estos cinco consejos tributarios:

1- ¿Es un pasatiempo o un negocio? Una característica clave de un negocio es que la gente lo hace para recibir una ganancia. Las personas participan en un pasatiempo por deporte o recreación, no para recibir una ganancia. Considere los nueve factores (en inglés) al determinar si la actividad es un pasatiempo. Asegúrese de basar la determinación en todos los datos y circunstancias. Para obtener más información acerca de las reglas sobre las actividades “sin fines de lucro”, vea la Publicación 535, Gastos de negocio (en inglés).

2- Deducciones permitidas de los pasatiempos. Dentro de ciertos límites, los contribuyentes pueden usualmente deducir los gastos necesarios y ordinarios de los pasatiempos. Un gasto ordinario es aquel que es común y aceptado para la actividad. Un gasto necesario es aquel que es apropiado para la actividad.

3- Límite sobre los gastos de pasatiempos. Los contribuyentes pueden generalmente deducir los gastos de pasatiempos hasta la cantidad de ingresos de los mismos. Si los gastos de pasatiempos son más que sus ingresos, los contribuyentes han recibido una pérdida de la actividad. Sin embargo, una pérdida de pasatiempo no la puede deducir de otros ingresos.

4- Cómo deducir los gastos de pasatiempos. Los contribuyentes deben detallar las deducciones en sus declaraciones de impuestos, para deducir los gastos de pasatiempos. Los gastos pueden pertenecer a tres clases de deducciones y existen reglas especiales que se aplican a cada clase. Vea la Publicación 535 para las reglas sobre cómo reclamarlos en el Anexo A, Deducciones detalladas (en inglés).

5- Utilice Free File del IRS. Las reglas sobre los pasatiempos pueden ser complicadas y Free File del IRS puede hacer más fácil el presentar una declaración de impuestos. Free File del IRS está disponible hasta el 16 de octubre. Los contribuyentes que ganan $64,000 o menos, pueden utilizar el software tributario de marca. Aquellos que ganan más, pueden utilizar los Formularios Interactivos de Free File, que son las versiones electrónicas de los formularios del IRS en papel. Free File está disponible únicamente en la página web del IRS, en www.irs.gov/espanol.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

Important Facts about Filing Late and Paying Penalties

Posted by Admin Posted on May 15 2017

IMPORTANT FACTS ABOUT FILING LATE AND PAYING PENALTIES

 

April 18 was this year’s deadline for most people to file their federal tax return and pay any tax they owe. If taxpayers are due a refund, there is no penalty if they file a late tax return.

Taxpayers who owe tax, and failed to file and pay on time, will most likely owe interest and penalties on the tax they pay late. To keep interest and penalties to a minimum, taxpayers should file their tax return and pay any tax owed as soon as possible.

Here are some facts that taxpayers should know:  

Two penalties may apply. One penalty is for filing late and one is for paying late. They can add up fast. Interest accrues on top of penalties
 

Penalty for late filing. If taxpayers file their 2016 tax return more than 60 days after the due date or extended due date, the minimum penalty is $205 or, if they owe less than $205, 100 percent of the unpaid tax. Otherwise, the penalty can be as much as 5 percent of their unpaid taxes each month up to a maximum of 25 percent.  
 

Penalty for late payment. The penalty is generally 0.5 percent of taxpayers’ unpaid taxes per month. It can build up to as much as 25 percent of their unpaid taxes.

Combined penalty per month. If both the late filing and late payment penalties apply, the maximum amount charged for the two penalties is 5 percent per month.

Taxpayers should file even if they can’t pay. Filing  and paying as soon as possible will keep interest and penalties to a minimum. IRS e-file and Free File programs are available for  returns filed after the deadline. If a taxpayer can’t pay in full, getting a loan or paying by debit or credit card may be less expensive than owing the IRS.   

Payment options. Taxpayers should explore their payment options at IRS.gov/payments. For individuals, IRS Direct Pay is a fast and free way to pay directly from a checking or savings account. The IRS will work with taxpayers to help them resolve their tax debt. Most people can set up a payment plan using the Online Payment Agreement tool on IRS.gov.

Late payment penalty may not apply. If taxpayers requested an extension of time to file their income tax return by the tax due date and paid at least 90 percent of the taxes they owe, they may not face a failure-to-pay penalty. However, they must pay the remaining balance by the extended due date. Taxpayers will owe interest on any taxes they pay after the April 18 due date.

No penalty if reasonable cause.  Taxpayers will not have to pay a failure-to-file or failure-to-pay penalty if they can show reasonable cause for not filing or paying on time.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Renewing Your ITIN? Things You’ll Need

Posted by Admin Posted on May 15 2017

Renewing Your ITIN? Things You’ll Need

 

Some Individual Taxpayer Identification Numbers (ITIN) expire at the end of 2016. The IRS issues an ITIN to those who have a filing or reporting requirement but don’t have and are not eligible to get a Social Security number. If you need to renew your ITIN, you should submit a complete application this fall to avoid delays.

The following list includes the documents you’ll need to renew your ITIN:

1. Form W-7. You must submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number (Rev 9-2016). You don’t need a completed tax return for the renewal application. You must include the identification documents with the form.
 

2. Proof of foreign status and identity. Several documents satisfy this requirement. These are:

Passport. (Note: You can use a passport as a stand-alone document for dependents with a U.S. date of entry. Otherwise, an additional ID from the list below is required)

National ID card (must show photo, name, current address, date of birth and expiration)

U.S. driver's license

Birth certificate (required for dependents under 18)

Foreign driver's license

U.S. state ID card

Foreign voter's registration card

U.S. military ID card

Foreign military ID card

Visa

U.S. Citizenship and Immigration Services (USCIS) photo identification

Medical records (only dependents under 6)

School records (dependents under 14, or under 18 if a student)

Only original documents or copies certified by the issuing agency are accepted. If you would rather not mail original documents, you may use the IRS Certified Acceptance Agent (CAA) Program or make an appointment at a designated IRS Taxpayer Assistance Center.

3. Dependent requirements. If you need to renew your ITIN, you have the option to renew ITINs for your entire family at the same time. For dependents from countries other than Canada or Mexico or dependents of U.S. military members overseas, a passport with a U.S. entry date may serve as stand-alone identification. Along with the passport, dependent applications require:

U.S. medical records for dependents under age 6, or

U.S. school records for dependents under age 18

U.S. school records for dependents age 18 and over or,
• Rental statement with the applicant’s name and U.S. address or
• Utility bill with the applicant’s name and U.S. address or
• Bank statement with applicant’s name and U.S. address

To claim certain credits and to receive a timely refund, renew your ITIN before you file your taxes.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Private Debt Collection

Posted by Admin Posted on May 12 2017

Private Debt Collection

 

The Internal Revenue Service began a new private collection program of certain overdue federal tax debts selecting four contractors to implement it.

The new program, authorized under a federal law enacted by Congress, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. Authorized under a federal law enacted by Congress in December 2015, Section 32102 of the Fixing America’s Surface Transportation Act (FAST Act) requires the IRS to use private collection agencies for the collection of outstanding inactive tax receivables.

General Information

As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act.

These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working them. Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.

The IRS will give taxpayers and their representative written notice that the accounts are being transferred to the private collection agencies. The agencies will send a second, separate letter to the taxpayer and their representative confirming this transfer.

Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow provisions of the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights.

The IRS will do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities, particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment.

Private collection agencies will not ask for payment on a prepaid debit, iTunes or gift card. Taxpayers will be informed about electronic payment options for taxpayers on IRS.gov/Pay Your Tax Bill. Payment by check should be payable to the U.S. Treasury and sent directly to IRS, not the private collection agency. 

The IRS will continue to keep taxpayers informed about scams and provide tips for protecting themselves. The IRS encourages taxpayers to visit IRS.gov for information including the “Tax Scams and Consumer Alerts” page.

Private Collection Agencies Selected

The IRS will assign cases to these private collection agencies: 

CBE
P.O. Box 2217
Waterloo, IA 50704
1-800-910-5837

ConServe
P.O. Box 307
Fairport, NY 14450-0307
1-844-853-4875

Performant
P.O. Box 9045
Pleasanton CA 94566-9045
1-844-807-9367

Pioneer
PO Box 500
Horseheads, NY 14845
1-800-448-3531

If you do not wish to work with the assigned private collection agency to settle your overdue tax account, you must submit a request in writing to the private collection agency.

Accounts Not Assigned To Private Collection Agencies

IRS will not assign accounts to private collection agencies involving taxpayers who are:

Deceased

Under the age of 18

In designated combat zones

Victims of tax-related identity theft

Currently under examination, litigation, criminal investigation or levy

Subject to pending or active offers in compromise

Subject to an installment agreement

Subject to a right of appeal

Classified as innocent spouse cases

In presidentially declared disaster areas and requesting relief from collection

Private collection agencies will return accounts to the IRS if taxpayers and their accounts fall into any of these 10 situations after assignment to the private collection agencies. 

Stay Vigilant Against Scams

The IRS urges you to be on the lookout for unexpected scam phone calls from anyone claiming to be collecting on behalf of the tax agency.

The IRS will do everything it can do to help you avoid confusion and ensure you understand your rights and tax responsibilities when it assigns your case to a private collection agency. This is particularly important in light of continuing scams where callers impersonate IRS agents and request immediate payment.

Even with private debt collection, you shouldn’t receive unexpected phone calls from the IRS demanding payment. When people owe tax, the IRS always sends several collection notices through the mail before making phone calls.

TIGTA Hotline

To make a complaint about a private collection agency or report misconduct by its employee, call the TIGTA hotline at 800-366-4484 or visit www.tigta.gov or write to:

Treasury Inspector General for Tax Administration
Hotline
Post Office Box 589
Ben Franklin Station
Washington, DC 20044-0589

To report a threat, assault or attempted assault by a private collection agency employee, contact the TIGTA Office of Investigations with responsibility for your geographic area.  

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications

Posted by Admin Posted on May 12 2017

IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications

 

You must have information from your tax return in order to file a Free Application for Federal Student Aid (FAFSA®) or apply for an income-driven repayment plan.

The IRS Data Retrieval Tool (DRT) used to access your tax information for the FAFSA and income-driven repayment (IDR) plan applications is currently unavailable.

This does not limit an individual’s ability to apply for aid or an IDR plan. Applicants can manually provide their tax return information.  The online FAFSA and IDR applications remain operational, and applicants can continue filing the FAFSA or applying for an IDR plan as they normally would.

Getting Your 2015 Tax Return Information For the 2016–17 and 2017–18 FAFSA

Applicants filing a 2016–17 or 2017–18 FAFSA must use data from their 2015 tax returns.

You should always retain a copy of your tax return, either electronically or on paper, and keep it in a secure place.

If you did not keep a copy of your tax return, here are some options:

Access the tax software product you used to prepare and file your 2015 return.  You may be able to access your account to download/print a copy.

Contact the tax preparer/provider who filed your 2015 return if you used a tax professional.

Download your tax transcript (a summary) at Get Transcript Online.  Review the rigorous identity authentication requirements for Secure Access before attempting to register.

Use Get Transcript by Mail and a transcript will be mailed to the address on your return within five to 10 days.

Call our automated line at 800-908-9946 to order a transcript by mail.

If you filed an amended tax return, Form 1040X, you should use the adjusted gross income and earned income listed on your revised tax return.

Getting Your Alternative Documentation For IDR Applications

IDR plan applicants must submit alternative documentation of income to their federal loan servicers after they complete and submit the online IDR application. The process for submitting the alternative documentation of income is explained to borrowers as part of the online IDR application. As a general rule, alternative documentation of income consists of copies of pay stubs or most recently filed tax returns.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tax Tips to Consider for Cash Intensive Small Businesses in the Sharing Economy

Posted by Admin Posted on May 11 2017

Tax Tips to Consider for Cash Intensive Small Businesses in the Sharing Economy

 

Small business owners that offer goods and services through an online platform may be part of the sharing economy. Some participate part time while others operate full time. Activities such as ride sharing, freelancing, renting a spare bedroom and crowd funding are usually taxable. The IRS has a Sharing Economy Tax Center to help these taxpayers find the information and help they need to meet their tax obligations.

Some sharing economy tips for small businesses to consider:

Taxes. Sharing economy activity is generally taxable. Payments received in the form of money, goods, property or services may require filing a tax return to report that income to the IRS.Tips. People often conduct sharing-economy activities electronically but tips in cash are still a common occurrence. Tips are generally subject to withholding. Small businesses or self-employed persons should report tips they receive as income on Schedule C or C-EZ. See Publication 334, Tax Guide for Small Business, for more details.

Large Cash Amounts. Any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, within 15 days after receiving payment.

Deductions. Expenses to carry on a trade or business are usually deductible. Examples include claiming the 54 cents per mile rate for 2016 when using a car for a ride-sharing business. Or deducting the commission/fee charged by a freelancer marketplace service.

Estimated Payments. Small businesses in the sharing economy often need to make quarterly estimated tax payments to cover their tax obligation. Form 1040-ES, Estimated Tax for Individuals, will help to figure these payments. IRS Direct Pay is the fastest and easiest way to make these payments. The Treasury Department’s (EFTPS) system is also an option.

Records. Good records assist in monitoring a business’s progress, tracking deductible expenses and can substantiate items reported on tax returns. A good recordkeeping system includes a summary of all business transactions. Generally, it is best to record transactions on a daily basis.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tips to Taxpayers Preparing for Hurricanes, Floods and Other Natural Disasters

Posted by Admin Posted on May 11 2017

Tips to Taxpayers Preparing for Hurricanes, Floods and Other Natural Disasters

 

With Hurricane Preparedness Week, May 7 to 13, now in progress and the start of the Atlantic hurricane season looming on June 1, the Internal Revenue Service today offered advice to taxpayers who may be affected by these types of storms, as well as other  natural disasters. The IRS also wants taxpayers to know that the agency is here to help, including offering a special toll-free hotline to people in federally declared disaster areas, staffed with IRS specialists trained to handle disaster-related issues.

Don’t Forget to Update Emergency Plans

Because a disaster can strike any time, be sure to review emergency plans annually. Personal and business situations change over time, as do preparedness needs. When employers hire new employees or when a company or organization changes functions, they should update plans accordingly and inform employees of the changes. Make plans ahead of time and be sure to practice them.

Create Electronic Copies of Key Documents

Taxpayers can help themselves by keeping a duplicate set of key documents including bank statements, tax returns, identifications and insurance policies in a safe place such as a waterproof container and away from the original set.

Doing so is easier now that many financial institutions provide statements and documents electronically, and financial information is available on the Internet. Even if the original documents are provided only on paper, these can be scanned into an electronic format. This way, taxpayers can download them to a storage device such as an external hard drive or USB flash drive, or burn them to a CD or DVD.

Document Valuables

It’s a good idea to photograph or videotape the contents of any home, especially items of higher value. Documenting these items ahead of time will make it easier to claim any available insurance and tax benefits after the disaster strikes. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.

Photographs can help anyone prove the fair market value of items for insurance and casualty loss claims. Ideally, photos should be stored with a friend or family member who lives outside the area.

Check on Fiduciary Bonds

Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

IRS Ready to Help

In the case of a federally declared disaster, an affected taxpayer can call 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Back copies of previously filed tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return.  Alternatively, transcripts showing most line items on these returns can be ordered through the Get Transcript link on IRS.gov, by calling 1-800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Tax Return.

Find other hurricane preparedness tips and more information about Hurricane Preparedness Week on the National Weather Service web site.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Home Office Deduction Often Overlooked by Small Business Owners

Posted by Admin Posted on May 11 2017

Home Office Deduction Often Overlooked by Small Business Owners

 

The Internal Revenue Service today reminded small business owners who work from a home office that there are two options for claiming the Home Office Deduction. The Home Office Deduction is often overlooked by small business owners.

As part of National Small Business Week (April 30-May 6), the IRS is highlighting a series of tips and resources available for small business owners.

Regular Method

The first option for calculating the Home Office Deduction is the Regular Method. This method requires computing the business use of the home by dividing the expenses of operating the home between personal and business use. Direct business expenses are fully deductible and the percentage of the home floor space used for business is assignable to indirect total expenses. Self-employed taxpayers file Form 1040, Schedule C , Profit or Loss From Business (Sole Proprietorship), and compute this deduction on Form 8829, Expenses for Business Use of Your Home.

Simplified Method

The second option, the Simplified Method, reduces the paperwork and recordkeeping burden for small businesses. The simplified method has a prescribed rate of $5 a square foot for business use of the home. There is a maximum allowable deduction available based on up to 300 square feet. Choosing this option requires taxpayers to complete a short worksheet in the tax instructions and entering the result on the tax return. There is a special calculation for daycare providers. Self-employed individuals claim the home office deduction on Form 1040, Schedule C , Line 30; farmers claim it on Schedule F, Line 32 and eligible employees claim it on Schedule A, Line 21.

Regardless of the method used to compute the deduction, business expenses in excess of the gross income limitation are not deductible. Deductible expenses for business use of a home include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance and repairs. In general, expenses for the parts of the home not used for business are not deductible.

Deductions for business storage are deductible when the dwelling unit is the sole fixed location of the business or for regular use of a residence for the provision of daycare services; exclusive use isn't required in these cases.

Further details on the home office deduction and the simplified method can be found in Publication 587 on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Many Tax-Exempt Organizations Must File by May 15

Posted by Admin Posted on May 09 2017

Many Tax-Exempt Organizations Must File by May 15

 

The Internal Revenue Service today reminded tax-exempt organizations that many have a filing deadline for Form 990-series information returns in mid-May. 

With the May 15 filing deadline fast approaching, the IRS cautions these groups not to include Social Security numbers or other unnecessary personal information on their Form 990. The agency also asks them to consider taking advantage of the speed and convenience of electronic filing.

Form 990-series information returns and notices are due on the 15th day of the fifth month after an organization’s tax-year ends. Many organizations use the calendar year as their tax year, making May 15 the deadline to file for 2016.

Many Organizations Risk Loss of Tax-Exempt Status

By law, organizations that fail to file annual reports for three consecutive years will see their federal tax exemptions automatically revoked as of the due date of the third year they are required to file. The Pension Protection Act of 2006 mandates that most tax-exempt organizations file annual Form 990-series information returns or notices with the IRS. The law, which went into effect at the beginning of 2007, also imposed a new annual filing requirement for small organizations. Churches and church-related organizations are not required to file annual reports.

No Social Security Numbers on Forms 990

The IRS generally does not ask organizations for SSNs and cautions filers not to provide them on the Form 990. By law, both the IRS and most tax-exempt organizations are required to publicly disclose most parts of Form 990 filings, including schedules and attachments. Public release of SSNs and other personally identifiable information about donors, clients or benefactors could give rise to identity theft.

The IRS also urges tax-exempt organizations to file forms electronically to reduce the risk of inadvertently including SSNs or other unnecessary personal information. Electronic filing also provides acknowledgement that the IRS has received the return and reduces normal processing time, making compliance with reporting and disclosure requirements easier.

Tax-exempt forms that must be made public by the IRS are clearly marked “Open to Public Inspection” in the top right corner of the first page. These include Form 990, Form 990-EZ, Form 990-PF and others.

What to File

Small tax-exempt organizations with average annual gross receipts of $50,000 or less may file an electronic notice called a Form 990-N (e-Postcard). This form requires only a few basic pieces of information. Tax-exempt organizations with average annual gross receipts above $50,000 must file a Form 990 or 990-EZ, depending on their receipts and assets. Private foundations must file Form 990-PF.

Organizations that need additional time to file a Form 990, 990-EZ or 990-PF may obtain an automatic six-month extension. Use Form 8868, Application for Extension of Time to File an Exempt Organization Return, to request an extension. The request must be filed by the due date of the return. Note that no extension is available for filing the Form 990-N (e-Postcard).

Check Tax-Exempt Status Online

The IRS publishes a list of organizations identified as having automatically lost tax-exempt status for failing to file annual reports for three consecutive years. Organizations that have had their exemptions automatically revoked and wish to have that status reinstated must file an application and pay the appropriate user fee.

The IRS offers an online search tool, Exempt Organizations Select Check, to help users more easily find key information about the federal tax status and filings of certain tax-exempt organizations, including whether organizations have had their federal tax exemptions automatically revoked.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tips about Employee Business Expenses

Posted by Admin Posted on May 08 2017

Tips about Employee Business Expenses

 

Taxpayers who pay work-related expenses out of their own pocket may be able to deduct them. Generally, employee business expenses are deductible if they are more than two percent of adjusted gross income. In most cases, they go on IRS Schedule A, Itemized Deductions.

Other key points about employee business expenses:

They must be Ordinary and Necessary. People can only deduct unreimbursed expenses that are ordinary and necessary to their work as an employee. An ordinary expense is one that is common and accepted in the industry. A necessary expense is appropriate and helpful to a business.

Expense Examples. Some potentially deductible costs include:   

Required work clothes or uniforms not appropriate for everyday use.

Supplies and tools for use on the job.

Business use of a car.

Business meals and entertainment.  

Business travel away from home.  

Business use of a home.

Work-related education.

This list is not all-inclusive. Special rules apply for reimbursed expenses by an employer. IRS Publication 529, Miscellaneous Deductions, and Publication 463, Travel, Entertainment, Gift and Car Expenses, provide more details.

Forms to Use. In most cases, expenses are reported using Form 2106 or Form 2106-EZ. IRS Schedule A may also be used.

Educator Expenses. K-12 teachers may be able to deduct up to $250 of certain expenses paid in 2016. These may include books, supplies, equipment and other materials used in the classroom. They are an adjustment to income rather than an itemized deduction. In other words, people do not need to itemize to claim them. IRS Publication 529 has more.

Keep Records. The IRS urges people to keep good records for proof of income and expenses and also as a reminder not to overlook anything. IRS Publication 17, Your Federal Income Tax, has more on what to keep.

IRS Free File. Most people qualify to use free, brand-name software to prepare and efile their federal tax returns with IRS Free File. Free File software helps to determine what expenses may be deductible.  

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

TAX CREDIT CAN HELP EMPLOYERS HIRING NEW WORKERS

Posted by Admin Posted on May 04 2017

TAX CREDIT CAN HELP EMPLOYERS HIRING NEW WORKERS

 

The Internal Revenue Service today reminded employers planning to hire new workers that there’s a valuable tax credit available to those who hire long-term unemployment recipients and others certified by their state workforce agency. During National Small Business Week—April 30 to May 6—the IRS is highlighting tax benefits and resources designed to help new and existing small businesses.

The Work Opportunity Tax Credit (WOTC) is a long-standing income tax benefit that encourages employers to hire designated categories of workers who face significant barriers to employment. The credit, usually claimed on Form 5884, is generally based on wages paid to eligible workers during the first two years of employment.

To qualify for the credit, an employer must first request certification by filing IRS Form 8850 with the state workforce agency within 28 days after the eligible worker begins work. Other requirements and further details can be found in the instructions to Form 8850.

There are now 10 categories of WOTC-eligible workers. The newest category, added effective Jan. 1, 2016, is for long-term unemployment recipients who had been unemployed for a period of at least 27 weeks and received state or federal unemployment benefits during part or all of that time. The other categories include certain veterans and recipients of various kinds of public assistance, among others.

The 10 categories are:

Qualified IV-A Temporary Assistance for Needy Families (TANF) recipients

Unemployed veterans, including disabled veterans

Ex-felons

Designated community residents living in Empowerment Zones or Rural Renewal Counties

Vocational rehabilitation referrals

Summer youth employees living in Empowerment Zones

Food stamp (SNAP) recipients

Supplemental Security Income (SSI) recipients

Long-term family assistance recipients

Qualified long-term unemployment recipients.

Eligible businesses claim the WOTC on their income tax return. The credit is first figured on Form 5884and then becomes a part of the general business credit claimed on Form 3800.

Though the credit is not available to tax-exempt organizations for most categories of new hires, a special rule allows them to get the WOTC for hiring qualified veterans. These organizations claim the credit on Form 5884-C. Visit the WOTC page on IRS.gov for more information.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Startups Can Choose New Option for Claiming Research Credit

Posted by Admin Posted on May 03 2017

New Option for Claiming Research Credit

 

Eligible small business startups can now choose to apply part or all of their research credit against their payroll tax liability, instead of their income tax liability, according to the Internal Revenue Service. During National Small Business Week—April 30 to May 6—the IRS is highlighting tax benefits and resources designed to help new and existing small businesses.

This new option will be available for the first time to any eligible small business when filing its 2016 federal income tax return. Before 2016, the research credit, like most tax credits, could only be taken against income tax liability. The option to elect the new payroll tax credit may especially benefit any eligible startup that has little or no income tax liability.

To qualify for the new option for the current tax year, a small business must have gross receipts of less than $5 million and could not have had gross receipts prior to 2012. A small business meeting this standard with qualifying research expenses can then choose to apply up to $250,000 of its research credit against its payroll tax liability.

To choose this option, fill out Form 6765, Credit for Increasing Research Activities, and attach it to a timely-filed business income tax return. Because many business taxpayers request a tax-filing extension, they still have time to make the choice on a timely-filed return. A number of special rules and computations apply to this credit. See the instructions to Form 6765 for details.

For eligible small businesses that already filed and failed to choose this option, there is still time to make the choice. Under a special rule for tax-year 2016, they can still do so by filing an amended return. This return must be filed by Dec. 31, 2017.

Amended return forms vary depending upon the type of business. Sole proprietors file Form 1040X. Regular corporations file Form 1120X. S corporations file Form 1120S, identifying it as a corrected return (line H(4). For information on amending a partnership return, see the instructions to Form 1065.

After choosing this option, either on an original or amended return, a small business claims the payroll tax credit by filling out Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities. This form must be attached to its payroll tax return, usually Form 941, Employer’s Quarterly Federal Tax Return.

Further details on how and when to claim the credit are in Notice 2017-23, available on IRS.gov. The notice also provides interim guidance on other technical issues, such as controlled groups and the definition of gross receipts.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Protect Yourself! Create Strong Passwords

Posted by Admin Posted on May 03 2017

Protect Yourself! Create Strong Passwords

 

Passwords are often the key to the identification and authentication process for access to your computer, e-mail and encrypted information, both received and transmitted. For this reason, it is critical to you (and your business) and the security of your client data that you have strong passwords and that you protect those passwords.

Here are some things you should consider in creating and protecting passwords:

- Longer passwords are safe and more difficult to guess. A strong password should be a minimum of eight characters. It should include a combination of letters, numbers and symbols or special characters. Your password should include at least one uppercase letter, one lowercase letter, one number and one symbol or character.

- Personal information should not be included in your passwords.  Names of siblings, children, pets, etc., are generally available on social media, which makes it easier for cybercriminals to figure out your password.

- Avoid using the same password for all of your information systems, accounts or devices. If someone does guess one password, they will not have access to all your systems, devices or data.

- Substitute numbers and symbols for letters in words or phrases to make it more difficult to guess a password.

- Do not share your password and be careful of attempts to trick you into revealing your password.

For additional information, see the Department of Homeland Security’s “Creating a Password Tip Card.”

This is one in a series of security awareness tax tips for tax professionals. The “Protect Your Clients; Protect Yourself” campaign’s goal is to raise awareness among tax professionals. It is an initiative of the Security Summit, a joint project by the IRS, states and the tax community to combat identity theft. Because of the sensitive client data held by tax professionals, cybercriminals increasingly are targeting the tax preparation community.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Five Reasons to Choose Direct Deposit

Posted by Admin Posted on May 03 2017

Five Reasons to Choose Direct Deposit

 

Easy, safe and fast — that’s direct deposit. It’s the best way to get a tax refund. Eighty percent of taxpayers choose it every year. The IRS knows taxpayers have a choice of how to receive their refunds.

IRS Direct Deposit:

Is Fast. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit. Use IRS Free File to prepare and e-file federal returns for free. Use direct deposit for paper tax returns, too.

Is Secure. Since refunds go right into a bank account, there’s no risk of having a paper check stolen or lost in the mail. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.

Is Convenient. There’s no need to wait for a refund check to come in the mail.

Is Easy.  Choosing direct deposit is easy. With e-file, just follow the instructions in the tax software. For paper returns, the tax form instructions serve as a guide. Make sure to enter the correct bank account and routing number.

Has Options. Taxpayers can split a refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. The U.S. Treasury Department offers a retirement account. It’s called a MyRA account.  Designate all or a part of a refund to a new MyRA account. Simply mark the “savings” box in the refund section of the return. Use IRS Form 8888, Allocation of Refund (including Savings Bond Purchases), to deposit a refund in up to three accounts. Do not use Form 8888 to designate part of a refund to pay tax preparers.

Taxpayers should deposit refunds into accounts in their own name, their spouse’s name or both. Avoid making a deposit into accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Taxpayers should check with their bank for direct deposit rules.

There is a limit of three electronic direct deposit refunds made into a single financial account or pre-paid debit card. The IRS will send a notice and a refund check in the mail to taxpayers who exceed the limit. Find tips about direct deposit and the split refund option in Publication 17, Your Federal Income Tax. View, download and print tax products anytime at IRS.gov/forms.

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Employee or Independent Contractor? Know the Rules

Posted by Admin Posted on May 02 2017

Employee or Independent Contractor? Know the Rules

 

The IRS encourages all businesses and business owners to know the rules when it comes to classifying a worker as an employee or an independent contractor.

An employer must withhold income taxes and pay Social Security, Medicare taxes and unemployment tax on wages paid to an employee. Employers normally do not have to withhold or pay any taxes on payments to independent contractors.

Here are two key points for small business owners to keep in mind when it comes to classifying workers:

1- Control. The relationship between a worker and a business is important. If the business controls what work is accomplished and directs how it is done, it exerts behavioral control. If the business directs or controls financial and certain relevant aspects of a worker’s job, it exercises financial control. This includes:

- The extent of the worker's investment in the facilities or tools used in performing services

- The extent to which the worker makes his or her services available to the relevant market

- How the business pays the worker, and

- The extent to which the worker can realize a profit or incur a loss

2- Relationship. How the employer and worker perceive their relationship is also important for determining worker status. Key topics to think about include:

1- Written contracts describing the relationship the parties intended to create

2- Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation or sick pay

3- The permanency of the relationship, and

4- The extent to which services performed by the worker are a key aspect of the regular business of the company

5- The extent to which the worker has unreimbursed business expenses

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Práctica fraudulenta de pesca de información (Phishing)

Posted by Admin Posted on May 02 2017

Práctica fraudulenta de pesca de información (Phishing)

 

El IRS no inicia comunicación con el contribuyente a través de correo electrónico, mensajes de texto o mensajes por medio de las redes sociales para solicitar información personal o financiera.  Esto incluye pedirle su número PIN o claves de acceso, información de su tarjeta de crédito, de su banco u otra cuenta financiera.

¿Qué es phishing?

Phishing es una práctica fraudulenta realizada a través de correo electrónico no solicitado y/o sitios web que se presentan como sitios legítimos y logran atrapar a las personas para que revelen su información personal y financiera.

Todo correo no solicitado el cual dice ser del IRS o de alguno de sus programas, deberá reportarse a phishing@irs.gov. Estafas recientes han utilizado el Sistema de Pago Electrónico de impuestos federales (EFTPS) para atraer a víctimas. Además, si usted experimenta pérdidas financieras debido a un incidente relacionado con el IRS por favor reporte dicho incidente al Inspector General del Tesoro para la Administración Tributaria y presente una queja con la Comisión Federal de Comercio a través del Asistente de Quejas y presente toda información disponible a los investigadores.

Qué hacer si usted recibe comunicación sospechosa, y dicha comunicación está relacionada con el IRS

Si

Entonces

Usted recibe un correo electrónico de parte de alguien que dice ser del IRS y se le pide información personal, impuestos relacionados a una gran inversión de dinero, una herencia o premio de lotería…
  1. No responda.
  2. No abra ningún archivo adjunto. Los archivos pueden contener algún código malicioso que infectará su computadora.
  3. No seleccione ningún enlace. Visite nuestra página sobre el robo de identidad si usted selecciono alguno de los enlaces de éste correo electrónico dudoso o de un sitio web, o ingresó información confidencial.
  4. Reenvíe el correo electrónico tal como lo recibió a nuestro correo, a phishing@irs.gov. No envíe imágenes escaneadas, ya que estas pueden excluir valiosa información.
  5. Borre el mensaje original que usted recibió.
Usted recibe una llamada por teléfono de un individuo que dice ser del IRS, pero usted sospecha que tal individuo no es empleado del IRS
  1. Registre el nombre del empleado, número de identificación del empleado, número telefónico del empleado y el número del identificador de llamadas si está disponible.
  2. Llame al 1-800-366-4484 para determinar si la llamada que recibió es de parte de un empleado del IRS y la razón de la llamada es legítima.
    • Si la persona que le llamo es en realidad un empleado del IRS, regrese usted la llamada.
    • Si no, reporte el incidente a TIGTA, y también a nosotros en phishing@irs.gov y anote en el espacio para el asunto del correo, (Subject: IRS Phone Scam)
Usted recibe una carta por correo, aviso, formulario o fax de parte de un individuo que dice ser del IRS, pero usted sospecha que ese individuo no es empleado del IRS

Visite la Página Principal del IRS y busque información sobre la carta, el aviso o el número del formulario. Impostores pueden modificar cartas legítimas del IRS. Usted puede encontrar información en el enlace Información sobre avisos del IRS (en inglés) y busque en Formularios y Publicaciones (en inglés).

  • Si es una carta legítima, usted encontrará instrucciones sobre cómo contestar o completar el formulario.
  • Si no encuentra información en nuestro sitio web o las instrucciones son distintas de lo que se le indica en la carta, aviso o formulario, favor de llamar al 1-800-829-1040 para determinar si dicho documento es legítimo.
  • Si el documento no es legítimo, reporte el incidente a TIGTA, y a nosotros en phishing@irs.gov.
Usted recibe un fax no solicitado, tal como el Formulario W8-BEN (en inglés) el cual dice ser de parte el IRS, y este solicita información personal…

Por favor envíe el correo electrónico o la copia escaneada de dicho correo a phishing@irs.gov, (en la línea que indica el asunto del correo, anote “Subject: FAX”).

Visite la página principal de información sobre FATCA (en inglés) y el Formulario W8-BEN (en inglés) para mayor información.

Usted recibe una llamada telefónicacorreo electrónico no solicitado el cual involucra la compra de acciones, y dicha comunicación es sospechosa e involucra al IRS o el Departamento del Tesoro, y los documentos cobran “cuotas” o “multas”…

...y usted es ciudadano de los Estados Unidos viviendo en los Estados Unidos o uno de sus territorios, o es ciudadano de los Estados Unidos viviendo en el extranjero.

  1. Llene el formulario de queja apropiado a través del U.S. Securities and Exchange Commission.
  2. Reenvíe el correo electrónico a phishing@irs.gov. (Por favor anote en la línea correspondiente al asunto de su correo, Subject: Stock).
  3. Si usted es víctima monetaria o de robo de identidad, usted puede presentar su queja a través del Asistente de Quejas de la Comisión Federal de Comercio.

...y usted no es ciudadano de los Estados Unidos y vive en el extranjero.

  1. Llene el formulario de queja apropiado a través del U.S. Securities and Exchange Commission.
  2. Comuníquese con su organismo regulador local y presente su queja.
  3. Reenvíe el correo electrónico a phishing@irs.gov. (Por favor anote en la línea correspondiente al asunto de su correo, Subject: Stock).
  4. Si usted es víctima monetaria o de robo de identidad, usted puede presentar su queja a econsumer.gov.
Usted descubre un sitio web en el Internet que dice ser del IRS pero usted sospecha que es fraudulento... ...envíe el URL del sitio web fraudulento al IRS a phishing@irs.gov. Por favor anote en la línea correspondiente al asunto de su correo, (Subject: Suspicious Website).
Usted recibe un mensaje de texto o de un servicio de mensajes el cual dice ser de parte del IRS
  1. No responda.
  2. No abra ningún archivo adjunto. Los archivos pueden contener algún código malicioso que infectará su computadora o teléfono móvil.
  3. No seleccione ningún enlace. Si usted seleccionó alguno de los enlaces de éste mensaje, e ingresó información confidencial, visite nuestra página de protección de identidad
  4. Reenvíe el mensaje de texto tal como lo recibió al 202-552-1226. Tenga en mente que podría cobrársele gastos de texto.
  5. Si le es posible, envíe el texto original al 202-552-1226.
  6. Borre el mensaje original que usted recibió.

 

Que hacer si usted recibió un correo electrónico sospechoso que pretende ser de parte del IRS

Si

Entonces

Usted recibe un correo electrónico phishingsospechoso que no pretende ser de parte del IRS... Reenvíe el correo electrónico tal y como lo recibió reportphishing@antiphishing.org.
Usted recibe un correo electrónico el cual usted sospecha contiene códigos maliciosos y algún adjunto dañino y usted SELECCIONÓ un enlace o descargó el archivo adjunto...

Visite OnGuardOnline.gov para informarse sobre lo que debe hacer si descargo programas dañinos a su computadora.

Usted recibió un correo electrónico y usted sospecha que este contiene códigos dañinos y algún archivo adjunto contiene códigos dañinos y usted NO HA seleccionado el enlace ni descargó el archivo adjunto...

Reenvíe el correo electrónico a su proveedor de servicio de Internet al departamento de quejas y/o a spam@uce.gov.

 

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

¿Cómo puedo reportar actividad tributaria fraudulenta?

Posted by Admin Posted on May 01 2017

¿Cómo puedo reportar actividad tributaria fraudulenta?

 

Si sospecha de una persona o conoce de un negocio que no cumple con las leyes tributarias sobre asuntos como: Deducciones o exenciones falsas, sobornos, documentación falsa o alterada, incumplimiento con el pago de impuestos, ingreso no declarado, crimen organizado, incumplimiento con la retención tributaria, usted puede reportarlos con las autoridades.

Utilice el Formulario 3949-A, Referido de Información. Luego imprima el formulario y envíelo por correo a Internal Revenue Service, Fresno, CA 93888. También puede pedir el formulario por correo (información en inglés) o llamar a la Línea Directa para denunciar Fraude Tributario al 1-800-829-0433. Tome en cuenta que no se aceptarán por teléfono referidos alegando violaciones de la ley tributaria.

Una opción alterna al Formulario 3949-A, es enviar por correo, a la dirección indicada anteriormente, una carta escrita. Por favor, incluya la mayor cantidad de información posible, y sobre todo, información importante de interés, tal como:

1- El nombre y la dirección de la persona o negocio que usted esté reportando

2- El número de Seguro Social del individuo, o el Número de Identificación Patronal del negocio reportado

3- Una descripción breve de la(s) alegación(es), e incluya como usted supo y adquirió información sobre la(s) misma(s)

4- Los años que abarca la alegación

5- Un estimado de la suma total (en dólares) del ingreso no declarado

6- Su nombre, dirección y número de  teléfono

A pesar de que usted no tiene que identificarse, sería de gran utilidad hacerlo. El IRS garantiza que su identidad se mantendrá confidencial. Contribuyentes que presentan el Formulario 3949-A no serán informados sobre el estado o progreso del caso, ya que las normas de confidencialidad de las declaraciones de impuestos, definidas en la sección 6103 del Código de Impuestos Internos, lo prohíben. 

¿Cuándo NO utilizar el Formulario 3949-A?

No utilice el formulario 3949-A para reportar sobre los siguientes asuntos:

Si sospecha que alguien le robó su identidad y está utilizando su SSN (número de Seguro Social, por sus siglas en inglés) para propósitos de empleo, o para presentar una declaración de impuestos, utilice el Formulario 14039SP. Complete el formulario en línea, imprima el mismo y envíelo por correo a la oficina adecuada para atender su caso, según la lista de opciones que aparece en la página 2 del formulario. Incluya fotocopias de al menos uno de los documentos que aparecen en el formulario para verificar su identidad. Para más información, refiérase a la Guía del Contribuyente sobre Robo de Identidad.

Si cree que existe alguna actividad fraudulenta o de un esquema tributario abusivo relacionado con un preparador de declaraciones de impuestos o una compañía dedicada a la preparación de declaraciones de impuestos Utilice el Formulario 14157 (en inglés). El Formulario 1457-A podría también ser requerido. Usted podrá completar el formulario en línea, imprimirlo y enviarlo por correo a la dirección del IRS que aparece en el formulario.

Si sospecha que un preparador de declaraciones de impuestos entregó una declaración, o alteró una declaración suya sin su consentimiento, y usted está buscando un cambio a su cuenta, utilice el Formulario 14157 (en inglés) (PDF) y el Formulario 14157-A (en inglés). Envíe AMBOS formularios (el formulario 14157 y el formulario 14157-A) a la dirección de correo que aparece en las instrucciones del Formulario 14157-A.

Si sabe de un promotor o de una promoción tributaria abusiva, utilice el Formulario 14242 (en inlgés) (PDF). Envíelo por correo, a la dirección postal o número de fax que aparece en el formulario.

Si observa alguna conducta inapropiada o delito cometido por una organización exenta o de un plan de empleados, utilice el Formulario 13909 (en inglés) y envíe el formulario a la dirección de correo que aparece en el mismo.

Si tiene información y desea reclamar una recompensa, utilice el Formulario 211 (en inglés) (PDF). Envíe el formulario a la dirección de correo que aparece en el mismo.

Si tiene preguntas sobre contabilidad, impuestos nacionales o internacionales, representación con el IRS o implicaciones tributarias en bienes raíces, entre otros temas, no dude en llamar a Lord Breakspeare Callaghan LLC al 305-274-5811.

Source: IRS

What are the biggest mistakes investors make?

Posted by Admin Posted on Apr 28 2017

What are the biggest mistakes investors make?

 

The biggest mistakes that investors make are:

1- Starting Too Late

The time to start is now. The power of compound interest is astounding - the earlier you take advantage the more it will work for you. If you start out earlier, you can start with less, invest less and still end up making more than if you started out later.

2- Paying High Fees

Broker's commissions can negate all of the hard-earned interest that you have accumulated. Don't let this happen to you - pay attention to what you are being charged. The more you pay, the less you keep.

3- Investing Emotionally

Successful investing consists of planning and reason. Once emotion gets involved, it can ruin all of the planning and reason that you had used to construct your investment strategy. Keep using the strategies that have consistently made people rich over the years, don't look to follow the new and exciting strategies that haven't yet stood the test of time.

4- Using a One-Size-Fits-All Plan

Your individual needs should trump any ideas of blindly following any plan. Keep an account of how much risk you are willing to take, and what your time frame is. Your portfolio should match your needs.

5- Not Taking Taxes Into Consideration

The net profits from stocks are taxable as capital gains. Being in a tax-deferred investment account will stop this from eating away at your savings.

6- Overly Risky Investing

Being extremely risky can pay off big time, but it can also leave you with a diminished nest egg it you gamble wrong. There are many great investments that offer decent returns without putting your funds in excessive danger.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Guidelines to follow towards a comfortable retirement

Posted by Admin Posted on Apr 27 2017

 

Someone starting their savings in their early 20s can save 10% of their income and have a sufficient nest egg, while someone starting in their 40s may have to bump that number up more towards 20%. This is all dependent on the time of your life that you choose to start, the size of your current nest egg, and the amount of money that you will need to retire comfortably.

It is always a good idea to contribute as much as possible to retirement plans, to take advantage of tax deferral and employer matches.

Generally people need around 80% of their pre-retirement income after they have retired for the first few years and then learn how to live on less. This will greatly depend on the expenses that you plan on having:

Is the mortgage already paid off?

Do you have car payments?

Are you sending your children through school?

Another strategy worth following is to always have an emergency fund of at least 6 months of expenses. Considering your situation and the situations of the people that you depend on or depend on you, you can adjust the number of months accordingly, but 6 is a good ballpark number. This will also depend on how many bills you need to pay.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IRS Sees Millions of Tax Returns Last Days of Tax Filing Season

Posted by Admin Posted on Apr 26 2017

IRS Sees Millions of Tax Returns Last Days of Tax Filing Season

 

The Internal Revenue Service today announced that the agency has received 135.6 million returns this year following a late surge of filings last week.

During the week ending April 21, the IRS received more than 17 million tax returns. The vast majority, 13.6 million returns, were filed through IRS e-file. 

Looking at the entire tax filing season, the IRS has received 135.6 million tax returns through April 21. With the influx of returns last week, the number of filings is now close to the number of returns from last year’s filing season.

With the mid-April filings, the number of refunds issued this year swelled to 97 million worth $268.3 billion. The average refund was $2,763, up slightly from last year’s average of $2,711.

Taxpayers have filed 11.6 million extension forms this filing season, up 0.9 percent compared to the same time last year. The vast majority of extensions were e-filed, 9.7 million, an increase of 11 percent from the same time last year.

An extension form filed by the deadline allows a taxpayer to hold off on filing the actual tax return for six months, although any tax due must have been paid by the April 18 deadline to avoid interest and penalties.

2017 FILING SEASON STATISTICS

Cumulative statistics comparing 04/22/2016 and 04/21/2017

Individual Income Tax Returns:

2016

2017

% Change

Total Returns Received

136,528,000

135,638,000

-0.7

Total Returns Processed

129,456,000

128,789,000

-0.5

 

 

 

 

E-filing Receipts:

 

 

 

TOTAL           

122,546,000

122,164,000

-0.3

Tax Professionals

70,864,000

70,401,000

-0.7

Self-prepared

51,682,000

51,763,000

0.2

 

 

 

 

Web Usage:

 

 

 

Visits to IRS.gov

325,525,568

312,255,666

-4.1

 

 

 

 

Total Refunds:

 

 

 

Number

97,079,000

97,104,000

0.0

Amount

$263.197

Billion

$268.296

Billion

1.9

Average refund

$2,711

$2,763

1.9

 

Direct Deposit Refunds:

 

 

 

Number

81,221,000

81,646,000

0.5

Amount

$234.269

Billion

$239.410

Billion

2.2

Average refund

$2,884

$2,932

1.7

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Helpful Tips to Keep in Mind When Amending Your Tax Return

Posted by Admin Posted on Apr 25 2017

Helpful Tips to Keep in Mind When Amending Your Tax Return

 

Taxpayers can fix mistakes or omissions on their tax return by filing an amended tax return. Those who need to amend will find the following tips helpful.

1- File using paper form. Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct the tax return. Taxpayers can’t file amended returns electronically. They can obtain the form on IRS.gov/forms at any time. Mail the Form 1040X to the address listed in the form’s instructions.

2- Amend to correct errors. File an amended tax return to correct errors or make changes to an original tax return. For example, taxpayers should amend to change their filing status, or to correct their income, deductions or credits.

3- Don’t amend for math errors, missing forms. Taxpayers generally don’t need to file an amended return to correct math errors on their original return. The IRS will automatically correct these items. In addition, taxpayers do not need to file an amended return if they forgot to attach tax forms, such as a Form W-2 or a schedule. The IRS will mail a request to the taxpayer, if needed.

4- File within three-year time limit. Taxpayers usually have three years from the date they filed the original tax return to file Form 1040X to claim a refund. A taxpayer can file it within two years from the date they paid the tax, if that date is later. That means the last day for most people to file a claim for a refund for tax year 2013 is April 18, 2017. See Form 1040X instructions for special rules that may apply.  

5- Use separate forms for each year. Taxpayers who are amending more than one tax return must file a Form 1040X for each tax year. Mail each year’s Form 1040X in separate envelopes to avoid confusion. Note the tax year of the amended return on the top of the Form 1040X. Check the form’s instructions for where to mail the amended return.

6- Attach other forms with changes. If a taxpayer uses other IRS forms or schedules to make changes, they need to attach them to the Form 1040X.

7- Wait to file for corrected refund for tax year 2016. If due a refund from their original tax year 2016 return, taxpayers should wait to get it before filing Form 1040X to claim an additional refund. Amended returns may take up to 16 weeks to process.

8- Pay additional tax. If the taxpayer will owe more tax, they should file Form 1040X and pay the tax as soon as possible to avoid penalties and interest. Consider using IRS Direct Pay to pay any tax directly from a checking or savings account at no cost.

9- Track your amended return. Generally, a taxpayer can track the status of their amended tax return three weeks after they file with ‘Where’s My Amended Return?’ It is available in English, Spanish, Chinese, Korean, Vietnamese and Russian. The tool can track the status of an amended return for the current year and up to three years back. If a taxpayer has filed amended returns for multiple years, they can check each year, one at a time.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Missed the Tax Return Deadline? IRS Offers Help

Posted by Admin Posted on Apr 25 2017

Missed the Tax Return Deadline? IRS Offers Help

 

The tax deadline for most taxpayers was Tuesday, April 18, 2017. The IRS has some advice for taxpayers who missed the filing deadline.

File and pay as soon as possible. Taxpayers who owe federal income tax should file and pay as soon as they can to minimize any penalty and interest charges. For taxpayers due a refund, there is no penalty for filing a late return.

Use IRS Free File. Nearly everyone can use IRS Free File to e-file their federal taxes for free. Taxpayers whose income was $64,000 or less can use free brand-name tax software. Those who made more than $64,000 can use Free File Fillable Forms to e-file. This program uses electronic versions of IRS paper forms. Fillable forms work best for those who are used to doing their own taxes. Taxpayers can file -- even if they missed the deadline -- using free options on IRS.gov through the Oct. 16 extension period. 

 File electronically. No matter who prepares a tax return, taxpayers can use IRS e-file through Oct. 16. E-file is the easiest, safest and most accurate way to file a tax return. The IRS will send electronic confirmation when it receives the tax return and issues more than nine out of 10 refunds in less than 21 days.

Pay as much as possible. If taxpayers owe but can’t pay in full, they should pay as much as they can when they file their tax return. IRS electronic payment options are the quickest and easiest way to pay taxes. IRS Direct Pay is a free, secure and easy way to pay a balance due directly from a checking or savings account. Pay any owed amounts as soon as possible to minimize penalties and interest.

Make monthly payments through an installment agreement. Those who need more time to pay taxes can apply for a direct debit installment agreement through the IRS Online Payment Agreement tool. There’s no need to write and mail a check each month with a direct debit plan. Taxpayers who don’t use the online tool can still apply on Form 9465, Installment Agreement Request. Get the form at IRS.gov/forms.

File as soon as possible to get a refund. Taxpayers who are not required to file may still get a refund if they had taxes withheld from wages or they qualified for certain tax credits like the Earned Income Tax Credit. Those who don’t file their return within three years could lose their right to the refund.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tips on Determining If It’s Really The IRS At Your Door

Posted by Admin Posted on Apr 21 2017

Tips on Determining If It’s Really The IRS At Your Door

 

WASHINGTON — The Internal Revenue Service has created a special new page on IRS.gov to help taxpayers determine if a person visiting their home or place of business claiming to be from the IRS is legitimate or an imposter.

With continuing phone scams and in-person scams taking place across the country, the IRS reminds taxpayers that IRS employees do make official, sometimes unannounced, visits to taxpayers as part of their routine casework. Taxpayers should keep in mind the reasons these visits occur and understand how to verify if it is the IRS knocking at their door.

Visits typically fall into three categories:

IRS revenue officers will sometimes make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed or tax returns due. Revenue officers are IRS civil enforcement employees whose role involves education, investigation, and when necessary, appropriate enforcement.

IRS revenue agents will sometimes visit a taxpayer who is being audited. That taxpayer would have first been notified by mail about the audit and set an agreed-upon appointment time with the revenue agent. Also, after mailing an initial appointment letter to a taxpayer, an auditor may call to confirm and discuss items pertaining to the scheduled audit appointment.

IRS criminal investigators may visit a taxpayer’s home or place of business unannounced while conducting an investigation. However, these are federal law enforcement agents, and they will not demand any sort of payment. Criminal investigators also carry law enforcement credentials, including a badge.

For more information, visit “How to know it’s really the IRS calling or knocking on your door” on IRS.gov.

The IRS reminds people who owe taxes – or think they do – to stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more information, visit “Tax Scams and Consumer Alerts” on IRS.gov.

Taxpayers have a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore these rights and the agency’s obligations to protect them on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Some Taxpayers Get Extensions without Asking

Posted by Admin Posted on Apr 18 2017

Some Taxpayers Get Extensions without Asking

 

Taxpayers Abroad, in Combat Zones and Disaster Areas Qualify

Even though April 18 is the tax-filing deadline for most people, some taxpayers in special situations qualify for more time without having to ask for it, according to the Internal Revenue Service.

Taxpayers in Presidentially-declared disaster areas, members of the military serving in a combat zone and Americans living and working abroad get extra time to both file their returns and pay any taxes due. Here are details on each of these special tax relief provisions.

Victims of Natural Disasters

Taxpayers in several disaster area localities qualify for more time to file their tax returns and pay any taxes due. Currently, taxpayers in parts of Georgia and Mississippi have until May 31, 2017, to file and pay, while those in parts of Louisiana have until June 30, 2017, to file and pay. These extensions also apply to other tax-related actions, including the deadline for contributing to an individual retirement arrangement (IRA). The IRS automatically provides extensions to anyone living in these areas so there’s no reason for these residents to contact the IRS to request an extension.

The IRS generally provides relief, including postponing filing and payment deadlines, to any area covered by a disaster declaration for individual assistance issued by the Federal Emergency Management Agency (FEMA). Among other things, this relief includes extensions for relief workers, disaster area businesses and anyone whose tax records are located in the disaster area. For details on available relief and information on how to take advantage of it, visit the Around the Nation page on IRS.gov.

Combat Zone Taxpayers

Members of the military and eligible support personnel serving in a combat zone have at least 180 days after they leave the combat zone to file their tax returns and pay any taxes due. This includes those serving in Iraq, Afghanistan and other combat zone localities. A complete list of designated combat zone localities can be found in Publication 3, Armed Forces’ Tax Guide, available on IRS.gov.

Combat zone extensions give affected taxpayers more time for a variety of other tax-related actions, including contributing to an IRA. Various circumstances affect the exact length of the extension available to any given taxpayer. Details, including examples illustrating how these extensions are calculated, can be found in the Extensions of Deadlines section in Publication 3.

Taxpayers Outside the United States

U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico have until June 15, 2017, to file their 2016 returns and pay any taxes due. The special June 15 deadline also applies to members of the military, on duty outside the U.S. and Puerto Rico, who do not qualify for the longer combat zone extension. Be sure to attach a statement to the return explaining which of these situations applies.  Though taxpayers abroad get more time to pay, interest, currently at the rate of four percent per year, compounded daily, applies to any payment received after April 18. For more information about the special tax rules for U.S. taxpayers abroad, see Publication 54 on IRS.gov.

Everyone Else

Taxpayers who don’t qualify for any of these three special situations can still get more time to file, but they need to ask for it. Automatic extensions give people until Oct. 16, 2017, to file; tax payments are still due April 18, 2017.

An easy way to get the extra time to file is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an extension on Form 4868. To get the extension, taxpayers must estimate their tax liability on this form and pay any amount due.

Another option for taxpayers is to pay electronically and get an extension of time to file. IRS will automatically process an extension when taxpayers select Form 4868 and they are making a full or partial federal tax payment using Direct Pay, Electronic Federal Tax Payment System or a debit or credit card by the April due date. There is no need to file a separate Form 4868 when making an electronic payment and indicating it is for an extension. Electronic payment options are available at IRS.gov/payments.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Tax Rules on Rental Property

Posted by Admin Posted on Apr 17 2017

Tax Rules on Rental Property

 

Provided by Eyal "Alan" Galinsky, ChFC®

Buying or selling income property has definite tax consequences. A taxpayer should clearly understand them, whether he or she intends to acquire a property or put one on the market. 

 

A sale of income property incurs either a capital gain or loss. If you profit from the sale of income property, that profit is considered fully taxable by the Internal Revenue Service. Fortunately, if you have owned that property for at least a year, you will pay only capital gains tax on those profits rather than income tax.1

Your capital gain is determined by subtracting the adjusted basis of the property (i.e., the price you paid for it, plus the total of any renovations, closing costs, and eligible legal fees) from the sale price. For most taxpayers, the capital gains rate is but 15%. If you sell an investment property for a capital gain of $30,000 and your capital gains rate is 15%, you will pay $4,500 of capital gains tax from the sale.1

Depreciation can factor into this. If the market turns south and you can deduct $20,000 in depreciation within your ownership period, then your capital gain from the sale is $10,000 instead of $30,000.2

Should you happen to sell one investment property at a gain and another at a loss in the same year, you can subtract your capital loss from your capital gain, resulting in a net capital gain or loss for that tax year.1

Should you buy & hold, you could qualify for the homeowner exclusion. If you live in an investment property for two or more years during a five-year period, the I.R.S. will consider that investment property to be your primary residence, whether you do or not. You are, thereby, eligible for the federal homeowner exclusion when you sell such property, which enables you to shield up to $250,000 of capital gains from tax. Joint filers may exclude up to $500,000 of capital gains from tax through this break.1,3

Income property investors may also qualify for some federal tax deductions. If you happen to utilize an investment property (or even a vacation home) for your personal use, you may be able to take advantage of property tax deductions, the mortgage interest deduction, even the home office deduction. The size of a deduction typically corresponds to how frequently you use the property. For example, you can deduct property management fees, insurance premiums, and certain other costs only when you use the property for longer than 14 days or 10% of the total days it is rented or leased.4

This article is simply an overview of the tax rules on rental property. To fully explore the tax implications of a sale or purchase and the deductions and exclusions you may qualify to receive, speak to a qualified tax, real estate, or financial professional today.

Eyal " Alan " Galinsky, ChFC® may be reached at (561) 368-6388 or admin@archfg.com| www.archfg.com   

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. 

Citations.

1 - finance.zacks.com/tax-liability-selling-investment-property-5957.html [3/28/17]

2 - investopedia.com/articles/mortgages-real-estate/08/rental-property.asp [2/22/17]

3 - irs.gov/taxtopics/tc701.html [1/7/17]

4 - ajc.com/business/personal-finance/these-tax-breaks-can-help-make-homeownership-more-affordable/1rauoRXHzDmeWZVgbfmsoI [3/16/17]

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

 

Deductible Home Offices

Posted by Admin Posted on Apr 14 2017

Deductible Home Offices

 

Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities. If you use both your home and other locations regularly in your business, you must determine which location is your principle place of business, based on the relative importance of the activities performed at each location. If the relative importance factor doesn't determine your principle place of business, you can also consider the time spent at each location.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. Please contact us for more!

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

SCAM ARTISTS THREATEN TAXPAYERS WITH POLICE ARREST, DEPORTATION AND LICENSE REVOCATION

Posted by Admin Posted on Mar 08 2017

 SCAM ARTISTS THREATEN TAXPAYERS

 

Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, headlining the annual "Dirty Dozen" list of tax scams for the 2017 filing season, the Internal Revenue Service announced today. The IRS has seen a surge of these phone scams as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season.

The caller may threaten you with arrest or court action to trick you into making a payment,” said IRS Commissioner John Koskinen. “Some schemes may say you're entitled to a huge refund."

This January, the Treasury Inspector General for Tax Administration (TIGTA) announced they have received reports of roughly 896,000 contacts since October 2013 and have become aware of over 5,000 victims who have collectively paid over $26.5 million as a result of the scam.  

Protect yourself.

The IRS will never:

-Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.

-Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

-Require you to use a specific payment method for your taxes, such as a prepaid debit card.

-Ask for credit or debit card numbers over the phone.

-Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you don’t owe taxes, or have no reason to think that you do:

-Do not give out any information. Hang up immediately.

-Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.

-Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.


If you know you owe, or think you may owe tax:

-Call the IRS at 800-829-1040. IRS workers can help you.

Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source:  IRS

FUNDING A COLLEGE EDUCATION? DON'T FORGET THE 529

Posted by Admin Posted on Feb 17 2017

FUNDING A COLLEGE EDUCATION? DON'T FORGET THE 529

 

When 529 plans first hit the scene, circa 1996, they were big news. Nowadays, they’re a common part of the college-funding landscape. But don’t forget about them — 529 plans remain a valid means of saving for the rising cost of tuition and more.

Flexibility is king

529 plans are generally sponsored by states, though private institutions can sponsor 529 prepaid tuition plans. Just about anyone can open a 529 plan. And you can name anyone, including a child, grandchild, friend, or even yourself, as the beneficiary.

Investment options for 529 savings plans typically include stock and bond mutual funds, as well as money market funds. Some plans offer age-based portfolios that automatically shift to more conservative investments as the beneficiaries near college age.

Earnings in 529 savings plans typically aren’t subject to federal tax, so long as the funds are used for the beneficiary’s qualified educational expenses. This can include tuition, room and board, books, fees, and computer technology at most accredited two- and four-year colleges and universities, vocational schools, and eligible foreign institutions.

Many states offer full or partial state income tax deductions or other tax incentives to residents making 529 plan contributions, at least if the contributions are made to a plan sponsored by that state.

You’re not limited to participating in your own state’s plan. You may find you’re better off with another state’s plan that offers a wider range of investments or lower fees.

The downsides

While 529 plans can help save taxes, they have some downsides. Amounts not used for qualified educational expenses may be subject to taxes and penalties. A 529 plan also might reduce a student’s ability to get need-based financial aid, because money in the plan isn’t an “exempt” asset. That said, 529 plan money is generally treated more favorably than, for instance, assets in a custodial account in the student’s name.

Just like other investments, those within 529s can fluctuate with the stock market. And some plans charge enrollment and asset management fees.

Finally, in the case of prepaid tuition plans, there may be some uncertainty as to how the benefits will be applied if the student goes to a different school.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Five Things to Know About the Child Tax Credit

Posted by Admin Posted on Feb 16 2017

Five Things to Know About the Child Tax Credit

 

The Child Tax Credit is a tax credit that may save taxpayers up to $1,000 for each eligible qualifying child. Taxpayers should make sure they qualify before they claim it. Here are five facts from the IRS on the Child Tax Credit:

1. Qualifications. For the Child Tax Credit, a qualifying child must pass several tests:

      - Age. The child must have been under age 17 on Dec. 31, 2016.

     - Relationship. The child must be the taxpayer’s son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother or half-sister. The child may be a descendant of any of these individuals. A qualifying child could also include grandchildren, nieces or nephews. Taxpayers would always treat an adopted child as their own child. An adopted child includes a child lawfully placed with them for legal adoption.

     - Support. The child must have not provided more than half of their own support for the year.

     - Dependent. The child must be a dependent that a taxpayer claims on their federal tax return.

     - Joint return. The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.

    - Citizenship. The child must be a U.S. citizen, a U.S. national or a U.S. resident alien.

    - Residence. In most cases, the child must have lived with the taxpayer for more than half of 2016.

The IRS Interactive Tax Assistant tool – Is My Child a Qualifying Child for the Child Tax Credit? – helps taxpayers determine if a child is a qualifying child for the Child Tax Credit.

2. Limitations. The Child Tax Credit is subject to income limitations. The limits may reduce or eliminate a taxpayer’s credit depending on their filing status and income.

3. Additional Child Tax Credit. If a taxpayer qualifies and gets less than the full Child Tax Credit, they could receive a refund, even if they owe no tax, with the Additional Child Tax Credit.

Because of a new tax-law change, the IRS cannot issue refunds before Feb. 15 for tax returns that claim the Earned Income Tax Credit (EITC) or the ACTC. This applies to the entire refund, even the portion not associated with these credits. The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS expects these refunds to be available in bank accounts or debit cards at the earliest, during the week of Feb. 27. This will happen as long as there are no processing issues with the tax return and the taxpayer chose direct deposit. Read more about refund timing for early EITC/ACTC filers.

4. Schedule 8812. If a taxpayer qualifies to claim the Child Tax Credit, they need to check to see if they must complete and attach Schedule 8812, Child Tax Credit, with their tax return. Taxpayers can visit IRS.gov to view, download or print IRS tax forms anytime.

5. IRS E-file. The easiest way to claim the Child Tax Credit is with IRS E-file. This system is safe, accurate and easy to use. Taxpayers can also use IRS Free File to prepare and e-file their taxes for free. Go to IRS.gov/filing to learn more.

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

GO, SAVE GREEN WITH SUSTAINABLE TAX BREAKS

Posted by Admin Posted on Feb 16 2017

GO, SAVE GREEN WITH SUSTAINABLE TAX BREAKS

 

Many people want to do something, however small, to contribute to a healthier environment. There are many ways to do so and, for some of them, you can even save a few tax dollars for your efforts.

Indeed, with the passage of the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) late last year, a couple of specific ways to go green and claim a tax break have been made permanent or extended. Let’s take a closer look at each.

Not driving for dollars

Air pollution is a problem in many areas of the country. Among the biggest contributors are vehicle emissions. So it follows that cutting down on the number of vehicles on the road can, in turn, diminish air pollution.

To help accomplish this, many people choose to commute to work via van pools or using public transportation. And, helpfully, the PATH Act is doing its part as well. The law made permanent the requirement that limits on the amounts that can be excluded from an employee’s wages for income and payroll tax purposes be the same for both parking benefits and van pooling / mass transit benefits.

Before the PATH Act’s parity provision, the monthly limit for 2015 was only $130 for van pooling / mass transit benefits. But, because of the new law, the 2015 monthly limit for these benefits was boosted to the $250 parking benefit limit and the 2016 limit is $255.

Sprucing up the homestead

Energy consumption can also have a negative impact on the environment and use up limited natural resources. Many homeowners want to reduce their energy consumption for environmental reasons or simply to cut their utility bills.

The PATH Act lends a helping hand here, too, by extending through 2016 the credit for purchases of residential energy property. This includes items such as:

New high-efficiency heating and air conditioning systems,

Qualifying forms of insulation,

Energy-efficient exterior windows and doors, and

High-efficiency water heaters and stoves that burn biomass fuel.

The provision allows a credit of 10% of eligible costs for energy-efficient insulation, windows and doors. A credit is also available for 100% of eligible costs for energy-efficient heating and cooling equipment and water heaters, up to a lifetime limit of $500 (with no more than $200 from windows and skylights).

Doing it all

Going green and saving some green on your tax bill? Yes, you can do both. Van pooling or taking public transportation and improving your home’s energy efficiency are two prime examples. Please contact us for more information about how to claim these tax breaks or identify other ways to save this year.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Check Out These Tax Benefits for Parents

Posted by Admin Posted on Feb 16 2017

Check Out These Tax Benefits for Parents

 

Taxpayers with children may qualify for certain tax benefits. Parents should consider child-related tax benefits when filing their federal tax return:

Dependent. Most of the time, taxpayers can claim their child as a dependent. Use the Interactive Tax Assistant to help determine who can be claimed as a dependent. Taxpayers can generally deduct $4,050 for each qualified dependent. If the taxpayer’s income is above a certain limit, this amount may be reduced. For more on these rules, see Publication 501, Exemptions, Standard Deduction and Filing Information.

Child Tax Credit.  Generally, taxpayers can claim the Child Tax Credit for each qualifying child under the age of 17. The maximum credit is $1,000 per child. Taxpayers who get less than the full amount of the credit may qualify for the Additional Child Tax Credit. Use the Interactive Tax Assistant to determine if a child qualifies for the Child Tax Credit. For more information, see Schedule 8812 and Publication 972, Child Tax Credit.

Child and Dependent Care Credit. Taxpayers may be able to claim this credit if they paid for the care of one or more qualifying persons. Dependent children under age 13 are among those who qualify. Taxpayers must have paid for care so that they could work or look for work. Use the Interactive Tax Assistant to determine if a child qualifies for the Child Tax Credit. See Publication 503, Child and Dependent Care Expenses, for more on this credit.

Earned Income Tax Credit. Taxpayers who worked but earned less than $53,505 last year should look into the EITC. They can get up to $6,269 in EITC. Taxpayers may qualify with or without children. Use the 2016 EITC Assistant tool at IRS.gov or see Publication 596, Earned Income Tax Credit, to learn more.

EITC and ACTC Refunds. Because of new tax-law change, the IRS cannot issue refunds before Feb. 15 returns that claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). This applies to the entire refund, even the portion not associated with these credits. The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS expects the earliest of these refunds to be available in bank accounts or debit cards during the week of Feb. 27, as long as there are no processing issues with the tax return and the taxpayer chose direct deposit. Read more about refund timing for early EITC/ACTC filers.

Adoption Credit. It is possible to claim a tax credit for certain costs paid to adopt a child. For details, see Form 8839, Qualified Adoption Expenses.

Education Tax Credits. An education credit can help with the cost of higher education. Two credits are available: the American Opportunity Tax Credit and the Lifetime Learning Credit. These credits may reduce the amount of tax owed. If the credit cuts a taxpayer’s tax to less than zero, it could mean a refund. Taxpayers may qualify even if they owe no tax. Complete Form 8863, Education Credits, and file a return to claim these credits. Taxpayers can use the Interactive Tax Assistant tool on IRS.gov to see if they can claim them. Visit the IRS’s Education Credits web page to learn more on this topic. Also, see Publication 970, Tax Benefits for Education.  

Student Loan Interest. Taxpayers may be able to deduct interest paid on a qualified student loan. They can claim this benefit even if they do not itemize deductions. Use the Interactive Tax Assistant to determine if interest paid on a student or educational loan is deductible. For more information, see Publication 970.

Self-employed Health Insurance Deduction. Taxpayers who were self-employed and paid for health insurance may be able to deduct premiums paid during the year. See Publication 535, Business Expenses, for details.   

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Answers Common Early Tax Season Refund Questions and Addresses Surrounding Myth

Posted by Admin Posted on Feb 08 2017

 Tax Season Refund Questions and Addresses Surrounding Myth

 

WASHINGTON — As millions of people begin filing their tax returns, the Internal Revenue Service reminded taxpayers about some basic tips to keep in mind about their refunds.

During the early parts of the tax season, early filers are anxious to get details about their tax refunds. And in some social media, this can lead to misunderstandings and speculation about refunds. The IRS offers some tips to keep in mind.

Myth 1: All Refunds Are Delayed

While more than 90 percent of federal tax refunds are issued in the normal timeframe – less than 21 days – it is true some refunds may be delayed – but not all of them. Recent legislation requires the IRS to hold refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until mid-February. Other returns may require additional review for a variety of reasons and take longer. For example, the IRS, along with its partners in the state’s and the nation’s tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud. The IRS encourages taxpayers to file as they normally would.

Myth 2: Calling the IRS or My Tax Professional Will Provide a Better Refund Date

Many people mistakenly think that talking to the IRS or calling their tax professional is the best way to find out when they will get their refund. In reality, the best way to check the status of a refund is online through the “Where’s My Refund?” tool at IRS.gov or via the IRS2Go mobile app.

Taxpayers eager to know when their refund will be arriving should use the "Where's My Refund" tool rather than calling and waiting on hold or ordering a tax transcript. The IRS updates the status of refunds once a day, usually overnight, so checking more than once a day will not produce new information. “Where’s My Refund” has the same information available to IRS telephone assistors so there is no need to call unless requested to do so by the refund tool.

Myth 3: Ordering a Tax Transcript a “Secret Way” to Get a Refund Date

Ordering a tax transcript will not help taxpayers find out when they will get their refund. The IRS notes that the information on a transcript does not necessarily reflect the amount or timing of a refund. While taxpayers can use a transcript to validate past income and tax filing status for mortgage, student and small business loan applications and to help with tax preparation they should use “Where’s My Refund?” to check the status of their refund.

Myth 4: “Where’s My Refund,” Must be Wrong Because There’s No Deposit Date Yet

Where's My Refund? ‎on both IRS.gov and the IRS2Go mobile app will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after Feb. 15. Taxpayers claiming EITC or ACTC will not see a refund date on Where's My Refund? ‎or through their software package until then. The IRS, tax preparers and tax software will not have additional information on refund dates.

The IRS cautions taxpayers that these refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27 -- if there are no processing issues with the tax return and the taxpayer chose direct deposit. This additional period is due to several factors, including banking and financial systems needing time to process deposits. Taxpayers who have filed early in the filing season, but are claiming EITC or ACTC, should not expect their refund until the week of Feb. 27. The IRS reminds taxpayers that President’s Day weekend may impact when they get their refund since many financial institutions do not process payments on weekends or holidays.

Myth 5: Delayed Refunds, those Claiming EITC and/or ACTC, will be Delivered on Feb. 15

By law, the IRS cannot issue refunds before Feb. 15 for any tax return claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). The IRS must hold the entire refund, not just the part related to the EITC or ACTC. The IRS will begin to release these refunds starting Feb. 15.

These refunds likely won’t arrive in bank accounts or on debit cards until the week of Feb. 27. This is true as long as there is no additional review of the tax return required and the taxpayer chose direct deposit. Banking and financial systems need time to process deposits, which can take several days.

More Information About “Where’s My Refund”

“Where’s My Refund?” can be checked within 24 hours after the IRS has received an e-filed return or four weeks after receipt of a mailed paper return. "Where’s My Refund?" has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent.

Users who access “Where’s My Refund?” on IRS.gov or the IRS2Go app must have information from their current, pending tax return to access their refund information. The IRS reminds taxpayers claiming the EITC or the ACTC that recent legislation requires the IRS to hold those refunds until mid-February. Keep in mind that only a small percentage of total filers will fall into this situation. The change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent tax fraud.

The IRS continues to strongly encourage the use of e-file and direct deposit as the fastest and safest way to file an accurate return and receive a tax refund. More than four out of five tax returns are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit.

Help for Taxpayers

The IRS reminds taxpayers they have a variety of options to get help filing and preparing their tax return on IRS.gov. Taxpayers can also, if eligible, receive help from a community volunteer. Go to IRS.gov and click on the “Filing” tab for more information.

Seventy percent of the nation’s taxpayers are eligible for IRS Free File. Commercial IRS partners offer free brand-name software to about 100 million individuals and families with incomes of $64,000 or less.

Online fillable forms provides electronic versions of IRS paper forms to all taxpayers regardless of income that can be prepared and filed by people comfortable with completing their own returns.

Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) offer free tax help to people who qualify. Go to irs.gov and enter “free tax prep” in the search box to learn more and find a nearby VITA or TCE site, or download the IRS2Go smartphone app to find a free tax prep provider. 

The IRS also reminds taxpayers that a trusted tax professional can provide helpful information and advice about the ever-changing tax code. Tips for choosing a return preparer and details about national tax professional groups are available on IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Use IRS Free File Software on Smart Phones or Tablets

Posted by Admin Posted on Feb 08 2017

Use IRS Free File Software on Smart Phones or Tablets

 

WASHINGTON – The Internal Revenue Service announced that taxpayers now may use their smart phones or tablets to electronically prepare and file their federal and state tax returns through IRS Free File.

The IRS and its private-sector partners who offer their brand-name software products for free now support a new design that allows for the use of desktops, laptops, mobile phones and tablets.

You may access the products using mobile devices in two ways: (1) Use the IRS app, IRS2Go, which has a link to the Free File Software Lookup Tool or (2) use the device’s browser to go to www.IRS.gov/freefile and select the “Free File Software Lookup Tool” or “Start Free File Now” to find the software product that matches your situation. The IRS2Go app is available for Android and iOS devices.

Taxpayers with adjusted gross income of $64,000 or less will find one or more free software options. Each of the 12 software providers set the eligibility requirements for their product, generally based on age, income or state residency. The Free File Software Lookup Tool asks a few questions to help you identify the appropriate software products.

Some partners offer free federal and free state tax return preparation; some charge a fee for state return preparation. Active duty military personnel whose income was $64,000 or less are exempt from any eligibility requirements and may use any Free File product they choose to file their federal return for free.

The Free File software allows for free electronic tax preparation and filing and direct deposit of refunds. Some taxpayers may need their 2015 adjusted gross income if they filed a return, in order to validate their identities and complete the electronic filing process.

Also, taxpayers who are eligible for the Earned Income Tax Credit or the Additional Child Tax Credit are reminded that, by law, the IRS must hold refunds that contain those credits until February 15. The refunds likely won’t arrive into taxpayers’ financial accounts until the week of February 27.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS “Dirty Dozen” Series of Tax Scams for 2017

Posted by Admin Posted on Feb 07 2017

IRS DIRTY DOZEN TAX SCAMS 2017

 

WASHINGTON — The Internal Revenue Service today warned taxpayers to be on the lookout for unscrupulous return preparers, one of the most common “Dirty Dozen” tax scams seen during tax season. 

The vast majority of tax professionals provide honest, high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. That's why unscrupulous preparers who prey on unsuspecting taxpayers with outlandish promises of overly large refunds make the Dirty Dozen list every year. 

"Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected," said IRS Commissioner John Koskinen. "Most preparers provide high-quality service but we run across cases each year where unscrupulous preparers steal from their clients and misfile their taxes."  

Return preparers are a vital part of the U.S. tax system. About 60 percent of taxpayers use tax professionals to prepare their returns. 

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them. 

Choosing Return Preparers Carefully 

It is important to choose carefully when hiring an individual or firm to prepare a tax return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to in order to increase their fee. Every year, these types of tax preparers face everything from penalties to jail time for defrauding their clients. 

Here are a few tips when choosing a tax preparer:

Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on tax returns.

- Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant or attorney), belongs to a professional organization or attends continuing education classes. A number of tax law changes can be complex. A competent tax professional needs to be up-to-date in these matters. Tax return preparers aren’t required to have a professional credential. The IRS website has more information regarding the national tax professional organizations.

- Check the preparer’s qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help locate a tax return preparer with the preferred qualifications

- The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:

Attorneys

CPAs

Enrolled Agents

Enrolled Retirement Plan Agents

Enrolled Actuaries

Annual Filing Season Program participants

- Check the preparer’s history. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory.

- Ask about service fees. Avoid preparers who base fees on a percentage of their client’s refund or boast bigger refunds than their competition. Don’t give your tax documents, SSNs, and other information to a preparer when only inquiring about their services and fees. Unfortunately, some preparers have improperly filed returns without the taxpayer’s permission once the records were obtained.

- Ask to e-file your return. Make sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally must file electronically. The IRS has processed more than 1.5 billion e-filed tax returns. It’s the safest and most accurate way to file a return.

- Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask questions to determine your total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.

- Make sure the preparer is available. In the event questions come up about your tax return, you may need to contact your preparer after the return is filed. Avoid fly-by-night preparers.

- Understand who can represent you. Attorneys, CPAs, and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent you in limited situations if they prepared and signed your return. However, non-credentialed preparers who do not participate in the Annual Filing Season Program may only represent clients before the IRS on returns they prepared and signed on or before Dec. 31, 2015.

- Never sign a blank return. Don’t use a tax preparer that asks you to sign an incomplete or blank tax form.

- Review your return before signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it and that your refund goes directly to you – not into the preparer’s bank account. Reviewing the routing and bank account number on the completed return is always a good idea.

- Report abusive tax preparers to the IRS. You can report abusive tax return preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms on IRS.gov.

To find other tips about choosing a preparer, understanding the differences in credentials and qualifications, researching the IRS preparer directory, and learning how to submit a complaint regarding a tax return preparer, visit www.irs.gov/chooseataxpro.

Remember: Taxpayers are legally responsible for what is on their tax return even if someone else prepares it. Make sure the preparer you hire is up to the task.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN?

Posted by Admin Posted on Feb 06 2017

ARE YOU SURE YOU WANT TO TAKE THAT 401(K) LOAN?

 

With summer headed toward its inevitable close, you may be tempted to splurge on a pricey “last hurrah” trip. Or perhaps you’d like to buy a brand new convertible to feel the warm breeze in your hair. Whatever the temptation may be, if you’ve pondered dipping into your 401(k) account for the money, make sure you’re aware of the consequences before you take out the loan.

Pros and cons

Many 401(k) plans allow participants to borrow as much as 50% of their vested account balances, up to $50,000. These loans are attractive because:

- They’re easy to get (no income or credit score requirements),

- There’s minimal paperwork,

- Interest rates are low, and

- You pay interest back into your 401(k) rather than to a bank.

Yet, despite their appeal, 401(k) loans present significant risks. Although you pay the interest to yourself, you lose the benefits of tax-deferred compounding on the money you borrow.

You may have to reduce or eliminate 401(k) contributions during the loan term, either because you can’t afford to contribute or because your plan prohibits contributions while a loan is outstanding. Either way, you lose any future earnings and employer matches you would have enjoyed on those contributions.

Loans, unless used for a personal residence, must be repaid within five years. Generally, the loan terms must include level amortization, which consists of principal and interest, and payments must be made no less frequently than quarterly.

Additionally, if you’re laid off, you’ll have to pay the outstanding balance quickly — typically within 30 to 90 days. Otherwise, the amount you owe will be treated as a distribution subject to income taxes and, if you’re under age 59½, a 10% early withdrawal penalty.

Hardship withdrawals

If you need the money for emergency purposes, rather than recreational ones, determine whether your plan offers a hardship withdrawal. Some plans allow these to pay certain expenses related to medical care, college, funerals and home ownership — such as first-time home purchase costs and expenses necessary to avoid eviction or mortgage foreclosure.

Even if your plan allows such withdrawals, you may have to show that you’ve exhausted all other resources. Also, the amounts you withdraw will be subject to income taxes and, except for certain medical expenses or if you’re over age 59½, a 10% early withdrawal penalty.

Like plan loans, hardship withdrawals are costly. In addition to owing taxes and possibly penalties, you lose future tax-deferred earnings on the withdrawn amounts. But, unlike a loan, hardship withdrawals need not be paid back. And you won’t risk any unpleasant tax surprises should you lose your job.

The right move

Generally, you should borrow or take hardship withdrawals from a 401(k) only in emergencies or when no other financing options exist (and your job is secure).

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

IS THE SALES TAX DEDUCTION RIGHT FOR YOU?

Posted by Admin Posted on Feb 03 2017

IS THE SALES TAX DEDUCTION RIGHT FOR YOU?

 

As the year winds down, many people begin to wonder whether they should put off until next year purchases they were considering for this year. One interesting wrinkle to consider from a tax perspective is the sales tax deduction.

Making the choice

This tax break allows taxpayers to take an itemized deduction for state and local sales taxes in lieu of state and local income taxes. It was permanently extended by the Protecting Americans from Tax Hikes Act of 2015.

The deduction is obviously valuable to those who reside in states with no or low income tax. But it can also substantially benefit taxpayers in other states who buy a major item, such as a car or boat.

Considering the break

Because the break is now permanent, there’s no urgency to make a large purchase this year to take advantage of it. Nonetheless, the tax impact of the deduction is worth considering.

For example, let’s say you buy a new car in 2016, your state and local income tax liability for the year is $3,000, and the sales tax on the car is also $3,000. This may sound like a wash, but bear in mind that, if you elect to deduct sales tax, you can deduct all of the sales tax you’ve paid during the year — not just the tax on the car purchase.

Picking an approach

To claim the deduction, you need not keep receipts and track all of the sales tax you’ve paid this year. You can simply use an IRS sales tax calculator that will base the deduction on your income and the sales tax rates in your locale, plus the tax you actually pay on certain major purchases.

Then again, if you retain documentation for your purchases, you might enjoy a larger deduction. The “actual receipt” approach could result in a sizable deduction if you’ve made a number of notable purchases in the past year that don’t qualify to be added on to the sales tax calculator amount. Examples include furnishing a new home, investing in high-value electronics or software, or purchasing expensive jewelry (such as engagement and wedding rings).

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

HOW TO ASSESS THE IMPACT OF A CHILD'S INVESTMENT INCOME

Posted by Admin Posted on Feb 03 2017

HOW TO ASSESS THE IMPACT OF A CHILD'S INVESTMENT INCOME

 

When they’re old enough to understand the concepts, some children start investing in the markets. If you’re helping a child learn the risks and benefits of investments, be sure you learn about the tax impact first.

Potential danger

For the 2016 tax year, if a child’s interest, dividends and other unearned income total more than $2,100, part of that income is taxed based on the parent’s tax rate. This is a critical point because, as joint filers, many married couples’ tax rate is much higher than the rate at which the child would be taxed.

Generally, a child’s $1,050 standard deduction for unearned income eliminates liability on the first half of that $2,100. Then, unearned income between $1,050 and $2,100 is taxed at the child’s lower rate.

But it’s here that potential danger sets in. A child’s unearned income exceeding $2,100 may be taxed at the parent’s higher tax rate if the child is under age 19 or a full-time student age 19–23, but not if the child is over age 17 and has earned income exceeding half of his support. (Other stipulations may apply.)

Simplified approach

In many cases, parents take a simplified approach to their child’s investment income. They choose to include their son’s or daughter’s investment income on their own return rather than have him or her file a return of their own.

Basically, if a child’s interest and dividend income (including capital gains distributions) total more than $1,500 and less than $10,500, parents may make this election. But a variety of other requirements apply. For example, the unearned income in question must come from only interest and dividends.

Many lessons

Investing can teach kids about the time value of money, the importance of patience, and the rise and fall of business success. But it can also deliver a harsh lesson to parents who aren’t fully prepared for the tax impact.

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

AGE 50 OR OLDER? CATCH-UP CONTRIBUTIONS ARE FOR YOU

Posted by Admin Posted on Feb 02 2017

AGE 50 OR OLDER? CATCH-UP CONTRIBUTIONS ARE FOR YOU

 

Are you in your 50s or 60s and thinking more about retirement? If so, and you’re still not completely comfortable with the size of your nest egg, don’t forget about “catch-up” contributions. These are additional amounts beyond the regular annual limits that workers age 50 or older can contribute to certain retirement accounts.

Catch-up contributions give you the chance to take maximum advantage of the potential for tax-deferred or, in the case of Roth accounts, tax-free growth.

401(k) feature

Under 2016 401(k) limits, if you’re age 50 or older, after you’ve reached the $18,000 maximum limit for all employees, you can contribute an extra $6,000, for a total of $24,000. If your employer offers a Savings Incentive Match Plan for Employees (SIMPLE) instead, your regular contribution maxes out at $12,500 in 2016. If you’re 50 or older, you’re allowed to contribute an additional $3,000 — or $15,500 in total for the year.

But, check with your employer because, while most 401(k) plans and SIMPLEs offer catch-up contributions, not all do.

IRA benefits

Another way to save more after age 50 is through a traditional IRA or a Roth IRA. With either plan, those 50 or older generally can contribute another $1,000 above the $5,500 limit for 2016. Plus, you can make 2016 IRA contributions as late as April 18, 2017.

The benefits of making the additional contribution differ depending on which account you’re considering. With a traditional IRA, contributions may be tax deductible, providing you with immediate tax savings. (The deductibility phases out at higher income levels if you or your spouse is covered by an employer retirement plan.)

Roth contributions are made with after-tax dollars, but qualified withdrawals are tax-free. By contributing to a Roth IRA and taking the tax hit up front, you won’t lose any of the income to taxes at withdrawal, provided you’re at least 59½ and have held a Roth IRA at least five years. However, be aware that the ability to contribute to a Roth IRA is phased out based on income level.

Another option if you’d like to enjoy tax-free withdrawals is to convert some or all of your traditional IRA to a Roth IRA — but you’ll also take an up-front tax hit.

Self-employed limits

If you’re self-employed, retirement plans such as an individual 401(k) — or solo 401(k) — also allow catch-up contributions. A solo 401(k) is a plan for those with no other employees. You can defer 100% of your self-employment income or compensation, up to the regular yearly deferral limit of $18,000, plus a $6,000 catch-up contribution in 2016. But that’s just the employee salary deferral portion of the contribution.

You can also make an “employer” contribution of up to 20% of self-employment income or 25% of compensation. The total combined employee-employer contribution is limited to $53,000, plus the $6,000 catch-up contribution.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

Posted by Admin Posted on Feb 02 2017

JUGGLING FAMILY WEALTH MANAGEMENT IS NO TRICK

 

Preserving and managing family wealth requires addressing a number of major issues. These include saving for your children’s education and funding your own retirement. Juggling these competing demands is no trick. Rather, it requires a carefully devised and maintained family wealth management plan.

Start with the basics

First, a good estate plan can help ensure that, in the event of your death, your children will be taken care of and, if your estate is large, that they won’t lose a substantial portion of their inheritances to estate taxes. It can also guarantee that your assets will be passed along to your heirs according to your wishes.

Second, life insurance is essential. The right coverage can provide the liquidity needed to repay debts, support your children and others who depend on you financially, and pay estate taxes.

Prepare for the challenge

Most families face two long-term wealth management challenges: funding retirement and paying for college education. While both issues can be daunting, don’t sacrifice saving for your own retirement to finance your child’s education. Scholarships, grants, loans and work-study may help pay for college — but only you can fund your retirement.

Uncle Sam has provided several education incentives that are worth checking out, including tax credits and deductions for qualifying expenses and tax-advantaged savings opportunities such as 529 plans and Education Savings Accounts (ESAs). Because of income limits and phaseouts, many higher-income families won’t benefit from some of these tax breaks. But, your children (or your parents, in the case of contributing to an ESA) may be able to take advantage of them.

Give assets wisely

Giving money, investments or other assets to your children or other family members can save future income tax and be a sound estate planning strategy as well. You can currently give up to $14,000 per year per individual ($28,000 if married) without incurring gift tax or using your lifetime gift tax exemption. Depending on the number of children and grandchildren you have, and how many years you continue this gifting program, it can really add up.

By gifting assets that produce income or that you expect to appreciate, you not only remove assets from your taxable estate, but also shift income and future appreciation to people who may be in lower tax brackets.

Also consider using trusts to facilitate your gifting plan. The benefit of trusts is that they can ensure funds are used in the manner you intended and can protect the assets from your loved ones’ creditors.

Overcome the complexities

Creating a comprehensive plan for family wealth management and following through with it may not be simple — but you owe it to yourself and your family. We can help you overcome the complexities and manage your tax burden.

Sidebar: Charitable giving’s place in family wealth management

Do charitable gifts have a place in family wealth management? Absolutely. Properly made gifts can avoid gift and estate taxes, while possibly qualifying for an income tax deduction. Consider a charitable trust that allows you to give income-producing assets to charity, but keep the income for life — or for the charity to receive the earnings and the assets to later pass to your heirs. These are just two examples; there are more ways to use trusts to accomplish your charitable goals.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

5 THINGS TO KNOW ABOUT SUBSTANTIATING DONATIONS

Posted by Admin Posted on Feb 02 2017

5 THINGS TO KNOW ABOUT SUBSTANTIATING DONATIONS

 

There are virtually countless charitable organizations to which you might donate. You may choose to give cash or to contribute noncash items such as books, sporting goods, or computers or other tech gear. In either case, once you do the good deed, you owe it to yourself to properly claim a tax deduction.

No matter what you donate, you’ll need documentation. And precisely what you’ll need depends on the type and value of your donation. Here are five things to know:

1. Cash contributions of less than $250 are the easiest to substantiate. A canceled check or credit card statement is sufficient. Alternatively, you can obtain a receipt from the recipient organization showing its name, as well as the date, place and amount of the contribution. Bear in mind that unsubstantiated contributions aren’t deductible anymore. So you must have a receipt or bank record.

2. Noncash donations of less than $250 require a bit more. You’ll need a receipt from the charity. Plus, you typically must estimate a reasonable value for the donated item(s). Organizations that regularly accept noncash donations typically will provide you a form for doing so. Keep in mind that, for donations of clothing and household items to be deductible, the items generally must be in at least good condition.

3. Bigger cash donations mean more paperwork. If you donate $250 or more in cash, a canceled check or credit card statement won’t be sufficient. You’ll need a contemporaneous written acknowledgment from the recipient organization that meets IRS guidelines.

Among other things, a contemporaneous written acknowledgment must be received on or before the earlier of the date you file your return for the year in which you made the donation or the due date (including an extension) for filing the return. In addition, it must include a disclosure of whether the charity provided anything in exchange. If it did, the organization must provide a description and good-faith estimate of the exchanged item or service. You can deduct only the difference between the amount donated and the value of the item or service.

4. Noncash donations valued at $250 or more and up to $5,000 require still more. You must get a contemporaneous written acknowledgment plus written evidence that supports the item’s acquisition date, cost and fair market value. The written acknowledgment also must include a description of the item.

5. Noncash donations valued at more than $5,000 are the most complicated. Generally, both a contemporaneous written acknowledgment and a qualified appraisal are required — unless the donation is publicly traded securities. In some cases additional requirements might apply.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

ORGANIZING YOUR FINANCIAL RECORDS FOR BEST RESULTS

Posted by Admin Posted on Jan 31 2017

ORGANIZING YOUR FINANCIAL RECORDS FOR BEST RESULTS

 

Throwing all your important documents into a drawer won’t help much when an emergency occurs and you (or a family member) need to find a certain piece of paper.

Make a list

Of course, emergencies aren’t the only reason to organize your records. For example, you may need to be able to access relevant personal records if you’re ever audited or a victim of theft. Or your home could be damaged in a storm or fire. Or you may need proof to cash in investments or claim insurance benefits.

To get started, make a list of important records. These include items related to:

Bank and investment accounts,

Real estate and homeownership,

Insurance policies,

Credit card accounts,

Health care benefits and medical history, and

Marriage and your estate.

Grouping the items into broad categories such as these will make them easier to file and find later.

Establish your approach

With your list in hand, it’s time to start organizing and storing your records. Here are some tips for streamlining the process:

Create a central filing system. The ideal storage medium for personal documents is a fire-, water- and impact-resistant security cabinet or safe. Create a master list of the cabinet contents and provide a copy of the key to your executor or a trusted family member.

Designate a second storage location. Maintain a duplicate set of the records in another location, such as a bank safety deposit box, and provide access to a trusted individual (preferably not the same individual with access to the original documents). Consider keeping originals of your important legal documents, such as your will, with your attorney.

Back up records electronically. It also makes sense to store copies of records electronically. Simply scan your documents and save them to a trustworthy external storage device. If opting for a cloud-based backup system, choose your provider carefully to ensure its security measures are as stringent as possible.

Follow the ritual

Make organizing your records an annual ritual and not just a one-time event. Need assistance? We can help you identify the specific documents pertinent to your situation and organize them appropriately.

Sidebar: Create an emergency checklist to cope with calamity

Having an emergency checklist of important personal records handy is essential in the event you must evacuate your home. In a crisis, you’ll likely be able to take only what you can easily carry with you. That means storing the bare essentials in a portable container. Include these items:

Driver’s license, passport and Social Security card,

Credit cards,

Vital medical condition and medication information,

Health insurance cards, and

Emergency family and physician contacts.

Also set up an “In Case of Emergency” (ICE) directory in your cell phone. In your phone directory, simply type in “ICE” before each contact (ICE-1 Jane Smith, ICE-2 Dr. John Smith, etc.). Also consider storing and carrying electronic copies of key personal records on a USB flash drive.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

GETTING COMFORTABLE WITH THE HOME OFFICE DEDUCTION

Posted by Admin Posted on Jan 31 2017

GETTING COMFORTABLE WITH THE HOME OFFICE DEDUCTION

 

One of the great things about setting up a home office is that you can make it as comfy as possible. Assuming you’ve done that, another good idea is getting comfortable with the home office deduction.

To qualify for the deduction, you generally must maintain a specific area in your home that you use regularly and exclusively in connection with your business. What’s more, you must use the area as your principal place of business or, if you also conduct business elsewhere, use the area to regularly conduct business, such as meeting clients and handling management and administrative functions. If you’re an employee, your use of the home office must be for your employer’s benefit.

The only option to calculate this tax break used to be the actual expense method. With this method, you deduct a percentage (proportionate to the percentage of square footage used for the home office) of indirect home office expenses, including mortgage interest, property taxes, association fees, insurance premiums, utilities (if you don’t have a separate hookup), security system costs and depreciation (generally over a 39-year period). In addition, you deduct direct expenses, including business-only phone and fax lines, utilities (if you have a separate hookup), office supplies, painting and repairs, and depreciation on office furniture.

But now there’s an easier way to claim the deduction. Under the simplified method, you multiply the square footage of your home office (up to a maximum of 300 square feet) by a fixed rate of $5 per square foot. You can claim up to $1,500 per year using this method. Of course, if your deduction will be larger using the actual expense method, that will save you more tax. 

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

Facing the Tax Challenges of Self-Employment & Phaseouts and Reductions

Posted by Admin Posted on Jan 30 2017

Tax Challenge of Self-Employment

 

Today’s technology makes self-employment easier than ever. But if you work for yourself, you’ll face some distinctive challenges when it comes to your taxes. Here are some important steps to take:

Learn your liability. Self-employed individuals are liable for self-employment tax, which means they must pay both the employee and employer portions of FICA taxes. The good news is that you may deduct the employer portion of these taxes. Plus, you might be able to make significantly larger retirement contributions than you would as an employee.

However, you’ll likely be required to make quarterly estimated tax payments, because income taxes aren’t withheld from your self-employment income as they are from wages. If you fail to fully make these payments, you could face an unexpectedly high tax bill and underpayment penalties.

Distinguish what’s deductible. Under IRS rules, deductible business expenses for the self-employed must be “ordinary” and “necessary.” Basically, these are costs that are commonly incurred by businesses similar to yours and readily justifiable as needed to run your operations.

The tax agency stipulates, “An expense does not have to be indispensable to be considered necessary.” But pushing this grey area too far can trigger an audit. Common examples of deductible business expenses for the self-employed include licenses, accounting fees, equipment, supplies, legal expenses and business-related software.

Don’t forget your home office! You may deduct many direct expenses (such as business-only phone and data lines, as well as office supplies) and indirect expenses (such as real estate taxes and maintenance) associated with your home office. The tax break for indirect expenses is based on just how much of your home is used for business purposes, which you can generally determine by either measuring the square footage of your workspace as a percentage of the home’s total area or using a fraction based on the number of rooms.

The IRS typically looks at two questions to determine whether a taxpayer qualifies for the home office deduction:

1. Is the specific area of the home that’s used for business purposes used only for business purposes, not personal ones?

2. Is the space used regularly and continuously for business?

If you can answer in the affirmative to these questions, you’ll likely qualify. But please contact our firm for specific assistance with the home office deduction or any other aspect of filing your taxes as a self-employed individual.

7 LAST-MINUTE TAX-SAVING TIPS

Posted by Admin Posted on Jan 27 2017

7 LAST-MINUTE TAX-SAVING TIPS

 

Where did the time go? The year is quickly drawing to a close, but there’s still time to take steps to reduce your 2016 tax liability. Here are seven last-minute tax-saving tips to consider — you just must act by December 31:

1. Pay your 2016 property tax bill that’s due in early 2017.

2. Pay your fourth quarter state income tax estimated payment that’s due in January 2017.

3. Incur deductible medical expenses (if your deductible medical expenses for the year already exceed the applicable floor).

4. Pay tuition for academic periods that will begin in January, February or March of 2017 (if it will make you eligible for a tax deduction or credit).

5. Donate to your favorite charities.

6. Sell investments at a loss to offset capital gains you’ve recognized this year.

7. Ask your employer if your bonus can be deferred until January.

Keep in mind, however, that in certain situations these strategies might not make sense. For example, if you’ll be subject to the alternative minimum tax this year or be in a higher tax bracket next year, taking some of these steps could have undesirable results.

To make absolutely sure which of these tips are right for you, and learn whether there are other beneficial last-minute moves you might make, please contact our firm. We can help you maximize your tax savings for 2016.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

2016 Tax Deductions for Realtors

Posted by Admin Posted on Jan 03 2017

2016 Tax Deductions for Realtors

 

By Lord Breakspeare Callaghan LLC

The following are the most common tax deductions you are entitled to take on your tax return:

Business use of your car: This will probably be one of the largest deductions you can take. There are two methods available to compute your deduction and you will use the one which gives you the higher amount:

Actual method cost: You may deduct the actual expenses of operating your car for business purposes. This includes gas, tolls, insurance, parking, repairs, maintenance, registration, depreciation and loan interest.

Standard mileage method: The standard mileage rate for business miles driven in 2016 is 54 cents per mile. For example: If you drove 10,000 business miles in 2016 you will be able to get a $5,400 deduction. You can also deduct tolls, parking fees, and loan interest paid on your car.

Health insurance premiums: If you are a self-employed taxpayer, like most realtors are, unless you’ve incorporated your business, you can take a deduction for the health insurance premiums you pay for yourself and your family members.

Commissions paid to third parties: If you pay commission to your brokerage, marketing team, other real estate agents or third parties, you can deduct the full amount paid.

Marketing expenses: Business cards, website fees, MLS dues, signs, sponsorships, promotional items, etc… can be deducted.

Continuing education: Amounts you pay for classes, seminars, conferences you attend to maintain your ability to be an agent or to increase your skills is deductible.

Travel, meals and entertainment: Travel to business events is fully deductible. On the other hand, meals and entertainment expenses are 50% deductible unless you are incurring these types of expenses for a company event or an open house you are sponsoring. In this case meals and entertainment are 100% deductible.

Home office deduction: If you use a portion of your home for business, you may be entitled to deduct home-office expenses that allow you to write off the business portion of your home rent, mortgage, taxes, utilities, insurance, repairs etc, based on the square footage of your office ratioed to the home square footage.

Depreciation: You may be able to fully deduct in the current year the cost of computers, laptops, digital cameras, office furniture, GPS, video camera, scanners, and other equipment used on your daily activity as a real estate agent.

Professional fees: Associations or professional fees payable to NAR, NAIREB, NAREB, NAEBA, CREA, Chamber of Commerce, business licenses, are fully deductible.

Communication expenses: Cell phone service, fax, eFax, internet service, office telephone/VOIP, interactive voice response (IVR), toll free number expenses can also be deducted.

Tax preparation fees: If you choose to outsource the preparation of your tax return to a professional who is on top of the rules and regulations, you can deduct the tax preparation fees paid to the professional.

It is extremely important to keep adequate records for all the expenses incurred to be able to substantiate the business purpose of the expenses in case the IRS chooses to examine your tax return.  You should setup a separate business account and use it strictly for business. Besides reducing legal liability, keeping your business finances separate from your personal makes recordkeeping easier and for sure will lower your tax preparation fees as the professional will not have to spend a lot of time trying to figure out which expenses are related to your business and which ones related to your personal activities.

The following tax planning techniques can be implemented in order for you to reduce your tax liability:

Open or fund a retirement plan: Contributions made to a retirement plan can reduce your tax bill significantly and build a nest egg for your retirement. If you would like to explore the different types of retirement plans available, let us know and we will setup a meeting with a qualified financial planner that we work closely with to analyze your overall situation and recommend the best option for you and your family.

Hire your spouse: If your spouse is spending considerable time in your office, you can hire her/him as an employee. Multiple benefits can arise from this decision:

Social security history: Your spouse will receive Social Security credits toward retirement. Social Security and Medicare paid by the company on the spouse’s behalf is a deduction for the company.

Retirement benefits: Your spouse can receive retirement benefits. The contributions to the retirement plan made by your company are tax deductible.

Health insurance: It will probably be cheaper to cover your spouse as an employee rather than as a dependent under your coverage as an employee/owner. The health insurance premium paid for your spouse is tax deductible.

Hire your children: If you need help in your business, also consider hiring your children. The wages you pay to them will be deductible by your business and your children most like will be subject to a lower tax rate or no tax at all on the wages earned. For example: If you were in the 35% tax bracket, you paid your teen $10,000 to do filing or other odd jobs in the office, you will be able to reduce your tax bill by $3,500. If you still claim your child as a dependent the first $6,300 earned by your dependent child will not be subject to tax. On the other hand, if you do not get any benefit for claiming your child as a dependent, the first $10,350 earned will not be subject to tax.

We look forward to continue sending you useful information that can benefit your foreign and domestic clients.  If you have any specific questions or subjects that you would like us to address, please send us an e-mail to BusinessRelations@lbcpa.com

It will be a pleasure to assist you with your current and future clients’ tax matters regarding their Real Estate investments in the United States. Our firm has a network of professionals that include International Tax Attorneys as well as Real Estate and Immigration Attorneys that will assist you and your clients to ensure that the whole process of buying, holding and selling real estate in the United States goes without any unpleasant surprises from the U.S. income and estate tax standpoint.

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.

5 Ways You're Wasting Money During the Holidays

Posted by Admin Posted on Dec 07 2016

5 Ways You're Wasting Money During the Holidays

 

By Geoff Williams 

It's a yearly tradition for many consumers. Every January, you suddenly realize you have less money than normal. And then you realize you're poor because in December, you mistakenly thought you were very rich.

Want to end that tradition this year? Start by looking at how you're spending your money. There may be no avoiding splurging during the holidays, but you can at least try to spend your holiday money smarter – and make sure you aren't wasting your money in these ways.

1. You're making financial decisions with your heart, not your head. Amanda Mulfinger, a psychologist who owns a small group practice just outside of Minneapolis, believes this is where many consumers go wrong.

"Part of the reason people spend so much money during the holidays is because they're chasing the idealized picture of the holiday that they have in their heads. It doesn't feel fun to just set a budget and stick to it," she says. "We believe that the more money we spend, the better the chances that we'll be able to purchase the perfect holiday."

Her recommendation? If we focus more on what we love about the holidays, beyond the shopping part, and we make it a point to engage in non-spending activities, whether that's baking Christmas cookies with friends or volunteering at a soup kitchen, then suddenly, "the holidays are both more meaningful and a lot less expensive."

2. Your gift list is too long. Dawn Casey-Rowe, a social studies high school teacher in Providence, Rhode Island, who just finished writing an upcoming book, "A Broke Teacher's Guide to Success," suggests considering whether someone can be cut from your gift list.

Sure, it sounds cruel, but Casey-Rowe points out that "many times, we buy out of guilt or obligation while the other party is doing the same thing. If you can get a no-buy agreement with some people, that will go a long way to helping you reduce holiday costs."

You can always be truthful and explain that it's nothing personal, but you're trying to save money. Most people will likely understand that.

3. You're glued to social media. You may not realize it, but social media can affect buying patterns.

Vassilis Dalakas, a consumer psychology specialist and a professor of marketing at Cal State University–San Marcos, says you might save money by staying away from Facebook. After all, your friends and family may be posting photos of shopping bag after shopping bag or of elaborate holiday parties that they're throwing.

"They essentially establish norms," Dalakas says.

And if their normal is in a higher financial bracket than your normal, you could be in trouble. After all, Dalakas points out, we all have a desire to win.

"So not only are [we] likely to follow those norms established by our peers but we are also likely to try and do better than them, which means spending even more money," he says.

4. You're overdoing gift cards. Arguably, one of the best ways to waste money is to get everyone on your list gift cards. Look at the math. Unless you're getting everyone $10 gift cards, you're probably buying gift cards worth $25, $50 or more, depending who you're buying for. So let's say you're shopping for your brother-in-law. You want to get him something nice, but you want to avoid that tradition of being broke in January.

Now, you can give him a $50 gift card to his favorite restaurant or home improvement store, and he'll probably appreciate the gift (he'd better). But unless you're going to a gift card reselling website, like GiftCardGranny.com or Cardpool.com, you're almost certainly going to spend $50 on that $50 gift card. But if you shop and look for deals, hypothetically speaking, you might buy him a sweater and slacks on sale for a total of $35. He does well, and you've saved yourself $15.

These numbers add up, and if you plan on buying a lot of gift cards, you will save time, but you will be killing any chance to save money.

5. You wait until the last minute. Starting early means you'll have more time to give a loved one something meaningful and relatively inexpensive, like, say, a handmade scrapbook.

It also means you have more time to look for sales and consider what your friend or family member really needs.

"Do a little detective work to see where they shop, what they were looking to buy, if they have an Amazon wish list," Casey-Rowe suggests, adding that too often, we end up getting the recipient what we would like to receive. And while there's nothing inherently wrong with that, as Casey-Rowe says, if the gift isn't used or is underappreciated, "that creates waste."

And, really, if you're smart about how you buy your gifts, you're really giving yourself at least two presents – less stress and more money.

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

Avoid Identity Theft; Learn How to Recognize Phishing Scams

Posted by Admin Posted on Dec 07 2016

Avoid Identity Theft; Learn How to Recognize Phishing Scams

 

Simply ask for it. That’s the easiest way for an identity thief to steal your personal information.

Each day, people fall victim to phishing scams through emails, texts or phone calls and mistakenly turn over important data. In turn, cybercriminals try to use that data to file fraudulent tax returns or commit other crimes.

The Internal Revenue Service, state tax agencies and the tax industry -- all partners in the fight against identity theft -- urge you to learn to recognize and avoid phishing scams.

We need your help in the fight against identity theft. That’s why, as part of the Security Summit effort, we launched a public awareness campaign that we call Taxes. Security. Together. We’ve launched a series of security awareness tips that can help protect you from cybercriminals.

It’s called “phishing” because thieves attempt to lure you into the scam mainly through impersonations. The scam may claim to be from a friend, a company with whom you do business, a prize award – anything to get you to open the email or text.

A good general rule: Don’t give out personal information based on an unsolicited email request.

Here are a few basic tips to recognize and avoid a phishing email:

It contains a link. Scammers often pose as the IRS, financial institutions, credit card companies or even tax companies or software providers. They may claim they need you to update your account or ask you to change a password. The email offers a link to a spoofing site that may look similar to the legitimate official website. Do not click on the link. If in doubt, go directly to the legitimate website and access your account.

It contains an attachment. Another option for scammers is to include an attachment to the email. This attachment may be infected with malware that can download malicious software onto your computer without your knowledge. If it’s spyware, it can track your keystrokes to obtain information about your passwords, Social Security number, credit cards or other sensitive data. Do not open attachments from sources unknown to you.

It’s from a government agency. Scammers attempt to frighten people into opening email links by posing as government agencies. Thieves often try to imitate the IRS and other government agencies.

It’s an “off” email from a friend. Scammers also hack email accounts and try to leverage the stolen email addresses. You may receive an email from a “friend” that just doesn’t seem right. It may be missing a subject for the subject line or contain odd requests or language. If it seems off, avoid it and do not click on any links.

It has a lookalike URL. The questionable email may try to trick you with the URL. For example, instead of www.irs.gov, it may be a false lookalike such as www.irs.gov.maliciousname.com. You can place your cursor over the text to view a pop-up of the real URL.

Use security features. Your browser and email provider generally will have anti-spam and phishing features. Make sure you use all of your security software features.

Opening a phishing email and clicking on the link or attachment is one of the most common ways thieves are able not just steal your identity or personal information but also to enter into computer networks and create other mischief.

Learning to recognize and avoid phishing emails – and sharing that knowledge with your family members – is critical to combating identity theft and data loss. Businesses should educate employees about the dangers. 

The IRS, state tax agencies and the tax industry joined as the Security Summit to enact a series of initiatives to help protect you from tax-related identity theft in 2017. You can help by taking these basic steps.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Beware of Fake IRS Tax Bill Notices

Posted by Admin Posted on Sept 28 2016

fake irs tax bill notes

 

The Internal Revenue Service and its Security Summit partners are warning taxpayers and tax professionals of fake IRS tax bills related to the Affordable Care Act.

The IRS has received numerous reports of scammers sending a fraudulent version of a notice- labeled CP2000 - for tax year 2015. The issue has been reported to the Treasury Inspector General for Tax Administration for investigation.

This scam may arrive by email, as an attachment, or by mail. It has many signs of being a fake:

The CP2000 notices appear to be issued from an Austin, Texas, address;

The letter says the issue is related to the Affordable Care Act  and requests information regarding 2014 coverage;

The payment voucher lists the letter number as 105C;

Requests checks made out to I.R.S. and sent to the “Austin Processing Center” at a post office box.

IRS impersonation scams take many forms: threatening phone calls, phishing emails and demanding letters. Learn more at Reporting Phishing and Online Scams. The IRS does not initiate unsolicited email contact or contact by social media.

An authentic CP2000 notice is used when income reported from third-party sources such as an employer does not match the income reported on the tax return. Unlike the fake, it provides extensive instructions to taxpayers about what to do if they agree or disagree that additional tax is owed. A real notice requests that checks be made out to “United States Treasury.”

The IRS and its Security Summit partners – the state tax agencies and the private-sector tax industry – are conducting a campaign to raise awareness among taxpayer and tax professionals about increasing their security and becoming familiar with various tax-related scams.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

 

IRS Has a Reminder for Extension Filers: Prior-Year Adjusted Gross Income Amount May Be Needed to File Electronically

Posted by Admin Posted on Sept 28 2016

IRS REMINDER EXT FILERS

 

The Internal Revenue Service has an important reminder for taxpayers who filed for an extension and face an Oct. 17 filing deadline:  the adjusted gross income (AGI) amount from your 2014 return may be needed to electronically file a tax return.

The IRS reminds all taxpayers that they should keep a copy of their tax returns and supporting documents for a minimum of three years. Going forward, keeping copies of tax returns is even more important as the IRS makes changes to protect taxpayers and authenticate their identity.

The IRS recommends extension filers using a software product for the first time plan ahead. They should locate a copy of their 2014 tax return or alternatively, order a tax transcript, a process that may take five to 10 calendar days. The adjusted gross income (AGI) is clearly labeled on both the tax return and the transcript

Taxpayers who prepare their own electronic tax returns are required to electronically sign their  return by using a five-digit, self-selected personal identification number (PIN). In order to authenticate their identities, taxpayers will now also need to enter either of two items: their prior-year AGI or their prior-year self-select PIN and their date of birth. If married filing jointly, both taxpayers must authenticate their identities with this information.

The IRS is phasing out the use of the Electronic Filing PIN, which is no longer available as an alternative except for those taxpayers who had obtained an e-file PIN earlier this year. The IRS emphasizes that those filers may use their e-file PIN for this year only.

Generally, tax-preparation software automatically generates the prior-year AGI and/or self-select PIN for returning customers. However, taxpayers who are new to a software product must enter the prior-year AGI or prior-year Self-Select PIN themselves.

How to find AGI

The adjusted gross income is gross income minus certain adjustments. On the 2014 tax returns, the AGI is found on line 37 of Form 1040; line 21 on Form 1040A and line 4 on Form 1040EZ. Taxpayers who e-filed and did not keep a copy of their original 2014 tax return may be able to return to their prior-year software provider or tax preparer to obtain a copy.

Taxpayers who lack access to their prior-year tax returns also may go to irs.gov/transcript and use Get Transcript Online or Get Transcript by Mail. A transcript is a summary of the tax return or tax account. There are various types of transcripts, but the Tax Return Transcript works best. Look for the “Adjusted Gross Income” amount on the transcript.

Taxpayers must pass Secure Access authentication in order to access Get Transcript Online and immediately access their transcripts. Taxpayers who cannot pass Secure Access authentication should use Get Transcript by Mail or call 800-908-9946, and a transcript will be delivered to the home address within five to 10 calendar days.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Important Update about Your e-Services Account

Posted by Admin Posted on Sept 27 2016

IRS IMPORTANT UPDATE

 

The IRS is committed to protecting taxpayer and tax preparer data as well as its systems from attacks by cybercriminals. As part of that effort, the IRS has been strengthening the identity authentication process for several IRS.gov self-help tools. This identity authentication process, which we call Secure Access, will help protect tax professionals, your clients and our systems.

What is planned?

In late October – target date October 24 – the IRS will strengthen the protections for e-services accounts by requiring a stronger identity verification process for existing and new e-services users. Existing e-services users will be required to re-register and verify their identities, most through the new Secure Access platform. You must revalidate your identity to maintain access to e-services products.

Who is affected?

Anyone who currently has an e-services account is affected. This includes individuals who are registered as:  Electronic Return Originators, Transmitters, Large Business Taxpayers with e-file mandates, Software Developers, ACA insurance provider fee/Branded prescription drug filers, ACA Information Return Transmitter/Issuer, Reporting agents, Not for Profit (VITA/TCE/LITC) users, States that use Transcript Delivery Service, and IVES Participants. E-services account holders who only use TIN Matching will also need to validate their identity. However, because there is no exchange of sensitive data, these users will have a more streamlined process.   

What do I have to do?

When you return to your e-services account on or after October 24, you will be directed to update your account information. You will be directed through the Secure Access process, which includes identity proofing, financial verification and mobile phone verification. Secure Access is a two-factor authentication process which means all returning users, once they have successfully registered, must provide their credentials (username and password) AND the security code sent to their mobile phone via text. To learn more about the required steps, review Secure Access: How to Register for Certain Online Self-Help Tools.

What is the IRS doing to help?

We are aware of the importance of the e-services tools to its users. Starting October 24, the IRS will temporarily add additional assistors to the e-Help Desk to provide assistance as needed. The assistors may be able to validate an existing user's identity over the phone. If the assistor can complete this process, they will generate an activation code and send it by mail. Once you receive the activation code by mail which will take five to 10 calendar days, you will be able to complete the registration process. The IRS also will be working with partner groups to assist with this process.

How does this change better protect my account?

After you successfully register and each time you return to e-services, you will be required to enter your credentials (username and password) AND a security code that will be sent as a text to your mobile phone. This is a two-factor authentication protection. Currently, as you know, we often warn e-services users of phishing emails from criminals seeking to steal your username and password. With two-factor authentication, your credentials alone are not enough to enter the system.

What if I already have a Get Transcript account?

If you successfully registered for Get Transcript Online after June 2016, you already have passed the Secure Access process. Your validated identity information automatically will migrate to your e-services account. On October 24, all you must do is change your password. You also should be aware that your e-services username will, by default, become your username for your personal accounts, such as Get Transcript Online.  You can register through Get Transcript Online now but if you cannot complete the process, we will be able to assist you via the e-services Help Desk starting October 24.

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

 

Newly Married Couples Should Report Marriage to Marketplace

Posted by Admin Posted on Sept 26 2016

newly married couples should report marriage to marketplace

 

If you’re recently married, you probably have a list of things to do.  There’s one other thing you should add to that list: a health insurance review. This is particularly important if you enrolled in coverage through a Health Insurance Marketplace and you receive premium assistance in the form of advance payments of the premium tax credit.

When you apply for assistance to help pay the premiums for health coverage through the Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year using information you provide. This information includes details about your family composition and your projected household income.

It is important for you to report life changes – known as changes in circumstances – to your Marketplace to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace. Be sure to report all changes directly to that Marketplace because they can affect both your coverage and your final credit when you file your federal tax return.

Other changes you should report to the Marketplace include:

Birth or adoption

Marriage or divorce

Moving to a different address

Increases or decreases in your household income

These changes may also open the door for the Marketplace special enrollment period that permits health care plan changes. In most cases, the special enrollment period for Marketplace coverage is open for 60 days from the date of the life event.

The Premium Tax Credit Change Estimator can help you estimate how your premium tax credit will change if your income or family size changes during the year. This estimator tool does not report changes in circumstances to your Marketplace. Because these tools provide only an estimate, you should not rely upon them as an accurate calculation of the information you will report on your tax return. You should use these estimators only as a guide to assist you in making decisions regarding your tax situation.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Retirement Plans Can Make Loans, Hardship Distributions to Louisiana Flood Victims

Posted by Admin Posted on Aug 31 2016

Retirement Plans Can Make Loans, Hardship Distributions to Louisiana Flood Victims

 

The Internal Revenue Service today announced that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to Louisiana flood victims and members of their families.

Participants in 401(k) plans, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, as well as state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures.

Retirement plans can provide this relief to employees and certain members of their families who live or work in the disaster area. To qualify for this relief, hardship withdrawals must be made by Jan. 17, 2017.

The IRS is also relaxing procedural and administrative rules that normally apply to retirement plan loans and hardship distributions. As a result, eligible retirement plan participants will be able to access their money more quickly with a minimum of red tape. In addition, the six-month ban on 401(k) and 403(b) contributions that normally affects employees who take hardship distributions will not apply.

This broad-based relief means that a retirement plan can allow a Louisiana flood victim to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area.

Plans will be allowed to make loans or hardship distributions before the plan is formally amended to provide for such features. In addition, the plan can ignore the reasons that normally apply to hardship distributions, thus allowing them, for example, to be used for food and shelter. If a plan requires certain documentation before a distribution is made, the plan can relax this requirement as described in the announcement.

Ordinarily, retirement plan loan proceeds are tax-free if they are repaid over a period of five years or less.  Under current law, hardship distributions are generally taxable. Also, a 10 percent early-withdrawal tax usually applies.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Warns of Back-to-School Scams!!!

Posted by Admin Posted on Aug 24 2016

IRS Warns of Back-to-School Scams

 

The Internal Revenue Service warned taxpayers against telephone scammers targeting students and parents during the back-to-school season and demanding payments for non-existent taxes, such as the “Federal Student Tax.”

People should be on the lookout for IRS impersonators calling students and demanding that they wire money immediately to pay a fake “federal student tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested. As schools around the nation prepare to re-open, it is important for taxpayers to be particularly aware of this scheme going after students and parents.    

“Although variations of the IRS impersonation scam continue year-round, they tend to peak when scammers find prime opportunities to strike”, said IRS Commissioner John Koskinen. “As students and parents enter the new school year, they should remain alert to bogus calls, including those demanding fake tax payments from students.”

The IRS encourages college and school communities to share this information so that students, parents and their families are aware of these scams.

Scammers are constantly identifying new tactics to carry out their crimes in new and unsuspecting ways. This year, the IRS has seen scammers use a variety of schemes to fool taxpayers into paying money or giving up personal information. Some of these include:

Altering the caller ID on incoming phone calls in a “spoofing” attempt to make it seem like the IRS, the local police or another agency is calling

Imitating software providers to trick tax professionals--IR-2016-103

Demanding fake tax payments using iTunes gift cards--IR-2016-99

Soliciting W-2 information from payroll and human resources professionals--IR-2016-34

“Verifying” tax return information over the phone--IR-2016-40

Pretending to be from the tax preparation industry--IR-2016-28

If you receive an unexpected call from someone claiming to be from the IRS, here are some of the telltale signs to help protect yourself.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

How Identity Theft Can Affect Your Taxes

Posted by Admin Posted on Aug 15 2016

HOW IDENTITY THEFT CAN AFFECT YOUR TAXES

 

Tax-related identity theft normally occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Many people first find out about it when they do their taxes.

The IRS is working hard to stop identity theft with a strategy of prevention, detection and victim assistance. Here are nine key points:

- Taxes. Security. Together. The IRS, the states and the tax industry need your help. We can’t fight identity theft alone. The Taxes. Security. Together. awareness campaign is an effort to better inform you about the need to protect your personal, tax and financial data online and at home.

- Protect your Records. Keep your Social Security card at home and not in your wallet or purse. Only provide your Social Security number if it’s absolutely necessary. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for internet accounts.

- Don’t Fall for Scams.  Criminals often try to impersonate your bank, your credit card company, even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts. Also, the IRS will not call you threatening a lawsuit, arrest or to demand an immediate tax payment. Normal correspondence is a letter in the mail. Beware of threatening phone calls from someone claiming to be from the IRS.

- Report Tax-Related ID Theft to the IRS. If you cannot e-file your return because a tax return already was filed using your SSN, consider the following steps: • File your taxes by paper and pay any taxes owed. • File an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper return. • File a report with the Federal Trade Commission using the FTC Complaint Assistant; • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on your account;

- IRS Letters. If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.

- IP PIN. If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-file your tax return. Each year, you will receive an IRS letter with a new IP PIN.

- Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

- Combating ID Theft.  In 2015, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft returns. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Five Tax Tips about Hobbies that Earn Income

Posted by Admin Posted on Aug 11 2016

 

Millions of people enjoy hobbies. Hobbies can also be a source of income. Some of these types of hobbies include stamp or coin collecting, craft making and horse breeding. You must report any income you get from a hobby on your tax return. How you report the income from hobbies is different from how you report income from a business. There are special rules and limits for deductions you can claim for a hobby. Here are five basic tax tips you should know if you get income from your hobby:

Business versus Hobby. There are nine factors to consider to determine if you are conducting business or participating in a hobby. Make sure to base your decision on all the facts and circumstances of your situation.

- Allowable Hobby Deductions. You may be able to deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is helpful or appropriate.

- Limits on Expenses. As a general rule, you can only deduct your hobby expenses up to the amount of your hobby income. If your expenses are more than your income, you have a loss from the activity. You can’t deduct that loss from your other income.

- How to Deduct Expenses. You must itemize deductions on your tax return in order to deduct hobby expenses. Your costs may fall into three types of expenses. Special rules apply to each type. See Publication 535 for how you should report them on Schedule A, Itemized Deductions.

- Use IRS Free File. Hobby rules can be complex. IRS Free File can make filing your tax return easier. IRS Free File is available until Oct. 17. If you make $62,000 or less, you can use brand-name tax software. If you earn more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. You can only access Free File through IRS.gov.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

 

Don't miss this!!! Are you getting married this summer?

Posted by Admin Posted on July 18 2016

DON'T MISS THIS! ARE YOU GETTING MARRIED THIS SUMMER?

 

Getting married this summer? Congratulations! You’ve tied the knot and cut the cake. Soon, you’ll be filing your first joint income tax return. Here are some simple steps to make this event less stressful.

Step 1: Marriage can mean a change in name. Make sure that the names you enter on your first tax return match the names and Social Security numbers on file with the Social Security Administration. For example, if you are taking your spouse’s surname, you should notify SSA of the change in your name.

Step 2: No matter when you get married, even on Dec. 31, the IRS considers you to have been married for the entire year for tax purposes. To make sure you are having enough taxes taken out of your paychecks, check your withholding. If both you and your spouse work, your combined income may place you in a higher tax bracket.

The IRS Withholding Calculator will help you figure the correct amount of withholding for a married couple. Making a change to your withholding now can eliminate or reduce a tax bill when it’s time to file your tax return. Use Form W-4, Employee’s Withholding Allowance Certificate, to make the needed adjustments and give the form to your employer.

Step 3: Let the IRS know your new address by completing Form 8822, Change of Address. Mail the completed change of address form to the address listed on Page 2 of the form.

Step 4: The U.S. postmaster will also want to make sure the post office has your correct address. So, don’t forget to notify the U.S. Postal Service when you move, so it can forward any IRS correspondence or refunds.

Step 5: Just in case you forgot to invite your employer to the wedding, make sure you let them know about any name and address changes. This will ensure that you receive your Form W-2, Wage and Tax Statement, after the end of the year. Make sure banks or other payers that may send you year-end tax statements have your updated name and address as well.

Step 6: If you receive advance payments of the premium tax credit, you should report changes in circumstances, such as your marriage, to your Health Insurance Marketplace. Other changes that you should report include a change in your income or family size. Advance payments of the Premium Tax Credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

If one or both of you received the benefit of advance credit payments for the year, you may be eligible to use an alternative calculation to determine your excess advance credit payments. The alternative calculation can be used to reduce excess advance credit payments, but not to increase your net premium tax credit. See the instructions for Form 8962, Premium Tax Credit, for eligibility. If you’re eligible, you need to complete Form 8962, Part 5, Alternative Calculation of Year of Marriage.

 Step 7: Select the right tax form. Choosing the right individual income tax form can help save money. Newly married taxpayers may find that they now have enough deductions to itemize on their tax returns. You must claim itemized deductions on a Form 1040, U.S. Individual Income Tax Return, not a Form 1040A or Form 1040EZ. Step

8: Choose the best filing status. A person’s marital status on Dec. 31 determines whether the person is considered married for that year. Generally, the tax law allows married couples to choose to file their federal income tax return either jointly or separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but usually filing jointly is more beneficial. When it comes to wedding planning, details are important. Why not take these steps now to be sure your first tax season as a married couple goes smoothly.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

No 2015 Income Tax Filing may mean no Health Insurance from the Marketplace in 2017

Posted by Admin Posted on July 18 2016

 

FILE YOUR 2015 INCOME TAX 

If you, or anyone on your tax return, received advance payments of the Premium Tax Credit in 2015 under the health care law, you should file your 2015 tax return as soon as possible — even if you missed the April 18 deadline or received an extension to file. This will ensure you can timely receive advance payments next year from your Health Insurance Marketplace.

When you purchased health coverage for 2015 through the Marketplace, if you chose to have advance payments of the Premium Tax Credit sent directly to your insurer to lower your monthly insurance premiums, you are required to file a tax return to reconcile advance payments even if you are otherwise not required to file.

If advance payments of the Premium Tax Credit were paid on behalf of you or an individual in your family in 2015, and you do not file a 2015 tax return, you will not be eligible for advance payments of the Premium Tax Credit or cost-sharing reductions to help pay for your Marketplace health insurance coverage in 2017. This means you will be responsible for the full cost of your monthly premiums and all covered services. In addition, the IRS may contact you to pay back some or all of the 2015 advance payments of the Premium Tax Credit.

Because your Marketplace will determine eligibility for advance tax credit payments and cost-sharing reductions for the 2017 coverage year this fall, it will substantially increase your chances of avoiding a gap in receiving this help if you file your 2015 tax return with Form 8962, Premium Tax Credit, electronically as soon as possible.

To repeat, if you missed the April 18 deadline or received an extension to file, you should file your return as soon as possible. You should not wait to file if you have your information including Form 1095-A, Health Insurance Marketplace Statement. File now to reconcile any advance credit payments you received in 2015 and to maintain your eligibility for future premium assistance.

Some taxpayers will be receiving an IRS letter about their Premium Tax Credit. The IRS is sending the letter because the Health Insurance Marketplace notified us that they made advance payments of the credit on your behalf to your insurance company last year. When you filed your 2015 tax return, you didn’t file Form 8962, Premium Tax Credit, to reconcile these advance payments of the premium tax credit.

Information is available on IRS.gov to help you understand why you’re getting the letter and what you need to do to resolve the issue. It also emphasizes how important it that you read the letter carefully and respond timely. Filing a tax return without including Form 8962 will delay your refund and prevents you from receiving advance credit payments in future years.

If you received a letter from the IRS about advance payments of the Premium Tax Credit, you should respond promptly. You must complete Form 8962 to reconcile your advance credit payments with the Premium Tax Credit you are eligible to claim on your return. You should have received Form 1095-A, from your Marketplace. This form provides information you will need when completing Form 8962. If you have questions about the information on Form 1095-A for 2015, or about receiving Form 1095-A for 2015, you should contact your Marketplace directly. For more information about Form 1095-A, see Health Insurance Marketplace Statements.

 Remember that filing electronically is the best and simplest way to file a complete and accurate tax return as it guides you through the process and does all the math. For more information about the Affordable Care Act and the Premium Tax Credit, visit IRS.gov/aca.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Saving for retirement when you belong to multiple retirement plans

Posted by Admin Posted on July 18 2016

Saving for retirement when you belong to a multiple retirement plans

 

The most you can contribute from your wages to retirement plans each calendar year is your individual contribution limit. Although your limit is affected by the plan terms, it generally doesn’t depend on how many plans you participate in or on the type of employer who is sponsoring those plans. If you exceed your individual contribution limit and the excess isn’t returned by April 15 (sooner for a 457(b) plan) of the next year, you could be subject to double taxation:

• once in the year you deferred your salary, and

• again when you receive a distribution. Limits

• General limit for 2016 — You may contribute a total of $18,000 in pre-tax or designated Roth contributions to all your plans (not counting 457(b) plans).

• Age-50 catch-up contributions — If you are age 50 or older by the end of 2016, you may be able contribute an additional $6,000 in total to your 401(k), 403(b) or governmental 457(b) plan.

• 403(b) plans’ 15-year catch-up contribution — If you have at least 15 years of service with your employer, you may be able to contribute up to an additional $3,000 to your 403(b) plan.

• 457(b) plans’ separate contribution limit — A separate individual contribution level for 457(b) plans and additional catch-up amounts depend on whether the plan sponsor is a state or local government, or some other tax-exempt organization. Check your plan documents for the amount you can contribute to the plan, and make sure you don’t exceed your limit.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

 

What every student should know about summer jobs and taxes

Posted by Admin Posted on July 14 2016

WHAT EVERY STUDENT SHOULD KNOW ABOUT SUMMER JOBS AND TAXES

 

Many students take a job in the summer after school lets out. If it’s your first job, it gives you a chance to learn about the working world. That includes taxes we pay to support the place we live, our state and our nation. Here are eight things you should know about taxes:

1. Don’t be surprised when your employer withholds taxes from your paychecks. That’s how you pay your taxes when you’re an employee. If you’re selfemployed, you may have to pay estimated taxes directly to the IRS on certain dates during the year. This is how our pay-as-you-go tax system works.

2. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use it to figure how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on IRS.gov can help you fill out the form.

3. Keep in mind that all tip income is taxable. If you get tips, you must keep a daily log so you can report them. You must report $20 or more in cash tips in any one month to your employer, and you must report all of your yearly tips on your tax return.

4. Money you earn doing work for others is taxable. Some work you do may count as self-employment. This can include jobs like baby-sitting and lawn mowing. Keep good records of expenses related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction may help lower your taxes.

5. If you’re in ROTC, your active duty pay, such as pay you get for summer camp, is taxable. A subsistence (living) allowance you get while in advanced training isn’t taxable.

6. You may not earn enough from your summer job to owe income tax, but your employer usually must withhold Social Security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count toward your coverage under the Social Security system.

7. If you’re a newspaper carrier or distributor, special rules apply. If you meet certain conditions, you’re considered self-employed. If you don’t meet those conditions and are under age 18, you are usually exempt from Social Security and Medicare taxes.

8. You may not earn enough money from your summer job to be required to file a tax return. Even if that’s true, you may still want to file. For example, if your employer withheld income tax from your pay, you’ll have to file a return to get your taxes refunded. You can prepare and e-file your tax return for free using IRS Free File. It’s available exclusively on IRS.gov

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

If you missed the tax deadline, these tips can help

Posted by Admin Posted on July 14 2016

Image Source: 106thefox.com

 

The tax filing deadline has come and gone. If you didn’t file a tax return or an extension, but should have, you need to take action now. Here are some tips to help you.

• File as soon as you can. If you owe taxes, you should file and pay as soon as you can. This will stop the interest and penalties that you’ll owe. IRS Direct Pay offers a free, secure and easy way to pay your tax directly from your checking or savings account. There is no penalty for filing a late return if you are due a refund. The sooner you file, the sooner you’ll get it.

• Use IRS e-file to do your taxes. No matter who prepares your tax return, you can use IRS e-file through Oct. 17. E-file is the easiest, safest and most accurate way to file your taxes. The IRS will confirm that it received your tax return. The IRS issues more than nine out of 10 refunds in less than 21 days.

• E-file using IRS Free File, if you qualify. Nearly everyone can use IRS Free File to e-file their federal taxes for free. If your income was $62,000 or less, you can use free brand-name tax software. If you made more than $62,000, use Free File Fillable Forms to e-file. This program uses electronic versions of IRS paper forms. It does some of the math, and it works best for those who are used to doing their own taxes. Either way, you have a free option that you can only access on IRS.gov. It’s available at least through the Oct. 17 extension period.

• Pay as much as you can. If you owe tax but can’t pay it in full, you should pay as much as you can when you file your tax return. IRS electronic payment options are the quickest and easiest way to pay your taxes. Pay the rest of the tax you still owe as soon as possible. Doing so will reduce future penalties and interest.

• Use the IRS.gov tool to pay over time. If you need more time to pay your tax, you can apply for an installment agreement with the IRS. The best way to apply is to use the IRS Online Payment Agreement tool. You can use the IRS.gov tool to set up a direct debit agreement. You don’t need to write and mail a check each month with a direct debit plan. If you don’t use the tool, you can use Form 9465, Installment Agreement Request, to apply. You can get the form on the IRS.gov Forms and Publications page at any time.

• A refund may be waiting. If you are due a refund, you should file as soon as possible to get it. Even if you are not required to file, you may still get a refund. This could apply if you had taxes withheld from your wages or you qualify for certain tax credits. If you do not file your return within three years, you could lose your right to the refund.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Offers a New Way to Pay Taxes With Cash

Posted by Admin Posted on July 14 2016

IRS OFFERS A NEW WAY TO PAY TAXES WITH CASH

 

If you owe taxes, you should file and pay in full as soon as you can, which will stop the interest and penalties that you’ll owe. The best way to pay your taxes is with Direct Pay or other online options.

If cash is your only option to make a tax payment, PayNearMe may be the answer for you. Through a partnership with OfficialPayments.com and the PayNearMe Company, you can now make a payment without a bank account or credit card at more than 7,000 7- Eleven stores nationwide.

It generally takes five to seven business days to process your payment. Be sure to plan ahead of your due date to ensure timely posting of your payment.

Here's how it works. First visit IRS.gov/paywithcash and follow the instructions. Next, visit the OfficialPayment.com/fed secure payment website to enter your information and the amount you want to pay.

Like the other IRS payment options, Official Payments is a safe and secure way to pay your federal taxes.

They have been processing debit and credit card payments for the IRS since 1999 and was the first provider engaged by the IRS to do so. They will send you a confirmation email in about two to three business days to let you know your information was received, and they submitted it to the IRS for verification.

Once IRS verifies your information, you will receive an email from PayNearMe with instructions and the link to your payment code. You can either print the payment code or send it to your smartphone. To complete your payment, go to one of the participating 7-Eleven stores listed in your PayNearMe email and have the clerk scan or enter your payment code.

The receipt you get from 7-Eleven is confirmation of your sent payment. Keep it for your records. It usually takes two business days for your payment to post to your IRS account. At this time, PayNearMe is only available in 34 states.

Visit Approved Payment Locations to find a location near you. There is a $3.99 fee per payment with a payment limit of up to $1,000 per day. Other limits may apply

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Five Facts about the Small Business Health Care Tax Credit

Posted by Admin Posted on July 14 2016

Five Facts about the Small Business Health Care Tax Credit

 

If you are a small employer, there is a tax credit that can put money in your pocket. The small business health care tax credit benefits employers that:

- Offer coverage through the small business health options program, also known as the SHOP marketplace

- Have fewer than 25 full-time equivalent employees

- Pay an average wage of less than $50,000 a year

- Pay at least half of employee health insurance premiums

Here are five facts about this credit:

- The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers. 

- To be eligible for the credit, you must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace, or qualify for an exception to this requirement.

- The credit is available to eligible employers for two consecutive taxable years beginning in 2014 or later. You may be able to amend prior year tax returns to claim the credit for tax years 2010 through 2013 in addition to claiming this credit for those two consecutive years.

- You can carry the credit back or forward to other tax years if you do not owe tax during the year.

- You may get both a credit and a deduction for employee premium payments. Since the amount of your health insurance premium payments will be more than the total credit, if you are eligible, you can still claim a business expense deduction for the premiums in excess of the credit.    For more information, see the small business health care tax credit page on IRS.gov. 

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

What to do if I get a letter from the IRS

Posted by Admin Posted on July 14 2016

What to do ig I get a letter from the IRS?

The IRS normally sends correspondence in the mail. They mail millions of letters to taxpayers every year. Keep these important points in mind if you get a letter or notice:

Don’t Ignore It.  You can respond to most IRS notices quickly and easily. 

Follow Instructions.  Read the notice carefully. It will tell you if you need to take any action. Be sure to follow the instructions. The letter will also have contact information if you have questions. 

Focus on the Issue.  IRS notices usually deal with a specific issue about your tax return or tax account. Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. You can learn more about your notice or letter on IRS.gov.

Correction Notice. If the IRS corrected your tax return, you should review the information provided and compare it to your tax return.

If you agree, you don’t need to reply unless a payment is due.

If you don’t agree, it’s important that you respond. Follow the instructions on the notice for the best way to respond to them. You may be able to call them to resolve the issue. Have a copy of your tax return and the notice with you when you call. If you choose to write to them, be sure to include information and any documents you want them to consider. Also, write your taxpayer identification number (Social Security number, employer identification number or individual taxpayer identification number) on each page of the letter you send. Mail your reply to the address shown on the notice. Allow at least 30 days for a response.

Respond to Requests about the Premium Tax Credit.  The IRS may send you a letter asking you to clarify or verify your premium tax credit information. You should follow the instructions on the letter. For more information about these letters, see the Understanding Your Letter 0012C page on IRS.gov/aca.

You Don’t Need to Visit the IRS.  You can handle most notices without visiting the IRS. If you have questions, call the phone number in the upper right corner of the notice. Have a copy of your tax return and the notice when you call.

Keep the Notice.  Keep a copy of the IRS notice with your tax records.

Watch Out for Scams.  Don’t fall for phone and phishingemail scams that use the IRS as a lure. We will contact you about unpaid taxes by mail first – not by phone.  Be aware that the IRS does not initiate contact with taxpayers by email, text or social media.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

IRS Summertime Tax Tip 2016-02: IRS Offers Tips on Filing an Amended Tax Return

Posted by Admin Posted on July 07 2016

IRS Summertime Tax Tip 2016-02: IRS Offers Tips on Filing an Amended Tax Return

 

You may discover you made a mistake on your tax return. You can file an amended return if you need to fix an error. You can also amend your tax return to claim a tax credit or deduction. Here are 10 tips from the IRS on amending your return:

1- When to amend. You should amend your tax return if you need to correct filing status, the number of dependents or total income. You should also amend your return to claim tax deductions or tax credits that you did not claim when you filed your original return. The instructions for Form 1040X, Amended U.S. Individual Income Tax Return, list more reasons to amend a return. 

2- When NOT to amend. In some cases, you don’t need to amend your tax return. The IRS will make corrections, such as math errors, for you. If you didn’t include a required form or schedule, for example, the IRS will mail you a notice about the missing item.  

3- Form 1040X.  Use Form 1040X to amend a federal income tax return that you filed before. You must file it by paper; you cannot file it electronically. Make sure you check the box at the top of the form that shows which year you are amending. Form 1040X has three columns. Column A shows amounts from the original return. Column B shows the net increase or decrease for the amounts you are changing. Column C shows the corrected amounts. You should explain what you are changing and the reasons why on the back of the form. 

4- More than one tax year.  If you file an amended return for more than one year, use a separate 1040X for each tax year. Mail them in separate envelopes to the IRS. See "Where to File" in the instructions for Form 1040X for the address you should use. 

5- Other forms or schedules. If your changes have to do with other tax forms or schedules, make sure you attach them to Form 1040X when you file the form. If you don’t, this will cause a delay in processing. 

6- Amending to claim an additional refund. If you are waiting for a refund from your original tax return, don’t file your amended return until after you receive the refund. You may cash the refund check from your original return. Amended returns take up to 16 weeks to process. You will receive any additional refund you are owed. 

7- Amending to pay additional tax. If you’re filing an amended tax return because you owe more tax, you should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges. 

8- Reconciling the Premium Tax Credit. You may also want to file an amended return if:
         • You filed and incorrectly claimed a premium tax credit, or 
         • If you received a corrected or voided Form 1095-A. For more information, see Corrected, Incorrect or Voided Forms 1095-A for Tax Years 2014 and 2015.

9- When to file. To claim a refund file Form 1040X no more than three years from the date you filed your original tax return. You can also file it no more than two years from the date you paid the tax, if that date is later than the three-year rule.

10- Track your return. You can track the status of your amended tax return three weeks after you file with “Where’s My Amended Return?” This tool is available on IRS.gov or by phone at 866-464-2050.

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

Cyber attacks against the IRS increase, forcing closure of a filing tool..

Posted by Admin Posted on June 30 2016

CYBER ATTACKS AGAINST THE IRS INCREASE, FORCING CLOUSURE OF A FILING TOOL

As a precautionary step to protect taxpayers, the Internal Revenue Service announced that the electronic filing PIN tool is no longer available on IRS.gov or by toll-free phone following additional questionable activity.

The e-File PIN serves as an alternative signature verification method on the Form 1040 series and helps assist with electronic filing of tax returns. Most taxpayers do not need an e-File PIN to file electronically, they can use their prior-year adjusted gross income from copies of their prior year tax returns. For those who do not have a copy of their tax return, they may use Get Transcript to obtain a copy which will display the adjusted gross income.

In February, the IRS announced that cybercriminals using taxpayer data stolen elsewhere and an automated bot attack program accessed more than 100,000 e-File PINs through the tool. The tool only reveals the PIN. It does not reveal any taxpayer data. Criminals used taxpayers’ names, addresses, filing status, dates of birth and Social Security Numbers which they obtained from other sources to access the e-File PIN.

The IRS retained the tool at that time because links are embedded in almost all commercial tax software products that helped taxpayers file their returns. However, additional defenses were added inside the IRS processing systems for protection, including extra scrutiny for any return with an e-File PIN.

Recently, the IRS observed additional automated attacks taking place at an increasing frequency, but only affecting a small number of e-File PINs. We were able to identify this issue because of additional defenses put in place earlier this year, and backend protections remain in place. However, the IRS decided to remove the e-File PIN program as a safety measure.

Prior to this, the IRS had been working with industry to assess elimination of the e-File PIN later this year.

The IRS notes that the change only affects a smaller segment of taxpayers who have not filed their tax returns this year and need a replacement e-File PIN. The IRS continues to work with the tax software community to make this change as smooth as possible for affected taxpayers.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Don’t Forget to Report Certain Foreign Accounts to Treasury by the June 30 Deadline

Posted by Admin Posted on June 20 2016

WASHINGTON—The Internal Revenue Service today reminded taxpayers who have one or more bank or financial accounts located outside the United States, or signature authority over such accounts that they may need to file an FBAR by Thursday, June 30.

By law, many U.S. taxpayers with foreign accounts exceeding certain thresholds must file Form 114, Report of Foreign Bank and Financial Accounts, known as the "FBAR." It is filed electronically with the Treasury Department's Financial Crimes Enforcement Network (FinCen).

"Robust growth in FBAR filings in recent years shows we are getting the word out regarding the importance of offshore tax compliance," said IRS Commissioner John Koskinen. "Taxpayers here and abroad should take their foreign account reporting obligations very seriously.”

In general, the filing requirement applies to anyone who had an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2015. Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is only available through the BSA E-Filing System website.

In 2015, FinCen received a record high 1,163,229 FBARs, up more than 8 percent from the prior year. FBAR filings have grown on average by 17 percent per year during the last five years, according to FinCen data.

The IRS is implementing the Foreign Account Tax Compliance Act (FATCA), which mandates third-party reporting of foreign accounts to foster offshore tax compliance. FATCA created a new filing requirement: IRS Form 8938, Statement of Specified Foreign Financial Assets, which is filed with individual tax returns. The filing thresholds are much higher for this form than for the FBAR.

The International Taxpayers page on IRS.gov provides the best starting place to get answers to important questions. The website has a directory that includes overseas tax preparers. International taxpayers will find the online IRS Tax Map and the International Tax Topic Index to be valuable resources.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

Top 5 Tax Saving Techniques!!!

Posted by Admin Posted on May 11 2016

 

Top 5 Tax Saving Techniques

Following are some generally recognized financial planning tools that may help you reduce your tax bill.

5- Charitable Giving: Instead of selling your appreciated long-term securities, donate the stock instead and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.

4-   Health Savings Accounts (HSAs): If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.

3-   Municipal Bonds: Interest earned on these types of investments is tax-exempt.

2- Own a home: Most of the cost of this type of investment is financed and the interest (on mortgages up to $1,000,000) is tax deductible. When the property is sold, individuals may exclude up to $250,000 ($500,000 if married jointly) of the gain.

1- Retirement Plans: Participate in your employer sponsored retirement plan, especially if there is a matching component. You will receive a current tax deduction and the tax-deferred compounding can add up to a large retirement savings.

- BONUS - 

ROTH IRAs: Contributions to a ROTH IRA are not tax deductible but the qualified distributions, including earnings are tax-free.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial Statements, please give us a call at 305-274-5811

Source: Thomson Reuters.

 

why should I have life insurance?

Posted by Admin Posted on May 06 2016

WHY SHOULD I HAVE INSURANCE?

The main reason that people purchase life insurance is to know that in the event of their passing, their children and loved ones will be taken care of. Life insurance can also help with the distribution of your estate. Your payout could go to family, charity, or wherever you choose to distribute it.

The main reasons to buy life insurance would be because you have dependents that would be put in a tough position without you providing for them. For example, if you have a spouse, a child, or a parent who is dependent on your income, you should have life insurance.

If you have a spouse and young children, you will need more insurance than someone with older children, because they will be dependents for a longer amount of time than older children. If you are in a position where you and your spouse both earn for the family, then you should both be insured in proportion to the incomes that you garner.

If you have a spouse and older children or no children, you will still want to have life insurance, but you won't need the same level of insurance as in the first example, just enough to ensure that your spouse will be provided for, to cover your burial expenses, and to settle the debts that you have accumulated.

If you don't have children or a spouse, you will only need enough insurance to make sure that your burial expenses are covered, unless you would like to have an insurance policy in order to help in the distribution of your estate.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

 

What will I need if a member of the family dies?

Posted by Admin Posted on May 05 2016

The following is a list of papers that will be necessary:

Copies of all insurance policies.

Marriage Certificate (if the deceased's spouse will be requesting benefits). You may obtain copies at the Office of the County Clerk where the marriage license was issued.

Certified copies of the death certificate (a minimum of 10). These can be bought from the funeral director or from the Health Department in your county.

Birth Certificates of dependent children. These may be obtained at either the County or State Public Health offices where the child was born.

Social Security numbers of the spouse, deceased and any dependent children.

Military discharge, if the deceased was a veteran. Write to The Department of Defense if you are unable to find copies.

A complete list of all property, including stocks, savings accounts, real estate, and personal property of the deceased.

Will, which will more than likely be with the lawyer of the deceased.

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Which is better? Buying or Leasing my next car?

Posted by Admin Posted on May 05 2016

Which is better, buying or leasing my next car?

It depends on factors such as 1) what kind of deal you can make with the dealership, 2) the typical mileage you put on your car, 3) how much you wear down a car, and 4) the primary use for the car.

To determine whether leasing or buying is best, compare the costs and other issues involved in a lease or purchase. The following factors should be considered:

Beginning costs

Continual costs

Total costs

Is there a possibility of deduction of any of the costs due to the car being used for business?

How important is it to have ownership of the car?

If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate  transactions or financial statements, please give us a call at 305-274-5811.

Source: Thomson Reuters

Beware of promises of a big refund before looking at your records

Posted by Admin Posted on Apr 11 2016

"BE WARY OF TAX PREPARERS THAT TOUT OUTLANDISH REFUNDS"

WASHINGTON — The Internal Revenue Service warns taxpayers to be on the lookout for unscrupulous tax return preparers pushing inflated tax refund claims. This scam remains on the annual list of tax scams known as the “Dirty Dozen” for the 2016 filing season.

"Be wary of tax preparers that tout outlandish refunds based on federal benefits or tax credits you've never heard of or weren't eligible to claim in the past," said IRS Commissioner John Koskinen. "Taxpayers should choose preparers who file accurate returns."

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter any time but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

Don't Fall Victim to Promises of Outlandish Refunds.

Scam artists routinely pose as tax preparers during tax time, luring victims in by promising large federal tax refunds or refunds that people never dreamed they were due in the first place.

Scam artists use flyers, advertisements, phony store fronts and even word of mouth to throw out a wide net for victims. They may even spread the word through community groups or churches where trust is high. Scammers frequently prey on people who do not have a filing requirement, such as low-income individuals or the elderly. They also prey on non-English speakers, who may or may not have a filing requirement.  

Scammers build false hope by duping people into making claims for fictitious rebates, benefits or tax credits. They charge good money for very bad advice. Or worse, they file a false return in a person's name and that person never knows that a refund was paid.

Scam artists also victimize people with a filing requirement and due a refund by promising inflated refunds based on fictitious Social Security benefits and false claims for education credits, the Earned Income Tax Credit (EITC), or the American Opportunity Tax Credit, among others.

The IRS sometimes hears about scams from victims complaining about losing their federal benefits, such as Social Security benefits, certain veteran’s benefits or low-income housing benefits. The loss of benefits was the result of false claims being filed with the IRS that provided false income amounts.

While honest tax preparers provide their customers a copy of the tax return they’ve prepared, victims of scams frequently are not given a copy of what was filed. Victims also report that the fraudulent refund is deposited into the scammer’s bank account. The scammers deduct a large “fee” before paying victims, a practice not used by legitimate tax preparers.

The IRS reminds all taxpayers that they are legally responsible for what’s on their returns even if it was prepared by someone else. Taxpayers who buy into such schemes can end up being penalized for filing false claims or receiving fraudulent refunds.

Taxpayers can help protect themselves by doing a little homework before picking preparers who make refund claims that may sound too good to be true. Start with the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help taxpayers find a tax return preparer with the right qualifications. The Directory is a searchable and sortable listing of pertain preparers registered with the IRS. It includes the name, city, state and zip code of:

Attorneys
CPAs
Enrolled Agents
Enrolled Retirement Plan Agents
Enrolled Actuaries
Annual Filing Season Program participants

Also check the preparer’s history.  Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory. 

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

 

The information provided on the LBCPA Blog is a community service for general information purposes only, and should not be used as a substitute for consultation with professional advisors who specialize in the topics covered. Please refer to your advisors for specific advice on these subjects. The information is not intended to be used, and it cannot be used, for the purposes of avoiding U.S. Federal and/or State tax laws or the tax laws of any foreign jurisdiction.

These blogs contain general information only and Lord Breakspeare Callaghan LLC or any of the other companies or firms presenting information are not providing accounting, business, financial, investment, legal, tax, or other professional advice or services. Lord Breakspeare Callaghan LLC or any of the other companies or firms contributing with articles shall not be responsible for any loss sustained by any person who relies on this information.