Tax Cuts and Jobs Act required that the inflation adjustments now must be calculated using the chained consumer price index method, updating some of the numbers that were originally announced in Rev. Proc. 2017-58. Of particular interest to US expats are changes to the foreign earned income exclusion – under Sec. 911 it is $103,900 […]
Tax year 2014 is about to fall off the table – the last date to file a claim for refund is the later of 3 years from the extended due date of the tax year filing, or 2 years after the tax was paid. Unclaimed federal income tax refunds totaling about $1.1 billion may be […]
FinCEN clarifies that, in line with the due dates for federal income tax returns, (normally April 15 this year but April 15 falls on a Sunday and April 16 is Emancipation Day in DC) for the 2017 tax season the FBAR Form 114 is due on April 17. Additionally, there is an automatic extension available […]
Congress and the Senate does it to taxpayers and CPA’s again, with the Bipartisan Budget Act after tax season is well under way, the 2017 tax forms released and finalized – three benefits were renewed on February 22, 2018! The Internal Revenue Service today said that it is ready to process tax year 2017 returns […]
Just when you thought that the recent The Tax Cuts and Jobs Act of 2017 prevented claiming home equity line of credit (HELOC) interest, think again! The Internal Revenue Service today advised taxpayers that in many cases they can continue to deduct interest paid on home equity loans. Responding to many questions received from taxpayers […]
Shame on the IRS. Court rules that whether the individual willfully failed to submit an accurate FBAR was an inherently factual question that could not be resolved by summary judgment, since this deals with intent of the taxpayer. The IRS was not entitled to summary judgment on the issue of a taxpayer’s willful failure to […]
The national Taxpayer Advocate Nina Olson to the rescue – Ms. Olson issues Taxpayer Assistant Orders TAO’s for almost 800 taxpayers whose cases were with the Taxpayer Advocate Services office that Ms. Olson oversees as the National Taxpayer Advocate. On January 16, 2018 July 24, 2017, April 1 , 2016 and December 14, 2015 Protax […]
On January 16, 2018 the IRS further warned that Travelers Requiring Passports to Pay Their Back Taxes or Enter into Payment Agreements; People Owing $51,000 or More Covered. This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” On December 14, 2015 and then again on April 1, […]
Please remember at the end of 2017 (to file for 2017 tax returns in 2018) ITINs expire after not being used for 3 tax years, as well as ITINs with middle digits of 70, 71, 72 or 80! ITINs that have middle digits of 78 or 79 expired on December 31, 2016. Taxpayers with an […]
Beware U.S. Expats! On December 14, 2015 and then again on April 1, 2016 we reported that under The Fixing America’s Surface Transportation Act (FAST Act), P.L. 114-94, was added Sec. 7345, which authorizes the IRS to certify to the secretary of State that a taxpayer is seriously delinquent with his or her taxes. The […]
The IRS announced on January 4, 2018 that the 2018 tax season will begin on Monday January 29, 2018…we are off to the races. In addition that, the due date of April 15 this year will move to April 17 since April 15 falls on a Sunday and April 16 falls on Emancipation Day in […]
An excellent list of 12 tips the US expat should consider prior to accepting a foreign assignment. US taxes are #1! Negotiation tips for expatriates Before taking a role in a different country, consider these 12 factors that could affect your compensation and quality of life. By Neil Amato, 1 May 2017 We recommends requesting […]
A terrific read on what Expatriation is- relinquishment of your US Green Card or Lawful Permanent Residence or US Citizenship, determining if you are a Covered Expatriate, the resulting Exit Tax and the carve puts for Specified Tax-Deferred Accounts, Eligible and Ineligible Deferred Compensation and Interests in Nongrantor trusts. Avoiding the Exit Tax Every year, […]
Did you know that you can use the foreign tax credit on qualified dividends but that you need to calculate the amount of foreign tax credit that the taxpayer can offset against his U.S. tax liability? Foreign-source qualified dividends may require certain adjustments to those amounts before you can take them into consideration as foreign-source […]
Every tax year the IRS reminds us of our Rights as Taxpayers. Please keep these in mind as we navigate together the slippery slope of dealing with the IRS! Get to Know Your Taxpayer Bill of Rights Every taxpayer has rights. The Taxpayer Bill of Rights takes these rights from the tax code and groups […]
As is usual this time of the year the IRS likes to remind us what the 2% Miscellaneous Itemized Deduction is all about, but be careful because as of January 1, 2018 under the H.R. 1, known as the Tax Cuts and Jobs Act it goes away. Making the Most out of Miscellaneous Deductions Miscellaneous […]
H.R. 1, known as the Tax Cuts and Jobs Act, which both houses of Congress passed on Dec. 20 starting for 2018 will significantly alter the taxation of individuals starting for tax year 2018. We have outlined the differences between current law and the conference report. This table compares the predominate changes made by the […]
H.R. 1, known as the Tax Cuts and Jobs Act, which both houses of Congress passed on Dec. 20 starting for 2018 capped the State and local taxes deduction (affectionately known as SALT) : for individuals to deduct up to $10,000 ($5,000 for married taxpayers filing separately). The big question is will 2018 State and […]
H.R. 1, known as the Tax Cuts and Jobs Act, which both houses of Congress passed on Dec. 20 starting for 2018 capped the State and local taxes deduction (affectionately known as SALT) : for individuals to deduct up to $10,000 ($5,000 for married taxpayers filing separately). The big question is will 2018 State and […]
H.R. 1, known as the Tax Cuts and Jobs Act, which both houses of Congress passed on Dec. 20 starting for 2018 capped the State and local taxes deduction (affectionately known as SALT) : for individuals to deduct up to $10,000 ($5,000 for married taxpayers filing separately). The big question is will 2018 State and […]
H.R. 1, known as the Tax Cuts and Jobs Act, which both houses of Congress passed on Dec. 20 starting for 2018 will significantly alter the taxation of individuals starting for tax year 2018. The following article represents an excellent summary of these new changes and how they will affect you. What the tax reform […]
As the 2017 tax season (2016 income tax returns) season draws to a close the IRS as is customary is reminding us that on November 18 2017 it will close efiling down to prepare for the upcoming 2018 tax season to file 2017 tax returns. After that we must paper file until some point in […]
A terrific read on what Streamlined is and when Streamlined can be used without going to the more over reaching OVDP Offshore Voluntary Compliance Program, including some facts that may not support non-willful behavior.g The Pitfalls of Streamlined Foreign Account Disclosures Tax professionals, and also the general public, well know by now that U.S. taxpayers […]
Rules have exited for nearly a century (since 1921) under IRC Sec. 6851(d) providing that all resident aliens and certain nonresident aliens must obtain a “Certificate of Compliance” before leaving the United States. In practice this is rarely done, but new IRC Sec 7345 may put a wrinkle in that! IRC Sec 7345 requires the […]
As is usual this time of the year the IRS advises the tax practionner commu8nity and taxpayers of the upcoming 2018 Pension Plan limitations as pertains to ORC Sec 401(k) and the NPO corresponding 403(b), traditional and ROTH IRA’s, Cat-up’s and Defined Contribution Plans. The Internal Revenue Service announced cost of living adjustments affecting dollar […]
As is usual this time of the year the IRS advises the tax practioner community and taxpayers of the upcoming 2018 inflation increases to such items as tax rate brackets, Standard Deductions and Exemptions and applicable phase out ranges for each, IRC Sec 911 Foreign Earned Income Exclusion, IRC Sec 877(A) Expatriation provisions 5 year […]
As the 2017 tax season (2016 income tax returns) season draws to a close the IRS reminds us of year-end tax planning tips we should consider including charitable contributions and IRA contributions, but others we should consider include selling loss capital positions to offset capital gains in 2017, paying deductible expenses early before December 31, […]
In a last ditch and final reminder the IRS reminds individual taxpayers that Monday October 16, 2017 (since October 15 falls on a Sunday) is the last date to file their 2016 income tax returns. Taxpayers who reside outside the U.S. may request by application to the IRS (by the extended October 16 due date) […]
The IRS reminds taxpayers that they do not call taxpayers, do not demand immediate payment without allowing the taxpayer to question or appeal the amount owed, do not request a prepaid debit card or credit card and not over the telephone, and the IRS does not threaten to bring in local police or other agencies […]
In a compassionate move realizing the extent of the devastation from Hurricane Irma and Harvey before it to taxpayers in FEMA designated areas, as has become customary the IRS grants an extension from October 16, 2017 to January 31,2018 those taxpayers filing personal tax returns, in addition to business filings whose extension expire September 15, […]
In a compassionate move realizing the extent devastation from Hurricane Irma and Harvey before it to taxpayers in FEMA designated areas, the IRS has included in the definition of Hardship under IRC Sections 401(k) and 403(B) distributions to victims of hurricane Irma as followed hurricane Harvey on Aug 30, 2017 and Matthew last year. The […]
In a compassionate move realizing the extent devastation from Hurricane Irma to taxpayers in FEMA designated areas, FinCEN has extended the October 16, 2017 FBAR Form 114 deadline to January 31, 2018. Virgin Islands, Puerto Rico, and parts of Florida now eligible, extension filers have until January 31, 2018 to file. The Financial Crimes Enforcement […]
The IRS has begun notifying taxpayers as expected under the PATH Act that ITINs that have not been used in at least once in the last 3 consecutive tax years and all ITINs with middle digits 70,71,72 and 80 will expire on December 31, 2017 and must be renewed. The Internal Revenue Service began mailing […]
WASHINGTON — The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account that a new deadline now applies to reports for […]
April 18 was this year’s deadline for filing your federal tax return and paying any tax you might have owed . When taxpayers are due a refund, there is no penalty for filing a late tax return. However, If you owe tax, and failed to file and pay on time, chances are you will owe […]
If you’re a taxpayer who gives money or property to others, you may wonder if the federal gift tax applies to you. Fortunately, while any gift is potentially taxable, gifts are only subject to gift tax in a few specific situations. Here are seven things taxpayers need to know about the US federal gift tax: […]
It’s important for businesses and business owners to know the rules when it comes to classifying a worker as an employee or an independent contractor. This is especially true for tax purposes, as there are different reporting, taxation and withholding requirements for each. As an employer, you must withhold income taxes and pay Social Security, […]
The Internal Revenue Service reminds non-U.S. citizens who may have taxable income, such as international students and scholars who may be working or receiving scholarship funds, that they may have special requirements to file a U.S. tax return. The IRS also reminded withholding agents — such as payroll professionals or universities — that accurately filed […]
By: Linda M. Bruckner, CPA, Guest Author Clients are often surprised when tax professionals inform them that although they will be living and working abroad, they must continue to file U.S. income tax returns and also report their worldwide income. This is true for U.S. permanent residents and green card holders. There are several tax […]
The good news about debt forgiveness, in relation to the Mortgage Forgiveness Debt Relief Act of 2007, is that many taxpayers may qualify for a steep reduction on their tax liability. Debt Cancellation May be Taxable It works like this: If a mortgage lender cancels all or part of your debt during a specific tax year,
Most taxpayers claim the standard deduction vs. itemized when they file their federal tax return. However, some filers may be able to lower their tax bill by itemizing. Find out which way saves the most money by figuring taxes both ways. The IRS Offers the Following Six Tips to Help Taxpayers Decide 1. Use IRS […]
For the third year, the IRS has compiled an official list of top tax scams, dubbed the Dirty Dozen. And again, offshore tax cheating has earned a place on the list. Recently, the IRS boasted of obtaining more than half a million disclosures of unreported offshore money from dodgers and recovery of $9.9 billion in owed
Every year the IRS compiles a Dirty Dozen list of the most prevalent tax scams for the previous year. Topping the recently published 2017 report are phone scams, phishing, and one that really hits home: Return Preparer Fraud. “The vast majority of tax professionals provide honest, high quality service.” But there are a minority of preparers
The Bona Fide Resident Test is one out of the two tests given to United States citizens and those holding green cards that live overseas to qualify them to claim the Foreign Earned Income Exclusion, The Foreign Housing Deduction and the Foreign Housing Exclusion. The Bona Fide Test is only used by the expats whose […]
If you are a U.S. citizen, but also an expatriate, filing an expatriate tax return should be your top-most priority to save yourself against hefty fines, penalties, interest and even imprisonment. Filing expatriate tax return is essential, but how you are going to file it will make all the difference. Don’t be appalled; for now, […]
The Meaning of Foreign Tax Credit This is a non-repayable tax credit that is paid to the government of a foreign country due to foreign income tax withholdings. Foreign income tax credit is only obtainable by people who did work in a foreign nation or have their investment income flowing from a foreign source. The […]
Importance of US Expatriates and their Foreign Earned Income Exclusion with their US tax Needs There are general rules for filing the expatriate tax return whether you stay in the States or in a foreign country. All the income generated worldwide by Americans is subject to the United States income tax. Regardless of the country […]
There are many penalties the IRS can impose on taxpayers, but don’t worry just yet there may be a solution for you. This blog discusses common IRS penalties that come up on a regular basis and ways to either reduce the penalty or have it completely removed. Failure-to-File and Failure-to-Pay Penalties (Sec. 6651) Every year […]
According to recent guidance from the New York State Department of Taxation and Finance an extra layer of identification verification will need to be provided when using software for processing e-filed New York state personal income tax returns. One must now include a driver’s license or state-issued ID information. Taxpayers will now be required to […]
Recently, many tax return preparers have learned that a number of their clients failed to report their interest in a foreign bank account, corporation or trust to the IRS. Because the Foreign Account Tax Compliance Act (FATCA) requires foreign financial institutions to report their U.S. depositors to the IRS, the IRS is more likely to […]
Who needs to fill out a Form 114, Report of Foreign Bank and Financial Accounts (FBAR)? According to The Bank Secrecy Act, P.L. 91-508 “[e]ach United States person having a financial interest in, or signature or other authority over, a bank, securities, or other financial account in a foreign country” and if that person’s foreign […]
What is an Individual Taxpayer Identification Number (ITIN)? Individuals who are not eligible for a Social Security number but have tax-filing or payment obligations according to U.S. law are given ITINs. If you need to file a return in the upcoming filing season and your ITIN is expiring then it is very important that […]
WASHINGTON – As tax filing season approaches, the Internal Revenue Service is reminding taxpayers there are things they should do now to get ready for filing season. For most taxpayers, Dec. 31 is the last day to take actions that will impact their 2016 tax returns. For example, charitable contributions are deductible in the year […]
WASHINGTON ― The Internal Revenue Service announced today that the nation’s tax season will begin Monday, Jan. 23, 2017 and reminded taxpayers claiming certain tax credits to expect a longer wait for refunds. The IRS will begin accepting electronic tax returns that day, with more than 153 million individual tax returns expected to be filed […]
WASHINGTON — The Internal Revenue Service today 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 […]
Were you charitable this year? If so you may be able to claim a deduction on your 2016 federal income tax return. Donations of money or goods by December 31, 2016 made to an eligible organization can cut your tax bill. Please note that if you received something in return for your donation your deduction […]
If you are a U.S. citizen and have offshore bank accounts you better make sure you are in full compliance with U.S. tax laws and that you have disclosed all necessary information. The Department of Justice (DOJ) is determined to find offenders and has restarted their engine on identifying tax evaders. In January 2016 a […]
Avoid a Refund Delay Note to Editor: This is the second in a series of reminders to help taxpayers prepare for the upcoming tax filing season. WASHINGTON – As tax filing season approaches, the Internal Revenue Service is reminding taxpayers about steps they can take now to ensure smooth processing of their 2016 tax return […]
An Alternative to Streamlined It can take months to get a nonfiler back into compliance with the IRS. By Jim Buttonow, CPA/CITP November 7, 2016 – See more at: http://www.journalofaccountancy.com/newsletters/2016/nov/bring-nonfiler-bac-into-compliance.html The IRS estimates that more than 7 million individual taxpayers didn’t file a 2010 tax return. The IRS bases this estimate on information statements […]
2017 Tax Season A new federal law moves up the W-2 filing deadline for employers and small businesses to Jan. 31. The new law makes it easier for the IRS to find and stop refund fraud. It also delays some taxpayer refunds. Those taxpayers claiming the Earned Income Tax Credit or the Additional Child Tax […]
Undisclosed Offshore Accounts WASHINGTON — As international compliance efforts pass several new milestones, the Internal Revenue Service reminds U.S. taxpayers with undisclosed offshore accounts that they should use existing paths to come into full compliance with their federal tax obligations. Updated data shows 55,800 taxpayers have come into the Offshore Voluntary Disclosure Program (OVDP) to […]
ITIN Renewal Application WASHINGTON — The Internal Revenue Service reminds taxpayers affected by recent changes involving the Individual Taxpayer Identification Number (ITIN) program that they can now begin submitting their ITIN renewal applications to the IRS. Under the Protecting Americans from Tax Hikes (PATH) Act of 2015 passed by Congress and signed into law last […]
Extension Deadline Millions of taxpayers ask for an extra six months to file their taxes every year. If you are one of them, then you should know that Monday, Oct. 17 is the extension deadline in 2016. This is so because Oct. 15falls on a Saturday. If you have not yet filed, here are some […]
Gambling Income and Losses Report any Gambling Winnings as income on your tax return. Be sure you itemize to deduct gambling losses up to the amount of your winnings. If you are a casual gambler, these tax tips can help: Gambling income. Income from gambling includes winnings from the lottery, horse racing and casinos. It […]
Written by Phil Bradford Are you an American expat who owe money to the IRS? Or, are you thinking of escaping your US tax debt by moving abroad? If so, then beware! The IRS won’t leave you without grabbing its money. It’s because, the US has tax treaties with more than 42 countries, where the […]
Tax Effects of Divorce or Separation If you are divorcing or recently divorced, taxes may be the last thing on your mind. However, these events can have a big impact on your wallet. Alimony and a name or address change are just a few items you may need to consider. Here are some key tax […]
IRA and Retirement Plan Rollovers WASHINGTON — The Internal Revenue Service today provided a self-certification procedure designed to help recipients of retirement plan distributions who inadvertently miss the 60-day time limit for properly rolling these amounts into another retirement plan or individual retirement arrangement (IRA). In Revenue Procedure 2016-47, posted today on IRS.gov, the IRS […]
If you are looking for a job in the same line of work, you may be able to deduct some of your job search expenses. Here are some key tax facts you should know about when searching for a new job: Same Occupation. Your expenses must be for a job search in your current line […]
Duplicative Expatriate Tax Reporting Requirement The tax compliance process for certain Americans living overseas should be simplified through targeted elimination of certain duplicative reporting requirements, the American Institute of CPAs (AICPA) has recommended in an August 15 letter to the U.S. Department of the Treasury and the Internal Revenue Service (IRS). The relief would apply […]
Renting your vacation home to others can be profitable. You must normally report the rental income on your tax return. You may not have to report the rent, however, if the rental period is short and you also use the property as your home. Here are some tips that you should know: Vacation Home. A […]
Did you move due to a change in your job or business location? If so, you may be able to deduct moving expenses, except for meals. Here are the top tax tips for moving expenses. In order to deduct moving expenses, your move must meet three requirements: The move must closely relate to the start […]
WASHINGTON — The Internal Revenue Service today 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 […]
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, […]
New Phishing Scheme Mimics Software Providers; Targets Tax Professional WASHINGTON — The Internal Revenue Service today alerted tax professionals to an emerging phishing email scam that pretends to be from tax software providers and tries to trick recipients into clicking on a bogus link. The email scheme is the latest in a series of attempts […]
