Tag Archive for Tax Blog

Claiming Parents As Dependents On Income Taxes

As more and more Baby Boomers are caring for elderly parents, the question often arises: “Can I claim my parent(s) as dependents on my taxes?” The answer to that is, “It depends.”

The IRS does allow parents to be claimed as dependents if certain requirements are met. The IRS always has requirements.

To meet the support requirements necessary to claim your parent as a dependent on your tax return, you must cover 51% or more of their support costs. These costs include food, housing or lodging expenses, clothing, and medical services and/or equipment costs. Read More

Written by | Posted in Adult- Dependent Exemption

Tax Advisor’s – Please Help Answer Tax Question Of The Week!

Tax Advisor’s – Your Thoughts On This Question Of The Week?

I spoke with the IRS about a Letter 12C and they have my response. Knowing it was an error on Turbotax end, will it take 6-8 weeks to deposit into my account? Can anyone help me?

Every Friday, TaxConnections addresses a question submitted to our Ask Tax Questions Platform. We ask our members to offer their thoughts on this question for the week. We realize you may need more information which you can request in the comments section below, or reach taxpayer privately as a TaxConnections Member. 

Please Make Comments Below To Communicate Your Thoughts

 

Written by | Posted in Tax Questions

IRS Reminds Retirees Of April 1, 2018 Deadline To Take Required Retirement Plan Distributions

WASHINGTON — The Internal Revenue Service today reminded taxpayers who turned age 70½ during 2017 that, in most cases, they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Sunday, April 1, 2018.

The April 1 deadline applies to all employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans. The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs, however, they do not apply to ROTH IRAs. Read More

Written by | Posted in IRA • IRS • Retirement • RMD

Non-Active Canadian Corporations Are Not Required To File A Corporate Tax Return…Or Are They?

Non-resident corporations that have no activity in Canada during its fiscal year are not required to file a Canadian corporate tax return. However, without filing a Canadian corporate tax return, the Canada Revenue Agency (CRA) will not know that you did not have activity in Canada. Therefore, CRA may send you a letter requesting that a return is required to be filed.

If CRA requests that a return be filed, even though your company had no activity in Canada, you may be tempted to file a return in order to be in compliance. Read More

Written by | Posted in Canada • International • Tax Refund

Tax Advisor’s Reference Guide – 292 Pages Of Individual Federal Tax Return Instructions

With all the changes in taxes this year, it takes an ace tax advisor to figure them out. Therefore we want to make certain our members and followers have access to the most up-to-date information in preparing clients individual federal tax return.  We are providing you the Tax Advisors Reference Guide with 292 pages published by the IRS  for those of you preparing federal tax returns for tax clients. What is also wonderful about this publication is it provides all the Tax Forms you will need to prepare tax returns in English, Spanish, Chinese, Korean, Russian and Vietnamese. Read More

Written by | Posted in Tax Return

Options Available For U.S. Taxpayers With Undisclosed Foreign Financial Assets

The implementation of FATCA and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to non-U.S. investments.  Because the circumstances of taxpayers with non-U.S. investments vary widely, the IRS offers the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those investments:

  1. Offshore Voluntary Disclosure Program;
    Note: The Offshore Voluntary Disclosure Program (OVDP) is closing. Refer to the OVDP FAQs for an outline of the sunset provisions.
  2. Streamlined Filing Compliance Procedures;
  3. Delinquent FBAR submission procedures; and
  4. Delinquent international information return submission procedures.

Read More

Written by | Posted in FATCA • FBAR • IRS • OVDP

IRS Alerts Taxpayers About Refund Scam

The IRS warns taxpayers of a new twist on an old scam. Criminals are depositing fraudulent tax refunds into individuals’ actual bank accounts, then attempting to reclaim the refund from the taxpayers.
Here are the basic steps criminals follow to carry out this scam. The thief:

• Hacks tax preparers’ computers to steal taxpayer data.

• Uses the stolen information to file tax returns as the taxpayers.

• Has refunds deposited into taxpayers’ bank accounts. Read More

Written by | Posted in Fraud • IRS • IRS Scam • Tax Reform • TaxConnections

Major New US Tax Reporting Requirement For Foreign-Owned LLCs

Are you a non-US person with a US LLC? Then you need to be aware of the major new US reporting requirement for foreign-owned LLCs. The deadline is coming up soon.

Previously, foreign-owned single-member LLCs enjoyed an exemption from US tax reporting requirements. Starting with the 2017 tax year however LLCs that are wholly owned by foreign persons and did not elect to be treated as corporations for tax purposes, are subject to new IRS reporting requirements. Read More

Written by | Posted in Foreign Owned LLC • LLC

Tax Reform And Cash Management Considerations For Clients

A recent interview style Q and A session appeared in Accounting Today featuring the expertise of author Iralma Pozo. In this series of questions, Pozo tackles some important aspects of the most significant change to the U.S. tax code since 1986. With such historic changes underway, it’s critical that you understand how the Tax Cuts and Job Act will affect cash flow issues for clients.

What’s particularly insightful is Pozo’s advice regarding parents and what they need to know about 529 plans. Her observations about developing a new strategy for charitable deductions and nonprofit organizations are also highlights:

With So Many Changes And Factors, Where Do Advisors Start? Read More

Written by | Posted in Tax Cuts Jobs Act • Tax Reform

Wayfair Vs. South Dakota: What Are The Possible Outcomes Of The Online Sales Tax Case?

Earlier this year we shared the U.S. Supreme Court would hear a case related to online sales tax: Wayfair v. South Dakota. This ruling could settle how online purchases are taxed, potentially overturning the 1992 Quill Corp v. North Dakota ruling currently preventing states from collecting sales tax from sellers without a physical presence (or nexus) in the state.

Why is it worth it for the Supreme Court to consider this case rather than fall back on the previous Quill ruling? The world has changed a lot since 1992. As The Wall Street Journal reports, “In 1992, the justices ‘did not and could not anticipate the development of modern e-commerce,’ Solicitor General Noel Francisco wrote in a friend-of the-court brief.” Read More

Written by | Posted in Online Sales Tax • South Dakota Tax

Reduce Tax Liability: Deducting Medicare Premiums

Well, it would be a bit of a stretch to say that most of us don’t want to pay taxes. However, who wouldn’t take a tax deduction if it is available? For all those individuals who are looking out for different ways by which they can reduce their tax liability, here is one effective method of doing so. You can include your Medicare premiums and even dental expenses in tax filing for better deductions. Sure, there are some prerequisites and details that one must consider and they are below.

Deducting Medicare Premiums Read More

Written by | Posted in Form 1040 • IRS • Medicare • Tax Deductions

A Secret Few Know About A Graduate Tax Degree

While speaking to the Dean of a graduate tax program recently, I shared with them an important fact. The majority of corporations, public accounting, and law firms all require a graduate tax degree to get through the front door to interview today (or they want to see you are enrolled in a graduate tax program).  If you have a graduate tax degree like an MST, MLST or an LL.M, you made a great career decision already as these tax professionals are the ones who are being hired by major firms today.   Read More

Written by | Posted in Graduate Tax Degree
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