Tag Archive for Tax Blog

Retirement Plan Contributions In 2018: An Elderly Parent Might Qualify As Your Dependent

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. Read More

Written by | Posted in Adult- Dependent Exemption • IRA • Retirement • Social Security

Foreign Earned Income Exclusion For U.S. Expatriates

Even if you have left the United States for a brighter future elsewhere, you  (something not as strong) take a moment and think about any obligations you have towards the IRS. The US retains its right to tax globally its citizens and resident aliens who are a citizen or national of a country with which the United States has an income tax treaty in effect. Only two countries have such a citizenship-based taxation system: the United States and Eritrea.

What Is A Foreign Earned Income Exclusion For U.S. Expats?

The Foreign Earned Income Exclusion (FEIE) is offered to US citizens and resident aliens that are living abroad on a consistent basis, have earned income in a foreign country and can prove that they have done so for the past tax year by satisfying either the Physical Presence Test or the Bona Fide Residence. Read More

Written by | Posted in Expatriate • Expatriate Taxes • Foreign Earned Income Exclusion

IRS Owes $1.1 Billion To Taxpayers In Unclaimed Tax Refunds For 2014 – Is This You?

US Expats – Have you filed your 2014 US Tax Return?

IRS Refunds worth $1.1 billion waiting to be claimed by those who have not filed 2014 federal income tax returns

Claim yours now before you are unable to do so – June 15 is the deadline for US Citizens Living Abroad

WASHINGTON ―Unclaimed federal income tax refunds totaling about $1.1 billion may be waiting for an estimated 1 million taxpayers who did not file a 2014 federal income tax return, according to the Internal Revenue Service.

Read More

Written by | Posted in Federal Income Tax Return • IRS • Tax Refund • Tax Return

U.S. Tax Considerations For The Digital Nomad Living Abroad

In today’s age of “digital nomads,” the idea of working remotely overseas continues to grow in popularity. New programs, such as Remote Year, have further facilitated overseas commuting by organizing year-long trips for employees and freelancers to live in multiple cities abroad. Participants, for example, travel in groups to live in multiple cities throughout Europe, Asia and South America, for one month each over a year period.

Working abroad presents a number of unique U.S. income tax issues and opportunities for the digital nomad.  One main issue is qualification for the Foreign Earned Income Exclusion (“FEIE”), which allows U.S. citizens living abroad to exclude their foreign earned income from U.S. federal taxation. Another important issue is a digital nomad’s potential liability for state and local taxation even during their time living and working abroad. Read More

Written by | Posted in Foreign Earned Income Exclusion • Tax Home

US Tax Reform: 5 Things Americans Overseas Need To Know

What Are The Important Updates One Needs To Know About U.S. Tax Reform?

The New Tax Bill “Tax Cuts and Jobs Act” presents the first major overhaul of the United States federal income tax system in more than three decades. The major benefits will be mostly felt by the large and small businesses. But what’s about tax reform’s impact on Americans overseas?

What Has NOT Changed For Americans Overseas?

  1. You can still use Foreign Earned Income Exclusion or Foreign Tax Credit to lower your tax bill. In 2018 a U.S. expat can exclude up to $104,100 of foreign earned income.
  2. The reporting requirements for FBAR stay in place: you need to file FinCEN Form 114 if you have an aggregate value of over $10,000 in any foreign financial accounts you own or have a signature over.
  3. FATCA and Form 8938 also didn’t have any changes (unfortunately).

Read More

Written by | Posted in Expatriate Taxes • Tax Cuts Jobs Act • Tax Reform • TaxConnections

County Auditors Seek Legislation To Increase Real Estate Conveyance Fee Tax Collections

County Auditors in Ohio are permitted to collect a fee for the administration related to the transfer of deeds.  There are two elements to the “real estate conveyance fee” (which is also commonly referred to as the “real estate transfer tax”).  R.C. 319.54 levies a fee that is measured as 10 cents of every 100 dollars of the value of the real property transferred.  Counties, under R.C. 322.02, are also given the authority to levy an additional real estate transfer tax of up to 30 cents per one hundred dollars of value (grand total of maximum fee/tax of 40 cents of every 100 dollars of value of real property transferred; or, denoted as a decimal 0.004).  Read More

Written by | Posted in Real Estate

Do Not Let Cryptocurrency Crimp Your Relationship With The IRS

Cryptocurrencies such as Bitcoin are becoming more popular as a form of payment and as investment. However, there has been little attention paid to how this virtual currency will be treated by the IRS until now. In fact, the IRS is taking a much closer look and has established some tax guidelines.

According to an article published in accountingtoday.com, “For federal tax purposes, virtual currency is treated as property and not currency.” They add, “The fair market value of the virtual currency on the date of receipt determines the taxpayer’s basis.”

Some businesses are actually paying employee wages in virtual currency instead of U.S. dollars. Read More

Written by | Posted in Cryptocurrency • Currency • IRS

North Carolina Sales And Use Tax Exemptions For Manufacturers Revised Effective July 1, 2018

North Carolina sales and use tax law provides an exemption for sales of mill machinery, machinery parts and manufacturing accessories, however these items are subject to a 1% privilege tax with a maximum tax of $80 per article until June 30, 2018. The 1% privilege tax has been repealed effective June 30, 2018 by Senate Bill 257 from the 2017 Legislative Session.  Beginning July 1, 2018 purchases of qualifying mill machinery, machinery parts and manufacturing accessories will be exempt from both North Carolina sales and use tax as well as the privilege tax. Read More

Written by | Posted in North Carolina • Sales And Use Tax Manufacturing Exemption

Consumer Spending Hits A 6-Year High Before TCJA

As savings decline and consumer debt increases, the likelihood of future reductions in consumer demand will send shock waves through the business economy as production will shrink, employment will decline, and recessionary impacts will further reduce consumer confidence. This will impact construction spending and manufacturing investments leading to a downward cycle until we hit a solid core and time allows an economic healing.

Looking ahead, we believe the Tax Cuts and Jobs Act will certainly modify people’s behaviors as companies determine how their revised cash flows will provide options. Ultimately tax cuts drive three behaviors. Read More

Written by | Posted in Tax Cuts Jobs Act

NASCAR Holdings V. Testa: A Yellow Flag For Tax Practitioners And Taxpayers

In NASCAR Holdings, Inc. v. Testa, decided December 21, 2017, the Ohio Supreme Court held that the filing of a notice of appeal with the Ohio Board of Tax Appeals (“BTA”) by an attorney not licensed in Ohio did not deprive the BTA of jurisdiction over the appeal.  The Court followed the plurality opinion in Jemo Assoc., Inc. v. Lindley, 64 Ohio St.2d 365 (1980), which reversed the BTA’s dismissal of the appeal because it was filed by a corporate accountant.  Jemo stated that the proper inquiry in determining whether the notice of appeal invoked the BTA’s jurisdiction is whether the person who filed the notice of appeal was authorized by the taxpayer to file the appeal. Read More

Written by | Posted in Ohio Tax

Taxpayers Should Report Name Changes Before Filing Taxes

When a taxpayer changes their name, that change can affect their taxes. All the names on a taxpayer’s tax return must match Social Security Administration records. A name mismatch can delay a tax refund. Here’s what a taxpayer should do if anyone listed on their tax return changed their name:

  • Reporting Taxpayer’s Name Change. Taxpayers who should notify the SSA of a name change include:
    • Taxpayers who got married and use their spouse’s last name.
    • Recently married taxpayers who now use a hyphenated name.
    • Divorced taxpayers who now use their former last name.

Read More

Written by | Posted in Tax Filing

Tax Question: How Do I Handle My LLC With Early Retirement?

I am early retiring this year and own an LLC company that only makes about 30K a year but much more than the allotted 17K that I have to stay under for this year. My wife helps me with this work but we don’t pay each other a salary, we just put the money in our business account when it comes in and file 1 Schedule C for the business on our yearly tax forms. She owns 1 share in the LLC and I own 100.

How would I structure this so that my income is limited to 17K and the remainder over that goes into her income. Do I need to update the LLC agreement or put each other on the payroll or maybe just me on the payroll? Do I just transfer ownership (all shares) to her? How would you advise me? Read More

Written by | Posted in Tax Questions
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