Tag Archive for Tax Blog

Time to Extend

Extensions for individual or business returns are relatively simple to complete, but they are becoming more and more important. If you filed your return already, you can probably stop reading this. For those who have not completed a return, I would consider an extension and keep reading…

An extension is an extension of time to file a return. It is not an extension of time to pay your tax. I repeat; it is not an extension of time to pay your tax liability.  For pass-through entities like S Corps or Partnerships, a federal extension doesn’t require any payment because generally those entities do not incur a tax liability. There may be liabilities on the various state returns the pass-through files. Read More

Written by | Posted in Federal • Income Tax • Individual • IRS • Partnership

Employers Face Stiff Affordable Health Care Act Excise Taxes (aka Penalties)

The Affordable Health Care Act (ACA) (“Obama Care”) may lead to stiff excise taxes for larger and midsize employers that misclassify employees as independent contractors (see §4980H Shared responsibility for employers regarding health coverage). The term “applicable large employer” means, with respect to a calendar year, an employer who employed an average of at least 50 full-time employees on business days during the preceding calendar year.  The term “full-time employee” means, with respect to any month, an employee who is employed on average at least 30 hours of service per week.  However, employers with less than a 100 employees have a transition period until 2016 for the application of §4980H.

Employers that misclassify employees as independent contractors already face potential tax Read More

Written by | Posted in Affordable Healthcare Act

A Collection… The Humorous Side of Tax… (12)

♦ April 15 is lurking around the corner, so if you have yet to file your federal tax return, it’s time to set aside a few hours, gather together your financial records, and flee the country. Dave Barry

♦ Two things in life are inevitable: death and taxes. We can’t say for certain when death will come. Tax day, however, is usually April 15, unless it falls on a weekend or holiday. Tracy Bunner, Standard-Examiner 3-12-12

♦ Taxes are paid in the sweat of every man who labors. ~Franklin D. Roosevelt

♦ A patient was at her doctor’s office after undergoing a complete physical exam. The doctor said, “I have some very grave news for you. You only have six months to live.” Read More

Written by | Posted in Tax Humor

7 Habitual Mistakes Companies Make – Chapter 8 (5 – Final)

TaxConnections Blog Post
The Protectors for Big Business –
Remarks That Are Dynamic

“Strong lives are motivated by dynamic purposes.”

Source: Kenneth Hildebrand

DYNAMIC MEANS “CHANGING; action and in motion.” Dynamic is synonymous with lively, active, energetic, vigorous, and impelling.
In a blink, there is more change.
In another blink, there is additional action. Read More

Written by | Posted in Tax Risk Management

Bonus Depreciation 2013 and Beyond

Bonus depreciation is just that – a bonus amount of depreciation you get to claim in the first year. Bonus depreciation allows for an extra 50% depreciation on certain assets purchased in 2013. Currently the law for bonus depreciation expires in 2014. When tax bills are brought up in Congress and tax incentives are discussed, bonus depreciation is one of the items frequently discussed so it is possible that it gets extended for 2014.

Not all business assets purchased qualify for bonus depreciation. The assets must be placed in service during the year and they must have been new. Buying a used piece of machinery would not be eligible for bonus depreciation. Also, assets must have a depreciable life of 20 years or less, so you can’t go out and buy a building then write it all off with bonus depreciation. Taking 50% depreciation in the first year can be a real tax savings Read More

Written by | Posted in Corporate • Income Tax • Small Business • Specialty Tax Incentives

The Senate Finance Committee Passes Tax Extenders For 2014 & 2015

On April 3rd, the Senate Finance Committee overwhelmingly approved the Expiring Provisions Improvement Reform and Efficiency Act of 2014 (hereinafter “EXPIRE”) with a strong bipartisan vote, setting the stage for Congress to address. The House Ways and Means Committee is expected to have its own extension package later this month. To that end and as a caveat, it is not certain whether any or all of these incentives will become law.

The bill extends many long awaited business tax extenders that originally expired on December 31, 2013 and modifies other certain tax provisions. Some of the key temporary tax benefits in this EXPIRE bill includes:

• 50% Bonus Depreciation & §179 Expensing Thresholds Return: The 50% bonus Read More

Written by | Posted in Federal • R&D Credit Services • Real Estate • Tax Provision/Tax Reporting

Application For Automatic Extension of Time To File U.S. Individual Income Tax Return – IRS Form 4868

Everyone starts getting a little freaked out this time of year because of personal income tax reporting and paying obligations due on April 15th. I have found through the years that this kind of pressure causes people in all walks of life to make poor judgments and less than fully informed decisions just to hit a deadline.

The point of this post is to inform you that it is okay to file an application for a six month automatic extension of time to file your United States individual income tax return and NOT TO WORRY IF YOU ARE BEHIND THE CURVE THIS YEAR. There are many reasons why you may need an extension of time to file your taxes that are all fully legitimate including:

1. life changing events, Read More

Written by | Posted in Federal • Income Tax • Individual • IRS • Tax Provision/Tax Reporting

A Collection… The Humorous Side of Tax… (11)

♦ “Today is April 1, April Fools’ Day, a day that people try to fool their friends and relatives. Don’t confuse that with April 15, when people try to fool the IRS.” –Jay Leno

♦ April is always a difficult month for Americans — even if your ship comes in, the IRS is right there to help you unload it.

♦ “Ignore them and they’ll go away” is great advice for some of life’s annoyances. Unfortunately, it doesn’t apply to taxes. Martha C. White, Time.com April 17, 2012

♦ Unless we wish to hamper the people in their right to earn a living, we must have tax reform. — President Calvin Coolidge Read More

Written by | Posted in Tax Humor

The IRS Will Soon Be Asking Questions, PART II: Nominees and FATCA

FATCA and the Nominee –

Part I of this post can be found here.

By brief background, under FATCA, foreign financial institutions (FFIs) must agree to verification and due diligence procedures – meaning they must be on the look-out for customers, owners or beneficiaries evidencing any “US indicia”. They must identify and report information on US account holders/owners directly to the Internal Revenue Service or to their own government via an intergovernmental agreement (IGA). They must look through their customers and counterparties’ ownership to find “substantial US owners” (generally, more than 10% ownership) of any entities holding accounts at the financial institution. Read More

Written by | Posted in Expatriate • FATCA • FBAR • International • IRS

Filing Season And Rental Activities

A regular area for Tax Court litigation for the past few years involves individuals with a few rental properties deducting the losses from them under the theory they are real estate professionals (using a special rule of section 469(c)(7)). These individuals usually have jobs outside of the real estate profession and do not devote more hours than in their other employment to the rentals. They clearly do not qualify for the special rule. Yet, they claim the loss (rate her than carrying it forward) and then after losing during the Internal Revenue Service audit, they go to Tax Court and lose. Why? A better way to challenge would be to try to get Congress to change the law. Perhaps trying to convince Congress to increase the income limit so they could use up to $25,000 of the loss currently (under a modified section 469(i)). Read More

Written by | Posted in Audit • IRS • Property Tax • Real Estate
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