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Wednesday, February 19, 2014

IR-2014-16: IRS Releases the “Dirty Dozen” Tax Scams for 2014; Identity Theft, Phone Scams Lead List

The IRS has released its dirty dozen list regarding tax scams.  Note that "Hiding Income Offshore" is once again on the list.  Of note is their list of structures that have been used by individuals to hide income, such as "offshore banks, brokerage accounts or nominee entities . . . foreign trusts, employee-leasing schemes, private annuities or insurance plans . . ."  This is why it is essential for proper reporting to be done, not just for individuals but for their related entities as well.



Despite the end of this section, which states that taxpayers should come forward to "pay their fair share," taxpayers who fail to report will oftentimes find themselves having to pay far more than their fair share.



IR-2014-16: IRS Releases the “Dirty Dozen” Tax Scams for 2014; Identity Theft, Phone Scams Lead List

Monday, July 1, 2013

Getting married this summer? The IRS has published some tax tips!

The IRS just published some helpful tax tips for newlyweds.  Here is IRS Summertime Tax Tip 2013-01:

Tax Tips for Newlyweds

Late spring and early summer are popular times for weddings. Whatever the season, a change in your marital status can affect your taxes. Here are several tips from the IRS for newlyweds.

  • It’s important that the names and Social Security numbers that you put on your tax return match your Social Security Administration records. If you’ve changed your name, report the change to the SSA. To do that, file Form SS-5, Application for a Social Security Card. You can get this form on their website at SSA.gov, by calling 800-772-1213 or by visiting your local SSA office.
  • If your address has changed, file Form 8822, Change of Address to notify the IRS. You should also notify the U.S. Postal Service if your address has changed. You can ask to have your mail forwarded online at USPS.com or report the change at your local post office.
  • If you work, report your name or address change to your employer. This will help to ensure that you receive your Form W-2, Wage and Tax Statement, after the end of the year.
  • If you and your spouse both work, you should check the amount of federal income tax withheld from your pay. Your combined incomes may move you into a higher tax bracket. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4, Employee's Withholding Allowance Certificate. See Publication 505, Tax Withholding and Estimated Tax, for more information.
  • If you didn’t qualify to itemize deductions before you were married, that may have changed. You and your spouse may save money by itemizing rather than taking the standard deduction on your tax return. You’ll need to use Form 1040 with Schedule A, Itemized Deductions. You can’t use Form1040A or 1040EZ when you itemize.
  • If you are married as of Dec. 31, that’s your marital status for the entire year for tax purposes. You and your spouse usually may choose to file your federal income tax return either jointly or separately in any given year. You may want to figure the tax both ways to determine which filing status results in the lowest tax. In most cases, it’s beneficial to file jointly.

For more information about these topics, visit IRS.gov. You can also get IRS forms and publications at IRS.gov or by calling 800-TAX-FORM (800-829-3676).


Thursday, June 6, 2013

Have accounts overseas? Reporting deadlines approach!

For those with foreign financial accounts, it's very important that reporting deadlines aren't missed.  Don't forget there are BOTH IRS and Treasury Department filing requirements.

Here is IR-2013-54 from the IRS, which details some of the requirements:

Issue Number:   IR-2013-54

IRS Reminds Those with Foreign Assets of U.S. Tax Obligations

WASHINGTON – The Internal Revenue Service reminds U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2012, that they may have a U.S. tax liability and a filing requirement in 2013.

The filing deadline is Monday, June 17, 2013, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return. Eligible taxpayers get two additional days because the normal June 15 extended due date falls on Saturday this year. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for additional information additional information on extensions of time to file.

Nonresident aliens who received income from U.S. sources in 2012 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be April 15 or June 17 depending on sources of income. See Taxation of Nonresident Aliens on IRS.gov.

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 fill out and attach Schedule B to their tax return. Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial 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 to report the country in which each account is located.

Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds. Instructions for Form 8938 explain the thresholds for reporting, what constitutes a specified foreign financial asset, how to determine the total value of relevant assets, what assets are exempted and what information must be provided.

Separately, taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2012 must file Treasury Department Form TD F 90-22.1. This is not a tax form and is due to the Treasury Department by June 30, 2013. For details, see Publication 4261: Do You Have a Foreign Financial Account? Though this form can be filed on paper, Treasury encourages taxpayers to file it electronically.

Taxpayers abroad can now 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 $57,000 or less can use brand-name software to prepare their returns and then e-file them for free.

Taxpayers with an AGI greater than $57,000 who don’t qualify for Free File can still choose the accuracy, speed and convenience of electronic filing. Check out the e-file link on IRS.gov for details on using the Free File Fillable Forms or e-file by purchasing commercial software.

A limited number of companies provide software that can accommodate foreign addresses. To determine which will work best, get help choosing a software provider. Both e-file and Free File are available until Oct. 15, 2013, for anyone filing a 2012 return.

Any U.S. taxpayer here or abroad with tax questions can use the online IRS Tax Map to get answers. An International Tax Topic Index page was added recently. The IRS Tax Map assembles or groups IRS forms, publications and web pages by subject and provides users with a single entry point to find tax information.  

Have accounts overseas? Reporting deadlines approach!

For those with foreign financial accounts, very important reporting deadlines aren't missed.  Don't forget there are BOTH IRS and Treasury Department department filing requirements.

Here is IR-2013-54 from the IRS, which details some of the requirements:

Issue Number:   IR-2013-54

IRS Reminds Those with Foreign Assets of U.S. Tax Obligations

WASHINGTON – The Internal Revenue Service reminds U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2012, that they may have a U.S. tax liability and a filing requirement in 2013.

The filing deadline is Monday, June 17, 2013, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return. Eligible taxpayers get two additional days because the normal June 15 extended due date falls on Saturday this year. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for additional information additional information on extensions of time to file.

Nonresident aliens who received income from U.S. sources in 2012 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be April 15 or June 17 depending on sources of income. See Taxation of Nonresident Aliens on IRS.gov.

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 fill out and attach Schedule B to their tax return. Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial 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 to report the country in which each account is located.

Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds. Instructions for Form 8938 explain the thresholds for reporting, what constitutes a specified foreign financial asset, how to determine the total value of relevant assets, what assets are exempted and what information must be provided.

Separately, taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2012 must file Treasury Department Form TD F 90-22.1. This is not a tax form and is due to the Treasury Department by June 30, 2013. For details, see Publication 4261: Do You Have a Foreign Financial Account? Though this form can be filed on paper, Treasury encourages taxpayers to file it electronically.

Taxpayers abroad can now 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 $57,000 or less can use brand-name software to prepare their returns and then e-file them for free.

Taxpayers with an AGI greater than $57,000 who don’t qualify for Free File can still choose the accuracy, speed and convenience of electronic filing. Check out the e-file link on IRS.gov for details on using the Free File Fillable Forms or e-file by purchasing commercial software.

A limited number of companies provide software that can accommodate foreign addresses. To determine which will work best, get help choosing a software provider. Both e-file and Free File are available until Oct. 15, 2013, for anyone filing a 2012 return.

Any U.S. taxpayer here or abroad with tax questions can use the online IRS Tax Map to get answers. An International Tax Topic Index page was added recently. The IRS Tax Map assembles or groups IRS forms, publications and web pages by subject and provides users with a single entry point to find tax information.  

Saturday, June 30, 2012

New IRS Program for U. S. Citizens Overseas: Dual Citizens/Those with Foreign Retirement Plans who haven't filed.

New IRS Program for U. S. Citizens Overseas: Dual Citizens/Those with Foreign Retirement Plans who haven't filed:
irs.gov/businesses/sma…

Allows people who owe little tax but failed to file FBARs and tax returns to avoid penalties by becoming compliant. Even late filed retirement elections can be fixed.

The catch? Must be a current nonresident.


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Saturday, April 28, 2012

Are you an employer with a 401(k)? Is your plan compliant?

Are you an employer with a 401(k) plan?

Service providers will soon be required to disclose all of their fees and service charges to plan sponsors (employers).

Beware, as in addition to disclosure to plan sponsors, service providers will also be required to disclose fees and service charges to employees of the employer.

The law requires that fees be reasonable. Dissatisfied employees will be able to complain to the US Department of Labor. Many will be surprised at the amount of the fees.

As such, now is the time to have your plan reviewed by a qualified professional. Said professional should not only check the fee is reasonable, but also inquire as to whether the plan itself is compliant, and has made all the proper elections.

If problems are found, then attorneys and accountants can be brought in to file for governmental voluntary correction programs.

Remember, if employer is caught with significant plan violations by the IRS or the US Department of Labor, then these voluntary correction programs may be unavailable. Significant fines can be assessed for plan violations, and plans can even be disqualified. As such, it pays to be proactive and have your plans reviewed. Many companies rely on third-party administrators to administer their plans. However, the plan sponsor (employer) is still ultimately responsible for any violations.

On a final note, fees are an important factor in determining whether a service provider is appropriate. However, fees should not be the only consideration.

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Saturday, March 17, 2012

Liar Daisey to Continue Lying About Apple

Yesterday, I wrote a post regarding Daisey's lies about Apple:

http://www.thegoodeview.com/2012/03/facts-are-stubborn-thingsmike-daisey.html

I recently saw on Daring Fireball this post, which lists every lie that Mike Daisey told. Worse, the show is actually continuing!:

http://www.edrants.com/mike-daisey-lies-on-this-american-life-theaters-wont-cancel-performances-or-issue-refunds/

I wrote this comment to that article:

His art lacks integrity. Shame of those venues for allowing this to continue.

It's not okay to lie this way. If truth is not a requirement, then what incentive do companies have to improve workering conditions? If, rather than doing the hard work of actually understanding the situation a person like Mike Daisey can just come along and make things up why bother to make real improvements? It will never be good enough.

Truth is very important. By utilizing truth we can appreciate and evaluate what progress has been made, and what else needs to be done. Otherwise we risk doing more harm than good by punishing those who are trying to effect positive change.

Stating that this is "dramatic license" rather than laziness and fraud is shameful. We should not tolerate deceit as a shortcut to frame, power and influence. Mike Daisey had no business being the de facto spokesperson for fair labor at Foxconn.

I hope these venues realize that their integrity isn't worth a few nights profit.


I also agree with this post I saw on Daring Fireball that Daisey's "work" distorts our view of China:

http://www.newyorker.com/online/blogs/evanosnos/2012/03/mike-daiseys-mistakes-in-china.html


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