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Archive for Manasa Nadig

What’s New On The 2018 Form 1040NR: Small Changes, Big Impact!

Manasa Nadig -Form 1040NR

Do train stations make you wistful? My husband and I lived on the East Coast when we first moved to the US and sometimes took the train from Baltimore to DC. Passing the town of Riverdale, MD got us all excited because like every other Indian teenager of our generation, we had grown up on a rather unhealthy dose of Archie comics!

Well, it was around this time that I discovered Tax Law and found it quite fascinating. I started to prepare our own taxes which involved Form 1040NR’s, India-US Treaty knowledge and the rest is rather choppy history which is reserved for another post because today we need to talk to about this 2018 Form 1040NR.

For the longest time ever this foreign cousin of the good ol’ Form 1040 had a rather mundane existence, nothing usually changed on it. Tax geeks got all excited when the Form 1040NR finally entered the digital age in 2017, we had hardly settled down from that when the BIG 2017 Tax Reform happened and everything pretty much is different now.

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The 20% Qualified Business Income Deduction: Section 199A

Manasa Nadig - Section 199A

2018 has been all about Tax Reform, you would probably have to be living in a cave in the United States if you did not hear about this. In this post we will talk about the biggest change that came out with the Tax Cuts and Jobs Act: Section 199A. This section allows owners of flow through entities such as Sole Proprietorships, S Corporations or Partnerships a deduction of 20% of the income earned by the flow-through.

The Internal Revenue Service dropped the proposed Regulations on Section 199A on August 8th, 2018, all of its 184 pages can be accessed here. A lot of different interpretations have been tossed around; everyone was hoping that the guidance would clear up the ambiguity. There is still much that needs to be addressed but unlike the story of the four blind men and the elephant, a solid shape is emerging out of the mist!

Caveat: Today’s post is a small introduction to this new section. There is much more information to be culled from the 184 pages.  My goal in this post is helping you glean some knowledge about Section 199A and will talk to experts about the mechanics of qualifying for the deduction.

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Tax Cuts And Jobs Act (TCJA): Changes For American Expatriates

Many American citizens who live outside the US have for years raised concerns about the United States’ Citizen-Based-Taxation System. They may have been hopeful when tax reform was being proposed but have been disappointed that their concerns have been ignored. The new tax reform bill Tax Cuts and Jobs Act called TCJA (pronounced tick-jah) has brought about massive changes in the way individuals are going to be taxed but not much has changed for American Expatriates.

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Tax Reform Changes How You Itemize

The media is abuzz with Tax Reform news, here to allay your confusion regarding the cut to some deductions and tax rates is my latest blog post. The media is abuzz with Tax Reform news, here to allay your confusion regarding the cut to some deductions and tax rates is my latest blog post.

The tax rates change has been the most publicized but there are many deductions on the chopping block that will drastically change how you prepare your taxes and/ or your bottom line.  Read more

When Can A Non-Resident Spouse Be Treated As A Resident?

As the tax reform debate rages on currently, I do not see much in the proposals changing for US citizens living abroad. As this story unfolds, I think it is a good thing that US citizens/ resident aliens living abroad are not affected. We shall wait and watch. For all the latest news-stay tuned!

As it happens many times for those US citizens who have moved abroad and married someone who is a citizen of their resident country, when times comes to file a tax return, they have to use the “Married Filing Separately” or the “Head of Household” filing status. Both of these may not be as advantageous as the “Married Filing Jointly” filing status tax-wise.

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Foreign Freelance Income & What Does Maradona Have To Do With It?

Just when I was planning on publishing my post on foreign free lance income and tax consequences- the big news headline of 2017 dropped! Today special prosecutor, Robert Mueller brought charges against Manafort & Gates for money laundering and foreign bank accounts among any other things. While those fireworks continue and you think that you may not be in the same league as them, let me assure you that many U.S. citizens who live abroad and have freelance income do not understand its tax implications.

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Cryptocurrency: A Story And Tax Consequences

Thinking about writing about Bitcoin, I remembered my maverick of an Economics teacher back in high school in Mumbai, India whose very thick south Indian accent meant we did not know what he was saying more than half the time. He started off the chapter on currency by having everyone in class remain standing till we came up with a definition for “Money”. Thankfully someone said “medium of exchange” real quick!

Although the underlying meaning of currency remains the same, the simple concept of a medium of exchange has undergone several upgrades particularly so with the cryptocurrency or digital payment systems known more commonly as Bitcoin.

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U.S. Expat Mistakes : Part III

The same vein runs through most expat conversations. U.S. taxes are burdensome and compliance is difficult. Keeping up with the rules and regulations takes up a big chunk of the expats’ time.

Many financial institutions in countries which have Inter-Governmental Agreements {IGAs} with the U.S. find keeping up with U.S. Bank Secrecy Act reporting requirements so cumbersome that they  do not want U.S. citizens to be their patrons.  Read more

U.S. Expat Mistakes: Part II

I have been on many online forums, message boards, and groups for U.S. citizen expats over the past few years. Most posts you see are ones with frantic U.S. citizens overwhelmed with U.S. tax rules & regulations they have to keep up with. This, in addition to keeping up with their resident country’s tax laws, must drive one crazy. These forums provide quick answers; no wonder they are so popular! Read more

U.S. Expat Mistakes: Part I

Manasa Nadig

United States is one of the few countries in the world in its Citizen-Based-Taxation format. This means that no matter where you live, you need to be current on your U.S. tax filing if you are a U.S. Citizen or Green Card Holder. You are known as an Expatriate or Expat (for short) if you are a U.S. citizen or green card holder living outside the United States.   Read more

Spring Cleaning? Can You Toss Those Tax Records?

Manasa Nadig

Ever stare at boxes and boxes of files in your garage or your basement and get an itch to clean up? Or are you the sort who pushes these boxes out of sight and is quite happy to let them be? Whichever personality best describes you, you will want to read this before you decide to throw those papers or cover them up with something fancy, call it art and make it a fixture in your basement!

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Perspective: What Frustrates Me Most About Start-Ups!

Manasa Nadig, Start-ups, tax help

One of the services my firm offers is assistance in Entity Selection for start-ups. This is usually when we talk about various options available for the incorporator and what type of entity would be the best fit for the start-up in terms of liability exposure, record-keeping, and tax filing. This meeting usually results in setting up an entity, giving the incorporators guide-lines for record-keeping and help with choosing accounting software and set up, and so on, you get the drift?

So off they go with an Entity tucked away neatly under their arm, and the title music plays—you think? But no! Wait, here’s where the music stops with an ugly, teeth-tingling screech… The incorporator comes back at tax time and you look at all the bank statements, and you see the big thou-shalt-not of, “Commingling the Books.”

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