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Archive for Form 1040

With A CLAT, CLUT Here And A CRAT, CRUT There – Old MacDonald Had A Trust EIEIO: IRC 641-692 & IRS Form 1041

John Dundon

The one thing stopping good people from engaging the full force and effect of tax and estate planning using trust instruments is the language. Acronyms make it hard to understand what lawyers are saying and most of us simply put ourselves out of commission when it comes to this type of tax planning.

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Income Tax Aspects Of Non-Business Capital Gains And Losses Part I

Harold Goedde

This article will discuss the general aspects of capital gains and losses, the brokers reporting to investors, how and where they are reported on Form 1040 and supporting schedules.

It is advantageous to have investment income in the form of long-term (held longer than one year) capital gains (LTCG) because they are taxed at a lower rate than ordinary income. For 2016, the net LTCG will be taxed at various rates depending on the tax bracket:

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Some Cautions Affecting Your Tax Situation

For this post, I will present some news about tax topics that may affect your current situation: earned income tax credit (EITC), delayed nonresident refunds, and expatriate income tax.

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U.S. Citizens’ Capital Gains Taxable Under U.S.-Israel Treaty

Ron Marini

The United States Tax Court has concluded that a pro se taxpayer who was a U.S. citizen and permanent Israel resident was taxable on his capital gains. Although the taxpayer argued that such gain was excluded from U.S. tax under one provision of the U.S.-Israel income tax treaty, the court nonetheless ruled the income taxable under the treaty’s “saving clause.”

After moving to Israel in 2009, Elazar Cole, a U.S. citizen, became a permanent resident of Israel in 2010. As a result of moving to Israel, he qualified for a ten-year Israeli “tax holiday,” which exempted him from Israeli tax on non-Israeli-source capital gain income. Indeed, Article 15, paragraph 1, of the Convention between the Government of the United States of America and the Government of Israel with Respect to Taxes on Income, U.S.-Israel, Nov. 20, 1975 provides that “[a] resident of one of the Contracting States shall be exempt from tax by the other Contracting State on gains from the sale, exchange, or other disposition of capital assets.”

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When Junior Has A Foreign Bank Account: What’s To Be Expected!

Manasa Nadig

I looked up my last blog post and realized I have not posted here since January! What a tax season it was, and how did time get away from me? Oh wait…I know how!

The past few years have seen a steady growth of a client base that has foreign accounts: no complaints there! Most clients have very routine FBAR filing requirements but then sometimes things are a little out of the ordinary and that gets me all excited…yes, I know..it does! That either tells you about my lack of a life during tax season or we should just notch it up to tax nerd-iness!

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The Newly Issued Form 1042-S – Foreign Person’s U.S. Source Income Subject to Withholding

Ronald Marini

IRS has issued the 2016 version of Form 1042-S, Foreign Persons’ U.S. Source Income Subject to Withholding, and the instructions for that form. The form requests even more information then the 2015 version of this form!

What’s New In 2016:

Substitute forms. A substitute form furnished to a recipient must conform in format and size to the official IRS form and contain the exact same information as the copy filed with the IRS. However, the size of the form may be adjusted if the Read more

Can IRS Stop Printing Forms And Pubs?

Annette Nellen

Who remembers when the IRS mailed a packet with blank tax forms and instructions AND your Social Security number printed on your mailing label?  Several years ago the IRS reduced mailings such as when they could tell the taxpayer prepared their return with software the year before and for the past few years don’t mail forms.  They do still print them to pick up at IRS service locations. All of the forms, instructions and publications can be read or printed from the IRS website. Read more

Transparency For Individual Taxes

Annette Nellen

Transparency as a principle of good tax policy means taxpayers should understand taxes and how they apply to them. Despite lots of data on a filer’s Form 1040, the one number people focus on is the amount due or refund. Clearly the better number is total federal income tax liability. And better yet, people should also Read more

Obtaining and Claiming a Health Coverage Exemption

David Green

The Affordable Care Act requires you and each member of your family to have minimum essential coverage, qualify for an insurance coverage exemption, or make an individual shared responsibility payment for months without coverage or an exemption when you file your federal income tax return.You, your spouse or your dependents may be eligible to claim an exemption Read more

Amended Returns

Debra Thompson

Oops! You’ve discovered an error after your tax return has been filed. What should you do? You may need to amend your return.

The IRS usually corrects math errors or requests missing forms (such as W-2s) or schedules. In these instances, do not amend your return. However, do file an amended return if any of the following were reported incorrectly: Read more