Archive for Income Tax

Claiming Your Employee Business Expenses

If you are an employee with unreimbursed work-related expenses, you may be able to deduct them as an itemized deduction on Schedule A. You can deduct all unreimbursed employee business expenses incurred in the normal course of carrying out your responsibilities as an employee. Note that employee business expenses are subject to the 2% of AGI limitation, meaning that they must exceed 2% of your adjusted gross income before you can claim the deduction

You can deduct only unreimbursed employee business expenses that are:

• Paid or incurred during your tax year.
• Incurred for carrying on your trade or business as an employee. Read More

Written by | Posted in Income Tax • Individual • Small Business

Tips on Travel While Giving Your Services to Charity

Do you plan to donate your services to charity this summer? Will you travel as part of the service? If so, some travel expenses may help lower your taxes when you file your tax return next year. Here are several tax tips that you should know if you travel while giving your services to charity.

• Qualified Charities.  In order to deduct your costs, your volunteer work must be for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are qualified, and do not need to apply to the IRS. Ask the group about its IRS status before you donate. You can also use the Select Check tool on IRS.gov to check the group’s status. Read More

Written by | Posted in Corporate • Income Tax • Individual • International • Military • Non-Profit Tax • Small Business • Tax Planning

10 Tips For Deducting Losses From A Disaster

National Hurricane Season is officially in progress. If you suffer damage to your home or personal property, you may be able to deduct the losses you incur on your federal income tax return. Here are ten tips you should know about deducting casualty losses:

1. Casualty loss. You may be able to deduct losses based on the damage done to your property during a disaster. A casualty is a sudden, unexpected or unusual event. This may include natural disasters like hurricanes, tornadoes, floods and earthquakes. It can also include losses from fires, accidents, thefts or vandalism.

2. Normal wear and tear. A casualty loss does not include losses from normal wear and tear. It does not include progressive deterioration from age or termite damage. Read More

Written by | Posted in Corporate • Expatriate • Federal • Income Tax • Individual • International • Tax Deductions • Tax Planning • Tax Tips

Cash Flow: The Pulse of Your Business

Cash flow is the lifeblood of any small business. Some business experts even say that a healthy cash flow is more important than your business’s ability to deliver its goods and services! While that might seem counterintuitive, consider this: if you fail to satisfy a customer and lose that customer’s business, you can always work harder to please the next customer. If you fail to have enough cash to pay your suppliers, creditors, or employees, then you’re out of business!

What is Cash Flow?

Cash flow, simply defined, is the movement of money in and out of your business; these movements are called inflow and outflow. Inflows for your business primarily come from the sale of goods or services to your customers but keep in mind that inflow only occurs Read More

Written by | Posted in Corporate • Federal • Income Tax • Individual • Small Business

Receiving Tips Can Be Taxing

If you work in an occupation where tips are part of your total compensation, you need to be aware of several facts relating to your federal income taxes:

• Tips are taxable – Tips are subject to federal income, social security, and Medicare taxes. The value of non-cash tips, such as tickets, passes, or other items of value, is also income and subject to taxation.

• Include tips on your tax return – You must include in gross income all cash tips received directly from customers, tips added to credit cards, and your share of any tips received under a tip-splitting arrangement with fellow employees.

• Report tips to your employer – If you receive $20 or more in tips in that month, you should Read More

Written by | Posted in Income Tax • Individual

Tax Tips For Students With A Summer Job

Is your child a student with a summer job? Here’s what you should know about the income your child earns over the summer.

1. All taxpayers fill out a W-4 when starting a new job. This form is used by employers to determine the amount of tax that will be withheld from your paycheck. Taxpayers with multiple summer jobs will want to make sure all their employers are withholding an adequate amount of taxes to cover their total income tax liability. If you have any questions about whether your child’s withholding is correct, please call our office.

2. Whether your child is working as a waiter or a camp counselor, he or she may receive tips as part of their summer income. All tip income is taxable and is therefore, subject to Read More

Written by | Posted in Federal • Income Tax • Individual • United States

Tax And Non-Tax Issues of Sharing Residences

We hear a lot about the sharing economy – making money by sharing something you are not fully using, such as a room in your home, or your entire home or vacation home. Sounds like a good way to make some extra money and perhaps raise your standard of living* (note- the rental income is taxable unless the dwelling is rented out less than 15 days for the year (Section 280A(g)). The federal tax treatment (and state as most states follow the federal income tax rules) can be complicated due to the need to determine which of two rules apply to measure deductible expenses and what to do with any loss generated. If the average rental period is 7 days or less, treatment of any income and loss also depends on whether you materially participate.  The income tax rules easily get complex. Read More

Written by | Posted in Income Tax • Tax Tips

The Home-Based Business: Basics to Consider

More than 52 percent of businesses today are home-based. Every day, people are striking out and achieving economic and creative independence by turning their skills into dollars. Garages, basements, and attics are being transformed into the corporate headquarters of the newest entrepreneurs–home-based business people.

And, with technological advances in smartphones, tablets, and iPads as well as a rising demand for “service-oriented” businesses, the opportunities seem to be endless.

Is a Home-Based Business Right for You?

Choosing a home business is like choosing a spouse or partner: Think carefully before starting the business. Instead of plunging right in, take the time to learn as much about Read More

Written by | Posted in Federal • Income Tax • Individual • Small Business

South African Tax Man’s Message To HSBC Account Holders

The South African Revenue Service (SARS) has announced an amnesty of sort – a threat and upfront warnings: we do know about you, best you come forward before we make the tax audit into your affairs known.

On July 9th, 2015, SARS issued a press release, which can be read in more detail on:

http://www.sars.gov.za/Media/MediaReleases/Pages/9-July-2015 – – – South-Africans-with-accounts-and-investments-in-foreign-tax-jurisdictions.aspx

The International Consortium of Investigative Journalists (ICIJ), based information obtained by French newspaper Le Monde, ranked South Africa number 31 among the countries with the largest amount of dollars ($2.3blion) in the so-called leaked Swiss Read More

Written by | Posted in Africa • Expatriate • FATCA • FBAR • Income Tax • International • IRS • OECD • OVDP • Swiss Bank Accounts • Tax Controversy • Tax Fraud/Evasion/Crimes • Tax Policy • Tax Provision/Tax Reporting • Tax Risk Management • Transfer Pricing • United States

Tax Tips For Students With A Summer Job

Many students hold a summer job during their time off from school. Here are some tax issues that should be considered when working a summer job.

1. Completing Form W-4 When Starting a New Job – This form is used by employers to determine the income taxes that will be withheld from your paycheck. Taxpayers with multiple summer jobs will want to make sure all of their employers are withholding an adequate amount of taxes to cover their total income tax liability. Generally, a student who is claimed as a dependent of another with income only from summer and part-time employment can earn as much as $6,300 (the standard deduction amount) without being liable for income tax. However, if the student is a dependent and has investment income, the tax determination becomes more complicated and subject to special rules.  Read More

Written by | Posted in Income Tax • Individual

Filing an Amended Tax Return

What should you do if you already filed your federal tax return and then discover a mistake? First of all, don’t worry. In most cases, all you have to do is file an amended tax return. But before you do that, here is what you should be aware of when filing an amended tax return.

Taxpayers should use Form 1040X, Amended U.S. Individual Income Tax Return, to file an amended (corrected) tax return. You must file the corrected tax return on paper. An amended return cannot be e-filed. Please call if you need assistance or have any questions about Form 1040X.

If you need to file another schedule or form, don’t forget to attach it to the amended return. Read More

Written by | Posted in Income Tax • Individual • IRS

Choosing The Correct Filing Status – Head of Household (HOH)

If you are unmarried, or married but considered unmarried (see below) on the last day of the tax year, you can file Head of Household if the following conditions apply:

(a) You paid more than half the costs of keeping up a home for the tax year, and

(b) A qualified person (see definition below) lived with you for more than half of the tax year.

Filing Head of Household can have substantial financial benefits over filing as a single status taxpayer. In filing as Head of Household, one enjoys lower tax rates and a larger Standard Deduction. Read More

Written by | Posted in Income Tax • Individual • Tax Deductions • Tax Planning
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