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Archive for Tax Credit

Effect Of Sequestration On The Alternative Minimum Tax Credit For Corporations

Pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments issued to, and credit elect and refund offset transactions for, corporations claiming refundable prior year minimum tax liability, are subject to sequestration.

This means that refund payments and credit elect and refund offset transactions processed on or after Oct. 1, 2017, and on or before Sept. 30, 2018, will be reduced by the fiscal year 2018 6.6 percent sequestration rate, irrespective of when the IRS received the original or amended tax return.

The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise affects the sequester, at which time the sequestration reduction rate is subject to change.

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IRS Announces Six Large Business And International Compliance Campaigns

The IRS Large Business and International division (LB&I) has announced the approval of six additional compliance campaigns. LB&I announced on January 31, 2017, the rollout of its first 13 campaigns, followed by an additional 11 on November 3, 2017, and five more on March 13 of this year.

LB&I is reviewing legislation enacted on December 22, 2017, to determine which existing campaigns, if any, could be impacted as a result of a change in the controlling statutory framework. Information regarding any identified impact will be communicated after that analysis has been completed.

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Tax Credits Can Mean A Refund for Individual Taxpayers

Taxpayers who are not required to file a tax return may want to do so. They might be eligible for a tax refund and don’t even know it. Some taxpayers might qualify for a tax credit that can result in money in their pocket. Taxpayers need to file a 2017 tax return to claim these credits.

Here is information about four tax credits that can mean a refund for eligible taxpayers:

  • Earned Income Tax Credit. A taxpayer who worked and earned less than $53,930 last year could receive the EITC as a tax refund. They must qualify for the credit and may do so with or without a qualifying child. They may be eligible for up to $6,318. Taxpayers can use the 2017 EITC Assistant tool to find out if they qualify.

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Tax Credit Can Help Employers Hiring New Workers; Key Certification Requirement Applies

WASHINGTON — With many businesses facing a tight job market, the Internal Revenue Service reminds employers to check out a valuable tax credit available to them for hiring long-term unemployment recipients and other categories of workers with employment barriers.

During National Small Business Week — April 29 to May 5 — the Internal Revenue Service highlighted tax benefits and resources designed to help new and existing small businesses. Read more

Australian Tax: New Tax Incentive To Drive The Minerals Exploration Industry

Applications open on the 16th of April 2018 for the Junior Minerals Exploration Incentive (JMEI).

Back in September 2017, the government announced it will look to provide a tax incentive for junior exploration companies to encourage investment and risk taking. The Junior Mining Exploration Incentive (JMEI) builds upon the Exploration Development Incentive (EDI) which ceased on the 30th of June 2017.

The Australian Bureau of Statistics released Australia’s mineral exploration statistics for the December 2017 quarter. The report found that overall there continues to be an imbalance between greenfields and brownfields exploration, with 67% of drilling happening in already explored brownfield locations. Read more

Foreign Tax Credit For Individuals Living Abroad

As you know, the United States requires all citizens and permanent residents (Green Card holders) to report income via annual income tax filings regardless of where in the world the money was earned. As the name suggests, the Foreign Tax Credit for individuals is designed to reduce your U.S. tax burden on income that was earned and consequently taxed in a foreign country. In this way, you will not be subject to double taxation on that money.

In addition to foreign earned income (FEI), dividends, interest, and even rental income that come from foreign sources are eligible for consideration with the Foreign Tax Credit if they were taxed by a foreign entity. One benefit to using this credit is that it is available to all U.S. taxpayers who have foreign earned income or investment income from a foreign source. There are no stipulations regarding residency or time spent in a foreign country to take advantage of this reduction in taxes owed at home. Read more

The American Opportunity Tax Credit System Is In Place

Tax credit systems are in place to let tax payers deduct a certain amount from their tax liability to the state or federal government based on different programs. One such initiative is the American Opportunity Tax Credit, or commonly known as AOTC. This tax credit system is designed specifically for college going students, allowing them to settle their college costs via tax credits. AOTC is much more beneficial when compared to tuition deduction since it allows for an actual reduction in taxes that you owe to the government. But there are certain eligibility criteria that one must meet to be able to benefit from this system. Read more

Tax Benefits And Credits: Planning And Saving For College

As a CPA, I am asked a lot of questions regarding tax benefits and credits for children. One of the more interesting questions I have heard is “Why do they take away benefits as the kids get older? They don’t cost less, they cost more – a lot more”. While I don’t really have a good answer, one thing I do explain is that there are different benefits and credits that apply to older children as it pertains to their college education.
 
One of the biggest decisions in a person’s life is what college to attend – or whether to attend at all. The decision and the subsequent attendance and performance will likely have more of an impact on their overall comfort and life style than any other event or decision in their lives.

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Some Taxpayers Eligible For A Refund And Do Not Even Know It

Taxpayers who are not required to file a tax return may want to do so. They might be eligible for a tax refund and don’t even know it. Some taxpayers might qualify for a tax credit that can result in money in their pocket. Taxpayers need to file a 2017 tax return to claim these credits.

Here is information about four tax credits that can mean a refund for eligible taxpayers:

  • Earned Income Tax Credit. A taxpayer who worked and earned less than $53,930 last year could receive the EITC as a tax refund. They must qualify for the credit, and may do so with or without a qualifying child. They may be eligible for up to $6,318. Taxpayers can use the 2017 EITC Assistant tool to find out if they qualify.

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Tax Deductions Vs. Tax Credits

Tax Credits and Deductions are probably the most exciting part when preparing your tax return. They both help you save money by reducing your overall income tax liability. So, you should take a full advantage of all the tax credits and deductions you qualify for.

Tax Credits and Deductions are probably the most exciting part when preparing your tax return. They both help you save money by reducing your overall income tax liability. So, you should take a full advantage of all the tax credits and deductions you qualify for.
As many still get confused about the difference between tax credits and tax deductions, here’s a simple introduction to the these two in the light of the New Tax Reform that just has been approved.  Read more

The Postcard Filing – A Naïve, Misguided Fantasy

Eva Rosenberg, Tax Connections

The good news. President Trump Congress keeps telling you that taxpayers will be able to file on a postcard.

The bad news? Look at lines 3, 10, 11, and 12.
Your government is naïve. While this may be wish-fulfillment, it has no basis in practical reality.

It should be a required pre-requisite for all lawmakers to prepare their own income tax returns before they are permitted to write, vote on, or pass legislation. I loved that episode of the short-lived TV series Mr. Sterling, where Senator Bill Sterling (Josh Brolin)  is grumbling, trying to prepare his own tax return. Better yet, they should spent two weeks volunteering, or observing, at a VITA site to see how their tax laws truly affect low-income people’s tax filings. Read more

Michigan in the Spotlight: History, Business Climate, Tax Incentives and Credits

This month takes us to the Wolverine State of Michigan. The origins of this name are obscure, but may be derived from a busy trade in Wolverine furs during the 18thCentury.

Its largest city, Detroit, is famed as the seat of the U.S. auto industry, which inspired Diego Riviera’s murals at the Detroit institute of Arts. Also in Detroit is Hitsville U.S.A., the original headquarters of the Motown Record Company. Michigan is home to many great musicians including The Supremes, The Temptations, Stevie Wonder, Smokey Robinson, Bob Seger, Kid Rock and Alice Cooper.

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