Archive for Tax Reform

Newly-Revised Estimated Tax Form And Publication Can Help People Pay The Right Amount

WASHINGTON – With tax reform bringing major changes for the year ahead, the Internal Revenue Service today reminded the many self-employed individuals, retirees, investors and others who need to pay their taxes quarterly that the first estimated tax payment for 2018 is due on Tuesday, April 17, 2018.

The Tax Cuts and Jobs Act, enacted in December 2017, changed the way tax is calculated for most taxpayers, including those with substantial income not subject to withholding. Among other things, the new law changed the tax rates and brackets, revised business expense deductions, increased the standard deduction, removed personal exemptions, increased the child tax credit and limited or discontinued certain deductions. As a result, many taxpayers may need to raise or lower the amount of tax they pay each quarter through the estimated tax system. Read More

Written by | Posted in IRS • Tax Cuts Jobs Act • Tax Reform • Withholding Calculator

IRS Alerts Taxpayers About Refund Scam

The IRS warns taxpayers of a new twist on an old scam. Criminals are depositing fraudulent tax refunds into individuals’ actual bank accounts, then attempting to reclaim the refund from the taxpayers.
Here are the basic steps criminals follow to carry out this scam. The thief:

• Hacks tax preparers’ computers to steal taxpayer data.

• Uses the stolen information to file tax returns as the taxpayers.

• Has refunds deposited into taxpayers’ bank accounts. Read More

Written by | Posted in Fraud • IRS • IRS Scam • Tax Reform • TaxConnections

Tax Reform And Cash Management Considerations For Clients

A recent interview style Q and A session appeared in Accounting Today featuring the expertise of author Iralma Pozo. In this series of questions, Pozo tackles some important aspects of the most significant change to the U.S. tax code since 1986. With such historic changes underway, it’s critical that you understand how the Tax Cuts and Job Act will affect cash flow issues for clients.

What’s particularly insightful is Pozo’s advice regarding parents and what they need to know about 529 plans. Her observations about developing a new strategy for charitable deductions and nonprofit organizations are also highlights:

With So Many Changes And Factors, Where Do Advisors Start? Read More

Written by | Posted in Tax Cuts Jobs Act • Tax Reform

US Tax Reform: 5 Things Americans Overseas Need To Know

What Are The Important Updates One Needs To Know About U.S. Tax Reform?

The New Tax Bill “Tax Cuts and Jobs Act” presents the first major overhaul of the United States federal income tax system in more than three decades. The major benefits will be mostly felt by the large and small businesses. But what’s about tax reform’s impact on Americans overseas?

What Has NOT Changed For Americans Overseas?

  1. You can still use Foreign Earned Income Exclusion or Foreign Tax Credit to lower your tax bill. In 2018 a U.S. expat can exclude up to $104,100 of foreign earned income.
  2. The reporting requirements for FBAR stay in place: you need to file FinCEN Form 114 if you have an aggregate value of over $10,000 in any foreign financial accounts you own or have a signature over.
  3. FATCA and Form 8938 also didn’t have any changes (unfortunately).

Read More

Written by | Posted in Expatriate Taxes • Tax Cuts Jobs Act • Tax Reform • TaxConnections

U.S. Impact Of Federal Tax Reform From Italy’s Perspective: Renewed Attention On Italy’s Anti Inversion Rules

As a result of the significant reduction of U.S. corporate income tax rates pursuant to the tax reform of the TCJA enacted on December 22, 2017, the Unites States now has a lower corporate tax rate than many of its trading partners, meaning that, in many instances, the profits of foreign owned or controlled-U.S. subsidiaries shall be taxed more favorably than the profits of their foreign parent companies or affiliates in their home jurisdictions. That creates an incentive for foreign companies to channel more profits through their U.S. subsidiaries, in order to benefit from lower U.S. income taxation compared to that applicable in the parent company’s home country. Read More

Written by | Posted in Italy Tax • Tax Cuts Jobs Act • Tax Reform • TaxConnections

How The New 2017 Tax Reform Will Affect You

In summary, based on an analysis prepared by the Tax Policy Center, President Trump’s revised tax plan would cut taxes on every income level.  However, high wage earners will receive the biggest tax cuts, both in terms of dollars, as well as in percentage of income.  According to the analysis, the Trump revised tax plan would reduce the top individual income tax rate to 33 percent, and reduce the corporate rate to 15 percent.

The plan will allow owners of pass-through businesses (such as sole proprietorships, partnerships, and S corporations) to elect to be taxed at a flat rate of 15 percent, rather than under the regular individual income tax rates.  Capital gains and dividends would be taxed under the current preferential rate structure.  Distributions from “large” pass-through businesses received by owners who elected the 15 percent flat rate would be taxed as dividends. Read More

Written by | Posted in Tax Reform

The Good & Bad Of The New Tax Reform: How California’s Affected

The beginning of the year marks the start of many new things: a new year, new business goals and new federal tax reform. What do the changes in tax law mean for California companies – especially in Silicon Valley?

In The Daily Journal, Carl Guardino (CEO of the Silicon Valley Leadership Group) likened the latest tax reform to the 1960s western, “The Good, the Bad and the Ugly” – and for good reason. While there are some changes that will benefit corporations, others will likely make it difficult for businesses in the area. Read More

Written by | Posted in Tax Reform

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

Written by | Posted in Tax Reform • TaxConnections

Federal Tax Reform Is Nearing The Finish Line

Thomas Zaino, Tax Connections

On December 15, 2017, the Tax Cuts and Jobs Act (H.R. 1) conference committee members signed and released a Conference Agreement reconciling the different tax bills passed by the U.S. House and the U.S. Senate. The U.S. Senate passed the bill on December 19, 2017, and the U.S. House passed the final version of the conference committee report on December 20, 2017. President Trump is expected to sign the bill into law.On December 15, 2017, the Tax Cuts and Jobs Act (H.R. 1) conference committee members signed and released a Conference Agreement reconciling the different tax bills passed by the U.S. House and the U.S. Senate. The U.S. Senate passed the bill on December 19, 2017, and the U.S. House passed the final version of the conference committee report on December 20, 2017. President Trump is expected to sign the bill into law. Read More

Written by | Posted in Federal • Tax Reform

Senate Finally Approves and Passes Tax Reform Bill- Part II Deductions

Harold Goedde, Tax Advisor

The standard deduction will be doubled starting in 2018 and many taxpayers itemized deductions may be less than the standard deduction. To maximize itemized deductions in 2017, taxpayers should pay these in 2017.

(A) State and local taxes.

The House bill puts a $10,000 cap on these, but the Senate Finance Committee completely repeals the deduction. In light of this, the following actions should be taken for: Read More

Written by | Posted in Tax Reform • TaxConnections

Senate Finally Approves and Passes Tax Reform Bill-What’s in Store?

The House has passed their version of the Tax Reform bill and the Senate Finance Committee has approved a bill which will now be debated, amended, and voted on by the full Senate. The bill passed by the Senate will be different from the one passed by the House. The differences will be ironed out by the joint House-Senate Compromise Committee and then voted on by the full House and Senate, which cannot be amended.

This process may not be completed until the end of the year which will not leave much time for taxpayers to do effective planning to minimize their 2017 taxes. Due to the uncertainty of the final law’s provisions, this article makes suggestions how taxpayers can minimize their 2017 taxes. Part I explains ways to minimize income and Part II explains ways to increase deductions. Read More

Written by | Posted in Tax Reform • TaxConnections

Tax Reform Links and Examples

UPDATED 12/2/17: Tax reform is moving along. The House Ways and Means Committee introduced its bill – H.R. 1, on November 2 and the House passed it on November 16. The Senate Finance Committee released its proposal on November 9 and passed it on November 16. Late on 12/1/17, the Senate passed a bill that made numerous amendments to the bill passed by the Senate (see the list of amendments in this JCT document). Now the House and Senate need to create a conference committee to work out the differences among the bills and that version will go back to House and Senate for votes.  Or, perhaps the House will just pass the Senate version, but I don’t think so. I think there are some items the House doesn’t like such as the corporate rate reduction not starting until 2019.

Read More

Written by | Posted in Senate • Tax Reform • United States
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