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Paying Taxes On Bitcoin And Other Forms Of Cryptocurrency

With exponential gains in value and thousands of new retailers now accepting it as payment, Bitcoin has suddenly become one of the hottest discussion topics around the country. Bitcoin (BTC) is currently the most circulated virtual currency (also referred to as cryptocurrency, or “crypto”) in the world and can be exchanged for U.S. dollars, Euros, and other real or virtual currencies like Ethereum (ETH) and Ripple (XRP).

You may spend virtual currency to pay for products or services, or you may treat it like an investment or commodity and hold onto it. But how is a virtual currency like Bitcoin taxed and treated by the IRS? Do you have to pay taxes on Bitcoin? Depends on what you do with it.

  • How is virtual currency like Bitcoin handled for federal tax purposes?

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Tax Cuts And Jobs Acts: Impact On Businesses

The Tax Cuts and Jobs Act, a $1.5 trillion tax cut package, was signed into law on December 22, 2017. The centerpiece of the legislation is a permanent reduction of the corporate income tax rate. The corporate rate change and some of the other major provisions that affect businesses and business income are summarized below. Provisions take effect in tax year 2018 unless otherwise stated.

Corporate Tax Rates

  • Instead of the previous graduated corporate tax structure with four rate brackets (15%, 25%, 34%, and 35%), the new legislation establishes a single flat corporate rate of 21%.
  • The Act reduces the dividends-received deduction (corporations are allowed a deduction for dividends received from other domestic corporations) from 70% to 50%. If the corporation owns 20% or more of the company paying the dividend, the percentage is now 65%, down from 80%.
  • The Act permanently repeals the corporate alternative minimum tax (AMT).

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Tax Executives Stunned To Learn About Their Corporate Tax Software…From Three Anonymous Consultants!

For those corporate tax leaders who attended the private conference call with I hosted with three anonymous tax technology consultants last week, I know you were as stunned as everyone on the call what was revealed. Three tax consultants in software implementation privately shared what is happening in corporate tax organizations today and costing companies millions.

While many corporate tax organizations are running lean, all too often companies are using tax software that has not been upgraded for some time. There are huge mistakes made every day utilizing complicated large enterprise tax software that has not been updated, implemented properly or that takes a degree in rocket science to figure out how to use it! There is exposure due to outdated corporate tax software.

Given that corporate tax executives are scrambling to stay updated on all the changes in the corporate tax laws, no one has had time to pay attention to what version tax software they may still be using to prepare the tax provision. Everyone agreed there is calamity coming in the third quarter for unprepared corporate tax organizations and the tax provision. You must be aware and start planning for the third quarter scramble corporate tax professionals are about to face in 2018. Everyone agreed on this matter.

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Looking For A Tax Job? Want Tax Consulting Work? Understand How The System Really Works! Everything Has Changed! Call In Conference Today 9:00 AM PDT

TaxConnections CEO Kat Jennings is hosting a valuable conference call on Friday, May 18th2018 at 9:00AM PDT/10:00AM MT/11:00AM CT/12:00NOON EST specifically to teach tax professionals how to be more successful finding a tax job or consulting roles. As a globally recognized tax search expert with a long list of clients, Kat will teach you what you need to know! Most people are in the dark what to do and Kat brings you into the spotlight!

Want to stop wasting time submitting your resume to company portals? Want to know why companies never respond to your resume submissions? Want to know why there are more tax jobs out there today but people cannot find you? Want to learn the challenges hiring authorities encounter to find you? It is nearly impossible to succeed until you understand the barriers to success and how to break down the walls preventing you from getting to the decision-makers.

There is a lot that prevents you from getting an interview and I will teach you how to get key decision makers to notice you! After years teaching senior tax executives how to get to the top, I will teach you how to do it. All you need to do is listen in on a conference call  (call in conference limited to the first 400 tax professionals).

REGISTER HERE FOR ACCESS CODE: https://www.taxconnections.com/call-in-conference-invitation

 

Virtual Currency Business Act Proposed Drives Droves Of Investors To Bermuda

TaxConnections, Virtual Currency Legislation

Virtual Currency Business Act Proposed In Bermuda – Regulation Of Virtual Currency Business Driving Many Investors To Bermuda

With interest in virtual currency at an all-time high, virtual currency is here to stay. Kevin Anderson of the Bermuda Monetary Authority, the financial services regulator states the Virtual Currency Business Act (VCBA) has been proposed as a “shining example” for what Bermuda can accomplish.

The Bermuda VCBA defines “virtual currency business” as the provision of the following activities: issuing, selling or redeeming virtual coins, tokens or any other form of virtual currency. This would include an ICO business on behalf of customers. The Act would also cover payment service providers, defined as: “a person whose business includes the provision of services for the transfer of funds.”

It would also cover virtual currency exchanges, virtual currency wallets and virtual currency services vendors, defined as any business providing specific virtual currency-related services to the public. The legislation also addresses the intersection of cryptocurrency and fiat, preventing fraud and market manipulation, the integrity of cryptocurrency owners, clear descriptions of the risks for prospective investors, and the Bermuda Monetary Authority BMA enforcement powers. Review the Consultation Paper at this link.

Want Your Crypto Tax Business To Appear On TaxConnections?

Contact kat@taxconnections.com

 

How To Mount A Tax Defense For Unreported Crypto Income

On February 23, Coinbase, a popular U.S.-based digital currency exchange, notified 13,000 of its customers that it would be turning over their account information to the IRS. The notice was precipitated by a U.S. District Court ruling in a protracted John Doe Summons battle between the company and the IRS concerning accounts with potentially unreported cryptocurrency income.

Ultimately, the Court found that the IRS was entitled to the information.

The Coinbase summons battle is reminiscent of aggressive tax enforcement efforts pursued by the Department of Justice to ferret out U.S. taxpayers holding unreported income and assets abroad. That initiative also began with the issuance of a John Doe summons, but to a Swiss bank, UBS, for unreported foreign account information.

The IRS and DOJ then quickly expanded to other foreign banks and other countries. With the offshore voluntary disclosure program (“OVDP”) winding down, there are strong indications that the IRS will be turning its attention to unreported cryptocurrency transactions.

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Looking For A Tax Job? Want Tax Consulting Clients? Join Conference Call Friday, May 18, 2018

TaxConnections CEO Kat Jennings is hosting a valuable conference call on Friday, May 18th2018 at 9:00AM PDT/10:00AM MT/11:00AM CT/12:00NOON EST specifically to teach tax professionals how to be more successful finding a tax job or consulting roles. As a globally recognized tax search expert with a long list of clients, Kat will teach you what you need to know! Most people are in the dark what to do and Kat brings you into the spotlight!

Want to stop wasting time submitting your resume to company portals? Want to know why companies never respond to your resume submissions? Want to know why there are more tax jobs out there today but people cannot find you? Want to learn the challenges hiring authorities encounter to find you? It is nearly impossible to succeed until you understand the barriers to success and how to break down the walls preventing you from getting to the decision-makers.

There is a lot that prevents you from getting an interview and I will teach you how to get key decision makers to notice you! After years teaching senior tax executives how to get to the top, I will teach you how to do it. All you need to do is listen in on a conference call (no webinar, just a call in conference limited to the first 400 tax professionals).

This session is for tax professionals exclusively who want to find employment or consulting projects.

Go to this link and click on radio dial “To Find A Tax Job” for information that will help you even when you are not looking.

Date: Friday, May 18, 2018

Time: 9:00AM PDT/10:00AM MT/11:00AM CT/12:00 NOON EST

Call In Number: 605.562.0400/ Access Code 946 5628

Have questions? Contact Kat Jennings.

 

Track Your Charitable Organization Driving Miles

Now that the effects of last year’s tax reform bill are being felt, the proposals to reform the reform keep rolling in. Last month, Sen. Bob Casey (D-PA) put forth a bill to reinstate unreimbursed job expenses. This week, Rep. Richard Nolan (D-MN) introduced H. R. 5662, also known as the Volunteer Driver Tax Appreciation Act of 2018.

The purpose of the bill is to amend the Internal Revenue Code of 1986 to equalize the charitable mileage rate with the business travel rate. For 2018, the Internal Revenue Service (IRS) optional standard mileage rates for the use of a car, van, pickup or panel truck are 54.5 cents per mile for business miles driven but a mere 14 cents per mile driven in service of charitable organizations.

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Dynasty Trusts Are More Valuable Than Ever

The Tax Cuts and Jobs Act (TCJA), signed into law this past December, affects more than just income taxes. It’s brought great changes to estate planning and, in doing so, bolstered the potential value of dynasty trusts.

Exemption Changes

Let’s start with the TCJA. It doesn’t repeal the estate tax, as had been discussed before its passage. The tax was retained in the final version of the law. For the estates of persons dying, and gifts made, after December 31, 2017, and before January 1, 2026, the gift and estate tax exemption and the generation-skipping transfer tax exemption amounts have been increased to an inflation-adjusted $10 million, or $20 million for married couples (expected to be $11.2 million and $22.4 million, respectively, for 2018).

Absent further congressional action, the exemptions will revert to their 2017 levels (adjusted for inflation) beginning January 1, 2026. The marginal tax rate for all three taxes remains at 40%.

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Learn Why Many Taxpayers Are Converting From A Traditional IRA To A Roth IRA

Roth IRA accounts provide the benefits of tax-free accumulation and, once you reach retirement age, tax-free distributions. This is the reason why so many taxpayers are converting their traditional IRA account to a Roth IRA. However, to do so, you must generally pay tax on the on the converted amount. After making a conversion, your circumstances may change, and you may find yourself wishing you had not made the conversion. In the past, you could change your mind later and undo the conversion. But that option is no longer available under tax reform. So, be careful: once a conversion is made, there is no going back.

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Want To Find A Tax Job? Want New Tax Consulting Clients? Join Audio Conference Call TODAY Friday, May 11, 2018

Looking For A Tax Job? Looking For New Tax Consulting Clients? Tax Professionals Are Invited To Conference Call Today Friday, May 11, 2018 at 1:00PM PDT /2:00PM MT/ 3:00PM CT/4:00PM EST

TaxConnections CEO Kat Jennings is hosting a rare conference call on Friday, May 11th2018 at 1:00PM PDT/2:00PM MT/3:00PM CT/4:00PM EST specifically to teach tax professionals how to be more successful finding a tax job or consulting roles. As a globally recognized tax search expert with a long list of clients, Kat will teach you what you need to know! Most people are in the dark what to do and Kat brings you into the spotlight!

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Understanding Marginal Income Tax Brackets

Lillian Meyers, Tax Advisor, Tax Blog, Sonoma, California, USA, TaxConnections

By any measure, the tax code is huge. According to Commerce Clearing House’s Standard Federal Tax Reporter it’s up to 74,608 pages in length.¹

And each Monday, the Internal Revenue Service publishes a 20- to 50- page bulletin about various aspects of the tax code.²

Fortunately, it’s not necessary to wade through these massive libraries to understand how income taxes work. Understanding a few key concepts may provide a solid foundation. Read more

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