Archive for TaxConnections

U.S. Citizens Speak Out “While You Can” About Proposed Repatriation Tax Regulations: Exempt American Small Business Owners In United States And Worldwide From US Transition And GILTI Taxes

John Richardson - U.S. Citizens And Proposed Repatriation Tax

This is part of my series of posts discussing the Section 965 U.S. Transition Tax. This has been reposted with permission from

Time Out From Our Regular Programming With This Special Message – A Call To Action – from Attorney Monte Silver:

Hi Fellow Americans:

On August 1, 2018, the Treasury/IRS issued proposed regulations that interpret the Repatriation Tax Law – a 250 page very complicated document. I discovered that in issuing the document, Treasury, the IRS and other Federal agencies seriously violated numerous Federal laws and procedures. This gives us tremendous leverage in negotiating for an exemption from the Repatriation & GILTI laws.

It is not unreasonable to expect that this battle may be won by December 15, 2018. What you can do to help win the battle? Easy! Treasury needs to hear your voice in a few short paragraphs (as outlined below) – by October 7, 2018.

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What Property Is Exempt From IRS Seizure?

The IRS can seize many different types of property, including bank accounts, wages, and retirement accounts. However, some items are specifically exempt from IRS seizure under federal law.

The following types of property can’t be seized by the IRS under any circumstances:

  • unemployment benefits
  • certain annuity and pension benefits
  • certain military service-connected disability payments
  • workers’ compensation benefits
  • certain public assistance payments
  • income for court-ordered child support payments
  • necessary schoolbooks and clothing
  • certain amounts worth of fuel, provisions, furniture, personal effects for a household
  • certain amounts worth of books and tools for trade, business, or professions

In addition to these payments and assets, a portion of your wages from each paycheck is exempt from seizure. The exempt amount is calculated based on your filing status and number of dependents. Your wages above this amount can be seized continuously until your tax debt is paid off.

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IRS Issues Proposed Regulations On Global Intangible Low-Taxed Income For U.S. Shareholders

IRS - IRS Issues Proposed Regulations On Global Intangible Low Taxed Income For U.S. Shareholders

The Internal Revenue Service issued proposed regulations today concerning global intangible low-taxed income under section 951A and related sections of the Internal Revenue Code.

The Tax Cuts and Jobs Act (TCJA), passed in December 2017, made major changes to the tax law, including adding new rules requiring the inclusion of global intangible low-taxed income generated by controlled foreign corporations (CFCs).

Under the TCJA, a U.S. person that owns at least 10 percent of the value or voting rights in one or more CFCs will be required to include its global intangible low-taxed income as currently taxable income, regardless of whether any amount is distributed to the shareholder. A U.S. person includes U.S. individuals, domestic corporations, partnerships, trusts and estates.

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Surrogacy Fees And Taxes

Charles Woodson - Surrogate Fees And Taxes

Articles about the taxability and deductibility of surrogacy fees are rare because there are far fewer surrogacies than with conventional births. Surrogacy is a legal arrangement in which a surrogate mother, new parents and (often) a surrogacy agency enter into a binding contract. In the event of a breach of that contract, any party can be held to the terms of the agreement.

Tax Treatment for the Surrogate – The Internet contains a wide variety of opinions related to the taxability of the surrogacy fee to the surrogate mother. Some authors classify this fee as a gift; however, a U.S. Supreme Court decision (Commissioner vs. LoBue, Philip (1956, S Ct)) stated that, for tax purposes, gifts must be made out of detached or disinterested generosity. Any payment that parents make to a surrogate mother cannot reasonably be considered detached or disinterested, so surrogate fees are not gifts.

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Foreign Asset Reporting Requirements

Venar Ayar - Foreign Assets Reporting Requirements
Understanding Foreign Asset Reporting

US tax code can be very confusing. This is especially true when it comes to reporting foreign assets. The IRS has a number of complex regulations regarding foreign assets and how they are reported, any of which can cause headaches for those filing. To give you some insight into the FBAR and other relevant forms, here is Ayar Law’s guide to foreign asset reporting requirements.

Foreign Asset Reporting Forms

The Internal Revenue Service has a variety of forms when it regards foreign asset reporting. The most common of these forms are:

  • Form 3520 – Foreign Trust and Gifts
  • Form 3520-A – US Owner of a Foreign Trust
  • Form 5471 – Foreign Corporation
  • Form 8865 – Foreign Partnership
  • Form 8621 – Passive Foreign Investment Company
  • Form 8938 – Specified Foreign Assets
  • FBAR – Report of Foreign Bank and Financial Accounts (also known as FinCen 114)

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Understanding Tax-Deferred Investing

Charles Woodson - Understanding Tax- Deferred Investing

When you are attempting to save money for your children’s future education or your retirement, you may do so in a number of ways, including investing in the stock market, buying real estate for income and appreciation, or simply putting money away in education savings accounts or retirement plans.

Knowing how these various savings vehicles are taxed is important for choosing the ones best suited to your particular circumstances. Let’s begin by examining the tax nuances of IRA accounts.

Individual Retirement Account (IRA) – There are two types of IRA accounts—the traditional and the Roth—and even though they are both IRAs, there is a huge difference in their tax treatment.

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Is Your Business Still The Right Entity Under The New Tax Rule? (Part 2)

Blake Christian - Choose Business Entity Part 2

More tips about determining the right corporate, partnership or other structure that’s best for your business—and where you are in life.

Key Takeaways:
• The legal structure of your business operations can have a significant impact on your annual income tax and estate planning.
• When you and/or your heirs expect to be at or near the maximum income tax rates, you will generally want to leave appreciated and appreciating assets in the taxable estate, rather than transfer them prior to death.
• In general, assets with the potential to appreciate in value should not be placed into an S or C Corporation.

As many of you know, The Tax Act of 2017 created a host of changes and considerations for successful business owners in their families. There are six widely used business operating structure. In Part 1 {LINK} of this article we discussed Sole Proprietorships (Schedule C), Limited Liability Companies (LLC) and Limited Partnerships. Here will take a closer look at the other three
entities: General Partnerships, Subchapter S Corporations and Subchapter C Corporations.

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Is Your Business Still The Right Entity Under The New Tax Rule? (Part 1)

Blake Christian - Choose Business Entity

What you need to know about corporations, partnerships and other structures under which you do business.

Key Takeaways:
• There are six widely used business operating structures. Each has pros and cons depending on the owner’s income and estate planning options.
• Choosing the right legal form for your business is critical for both legal and tax purposes
• The Tax Cuts and Jobs Act of 2017 (2017 Tax Act) made significant changes that should be factored into your entity choice.

As many of you know, The 2017 Tax Act made significant changes to the tax code. Most significantly individual tax rates have dropped and now cap out at 37 percent (vs. prior 39.6 percent). Here are some of the other highlights:

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Tax Professionals – Learn How To Attract New Clients

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What You Need To Know About The Taxability Of SAAS In Northeastern States

Monika Miles- What You Need To Know About The Taxability Of SAAS In Northeastern States

Are you curious if you need to be paying taxes on or charging your customers sales tax on your sales of these revenue streams: Software-as-a-Service (SaaS), cloud computing and electronically downloaded software? The answer is, maybe. Because these three areas are defined differently by each state, it’s important to understand how each state’s tax codes approaches them.

Being aware of the tax ramifications in any state your company has established nexus is incredibly important, especially considering the Wayfair decision from earlier this summer. While the U.S. Supreme Court’s decision may seem like it was only directed at online sellers, the truth is that multi-state sellers (such as those generating revenue from SaaS and software) are also affected. Because of the ruling, it will be even easier to establish nexus in more states across the country; companies need to know which taxes they’re responsible for in regards to SaaS, cloud computing and electronically downloaded software.

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