Tag Archive for Income Tax

May 2015 Business Due Dates

May 11 – Social Security, Medicare and Withheld Income Tax

File Form 941 for the first quarter of 2015. This due date applies only if you deposited the tax for the quarter in full and on time.

May 15 – Employer’s Monthly Deposit Due

If you are an employer and the monthly deposit rules apply, May 15 is the due date for you to make your deposit of Social Security, Medicare and withheld income tax for April 2015. This is also the due date for the non-payroll withholding deposit for April 2015 if the monthly deposit rule applies.

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

Is There Anything as Nontaxable Income?

Nontaxable or tax exempt income is income that is not subject to income tax, and you do not report these on your tax return. Surprisingly to some taxpayers, there are quite a number of income sources that are actually nontaxable, and these include the following:

• Child support.
• Federal tax refunds.
• Interest on state or local government obligations, such as municipal bonds.
• Welfare and other public assistance benefits.
• Workers’ compensation and similar payments for sickness and injury.
• Meals and lodgings provided by your employer. These will be excluded from your taxable income if: (a) the meals are furnished on your employer’s business premises, (b) the Read More

Written by | Posted in Income Tax • Individual

London Mayor Refuses To Pay U.S. Tax Bill

London Mayor Boris Johnson is being pursued by U.S. tax officials while his former New York counterpart Michael Bloomberg was given an honorary knighthood by Queen Elizabeth last month.

Beware As The U.S. Tax Net Closes On Thousands Of U.S. Citizens Living Abroad.

The Conservative mayor of London – who was born in New York and holds an American passport – just revealed he is being pursued by the U.S. authorities for an unpaid tax demand. The demand reportedly relates to his first home in the UK, which he said was not subject to capital gains tax in England. According to U.S. tax law all citizens are required to file a tax return and pay U.S. taxes, even those with dual citizenship and Read More

Written by | Posted in Income Tax • International • IRS

Learning The Mechanics of A Foreign Tax Credit!

Income tax systems that tax residents on worldwide income (such as the American tax system) generally offer a foreign tax credit to relieve a potential for double taxation. This credit is usually limited to the income attributable to foreign source income.

What does this mean? If you paid or accrued foreign taxes to a foreign country on foreign source income and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.

This means that, if taken as a deduction, foreign income taxes reduce your U.S. taxable income. Or if taken as a credit, foreign income taxes reduce your U.S. tax liability. One can choose whether to take the amount of any qualified foreign taxes paid or accrued during Read More

Written by | Posted in Income Tax

2015 Budget Announced Today In Ireland

Here is a brief Summary of some of the Taxation Measures for introduction in Ireland in 2015.

Income Tax

There will be an increase in the standard rate band of income tax by €1,000 from €32,800 to €33,800 for single individuals and from €41,800 to €42,800 for married one earner couples.

There will also be a reduction in the higher rate of income tax from 41% to 40%.

Artists’ Exemption

The threshold for the artists’ exemption will be increased by €10,000 to €50,000. Read More

Written by | Posted in Capital Gains • Income Tax • Tax Deductions • Tax Policy • Tax Tips

States Without An Income Tax – Good Idea?

California’s largest tax revenue source by far is its personal income tax. This tax generated 67% of total tax revenues for FY 2012-2013’s General Fund. As shown in the pie chart from the California State Controller’s Office, the corporate income tax only provided 8% of state tax revenues.

Seven states do not impose an income tax and two states impose it on only a portion of one’s income. How can they do that? A recent article in Cleveland.com answers that question. See “No-income-tax states use other taxes to pay the bills: Axing Ohio’s Income Tax,” by Robert Higgs, 10/2/14.

The seven states without an income tax are: Read More

Written by | Posted in Corporate • Income Tax

State Income Tax Filing Post-Windsor

The United States Supreme Court’s June 2013 ruling in Windsor held that Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional. The Internal Revenue Service soon thereafter, issued Revenue Ruling 2013-17 holding that a couple married in any jurisdiction allowed to confer marriage status would be considered married even if they live in a state that does not view them as married (that is, it would interpret marriage using a state of celebration approach rather than a state of domicile approach). That makes sense in that otherwise, the federal government would continue to treat some marriages as unequal to others.

So, how do same-sex married couples file their state tax return if they live in a state that doesn’t treat them as married? It depends. Read More

Written by | Posted in Income Tax • Same Sex Couples

FTB Issues Letters to Over 1 Million California Tax Payers Seeking Tax Returns

More than one million people who did not file a 2012 state income tax return are receiving letters seeking those returns or to verify that they do not have a tax filing requirement, according to the Franchise Tax Board (FTB).

Since the 1950s, FTB has contacted people who have California income, but did not file a tax return. Last year, FTB collected more than $727 million through these efforts.

Each year FTB receives more than 400 million income records from third parties such as banks, employers, state departments, the IRS, and other sources. FTB matches these income records against its records of tax returns filed. While this program mainly identifies wage earners and self-employed individuals who have not filed, it also detects Read More

Written by | Posted in Federal • Individual • IRS • State And Local Tax (SALT)

2014 – The South African “Tax Year” Ahead In Perspective

The first and very important note to make, in dealing with South African tax issues: tax year 2014 ends on the last day of FEBRUARY 2014. The South African tax year for most individuals, are 1 March until the last day of February in the next calendar year. Corporates can change their tax year-end to align with the last day of their financial year-end, yet Trusts partners in a JV or partnership, are obliged to file assuming a tax year-end on the last day of February, despite their financial year-end being the last day of another month.

Yes, sadly this date, Friday 28th 2014, is not even listed on the SARS webpage on important dates, yet is an extremely important tax deadline.

SARS has two webpages namely: www.sars.gov.za and www.sarsefiling.co.za. Read More

Written by | Posted in Africa • Expatriate • FATCA • FBAR • Indirect Tax • International • Tax Provision/Tax Reporting • Tax Risk Management • VAT

Streamlined Procedure And Foreign Bank Account Regs For Non-Resident US Citizens

It all started with the announcement of the FATCA (Foreign Account Tax Compliance Act) going into effect, then the new streamlined compliance procedures were announced in 2012 to go into effect on September 1st, 2012.

They were implemented in recognition that some U.S. taxpayers living abroad had failed to timely file U.S. federal income tax returns or FBARs, Form TD F 90-22.1. These delinquent taxpayers may have recently become aware of their filing obligations and now seek to come into compliance with the law.

The new procedures are for non-residents including but not limited to dual citizens who have not filed U.S. income tax and other related information returns. Read More

Written by | Posted in FATCA • FBAR • OVDP

Income Tax Aspects of Non-business Capital Gains and Losses – Part II

Wash Sales

A wash sale occurs when the same securities are purchased 30 days before or after the sale. If a loss results, all or part of the loss is disallowed. If an equal or greater number of the same securities that were sold are purchased, the entire loss is disallowed. If fewer shares are purchased than were sold, part of the loss is disallowed. The disallowed loss is added to the basis of the securities purchased.

Example 1-total loss disallowed.

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Written by | Posted in Capital Gains • Income Tax

Income Tax Aspects of Non-business Capital Gains And Losses – Part I

This article is divided in to three parts. Part I will cover the general aspects of capital gains and losses and how and where they are reported on Form 1040 and supporting schedules. Part II covers special situations involving sales of securities-wash sales, gifts, and inheritances. Part III will cover mutual funds, stock rights, debt securities purchased at a discount and premium, and exchanges.

Part I

It is advantageous to have investment income in the form of long-term (held longer than one year) capital gains (LTCG) because they are taxed at a lower rate than ordinary income. For 2013, the net LTCG will be taxed at various rates depending on the tax bracket: Read More

Written by | Posted in Capital Gains • Income Tax
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