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Tag Archive for Tax Blog

Seasonal, Part-Year Workers Urged To Check Tax Withholding Amount

Tom Kerester, Tax Blog, Tax Ambassador, Washington D.C., USA, TaxConnections

WASHINGTON – The Internal Revenue Service today encouraged taxpayers who work seasonal jobs or are employed part of the year to visit the Withholding Calculator and perform a “paycheck checkup.”

The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, eliminating personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets. These changes do not affect 2017 tax returns due earlier this year, but they will affect 2018 tax returns filed next year. Read more

Top Predictions You Need To Know: Wayfair V. South Dakota Onlines Sales Tax Case

Monika Miles, Tax Advisor, Tax Blog, San Jose, California, USA, TaxConnections

As we wait for a decision in the Wayfair v. South DakotaSupreme Court Case regarding online sales tax, we thought it would be fun to take a look at possible outcomes depending on how the Court rules.

Our Opinion On The Online Sales Tax Case

Back in March we shared our predictions on how the online sales tax case’s outcome would affect businesses.

What if the Supreme Court rules against South Dakota? We’re back where we started with Quill remaining the physical presence standard and states passing various legislation that’s either unconstitutional (and likely not upheld) or that requires onerous reporting. Read more

Virtual Currency Transactions Must Be Properly Reported For Tax Purposes

Taxpayers who do not properly report the income tax consequences of virtual currency transactions can be audited for those transactions and, when appropriate, can be liable for penalties and interest.

In more extreme situations, taxpayers could be subject to criminal prosecution for failing to properly report the income tax consequences of virtual currency transactions. Criminal charges could include tax evasion and filing a false tax return. Anyone convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Anyone convicted of filing a false return is subject to a prison term of up to three years and a fine of up to $250,000. Read more

Expatriate Offshore Banking: Best Overseas Banks For US Citizens

Olivier Wagner, Tax Nomad, Tax Blog, Vancouver, Canada, TaxConnections
About Expatriate Offshore Banking For US Citizens
As a US expat tax firm, we are regularly asked about expat offshore banking, best overseas countries, and banks for US citizens and incorporation. It’s a well-known fact that a right bank can save money for full-time US expats and US citizens traveling abroad over an extended period. Many Americans living (semi-)permanently abroad are looking into ways to invest through financial institutions either in their place of residence, in popular financial city centers or in offshore destinations. When choosing a bank, everyone usually pays attention to following criteria:

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

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

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

Tax Changes Are Coming – New Rules On Divorces And Home Buying

Barry Fowler, Tax Advisor, Tax Blog, Houston, Texas, USA, TaxConnections

With the end of this season we also see the end of tax laws as they have been for decades. Now we have to look ahead and make sure there won’t be any unpleasant surprises and taxpayers will be subject to the new laws.

If you are planning on a divorce this year, you’ll want to review the new rulings. If you’re buying a new home, again, you’ll want to make sure you are clear about whether or not you can write off the interest on your loan. Read more

Self-Employed? 5 Easy Ways To Lower Your Tax Bill

James Waligora, Tax Advisor, Tax Blog, Homewood, Alabama, USA, TaxConnections

If you’re like most small business owners, you’re always looking for ways to lower your taxable income. Here are five ways to do just that.

1. Deducting The Cost Of A Home Computer

If you purchased a computer and use it for work-related purposes, you can take advantage of the Section 179 expense election, which allows you to write off new equipment in the year it was purchased if it is used for business more than 50 percent of the time (subject to certain rules).

2. Meal Expenses For Company Picnics And Holiday Parties

If you host a company picnic or holiday party–even if it is at your home–100 percent of your meal expenses are deductible. Prior to tax reform legislation passed in late 2017, 50 percent of your business-related entertainment expenses (with some exceptions) were generally deductible. Starting in 2018, however, entertainment-related expenses are no longer deductible. If you have any questions, please don’t hesitate to call.

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Virtual Currency And Taxes – The View Of The United States Internal Revenue Service

Kat Jennings, CEO, Tax Blog, TaxConnections

Internal Revenue Service Notice 2014-21

Section   1. Purpose

This notice describes how existing general tax principles apply to transactions using virtual currency. The notice provides this guidance in the form of answers to frequently asked questions.

Section   2. Background

The Internal Revenue Service (IRS) is aware that “virtual currency” may be used to pay for goods or services, or held for investment. Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value. In some environments, it operates like “real” currency — i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance — but it does not have legal tender status in any jurisdiction. Read more

How To Submit A Reasonable Cause Claim To The IRS For Penalty Abatement

John Dundon, Tax Advisor, Tax Blog, Denver, Colorado, USA, TaxConnections

If you have not filed your personal income tax form (1040), generally, you should get the tax form filed ASAP without consideration for the yet to be assessed penalties.

Then exercise patience.

Wait for the IRS to assess the penalty and then send a reasonable cause explanation to the address indicated on the notice from the IRS. This way you mitigate all sorts of procedural kerfuffles. Read more

New IRS Online Tool Offers Expanded Access To Information On Tax-Exempt Organizations

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON — The Internal Revenue Service today introduced a new online tool on IRS.gov designed to provide faster, easier access to publicly available information about exempt organizations.

“This new tool provides taxpayers an easy way to get information about charitable organizations,” said Acting IRS Commissioner David Kautter. “Tax-exempt organizations play a critical role in our nation, and this will provide greater insight for people considering donations.” Read more

The IRS Issues 2018 “Dirty Dozen” Report To Highlight The Biggest Scams The Public Needs To Avoid

Kazim Qasim, Tax Advisor, Tax Blog, Orlando, Florida, USA, TaxConnections

Every year the IRS issues its “Dirty Dozen” report to highlight the biggest scams that the public needs to avoid.

The IRS has released the following press release:

This year’s “Dirty Dozen” list highlights a wide variety of schemes that taxpayers may encounter throughout the year, many of which peak during tax-filing season. The schemes can run the gamut from simple refund inflation scams to technical tax shelter deals. A common theme throughout these: Scams put taxpayers at risk. Read more

Canada Tax: Qualifying Non-Resident Employee And Withholding Tax

Grant Gilmour, Tax Advisor, Tax Blog, Vancouver, Canada, TaxConnections

If you are a certified qualifying non-resident employer, then you do not have to withhold taxes from the salary or other compensation paid to employees that are qualifying non-resident employees in Canada.

Discussion:

In order to be a qualifying non-resident employee, the employee must meet the following criteria:

  • Be a resident of a country that has a tax treaty with Canada at the time of the payment;
  • Not be liable for income tax in Canada due to the tax treaty and the type of payment received; and
  • Either works less than 45 days in the calendar year in Canada or is present less than 90 days in any 12 month period in Canada.

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