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Claiming The Foreign Tax Credit With Or Without Filing Form 1116

Leave a comment FATCA, FBAR, Foreign Earned Income, Foreign Tax Credit

Form 1116 relates to foreign tax credits, which are intended to affect taxpayers living abroad. These credits benefit foreign taxpayers by reducing the double tax burden that arises when foreign source income is taxed by both the United States and the foreign country where the taxpayers’ income originates.

The foreign tax must meet four tests to qualify for the foreign tax credit:

  1. The tax must be a legal and actual foreign tax liability;
  2. The tax must be imposed on the taxpayer claiming the credit;
  3. The taxpayer must have paid or accrued the tax; and
This is a preview of Claiming The Foreign Tax Credit With Or Without Filing Form 1116. Read the full post (397 words, 1 image, estimated 1:35 mins reading time)

IRS Payment Arrangements Part 3: Other Types Of Arrangements

Leave a comment Collection Activities, Installment Agreement, Offer-In-Compromise

This is the last part of a three part series of blogs on IRS payment arrangements. While most taxpayers utilize an installment agreement to pay their tax debt, other payment arrangements exist for taxpayers to utilize in the settlement of their outstanding tax debt. Here are some other types of arrangements that are useful in paying delinquent taxes:

Currently not collectible (CNC) status

The IRS may place a taxpayer’s account in currently not collectible status. If a taxpayer owes more than $10,000, the IRS will file a tax lien, but it will cease collection activity. CNC is a temporary status which the IRS regularly reevaluates, usually on an annual basis.

This is a preview of IRS Payment Arrangements Part 3: Other Types Of Arrangements. Read the full post (412 words, 1 image, estimated 1:39 mins reading time)

IRS Payment Arrangements Part 2: Installment Agreements

Leave a comment Collection Activities, Installment Agreement

This is part two of a series of blogs on IRS payment arrangements. Most taxpayers utilize an installment agreement to pay their tax debt for obvious reasons. Such an arrangement allows monthly intermittent payments at an affordable amount, while addressing the issue with some forward resolution. The IRS charges a modest setup fee for an installment agreement.

Individual taxpayers must complete and mail Form 9465, Installment Agreement Request and Form 433-F, Collection Information Statement before entering into any installment agreement. Taxpayers then make monthly payments usually by direct debit or payroll deduction. Interests and late-payment penalties continue to accrue during the installment period, but the late-payment penalty is cut in half for any month an installment agreement is in effect.

This is a preview of IRS Payment Arrangements Part 2: Installment Agreements. Read the full post (385 words, 1 image, estimated 1:32 mins reading time)

IRS Payment Arrangements Part 1: Introduction

Leave a comment Collection Activities, Installment Agreement, Offer-In-Compromise

This is the first part of a multiple part series on IRS payment arrangements. This blog will discuss some general points of IRS payment arrangements while future blogs will deal with their individual details.

Individuals whot cannot pay their tax debt within a reasonable time frame may request to make monthly payment arrangement with the IRS to satisfy their tax bill. There are several options, including an IRS installment agreement. As long as the tax debt is paid in full, taxpayers can avoid the penalties and interests associated with their tax debt. It is essential to know that before applying for any payment agreement, a taxpayer must file all required tax returns.

This is a preview of IRS Payment Arrangements Part 1: Introduction. Read the full post (398 words, 1 image, estimated 1:36 mins reading time)

Jan Brady’s Capital Gain: Sells House (She Bought In 1969 For 55.3k) For 3.9 Million

Leave a comment Capital Gains, Capital Losses, Gains & Losses, Long-Term Capital Gain

Here’s the story of a middle child who made one heckuva investment! Eve Plumb, who played Jan Brady on the iconic 70s TV show, The Brady Bunch, recently sold her Malibu bungalow for $3.9 million. Ms. Plumb purchased the seaside property in 1969 for a mere $55,300, equivalent to approximately $360,000 in our present economy. Sure, it will be subject to tax as a long term capital gain, but it still made Marcia and Greg’s younger sister a rich gal.

This is a preview of Jan Brady’s Capital Gain: Sells House (She Bought In 1969 For 55.3k) For 3.9 Million. Read the full post (435 words, 1 image, estimated 1:44 mins reading time)

Yes, Olympic Medals and Prize Money Are Taxable

Leave a comment Taxable Income

The Summer Olympics in Rio de Janeiro recently concluded and many Americans took home gold, silver, and bronze medals. To be precise, 46 gold, 37 silver, and 38 bronze medals were won by American athletes. But not only were U.S. athletes like Michael Phelps and Kevin Durant raking in the gold in Brazil, so was the U.S. Treasury Department and the Internal Revenue Service. Yes, big surprise, the U.S. government has a stake in the Olympics as it taxes Olympic winnings as income.

This is a preview of Yes, Olympic Medals and Prize Money Are Taxable. Read the full post (335 words, 1 image, estimated 1:20 mins reading time)

Tax Treatment of Income from Hobbies

Leave a comment Ordinary and Necessary Expenses

Countless Americans take pleasure from hobbies that also generate income. Collectibles of all types have skyrocketed in popularity, as well as income potential, in the last fifty years. Whether its dolls, baseball cards, stamps, coins, or Star Trek action figures, all types of hobbies have the potential to generate some amount of income, which, of course, is taxed by Uncle Sam.

The rules for reporting the income and expenses associated with a “hobby” depends upon whether or not the activity in question is a hobby or business. There are deductions that hobbyists may claim but they, like most everything, are subject to special rules and limits imposed by the Tax Code.

This is a preview of Tax Treatment of Income from Hobbies. Read the full post (445 words, 1 image, estimated 1:47 mins reading time)

Start Your Year-End Tax Saving Moves Now – Here’s How Part 2

Leave a comment Expenses Deductions, Tax Attorneys, Tax Credit

It’s already fall and before you know it, another year wil be upon us. It’s never too early to plan ahead to minimze your tax bill. An experienced and knowledgeable tax professional can help any individual or business make the right year-end savings moves with important advice and assistance. Here is the second part of a two-part series on some things to ponder when considering potential tax moves between now and the end of 2016:

  1. Accelerate deductions
This is a preview of Start Your Year-End Tax Saving Moves Now – Here’s How Part 2. Read the full post (439 words, 1 image, estimated 1:45 mins reading time)

Start Your Year-End Tax Saving Moves Now – Here’s How Part 1

Leave a comment Expenses Deductions, Tax Attorneys, Tax Credit

It’s already fall and before you know it, another year will be upon us. It’s never too early to plan ahead to minimize your tax bill. An experienced and knowledgeable tax professional can help any individual or business make the right year-end savings moves with important advice and assistance. Here is the first part of a two part series on some things to ponder when considering potential tax moves between now and the end of 2016:

  1. Make time to plan
This is a preview of Start Your Year-End Tax Saving Moves Now – Here’s How Part 1. Read the full post (426 words, 1 image, estimated 1:42 mins reading time)
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