According to the IRS, virtual currency is “a digital representation of value that functions as a medium of exchange…” However, it does not have legal tender status in any jurisdiction of the United States. Virtual currency is used similarly to conventional currency, accepted as a medium of exchange in the issuing country. As this area is rapidly changing, the Internal Revenue Service has issued guidance for taxpayers who transact business using virtual currency.
Brits Risk Frozen Bank Accounts For Unpaid U.S. Taxes
As a result of substantial pressure by U.S. tax authorities on banks in the United Kingdom, many British citizens born in the United States are currently at risk of having their accounts in British banks frozen. The Brits involved are those born in the U.S., but who left when they were just a few months or a few years old. Many fear that they are being pursued to pay taxes for which they never had knowledge were even due.
Recently In Tax News – September 4, 2019
IRS grants waivers of tax underpayment penalties for more than 400,000 taxpayers. . .
In the middle of August, the IRS announced it would automatically waive the tax underpayment penalty for more than 400,000 taxpayers who have already submitted their 2018 federal income tax return and failed to claim a special penalty waiver this spring.
The waiver is only of the penalty. Any taxes that are owed must be paid.
Normally, taxpayers must pay at least 90% of the income taxes owed for a given year, or 100% of the tax liability from the prior year before filing a return, to avoid an underpayment penalty. The threshold is 110% if adjusted gross income on that year’s return exceeds $150,000.
The $10,000 SALT Limit and the Rental Real Estate
The $10,000 SALT Limit and the Rental Real Estate
Under the recently enacted Tax Cuts and Jobs Act, State And Local Tax (SALT) deductions are limited to $10,000. How does this affect the individual taxpayer?
QUESTION: Are SALT payments made on my rental real estate subject to the $10,000 cap?
ANSWER: Generally, under the old law, all SALT payments were deductible. However, the new law caps deductible SALT at an aggregate of $10,000 for individual taxpayers.
OF SALT, TAXES & MORTGAGES…
OF SALT, TAXES AND MORTGAGES…
Do you pay State and Local Taxes (SALT)? If you live in any of New York, California, New Jersey, Connecticut, or any other of the so-called high-tax states, you likely pay more than the national average in SALT. Prior to 2018, you were allowed to itemize all of your SALT payments on your federal tax returns. However, the recently passed law, the Tax Cuts and Jobs Act, curbs the deductibility and otherwise affects you disproportionately, compared with the rest of the country. The changes to the deduction of State and Local Taxes (SALT) on federal tax returns are generally as follows
AN ANALYSIS OF THE TAX CUTS AND JOBS ACT
January 2018
AN ANALYSIS OF THE TAX CUTS AND JOBS ACT
On December 22, 2017, after much, well-publicized legislative skirmishes, President Donald Trump signed into law H.R. 1, otherwise known as the “Tax Cuts and Jobs Act.” Provisions affecting individuals are generally effective beginning December 31, 2017 and expire on December 31, 2025. Most business-related provisions are permanent and are effective beginning December 31, 2017.
This new law is, by all accounts, the most significant revisions to the U.S. tax code since 1986, affecting almost all individual and business taxpayers. Our firm’s general assessment of the new law will therefore be a two-part series: this first part covers changes to individual taxpayers, and the second part will cover changes to business taxpayers.
Which State Has The Best Tax Climate?
The Tax Foundation is an independent tax policy nonprofit organization that has studied and researched tax policy since 1937. It reviewed the 2017 tax climates in each of the fifty states and ranked them overall based on five categories: corporate tax, individual income, sales tax, unemployment insurance tax, and property tax. In the near future, we will address the state tax climates of New York, New Jersey, and Connecticut.
The purpose of the Tax Foundation State Business Tax Climate Index is to enable business owners, policymakers, and taxpayers evaluate how their states’ tax systems compare to others. The Tax Foundation’s rankings are designed to show how well state tax systems are structured, rather than simply rank the states by the amount of taxes assessed.
The IRS Releases 2017 Inflation Adjustments
Now that we’re well into the New Year, taxpayers should know 2017’s inflation adjustments for several tax provisions set forth in Rev. Proc. 2016-55. These adjustments apply to tax years beginning in 2017 and transactions or events occurring during the 2017 calendar year. Many affect estate planners and expatriates.
*The 2017 taxable income thresholds on trusts and estates under § 1(e) are:
If Taxable Income is: | The Tax is: |
Not over $ 2,550 | 15% of the taxable income |
Over $ 2,550 but not over $ 6,000 | $ 382.50 plus 25% of excess over $ 2,550 |
Tax Professionals Provide Input For IRS Future State
At the end of 2016, as part of a concerted, continuous effort to gather feedback from the tax community and partner groups, the Internal Revenue Service announced that tax professionals attending the Nationwide Tax Forums provided valuable guidance to Future State efforts to improve taxpayer service by highlighting a number of areas of concern.
The 2016 tax forums held by the IRS in five cities held during July, August and September were attended by more than 10,700 tax professionals. IRS Tax Forums are three-day events that are intended to provide tax professionals with the most current information on federal and state tax issues. This information is presented by experts from the IRS and partner organizations through training seminars and workshops.
New IRS Statistics Show A Concentration Of U.S. Income Among Only A Few
The U.S. has a progressive income tax system. Therefore, the rate of tax increases as taxable income increases. The purpose of imposing progressive taxes is to reduce the tax incidence of people with a lower ability to pay taxes, as these taxes shift increasingly to those with a higher ability-to-pay. Thus, the bulk of tax revenue is in high-income households.
Statistics just released by the IRS show that the top 1% of households received more than 20% of adjusted gross income in 2014 while paying almost 40% of income taxes. Less than 4% of income tax is paid by the bottom 50% of households. Federal tax rates in 2015 varied from 10% to 39.6%.