If you have a financial interest in or signature authority over a foreign financial account, the Bank Secrecy Act may require you to report the account yearly. The Act requires that each qualifying taxpayer file a FBAR or Report of Foreign Bank and Financial Accounts. The types of foreign financial accounts to which the Bank Secrecy Act applies this requirement includes a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds.
SOCIAL SECURITY TAXES DEDUCTIONS
As long as they are taxes, there will be taxpayers that consider any and all arguments, schemes, and angles to avoid paying them. The 21st century has seen a rise in situations where some taxpayers are filing claims for refund of their Social Security taxes using meritless arguments which have consistently failed in the past and which will consistently fail in the future.
SURGEON WHO HID MONEY FROM WIFE AND IRS IN DIVORCE ACTION MAY GET PRISON TIME OF UP TO 95 YEARS FOR TAX FRAUD AND EVASION
Tax evasion is a serious crime. It is an enormous task and undertaking that rarely succeeds unless exorbitant monetary penalties and prison time are the ultimate goal. Taxpayers risk everything when they attempt to conceal any part of their financial portfolio, including any amount of their assets, from the IRS.
OWE THE IRS? YOU MAY LOSE YOUR PASSPORT
The Internal Revenue Service, probably the most-hated government agency in America, just became more powerful, and probably more ominous. As everyone knows, IRS is the only agency that can, without going to Court, seize your asses and empty your bank accounts – one of the reasons they earned the title of being the most feared agency. Now, the IRS has been empowered to seize American passports of delinquent taxpayers, maybe even preventing those taxpayers from domestic flights.
FEDERAL TAX IMPLICATIONS FOR SAME-SEX COUPLES MARRIED UNDER STATE LAWS
In June of 2013, the U.S. Supreme Court held in U.S. v. Windsor that provisions of the Defense of Marriage Act (DOMA) were unconstitutional. Prior to this ruling, Section 3 of DOMA required that, for purposes of federal enactments, marriage be defined as the union of one man and one woman and the word spouse be defined as someone of the opposite-sex who is a husband or wife.
WHAT? I HAVE TO PAY TAXES ON MY LAWSUIT AWARD?
You’ve just received an award as the prevailing party in a lawsuit and it’s just a few weeks before the April 15th tax deadline. As you organize your documentation for the preparation of your taxes, you suddenly wonder if you have to pay taxes on the legal proceeds that you received a few weeks earlier. Are they indeed taxable? Whether you must include the amount of the proceeds in your income depends on all the facts and circumstances of each individual case. It also depends upon the type of injury incurred.
TOP TEN TAX BREAKS FOR MILITARY PERSONNEL
The IRS has made available several tax breaks for military personnel, especially over the last few decades. For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard is also included, but not the U.S. Merchant Marine or the American Red Cross. Some of these tax breaks are retroactive, and thus require the filing of an amended return by the affected taxpayer. Remember that if you away from home because of duty in the military, your spouse can use a power of attorney to file a joint return on your behalf. Here are ten tax breaks worth noting for military personnel.
TAX CONSEQUENCES OF RENTING YOUR HOME ON AIRBnB
A profitable way to convert your home into a means of producing income is the rental of it completely, or just in part (a room), even for a short period of time. Taxpayers may avail themselves of rental services like Airbnb, HomeAway, or VRBO to accomplish this. Of course all income is “all income from whatever source derived” under the Internal Revenue Code. Income earned through the rental of your home, or a room in your home, is taxable “income” and must be reported to the IRS on your tax return.
When Married, To File Jointly or Separately
IS IT BETTER TO FILE SEPARATELY OR JOINTLY WHEN MARRIED?
Under the tax laws, if you are legally married, when filing your tax returns, you have a choice of filing jointly with your spouse, or filing separately. The tax laws generally expect married couples to file jointly though they may legally elect to file separately.
Most times, it is more to the advantage of the filing couple to file jointly. Where married taxpayers file separately, most deductions and exemptions are generally halved for each tax return. In rare cases, married taxpayers may be able to file separately and claim higher deductions and get bigger refunds on their returns.
Is Your Income Taxable
Is Your Income Taxable?
Generally, under IRS rules, all incomes are taxable, except if they are specifically excluded from income. Taxable income includes money earned, like wages and tips. It also includes bartering, an exchange of property or services
Certain incomes are usually excluded from income, such as
• Gifts and inheritances
• Child support payments
• Welfare benefits
• Damage awards for physical injury or sickness
• Cash rebates from a dealer or manufacturer for an item you buy
• Reimbursements for qualified adoption expenses
Under certain conditions, the following income may not be taxable::
• Life insurance. Proceeds paid to you because of the death of the insured person are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that you get that is more than the cost of the policy is taxable.
• Qualified scholarship. In most cases, income from this type of scholarship is not taxable. This means that amounts you use for certain costs, such as tuition and required books, are not taxable. On the other hand, amounts you use for room and board are taxable.
• State income tax refund. If you got a state or local income tax refund, the amount may be taxable. You should have received a 2014 Form 1099-G from the agency that made the payment to you. If you didn’t get it by mail, the agency may have provided the form electronically. Contact them to find out how to get the form. Report any taxable refund you got even if you did not receive Form 1099-G.