New Reporting Requirement for Individuals with Foreign Financial Assets

Each U.S. person who has a financial interest in or signature or other authority over foreign bank accounts, securities accounts or other financial accounts must file a Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts or FBAR) if the aggregate value of the accounts exceeds $10,000 at any time during the calendar year.

A “foreign financial account” is a financial account located outside the U.S. An account maintained with a branch of a U.S. bank that is physically located outside of the U.S. is a foreign financial account. A ...

1099 Filing Requirement

The 1099s for 2012 must be provided to the independent contractor no later than January 31 of 2013. We can issue the 1099s for you.

The following are the exceptions to the above rule:

1. You do not need to issue a 1099- MISC. to a corporation unless the service provider/corporation is either an attorney or a medical practitioners.

Example 1: If your engineer is incorporated, you do not need to issue him or her a 1099- MISC. However, if he or she is not incorporated, then you do.

Example 2: Whether your attorney or your ...

Preparing for the New Surtax

As part of the Affordable Care Act (the new health care legislation), a new tax kicks in this year. The official name of this tax is the Unearned Income Medicare Contribution Tax, and even though the name implies it is a contribution, don’t get the idea that it is voluntary or that you can deduct it as a charitable contribution. It is actually a surtax levied on the net investment income of taxpayers in the higher income brackets. And although it is perceived as an additional tax on higher-income taxpayers, it can affect even those who normally ...

Maximizing Qualified Tuition Program Contributions

Qualified Tuition Programs, commonly referred to as Section 529 plans (named after the section of the IRS Code that created them), are plans established to help families save and pay for college in a tax-advantaged way and are available to everyone, regardless of income. These state-sponsored plans allow you to gift large sums of money for a family member’s college education, while you maintain control of the funds. The earnings from these accounts grow tax-deferred and are tax-free if used to pay for qualified higher education expenses. 529 plans can be used as an estate-planning tool as well, providing ...

Are You In Danger of An Audit

During fiscal year 2013, the IRS collected almost $2.3 trillion in taxes (net of refunds) and processed more than 240 million returns. More than 118 million individual income tax return filers received tax refunds that totaled $312.8 billion. In fiscal year 2013, the IRS spent an average of 41 cents to collect each $100 of tax revenue.

So what are your chances of being audited?A total of $1,404,931 individual income tax returns were audited, out of a total of $145.8 million individual returns that were filed in the previous year. This is about 0.8% of all individual returns filed, down from the previous year. This downward trend ...