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Showing posts with label tax planning. Show all posts
Showing posts with label tax planning. Show all posts

May 27, 2019

Reducing or Eliminating 951a GILTI Tax on Conrolled Foreign Corporations

Many clients want to reduce or eliminate the new tax for 2018 and beyond on the undistributed earnings of their controlled foreign corporations (over 50% ownership in the hands of US taxpayers). This replaces the old regime where profits left in foreign corporations (except in certain specific types of situations) are not taxed until distributed as dividends or wages.

The new  IRS Section 951a is complex and often hits  US owners of small foreign corporations. The tax on the earnings which are deemed distributed actually is assessed on the 1040 (or other US tax form) of the owner of the corporation though a deemed distribution (Subpart F) which is included with the shareholders other income.  READ MORE ABOUT HOW TO AVOID  OR REDUCE THE GILTI 951A TAX HERE

If you own a controlled  foreign corporation we can provide you with guidance and help you eliminate or reduce this new tax on deemed distributions of its profits.  Email us at taxmeless@gmail.com with your questions or for help.   Don Nelson, Tax Attorney

March 28, 2018

IRS TAX TOOLS YOU CAN USE ON LINE TO FIND ANSWERS TO YOUR TAX QUESTIONS


Where’s my refund?

By using the “Where’s My Refund?” tool available on IRS.gov and on the official IRS mobile app, IRS2Go, taxpayers can easily find the most up-to-date information about their tax refund. Taxpayers can start checking on the status of their return within 24 hours after the IRS acknowledges receipt of a taxpayer’s e-filed return or four weeks after the taxpayer mailed in a paper return. The system is updated daily, so there’s no need to check more often.

Getting a tax return transcript?

Those who need a copy of their tax return can use the online tool, Get Transcript. It’s free and available on IRS.gov. Taxpayers can view, print or download their tax transcripts for the most current tax year after the IRS has processed the tax return.

Instant answers to tax law questions.

Many tax law questions can be answered quickly when using any of several tools on IRS.gov:
Need to make a payment?

IRS Direct Pay offers taxpayers the fastest and easiest way to pay what they owe. This free online system allows individuals to securely pay their tax bills or make quarterly estimated tax payments directly from checking or savings accounts without fees or pre-registration. See IRS.gov/Payments for information on this and other payment options.

Can’t pay a tax bill?

For taxpayers concerned about a tax bill they can’t pay, the Online Payment Agreement tool can help determine if they qualify for a payment plan with the IRS.
The Offer in Compromise Pre-Qualifier can help determine if a taxpayer qualifies for an Offer in Compromise. An Offer in Compromise is an agreement with the IRS that settles a person’s tax liability for less than the full amount owed. 

Questions about an amended return?

The “Where’s My Amended Return?” tool provides the status of an amended tax return, Form 1040X. Taxpayers can check on the current year 1040X and up to three prior years. Allow up to three weeks after filing to check on the initial status, and up to 16 weeks for processing.

When you need professional assistance and guidance we offer a mini consultation by phone or skype where most of your questions can be answered and you can structure your US tax future to your personal benefit. It is subject to the absolute privacy of 'attorney-client" privilege. Email Don Nelson, Attorney at Law at ddnelson@gmail.com or call US 949-480-1235. Visits our website at www.taxmeless.com 

December 17, 2017

5 WAYS TO EXPLOIT NEW TAX BILL BEFORE YEAR END (12-31-17)

There is still time to take advantage of old tax laws that will go away under the new tax law. Time Magazine sets for five ways you can take action now before year end.  READ MORE HERE.




November 21, 2016

YEAR-END MOVES FOR THOSE WHO BELIEVE PRESIDENT-ELECT TRUMP WILL CUT THEIR TAXES NEXT YEAR


President Elect Trump has promised to make some major changes in the tax law next year. If you thnk that will happen there may be some steps you need to take before year end.
Defer income to 2017. The Trump tax plan would feature three tax brackets instead of current law's seven, and a top tax rate of 33% instead of current law's 39.6%. If Congress approves this reduction next year you may want to defer income into next year..
The standard year-end tax-savings wisdom always has been to defer income, where possible, into the coming year. This standard approach would make even more sense for middle and upper income taxpayers if the Trump tax plan prevails over others in Congress, and goes into effect for tax year 2017.
Here are some of the ways to defer income until 2017:
  • An employee who believes a bonus may be coming his way may be able to request that his employer delay payment of any bonus until early in the following year. For example, if a bonus would normally be paid on Dec. 15, 2016, an employee may ask the employer before Dec. 15 to defer any bonus coming his way until Jan. 2, 2017. By deferring the bonus, the employee will succeed in having it taxed in 2017. But note that if an employee waits until a bonus is due and payable to request a deferral, the tax on the bonus will not be deferred. Also, if the deferral extends beyond 2-½ months after the close of the tax year, the bonus will be treated as nonqualified deferred compensation (currently includible in income to the extent not subject to a "substantial risk of forfeiture" if the arrangement fails to meet certain distribution, acceleration of benefit, and election requirements).
  • Income that a cash basis taxpayer earns by rendering services isn't taxed until the client, patient etc., pays. If the taxpayer (e.g., consultant, business person, medical professional) holds off billing until next year—or until so late in the year that no payment can be received in 2016—he will succeed in deferring taxable income until next year.
  • Defer "first year" required minimum distributions (RMDs) from an IRA or 401(k) plan (or other employer-sponsored retirement plan). RMDs from IRAs must begin by April 1 of the year following the year a taxpayer reaches age 70-½. That start date also applies to company plans, but non-5% company owners who continue working may defer RMDs until April 1 following the year they retire. Although RMDs must begin no later than April 1 following the year in which the IRA owner attains age 70-½, the first distribution calendar year is the year in which the IRA owner attains age 70-½. Thus, if a taxpayer turns age 70-½ in 2016, he can delay the first required distribution to 2017, but if he does so, there will have to take a double distribution in 2017—the amount required for 2016 plus the amount required for 2017. Delaying 2016 distributions to 2017 thus will bunch income into 2017, but that would be beneficial if the taxpayer winds up in a substantially lower bracket that year.
  • Defer a traditional IRA-to-Roth IRA conversion until 2017. Such a conversion generally is subject to tax as if it were distributed from the traditional IRA or qualified plan and not recontributed to another IRA. Thus, a taxpayer who plans to make such a conversion should defer doing so if he believes the conversion will face a lower tax next year.
Defer property sales. The President-elect's plan to repeal the Affordable Care Act ("Obamacare") also would repeal the 3.8% surtax on investment income. This surtax applies to the lesser of
  1. Net investment income or
  2. The excess of modified adjusted gross income (MAGI) over the threshold amount ($250,000 for joint filers or surviving spouses, $125,000 for a married individual filing a separate return, and $200,000 for other taxpayers).
As a result, if the surtax is repealed for 2017, taxpayers within the reach of the surtax, and are contemplating the sale of property that would generate a large investment gain, would benefit by deferring the sale until next year (assuming of course that the sale price would stay more or less the same).
If the sale can't be postponed, it may be possible to structure the deal as an installment sale. By making a sale this year with part or all of the proceeds payable next year or later, a non-dealer seller to whom the installment method applies becomes taxable in any year on only that proportion of his profit which the payments he receives that year bear to the total sale price. If the 3.8% surtax is repealed for tax years beginning after 2016, the profit on the post-2016 installment payments would escape the surtax. Note that the Trump tax plan would keep current law's maximum tax rate of 20% of capital gains.
On the deduction side. Itemized deductions produce no tax savings for a year in which a taxpayer claims the standard deduction, and many more taxpayers would claim the standard deduction under President-elect Trump's tax plan. It calls for a dramatically increased standard deduction: $30,000 for joint filers (up from $12,600 for 2016) and $15,000 for singles (up from $6,300). If the boosted standard deduction makes it into law for 2017, many taxpayers who itemize under current law and wouldn't be able to under the Trump plan would be better off accelerating next year's itemized deductions into this year, when they will generate a tax savings. And, even if the standard deduction proposal is watered down, itemized deductions still will be more valuable to a taxpayer this year than next if he expects to be in a lower marginal tax bracket in 2017.

May 10, 2012

YOUR US INCOME and TAXES MAY GO UP ON 1/1/13


Unless Congress takes action and passes new tax law (and that will not happen until after the Presidential election , a tax Bomb will go off on January 1, 2013 which could cause you adverse consequences.
  • The Lowest income tax rate jumps from 10% to 15%
  • The top tax rate climbs from 35% to 39.6%
  • Long-term capital gains tax rate climbs from 15% to 20%
  • Dividends will be taxed at substantially higher rates
  • The 2% payroll tax credit expires, and much more...
  • The lifetime estate and gift tax exemption will decrease from $5 million to $1 million
Now is the time to do  your  income and estate tax planning in the event Congress does not take any action to stop these increases.  We can help.  www.TaxMeLess.com 

November 11, 2010

2010 Year End US Income Tax Planning

Its time to try to reduce your taxes for 2010 by doing year end tax planning.  Our year end tax planning letter is on our website. Click Here to Get Year End Tax Planning Ideas

October 24, 2010

YOU MUST NOTIFY THE IRS OF YOUR ADDRESS CHANGE WHEN YOU MOVE ABROAD TO AVOID PROBLEMS

When you move to Mexico or other foreign countries you MUST notify the IRS of your new address. The IRS is not responsible to keeping its records up to date with your new address, you are!  You should notify them using Form 8822.  If you fail to notify them of the address change, any notices they send to your previous address are deemed received under the law, and various time limitations, assessments, etc. , may expire even though you are not receiving the IRS notices.

One client who failed to notify the IRS of her new address  was erroneously assessed a large sum of money and only learned about it many years later when the IRS took levied and took all of the money out of her bank account.  It was very expensive and time consuming to finally convince the IRS of their error and get her money refunded.  The problem would have never happened if a Form 8822 had been filed.  The error could have been corrected immediately when the initial erroneous assessment was made.

Due to poor mail delivery in many countries, it is wise in some situations to keep using a US mailing address of a friend or relative, so your IRS notices will be delivered to a competent person who can then forward the mail by fax, email or a private delivery service.

April 26, 2010

502 Expats Renounce Their US Citizenship in fourth quarter of 2009

According to government records, 502 expatriates renounced U.S. citizenship or permanent residency in the fourth quarter of 2009 — more than double the number of expatriations in all of 2008. And these figures don't include the hundreds — some experts say thousands — of applications languishing in various U.S. consulates and embassies around the world, waiting to be processed. While a small number of Americans hand in their passports each year for political reasons, the new surge in permanent expatriations is mainly because of taxes. Click on the Banner to this article to go to the Time Magazine Article.

Our firm has helped scores of Expats with the Tax Planning and Special Tax Forms Required to successfully surrender Citizenship and stop paying US Taxes. Visit our website at www.TaxMeLess.com for more.