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US Taxes and Moving Overseas
If you are moving overseas to work, taxes become a big issue to consider. You can exclude more than $100,000 of foreign wages or self-employment income per year from taxation. Watch the video to learn more.
What does back to school time and taxes have to do with each other?
Back to school time provides the perfect reminder of the many tax credits and benefits available to students of all ages. Everything from 529 plans, Coverdale savings accounts, and tuition tax credits can come in handy.
Watch the video below to learn more.
Who Claims The Kids Come Tax Time?
A divorce with children can be a stressful time. There are some steps that you can take tax time to make things less complex. Call this office for help with determining the best course of action.
Tips for Recently Married Taxpayers
Social Security Administration
Withholding & Estimated Payments
New Spouse's Past Liabilities
Capital Loss Limitations
Impact on Parents' Returns
Now that the honeymoon is over, there is a number of tax and financial issues newlyweds need to consider and take action on. Some are simply administrative while others can have significant impact on the couple's tax returns. If you've recently married, take some time to review the information below and avoid unpleasant surprises when it comes time to file as married taxpayers.
Notify the Social Security Administration - Report any name change to the Social Security Administration so that your name and SSN will match when you file your next tax return. Informing the SSA of a name change is quite simple and can be done on the SSA's website. If you don't have Internet access, call 800-772-1213 or visit a local office. Your income tax refund may be delayed if it is discovered that your name and SSN don't match at the time your return is filed.
Notify the IRS - If you have a new address, you should notify the IRS by completing and sending in Form 8822, Change of Address.
Notify the U.S. Postal Service - You should also notify the U.S. Postal Service of any address change so that the IRS or state tax agency correspondence can be forwarded to your correct address.
Review Your Withholding and Estimated Tax Payments - If both you and your new spouse work, your combined income may place the two of you in a higher tax bracket, and you may have an unpleasant surprise when you file as married.The combined higher incomes can also cause you to lose certain tax benefits available to individuals in lower tax brackets, such as the child care credit if either or both of you have a child and you both work (because a lower percentage of expenses applies as income increases) and loss or reduction of the earned income tax credit.
On the other hand, if only one of you works, filing jointly with your new spouse can provide a significant tax benefit, enabling you to reduce your withholding or estimated payments. In either case, it may be appropriate to review your withholding (W-4 status) and estimated tax payments, if any, to make sure that you are not going to be under-withheld and that you don't set yourself up to receive bad news for the next filing season.
Notify the Insurance Marketplace - If either or both of you are obtaining health insurance through a government health insurance marketplace, your combined incomes and change in family size could reduce the amount of the premium tax credit to which you would otherwise be entitled, requiring payback of some or all of the credit applied in advance to reduce your monthly premiums. More complicated yet, if either or both of you are included on your parents' Marketplace policy, those insurance premiums must be allocated from their return to your return.
Filing Status - For tax purposes, an individual's filing status is determined on the last day of the tax year. Thus, regardless of when you got married during the year, you and your new spouse will be treated as married for the entire year and, therefore, can no longer file as single individuals. Your options are to file using the married joint status, combining your incomes and allowed deductions on one return, or to file two separate returns using the married filing separate status. The latter is not the same as the single status you may have used in the past. Filing separately in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin) can be complicated. Also, the terms of a prenuptial agreement, if you have one, can affect your filing status choice.
New Spouse's Past Liabilities - If your new spouse owes back taxes, past state income tax liabilities or past-due child support or has unemployment debts to a state, the IRS will apply your future joint refunds to pay those debts. If you are not responsible for your spouse's debt and do not want your share of any tax refund used to pay your spouse's past debts, you are entitled to request your portion of the refund back from the IRS by filing an "injured spouse" allocation form. As an alternative, you can file separately using the "married filing separate" filing status; however, that generally results in higher overall tax.
Capital Loss Limitations - When filing as unmarried, each individual can deduct up to $3,000 of capital losses on their tax return for a possible combined total of $6,000, but a married couple is limited to a single $3,000 loss and if they file married separate, then the limit is $1,500 each.
Spousal IRA - Spousal IRAs are available for married taxpayers who file jointly where one spouse has little or no compensation; the deduction is limited to the smallest of 100% of the employed spouse's compensation or $5,500 (2017) for the spousal IRA. That permits a combined annual IRA contribution limit of a certain amount (up to $11,000 for 2017). The maximum amount is $6,500 if you or your spouse is age 50 or older ($13,000 if you are both 50+). However, the deduction for contributions to both spouses' IRAs may be further limited if either spouse is covered by an employer's retirement plan.
Deductions - The standard deduction in 2017 for a married couple (both spouses under age 65) is $12,700 and for a single individual is $6,350. So if both of you have been taking the standard deduction, there is no loss in deductions. However, if in past years one of you had enough deductions to itemize and the other took the standard deduction, after marriage and filing jointly you would either have to take the joint standard deduction or itemize, which likely will result in a loss of some amount of deductions.
Impact on Parents' Returns - If your parents have been claiming either of you as a dependent, they will generally lose that benefit. In addition, if you are in college and qualify for one of the education credits, those credits are only deductible on the return where your personal exemption is used. That generally means your parents will not be able to claim the education credits even if they paid the tuition. On the flip side, unless your income is too high, you will be able to claim the credit even though your parents paid the tuition.
If you need assistance in dealing with any of these issues or have questions about the impact of your new marital status on your taxes, please call this office.
The Equifax Data Breach, IRS and Your Identity Security
In the tax industry, we have been working to combat the threat of hackers for many years. When a security breach of the scope of the recent Equifax cyber security incident takes place, many clients are affected and concerned about how this may affect their financial lives.
What you need to know.
From May through July of 2017, Equifax reported unauthorized access to approximately 143 million American’s personal data, including names, social security numbers, birth dates, and in some instances driver's licenses. In addition, some 209,000 credit card numbers were accessed.
Steps to protect your identity.
Equifax has set up a special website dedicated to the breach event to help consumers find out if they have been impacted. The website will allow affected consumers to sign up for credit file monitoring and other identity theft protection. In addition, the company has set up a special call center to handle inbound inquiries. Equifax can be reached at 1-866-447-7559.
Step one is to see if your personal data was compromised. Visit the Equifax potential impact web page to start your inquiry.
Your identity and the IRS
The Equifax data breach is just one-way identity thieves can access your personal information. The IRS has published their list of common identity theft scams. Regardless if you were affected by the recent Equifax data breach, it is best practice to use common sense when sharing any personal data with third parties. If you have been a victim of the Equifax data breach, follow these 7 steps when communicating with the IRS about identity theft.
When in doubt, feel free to reach out to this office to verify any IRS correspondence or other suspicious activity when it comes to your tax filing.
Enhance Your Cash Flow, Enhance Your Business: The Top Tips You Need to Know
We've discussed at length in the past about how cash flow is ultimately one of the most important factors of a business that far too many people just aren't paying enough attention to. Cash flow maintenance is about more than just knowing how much money is coming in versus how much money is going out. Even if your business is very close to true profitability, this ultimately won't mean a thing if you're dealing with clients who are slow to pay. This can seriously impact your momentum, and worse — your chances at long-term success.
To put it simply, enhancing your cash flow isn't just about enhancing your accounting — it's also about enhancing the very organization you've already worked so hard to build. With that in mind, there are a few key tips you'll absolutely need to know about moving forward.
Technology Is Your Friend. It's Time to Start Acting Like It
Perhaps the most important tip that you should start using to enhance your cash flow (and thus, your entire business) is to start leveraging the power of modern technology to your advantage. There are a wide range of different financial solutions that allow you to not only submit invoices to clients electronically, but that then allow those clients to pay you in exactly the same way.
Not only will this make it far, far easier for you to track money that is still "in play" so to speak, but it will also significantly help shorten the time it takes to get you paid for your products and services in the first place. This means that money will be coming in at a much faster rate, helping to make sure that you have the cash on hand necessary to take advantage of certain opportunities as they develop.
Use Your Credit Cards in the Right Ways
Another key tip that you can use to enhance your cash flow actually involves using your company credit card for purchases that you may otherwise pay for by check. Using your company credit card gives you an extra grace period to pay off the card in full each month. This essentially allows you to "push" that cash payment down the road, giving you a bit more breathing room than you'd have rather than the net 15 or net 30 that you'd be dealing with for check-based payments.
Get Organized and Stay That Way
Perhaps the most important step that entrepreneurs can take to enhance their cash flow involves not just getting organized, but doing anything that they have to in order to stay that way as long as possible. Consider creating different types of tier groups in your records, clearly separating people based on when they absolutely need to be paid.
Order everyone by who must be paid first — meaning that you're definitely going to want to prioritize the government, payroll and certain vendors that may shut off your access to resources before anyone else. Certain others, on the other hand, can easily be paid later without too much undo fuss. Sure, you'd love to be able to pay everyone at the same time — but in the event that you can't, this information will be invaluable to have when making strategic decisions regarding where your available funds should go.
This itself can also help identify certain trends and patterns that make the next six, 12 and 24 months of essential decisions far easier to predict.
Never Be Afraid to Consult a Professional
At the end of the day, the most important tip that you need to not just understand but truly believe in with regards to cash flow is that you should never be afraid to enlist the help of a trained professional. You're a business leader and you're good at what you do. You wouldn't have gotten this far if you weren't.
However, that doesn't make you a financial expert and it certainly doesn't mean that you'll have the time necessary in a day to devote to something as mission-critical as proper bookkeeping and other financial tasks. In certain cases you might, sure — but if you start to feel like this is getting overwhelming, it is in your own best interest to pick up the phone and find someone who can lend you a much-needed helping hand. Find an accounting expert who doesn't just have experience in terms of cash flow, but who understands your niche and knows exactly how a business just like yours needs to perform.
Not only will this help put you in a better position to make positive cash flow gains moving forward, but it'll also give you the essential peace of mind that only comes with knowing your financial needs are being properly (and actively) taken care of.
October 2017 Individual Due Dates
October 10 - Report Tips to Employer
If you are an employee who works for tips and received more than $20 in tips during September, you are required to report them to your employer on IRS Form 4070 no later than October 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.
October 16 - Individuals
If you have an automatic 6-month extension to file your income tax return for 2016, file Form 1040, 1040A, or 1040EZ and pay any tax, interest, and penalties due.
October 16 - SEP IRA & Keogh Contributions
Last day to contribute to SEP or Keogh retirement plan for calendar year 2016 if the tax return is on extension through October 16.
October 2017 Business Due Dates
October 2 - Fiduciaries of Estates and Trusts
File a 2016 calendar year return (Form 1041). This due date applies only if you were given an extension of 5 ½ months. If applicable, provide each beneficiary with a copy of K-1 (Form 1041) or a substitute Schedule K-1.
October 15 - Taxpayers with Foreign Financial Interests
If you received a 6-month extension of time to report your foreign financial accounts to the Department of the Treasury, this is the due date for Form FinCEN 114.
October 16 - Social Security, Medicare and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in September.
October 16 - Nonpayroll Withholding
If the monthly deposit rule applies, deposit the tax for payments in September.
October 31 - Social Security, Medicare and Withheld Income Tax
File Form 941 for the third quarter of 2017. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until November 10 to file the return.
October 31 - Certain Small Employers
Deposit any undeposited tax if your tax liability is $2,500 or more for 2017 but less than $2,500 for the third quarter.
October 31 - Federal Unemployment Tax
Deposit the tax owed through September if more than $500.