Do beneficiaries of a trust pay taxes?
Beneficiaries of a trust typically pay taxes on distributions they receive from the trust’s income. However, they are not subject to taxes on distributions from the trust’s principal. When a trust makes a distribution, it deducts the income distributed on its own tax return and issues the beneficiary a tax form called a K-1. The […]
How Can American Expats Reduce their IRS Taxes?
Americans living abroad are still required to file US taxes. The US is the only country that requires its expats to file. It is because the US taxes based on citizenship rather than on residence. This leaves the millions of Americans who work abroad at risk of double taxation, paying taxes in both the country […]
How the Sales Tax Holiday Can Boost Your Back-to-School Savings
With several of my family members working in the education field, I know it will be only a matter of time before I’ll get tweets and Facebook shares on the back to school deals they find. Depending on where you live, your state may be offering a huge savings with a sales tax free […]
IRS Simplifies Surviving Spouse Portability Election
The Internal Revenue Service has released a revenue procedure that offers an easier way to get an extension of time to file a return to opt for portability of the deceased spousal unused exclusion amount. Revenue Procedure 2017-34 applies to estates that aren’t typically required to file an estate tax return because the value of […]
HOW TO AVOID TAX HEADACHES WHEN EMPLOYEES TRAVEL OUT OF TOWN ON BUSINESS
Business travel, an expensive and time-consuming activity for both the employer and employee, also can create tax problems for all concerned unless the rules are followed to the letter. If it’s done right, business travel will be fully deductible by the company (but only 50% of travel meals are deductible), tax-free to the employee, and […]
IRS Warns of New Phone Scam Involving Bogus Certified Letters
The Internal Revenue Service today warned people to beware of a new scam linked to the Electronic Federal Tax Payment System (EFTPS), where fraudsters call to demand an immediate tax payment through a prepaid debit card. This scam is being reported across the country, so taxpayers should be alert to the details. In the latest […]
How to Secure a Valuable Tax Credit for Hiring Designated Workers
Before you interview the next group of job candidates for your small business, whether it’s to fill a full-time position or just for the summer, keep in mind that long-term unemployment recipients and other workers certified by a state agency may qualify for the Work Opportunity Tax Credit (WOTC). This isn’t just chicken feed: The […]
How to Play All the Right Tax Angles for Hobbies
Millions of people enjoy hobbies that also provide a source of income. From catering to cupcake baking, crafting homemade jewelry to glass blowing – no matter what your passion is, there will likely be tax repercussions. Some taxpayers are surprised to learn that they must report income earned from hobbies on their tax return. The […]
Some of the Biggest Estate-Planning Mistakes People Make
Will your legacy be a benefit or a burden to your loved ones? It depends on how well you’ve planned. There are some things we just don’t like to think about, much less speak about. The universal truth is we are all going to pass away one day. The legacy you leave can either simplify […]
How To Pay Less In Taxes On Your Investments
In some cases, you can hold a stock for less than a year and avoid short-term capital-gains rates The current federal income-tax rates on long-term capital gains recognized by individual taxpayers are still low by historical standards. The rates range from a minimum of 0% to a maximum of 20% depending on your tax bracket. […]
When You Should Establish An IRA As A Trust
A trusteed IRA offers provisions beyond a custodial plan, but is it a good strategy for clients? That answer depends on several factors, including how much control — or not — the client wants their beneficiaries to have. Under the tax code, an IRA can be established as a trust or custodial account. With a […]
Taxpayer Tips: Best Practices for U. S. Tax Court
Taxpayers contesting IRS assessments of additional taxes, penalties and interest have a number of different options to contest and appeal those assessments. One of those options includes bringing a case to the United States Tax Court (Tax Court). Here are some Tax Court practice tips for taxpayers: 1. Know What Tax Court Is Congress created the Tax […]
Which Retirement Income Tax Strategy Is Right for You?
For many people, thinking about retirement simply means contemplating enjoyable ways of spending time during their golden years. What some people may not account for, however, is the impact taxation can have on savings, investments, and cash withdrawals. Just as it is important to plan your investments—and it is never too soon to start—it is […]
IRS and Security Summit Partners Warn of Fake Tax Bills
WASHINGTON — The Internal Revenue Service and its Security Summit partners today issued an alert to taxpayers and tax professionals to be on guard against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act. The IRS has received numerous reports around the country of scammers sending a fraudulent version […]
Ten Income Tax Benefits for Farmers
Farming has often been viewed as the backbone of the American economy. While technology and other recent developments may have changed this thinking, farmers still enjoy a preferred status, at least as federal income taxes are concerned. For instance, there are several special tax code provisions relating to farming, most of them beneficial. At the […]
How Will the Proposed Healthcare Reform Affect Reporting?
Most Americans are aware that the House of Representatives recently passed the “American Health Care Act” (AHCA). But what does this mean? First of all, the Affordable Care Act (ACA), or Obamacare, is not necessarily going away. There is a process that the AHCA (and any House-approved bill) must first complete before becoming law. This […]
Franchise Fees: Why Do You Pay & How Much Are They?
There are plenty of myths about franchising. A great deal of them revolve around money. I hear these two statements a lot: “Franchise companies make most of their profits from franchise fees.” “If it wasn’t for those franchise fees, I’d probably consider buying a franchise business.” In this article, I’m going to teach you all […]
How to Remove Assets from a Taxable Estate
A simple and basic estate planning tool is a revocable living trust (RLT). Revocable means it can be changed; living, because you are alive; and trust which is a legal document. The point of a RLT is to protect your assets from probate, the long and drawn out process that can take sometimes a year […]
Tips for Taxpayers Who Owe Taxes
The IRS offers a variety of payment options where taxpayers can pay immediately or arrange to pay in installments. Those who receive a bill from the IRS should not ignore it. A delay may cost more in the end. As more time passes, the more interest and penalties accumulate. Here are some ways to make […]
Many tax-exempts Owe heir 990s Soon
The IRS is warning nonprofits and their advisors that many tax-exempt organizations have a filing deadline for 990-series information returns next Monday, May 15. Form 990 information returns and notices are due on the 15th day of the fifth month after an organization’s tax year ends. For calendar-year organizations, May 15 is the deadline to […]