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Starting with the 2021 tax year, IRS forms K-2 and K-3 are new schedules that may need to be included with 1065 (Partnerships), 1120S (S Corporations), or 8865 (Certain Foreign Partnerships) filings. These are all pass-through entity filings that include Schedule K-1, which reports a partner’s or shareholder’s share of the entity’s profits, losses, deductions, […]
With the cost of home ownership on the rise, it is important for first-time homebuyers to be aware of certain possible benefits available to help with affordability. One of these is the Section 25 mortgage interest credit, which can be claimed on a taxpayer’s Federal tax return for a portion of the mortgage interest paid. […]
What is a 529 Plan? A 529 Plan is an investment account that offers tax benefits when used to pay for qualified education expenses. Investments grow tax free and withdraws are tax- and penalty-free as long as they are used to pay for eligible expenses. Most states offer their own 529 plan; you don’t have […]
What is a “tax home” and “abode” for purposed of the Foreign Earned Income Exclusion? Why is this important? If it is established that you have an abode in the U.S., you will not qualify for the foreign earned income exclusion. Your abode is generally where you live or have your strongest economic, familial, and personal ties. […]
In the fall of 2021, the IRS released guidance regarding new documentation requirements for companies looking to claim a Research & Development (R&D) credit refund. The extra documentation requirement is effective beginning in January 2022, and the information must be submitted with the annual tax return. The goal of the new requirements is to help […]
Since the Tax Cuts and Jobs Act of 2017, effective January 1, 2018, the US moved towards more of a hybrid territorial system. This “hybrid system” has components of both a worldwide and territorial system. Some of the changes included in the TCJA are the one-time transition tax on untaxed earnings of some foreign corporations, exemptions on […]
Are you confused about inbound taxation versus outbound taxation? Think of “inbound taxation” as those transactions which come from outside of and into the U.S.- an inbound transaction- is specifically those of foreign persons (non U.S. persons) with U.S. income or activities. “Outbound taxation” is the system by which the U.S. taxes its citizens and resident aliens […]
Dealing with the IRS can be stressful! There are taxpayers who receive an IRS notice and because they are so fearful, they will pay the notice without verifying the accuracy. The IRS may not have all the facts, so do not pay anything without checking the details. Also, do not ignore any letter sent by […]
There are two main types of taxing systems in the world. In a “worldwide system,” tax is imposed on residents of a country for all income- including at home and overseas. Foreign tax credits may be used to mitigate the effect of double taxation. Most countries use a “source-based taxation,” or “territorial,” system. In this format, the country in […]
Issuing 1099’s can become less cumbersome if you create an internal SOP for collecting W-9’s appropriately. We’ve written a brief SOP for you to help us help you! __________________________________________________ Please ensure that for all Service providers, Rents paid for property lease or equipment, Interest paid to non-financial institutions or individuals That you obtain a completed […]
