Recently the IRS issued final rules regarding the reporting and record-keeping requirements for deductible non-cash charitable contributions. There are different categories of mandatory documentation required for various amounts of contributions. Regardless of the value of the contribution, though, proof of its value is necessary, whether in the form of a hand-written note, a receipt or a qualified appraisal.
Foreign financial institutions (FFIs) without an adequate reporting strategy could risk noncompliance with IRS regulations regarding offshore accounts. Non-domestic accounts subject to the Foreign Account Tax Compliance Act (FATCA) must be reported by financial institutions as well as by the account holders themselves under the tax code. Not adequately informing the IRS – either directly or indirectly – about the presence of foreign assets held by U.S. taxpayers could lead to steep penalties, both for the account holder and the FFI itself. In particular, the FFI could face a punitive withholding tax that may far outweigh the cost of any single foreign account.
Thanks to the Tax Cuts and Jobs Act of 2017, many of us saw our income tax requirements and need for withholding shift. The IRS is now warning a particular demographic of the need to carefully review withholdings in light of upcoming changes brought about by the TCJA: retirees.
A recent tax court decision reveals just how important it is to not ignore income on Form 1099-C come tax time. The case, TCM 2018-140, involves a taxpayer who received debt discharge to the tune of over $360,000 back in 2010. Lacking any other income for the year, the taxpayer chose to not file a tax return. In 2018, he incurred failure-to-file and failure-to-pay penalties due to his lack of tax reporting.
The passage of the 2017 Tax Cuts and Jobs Act (TCJA) brought many changes to the way that most Americans handle their income taxes. Most of the changes for middle-class earners comes with the loss of personal exemptions and an increase in the standard deduction. There are also new tax brackets, which may allow some people to pay less even while maintaining their same salary.
One of President Trump’s campaign promises involved simplification of the tax return process for most filers; he specifically mentioned being able to file on a postcard-sized tax form. While that particular goal still hasn’t really come to fruition, Form 1040, the tax form used by most individual and married households throughout the country, has indeed undergone an overhaul.
Most Massachusetts residents know that the IRS has quite a bit of power when it comes to collecting the taxes it believes an individual owes. If you have been subjected to the agency's collection efforts, you may have a bank levy or wage garnishment filed against you. More than likely, these collection efforts put you in a precarious financial position. You may be able to stop these actions with the proper support.
Many Massachusetts residents find themselves unable to pay their taxes. They file their tax income tax returns with the IRS knowing that at some point, the agency will come looking for payment. They may receive a bill in the mail, not understanding that this constitutes the opening gambit of the collection process.
Not everyone filed their federal income taxes back in April. For example, you may be among the many individuals who requested an extension. For individuals who filed for an extension, an important deadline is coming up in a little under three months. This is the extended tax filing deadline. This year, this deadline is Oct. 15.
Unless a Massachusetts resident worked as an independent contractor, he or she probably received a paycheck that negated the need to worry about taxes but once a year. Now that the opportunity to retire has arisen, it is important to know that obligations to the IRS continue, but in a different way. How tax payments are made and how much is owed depends on whether funds come from a pension, Social Security benefits, a retirement account or a combination of the three.