Begging for the Earned Income Tax Credit

I recently ran across a 1999 tax court case that I thought was kind of humorous. Well I guess humorous if you do taxes for a living. Even though it is on the older side, it has some principles that can be learned for the earned income tax credit. The tax court case is Miguel …

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Guidance on FDAP withholding penalties

In an International Practice Unit released in May 2016, the IRS provides guidance to IRS examiners on the appropriate penalties associated with fixed or determinable annual or periodical (FDAP) withholding. Unless there is a treaty or other exception, payments of U.S. source FDAP income to foreign persons are generally subject to 30% withholding tax. Withholding …

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New guidance on sourcing FDAP income

In June 2016, the IRS released a new International Practice Unit to help IRS examiners determine the source of fixed or determinable annual or periodical income – also known as FDAP income. Withholding agents especially need to pay close attention to these rules, because if payments to foreigners aren’t confirmed as foreign source, they will …

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Taxable or Not? What You Need to Know about Income

All income is taxable unless the law excludes it. Here are some basic rules you should know to help you file an accurate tax return: Taxed income. Taxable income includes money you earn, like wages and tips. It also includes bartering, an exchange of property or services. The fair market value of property or services …

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YARR! The IRS is After Me Booty – Is it income?

Growing up we used run around pretending that we were pirates finding buried treasure while sailing the dangerous seas. Nineteen years later as new tax interns, we found that pirates have to pay taxes just like everyone else. The tax code identifies income for tax purposes as income from all sources unless it is specifically …

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Mid-Year Tax Planning Tips

Summer is the perfect time to begin your year-end tax planning so that you have time to identify the strategy (or strategies) that work for you and implement them well before year end. Try to avoid the new 3.8% net investment income tax (NIIT). It only affects higher-income individuals, but that can include anyone who …

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Key Dates & Milestones: Social Security, Pensions, IRAs, Medicare

There are many age-related financial and planning milestones that you need to be aware of in your sixties. Keep this list in mind. 59 ½ – Penalty Goes Away This is the age at which one can withdraw money from traditional IRAs, 401(k)s or similar retirement plans without restrictions and without an added 10% tax …

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Income Statements in Real Estate Appraisals and Business Appraisals

When reading business and real estate appraisals, one should recognize that a business appraiser and real estate appraiser do not rely on the same items of income and expenses when determining market value.  For example, when valuing an LLC that owns a multi-tenant office building, the real estate appraisal only considers income and expenses directly …

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Key points of the US – Canada Tax Treaty

The U.S. has entered into tax treaties with many countries in an effort to reduce or eliminate double taxation. The U.S. – Canada Income Tax Treaty is of special interest due to the proximity of this neighboring country. This treaty was signed in 1980 and has since been amended by five protocols. Income from personal …

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