Several filing requirements can apply when you own or are a beneficiary of foreign financial assets. These forms report on the specific assets themselves and are information returns versus income tax returns. However, the penalties for failing to file them are truly draconian, many starting at $10,000. The rules are complex, in some cases overlapping, […]
I often get questions as to whether payments a client has received are taxable and the answers are often surprising. Many taxpayers are receiving Form 1099-C reporting cancellation of debt income. In general, cancellation of debt is taxable. Several exclusions are available that you will want to discuss with your tax preparer. Often Form 1099-C […]
While you are working, the taxman has you at his mercy. You can take advantage of tax-deferred accounts and pension plans but after that you have little defense. When you are self-employed, you have more options available. When you retire, the situation changes dramatically and you can have a great deal of control over your […]
About this time of year, we begin to collect all the information we will need to properly file our income tax returns. Since it’s been a year, I have listed below some of the items you will want to look for. Your employer is required to send you your W2 forms by Jan. 31. You […]
Capital gains and losses are areas that offer great tax planning opportunities, since in many situations, you control when the gains and losses will be realized. Many taxpayers have incurred losses on stocks and mutual funds and selling them now can allow them to realize the loss and reduce their tax liability. Capital losses can […]
Trusts have become extremely popular in recent years. The most popular type is the intervivos or living trust which is used to control the disposition of your assets after death while avoiding probate. Many of these trusts are A-B trusts where the trust splits on the death of the first spouse into two trusts: the […]
Our tax code is extremely complex with rules and regulations that can often catch a taxpayer by surprise. There is nothing sadder than informing a taxpayer of a large tax liability he or she has incurred that could have been avoided. The tax code includes provisions for several types of “tax election” that can save […]
In an 1939 BBC broadcast, Winston Churchill called Russia “a riddle wrapped in mystery inside an enigma.” This would also be an apt description of our tax code. Our tax laws are written piecemeal year after year by lawmakers unfamiliar with our existing body of tax laws and with little thought toward coherence or consistency. […]
After finishing my first article on the American Tax Relief Act of 2012 (see the Jan. 10 issue of the Town Crier) I realized that there were several important provisions that I still needed to discuss. Cancellation of indebtedness income is taxable unless an exclusion applies. The principal residence exclusion for up to $2 million […]
About this time of year, we begin to collect all the information we will need to properly file our income tax returns. Since it’s been a year, I have listed below some of the items you will want to find. Your employer is required to send you your W2 form by Jan. 31. If it […]
