This is the standard the IRS uses to determine if an item sold or donated by you is valued correctly for income tax purposes. It is also a definition that is so broad that it is wide open to interpretation. The difficulty here, is if the IRS decides your FMV opinion is wrong, you are not only subject to more tax, but penalties to boot. Here are some tips to help defend your FMV in case of an audit.
The long-standing practice of automatically charging you a 15 – 20% gratuity at your favorite restaurant is changing as we speak. The practice of charging customers for tips is normally applied to large parties (tables of 8 or more) or at high profile restaurants. The practice came about to ensure servers handling large groups receive adequate tips. Here is what is changing:
If you own your own business, by hiring your children you can save in the following ways:
Effective October 1st, there is a new tax credit available; The Premium Tax Credit. If you are eligible for this credit you can decide to take it now based on your estimated income for 2014 or take it later when you file your tax return for 2014. Who does this impact and what should you do?
Here is a tax planning tip for those who file their tax returns early and wish to contribute to a tax deductible IRA, but do not have the funds to do so.
Say you want to pay into an IRA to get a tax break but you don’t have the money? Take heart, there are ways to get around this. The IRS allows you to take the deduction now and pay later when you get your refund.
On average less than 2% of over 90 million tax returns are selected for audit each year. The percentage increases for higher income groups and tax returns in areas of specific interest to the IRS.
The U.S. Treasury Department and the IRS issued a new ruling as a direct result of the Supreme Court action on June 26th regarding same-sex couples.
As our students prepare to head back to school, many families face the difficult decision to save for retirement or use those funds to pay for their children’s college education.
It seems that the world is smaller now, and I have had several contacts about foriegn money transferred into the US as gifts...
As an individual with relatives or friends overseas, you should be aware of an information reporting requirement that applies to certain large gifts or bequests from foreign persons.
If you, while a U.S. citizen or resident, received during the tax year either (1) more than $100,000 from a nonresident alien or a foreign estate, or (2) more than $10,000 (indexed to $14,723 for 2012) from foreign corporations or foreign partnerships, and you treated those amounts as gifts or bequests, you must report information relating to those gifts on Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Form 3520 is due on the date your federal income tax return is due, including extensions.
Failing to report such foreign gifts will subject you to a penalty equal to 5 percent of the amount of the foreign gifts for each month for which the failure to report continues (not to exceed a total of 25 percent). No penalty will be imposed if you can demonstrate that the failure to comply was due to reasonable cause and not willful neglect.
If needed... Please call so that we can discuss the rules for reporting large gifts from foreign persons as they apply to your particular situation.
Most income you receive is taxable income that is reported to you and to the Federal/State tax authorities. However, there are a few income-producing events that the IRS has said are not taxable. One of them is renting out your home or vacation property.
The rule: If you receive rental income for less than 15 days per year, that income is generally not taxable income.
Added benefit: In addition to tax-free rental income, you may still deduct your mortgage interest expense and property taxes as itemized deductions. Neither of these tax benefits is reduced with the income from up to two weeks of rental activity.
Camarillo Award Program Honors the Achievement
CAMARILLO April 15, 2013 -- DiSabatino CPA has been selected for the 2013 Best of Camarillo Award in the Certified Public Accountants category by the Camarillo Award Program.
Understanding the rules surrounding investment losses can really help minimize your tax obligation each year. This is because investment gains and income can be subject to a variety of federal tax rates as high as 39.6%. This and a newly minted tax law in 2013 that could add a 3.8% Medicare investment tax surcharge make planning around when to take investment losses an important tax planning subject.
There is a fine line between taking all of the travel and expense deductions you are entitled to without triggering an IRS audit.
In a recent announcement, Congress has passed a bill that will take much of the politics out of establishing student loan rates….at least for now.
In 2013 federal tax legislation reintroduces the phase-out of itemized deductions for certain taxpayers. Because of this, many who are subject to itemized deduction phase-outs wonder if the benefit of charitable giving is reduced. Here is what you need to know.
Every year taxpayers are hit with tax surprises that could be avoided if they just knew the rules. Here are five big ones that are easy to avoid with some simple planning.
Noted here is a copy of a recent interest error calculation announcement made by the IRS. If you recently received a form CP2000 from the IRS please be aware an adjusted, higher interest amount may be owed.
With the increased popularity of lotteries and casinos, more unsuspecting winners are experiencing a lucky payday only to end up with a huge tax head-ache when filing their income taxes. Here is what you need to know:
On July 2, 2013 the Department of the Treasury and the White House used their blogs to announce that the employer reporting requirements, and the employer shared responsibility/play or pay penalty, are being delayed until 2015. The Treasury said that it will provide a formal announcement and additional details next week.
Understanding Required Minimum Distribution (RMD) Rules
Every year thousands of taxpayers are hit with a heavy 50% penalty for not withdrawing enough money from their retirement plan(s). Here is what you need to know to ensure this does not happen to you or someone you know.