Taxation in the US comes in many different varieties. We have taxation on income, self-employment, gifts, and so on. When speaking in terms of the estate tax, we are discussing a tax imposed on a transfer of net assets, a transfer tax.
Different government bodies impose various types of taxes. Federal tax governs all US citizens or domiciled residents and encompasses all the different states found across the nation.
Each US state also has its own set of rules and regulations that apply to specific residents of that particular state.
By Greg Freyman, CPA and Angela Freyman, MBA
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world”
~ Franklin D. Roosevelt
There are so many fascinating aspects to real estate. In this edition we will briefly go over important information on financial and tax topics of real estate as personal and investment use.
“Take a better stand. Put money in my mom’s hand. Get my daughter this college plan, so she don’t need no man.”
My uncle was a man I greatly respected. My uncle was in fact a self-made multi-millionaire ten times over. You may ask yourself how he got there, and what is his story. Like most millionaires, he was an investor, and he invested his money so that his money would earn money for him. That was his job – his job was managing his investments, and not punching a clock. I remember his living room was filled with financial statements from companies of all kinds, and with prospectuses pilling up to the ceiling. Yes, much like Warren Buffet, he had to know the company inside and out before he would send any money that way.
“The purpose of a tax cut is to leave more money where it belongs: in the hands of the working men and working women who earned it in the first place.” – Bob Dole
We’ve watched the campaign promises, the debates, the flurry of activity and our government in action. The biggest tax reform of our generation has just been passed into law. So what does that mean for you? Will you see more money in your pockets, or are the taxes going up for you next year?
You’ve started working on your tax return (or spoken with your accountant) and it looks like you’ll owe more taxes than you’d like. Now what? It’s too late to change your 2016 taxes now that it’s 2017, right? Fortunately, retirement savings can save you and reduce tax liability!
It’s already December. Before long, it will be 2017, but we’ll all still accidentally write 2016. The start of a new year often brings tax changes, and with a new President in 2017, it is likely that there will be even more changes than usual. This article covers 2016 year-end update for individuals. What can we expect for next year?
Actually, most of the tax changes set for 2017 relate to businesses, and there aren’t that many for individuals. Most of the changes from 2016 simply relate either to amounts that have been indexed for inflation, or to tax benefits that are set to expire in 2016. We’ll cover some of the changes that may impact you for 2017 and beyond.
Jack and Diane Smith are in their mid-50’s. Jack’s father, Thomas, recently passed away. Jack is named as the executor of his father’s estate. Jack isn’t sure exactly what he’ll need to do to handle his father’s estate, so he hires Greg of Freyman CPA and a local law firm to assist him in all of the legal and financial matters related to the estate.
Greg and the lawyers review the legal documentation related to Thomas’ estate. They review his will, and the trusts that he set up for his grandchildren. Greg had acted as Thomas’ accountant, and worked with him years ago to establish a trust that could help avoid probate. The lawyers and accountants review documents related to Thomas’ assets and liabilities, including the title and deed to his home, and his investment statements.
This three part series will look at who qualifies, requirements and exemptions of the form based on individual circumstances, and, finally, special considerations to note when filing a 1040NR: U.S. Nonresident Alien Income Tax Return. Even after you have determined which form you should use for filing as an NRA as discussed in Part II, important special rules and considerations can play important roles in future tax planning when filing Form 1040NR.
The main focus of this segment will take a closer look at spouse elections under Section 6013 comparisons, filing status considerations for same-sex couples, and special rules for dual-status taxpayers.
Section 6013 (g) – Election to treat Nonresident Spouse as U.S. Resident: Only applies to married taxpayers with one spouse being a NRA and other must either be a U.S. citizen or resident at the end of the tax year. This is a continuing election that can only be used once in a lifetime, meaning this election must be selected every future tax year after the initial tax year it is used. Neither spouse can make another 6013 (g) election in the future even if the spouses separate, divorce, or remarry. The death of either spouse will result in the termination of the election. Termination or suspension of the election by either spouse will result in the inability to use this election in any future tax years for either spouse as well. Both spouses are taxed on worldwide income. Neither spouse is eligible to claim they are not U.S. residents under a tax treaty.
Part II: What form should I file?
This three part series will look at who qualifies, requirements and exemptions based on individual circumstances, and, finally, special considerations to note when filing a 1040NR: U.S. Nonresident Alien Income Tax Return. After establishing who is considered a U.S. nonresident alien (NRA) in Part I, the next step is understanding what conditions require an NRA to file this form.
This segment covers the qualifying conditions and exceptions for using Form 1040NR and 1040NR-EZ as well as additional form requirements based on triggering circumstances.
Form 1040NR – U.S.Nonresident Alien Income Tax Return requires U.S. nonresident aliens (NRAs) to file this form if the NRA participated in any trade or business in the U.S. during the tax year and has U.S. source income. Activities to include studying, teaching, or doing research in the U.S. are considered to be participating in trade or business within the U.S. NRAs that were employees during the tax year and received wages would also need to file this income tax form. For more information on Form 1040NR and its instructions, please visit this link: