We deal with agreements on a daily basis — from the terms and conditions on a website to municipal regulations that guide public actions. These agreements are often forgotten, if not entirely ignored, which may only become apparent when an issue arises. Similarly, partnership agreements may be drafted and then ignored. Partnership agreements guide many aspects of the partnership, including important tax consequences. Unless you have a legal background, you may have retained an attorney’s help when your partnership drafted its partnership agreement. What you may not have considered at the time was having a CPA review the agreement.
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.
This blog post covers 2016 year-end update for businesses. With the start of 2017 quickly approaching, a slew of changes is upon us. The new year often brings tax changes, and with a new president in 2017 there is already talk of overhaul of the tax code. While we will briefly discuss some speculative changes for 2017, most of the changes discussed below have already been approved by Congress and will be in effect for 2017.
In the past few weeks, you’ve likely been inundated with pre-recorded phone calls, unsolicited opinions on Facebook, and a mailbox full of political flyers. With the presidential election looming, what effect will our decision have on taxes? Every candidate always makes campaign promises related to taxes, whether it’s closing loopholes, lowering tax rates, or completely overhauling the tax system. While it’s hard to say whether a candidate will be able to successfully follow through with these promises, we can, at the very least, attempt to compare the positions that they’ve taken during this campaign cycle. Let us briefly review the candidates’ tax plans.
NOTE: This is a reprint of the article Greg Freyman wrote for Angie’s List.
Maybe you’ve always completed your business returns by hand, or maybe you’ve used off-the-shelf tax preparation software to file your personal taxes. However, when your tax situation becomes too complicated for you to handle, it’s best to call a certified public accountant. How do you know what to look for, though?
If you tell people “I work at a start-up,” images of open-working spaces with ping pong tables and casual working atmospheres probably pop into their heads. In reality, start-up companies face many obstacles, and the founders and officers have many tax, operational, and legal logistics to handle. No single person is fully knowledgeable in every field, so how do you ensure that you properly handle all of the details of developing your company?
The key is to assemble a team of experts who are well-versed in the areas that are essential to your business’ success. One of the most important players is a good accountant: they can provide information on how to structure and register your business, as well as important financial and tax considerations. Freyman CPA assists start-ups at every step: from determining what entity structure most appropriately meets your needs and long-term goals, to offering tailored solutions once your business is up and running.
Every day we hear about new scams in which a scammer calls victims and claims to be the IRS, demanding money. The general professional consensus is that the IRS will never call and demand money, but that is going to be changing in the next few months. Congress passed the FAST Act, which authorizes private debt collectors to call individuals who are delinquent in their tax payments. Although not currently in effect, likely by the end of 2016 if you owe more than $50,000 in back taxes to the federal government, they can suspend your passport. Many states, such as New York and Massachusetts, will suspend your driver’s license if unpaid state taxes exceed a certain threshold. New Jersey does not currently have a suspension policy like this in place.
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.
Have you had any of these thoughts about your business’ sales tax or use tax obligations:
“I’m a service provider; I don’t need to collect and remit sales tax.”
“We were only in the state at a trade show for one week – we don’t have physical presence in the state, so we don’t have to collect sales tax.”
“I bought equipment for my company in another state, since they don’t have sales tax. I saved 6% by doing this!”
Sales and use taxes are a murky area with few clear-cut rules. As a result, you or your business may not be in compliance with states’ sales and use tax regulations.
Sales tax is a tax that is levied on the sale of goods or services. Unfortunately, states have differing definitions of what is included as a taxable good or service. A general rule of thumb is that the sale of tangible personal property (that is, physical assets that are movable) is taxable. The provision of services is generally not subject to sales tax unless a state has a regulation or law that specifically subjects the service to sales tax.
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.