Should You Switch Your Business to C Corporation Status?

Thanks to the Tax Cuts and Jobs Act (TCJA), the federal income tax rate on C corporations is now a flat 21%, for tax years beginning in 2018 and beyond. Under prior law, C corporations were subject to graduated tax rates ranging from 15% to 35%. This is a permanent change, as long as Congress … Continued

2018 Tax Payments Fall Short? You May Be Eligible for Penalty Relief

The IRS announced that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year. The IRS is generally waiving the penalty for any taxpayer who paid at least 85% of their total tax liability during … Continued

There’s still time to get substantiation for 2018 donations

There’s still time to get substantiation for 2018 donations If you’re like many Americans, letters from your favorite charities have been appearing in your mailbox in recent weeks acknowledging your 2018 year-end donations. But what happens if you haven’t received such a letter — can you still claim an itemized deduction for the gift on … Continued

What will your marginal income tax rate be?

What will your marginal income tax rate be? While the Tax Cuts and Jobs Act (TCJA) generally reduced individual tax rates for 2018 through 2025, some taxpayers could see their taxes go up due to reductions or eliminations of certain tax breaks — and, in some cases, due to their filing status. But some may … Continued

Iraq-Based Worker Was Entitled to Foreign Earned Income Exclusion

Tax Code Background Internal Revenue Code Section 911(a) provides that a qualified individual may elect to exclude his or her foreign earned income from gross income, subject to limitations set out in Sec. 911(b)(2). To be entitled to this exclusion, a taxpayer must be: An individual “whose tax home is in a foreign country,” and … Continued

Limit on FBAR Willful Violation Penalty Applies Annually

Limit on FBAR Willful Violation Penalty Applies Annually Report Required Every U.S. citizen who has a financial interest in, or signature or other authority over, a financial account in a foreign country is required to report the account to the IRS annually on an FBAR. The Secretary of the Treasury may impose a civil monetary … Continued

IRS Releases Corporation Foreign Tax Credit Form and Instructions

IRS Releases Corporation Foreign Tax Credit Form and Instructions Credit Overview The United States, its possessions and foreign countries may tax the foreign source income of U.S. taxpayers. The amount of taxes imposed by U.S. possessions and foreign countries is allowed as a credit against U.S. taxes under Internal Revenue Code Section 901. If the … Continued

Important Tax Figures for 2019

The following table provides some important federal tax information for 2019, as compared with 2018. Many of the dollar amounts are unchanged and some changed only slightly due to inflation. Social Security/ Medicare 2019 2018 Social Security Tax Wage Base $132,900 $128,400 Medicare Tax Wage Base No limit No limit Employee portion of Social Security … Continued

Are You Risking the Trust Fund Penalty for Unpaid Payroll Taxes?

Are You Risking the Trust Fund Penalty for Unpaid Payroll Taxes? The trust fund penalty is one of the more onerous tax provisions on the books. In short, a company owner or officer, or another “responsible person,” may be held personally liable for any unpaid payroll taxes. Because the assessment is for 100% of the … Continued

10 New Year’s Resolutions to Improve Your Personal Financial Position

Have you ever kept a New Year’s resolution for the entire year? Every January, millions of Americans make promises to eat less, exercise more and save for the future. But most resolutions are forgotten by spring. However, there are ten promises that relate to your financial health that you can’t afford to abandon. 1. Make … Continued