Tax Planning Tips for Couples Involved in a Cross-Border Divorce

Tax Planning Tips for Couples Involved in a Cross-Border Divorce

tax planning
By Anthony DiosdiIf you are divorcing or recently divorced, taxes may be the last thing on your mind. However, a divorce, in particular a cross-border divorce, may have a big impact on your finances. This article discusses some key tax tips to keep in mind if you are divorcing or recently divorced and you held assets located in the U.S. and abroad with your spouse.Understand the Changes to the Tax Treatment of Alimony and Separation PaymentsPrior to the enactment of the 2017 Tax Cuts and Jobs Act, if a spouse made payments under a divorce or separate maintenance decree or written separation agreement, the spouse was able to deduct them as alimony. This applied only if the payments qualified as alimony for federal tax purposes. If a spouse received alimony…
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Tax Goals for 2023

Tax Goals for 2023

tax planning
Whether you are an individual or a business, taxes are a large part of your life. How you approach your taxes can determine how much you owe and whether you may have issues with the IRS and state tax authorities. First, you should try to maximize your amount of deductions and pre-tax spending. For example, you can contribute to a health savings account from pre-tax dollars. In addition, all your retirement contributions are from pre-tax dollars. Maximizing these contributions can help minimize your tax burden and enhance your savings goals. In addition, your employer may match your retirement contributions. Second, you should strive to get organized for filing your 2022 tax return as early as possible. If you wait until the last minute, you will be forced to rush. Haste…
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End of Year Tax Concerns

End of Year Tax Concerns

tax planning
Once January 1 rolls around, you generally lose the ability to make any changes or elections that can impact the tax return for your previous year. Therefore, you must make any moves prior to the end of the year to put you in a better position when you file taxes. Otherwise, you can be hit with a large bill unnecessarily on tax day. Your ending income for the year can significantly impact your taxes. It can put you in a higher tax bracket or make you subject to the alternative minimum tax. Many taxpayers are hit with the surprise that their income makes them subject to the AMT, and they only learn it in the following year. You should consider ways of reducing your income in the current year or…
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Do You Need to Amend Your Tax Return?

Do You Need to Amend Your Tax Return?

tax planning
You filed your tax return on time and forgot about it - that is until you realize you forgot a highly beneficial deduction or the IRS claims you owe more than you should. In this situation, you cannot change your initial return once it is submitted and accepted by the IRS. However, you do have the option to file an amended return. You can file an amended return using Form 1040X, which allows you to enter the proper information. You will also need to provide an explanation of why you are changing the information from your initial return. There is not a need to completely redo everything on the return - you only need to update the information that needs correction and make sure your tax liability is also corrected.…
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Tax Deadline Approaching for 2021

Tax Deadline Approaching for 2021

tax planning
In 2020, The Internal Revenue Service (IRS) extended the tax deadline due to the impact of the start of the COVID-19 pandemic. With the pandemic still continuing, many people are wondering whether they will be able to delay their tax filings in 2021, as well. The IRS has not extended the tax deadline for the general public, and it remains on April 15, 2021. Democrats in the House of Representatives are continuing to request that the IRS extends the deadline again, but there is no guarantee that will happen. It is best to abide by the usual deadline this year instead of expecting a last-minute extension. Some people across the United States will receive an automatic extension due to natural disasters in their areas. For example, taxpayers impacted by the…
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Things to Know About the 2021 Tax Season

Things to Know About the 2021 Tax Season

tax planning
2020 was an unusual year, to say the least, and taxes were no different. While the pandemic and related financial crisis continue across the country as we enter 2021, what can you expect this year when it comes to your tax filings? The following are some things to know, and you can always discuss the matter more closely with a tax lawyer in San Francisco. No Filing Extension Yet As of now, the tax deadline is the traditional date of April 15, 2021, and there has been no extension announced for filing 2020 taxes by the Internal Revenue Service (IRS). Make your appointment with an attorney now, so you can be prepared to file on time. Income Brackets and Deductions The income brackets and standard deductions were also adjusted for…
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Caution- The 2019 Calendar Year Has Yet Another International                                   Return Requirement

Caution- The 2019 Calendar Year Has Yet Another International Return Requirement

tax planning
 By Anthony Diosdi Individuals with foreign assets are subject to never ending informational return requirements. This tax year there is yet another international reporting requirement. Form BE-10 is a benchmark survey from the Bureau of Economic Analysis (“BEA”) which is under the United States Department of Commerce. The BE-10 is conducted every five years and is designed to collect information for all U.S. direct investments abroad from both large and small entities. The BE-10 treats all individuals as entities or companiesThe 2019 calendar year is a “Benchmark Year.” This means if you or a business that you own conducts any business outside the United States or holds assets outside the United States, you may be required to file a BE-10. Unlike FBAR informational returns, there is no $10,000 threshold. The…
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The Top Five Tax Planning Opportunities and Pitfalls that Should be Considered Before Contributing Stock of a CFC to a Holding Corporation to Reduce the U.S. Tax Liability on GILTI

The Top Five Tax Planning Opportunities and Pitfalls that Should be Considered Before Contributing Stock of a CFC to a Holding Corporation to Reduce the U.S. Tax Liability on GILTI

tax planning
By Anthony Diosdi Internal Revenue Code Section 951A requires US shareholders of a controlled foreign corporation (“CFC”) to include the corporation’s income determined to be in excess of specified return on investment in depreciable tangible personal property (i.e., GILTI). For most purposes, a GILTI liability operates for tax purposes in a similar manner as a subpart F inclusion. However, unlike subpart F income, GILTI was intended to impose a current year tax on income earned from intangible property subject to no or a low tax rate outside the US. GILTI is defined as the residual of a CFC’s income (excluding subpart F income or income that is effectively connected with a US trade or business) above a 10 percent return on its investment in tangible depreciable assets (defined as “qualified…
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Understanding the Beneficial Rules of the CARES Act for Retirement Fund Withdrawals

Understanding the Beneficial Rules of the CARES Act for Retirement Fund Withdrawals

tax planning
By Anthony Diosdi Recently, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act allows retirement savers to take “coronavirus-related distributions” of up to $100,000 from their Individual Retirement Account (‘IRA”) and 401(k) plans without the 10 percent penalty that normally applies to people under age 59 1/2. If effect, the new law allows individuals that made contributions to retirement plans to borrow up to $100,000 from the plan and re-contribute the amount borrowed at any time with up to three years with no federal income tax consequences. In other words, if an individual takes a distribution from a retirement account, he or she will have three years to repay the money withdrawn from the retirement plan. If the individual does…
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Tax Deadlines for 2020

Tax Deadlines for 2020

tax planning
If you thought that filing taxes in 2019 was a confusing process, the situation is not much simpler in 2020. With the COVID-19 pandemic sweeping through the U.S. and the world in the early months of the year, the Internal Revenue Service (IRS) has made adjustments to filing deadlines. The following is an overview of tax deadlines in 2020. Filing Date Extended First and foremost, the IRS has extended the standard tax filing date from April 15 to July 15, 2020. This means you do not have to file your federal returns until July, and you will not be charged interest on payments until after July 15. This can help many people who might owe taxes but are facing financial hardship due to temporary job loss or a decline in…
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