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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The IRS Delays the Filing Deadline from April 15th to July 15th

The IRS Delays the Filing Deadline from April 15th to July 15th

tax planning
By Anthony Diosdi Treasury Secretary Steve Mnuchin made the following announcement on Twitter “At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.” This means that in addition to providing taxpayers with additional time to pay their 2019 income tax liabilities, the IRS has extended the 2019 filing deadline from April 15th to July 15th. If taxpayers file extensions, they will be able to extend the filing deadline for their 2019 tax returns to October 15th.Anthony Diosdi is a partner and attorney at Diosdi Ching & Liu, LLP located in San Francisco, California. Diosdi Ching & Liu, LLP also has offices in Pleasanton, California and Fort Lauderdale, Florida.…
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Cross-Border Tax Planning with the Proposed Regulations Regarding Cloud Computing Transactions and Digital Downloads

Cross-Border Tax Planning with the Proposed Regulations Regarding Cloud Computing Transactions and Digital Downloads

tax planning
By Anthony Diosdi On August 9, 2019, the U.S. Treasury Department and the Internal Revenue Service (“IRS”) released proposed regulations characterizing cloud computing transactions and “transactions involving digital content.” See Prop. Reg. Sections 1.861-18 and 1.861-19. The proposed regulations modify the current “Software Rules” that govern the taxation of computer programs and transfer of digital content. This article will discuss these new proposed regulations and potential cross-border tax planning opportunities available to businesses involved in cloud computing and digital downloads. An Overview of Current Regulations Promulgated by the Treasury Department and the IRS Regarding the So-Called “Software Rules”The current Income Tax Regulations enumerated in Treasury Regulation Section 1.861-18 otherwise known as the “Software Rules” govern the taxation of transactions involving computer programs. These Software Rules provide guidance on how to…
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Did You Sell Cryptocurrency in 2019?

Did You Sell Cryptocurrency in 2019?

tax planning
With the ubiquity of online transactions and accounts, taxpayers must take the necessary steps to ensure they are in full compliance with tax laws in regard to these transactions. This certainly applies to cryptocurrency transactions, which became significantly more common in recent years. If you have tax-related questions about crypto sales, contact a tax lawyer at SF Tax Counsel. The markets for Bitcoin and other forms of cryptocurrency have been volatile, leading many people to sell their crypto investments during 2019. The IRS has provided guidance regarding crypto sales, and these must be reported as capital gains and losses on Schedule D (1040). Despite its name, the IRS treats cryptocurrency as property and not as currency. Therefore, it is reported like sales of stocks, bonds, and real estate. If you…
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