If you are self-employed and procrastinate filing your personal income tax returns, you not only run the risk of losing a tax refund because your Form 1040 return was filed after the statute of limitations for claiming a refund had expired, but you will also lose social security credits which may impact your social security benefits.
The social security code (42 U.S.C. 405(c)(4)) says you have to report the SE income [Read more…] about How to Lose Social Security Benefits
Remember the days when Swiss banks (as well as banks in other countries) refused to reveal their customers’ names? Some very wealthy Americans placed their assets in these foreign banks to hide them from the IRS to avoid paying income taxes. The IRS began serving “John Doe” warrants to foreign banks to compel those banks to release the names of account holders on certain bank accounts. This was followed by a tough crackdown by the IRS on taxpayers who failed to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), which certain foreign bank account holders are required to file (and face stiff penalties for not filing, including jail time).
You may not have heard of crypto currency. However, you likely have heard of Bitcoin which is a form of crypto currency. The use of crypto currency has definitely caught the attention of the IRS just like foreign banks did many years ago. Why is the IRS interested in crypto currency? [Read more…] about Crypto Currency and Taxes
Tax Rule Changes Regarding Sale of Stock
New Rule Becomes Effective January 1, 2018
Effective January 1, 2018, assuming that the proposed tax law changes go into effect, taxpayers will no longer be able to choose which lot of stock they own is sold. This choosing of the lot that was being sold was referred to as specific identification. Taxpayers could choose which lot of stock was sold (usually the one(s) with the highest tax basis (cost), to minimize the gain on the sale of stock or to generate the largest capital loss to offset capital gains from other sales. Effective January 1, 2018, taxpayers [Read more…] about Tax Rule Changes Regarding Sale of Stock
A new client recently walked into our office. He had been self-preparing his personal tax returns for quite a few years using TurboTax and received an audit inquiry from the IRS. He did what many taxpayers do, he ignored the letter. The IRS got his attention [Read more…] about $10,000 Self-Prepared Form 1040 Error
