Dear Valued Client,
This edition of our newsletter covers some important new reporting requirements for foreign owned assets, gold sales tax issues, tax season email scams and much more. This firm relies on satisfied clients as the primary source of new business, and your referrals are both welcome and most sincerely appreciated!
Top of the Line Tax
ONLINE NEWSLETTER
Our online newsletter is updated monthly and includes an assortment of articles and tax strategies.
Don’t be Scammed by Tax Season Cyber Criminals
Now that tax season is upon us, so are the e-mail scammers pretending to be the IRS. Most of these scams fraudulently use the IRS name, logo, and/or website header as a lure to make the communication appear more authentic and enticing. They lead you to believe you had a refund of some sort coming and request personal information. The goal of these scams - known as phishing - is to trick you into revealing your personal and financial information. The scammers can then use your information - like your Social Security number, bank account, or credit card numbers - to commit identity theft or steal your money.
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New Reporting Requirement for Individuals with Foreign Financial Assets
New for 2011 is a requirement for any individual who, during the tax year, holds any interest in a “
specified foreign financial asset” to complete and attach Form 8938 to his or her income tax return if a reporting threshold is met. The reporting threshold varies depending on whether the individual lives in the U.S. and files a joint return with his or her spouse. For example, someone who is not married and doesn’t live abroad will need to file Form 8938 for 2011 if the total value of his or her specified foreign financial assets was more than $50,000 as of December 31, 2011, or more than $75,000 at any time during 2011. For married taxpayers filing a joint return and living in the U.S., the threshold amounts are doubled. The thresholds also are higher for taxpayers residing abroad.
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Those Gold Sales May Be Taxable
If you took advantage of the escalating gold and silver prices and made any sales of gold, silver, gems, jewelry, or the like during 2011, you are required to report the sales on your tax return. Whether or not the sales are subject to tax, and at what tax rate, depends upon the type of item sold and your tax basis for the item.
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Schedule Cs in the IRS' Bull's-eye
Schedule C is the form that unincorporated sole proprietor businesses use to report their income and expenses as part of their individual tax returns. Schedule Cs have been center stage in recent IRS “tax gap” estimates.
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Nominees Have 1099 Reporting Requirements
Candidates seeking political offices aren’t the only individuals who are “nominees.” For tax purposes, if you receive, in your name, income that actually belongs to someone else, you are also a nominee. Being a nominee means you must file with the IRS a 1099 form appropriate to the type of income you received and give a copy of the 1099 to the actual owner of the income. However, if the other person is your spouse, no 1099 filing is required.
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It’s Not Too Late
It’s not too late to make an IRA and/or SEP contribution or undo a Roth IRA conversion for 2011.
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