TAX PRO PLUS LA

Foreign Account Reporting Requirements (FBAR)

Some years ago, Senate hearings revealed that many Americans were hiding millions of dollars in Swiss and other foreign banks, not reporting the income from these accounts, and not complying with foreign bank account reporting (FBAR) rules that require every U.S. citizen and resident who has a financial interest in or signature or other authority over any foreign financial accounts, including bank, securities, or other types of financial accounts in a foreign country, to report that relationship if the aggregate value of the accounts exceeds $10,000 at any time during the year.

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Take Advantage of the IRA-to-Charity Provision

Individuals age 70.5 or over—who must withdraw annual required minimum distributions (RMDs) from their IRAs—will be pleased to learn that the temporary provision allowing taxpayers to transfer up to $100,000 annually from their IRAs to qualified charities has been made permanent. If you are age 70.5 or over and have an IRA, taking advantage of this provision may provide significant tax benefits, especially if you would be making a large donation to a charity anyway.

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2015 Transition Relief under the Employer Shared Responsibility Provisions

Under the Affordable Care Act, certain employers – referred to as applicable large employers (ALEs) – are subject to the employer shared responsibility provisions, which require ALEs to offer affordable minimum essential coverage healthcare coverage that provides minimum value to full-time employees and their dependents (but not their spouses). Failure to do so can result in the employer being liable for substantial penalties that the government refers to as shared responsibility payments.

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Not All Home Mortgage Interest Is Deductible; The IRS is Watching

One of the current IRS audit initiatives is checking to see if taxpayers are deducting too much home equity debt interest. Generally, taxpayers are allowed to deduct the interest on up to $1 million of home acquisition debt (includes subsequent debt incurred to make improvements, but not repairs) and the interest on up to $100,000 of home equity debt. Equity debt is debt not incurred to acquire or improve the home. Taxpayers frequently exceed the equity debt limit and fail to adjust their interest deduction accordingly.

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Household Help - Employee or Contractor?

Frequently taxpayers will hire an individual or firm to provide services at the taxpayer's home. Because the IRS requires employers to withhold taxes for employees and issue them W-2s at the end of the year, the big question is whether or not that individual is a household employee.

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