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Monthly Archives: February 2017

Cash Buyers of Luxury Real Estate Remain in the Fed’s Cross Hairs by Barry M. Brant, CPA

Posted on February 28, 2017 by Barry Brant

On Feb. 23, 2017, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) again renewed an order requiring title insurance companies to report the identities of the true, beneficial owners behind all-cash purchases of luxury real estate in specific geographic regions, including South Florida.

 

The temporary geographic targeting order (GTO), which was introduced in early 2016 and renewed in July of the same year to help regulators uncover illicit financial activities, will continue to be in effect through August 22, 2017. It applies to all-cash residential real estate transactions of more than $3 million in New York City and its five boroughs, and $1 million or more that occur in Florida’s Broward, Miami-Dade and Palm Beach Counties, Bexar County in Texas, and San Diego, Los Angeles, San Francisco, San Mateo and Santa Clara Counties in California.

 

According to FinCEN, the GTO has been successful thus far at uncovering the names of the actual individuals behind shell companies, LLCs and other corporate structures that legally purchase residential real estate and who may, in fact, be using the purchase to deliberately hide assets, evade taxes and/or launder money. To date, 30 percent of the real estate transactions covered by the GTO have revealed a beneficial buyer or owner who is also the subject of a previous suspicious activity report (SAR).

 

Any individual or group of individuals planning to purchase luxury residential real estate without a mortgage should be prepared to be scrutinized by Federal authorities when the property is located in one of the counties covered by the geographic targeting order and the sales price exceeds $1 million. As a result, it is important for all-cash buyers to meet with experienced accountants and financial advisors to appropriately structure these transactions and comply with reporting, record keeping and other disclosure requirements.

 

About the Author: Barry M. Brant, CPA, is director of Tax, Consulting and International Services with Berkowitz Pollack Brant, where he leads the firm’s private client group and provides guidance on complex tax matters and issues related to multi-national holdings, cross-border treaties and wealth preservation and protection. He can be reached in the CPA firm’s Miami office at 305-379-7000, or via email at info@bpbcpa.com.

 

 

Trusts Face Looming Deadline to Reduce 2016 Tax Liabilities by Jeffrey M. Mutnik, CPA/PFS

Posted on February 28, 2017 by Jeffrey Mutnik

Individuals who serve as trustees for certain trusts and estates have until March 6, 2017, to distribute trust income to beneficiaries and treat the transaction as if it was completed in 2016.  This strategy allows a trust to reduce its taxable income and liabilities in the prior year and move taxable investment income to beneficiaries, who may be in lower tax brackets.

 

For the 2016 tax year, trusts with undistributed income in excess of $12,300 are taxed at the highest federal rate of 39.6 percent and may be subject to the 3.8 percent Net Investment Income Tax (NIIT). In contrast, individual taxpayers do not reach the top federal tax bracket until their income exceeds $415,051 for single taxpayers or $466,951 for married couples filing jointly.Because the modified adjusted gross income threshold for owing NIIT is much higher for individual taxpayers than it is for trusts, distributing trust income to beneficiaries may reduce the overall combined tax liabilities.

 

Because the exact amount of Distributable Net Income (DNI) cannot be calculated until after a tax-year ends, the Internal Revenue Code allows calendar-year complex trusts to make distributions to beneficiaries during the first 65 days of the following tax year and treat them as if they were made in the prior year. Under most circumstances, the DNI will not be known during the first quarter of a new tax year, and will subsequently require the trust to project an estimation of the distribution.

 

For example, when a trust estimates its DNI to be $30,000 in 2016, it may distribute that amount by March 6, 2017, and carry out the DNI to the beneficiary on a K-1.  If the trust distributes $30,000 to beneficiaries between January 1 and March 6, 2017, the trustee may elect to consider any or all $30,000 as distributed. Should the trust distribute $29,000 between January 1 and March 6, 2017, the trustee may elect to consider any or all $29,000 as distributed, leaving the trust with a tax liability on, at least, the $1,000 not distributed.

 

Trustees who are considering the 65-day election should meet with qualified accountants to project the consequences such action will have on the trust and its beneficiaries. In some instances, a distribution will not make sense, especially when assets are held in trust primarily for the benefit of asset protection. Additionally, trustees must understand the limitations of the 65-day rule, which do not apply to grantor trusts, in which the grantor reports all activity, or simple trusts, which require income, and only income, to be distributed annually.

 

About the Author: Jeffrey M. Mutnik, CPA/PFS, is a director with the Taxation and Financial Services practice of Berkowitz Pollack Brant Advisors and Accountants, where he provides tax and estate-planning counsel to high-net-worth families, closely held businesses and professional services firms. He can be reached in the CPA firm’s Ft. Lauderdale office at (954) 712-7000 or via email at info@bpbcpa

Presidential Order Does Not Affect Taxpayer’s Obamacare Compliance Requirements by Adam Cohen

Posted on February 24, 2017 by Adam Cohen

President Donald Trump’s Jan. 20, 2017, executive order directing federal agencies to minimize economic and regulatory burdens of the Affordable Care Act (ACA) has put into question how the IRS intends to process taxpayer returns for 2016.

 

Under the individual shared responsibility provisions of the ACA, taxpayers and each member of their families are required to have minimum essential healthcare insurance for all 12 months of the year, unless they qualify for a covered exemption. Failure to meet this requirement will result in a 2016 penalty of either 2.5 percent of a household’s modified adjusted gross income (MAGI) above the tax filing threshold, or a flat payment of $695 per adult and $347.50 per child under 18, up to a maximum of $2,085 per family.

 

To help process 2016 tax returns, the IRS this year instituted a practice of automatically rejecting tax returns in which taxpayers failed to check the “full-year coverage” box. However, in response to the President’s executive order, the IRS will continue to accept and process paper and electronic returns for the 2016 tax season, even when they do not indicate taxpayers’ health coverage.

 

For taxpayers, this processing change does not affect their requirement to comply with Obamacare or pay an Individual Shared Responsibility Payment for 2016. Similarly, individual taxpayers should ensure that they have health coverage, as required by the ACA, for every month of 2017, while businesses should have already taken steps to remain compliant with the law this year.

 

Because the new administration’s plans to repeal Obamacare may complicate taxpayer’s understanding of their requirements under the law, it is recommended that individuals and businesses consult with experienced tax accountants to remain compliant and avoid any unwelcome tax penalties.

 

About the Author: Adam Cohen, CPA, is an associate director in the Tax Services practice of Berkowitz Pollack Brant, where he works with closely held businesses and non-profit charities, hospitals and family foundations to maintain tax efficiency and comply with federal and state regulations. He can be reached at the CPA firm’s Ft. Lauderdale office at (954) 712-7000 or via e-mail info@bpbcpa.com.

 

 

The Joys of Parenthood Include Tax Benefits by Rick Bazzani, CPA

Posted on February 22, 2017 by Rick Bazzani

As individuals prepare to file their 2016 income tax returns, they should remember that if they are the parents of dependent children, they may qualify for certain benefits that can reduce their taxable income. It is important to remember, however, that many of these tax credits and deductions may be limited based upon a taxpayer’s income, filing status and other unique circumstances.

Child Tax Credit. Parents with children who are under the age of 17 and who live with the parent for at least one-half of the calendar year may claim a tax credit of up to $1,000 for each qualifying dependent. The credit is limited by the amount of income tax and alternative minimum tax (AMT) parents owe and will be completely unavailable for parents whose income exceed $110,000 for married couples, $55,000 for couples filing separately and $75,000 for all other taxpayers.

Child and Dependent Care Credit.  A parent who paid for someone else to care for his or her qualifying dependent child while the parent worked or looked for work in 2016, may qualify for a tax credit to cover a percentage of the expenses paid to the caregiver. A qualifying dependent may include a child who is under the age of 13 who lives with the taxpayer for more than half of the year or an individual of any age who is unable to care for him or herself. For 2016 and 2017, the dollar limit on the amount of expenses used to calculate the credit is $3,000 for the care of one dependent or up to $6,000 for two or more qualifying dependents. The allowable percentage of the credit depends on the taxpayer’s adjusted gross income.

Adoption Credit.  Depending on their income, taxpayers who adopted a child in 2016 may claim a credit of up to $13,460 per child to cover the costs of qualifying adoption expenses. The amount of the nonrefundable credit will be reduced if taxpayers’ modified adjusted gross income (MAGI) falls between $201,920 and $241,920; taxpayers’ with MAGI of more than $241,920 will not be entitled to apply the credit.

Dependent Deduction. Taxpayers with children who were under the age of 19 at the end of 2016 (or 24 if the children are full-time students) may claim a dependent deduction up to $4,050 for each qualified child. The amount of the deduction may be reduced or eliminated entirely when taxpayers’ income exceeds certain limits based on their filing status.

Student Loan Interest Deduction. A taxpayer may deduct up to $2,500 in interest they paid towards education and student loans during the tax year. The amount of the deduction will decrease when taxpayers’ MAGI exceeds certain levels. The credit is not available to single filing taxpayers whose MAGI exceeds $80,000 or married filing jointly filers with MAGI above $160,000.

Self-Employed Health Insurance. Entrepreneurial taxpayers who own their businesses and paid for health insurance coverage for a child under age 27 may deduct from their taxable income the amount of annual premiums they paid.

About the Author: Rick D. Bazzani, CPA, is a senior manager with Berkowitz Pollack Brant’s Tax Services practice, where he provides individuals with a broad range of tax-efficient estate-, trust- and gift-planning services. He can be reached in the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or at info@bpbcpa.com.

 

 

What You Need to Know about the Affordable Care Act (also known as Obamacare) in 2017 by Adam Cohen, CPA

Posted on February 21, 2017 by Adam Cohen

One of President Donald Trump’s first executive orders is a broad directive instructing federal agencies to begin “to minimize the economic and regulatory burdens of the Affordable Care Act” on individuals, including “families, healthcare providers, health insurers, patients…or makers of medical devices, products or medications.” While Trump’s action supports the GOP’s long-standing battle cry of “repeal and replace Obamacare” it is doubtful that any significant changes will be made and put into effect in the current year. As a result, individual taxpayers and businesses that are subject to the ACA must conform to the existing law when filing their 2016 tax returns and be prepared to meet the law’s reporting regulations throughout 2017.

Requirements for Individuals

The Affordable Care Act requires all U.S. taxpayers to have minimum essential health insurance coverage for themselves and each member of their families during every month of the year, unless they qualify for a covered exemption. Failure to have coverage will result in an individual shared responsibility payment penalty for 2016 in an amount that is the higher of:

  1. 2.5 percent of a household’s modified adjusted gross income (MAGI) above the tax filing threshold, or
  2. A flat payment of $695 per adult and $347.50 per child under 18, up to a maximum of $2,085 per family.

These penalties, which must be paid along with individuals’ 2016 tax return filings, are capped at the cost of the national average premiums for a bronze-level health plan available through the Marketplace. For 2016, these costs total $2,676 per year (or $223 per month) for individuals and $13,380 per year (or $1,115 per month) for families of five or more.

To report compliance with the law, individuals must simply check a box on their individual tax returns verifying that they had health insurance for every month during the prior year. Forms received from employers do not need to be sent to the IRS, however, individuals should hold onto these forms to verify coverage.

Requirements for Businesses with 50 or More Employees

Much of the responsibility for ensuring individuals have appropriate healthcare coverage falls to their employers. Under the current law, applicable large employers (ALEs), which include for-profit and not-for-profit businesses as well as government entities with 50 or more full-time equivalent (FTE) workers, are required to provide “minimum essential” health insurance coverage to 95 percent of their full-time workforce and those employees’ dependent children, excluding step-children and foster children, under the age of 26. The 95 percent rule also applies to those full-time employees who have health coverage through another source, such as Medicare, Medicaid or a spouse’s employer.

Businesses employing part-time or seasonal workers during any month of the prior calendar year have the complex task of calculating whether these employees should be included in its characterization as an ALE. After adding up the total hours worked by part-timers during a month, businesses should divide that amount by 120 and add in the number of their full-time workers. If this calculation exceeds 49, the employers are considered ALEs and has a requirement to offer health insurance to 95 percent of their full-time and full-time-equivalent workers.

ALEs that fail to meet these thresholds and that have at least one full-time employee receiving a Premium Tax Credit for coverage purchased through the Marketplace are required to pay an employer shared responsibility payment. This assessment also applies to applicable large employers who provide health coverage for 95 percent of full-time employees but have one or more full-time employees (not full-time equivalents) who purchase coverage through the Marketplace and receive the Premium Tax Credit.

For the 2016 tax year, the employer shared responsibility payment is $2,160 for each non-insured full-time employee after the first 30, as well as a $3,240 penalty for each full-time employee who must purchase insurance through the federal Marketplace to maintain his or her individual coverage responsibilities.

Employers that provide health insurance to workers have a requirement to report this information to employees as well as to the IRS. For 2017, ALEs, including those that are self-insured, should keep the following deadlines in mind.

February 28:    Deadline for paper filers to file with the IRS Form 1095-B, Health Coverage Information Return; Form 1095-C, Employer-Provided Health Insurance Offer and Coverage; Form 1094-B, Transmittal of Health Coverage Information Returns; and Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer

March 2:          Deadline to furnish to employees Form 1095-B, Health Coverage Information Return and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

March 31:        Deadline for e-filers to file with the IRS Form 1095-B, Health Coverage Information Return; Form 1095-C, Employer-Provided Health Insurance Offer and Coverage; Form 1094-B, Transmittal of Health Coverage Information Returns; and Form 1094-C, Transmittal of Employer-Provided Health Insurance

Requirements for Small Businesses with Less than 50 employees

Businesses with 50 or fewer employees have the option to provide workers with affordable health insurance when they purchase coverage through the Small Business Health Options Program (SHOP). When this is the case, the business must withhold from wages and report an addition 0.9 percent Medicare Tax on compensation paid to single workers earning $200,000 or more annually, or $250,000 or more for married workers filing jointly.

Those small businesses that have fewer than 25 full-time equivalent employees with an average annual compensation of $50,000 or less may qualify for an employer health care tax credit that can be as high as 50 percent, when those employers offer and pay the premiums for employees’ health insurance.

Interpretations of Trump’s “Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” is varied. On the one hand, the order provides taxpayers with a broader excuse for a hardship exemption from the ACA and provides agencies, such as the IRS, the “discretion…to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any state or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.” However, at this moment in time, the IRS has not changed its policy of rejecting tax returns which reflect a lapse in taxpayers’ healthcare coverage during 2016 and which fail to provide a valid exemption from the law or fail to include an individual shared responsibility payment.

For many taxpayers, the change in administration is making a complex law even more complicated. As a result, individuals and businesses should meet with their accountants to ensure they understand and comply with the provisions of Affordable Care Act.

About the Author: Adam Cohen, CPA, is an associate director in the Tax Services practice of Berkowitz Pollack Brant, where he works with closely held businesses and non-profit charities, hospitals and family foundations to maintain tax efficiency and comply with federal and state regulations. He can be reached at the CPA firm’s Ft. Lauderdale office at (954) 712-7000 or via e-mail info@bpbcpa.com.

 

5 Reasons to Choose Direct Deposit of Tax Refunds by Dustin Grizzle

Posted on February 14, 2017 by Dustin Grizzle

The 2016 tax filing season officially opened on Jan. 23, 2017, with a warning from the IRS that taxpayers should be prepared to wait longer than usual to receive expected refunds. The processing delays are due to enhanced efforts by the agency to catch potential fraud and identify theft. As a result, the IRS advises taxpayers to choose to receive refunds via direct deposit. Following are just five reasons why.

  1. It’s Fast. The quickest ways for taxpayers to receive a refund is to electronically file their federal tax returns (e-file) and elect direct deposit, even when returns are filed on paper.
  2. It’s Secure. Refunds are transferred directly into the bank accounts that taxpayers identify as their own. Conversely, taxpayers may receive paper checks via postal mail, which increases the likelihood that refunds may get lost in the mail or stolen from an individual’s mailbox.
  3. It’s Convenient. Taxpayers will not need to wait for a refund check to be delivered to their mailboxes or make extra trips to the bank to deposit the money into financial accounts.
  4. It’s Easy. After choosing direct deposit, all taxpayers need to do is enter their correct bank account and routing numbers or provide those details to their tax accountants.
  5. It’s Flexible. Direct deposit allows taxpayers to “split refunds” and allocate dollar amounts into different financial accounts, including bank checking and savings accounts, college savings accounts, health savings accounts and certain retirement accounts. The only caveat is that the IRS limits direct deposit refunds to no more than three into a single financial account during a tax year.

Whether taxpayers choose to file their annual federal returns or receive refunds on paper or electronically, it is important that they keep and maintain copies for a minimum of seven years.

About the Author: Dustin Grizzle is a senior manager in Berkowitz Pollack Brant’s Tax Services practice, where he provides tax planning and compliance services to businesses and high-net-worth individuals.  He can be reached at the CPA firm’s Boca Raton, Fla., office at (561) 361-2000 or via email at info@bpbcpa.com.

 

 

Understanding Taxpayer Rights when Dealing with the IRS by Edward N. Cooper, CPA

Posted on February 09, 2017 by Edward Cooper

A notice from the IRS rarely results in a taxpayer feeling joy or relief. However, U.S. tax laws are complex and constantly evolving, making it difficult for individuals to understand their responsibilities and liabilities under the tax code. In response, the IRS issued a Taxpayer Bill of Rights that details the protections and privileges afforded to taxpayers when dealing with the agency.

The Right to Be Informed. Taxpayers have a right to receive clear, easy-to-understand explanations about IRS procedures, laws and notices as well as how IRS decisions will affect their tax accounts.

The Right to Quality Service. Taxpayers have a right to receive prompt, courteous and professional assistance when dealings with the IRS and the freedom to speak to a supervisor when they consider service to be below par.

The Right to Pay No More than the Correct Amount of Tax. Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties. They should also expect the IRS to apply all tax payments properly.

The Right to Challenge the IRS’s Position and Be Heard. Taxpayers have the right to object to formal IRS actions or proposed actions and provide justification with additional documentation. They should expect that the IRS will consider their timely objections and documentation promptly and fairly and provide them with a timely response.

The Right to Appeal an IRS Decision in an Independent Forum. Taxpayers are entitled to appeal IRS decisions and receive a written response. They also have the right to take their cases to a court of law.

The Right to Finality. Taxpayers have the right to know the maximum amount of time they have to challenge an IRS position and the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. They also have a right to know when the IRS concludes an audit.

The Right to Privacy. Taxpayers have the right to expect that any IRS inquiry, examination or enforcement action will comply with privacy laws and be no more intrusive than necessary. They should also expect due process rights, including search and seizure protections.

The Right to Confidentiality. Taxpayers have the right to expect that the IRS will keep their tax information confidential and take appropriate action should the IRS disclose any information.

The Right to Retain Representation. Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS.

The Right to a Fair and Just Tax System. Taxpayers have the right to expect fairness from the tax system, including consideration of all facts and circumstances that might affect their underlying liabilities, ability to pay or ability to provide information timely. Taxpayers experiencing financial difficulty or having challenges resolving tax issues in a timely manner and through proper channels have the right to receive assistance from the Taxpayer Advocate Service.

The advisors and accountants with Berkowitz Pollack Brant help individuals and business comply with relevant domestic and international tax laws and have extensive experience representing then before taxing authorities.

 

About the Author: Edward N. Cooper, CPA, is director-in-charge of Tax Services with Berkowitz Pollack Brant, where he provides business- and tax-consulting services to real estate entities, multi-national companies, investment funds and high-net-worth individuals. He can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or via email at info@bpbcpa.com.

 

EB-5 Visa Program Extended through April, Faces an Uncertain Future by Andrew Leonard, CPA

Posted on February 08, 2017 by Andrew Leonard

At the end of 2016, Congress voted to extend until April 28, 2017, federal funding for the EB-5 visa program that provides foreign investors with a fast-track to U.S. residency in exchange for a capital investment in a U.S. commercial project that spurs economic growth.

 

Established in 1990, the EB-5 program grants green cards to foreign investors (and their spouses and children) who invest a minimum of $500,000 in a U.S. project that creates or preserves at least 10 permanent jobs.  After two years, the investor can petition the government for permanent U.S. residency.  According to the U.S. Citizenship and Immigration Services Office, 9,764 EB-5 visas were issued in 2015, contributing to the more than $15 billion of direct foreign investment that flowed to the U.S. through the program. As the program’s popularity has increased, so too has federal scrutiny of its complexities and questions about its integrity. This challenge, coupled with the new administration’s focus on immigration reform, leaves the future of the EB-5 program as it stands today uncertain beyond the April 28 deadline.  Proposals for future reform include raising the minimum investment requirement and refocusing investments to only those projects located in depressed and high-unemployment areas of the U.S.

 

Foreign individuals considering immigration to the U.S. should plan ahead under the guidance of experienced accountants, financial planners and attorneys to avoid risks and ensure compliance with the U.S’s complex tax, investment and immigration laws.

 

About the Author: Andrew Leonard, CPA, is an associate director with Berkowitz Pollack Brant’s International Tax Services practice, where he focuses on pre- and post-immigration tax planning for individuals from South America, Asia and Europe and helps U.S. citizens with foreign interests meet their filing disclosure requirements. He can be reached at the CPA firm’s Boca Raton, Fla., office at (561) 361-2000 or via email at info@bpbcpa.com.

 

 

Protect Yourself against Identify Theft, Learn the Anatomy of a Phishing Scam by Joseph L. Saka, CPA/PFS

Posted on February 06, 2017 by Joseph Saka

During last year’s tax season, the IRS saw an approximate 400 percent increase in email, text and telephone phishing and malware incidents that left taxpayers victims of identity theft.

 

These scams “reel in” victims and “lure” them into disclosing personal information by posing as a person or organization the victims know, promising an exciting prize or threatening legal action for failure to respond. Once victims give up their data, criminals can more easily file fraudulent tax returns or commit other crimes.

 

As a general rule, the IRS reminds taxpayers to never give out personal information based on an unsolicited email request. Moreover, special care should be taken to avoid opening attachments or clicking on links contained in texts or emails, which can provide criminals with easy access to one’s identity and computer network.  Often, criminals will go to extreme lengths to design an official-looking website, such as IRS.gov, that asks for personal information or carries malware that can infect one’s computer and mobile devices and allow criminals to access files or track keystrokes to gain information. Another common social engineering technique used by criminals involves email addresses that appear to be from individuals the victim knows, including coworkers or vendors whose email domains appear to be from trusted sources. However, once a victim responds to the email, his or her computer can be compromised.

 

To protect yourself from becoming a victim of identity theft and data loss, think before you click, and keep in mind the following commonly used phishing techniques.

  • The Message Contains a Link. Scammers often pose as the IRS, financial institutions, credit card companies or even tax-service providers and request that unsuspecting victims update their accounts or change account passwords. The email offers a link to a “spoofing site” that looks similar to a legitimate and official website. Do not click on the link. If in doubt, close the email and type in the legitimate website in a separate browser window to access your account.
  • The Message Contains an Attachment.  Scammers often include in an email message an attachment that, once opened, can download malicious software onto your computer without your knowledge. If it is spyware, it can track your keystrokes to obtain information about your passwords, Social Security number, credit cards or other sensitive data. Do not open attachments from sources unknown to you. Similarly, if you receive a suspicious attachment from someone you do know, stop and call the person or email them separately before opening it.
  • The Message Contains a False, Lookalike URL. While an email may say it is from the IRS or your friend Bill, the fact is that scammers often use lookalike URLs to trick recipients into taking action. An example is the URL www.irs.gov.maliciousname.com instead of the correct URL www.irs.gov. Before clicking on the link, simply place the cursor (mouse pointer) over the URL and a pop-up will appear with the true website address.
  • The Message Purports to Come from a Government Agency or Financial Institution. Scammers know that one of the best ways to trick consumers into opening an email and sharing their personal information is to frighten them by posing as a government agency, such as the IRS, or a financial institution. This is especially true during the tax filing season. Always remember that the IRS will never initiate contact with a taxpayer via email or telephone nor would the agency ask taxpayers for PINs, passwords or similar confidential information.
  • The Message is from a Friend. It is common for criminals to hack someone’s email account and steal all of their contacts’ email addresses.  Those contacts will subsequently receive an email from a “friend” that looks odd or doesn’t seem right. It may be missing a subject for the subject line or contain odd requests, language and typos. If the email seems “odd,” taxpayers should avoid clicking on any links or opening attachments. Call your friend to confirm that the email you received in fact comes from him or her and is safe.

About the author: Joseph L. Saka, CPA/PFS, CEO of Berkowitz Pollack Brant, where he provides a full range of income and estate planning, tax consulting and compliance services, business advice, and financial planning services to entrepreneurs, high-net-worth families and family companies and business executives in the U.S. and abroad. He can be reached at the firm’s Miami office at (305) 379-7000 or via e-mail at info@bpbcpa.com.

 

IRS Grants Six-Month Extension for Corporate Tax Returns by Angie Adames, CPA

Posted on February 03, 2017 by Angie Adames

The 2016 tax filing season has begun with an assortment of new deadlines for businesses to remember. For example, tax returns for calendar-year partnerships, S Corporations and LLCs are due on March 15, 2017. For calendar-year partnership, this deadline is one month earlier than in prior years. For calendar year C Corporations, the 2016 tax year filing deadline has been extended one month to April 18, 2017. With these new deadlines also come changes to automatic filing extensions for affected businesses.

 

Businesses may receive an automatic filing extension by completing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, and submitting it, along with a tax payment if applicable, to the IRS by the new filing due dates. However, while Section 6081(b) of the U.S. tax code allows calendar-year C corporations a five-month extension, the IRS’s revised Form 7004 for the 2016 tax year grants businesses the maximum allowable extension of six months.

 

This additional month is important for taxpayers to remember especially when they or their accountants rely on “out-of-the-box” tax-preparation software, which may not be updated with the correct timeline.

The advisors and accountants with Berkowitz Pollack Brant stay up-to-date on evolving regulations and tax-related issues that affect both domestic and international individuals and businesses.

About the Author: Angie Adames, CPA, is an associate director in the Tax Services practice of Berkowitz Pollack Brant, where she provides tax and consulting services to real estate companies, manufacturers and closely held business. She can be reached at the firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com.

 

Taxpayers Must Act Fast to Renew ITINs by Andrew Leonard, CPA

Posted on February 02, 2017 by Andrew Leonard

On January 1, 2017, the Individual Taxpayer Identification Numbers (ITINs) for certain U.S. taxpayers expired. This includes ITINs that have not been used to file a U.S. federal tax return for the past three years, those issued before 2013, and those in which 78 or 79 appear as the fourth and fifth digits (i.e. 9XX-78-XXXX).

 

The IRS issues ITINs to individuals who are required to report and pay U.S. taxes but who either do not currently have a social security number or are not eligible to receive one. This can include nonresident aliens, U.S. resident aliens with a “substantial presence” in the U.S. as well as spouses of U.S. citizens, resident aliens and nonresident alien visa holders.

 

To avoid processing and refund delays for 2016 tax returns, affected taxpayers should immediately apply for ITIN renewal by any of the following methods:

  1. Mailing to the IRS a completed Form W-7 along with required supporting documentation,
  2. Making an appointment to apply in person at a Taxpayer Assistance Center,
  3. Or contacting their accountants, who may be certified acceptance agents.

 

The international tax advisors with Berkowitz Pollack Brant are certified acceptance agents who work regularly with domestic and foreign individuals and multi-national businesses on a range of residency and financial matters. Services include pre-immigration planning, wealth preservation and tax efficiency across borders.

About the Author: Andrew Leonard, CPA, is an associate director with Berkowitz Pollack Brant’s International Tax Services practice, where he focuses on pre- and post-immigration tax planning for individuals from Asia, Latin America and Russia as well as filing disclosures for U.S. citizens with foreign interests. He can be reached at the CPA firm’s Boca Raton, Fla., office at (561) 361-2000 or via email at info@bpbcpa.com.

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