During the interview, she talks about being a victim herself, and gives tips on how to recognize when fradulent activity is happening to you.
View the video on our website at www.saltmarshcpa.com/cpa-news
Showing posts with label Tax News. Show all posts
Showing posts with label Tax News. Show all posts
Monday, February 13, 2012
Suzanne Cox Featured on Tampa's Fox 13
During the interview, she talks about being a victim herself, and gives tips on how to recognize when fradulent activity is happening to you.
View the video on our website at www.saltmarshcpa.com/cpa-news
Tuesday, December 27, 2011
Payroll Tax Cut Temporarily Extended into 2012
IR-2011-124, Dec. 23, 2011
WASHINGTON — Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits.
Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012.
Employers and payroll companies will handle the withholding changes, so workers should not need to take any additional action.
Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).
This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.
The IRS will issue additional guidance as needed to implement the provisions of this new two-month extension, including revised employment tax forms and instructions and information for employees who may be subject to the new “recapture” provision. For most employers, the quarterly employment tax return for the quarter ending March 31, 2012 is due April 30, 2012.
WASHINGTON — Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits.
Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012.
Employers and payroll companies will handle the withholding changes, so workers should not need to take any additional action.
Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).
This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.
The IRS will issue additional guidance as needed to implement the provisions of this new two-month extension, including revised employment tax forms and instructions and information for employees who may be subject to the new “recapture” provision. For most employers, the quarterly employment tax return for the quarter ending March 31, 2012 is due April 30, 2012.
Tuesday, December 13, 2011
IRS Announces 2012 Standard Mileage Rates
WASHINGTON — The Internal Revenue Service today issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations
The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51.
Notice 2012-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
At Saltmarsh, our tax consultants work full time to keep up with the constant changes in our tax laws. We develop strategies that will allow you to take full advantage of the law, and we use our best judgment and experience to advise you as to what actions you can take to reduce your tax burden. Learn more about tax and accounting services by visiting our website at www.saltmarshcpa.com.
Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations
The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51.
Notice 2012-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
At Saltmarsh, our tax consultants work full time to keep up with the constant changes in our tax laws. We develop strategies that will allow you to take full advantage of the law, and we use our best judgment and experience to advise you as to what actions you can take to reduce your tax burden. Learn more about tax and accounting services by visiting our website at www.saltmarshcpa.com.
Monday, October 3, 2011
IRS Announces 2011 Voluntary Compliance Program Focused on Employee vs. Independent Contractor Exposure
On September 21, 2011, the Internal Revenue Service (IRS) unveiled a Voluntary Compliance Program (VCP) that offers relief for businesses that may have misclassified workers as independent contractors, rather than employees, and so are potentially liable for significant additional taxes, penalties, and interest.
Background
Prior to announcement of the VCP, the IRS and the Department of Labor (DOL) stepped up joint enforcement efforts by signing a new memorandum of understanding to strengthen information sharing on enforcement actions aimed at misclassified workers. Several states are parties to the agreement including New York and Connecticut.
Observation: This enforcement issue has become more urgent as both federal and state authorities seek additional tax revenues to close large current and projected budget deficits.
V SummaryCP
The VCP is available for employers that are currently treating (perhaps incorrectly) workers or a class of workers as independent contractors, but want to prospectively reclassify the workers as employees for federal employment tax purposes. The IRS retains discretion over whether to accept an employer into the VCP.
VCP Consequences
Under the VCP, eligible taxpayers will generally be entitled to settle their employment tax liability under a single-year assessment of employment taxes of 10% of the Internal Revenue Code Section 3509 rates applicable to the most recently closed tax year. A 10.68% effective rate applies under the VCP in 2011, since the most recently closed tax year is 2010, and a 10.28% effective rate will apply in 2012. A rate of 3.24% also applies to compensation above the Social Security wage base in both years. These rates include federal income tax withholding and employer/employee social security and Medicare tax.
Observation: Employers in the program will generally pay an amount equal to just over 1% of the wages paid to reclassified workers for the most recent tax year and will eliminate the potential exposure for all prior years. It is unclear how states will react to the VCP program.
VCP Qualifications
The VCP is open to businesses, including exempt organizations, which have treated workers as independent contractors in the past, have filed Forms 1099 for the previous three years, and are not currently under a worker classification audit by the IRS, the DOL, or a state agency. An employer previously audited by the IRS or DOL concerning worker classification is eligible for this Program if it has complied with the results of such an audit.
Under the Program, an employer does not have to reclassify all of its workers who are currently treated as non-employees. However, once an employer chooses to reclassify certain of its workers as employees, all workers in the same class – i.e., workers who perform the same or similar services – must be reclassified as employees.
Employers apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program. This form must be filed at least 60 days before the taxpayer wants to begin treating the workers as employees.
Observation: The IRS has indicated that an employer that wants to begin treating a class or classes of workers as employees for the fourth quarter of 2011 may do so, but should file the Form 8952 as soon as possible.
Additional VCP Consequences
In addition to filing Form 8952, employers that participate must sign a closing agreement with the IRS extending the statute of limitations from three years to six years for the first three calendar years beginning after the agreement is signed. The agreement also requires the taxpayer to treat the same class of workers as employees in the future.
Observation: Tax professionals can help businesses and exempt organizations evaluate whether the VCP is feasible, appropriate, and cost effective for recipients of services from workers previously treated as independent contractors. Such a review is appropriate in order to make certain that businesses are not entering the VCP when their contractors are already appropriately classified.
EisnerAmper LLP
This publication is intended to provide general information to our friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.
Background
Prior to announcement of the VCP, the IRS and the Department of Labor (DOL) stepped up joint enforcement efforts by signing a new memorandum of understanding to strengthen information sharing on enforcement actions aimed at misclassified workers. Several states are parties to the agreement including New York and Connecticut.
Observation: This enforcement issue has become more urgent as both federal and state authorities seek additional tax revenues to close large current and projected budget deficits.
V SummaryCP
The VCP is available for employers that are currently treating (perhaps incorrectly) workers or a class of workers as independent contractors, but want to prospectively reclassify the workers as employees for federal employment tax purposes. The IRS retains discretion over whether to accept an employer into the VCP.
VCP Consequences
Under the VCP, eligible taxpayers will generally be entitled to settle their employment tax liability under a single-year assessment of employment taxes of 10% of the Internal Revenue Code Section 3509 rates applicable to the most recently closed tax year. A 10.68% effective rate applies under the VCP in 2011, since the most recently closed tax year is 2010, and a 10.28% effective rate will apply in 2012. A rate of 3.24% also applies to compensation above the Social Security wage base in both years. These rates include federal income tax withholding and employer/employee social security and Medicare tax.
Observation: Employers in the program will generally pay an amount equal to just over 1% of the wages paid to reclassified workers for the most recent tax year and will eliminate the potential exposure for all prior years. It is unclear how states will react to the VCP program.
VCP Qualifications
The VCP is open to businesses, including exempt organizations, which have treated workers as independent contractors in the past, have filed Forms 1099 for the previous three years, and are not currently under a worker classification audit by the IRS, the DOL, or a state agency. An employer previously audited by the IRS or DOL concerning worker classification is eligible for this Program if it has complied with the results of such an audit.
Under the Program, an employer does not have to reclassify all of its workers who are currently treated as non-employees. However, once an employer chooses to reclassify certain of its workers as employees, all workers in the same class – i.e., workers who perform the same or similar services – must be reclassified as employees.
Employers apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program. This form must be filed at least 60 days before the taxpayer wants to begin treating the workers as employees.
Observation: The IRS has indicated that an employer that wants to begin treating a class or classes of workers as employees for the fourth quarter of 2011 may do so, but should file the Form 8952 as soon as possible.
Additional VCP Consequences
In addition to filing Form 8952, employers that participate must sign a closing agreement with the IRS extending the statute of limitations from three years to six years for the first three calendar years beginning after the agreement is signed. The agreement also requires the taxpayer to treat the same class of workers as employees in the future.
Observation: Tax professionals can help businesses and exempt organizations evaluate whether the VCP is feasible, appropriate, and cost effective for recipients of services from workers previously treated as independent contractors. Such a review is appropriate in order to make certain that businesses are not entering the VCP when their contractors are already appropriately classified.
EisnerAmper LLP
This publication is intended to provide general information to our friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.
Thursday, September 15, 2011
Plan Sponsors Affected by Hurricane Irene Granted Additional Time to File Form 5500 and, in Certain Cases, to Fund Their Plans
As part of Internal Revenue Service (IRS) tax relief related to individual and business taxpayers impacted by Hurricane Irene, where retirement plan sponsors – or the plan sponsor’s records necessary to complete the return – are located in the federally designated disaster areas listed in IR 2011‐87 (originally published September 1, 2011 and subsequently updated to reflect new areas for relief), the sponsors will have until October 31, 2011 to file annual Form 5500 for their retirement and welfare benefit plans. This extension applies to Forms 5500 that had a due date for filing after August 26, 2011 and before October 31, 2011.
Plan Sponsors Qualifying for Relief
The U.S. Department of Labor (DOL) website discusses Disaster Relief Information as follows: “Filers affected by Presidentially-declared disasters are plan administrators, employers, and other entities who file Form 5500 series that are located in the areas designated as federal disaster areas (as listed in IRS’s announcements). These special extensions also apply to filers located outside the designated disaster areas who are unable to obtain the information necessary for filing from service providers, banks or insurance companies whose operations are directly affected by the disasters.”
Impact on Plan Funding and Deductions
Because the tax relief granted by IRS includes an extension of time to file business and individual tax returns, plan sponsors will be able to take a tax deduction for contributions made to their plans for the prior period if the contributions are deposited by the new extended due date of the return and provided they have met the other requirements of Internal Revenue Code (IRC) Section 404(a).
However, sponsors of plans that are subject to the minimum funding provisions of IRC Section 412 – such as defined benefit plans, cash balance plans, and money purchase pension plans – are still required to fund these plans within 8½ months after the plan’s year end, as IRS has not granted additional time to meet the minimum funding requirements under IRC section 412. For calendar year plans, this means that contributions will still need to be made by September 15, 2011 to meet the minimum funding requirements.
Designated Disaster Areas
Plan sponsors – or those with necessary records, as noted further above – located in designated counties (see list below) in Connecticut, Massachusetts, New Jersey, New York, North Carolina, Vermont, and Puerto Rico will receive the extension of time to file. The IRS may announce additional relief for taxpayers in other areas as damage assessments continue and encourages plan sponsors and tax practitioners to monitor Tax Relief in Disaster Situations (http://www.irs.gov/newsroom/article/0,,id=108362,00.html) for updates.
As of September 8, 2011, the IRS filing extension applies to the following counties and municipalities:
• Connecticut: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland and Windham
• Massachusetts: Berkshire and Franklin
• New Hampshire: Carroll and Grafton
• New Jersey: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union, and Warren
• New York: Albany, Clinton, Delaware, Dutchess, Essex, Greene, Montgomery, Nassau, Orange, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Sullivan, Suffolk, Ulster, Warren, and Westchester
• North Carolina: Beaufort, Bertie, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Duplin, Edgecombe, Gates, Halifax, Hertford, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Northampton, Onslow, Pamlico, Pasquotank, Perquimans, Pitt, Tyrrell, Vance, Warren, Washington, and Wilson
• Vermont: Addison, Bennington, Caledonia, Chittenden, Orange, Rutland, Washington, and Windsor
• Puerto Rico: Arroyo, Aguas Buenas, Caguas, Canovanas, Carolina, Cayey, Cidra, Coamo, Comerio, Humacao, Jayuya, Juncos, Loiza, Luquillo, Orocovis, Patillas, Ponce, and San Juan.
Reference to Form 5500 can be found in the announcement under the bold caption “Grant of
Relief.” Whatever special extension of filing Form 5500 is granted by the IRS will also be automatically permitted by the DOL and the Pension Benefit Guarantee Corporation (PBGC). Therefore, whether or not DOL and/or PBGC announce a special extension, Form 5500 series filers to whom the IRS has granted a special extension may file their annual returns/reports by the extended due date stated in the IRS’s announcement.
Filing Form 5500 Under the Relief
Plan sponsors should follow the instructions to Form 5500 series under the section “Extension of Time to File” regarding how to file the forms when special extensions are granted. Essentially, the guidance in the instructions is included under the caption “Other Extensions of Time” which advises that, if a plan sponsor is relying on an announced special extension, the sponsor should check the appropriate box on Form 5500 which is Part I, line D, and enter a description of the announced authority for the extension.
Although there is no specific language required under the current extension, the announced authority could be described as follows: “Special extension pursuant to federally designated disaster areas as listed in IR 2011‐87, originally published September 1, 2011 and subsequently updated to reflect new areas for relief, grants until October 31, 2011 to file annual Form 5500 for a retirement and welfare benefit plan.”
If you have any questions regarding this extension, please contact Saltmarsh, Cleaveland & Gund, (850) 435-8300.
© 2011 EisnerAmper LLP
This publication is intended to provide general information to our friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.
Plan Sponsors Qualifying for Relief
The U.S. Department of Labor (DOL) website discusses Disaster Relief Information as follows: “Filers affected by Presidentially-declared disasters are plan administrators, employers, and other entities who file Form 5500 series that are located in the areas designated as federal disaster areas (as listed in IRS’s announcements). These special extensions also apply to filers located outside the designated disaster areas who are unable to obtain the information necessary for filing from service providers, banks or insurance companies whose operations are directly affected by the disasters.”
Impact on Plan Funding and Deductions
Because the tax relief granted by IRS includes an extension of time to file business and individual tax returns, plan sponsors will be able to take a tax deduction for contributions made to their plans for the prior period if the contributions are deposited by the new extended due date of the return and provided they have met the other requirements of Internal Revenue Code (IRC) Section 404(a).
However, sponsors of plans that are subject to the minimum funding provisions of IRC Section 412 – such as defined benefit plans, cash balance plans, and money purchase pension plans – are still required to fund these plans within 8½ months after the plan’s year end, as IRS has not granted additional time to meet the minimum funding requirements under IRC section 412. For calendar year plans, this means that contributions will still need to be made by September 15, 2011 to meet the minimum funding requirements.
Designated Disaster Areas
Plan sponsors – or those with necessary records, as noted further above – located in designated counties (see list below) in Connecticut, Massachusetts, New Jersey, New York, North Carolina, Vermont, and Puerto Rico will receive the extension of time to file. The IRS may announce additional relief for taxpayers in other areas as damage assessments continue and encourages plan sponsors and tax practitioners to monitor Tax Relief in Disaster Situations (http://www.irs.gov/newsroom/article/0,,id=108362,00.html) for updates.
As of September 8, 2011, the IRS filing extension applies to the following counties and municipalities:
• Connecticut: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland and Windham
• Massachusetts: Berkshire and Franklin
• New Hampshire: Carroll and Grafton
• New Jersey: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union, and Warren
• New York: Albany, Clinton, Delaware, Dutchess, Essex, Greene, Montgomery, Nassau, Orange, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Sullivan, Suffolk, Ulster, Warren, and Westchester
• North Carolina: Beaufort, Bertie, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Duplin, Edgecombe, Gates, Halifax, Hertford, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Northampton, Onslow, Pamlico, Pasquotank, Perquimans, Pitt, Tyrrell, Vance, Warren, Washington, and Wilson
• Vermont: Addison, Bennington, Caledonia, Chittenden, Orange, Rutland, Washington, and Windsor
• Puerto Rico: Arroyo, Aguas Buenas, Caguas, Canovanas, Carolina, Cayey, Cidra, Coamo, Comerio, Humacao, Jayuya, Juncos, Loiza, Luquillo, Orocovis, Patillas, Ponce, and San Juan.
Reference to Form 5500 can be found in the announcement under the bold caption “Grant of
Relief.” Whatever special extension of filing Form 5500 is granted by the IRS will also be automatically permitted by the DOL and the Pension Benefit Guarantee Corporation (PBGC). Therefore, whether or not DOL and/or PBGC announce a special extension, Form 5500 series filers to whom the IRS has granted a special extension may file their annual returns/reports by the extended due date stated in the IRS’s announcement.
Filing Form 5500 Under the Relief
Plan sponsors should follow the instructions to Form 5500 series under the section “Extension of Time to File” regarding how to file the forms when special extensions are granted. Essentially, the guidance in the instructions is included under the caption “Other Extensions of Time” which advises that, if a plan sponsor is relying on an announced special extension, the sponsor should check the appropriate box on Form 5500 which is Part I, line D, and enter a description of the announced authority for the extension.
Although there is no specific language required under the current extension, the announced authority could be described as follows: “Special extension pursuant to federally designated disaster areas as listed in IR 2011‐87, originally published September 1, 2011 and subsequently updated to reflect new areas for relief, grants until October 31, 2011 to file annual Form 5500 for a retirement and welfare benefit plan.”
If you have any questions regarding this extension, please contact Saltmarsh, Cleaveland & Gund, (850) 435-8300.
© 2011 EisnerAmper LLP
This publication is intended to provide general information to our friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.
Friday, August 5, 2011
Protecting Your Financial Personal Information
Phishing sounds like something you might enjoy doing on a hot summer day. Phishing, unlike fishing, can be dangerous…that is to your personal information. Phishing is a scam typically carried out through unsolicited email or through websites claiming to be legitimate sites which lure the unsuspecting victims to provide personal information such as social security numbers, credit card numbers or passwords. Be aware that the IRS does not initiate taxpayer communication through email or request detailed personal information through email. If you receive a suspicious IRS communication, do not reply, open attachments, or click on links, instead simply forward to phishing@irs.gov and put "suspicious email or website" in the subject line and then delete the email. The IRS tries to respond to these suspicious emails within 24 hours, but not necessarily with an email. If a website was involved, check to see if it was shut down.
Tuesday, July 19, 2011
New Guidance Phases in FATCA Implementation
Recently, the IRS issued Notice 2011-53, the third Notice that addresses the Foreign Account Tax Compliance Act (FATCA), which was enacted in March 2010. Title V of that Act was about making sure that Americans could not hide assets in foreign bank accounts and essentially evade U.S. tax laws.
FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. In order to avoid being withheld upon under FATCA, a participating FFI will have to enter into an agreement with the IRS to:
• Identify U.S. accounts,
• Report certain information to the IRS regarding U.S. accounts, and
• Withhold a 30% tax on certain payments to non-participating FFIs and account holders who are unwilling to provide the required information.
FFIs that do not enter into an agreement with the IRS will be subject to withholding on certain types of payments, including U.S. source interest and dividends, gross proceeds from the disposition of U.S. securities, and pass-thru payments.
The prior two Notices, 2010-60 and 2011-34 outlined the way in which the IRS expects to implement the law. These are the basis for "final regulations."
Many banks, brokers, funds and others affected by the impending regulations lobbied for repeal or significant revisions More recently, there have been calls for some kind of phased implementation to allow firms to assess the nature and scope of changes they need to make both to client-facing procedures such as account opening, and to back office systems which, in some cases, may need to be re-built.
Notice 2011-53 essentially spreads the implementation period out across 2013 to 2015 with different bits of the regulation coming into force at different times.
Notice 2011-53 provides a more workable timeline for FFIs and U.S. withholding agents to implement the various requirements of FATCA. Specifically, the notice phases in the implementation of FATCA in the following manner:
• An FFI must enter an agreement with the IRS by June 30, 2013, to ensure that it will be identified as a participating FFI in sufficient time to allow withholding agents to refrain from withholding beginning on January 1, 2014.
• Withholding on U.S. source dividends and interest paid to non-participating FFIs will begin on Jan. 1, 2014, and withholding on all withholdable payments (including on gross proceeds) will be fully phased in on Jan. 1, 2015.
• Due diligence requirements for identifying new and pre-existing U.S. accounts (including certain high-risk accounts) will begin in 2013. Reporting requirements will begin in 2014.
• For purposes of the Notice, high risk accounts include private banking accounts with a balance that is equal to or greater than $500,000.
If you have any questions, please contact Saltmarsh, Cleaveland & Gund, (850) 435-8300.
© EisnerAmper LLP 2011
This publication is intended to provide general information to our friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.
FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. In order to avoid being withheld upon under FATCA, a participating FFI will have to enter into an agreement with the IRS to:
• Identify U.S. accounts,
• Report certain information to the IRS regarding U.S. accounts, and
• Withhold a 30% tax on certain payments to non-participating FFIs and account holders who are unwilling to provide the required information.
FFIs that do not enter into an agreement with the IRS will be subject to withholding on certain types of payments, including U.S. source interest and dividends, gross proceeds from the disposition of U.S. securities, and pass-thru payments.
The prior two Notices, 2010-60 and 2011-34 outlined the way in which the IRS expects to implement the law. These are the basis for "final regulations."
Many banks, brokers, funds and others affected by the impending regulations lobbied for repeal or significant revisions More recently, there have been calls for some kind of phased implementation to allow firms to assess the nature and scope of changes they need to make both to client-facing procedures such as account opening, and to back office systems which, in some cases, may need to be re-built.
Notice 2011-53 essentially spreads the implementation period out across 2013 to 2015 with different bits of the regulation coming into force at different times.
Notice 2011-53 provides a more workable timeline for FFIs and U.S. withholding agents to implement the various requirements of FATCA. Specifically, the notice phases in the implementation of FATCA in the following manner:
• An FFI must enter an agreement with the IRS by June 30, 2013, to ensure that it will be identified as a participating FFI in sufficient time to allow withholding agents to refrain from withholding beginning on January 1, 2014.
• Withholding on U.S. source dividends and interest paid to non-participating FFIs will begin on Jan. 1, 2014, and withholding on all withholdable payments (including on gross proceeds) will be fully phased in on Jan. 1, 2015.
• Due diligence requirements for identifying new and pre-existing U.S. accounts (including certain high-risk accounts) will begin in 2013. Reporting requirements will begin in 2014.
• For purposes of the Notice, high risk accounts include private banking accounts with a balance that is equal to or greater than $500,000.
If you have any questions, please contact Saltmarsh, Cleaveland & Gund, (850) 435-8300.
© EisnerAmper LLP 2011
This publication is intended to provide general information to our friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.
Tuesday, July 12, 2011
Home Energy Efficiency Tax Credits
It is the hot lazy, hazy days of summer and along with the heat comes additional expenses. If you own your home, you can make your home more energy efficient. Not only will you save on utility bills, you can reduce what you owe the IRS. For 2011 the maximum credit is $500 for eligible energy upgrades. These upgrades include heating and air conditioning systems, insulation, water heaters, windows, and doors. If you previously claimed an energy credit between 2005-2010 of $500 or more, you are not eligible for the 2011 credit.
However, if you make solar energy, wind power, or geothermal system upgrades, the tax break is even better; up to 30% of the cost, with no upper limit. This credit is available through 2016.
For questions or more information about Home Energy Efficiency Tax Credits, please call Lisa Fairbanks at (850) 435-8300, ext. 1066.
However, if you make solar energy, wind power, or geothermal system upgrades, the tax break is even better; up to 30% of the cost, with no upper limit. This credit is available through 2016.
For questions or more information about Home Energy Efficiency Tax Credits, please call Lisa Fairbanks at (850) 435-8300, ext. 1066.
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