by Donya Curry | Dec 13, 2018 | Business
The new tax cuts and jobs act was recently signed into
law for 2018. There are some pros and cons from this passage. One of the
biggest changes is the overall decrease in corporate tax rates. Last year C
corporations were subject to graduated tax rates of 15% for taxable income up
to $50,000, 25% for income over $50,000 to $75,000, 34% for income over $75,000
to $10,000,000, and 35% for income over $10,000,000. If you happened to own a
personal service corporation, you were subject to a flat income tax rate of 35%
on all of your income. Now in the 2018 tax year the corporate tax rate a flat
21%. The new flat rate is now only 25% for personal service corporations. The
new tax cuts and jobs act (TCJA) also gets rid of the corporate alternative
minimum tax. An additional pro of the TCJA is the increased write off amounts
for §179 deductions when you purchase new vehicles and machinery. There is a
new pass through 20% deduction that your business could possibly take.
There were a few downsides for businesses in the TCJA.
The first con was the new 20% deduction phases out for higher income businesses
and personal service companies. The 2nd and major issue has been the
removal of the meals and entertainment deduction. Businesses that take clients
to sports events and restaurants will be losing this deduction. Food expenses
that were previously 100% write off in 2017 starting in 2018 they are now cut
to 50%. The food given out at your workplace like donuts and coffee will be a reduced
write off in 2018. No matter what changes go into law be prepared by planning
with a professional.
by Donya Curry | Nov 11, 2018 | Business, Individuals
Foreign Reporting
Requirements
By law, U.S. citizens and residents must report their
worldwide income. This includes income from foreign trusts and foreign bank and
securities accounts.
You must file required tax forms. You may need to file
Schedule B, Interest and Ordinary Dividends, with your U.S. tax return. You may
also need to file Form 8938, Statement
of Specified Foreign Financial Assets. Certain domestic corporations,
partnerships, and trusts that are considered formed or availed of for the
purpose of holding, directly or indirectly, specified foreign financial assets
(specified domestic entities) must file Form 8938 if the total value of those
assets exceeds $50,000 on the last day of the tax year or $75,000 at any time
during the tax year.
There is a foreign earned income exclusion. If you qualify,
you won’t pay tax on up to $100,800 of your wages and other foreign earned
income.
Unmarried taxpayers. If you are not married, you satisfy the
reporting threshold only if the total value of your specified foreign financial
assets is more than $50,000 on the last day of the tax year or more than
$75,000 at any time during the tax year.
Married taxpayers filing a joint income tax return. If you
are married and you and your spouse file a joint income tax return, you satisfy
the reporting threshold only if the total value of your specified foreign
financial assets is more than $100,000 on the last day of the tax year or more
than $150,000 at any time during the tax year.
Specified foreign financial assets include the following
assets.
1. Financial accounts maintained by a foreign financial
institution.
2. The following
foreign financial assets if they are held for investment and not held in an
account maintained by a financial institution:
a. Stock or securities issued by
someone that is not a U.S. person (including stock or securities issued by a
person organized under the laws of a U.S. possession),
b. Any interest in a foreign
entity, and c. Any financial instrument or contract that has an issuer or
counterparty that is not a U.S. person (including a financial contract issued
by, or with a counterparty that is, a person organized under the laws of a U.S.
possession).
Exceptions: If you do not have to file an income tax return
for the tax year, you do not have to file Form 8938, even if the value of your
specified foreign financial assets is more than the appropriate reporting
threshold.
Duplicative reporting. You do not have to report any asset
on Form 8938 if you report it on one or more of the following forms that you
timely file with the IRS for the same tax year.
Form 3520, Annual Return To Report Transactions With Foreign
Trusts and Receipt of Certain Foreign Gifts.
Form 5471, Information Return of U.S. Persons With Respect
To Certain Foreign Corporations.
Form 8621, Information Return by a Shareholder of a Passive
Foreign Investment Company or Qualified Electing Fund.
Form 8865, Return of U.S. Persons With Respect to Certain
Foreign Partnerships. Instead, you must identify on Form 8938 the form(s) on
which you report the specified foreign financial asset and how many of these
forms you file.
In some cases, you may need to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts.
Visit IRS.gov for more information. The FBAR is not filed with a federal tax
return. When the IRS grants a filing extension for a taxpayer’s income tax
return, it does not extend the time to file an FBAR. It should be filed at https://bsaefiling.fincen.treas.gov/main.html.
- the US person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
- the aggregate value of all foreign financial accounts exceeded $10,000 at anytime during the calendar year reported.
The new annual due date for filing Reports of Foreign Bank
and Financial Accounts (FBAR) for foreign financial accounts is April 15. Schedule
an appointment today so IATC Inc can help you.
by Donya Curry | Jan 15, 2018 | Individuals
One out of every four US citizens are currently paying back their student loans. At the end of the year you might receive a Form 1098-E, Student Loan Interest Statement. Generally, an institution lender that received interest payments of $600 or more on one or more qualified student loans must send Form 1098-E to all borrowers by January 31. Don’t forget to take this easy deduction to minimize your tax burden.
The amount of your student loan interest deduction is gradually
reduced if your income is between $65,000 and $80,000 ($135,000 and $165,000 if
you are married and file a joint return). You can’t claim a student loan
interest deduction if your income is $80,000 or more ($165,000 or more if you
file a joint return). The maximum deduction you can get regardless of how much
you pay is $2,500 as of 2018.
by Donya Curry | Oct 8, 2017 | Business
Bookkeeping is one of the most outsourced functions of today’s accounting firms and businesses. A fairly large amount of accountants would gladly tell you it’s not worth their time to do your bookkeeping. Accountants at International Accounting & Tax Consultants feel just the opposite. Bookkeeping and accounting are really not the same thing. Bookkeeping is just one of the many functions of accounting. Accounting encompasses many different functions involved in managing the financial affairs of a business. Accountants do prepare reports based largely on the work of the bookkeepers.
Bookkeeping is a crucial record-keeping task. Bookkeeping is considered entry level work, but it actually forms the foundation of information your accountant uses. When transactions are not properly recorded it’s costly to have to go back through your books and find the error. Preparing source documents for all the operations of a business. The transactions recorded cover buying, selling, transferring, paying and collecting activities. The source documents include papers such as purchase orders, invoices, credit card slips, time cards, time sheets and expense reports. Bookkeeping involves the ability to determine and enter in the source documents the financial effects of the transactions and other business events. Those include paying the employees, making sales, borrowing money or buying products or raw materials for production.
Bookkeepers also make entries of the financial transactions into journals and accounts. A journal is the record of transactions in chronological order. An accounts is a separate record, or page for each asset and each liability. One transaction can affect several accounts.
Bookkeeping involves preparing reports at the end of specific periods of time, such as daily, weekly, monthly, quarterly or annually. To do this, all the accounts need to be up to date. Inventory records must be updated and the reports checked and double-checked to ensure that they’re as error-free as possible. A bookkeeper also compiles the adjusted trial balance. While a small business may have a hundred or so accounts, very large businesses can have thousands of accounts. You have probably heard once or twice before about closing the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized. Bookkeeping is still an important task for any company. Give your company the best foundation you can by using knowledgeable professionals like those at IATC.
by Donya Curry | May 15, 2017 | Business
Ever since our incorporation IATC Inc. has been assisting
entrepreneurs with their business accounting. In the past few years the US and
Canada has seen a large demand from businesses who are into producing and
selling Cannabis. They have run into various roadblocks that have limited their
potential to grow and succeed. They have legal road blocks because of Sec.
280E. This code takes away deductions or credits for businesses that carrying
on a trade or business if such trade or business which consists of the
trafficking in controlled substances. Marijuana is being slowly allowed on the
state level, but is still a Schedule I controlled substance affected by such
regulations. The businesses are being
provided generic accounting services which are exposing these companies to
unnecessary liabilities. The tax rate of 70% being paid by Cannabis companies
are the highest in the US from the state and federal level.
Cannabis businesses have found it difficult to be properly
serviced in these critical areas such as banking, accounting, and legal. We
took our time to learn about this industry and create specific accounting
systems and procedures that help cannabis companies stay compliant throughout
the US. Due to the specialized knowledge required we created our own green
division within IATC that assist businesses within the cannabis arena. If you
have a cannabis company and need expert help IATC Inc. is the company for you. Call
us today at (202) 780-4494.
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