Affordable Care Act Applies to Individuals

Starting with  the 2014 tax year, individuals and families must either carry health insurance meeting certain minimum standards or qualify for one of the exemptions to have coverage.

Otherwise, you, your spouse and dependents claimed on your tax return will be faced with an additional charge (or penalty) called the Shared Responsibility Payment.  

IRS Update on FBAR for US Citizens, Dual Citizens or Residents Living Outside the US

The IRS has issued new guidance on how penalties are determined when a US citizen, dual citizen or permanent resident lives outside the US and has not filed tax returns or reported foreign bank accounts (FBAR).  In many cases penalties would be waived altogether.

In many cases, the US citizen has complied with the tax requirements in their country of residence.  But US filings have not been made for years.

Often in these cases no US tax is owed because of the Foreign Earned Income Exclusion or the Foreign Tax Credit.   In addition, there's usually no tax penalty either as the penalty is based on the amount of the tax which is "zero".

California Use Tax Registration for Businesses

California businesses may be required to file a use tax return every year even if they don't owe tax.  The purpose is to pay use tax  (ie, "sales" tax) on products purchased and used in the business if tax wasn't paid at the time of purchase...e.g., products purchase by catalog or online with no sales tax charged.    

Under R&TC §6225,  any business with gross receipts of $100,000 or more must file a use tax return every year.   There's an exception if the business is  already registered with the Board of Equalization to pay sales and use tax,   for example,  retailers who already file a sales tax return for products they sell.  


Does your business have to send out Form 1099MISC?

Does your business have to send out Form 1099MISC?

Most businesses do. It doesn't matter whether your business is a sole-proprietorship, partnership, corporation or LLC, you may have a 1099 filing requirement with the IRS.

This requirement in addition to filing your income tax return every year.

IRS Announces 2011 Foreign Earned Income Exclusion Amount

The IRS has announced that the maximum amount that can be claimed for the foreign earned income exclusion for 2011 is $92,900.  This is up from $91,500 in 2010.

This would apply if you have foreign earnings such as wages, salary or business profits and meet the other requirements.  It is claimed on Form 2555.  It does not apply to unearned sources of income such as pension, interest and dividends.

In addition, you may be able to  deduct or exclude foreign housing  costs (such as rent or utilities) within certain limits.

Please contact me if you have questions or want more information.