By john paul June 26, 2017
he quickly sorted through the nuances of my complicated tax situation and offered great advice. Thanks, Leon! ...read more
By john paul June 26, 2017
he quickly sorted through the nuances of my complicated tax situation and offered great advice. Thanks, Leon! ...read more
By ragdoll9 February 05, 2014
Having worked with Elizabeth Gibbar for several years, I can honestly state that she makes income-tax preparation painless. She is calm, gracious, skillful, and competent. I recommend her without hesitation. ...read more
Forgiven debt is taxable. Forgiven home mortgage acquisition debt is excludable. Without a last-minute congressional extension, the home mortgage acquisition debt exclusion expires at the end of 2013. When a taxpayer settles a debt for less than its full amount, the forgiven amount of the debt is taxable, unless the taxpayer qualifies for one of two currently available exclusions. With the downturn in the economy and the accompanying drop in home prices that occurred in recent years, many taxpayers are unable to keep up the mortgage payments on their home, and unable to sell their homes because they owe more than the market price. As a result, a large number of homeowners have let their homes go back to the lender.Congress offered help for those in this situation by providing an exclusion from income of the forgiven acquisition debt from a taxpayer’s principal residence. If a taxpayer’s home is upside down, and they are considering letting it go back to the lender, they should be aware that unless Congress provides a last-minute extension, this Principal Residence Acquisition Debt Relief Exclusion will expire at the end of 2013. The only other exclusion available is the insolvent taxpayer exclusion, which limits the amount that can be excluded to the excess of the taxpayer’s total debts over the taxpayer’s total assets.An individual not able to exclude the forgiven debt on their home using the insolvent taxpayer exclusion may wish to act before year’s end. The tax implications of forgiven debt are very complicated and not all the details are covered in this article. You are strongly urged to contactAra Haddadian CPAif you are contemplating letting your home go back to the bank. ...read more
By Ara Haddadian CPA November 07, 2013
Have a Financial Interest in or Signature Authority over a Foreign Financial Account? Better Read This! May 24, 2013 More Sharing ServicesShare Each U.S. person 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)must report that relationshipto the U.S. government each calendar year if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.The government uses this reporting mechanism as a means of uncovering hidden foreign accounts and ensuring that investment income earned in foreign countries by U.S. taxpayers is included on their U.S. tax returns. The Treasury Department has placed a new emphasis on foreign accounts, and taxpayers with a financial connection to a foreign country should determine whether or not they have a reporting requirement.Reporting is accomplished by filing a “Report of Foreign Bank and Financial Accounts,” more commonly referred to as FBAR, which isdue on or before June 30of the succeeding year. No extensions are available for filing this form. In addition, taxpayers are generally required to answer “yes” or “no” to questions related to the foreign bank and financial accounts on their tax returns.Penalties for failing to comply can be draconian. For non-willful violations, civil penalties up to $10,000 may be imposed. The penalty for willful violations is the greater of $100,000 or 50% of the account’s balance at the time of the violation. A reasonable cause exception to the penalty is available for non-willful violations but not for willful violations.Overlooked Accounts- Many taxpayers overlook the fact that they have a reporting requirement in such situations as:Family Accounts- Recent immigrants to the U.S. may still have parents or other family members residing in the “old” country, and those relatives may have included them on an account in a foreign country. This practice is common for some ethnic groups. The taxpayer may not really consider the account to be his or hers; nevertheless, it falls under the reporting requirement if he or she has signature or other authority over the account and its value exceeds $10,000.Inherited Accounts- Accounts in a foreign country and inherited accounts fall under the FBAR reporting requirement, even if the funds are subsequently transferred to the U.S. The FBAR rules state that reporting is required if at any time during the year the foreign account exceeds $10,000.Business Accounts- A corporate officer or Board member may have signature authority over a business account in a foreign country and may overlook the need to meet the FBAR reporting requirements.Foreign Financial Accounts- These financial accounts are maintained by foreign financial institutions and include other investment assets not held in accounts maintained by financial institutions. However, no reporting is required for interests that are held in a custodial account with a U.S. financial institution.In addition to including any reportable foreign income on a tax return, the taxpayer must ensure that the foreign account questions are completed correctly on the tax return and that the FBAR form is filed, if required. If you have questions regarding this reporting requirement, please contact this office. ...read more
By Ara Haddadian CPA May 27, 2013
May 23, 2013 If you are unfortunate enough to have an unpaid tax liability and wish to put end the constant stream of correspondence from the IRS, there are several possible solutions to help you deal with the circumstances and take advantage of the IRS’s Fresh Start initiative.Establish An Installment Agreement- If you are unable to pay your tax liability immediately, a payment plan can be arranged, allowing you to pay the liability over a number of years. Under the new “Fresh Start” program, the IRS recently expanded access to streamlined installment agreements. Now, individual taxpayers who owe up to $50,000 can pay via monthly direct debit payments for up to 72 months (six years). While the IRS generally will not need a financial statement, they may request certain financial information from the taxpayer. Conditions that must be met in order to qualify for an installment agreement include the following: Installment payments must be made in full and on time. All future tax returns must be filed on time. Enough withholding or estimated tax payments must be made so that no tax is due with timely filed future returns. Owe more than $50,000 - If the amount you owe is in excess of $50,000 or it is impossible for you to pay off the debt within six years, you can still apply for an installment agreement, but you will be required to supply the IRS with a financial statement. User Fees - The IRS charges a user fee of $105 ($52 if the taxpayer makes the payment by electronic payment withdrawal) for setting up the installment agreement. A reduced fee of $43 applies to lower income taxpayers. Interest&Penalties - Taxpayers will also be charged interest at the current rate (which recently has been 3% annually), compounded daily, and a late payment penalty, usually 0.5% of the balance due per month. However, the penalty is reduced to 0.25% when the IRS approves the agreement for an individual taxpayer who timely filed the return and did not receive a levy notice. Offers in Compromise- If it is reasonably clear that you are unable to pay the entire liability, you can apply for an Offer in Compromise. An Offer in Compromise is an agreement that allows taxpayers to settle their tax debt for less than the full amount. The IRS Fresh Start program expanded and streamlined the OIC program. The IRS now has greater flexibility when analyzing a taxpayer’s ability to pay, making the offer program available to a larger group of taxpayers. Generally, the IRS will accept an offer if it represents the most that the agency can expect to collect within a reasonable period of time. The IRS will not accept an offer if it believes that the taxpayer can pay the amount owed in full as a lump sum or through a payment agreement. The IRS considers several factors, including the taxpayer’s income and assets, when making a decision regarding the taxpayer’s ability to pay. Tax Liens - The IRS Fresh Start program increased the amount that taxpayers can owe before the IRS generally will file a Notice of Federal Tax Lien. That amount is now $10,000. However, in certain cases, the IRS may still file a lien notice on amounts less than $10,000. When a taxpayer meets certain requirements and pays off his or her tax debt, the IRS may withdraw a filed Notice of Federal Tax Lien. Taxpayers must request that this withdrawal in writing using the appropriate IRS form. Some taxpayers may qualify to have their lien notice withdrawn if they are paying their tax debt through a Direct Debit installment agreement. Taxpayers need to request the withdrawal in writing using the appropriate IRS form. If a taxpayer defaults on the Direct Debit Installment Agreement, the IRS may file a new Notice of Federal Tax Lien and resume collection actions. If you would like assistance with getting your IRS back tax liabilities in order, please call Ara Haddadian CPA, in Burbank, CA for an appointment so that we can explore options for which you may qualify based on your situation. ...read more
By Ara Haddadian CPA May 23, 2013
Payroll accountants are responsible for tracking the expenditure of money and assets through a company. Their job is to help companies track their income and maintain a timely payment record for expenses and bills. If you are interested in becoming a payroll accountant, you will have to be... ...read more
Computer files can sometimes be deleted by accident, get lost or damaged. This could be a potential nightmare, especially if these are small business accounting files. You have peace of mind by knowing how to use the "Backup and Restore" function in Microsoft Small Business Accounting. With a few keys... ...read more