2019 Regional Seminar Topic Descriptions
There are more immigrants than any other country in the world
43.7 million immigrants (legal & illegal)
13.5% of the U.S population
27 million immigrants in the workforce
Is your client an alien?
Green card test
Substantial presence test
How do the followings topics affect H-1B, H-2A, & ITIN clients
ACA, EITC, CTC, Family Credit, and do they have dependents in other countries
What is an ITIN
Helps individuals comply with U.S tax law
Issued regardless of immigration status
Who should renew?
Middle digits “70” through “82” have expired
Middle digits “83”, “84” “85” “86” and “87” will expire Dec 31, 2019
How to renew
Complete form W-7, application for IRS Individual Taxpayer Identification Number.
Common reasons for delays
Reason for submitting not checked, reason for submitting incorrect, not submitting original documents.
Recommend a paycheck checkup
Some changes in the TCJA may affect employees’ withholdings
Taxpayers can protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year
Taxpayers can avoid too much withholding and receive more in their paychecks
Changes to standard deductions
Amount increased, limit on overall itemized deductions suspended, deduction for medical and dental expenses modified, deduction for state and local
Income, sales and property taxes modified, limit for charitable contributions modified, etc…
Many owners of sole proprietorships, partnerships, S corporations and some trusts and estates may be eligible for a qualified business income (QBI) deduction – also called Section 199A – for tax years beginning after December 31, 2017
The deduction allows eligible taxpayers to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.
QBI does not include items such as: Items that are not properly includable in taxable income, Investment items such as capital gains or losses or dividends, interest income not properly allocable to a trade or business, wage income, income that is not effectively connected with the conduct of business within the United States, commodities transactions or foreign currency gains or losses, and certain dividends and payments in lieu of dividends
Senators Tim Scott (R-SC) and Cory Booker (D-NJ) and Congressmen Pat Tiberi (R-OH) and Ron Kind (D-WI)
Enacted as sections 1400Z-1 and 1400Z-2 in the Tax Cuts and Jobs Act of 2017
A “qualified opportunity zone” is a population census tract that is a low-income community that is designated as such. Designation and approval process complete.
Highlights of 1400z-2
Only capital gains eligible for OZ benefits:
Temporary deferral of gain recognition for capital gains invested
Partial exclusion of such capital gains from gross income if “qualified opportunity fund” (QOF) investment held for requisite time
Permanent exclusion of capital gains arising from the sale or exchange of an interest in a QOF held for at least 10 years
Gain must be invested within 180 days from the date on which the gain would be recognized for Federal income tax purposes
IRC section 121 allows a taxpayer to exclude up to $250,000($500,000 MFJ returns) of the gain from the sale (or exchange) of property owned and used as a principal residence for at least two of the last five years before the sale.
A taxpayer can claim the full exclusion only once every two years
Ownership and use requirements.
The ownership and use requirements are based on the total number of days or months the taxpayer owns and uses the property as a principal residence during the five-year period ending on the date of disposition.
Capital gains are the profits from the sale of an asset: Shares of stock, Real estate, a business, are generally are considered taxable income. A lot depends on how long you held the asset before selling
Short term gains
is a tax on profits from the sale of an asset held for one year or less.
Long term gains
is a tax on profits from the sale of an asset held for more than a year. Long-term capital gains tax rates are 0%, 15%or 20% depending on your taxable income and filing status
IRS definition; If you use one of the many online platforms available to rent a spare bedroom, provide car rides, or to connect and provide a number of other goods or services, you’re involved in what is sometimes called the sharing economy
Size & Scope
25% - 30% of workers engage in supplementary income.
1 in 10 workers rely on “gigs” for primary income
Over 50% of Gig Workers are Millennials
1 in 3 are over age 50
1099-K & 1099-Misc
Where to report Gig income
Trade or business? Schedule C.
Personal items sold at loss? Schedule D.
Rental? Schedule E or Schedule C.
Not engaged in for profit? Line 21