Foreign Financial Account Reports Due Soon!

All deadlines have more or less equal implications, but some deadlines are more equal than others.  This one looms – no later than June 30 upcoming!

By law, many U.S. folk with foreign accounts exceeding certain thresholds must file Form 114, “Report of Foreign Bank and Financial Accounts” (aka “FBAR”) electronically with the Treasury Department’s Financial Crimes Enforcement Network (“FINCEN”).Read More

Some Recent Development Which May Affect You

So, we’re into the last quarter of the tax year – no time like the present to start your tax planning, and enhance your awareness of some recent changes in the rules.  A few items of importance, starting with some provisions of the recently enacted “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (the Transportation Act):

• Partnerships and S corporations must file their 2016 returns by the 15^th day of the third month after the end of the tax year – this means March 15 for calendar year entities.  This is a change for partnerships, which previously had until the fourth month after year end by which to file.  C corporations will have to file by the 15^th day of the fourth month after year end – previously the deadline for these entities was the third month after year end.
• Effective for returns required to be made and statements required to be furnished after December 31, 2016, lenders must report more info on mortgages, including the origination date, the amount of outstanding principal, and the address of the underlying property.  (More info for use by the Revenooers in potential audits of issues associated with your mortgage loan!)
• IRS will now have six years (instead of just three) within which to audit your return in situations where overstatement of your tax basis (and not just omission of gross income) results in a substantial understatement (2 5% or more) of your taxable income.  (The Revenooers had long thought these facts always allowed them the three additional years for audit, but they consistently lost the issue in the courts – including cases before the Supremes – so they now have been successful in their efforts to have the law actually changed to reflect the answer they want.)

Another important recent change, courtesy of the Ninth Circuit Court of Appeals, results in a doubling of the home mortgage interest deduction for unmarried taxpayers, as we recently mentioned.  The limitations on the amount of debt eligible for the home mortgage interest deduction ($1 million of mortgage “acquisition debt” and $100,000 of home equity debt) are to be applied on a “per individual” basis, and not on a “per residence” basis as IRS had always thought.  Consequently, for unmarried co-owners of a residence, the combined limit for the mortgage interest deduction is doubled from a maximum of $1.1 million to a maximum of $2.2 million!  Pretty nice windfall!

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He may be reached at 831-7288, and welcomes comments at [email protected].