Personal Taxes

If an area has been classified as a Presidentially declared Disaster Area, then the filing deadlines of the tax returns are delayed. Also the payment of any tax liability is delayed. Penalties and interest in some circumstances can be waived if it can be proven the disaster caused you to file or pay late. You should speak with your local CPA or the Federal Emergency Management Agency for more details.

A CP-2000 notice informs you of the proposed changes in income, credits, payments, or deductions and the amount due to the IRS, or a refund due to you. You should forward a copy of this letter to your local CPA for a follow-up response. Frequently these notices are sent out erroneously.

The IRS has a tax assistance staff in 7 U.S. Embassies throughout the world. Speak to your local CPA about locating the U.S. Embassy nearest to you.

No. Any termite or moth damage costs are not considered casualty losses. Generally, casualty losses occur from auto accidents, earthquakes, fires, floods, hurricanes, sonic booms, storms, thefts, tornadoes, vandalism, volcanic eruptions and other accidents.

If you itemized your deductions in the prior year and received a state tax refund in the current year (reported on a 1099-G slip), you may have to include all or part of the refund as income on your current year's tax return.
If you did not itemize your deductions in the prior year, you will not have to pick up as income the 1099-G refund amount.

Costs incurred while entertaining customers, prospective customers, clients, suppliers, employees and other business associates are valid business expenses that are subject to conditions and restrictions. For entertainment costs to be deductible, the following must be documented: the time, place and the nature of the entertainment, a description of the business purpose involved, the amount of each separate expense, the business relationship and identification of the persons entertained. A calender diary is recommended to maintain this information.

On Form W-2, box 15 will have an X in the box "retirement plan". You are an active participant in a retirement plan if contributions are made or allocated to your account for the plan year that ends within your tax year.

A Roth IRA is a special, nondeductible IRA. Earnings are tax-deferred and tax-free upon withdrawal if certain requirements are met. (If requirements are not met, taxes and penalties may apply). Contributions are not tax-deductible. You may continue making Roth IRA contributions after age 70 1/2 if you have earned income. Your modified adjusted gross income must be below certain limits depending on your tax filing status and you or your spouse must have earned income. You are not required to take mandatory distributions at any age during your lifetime. Non-spouse beneficiaries are subject to minimum distributions rules.

A retirement plan that covers self-employed persons (sole proprietors or partners)is referred to as a Keogh or H.R. 10 plan. With partnerships, the Keogh must be set up by the partnership, not the partner. Employees who are at least 21 and have at least one year of service must be allowed to participate. Employer contributions are tax deductible subject to certain income limitations. Employees may be permitted to make nondeductible voluntary contributions. There are two types of Keogh plans. Different rules apply to both types of the plan. A Keogh plan can be set up as a defined benefit plan or a defined contribution plan which includes 3 types: a Money Purchase plan, Profit Sharing and a Combination of the two.