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If an individual taxpayer cannot file his tax return by the due date of the return, the IRS allows most of such taxpayers to request an automatic six-month extension of time to file the return. In order to do so, the taxpayer should file Form 4868, Application for Automatic Extension of Time to File U.S. […]
Before filing your tax return, you should review it to make sure it is correct and complete. Here are the five most common errors on an individual tax return: 1. Incorrect or missing Social Security numbers. 2. Incorrect tax entered based on taxable income and filing status. 3. Withholding and/or estimated tax payments entered on […]
Tax treaties are bilateral agreements between two countries that generally provide relief from taxation for individuals who are covered. The U.S. has tax treaties with more than 50 different countries. The U.S. has a formulated a Model Income Tax Treaty to assist in negotiations of future tax treaties. In general, treaties will grant one country […]
The sourcing of income has very important tax consequences for U.S. and foreign taxpayers. The IRS taxes U.S. taxpayers on all income, from any source derived; however, U.S. taxpayers will be relieved of double taxation and may utilize the foreign tax credit in many circumstances involving non-purely domestic taxation. Foreign taxpayers, on the other hand, […]
Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence during tax years 2007 through 2012. The limit is $1 million for a married person filing a separate return. You may […]