May 4th, 2018 by Kim Chen
A U.S. citizen (or U.S. resident alien) living abroad can elect to exclude the foreign earned income and housing cost amount from gross income (subject to certain limitations). The Section 911 housing cost exclusion is calculated based on the number of days physically present in the foreign location. In addition, the IRS allows a higher […]
February 28th, 2018 by Kim Chen
Under the current rules, an individual who pays alimony or separate maintenance may deduct an amount equal to the alimony or separate maintenance payments paid during the year as an “above-the-line” deduction. (An “above-the-line” deduction, i.e., a deduction that a taxpayer need not itemize deductions to claim, is generally more valuable for the taxpayer than […]
February 23rd, 2018 by Kim Chen
Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act IRS has updated questions and answers (Q&As) on its website that provide guidance on employer responsibilities under Code Sec. 4980H. Background. Code Sec. 4980H, which was added by the Affordable Care Act (ACA), provides that an applicable large employer (ALE; see below) […]
February 9th, 2018 by Kim Chen
I am writing to inform you of a significant new tax deduction taking effect in 2018 under the new tax law, the Tax Cuts and Jobs Act (the Act). It should provide a substantial tax benefit to individuals with “qualified business income” from a partnership, S corporation, LLC, or sole proprietorship. This income is sometimes […]
February 5th, 2018 by Kim Chen
I am writing to inform you about new limit placed on individuals’ itemized deductions of various kinds of nonbusiness taxes, which was made by the massive Tax Cuts and Jobs Act (the Act), effective beginning with the 2018 tax year. Before the changes were effective, individuals were permitted to claim the following types of taxes […]
February 1st, 2018 by Kim Chen
I am writing to let you know about changes in the rules for deducting qualified residential interest, i.e., interest on your home mortgage, under the Tax Cuts and Jobs Act (the Act). Under the pre-Act rules, you could deduct interest on up to a total of $1 million of mortgage debt used to acquire your […]
January 30th, 2018 by Kim Chen
The Tax Cuts and Jobs Act (the Act) has made changes to the tax treatment of alimony that you will be interested in. These changes take effect for divorce agreements and legal separation agreements executed after 2018. Current rules. Under the current rules, an individual who pays alimony or separate maintenance may deduct an amount […]
January 7th, 2018 by Kim Chen
Among other things, the Disaster Tax Relief and Airport and Airway Extension Act of 2017 (Disaster Act) provided relief to taxpayers who suffered a net disaster loss due to Hurricanes Harvey, Irma, or Maria. For example, the Disaster Act eliminated the 10% of AGI reduction and allowed taxpayers claiming the standard deduction to take advantage […]
January 3rd, 2018 by Kim Chen
In a set of Revenue Procedures, the IRS has provided safe harbor methods that taxpayers may use in determining the amount of their casualty and theft losses for their homes and personal belongings. Rev. Proc. 2018-8 offers four safe harbor methods that apply to any qualifying casualty or theft loss, as well as three methods […]
December 28th, 2017 by Kim Chen
IR-2017-202, Dec. 13, 2017 WASHINGTON – As part of a wider effort to help victims of natural disasters, the Internal Revenue Service today issued guidance providing safe harbor methods that individuals may use in determining the amount of their casualty and theft losses for their homes and personal belongings, including losses from recent hurricanes. Revenue […]
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