June Tidbits
Foreign investments filing
If a taxpayer has a foreign bank or brokerage account, they may have a reporting requirement. Federal Form TD F 90-22-1 Report of Foreign Bank and Investments (FBAR) is used to report financial interest, signature authority or other authority in any foreign account valued at over $10,000. This form must be filed by June 30th and may not be extended.
Citizens who lived or worked abroad in 2012
U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2012, may have a U.S. tax liability and a filing requirement in 2013.
The filing deadline is Monday, June 17, 2013, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return (April 15th). Eligible taxpayers get two additional days because the normal June 15th due date falls on Saturday this year. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which situation applies. If you would like more information, go to http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad.
Child care credit for the summer
If you need to pay for child care this summer, as a working parent or someone looking for work, these expenses may qualify for a tax credit that can reduce your federal income taxes. The Child and Dependent Care Tax Credit is available throughout the year. Below are some key points to know about this credit:
1. You must pay for care so you – and your spouse if filing jointly – can work or actively look for work. Any month your spouse is a full-time student, or physically or mentally incapable of self-care would qualify.
2. You and your spouse, if you are married filing jointly, must have earned income. Earned income includes earnings such as wages and self-employment. There is the exception for a spouse who is full-time student or who is physically or mentally incapable of self-care.
3. You must pay for the care of one or more qualifying persons. Children under the age of 13 who you claim as a dependent qualify. Your spouse or dependent who lived with you for more than half the year may also qualify if they are physically or mentally incapable of self-care.
4. You may qualify for the credit whether you pay for care at home, at a daycare facility or at a day camp. If you pay for care in your home, you may be a household employer. Please contact our office for more information about household employers.
5. The credit is a percentage of the qualified expenses you pay for care. It can be up to 35 percent of your expenses, depending upon your income.
6. You may use up to $3,000 of the unreimbursed expenses you pay in a year for one qualifying person or $6,000 for two or more qualifying person.
7. Expenses for overnight camps or summer school tutoring do not qualify for the credit. Additionally, you cannot include the cost of care provided by your spouse or a person you can claim as your dependent. If you get dependent care benefits from your employer, there are special rules that apply.
8. Keep receipts and records to use when you file your tax return next year. Make sure to note the name, address and Social Security number or employer identification number of the care provider since this information will be needed when you claim the credit on your return.
IRS to be closed June 14 and three other days, payment deadlines unchanged
Due to the current budget situation, including the sequester , the Internal Revenue Service announced details about the closures planned for June 14, July 5, July 22 and Aug. 30, 2013. This means that all IRS offices, including all toll-free hotlines, the Taxpayer Advocate Service and the agency’s taxpayer assistance centers nationwide, will be closed on those days. IRS employees will be furloughed without pay.
Although no tax returns will be processed and no compliance-related activities will take place on those dates, taxpayers should continue to file their returns and pay any taxes due as usual. Since none of the furlough days are considered federal holidays, the shutdown will have no impact on any tax-filing deadlines. The IRS will be unable to accept or acknowledge receipt of electronically-filed returns on any day the agency is shut down.
Tax-payment deadlines are also unaffected. The only tax payment deadlines coinciding with any of the furlough days relate to employment and excise tax deposits made by business taxpayers through EFTPS which will operate as usual.
On the other hand, the agency will give taxpayers extra time to comply with a request to provide documents to the IRS. If the last day for responding to an IRS request falls on a furlough day, the taxpayer will have until the next business day to respond.
Some web-based online tools and phone-based automated services will continue to function on furlough days, while others will be shut down. Services not available on those days include Where’s My Refund? and the Online Payment Agreement. Further details on the impact of the shutdown on IRS procedures will be available on IRS.gov.
At a later date, the IRS may possibly announce one or two additional furlough days if necessary.
