Tax Tips to Help You Determine What Makes a Gift Taxable

Taxpayers who give money or property to others may wonder about the federal gift tax and if it applies. Most gifts are not subject to the gift tax.
Here are seven tax tips about the gift tax and giving:
1. Nontaxable Gifts. The general rule is that any gift is potentially taxable. However, there are exceptions to this rule. The following are nontaxable gifts:

• Gifts that do not exceed the annual exclusion amount for the calendar year,
• Tuition or medical expenses a taxpayer pays directly to a medical or educational institution for another person,
• A taxpayer’s gifts to their spouse,
• Gifts to a political organization for its use, and
• Gifts to charities.

2. Annual Exclusion. For 2016, the annual exclusion amount is $14,000. Most gifts are not subject to the gift tax. For example, there is usually no tax if the taxpayer makes a gift to their spouse or to a charity. If a taxpayer makes a gift to another person, the gift tax usually does not apply until the value of the gift exceeds the annual exclusion amount for the year.
3. No Tax on Recipient. Generally, the person who receives the gift will not have to pay tax on it.
4. Gifts Not Deductible. Making a gift does not ordinarily affect the taxpayer’s situation. A taxpayer cannot deduct the value of gifts they make (other than deductible charitable contributions as subject to the tax code).
5. Forgiven Debt and Certain Loans. Taxpayers who forgive debt or make a loan interest-free or below the applicable market interest rate may be subject to the gift tax.
6. Gift-Splitting. A taxpayer and their spouse can give up to $28,000 to a third party without making that gift taxable. Taxpayers need to consider one-half of the gift as from them and one-half given by their spouse.
7. Filing Requirement. Taxpayers need to file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, if any of the following apply:

• The taxpayer gave gifts to at least one person (other than their spouse) that amounts to more than the annual exclusion for the year.
• The taxpayer and their spouse are splitting a gift. This is true even if half of the split gift is less than the annual exclusion.
• If the taxpayer gave a person (other than their spouse) a gift of a future interest that the recipient can’t actually possess, enjoy, or from which that person will receive income later.
• A taxpayer gifting their spouse an interest in property that will terminate due to a future event.

Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680

 

Food Truck Fridays

Friday, June 23, 2017,

4:00pm to 8:00pm

 

On Friday evenings from June 2 to September 29, visitors of all ages can enjoy live family-friendly entertainment while eating gourmet treats from a rotating selection of more than a dozen food trucks parked on the Plaza de Panama and El Prado walkway from 4:00 to 8:00 p.m.

 

 

Source: The city of San Diego

contact@officetaxservices.com

(858)247-1680

 

IRS Now Accepting Renewal Applications for ITINs Set to Expire by End of 2017

The Internal Revenue Service is now accepting renewal applications for the Individual Taxpayer Identification Numbers (ITINs) set to expire at the end of 2017. The agency urges taxpayers affected by changes to the ITIN program to submit their renewal applications as soon as possible to avoid the rush.

In the second year of the renewal program, the IRS has made changes to make the process smoother for taxpayers. The renewal process for 2018 is beginning now, more than three months earlier than last year.

Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years will expire Dec. 31, 2017, and ITINs with middle digits 70, 71, 72 or 80 will also expire at the end of the year. Affected taxpayers who expect to file a tax return in 2018 must submit a renewal application.

As a reminder, ITINs with middle digits of 78 and 79 already expired last year. Taxpayers with these ITIN numbers can renew at any time.

ITINs are used by people who have tax filing or payment obligations under U.S. law but who are not eligible for a Social Security number.

Family Option Remains Available

Taxpayers with an ITIN with middle digits 70, 71, 72 or 80 have the option to renew ITINs for their entire family at the same time. Those who have received a renewal letter from the IRS can choose to renew the family’s ITINs together even if family members have an ITIN with middle digits other than 70, 71, 72 or 80. Family members include the tax filer, spouse and any dependents claimed on the tax return.

Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680

Estimated Payments Due Date

For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. If you don't pay enough tax by the due date of each payment period, you may be charged a penalty even if you're due a refund when you file your income tax return at the end of the year.

If you mail your estimated tax payment and the date of the U.S. postmark is on or before the due date, the IRS will generally consider the payment to be on time. If you use IRS Direct Pay, you can make payments up to 8 p.m. Eastern time on the due date. If you use a credit or a debit card, you can make payments up to midnight on the due date.

When to Pay Estimated Tax

Payment Period	Due Date
January 1 – March 31	April 15
April 1 – May 31	June 15
June 1 – August 31	September 15
September 1 – December 31	January 15* of the following year. *See January payment in Chapter 2 of Publication 505, Tax Withholding and Estimated Tax
Fiscal Year Taxpayers	If your tax year doesn't begin on January 1, see the special rules for fiscal year taxpayers in Chapter 2 of Publication 505
Farmers and Fishermen	See Chapter 2 of Publication 505

Note: If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that's not a Saturday, Sunday, or legal holiday.

Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680