Real Property received by US Person from their Indian parents.

Posted by Sanket Shah | Newsletters | Wednesday 6 February 2013 12:07 pm
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2013 Revised Tax Rates

Posted by Sanket Shah | International Tax | Tuesday 15 January 2013 12:49 pm

On January 11, 2013, Internal Revenue Service announced annual inflation adjustments for tax year 2013, including the tax rate schedules, and other tax changes from the recently passed American Taxpayer Relief Act of 2012.

The revised tax rates are as follows:

The other changes that are of great interest to most taxpayers include the following:

1. The standard deduction rises to $6,100 ($12,200 for married couples filing jointly), up from $5,950 ($11,900 for married couples filing jointly) for tax year 2012.

2. The American Taxpayer Relief Act of 2012 added a limitation for itemized deductions claimed on 2013 returns of individuals with incomes of $250,000 or more ($300,000 for married couples filing jointly).

3. The personal exemption rises to $3,900, up from the 2012 exemption of $3,800. However beginning in 2013, the exemption is subject to a phase-out that begins with adjusted gross incomes of $250,000 ($300,000 for married couples filing jointly). It phases out completely at $372,500 ($422,500 for married couples filing jointly.)

4. The Alternative Minimum Tax exemption amount for tax year 2013 is $51,900 ($80,800, for married couples filing jointly), set by the American Taxpayer Relief Act of 2012, which indexes future amounts for inflation. The 2012 exemption amount was $50,600 ($78,750 for married couples filing jointly).

5. The maximum Earned Income Credit amount is $6,044 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $5,891 for tax year 2012.

6. Estates of decedents who die during 2013 have a basic exclusion amount of $5,250,000, up from a total of $5,120,000 for estates of decedents who died in 2012.

7. For tax year 2013, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transit passes and transportation in a commuter highway vehicle is $245, up from $240 for tax year 2012 (the legislation provided a retroactive increase from the $125 limit that had been in place).

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US Persons investments in Indian Mutual Funds are treated as PFICs

Posted by Sanket Shah | Newsletters | Thursday 1 November 2012 8:47 pm
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US Person liable for Self-employment tax if they are self-employed abroad.

Posted by Sanket Shah | Newsletters | Friday 7 September 2012 4:15 pm
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A new streamlined filing compliance procedures for non-resident U.S. taxpayers went into effect on September 1, 2012

Posted by Sanket Shah | General | Tuesday 4 September 2012 4:33 pm

Description of the New Streamlined Procedure

This streamlined procedure is designed for taxpayers that present a low compliance risk. All submissions will be reviewed by the IRS, but, the intensity of review will vary according to the level of compliance risk presented by the submission. For those taxpayers presenting low compliance risk, the review will be expedited and the IRS will not assert penalties or pursue follow-up actions. Submissions that present higher compliance risk are not eligible for the streamlined processing procedures and will be subject to a more thorough review and possibly a full examination, which in some cases may include more than three years, in a manner similar to opting out of the Offshore Voluntary Disclosure Program (OVDP).

Taxpayers utilizing this procedure will be required to file delinquent tax returns, with appropriate related information returns (e.g. Form 3520 or 5471), for the past three years and to file delinquent FBARs (Form TD F 90-22.1) for the past six years. Payment for the tax and interest, if applicable, must be remitted along with delinquent tax returns.

Eligibility

The eligibility requirement is on the questionnaire that a taxpayer must submit (see attached questionnaire by clicking on http://slidesha.re/OjdYpH)

The taxpayer qualifies only if each of the following questions answered No.

1. Have you resided in the U.S. for any period of time since January 1, 2009?
2. Have you filed a U.S. tax return for tax year 2009 or later?
3. Do you owe more than $1,500 in U.S. tax on any of the tax returns you are submitting through this program?
4. If you are submitting an amended return (Form 1040X) solely for the purpose of requesting a retroactive deferral of income on Form 8891, are there any adjustments reported on the amended return to income, deductions, credits or tax?

You can read further about the program and its instructions at http://1.usa.gov/PFp8VJ

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Tax implications in India and US on sale of property held by US person in India

Posted by Sanket Shah | Newsletters | Tuesday 7 August 2012 10:52 am

NEWSLETTER SYNOPSIS:
Do you own, plan to purchase
or anticipate to receive an
immovable property in India.
What are the tax implications in
India and US on sale of property
held by US person in India.

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Taxability of [Indian] PPF Interest in USA

Posted by Sanket Shah | Newsletters | Thursday 26 July 2012 5:52 pm
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Avoid double taxation on your 401 [k] & retirement accounts.

Posted by Sanket Shah | Newsletters | Thursday 26 July 2012 5:42 pm
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U.S. Tax Amnesty Program on a comeback with the IRS

Posted by Sanket Shah | Newsletters | Monday 23 July 2012 10:07 am
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U.S. Citizens and Resident Aliens Abroad – Automatic 2 Month Extension of Time to File

Posted by Sanket Shah | General | Saturday 31 March 2012 3:20 pm

Internal Revenue Services (“IRS”) has allowed U.S. Citizens and Resident Aliens Abroad an automatic 2 month extension of time to file their tax return and pay any federal income tax that is due.

You will be allowed the extension if you are a U.S. citizen or resident alien and on the regular due date of your return:

(i) You are living outside of the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or

(ii) You are in military or naval service on duty outside the United States and Puerto Rico

If you use a calendar year, the regular due date of your return is April 15, and the automatic extended due date would be June 15.

In case of Married Taxpayers who are filing joint returns, either you or your spouse can qualify for the automatic extension. If you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies.

How To Get The Extension:
To use this automatic 2-month extension, you must attach a statement to your return explaining which of the two situations listed earlier qualified you for the extension.

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