This is the standard the IRS uses to determine if an item sold or donated by you is valued correctly for income tax purposes. It is also a definition that is so broad that it is wide open to interpretation. The difficulty here, is if the IRS decides your FMV opinion is wrong, you are not only subject to more tax, but penalties to boot. Here are some tips to help defend your FMV in case of an audit.

The long-standing practice of automatically charging you a 15 – 20% gratuity at your favorite restaurant is changing as we speak. The practice of charging customers for tips is normally applied to large parties (tables of 8 or more) or at high profile restaurants. The practice came about to ensure servers handling large groups receive adequate tips. Here is what is changing:

If you own your own business, by hiring your children you can save in the following ways:

Effective October 1^st, there is a new tax credit available; The Premium Tax Credit. If you are eligible for this credit you can decide to take it now based on your estimated income for 2014 or take it later when you file your tax return for 2014. Who does this impact and what should you do?

Here is a tax planning tip for those who file their tax returns early and wish to contribute to a tax deductible IRA, but do not have the funds to do so.

Say you want to pay into an IRA to get a tax break but you don’t have the money? Take heart, there are ways to get around this. The IRS allows you to take the deduction now and pay later when you get your refund.

On average less than 2% of over 90 million tax returns are selected for audit each year. The percentage increases for higher income groups and tax returns in areas of specific interest to the IRS.

The U.S. Treasury Department and the IRS issued a new ruling as a direct result of the Supreme Court action on June 26th regarding same-sex couples.

As our students prepare to head back to school, many families face the difficult decision to save for retirement or use those funds to pay for their children’s college education.

It seems that the world is smaller now, and I have had several contacts about foriegn money transferred into the US as gifts...

As an individual with relatives or friends overseas, you should be aware of an information reporting requirement that applies to certain large gifts or bequests from foreign persons.

If you, while a U.S. citizen or resident, received during the tax year either (1) more than $100,000 from a nonresident alien or a foreign estate, or (2) more than $10,000 (indexed to $14,723 for 2012) from foreign corporations or foreign partnerships, and you treated those amounts as gifts or bequests, you must report information relating to those gifts on Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Form 3520 is due on the date your federal income tax return is due, including extensions.

Failing to report such foreign gifts will subject you to a penalty equal to 5 percent of the amount of the foreign gifts for each month for which the failure to report continues (not to exceed a total of 25 percent). No penalty will be imposed if you can demonstrate that the failure to comply was due to reasonable cause and not willful neglect.

If needed... Please call so that we can discuss the rules for reporting large gifts from foreign persons as they apply to your particular situation.