FinCEN FBAR Requirements Due June 30th : Foreign Reporting Requirements: Could they apply to you?

Foreign Reporting Requirements: Could they apply to you?
When considering foreign reporting requirements, many people bypass the topic, believing that it doesn’t apply to them. However, it’s a good idea to take the time to review what may be considered a foreign asset subject to mandatory informational reporting.
• Inheriting property and or funds from a foreign person;
• Receiving a gift from a foreign person or a distribution from a foreign trust;
• Having an interest in a foreign corporation, partnership or entity; and
• Establishing a foreign bank account.
Recently, the IRS has been focusing its efforts on ensuring the reporting of the existence of these assets and income earned abroad. The penalties for failing to file are stiff and may include criminal penalties.
In an effort to assist those that have inadvertently failed to properly report certain accounts, the IRS has implemented an Offshore Voluntary Disclosure Program (OVDP). For those individuals who qualify, this program is intended to bring non-compliant individuals into compliance and provide them with a certain degree of amnesty.
Since there are various types of foreign financial interests and reporting requirements, you should speak with your tax advisor about your specific situation.
The IRS has put out guidance for the relevant reporting threshold when it comes to Form 8938, Statement of Specified Foreign Financial Assets and FBAR, FinCEN 114. It can be found at: http://www.irs.gov/Businesses/Comparison-of-Form-8938-and-FBAR-Requirements

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New York State Corporate Tax Reform Highlights

New York State Corporate Tax Reform Highlights By: Marisa Punzone, CPA

Did you know that New York State has made significant changes to the Tax Law that may affect your corporate tax filing requirements? Below please find a summary of these changes, as well as highlights of miscellaneous tax provisions from New York State’s 2015-16 Budget:

New York State Corporate Tax Reform
Transitional Filing Provisions – Corporations
• Form CT-4, General Business Corporation Franchise Tax Return Short Form, has been discontinued.
• If a New York C corporation is filing a short period tax return that begins on or after January 1, 2015, and the 2015 tax form is not yet available, you may not file using a 2014 tax form. Instead, the corporation must file an extension of time to file the short period until the 2015 tax form becomes available. If an additional three month extension is required, file Form CT-5.1, Request for Additional Extension of Time to File, and indicate “2015 form not yet available”.
• The same applies to a New York S corporation that is filing a short period tax return beginning on or after January 1, 2015. However, if the 2015 form is still not available after the six-month extension period, the S corporation may file its return using the 2014 forms by crossing out the year 2014 and writing in the year 2015.
• If a New York S corporation is terminating its federal or New York S election, the tax year is divided into two tax periods (an S short year and a C short year). The due date for both short period returns will be the same, even though they are treated as separate short tax years.
• When filing combined reports where members have different tax years, the member’s tax year that ends within the designated agent’s tax year is included in the combined report. However, any corporation with a fiscal tax year that begins in 2014 and ends in 2015 may not be included in a designated agent’s 2015 calendar year combined report.
• For those taxpayers that use a 52-53 week accounting period, and that period starts within seven days from the first day of the month, its tax year is deemed to begin on the first day of that calendar month. Therefore, if the taxpayer’s 52-53 week accounting period began within seven days of January 1, 2015, the Tax Law changes apply.
• If a corporation wants to dissolve prior to the close of a tax year that begins on or after January 1, 2015 and before December 31, 2015 and the 2015 form is not yet available, do not file a 2014 return. Instead, the corporation should make a payment of its estimated final tax due and submit it along with an affidavit signed by an officer of the corporation. The affidavit should describe the calculation of the final tax liability and include a statement affirming to file a final return no later than 30 days after the 2015 form becomes available.

Estimated Tax Payments
• Mandatory first installments of 2015 estimated tax is unaffected by the corporate tax reform.
• The mandatory first installment of MTA surcharge for a tax year beginning on or after January 1, 2015, is paid with the applicable 2014 MTA return. It is also unaffected by this tax reform.
• The remaining second, third, and fourth installments of estimated franchise tax and MTA surcharge are effected by corporate tax reform and changes to the computation of the MTA surcharge. Under the old law, fifty percent of the current estimated tax liability had to be paid in between the first and the second installment. However, under the new law, you must subtract the first installment payment from the estimated tax due, divide the result by three and pay these amounts over the three remaining installments.

Miscellaneous
• Foreign corporations no longer need to file Form CT-240, Foreign Corporation License Fee Return, or Form CT-245, Maintenance Fee and Activities Return. The license and maintenance fees imposed on foreign corporations have been repealed for tax years beginning on or after January 1, 2015.
• In addition, the organization tax and taxes on changes of capital imposed on domestic corporations have been repealed for tax years beginning on or after January 1, 2015. The incorporation fee of $125 will still be collected with the filing the Certificate of Incorporation.
• The Department of Taxation and Finance now requires annual information filings, in lieu of periodic filings with the Department of State. This contact information will be shared with the Department of State. The transmittal report to the DOS may also include information on noncompliance. A penalty of $250 will be imposed for failure to provide all the information required or to provide correct information. This will be implemented for tax years beginning on or after January 1, 2016.
• The Tax Department may go back up to three years to recover STAR savings plus interest from taxpayers who improperly received the Basic School Tax Relief (STAR) exemption.
• The Excelsior Jobs Program has been expanded to include entertainment companies, music production companies, and video game developers.
• As of June 1, 2015, beer, cider, and liquor used at tastings in conformity with the Alcoholic Beverage Control Law is exempt from use tax. This includes packaging supplies (bottles, corks, caps, labels) and applies to tastings held on or off the winery’s premises.
• As of June 1, 2015, NYS has exempted the purchase price of a boat that exceeds $230,000 from sales and use tax.
• There is a new Sales and Use Tax Bulletin (TB-ST-836) addressing sales tax on service contracts and extended warranties.

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