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San Jose virtual currency tax attorneyThe Internal Revenue Service (IRS) has no plans to create a voluntary disclosure program for virtual currency similar to what has previously been offered for undisclosed foreign assets, an agency official recently said in a speech at a tax symposium.

In 2014, the IRS stated that cryptocurrencies such as Bitcoin that could be converted to traditional currencies are considered property for the purposes of taxation. Thus, a person may experience a gain or a loss when selling or exchanging cryptocurrency based on the value of the cryptocurrency at the time of the exchange. 

Because cryptocurrencies are classified as property, general taxation rules of property will apply. The sale of cryptocurrencies, the use of them to purchase goods or services, or retaining the cryptocurrencies for investment purposes generally have tax consequences, which may mean taxes will be owed.

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San Jose tax planning attorneyIf you are one of the millions of Americans who is saving for retirement, the IRS recently announced some good news for you. Starting in 2019, you can contribute more money to certain retirement accounts, including IRAs, 401(k)s, 403(b)s, most 457 plans, and the Thrift Savings Plan for federal workers. These changes will allow many people to save more money for retirement, and more tax deductions will be available.

Changes to Contribution Limits and Deductions

With this change, the IRS has increased the annual IRA contribution limit for the first time since 2013. The IRS also announced rules that make it easier to qualify for a Roth IRA as well as to deduct contributions to a traditional IRA. The changes include:

  • With respect to the contribution limits to IRAs and Roth IRAs, the limit in 2019 is $6,000. That is a $500 increase from years prior.
  • An extra $500 can be contributed to 401(k)s, 403(b)s, most 457 plans, and Thrift Savings Plans. The new limit is $19,000 in 2019.

Starting in 2019, more people will be eligible for Roth IRAs. These IRAs have the distinct advantage of tax-free distributions during retirement. Only those under certain income levels qualify for a Roth IRA.

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San Jose tax attorney, IRS partnership audit, partnership audits, tax audits, tax lawIn recent months, much of the discussion surrounding tax laws in the United States has focused on the changes made by the Tax Cuts and Jobs Act of 2017. Yet while individuals and businesses should understand how they will be affected by tax reform, they should additionally be aware of recent new rules that govern tax audits.

The Centralized Partnership Audit Regime

Under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), the Internal Revenue Service (IRS) had certain rules for assessing and collecting taxes for partnerships. Audits of large partnerships, such as hedge funds or private equity firms, required individual audits of every partner. The Bipartisan Budget Act of 2015 (BBA) established a new, centralized audit regime, allowing the IRS to audit partnerships as a whole. This new regime will apply to partnership tax years beginning after December 31, 2017.

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San Jose tax attorney, estimated taxesIf you are an independent contractor, you may be required to pay your taxes several times throughout the year. This is called an estimated tax.

This requirement comes as a surprise to many freelancers and contract employees. If not properly handled, it can create undue stress as well as expose the taxpayer to IRS penalties.

It is important to not get bogged down in the complexity of your tax situation as an independent contractor. Instead, you should reach out to a professional, such as a tax attorney, who can advise you on how you need to comply.

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california marijuana laws, San Jose tax law attorneyWith voters' approval of Proposition 64 in November 2016, recreational marijuana has been legalized in California. This new law also creates tax implications for marijuana dispensaries now and changes that have to be implemented in 2018.

One of the benefits that supporters of Proposition 64 cited was that legalizing recreational marijuana would bring in more tax dollars to the state. This is true, according to estimates that project an additional $1 billion per year in tax revenue after the law goes into effect in 2018.

However, while the law will raise additional tax dollars, the state may also lose money because it will no longer collect taxes on medical marijuana sales.

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