IRS: Five Tips for Recently Married or Divorced Taxpayers with a Name Change (03.02.2012)
IRS: Pub 972 Child Tax Credit (13.02.2012)
The purpose of this publication is:
This credit is for people who have a qualifying child as defined later. It is in addition to the credit for child and dependent care expenses (on Form 1040, line 48; Form 1040A, line 29; or Form 1040NR, line 46) and the earned income credit (on Form 1040, line 64a; or Form 1040A, line 38a).
The maximum amount you can claim for the credit is $1,000 for each qualifying child.
Click here to go to the publication at the IRS website.
Directors: Hopefully you are not working on an employment contract
Companies that currently employ directors on parallel or employment-only contracts should contract their managing directors on a statutory management contracts only to avoid costly audit and tax costs. [Read more...]
Own or control a foreign company? IRS is expecting a tax return …
Most Americans do not realize that if they own or control more than 10% of a foreign company they may need to file a detailed information return on the company with the IRS every single year as part of their US1040. Failure to file – even if the company earns no profits – can result in $10.000-50.000 penalties per year. Read more here in the article by Vernon K Jacobs, “Tips for Preparing the Form 5471 for Controlled Foreign Corporations,” published in the February 2009 issue of The Tax Advisor.
2011/2012 Recent Changes at CFO2GO
CFO2GO continues to grow to accomodate the needs of its international clientele for comprehensive accounting, tax reporting and related services connected to their personal and business activities in the Czech Republic and around the world. You may not know this, but our activities today cover:
* Domiciliary services: company, partnership, sole proprietorship, nonprofits formation, reorganization, liquidation, registered address, databox, consulting
* Accounting and reporting: company, partnership, sole proprietorship, nonprofits in Czech Republic/United States
* Accounting software for businesses and sole-proprietors: Software-as-a-Service, hosted online, Win/Mac/Lin, multilingual, secure, in/out-sourced
* Management: Financial and statutory management and consultancy services on a part-time and interim basis
* Expat tax reporting: citizens of all countries doing business in Czech Republic/United States
* Czech residence visas / work permits: Czech Republic
In the recent several months CFO2GO has:
- Implemented a blog-based, communication-oriented web presentation featuring frequent and relevant articles, news, tax calendar, secure tax document upload portal
- Added resources in the area of international retirement planning
- Upgraded all U.S. tax returns to Intuit’s Proseries professional tax software
- Added Czech Visa application and renewal services
- Added US Expatriation services (by dual-nationals no longer desiring to retain US citizenship)
- Added a third accountant to the staff, focusing primarily on Czech accounting and tax reporting issues
- Expanded our online Czech business accounting software platform, FlexiBee, to include a wider range of businesses, iPhone and Eshop integration
- Opened up U.S. bank account to receive payments in U.S. Dollars
- Launched electronic monthly newsletters for Expats and investors in the Czech Republic and worldwide; one is optimized for US expats while the other is more general.
We are currently seeking to build our roster of more than 150 individual US tax return clients with an exciting offer guaranteeing 25% off prior year fees charged by the new client’s old tax preparer. We are currently contemplating accepting credit card payments into our new U.S. account … if this is a service that would interest you, please let us know.
In fact, I would be pleased to hear from you at any time about services and resources that you need and want but cannot find on our pages. Our new website is optimized to facilitate Skype, telephone and email contact.
Thank you for your patronage!
John W. Mohr
Director, CFO2GO entrepreneurial advisory
04.02.2012
2012 Changes in Czech tax and reporting
Tax year 2012 ushered in a number of changes in the area of compensation for employees and self-employed alike. Because you might want to know what way the fiscal winds are blowing this year, we discuss briefly many of them here. Feel free to ask as for more detailed information.
Employed
Agreements on the execution of work (Dohody o prevedení práce) have changed significantly. Key changes include:
- Maximum 300 hours/year
- Maximum 10.000 Kc/month.
- Less than 10.000 Kc/mo, employee must apply for state health insurance
- More than 10.000 Kc/mo, employer withholds from employee’s paycheck and pays health and social insurance as well
Travel per diem increases for trips
See below.
Compensation for use of vehicle per km increases in 2012:
See below.
Individual tax credit is increased in 2012 to 24.840 Kc annually.
The child tax credit is increased in 2012 to 13.404 Kc annually.
Self-Employed
Social insurance remains the same in 2012 at 29.2% of the measurement base (or 14.6% of the taxable base), although the minimum monthly advance amount increases for both part-time and full-time self-employed in April. If you are starting out in 2012 for the first time, you will pay the minimum advance amount. No social insurance advance payments are due if total income in the prior year was equal or less than 5.027 Kc/ mo.
New minimum advances from 2012/04:
- part-time – Until March: 723 from April: 735
- full-time – Until March: 1807 from April: 1836
Health insurance remains the same in 2012 at 13.5% of the measurement base (or 6.75% of the taxable base), although the minimum monthly advance amount increases for both full-time self-employed in January to 1697 Kc/mo. If you are starting out in 2012 for the first time, you will pay the minimum advance amount.
Income tax remains the same at 15% of the taxable base. The taxable base is either the accrual-based accounting profit, the cash-based simple accounting profit, or the % of income accounting profit – generally 40% of gross cash revenue received.
Compensation for use of vehicle per km increases in 2012:
Benzin 95: 34.90 Kc/liter
Benzin 98-100: 36.80 Kc/liter
Diesel/nafta: 34.70 Kc/liter
…and 3.70 Kc/km (same as 2011)
Travel per diem increases for trips
- lasting up to 12 hours/day: CR 96-116 Kc/day, International: according to city
- lasting longer than 12 hours/day: CR151-181 Kc/day, International: according to city
Value Added Tax (VAT) rates change. The reduced rate rises from 10% to 14% in 2012 and is planned to rise again to 17.5% in 2013. The basic rate remains at 20% during 2012, but is planned to fall to 17.5% in 2013
