Sanjiv Gupta CPA talks about the Tax Deadline Extension for various tax filers
- April 15th Deadline is shifted to May 17th - For Individual Filers Only
- No Extension for S Corp and C Corp
This also creates an issue for business owners, you need to apply for your Tax Filing Extensions:
- Must make an Estimated Tax Payment to avoid penalties
- What if you don't file extension?
- What about FTB? Franchise Tax Board...
Sanjiv reviews the recent American Rescue Plan:
Unemployment compensation - You can get up to $10,200 of tax free unemployment providing your modified AGI is less than $150K (filing married jointly).
What if you have already file your tax return? Should you file an amendment?
Because amendment's won't get you those refunds.
Wait for couple of months and than file amendments.
If there's a substantial amount that you owe on the taxes for 2020. And you've not paid so far, during the when you have to pay by estimated tax payments by and you don't have not done the estimated tax payment. Now you have to pay a lot bigger amount. To avoid any penalties interest. Don't wait for the for the filing till May 17. file as soon as possible. Because every month you accrue interest in penalty, at least a one to 2% of the text you. So you don't want to do load Rome onto the meter running from the IRS and also ftb. So if you all if you think you're doing a lot of taxes, don't wait to may 17. file the return as soon as possible. Okay, if you've played taxes earlier, and 100% 210% of 2018 19 taxes, you just have to pay the balance, then you can wait till May 17 because there's no interoperability that accrue with those payments
I have question regarding LLC policy. I'm talking about the policies where you know give premium for 20 years and then it matures so what is the best way to account for that transaction in the tax return?
When we talk about insurance policy, there is a cash surrender value, the value that you get if you sell the policy today That is known as cash surrender value. So typically the formulas are very complex, generally what we follow is, we take the first year of annual premium payment. And last year annual premium payment, if we disregard that, we take the, we take the value of the annual premium you paid so far and going to be so far, we take the value of whatever money you're paid the premium paid 30% of the premium, as a case in the value and that cash into value, if it exceeds $10,000, you have to report on FBAR. And if it exceeds along with other assets on 100,000 plus you have to report on on t 8938. Now, the income from those insurance policies does not have to report the dividend is not going to report but when you when you take random policy measures, that time whatever money you put in minus what you got it whatever you get it on the maturity of those policies, that income that amount, you have to report on the US tax returns, and you will pay tax at that time, minus whatever. If you have included in income earlier years, anything that you're interested in earlier, is that minus out.
Question About The Increase of Child Tax Credit (14:07)
The First question is on the child tax credit, child tax credit is depends upon the age of the child is less than six, more than six and less than 18. So this $3600 to $3,000 credit will be based on your 2020 tax return filing.
Most of the provisions are related to 2021 taxes, but you can get advance child tax credit, if you qualify and your income level is within that bracket of 100k AGI.
So child tax credit will be based on your return that you filed for 2020. Okay, so then it should go ahead and file the return because. This is based on 2021 tax year Child and Dependent child tax credit.
How to track your $1400 Stimulus Payment?
There's no way you can check this.
Only way is to call the IRS.
This $1400 is not only for, for husband wives, the spouse or single person, single taxpayer, but also for dependent any dependent or a 17. It can be a parent too. So this was not the earlier and $1400.
Make sure that when you file your return for 2020. Make if your income levels is high. For example, if you're if you see your 2020 taxes, married, filing joint is more than $150,000. But your 2019 tax return was less than $150,000. Don't file your 2020 extended, if you're if you think your 2019 income is, is much lower your 2019 much higher than your 2020 and 2020, you have less income less than $150,000. Go ahead and file this return as soon as possible.
But if your income exceed under $160,000 for 2020, or 2019, you will not be getting this stimulus payment. So if you get this stimulus payment, whether you're right or wrong. If you get it and you're not qualified, you don't have to return it back. It's all it's all taken care of. But if you don't get it, you see your income levels based on gross income level, you can decide whether you want to call the IRS or not.
Question - (18.22)
My father, he's a new green card holder and filing taxes first time this year.
This is about a form 8938, he has a brokerage account in India and they have invested in various mutual funds through their account. So, on that form, does he just have to report the brokerage name and the account name and no firm name or does he have to list out the mutual funds as well?
When you look at form 8938 form 8938 you can look at what is included on formatted and is foreign financial asset. So when foreign financial asset inclusive mutual fund, you don't have to disclose every mutual fund you just have to disclose the fair market value of the brokerage account as of December 31 2020. So he declared that value only now with respect to mutual fund you have to be careful, you have a form 8621 which come into play. Because you have to compute the imputed income. How do you calculate the imputed income is based on net asset value of the opening balance of the year and ending balance based upon that and also some some calculation respect to the holding period. You have to report on the form 8621. So just don't report on 8938.
Do you also report the imputed income on the form 8621 because that's what's the pfsi see rules relates to the mutual funds.