Tax & Accounting Blog

Medicare Surtax on Net Investment Income Goes into Effect on January 1, 2013

Medicare Surtax on Net Investment Income Goes into Effect on January 1, 2013

Under the 2010 Health Care reform legislation, a Medicare tax will, for the first time, be applied to investment income beginning in 2013. A new 3.8% tax will be imposed on net investment income of single taxpayers with AGI above $200,000 and joint filers over $250,000. Net investment income is interest, dividends, royalties, rents, gross … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 10: Do I Have to Withhold on Payments for Services Performed Abroad?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 10: Do I Have to Withhold on Payments for Services Performed Abroad?

Compensation for services performed abroad is foreign source income. For audit purposes, the place where the services are performed should be indicated in the agreement with the individual. It is not sufficient that the location where the services performed is indicated on the invoice since this is considered by the IRS to be a self-serving … Read More

Data Management Podcast Series: How a Tax Department Automated 70% of Their Tax Adjustments

Data Management Podcast Series: How a Tax Department Automated 70% of Their Tax Adjustments

Imagine eliminating the risk and time-consuming processes of using Microsoft® Office Excel during your income tax filings and year-end financial close. As part of the latest story in our Data Management Podcast Series, Chip Gooding, Director, Tax Accounting and Reporting at Commercial Metals Company (CMC), shares how transitioning to standardized workpapers helped his tax … Read More

Open Transaction Doctrine does not apply in insurance company demutualization case.

Open Transaction Doctrine does not apply in insurance company demutualization case.

On July 9, 2012, a federal district court in Arizona ruled that the taxpayer could not apply the “open transaction” doctrine in a case involving stock received from an insurance company that demutualized. Background. A mutual insurance company has no shareholders.  Instead, the policyholders have an ownership interest in the company, in addition to having … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 9: How Do I Find Out if the Payment Is U.S. Source Income?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 9: How Do I Find Out if the Payment Is U.S. Source Income?

The source of income is determined under U.S. tax rules based on the type of income. Compensation for personal services, whether employment or self-employment, is generally sourced where the services are performed, not where the income is paid. Therefore: Income for services performed outside the U.S. is foreign source income and is not subject to … Read More