Foreign Asset Reporting Update

Posted on March 5, 2012 by admin

Reporting of foreign asset ownership may require filing more than one form starting this filing season.

FATCA (Foreign Account Tax Compliance Act) requires certain U.S. taxpayers holding foreign financial assets with an aggregate value exceeding $50,000 to report certain information about those assets on a new form 8938 that the taxpayers must attach to their 1040 tax return for 2011. Failure to report foreign financial assets on form 8938 will result in a penalty of $10 000.

Form 8938 does not replace FBAR TD F 90-22.1 filing requirements. Certain foreign financial accounts are reported on both form 8938 and FBAR. However, the information required by the forms is not identical in all cases. Different rules, key definitions, and reporting requirements apply to form 8938 and FBAR reporting. For FBAR purposes, a filer (defined broadly as a U.S. person applies to individuals as well as to all type of entities) must report a financial account if the filer had a financial interest or signature authority in the financial account during the previous calendar year and minimum $10 000 reporting threshold.

For purposes of filing form 8938, an individual has foreign financial assets if potential tax attributes or transactions related to the account would be reported on the individual’s tax return. Financial assets include any stock or securities issued by non-U.S. persons and interest in a foreign entity. Form 8938 applies only to individuals for 2011.

For more information contact Ann-Christine Westerlund, westmusa@aol.com, www.westmusa.com

What’s new for 2011 Filing Season

Posted on January 16, 2012 by Ann-Christine

Schedule D changes and new Form 8949 to report capital gains and losses.
Self-employed health insurance deduction no longer allowed on Schedule SE.
First-time homebuyer credit only allowed for small number of filers.
Roth IRAs converted or rolled over in 2010 and not reported on 2010.
Additional tax on distributions from health savings accounts increased to 20%
New form 8938 may need to be filed if you have foreign financial assets.
Schedule L no longer needed to figure your standard deduction.
Schedule M no longer in use because the making work pay credit has expired.
Alternative motor vehicle credit has expired unless the vehicle is a new fuel cell motor vehicle.
Due date for individual tax returns is April 17,2012.

Payroll Tax Cut Temporarily Extended until Febuary 29, 2012

Posted on January 2, 2012 by Ann-Christine

On Dec 23, 2011, the IRS issued a news release announcing that nearly 160 million employees will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The two percent payroll tax cut from 6.2% to 4.2% is temporarily extended for wages paid through Feb 29, 2012. The reduced Social Security withholding will have no effect on employees’ future Social Security benefits.

Year-End Tax Planning

Posted on November 23, 2011 by admin

This is the time of year that could be filled with tax legislation impacting corporate tax strategies. The uncertainty makes planning difficult. Year-end planning should focus on tax advantages set to expire or decrease as of December 31st. As they may or may not be extended, the time to act is now.

The general approach to year-end planning includes the acceleration of deductions and the deferral of income. Maximizing tax advantages includes a review of both 2011 and 2012.

Last chance for 100 percent bonus depreciation. Without any legislative action, the 100 percent first year bonus depreciation allowance will generally not apply to any qualified property placed in service after December 31, 2011, as this attractive incentive drops to 50 percent in 2012.

Maximize the generous Section 179 expensing deduction. For tangible personal property placed in service in 2011, taxpayers can deduct as an expense up to $500,000, rather than depreciate over the useful life. Without any legislative action, this limitation will drop to $125,000 in 2012.

Take advantage of real property expensing. $250,000 of qualified real property including leasehold improvement, restaurant property, retail improvement can be deducted as expense. Without any legislative action, these properties revert to straight-line depreciation in 2012.

Accrue year-end bonuses. Certain bonuses accrued, but not paid by year-end, may still be deductible if: the employee does not own more than 50 percent of the corporation, the bonus is accrued 2011 and the bonus is paid by March 15, 2012.

Welcome to the Website of Westmusa Inc. – Tax and Accounting Services

Posted on November 23, 2011 by admin

Westerlund & Mousa was founded in 1993 by Ann-Christine Westerlund and incorporated in 1998 as WESTMUSA Inc.

Our international approach is founded on many years of European and US tax and accounting experience.   Prior to 1993 Ann-Christine Westerlund was an International Tax Advisor and Partner at Ernst & Young in Helsinki, Finland and New York for 15 years.

WESTMUSA has a strong network and extensive contacts to other business related experts in the USA, Finland and Sweden.

We build up teams to deliver professional services wherever our clients need them.
We speak English, Swedish and Finnish.

Federal Tax Update

Posted on December 14, 2010 by admin

The Bush tax cuts were scheduled to expire December 31, 2010. The newly enacted Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides for current rates to remain in effect through December 31, 2012.

1. The federal tax rate for individuals – as well as the benefits from deductions – can vary from no tax at all to tax rate of 35%.

The most common federal tax rates for individuals are:

15% for net long term (one year or more) capital gains and qualified dividends.
28% tax rate applies to ordinary AMT income in excess of $175,000, net of any allowable exclusion.
35% maximum rate for ordinary taxable income from $373,650.

2. Social security (FICA) and medicare tax totally 7.65% on the first $106,800 of 2010 wages and self-employment income was reduced in 2011 with 2% for the employee’s portion of the wages, a tax benefit of $2136 for individuals earning the FICA maximum of $106,800. The employer’s share was not reduced. The self-employment tax rate is 13.3% in 2011 (15.3% in 2010)

3. Business equipment. There is a significant increase in the immediate expensing of business equipment purchases.

Section 179 expensing rules allow deductions up to $500,000 of qualifying property placed in service during taxable years beginning in 2010. Computer software continues to be eligible for expensing as long as it is placed in service prior to 2012. Also 100% bonus depreciation applies for qualified investment made on or after September 9, 2010 and before December 31, 2011 and 50% bonus depreciation on qualified property placed in service effective for 2012.

This article is based on one published in Kauppalehti on December 14, 2010. (In Finnish)

What’s New: Tax Tips 2010

Posted on November 23, 2009 by admin

Tax Tips for 2010

Congress Passes Two-Year Extension of Bush-Era Tax Cuts, Payroll Tax relief, Estate Tax Compromise.

Highlights of the Obama Tax Compromise:

Reduced individual tax rates
Reduced capital gains/dividend tax rates
$1,000 child care tax credit
Education incentives
Two-year AMT patch
Payroll tax cut
100% bonus depreciation
Business extenders
Energy incentives
Estate tax relief

WESTMUSA, INC.

International Tax Advisor, Professional Services with Personal Care