Latest news with #taxfiling
Gizmodo
6 days ago
- Business
- Gizmodo
IRS Makes Direct File Software Open Source After Trump Tried to Kill It
The tax man won't be happy about this. Direct File, the Internal Revenue Service's long-promised free tax filing software, might be at risk of being killed off by the Trump administration, but the code that made the service possible will live on even if the program itself doesn't. According to 404 Media, the IRS published most of the code for its Direct File on GitHub, making it open source and available for others to use, much to the chagrin of tax lobbyists everywhere. Before you mistake the move as an act of resistance by those within the agency who are trying to keep the project alive, Direct File getting open-sourced was always part of the plan. The code was published in compliance with the SHARE IT Act, which requires agencies to share custom source code (though, of course, the Trump administration is not always motivated by following the law, so this wasn't a given). In a report published last year, the IRS explained its reasoning for making the code available publicly: 'First, it would enable public scrutiny of that code and invite independent groups to assess its accuracy and report potential issues. Second, other tax administrators, both in states and internationally, could build upon and contribute to the IRS's work, improving the robustness of the software over time and providing additional public value.' Now that the code is available, it should help others develop functioning (and hopefully free) tax-filing tools. According to 404 Media, the code can't run independently because it still relies on internal IRS systems; however, it does provide a strong baseline for a platform that is essentially guaranteed to be in compliance with the federal government, as it was built by the government itself. On a related note, 404 Media pointed out that several of the people who were heavily involved in building Direct File for the IRS have since left the government entirely and joined the Economic Security Project's Future of Tax Filing Fellowship, where they work on projects designed to make filing taxes simpler and more accessible. It seems like just the type of people who might want to build something based on that open-source codebase. Direct File getting open-sourced comes at a time when there is a target on the program's back. The Trump administration, Elon Musk, and tax lobbyists have set out to kill Direct File in one way or another. Musk's DOGE blew up 18F, the government agency that was key to building Direct File, and set out to explicitly shut down the Direct File tool despite it being wildly popular among taxpayers. Trump's Big Beautiful Bill would also cut the budget entirely for Direct File, leaving it dead in the water, which would surely thrill Intuit, the company behind TurboTax, that spent millions of dollars lobbying to kill a government-provided free tax filing option.
Forbes
30-05-2025
- Business
- Forbes
A Guide To Starting A US Business For International Entrepreneurs
Vincenzo Villamena, CPA & founder of Entity Inc., helps global entrepreneurs with U.S. incorporation, tax filing and compliance. American and non-American entrepreneurs living overseas can benefit from forming a U.S. limited liability company. LLCs are a flexible and accessible U.S. business structure that offers financial legal liability protection for the owners as well as the opportunity to access U.S. markets. For Americans living and working abroad, setting up a U.S. LLC can offer tax advantages, particularly for freelancers and self-employed professionals. Compared to other U.S. corporate structures, the pass-through taxation structure of an LLC means the company's income is not taxed at the entity level. Instead, it passes through to the owner's personal tax return, simplifying U.S. tax filing. Owning an LLC also offers legal protection to the owners. This means that it protects personal assets from business debts, and it protects the owner personally from being held legally responsible for issues relating to the business. A U.S. LLC can also enable invoicing through a professional entity and can simplify access to U.S.-based banking services, which can otherwise be challenging if you don't live in the U.S. Additionally, forming a U.S. LLC can support the use of various large payment platforms, which often prefer U.S.-registered businesses and which are widely used and trusted by U.S. consumers. Foreign entrepreneurs can benefit from forming a U.S. LLC, particularly those running online businesses, consulting services or e-commerce ventures. Essentially, a U.S. LLC can open up access to the internal market of the world's largest economy. Another benefit is credibility. Owning a U.S.-registered LLC can increase trust with international clients and partners, offering a professional image. For e-commerce entrepreneurs, I've found a U.S. LLC can simplify registration on e-commerce platforms. Similarly, access to U.S. financial systems allows non-residents to open business bank accounts, use payment processors and generally operate efficiently within U.S. markets. The U.S. LLC also offers a straightforward structure compared to other jurisdictions, and there's no requirement for directors or shareholders to be U.S. citizens or residents. Starting an LLC in the U.S. can involve what is sometimes complex admin and ongoing fees for compliance with varying state regulations. Entrepreneurs may also become subject to U.S. self-employment taxes and fewer fundraising options compared to corporations. To manage these challenges, ensure that an LLC is the right structure for you, your business activities and your long-term business goals. You should also research state laws so that you understand what is required of you in terms of compliance. Setting up a U.S. LLC involves a few straightforward steps. Engaging a professional incorporation service or agent can help ensure that the process is completed correctly and help you keep compliant with state and federal requirements after you've formed a U.S. LLC. (Disclosure: My company helps with this, as do others.) These experts can also apply for an employer identification number (EIN) on your behalf and advise on bookkeeping and tax obligations. If you decide to work with a U.S. incorporation agent, look for someone who is experienced and has transparent pricing, good customer reviews and high-quality client support. Avoid agents with hidden fees, or those who are slow to respond to your questions. You may also want to look for ongoing compliance services to help meet legal requirements. Non-residents often register in business-friendly states like Wyoming, Delaware or Nevada due to low taxes, minimal filing requirements and strong privacy protections. Make sure to carefully consider which is the right state for your needs. All U.S. LLCs must have a registered agent in the state of formation by law. The purpose of a registered agent is to serve as a reliable, official point of contact between your company and the government, ensuring that legal and administrative documents are properly received and handled. Think of them as a designated "receiver" for important paperwork on behalf of your business. Any resident of a given state can be a registered agent. However, if you don't live in the state you incorporate your business in, you'll likely need to contract a registered agent service. With regulations like the Corporate Transparency Act, foreign-owned LLCs will need to have a physical U.S. business address in order to open a U.S. business bank account. You can register a U.S. company with a virtual address in many states, but U.S. banks typically require a physical business address (not a virtual office, mail forwarding service or P.O. Box) when opening a business bank account, especially for foreign-owned LLCs. This is the foundational document that officially establishes the LLC. It includes basic information such as the business name, address and registered agent details. The articles of organization are created automatically when you provide the information to the state in question. An EIN is required for tax purposes, opening a U.S. bank account and to hire employees. The EIN is issued by the IRS and also identifies the LLC for federal reporting. Establishing a U.S. LLC as a foreign non-resident or American abroad can open the door to opportunities and benefits, but it's important to ensure that you incorporate in the right state and in the right way for your situation. Setting up a U.S. LLC can be a straightforward and efficient way to do business in the U.S., even if you don't live in the U.S. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
South China Morning Post
26-05-2025
- Business
- South China Morning Post
From salaries to side gigs and audits: how to navigate Hong Kong's tax system
The tax filing season in Hong Kong is in full swing, with June 2 marking the deadline for most individuals. Tax audits have come under scrutiny recently after at least 20 journalists raised concerns about 'unreasonable' reviews targeting them and their families. The Inland Revenue Department (IRD) Commissioner dismissed these claims, stressing that assessment procedures were applied uniformly and did not target specific industries or individuals based on their background. The Post provides a guide on what to pay attention to regarding filing requirements, with insights from taxation experts on the recent audit controversy. 1. How to file your tax return and what are the key deadlines? The government issued the Individual Tax Returns for 2024-25 on May 2, 2025, requiring taxpayers to report their salaries, rental income from solely owned properties and profits from sole-proprietorship businesses. The tax return must be filed within one month from the date of issue, or within three months if the taxpayer solely owned an unincorporated business during the year of assessment. An automatic extension of one month will be given for filing the tax return for the year electronically through a service called eTAX. An eTAX account holder can file their taxes online as long as they do not claim an exemption on their income, does not own any sole proprietorship business with gross income of more than HK$2,000,000, has not claimed double taxation relief, or has not obtained an advance tax ruling for that year.
Khaleej Times
22-05-2025
- Business
- Khaleej Times
First-year tax filing mistakes will draw regulatory scrutiny and penalties, says KISA's Nikos Kastellanis
With no previous tax data to reference, the Federal Tax Authority is expected to take a hard look at first-year submissions, especially in areas like expense classification, transfer pricing, and free zone claims As UAE businesses prepare their financial statements for corporate tax filings, KISA Chartered Accountants (KISA) Managing Partner warns that when the dust settles after the September 30 deadline, common errors and omissions could trigger reviews and penalties from the Federal Tax Authority. The clock is ticking for UAE businesses facing their first-ever corporate tax deadline. While many companies have registered and are working to prepare their filings, there's a dangerous misconception in the market: that submitting the return is the end of the journey. In reality, it's just the beginning. That's the message from Nikos Kastellanis, managing partner of KISA, one of the UAE's elite DFSA-Registered Auditors. KISA provides audit, tax, and advisory services to regulated and non-regulated entities across the UAE. 'Filing is not the finish line - it's the starting whistle for a new phase of regulatory scrutiny,' Kastellanis says. The real risks lie beneath the surface - inside the filings - where hidden errors and inconsistencies could expose businesses to audits, penalties, and reputational damage. Why first-year errors are especially risky The UAE is navigating uncharted waters with its new corporate tax regime. Unlike mature markets, where historical filings provide a baseline, the Federal Tax Authority (FTA) will review returns this year without any prior-year benchmarks. Every tax position is being scrutinised for the first time - and that scrutiny will be sharp. Globally, first-year tax mistakes are remarkably consistent. Businesses misclassify expenses, inflate deductions, or overlook Permanent Establishment obligations. Related-party transactions - common in multinational operations are frequently under-documented or priced in ways that don't meet the arm's length standard. Many firms overstate losses without sufficient proof. The OECD's Tax Administration 2022 report shows that in jurisdictions introducing corporate tax for the first time, audit rates spike within two years, as tax authorities establish credibility early. The FTA has published detailed guides, FAQs, and clarifications signaling a proactive stance on enforcement. Kastellanis notes, 'The Federal Tax Authority doesn't need to say much more - they've already made their expectations clear. The next step is enforcement.' With the September 30 deadline looming, the time to correct errors during financial statement preparation is closing fast. What triggers an audit? Certain mistakes are already emerging as clear audit triggers. A major pitfall is misuse of free zone tax claims. Many firms assume they automatically qualify for the 0% rate. But to benefit as a Qualifying Free Zone Person (QFZP), businesses must meet strict tests for both qualifying income and economic substance. A typical risk? A free zone company books revenue from UAE mainland clients but claims full exemption without segmenting and disclosing that income. Other red flags include failure to register or late registration. Entities missing the deadline face fines and extra scrutiny. Startups and smaller firms are particularly at risk. Another common issue is inconsistency between VAT and corporate tax positions. The FTA expects alignment across regimes. For example, a company reporting Dh20 million in VAT turnover but only Dh14 million in its tax filing will likely trigger an automated review. Transfer pricing and related-party transactions are also under the microscope. UAE law requires disclosure forms and arm's length documentation aligned with OECD standards. Failing to justify intra-group charges like excessive royalties raises compliance red flags. Beyond technicalities, the FTA relies on human intelligence. The UAE's Tax Evasion Reporting Facility allows anonymous whistleblowers to report suspected evasion, meaning disgruntled employees or competitors can also prompt investigations. 'What used to be an internal auditing decision can now be an audit trigger if not properly disclosed or documented,' Kastellanis warns. Practical steps to stay ahead What can businesses do? Kastellanis urges proactive review - even after filing. 'Companies should conduct an internal tax health check to identify weak points before the FTA does,' he advises. This includes ensuring VAT and tax filings are reconciled and consistent, especially when different teams handle each function. For Free Zone entities, robust documentation is essential. Companies must prove both economic substance and proper classification of qualifying versus non-qualifying income. Businesses with related-party transactions must prepare full transfer pricing files even for minor transactions because disclosure is mandatory from day one. Finally, Kastellanis emphasises partnering with experienced auditors who understand both compliance and risk. 'We're not just auditors, we're early warning systems. That's the value of insight-driven advice,' he says. What happens next? As the first corporate tax filings are completed, follow-up from the FTA is inevitable. Kastellanis expects soft review notices and document requests to begin in Q4 2025, focusing on free zone claims, loss-making entities, and filings that don't match VAT data. And while penalties matter, Kastellanis stresses that reputational risk is just as serious. Being flagged can affect a company's standing with banks, investors, and partners. In today's compliance environment, a tax inquiry can quickly snowball into anti-money laundering, Know Your Customer (KYC), and Know Your Business (KYB) reviews. 'Smart businesses don't wait to be audited - they act as if they already are,' Kastellanis concludes.
CTV News
16-05-2025
- Business
- CTV News
B.C. bookkeeper gets conditional sentence, probation for helping hotels evade nearly $1M in GST
Aeddy Leung worked as the bookkeeper for the Quality Hotel Airport (South), left, and the Coast Vancouver Airport Hotel during the 2014 through 2018 tax filing periods, the CRA said in a statement Friday. (Photos from hotel websites)
