President Elect Donald Trump and his Republican Party colleagues may have grand plans for tax overhaul, but some things would remain constant. One of them is the notion of the IRS that everything can be considered as an income, regardless of it being cash or kind. Taxes can be had from lottery and gambling too. If you find something pricey, you have to pay tax. It does not matter whether you sell any high value item or not.
Timing and foreign accounts
Like as in other years, you can pay taxes later in the Trump era too. Timing is of crucial importance in tax planning. You can ask for deferring tax payments and expedite tax deductions, all under the umbrella of constructive receipt doctrine. However, if you enjoy legal rights to any money, but reply to pay later, do note that it is taxed as under present circumstances. However, you can condition the payment, like settling lawsuit only when you are paid. Also do understand that those Forms 1099 are actually important. The January time tax forms are linked to Social Security number, with a copy being sent to IRS. The latter always checks them- and you should as well.
Do be careful of any foreign accounts you might have. They may provide you income, but you will not receive any Form 1099. Reporting them, however, is important. In case the balance in those accounts surpasses the average of $10,000 any time within the year, you may have to file the FBAR. The IRS scrutinizes carefully in times of FATCA and the work in such a case can be a delicate one. Do understand that the IRS has garnered a massive $10 billion due to offshore compliance.
Truth and small bills
Do not forget to pay all the small tax bills. In case you receive such bills, pay even if you think that the IRS has made a mistake. It is not a good decision to go for an audit over a few dollars. You should also reply to every letter sent to you by the IRS. If you fight with the revenue service, you will only lose. If IRS personnel visit you, do not answer their questions and do not lie. Tell the IRS officers that your lawyer will speak to them. Be firm and polite in your answers. In case you reply to their questions, say the truth. It is not a good decision to lie to the IRS.