Financial Advisor

Taxes are utilized to benefit the whole citizenry. Tax collections support health care services, national defense budget, social services, and many more. To ensure a balance and continuous revenue, the federal government encourages taxpayers to responsibly pay in time. Otherwise, the law imposes penalties to all non- compliant individuals. To avoid tax problems with the Internal Revenue Service (IRS), it is highly recommended to file tax returns ahead of time.

Most of the citizens would probably undermine paying of taxes, failure to pay and its corresponding penalties. However, the government recognizes it as stealing from the national and local budget and so must be penalized by law. The deadline for filing income tax returns is on the 15th day of April. Failure to comply with payment means accumulation of debts to your account. The IRS begins to penalize you with interests and penalties on your unpaid taxes on April 16. Then your tax problems begin to amass. Continue reading ‘Avoid Tax Problems, File Tax Returns ASAP!’ »

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Are you confident that you’ll get an income tax refund in this year? Till date, it is reported that the IRS has issued around $45 million tax refunds to the consumers. The consumers have received nearly $3,129 in an average. So, if you are sure that you’ll be one of those lucky consumers, then you may have already decided to spend the tax refund for making luxury expenses. You may have planned to use them for purchasing jewelry or the latest version of play station. However, there are some wise and interesting ways to use your tax refund check, which will benefit you in the future. Have a look at the article to know about 4 ways to put your tax refund into good use.

Income tax refund – Interesting ways to use it

Here are the 4 ways to put your income tax refund check into good use:

1. Save for meeting your financial goals: If the tax refund amount is good, then you can use it to open a high interest savings account in a good bank. For instance, if you are planning to purchase a house or invest in gold, then you can use the money saved in the account to meet your goals. However, make sure you create the account which offers high interest rates and is easily accessible. After all, you’ll want to access the money when the need arises without any hassle. Shop around for the bank that is offering the best rate to the consumers. The higher the interest rate, the greater will be your saving. Continue reading ‘Income Tax Refund – 4 Intelligent And Interesting Ways To Use It’ »

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Last year American taxpayers received a hefty $328 billion in income tax refunds with the average refund around $3,000. It’s not difficult to see why the IRS loves for you to send them more money than you owe. And it’s fun to get a refund. But in exchange for the average refund, you give up control of $250 a month for an entire year. That’s $250 take-home.

You’re in control

The IRS does not prescribe “hard and fast” withholding rules. Their guiding principle is “pay as you go”. Self-employed individuals estimate and pay taxes quarterly. Employees file a Form W-4 on which they try to approximate a withhold number. But neither withholding nor quarterly estimate amounts are dictated as are the Social Security and Medicare taxes.

So you’re in control. However, if you end the year owing the IRS money you could be assessed a penalty. Continue reading ‘Withholding Tax: Increase Your Net Pay by Managing Your W-4’ »

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As we all prepare our tax filings, here are some of the most common mistakes and bad assumptions my clients make.

1. Not Paying Estimated Taxes – I see this very often since most self-employed individuals do not understand their filing requirements relative to self-employment taxes. Consequently, they do not pay them and are hit with a hefty tax bill at the end of the year and/or underpayment penalties for not paying them in the first place. Income tax is a pay as you go system and everyone who works for themselves and do not pay federal taxes via standard payroll wage deductions are required to pay into the tax system via estimated taxes quarterly throughout the year. It is also important to note that the self-employment taxes paid through estimated tax payments is the method by which self-employed individuals pay into the social security system. So it is very important for a variety of reasons that self-employed individuals understand their estimated tax filing requirements and be diligent about paying them to avoid costly tax bills down the line. Continue reading ‘Top 5 Most Common Tax Mistakes’ »

A good income tax adviser can save you a lot more than they will charge for the preparation of your tax forms. But you need to find one that is willing to listen to your thoughts and offer ideas that will help you take advantage of what you are already doing as well as offer additional suggestions that can save you even more.

Here are five ways your tax adviser can help you to save money.

1. Advance Preparation: An important part of the income tax saving process is being reminded to get your finances and deductions in order before it is too late. Most people file their taxes on a calendar basis, so after December 31st, it may be too late for some strategies. A gentle reminder by email, postcard or newsletter before the end of the year could save you thousands. Continue reading ‘Five Ways A Good Tax Adviser Will Save You Money’ »

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Setting up a stamrecht bv when you receive a severance payment in The Netherlands is meant to postpone and ultimately save income tax. Setting up a stamrecht bv can be complicated when you do not have the necessary knowledge of the pertinent tax and company law.

A stamrecht bv (“annuity company”) is a limited company (“besloten vennootschap” or “bv”) constituted according to Dutch law which has an annuity agreement with the former employee / owner. The company receives the severance payment and promises to make periodical payments in the future. Due to the progressive tax brackets, postponing income tax on a redundancy payment can lead to lower income tax when the severance payment is paid out at times when your income is lower. Since the cost of setting up a stamrecht-bv is fixed, it depends to a large extent on the amount of your severance payment if it is worthwhile to do so. Continue reading ‘Stamrecht BV Set-Up for a Severance Payment to Save Income Tax’ »

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If you are a foreign resident taking up employment in Australia it is strongly recommended that you seek expert advice on your Australian Taxation obligations. Expatriates working here will usually be liable for income tax on their Australian sourced income. This not only includes wages and salaries, but also interest and dividends that have their source within Australia.

Whether you are a resident for Australian income tax law will depend on your circumstances and this needs to be reviewed on a case by case basis. Continue reading ‘Tax Tips for Expatriates Working in Australia’ »

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Many employees today are using their own resources to provide certain miscellaneous items that help their employer’s business run more efficiently. Unfortunately these expenses are not being reimbursed or employees are afraid to ask for reimbursement. The good news is that the IRS may allow you to get some tax relief in these circumstances.

If you find that you are spending your own money at business related functions, home-work activities or multiple job sites, then you may be entitled to request a company reimbursement or claim a tax deduction for your un-reimbursed expenses. Here are some of the most common costs that employees may be able to deduct if not reimbursed. Continue reading ‘Seven Types Of Employee Expenses That May Be Deductible – Save Some Tax Dollars’ »

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One of the IRS’s major taxation groups is individuals with rental income. Small scale rental business is huge in the U.S. and definitely has a significant impact on the taxes collected every year. For this reason, the IRS and other tax authorities keep scrutinizing and reevaluating rental business to ensure that all landlords pay their full dues to Uncle Sam. Some of the recent developments in these areas of rental income are given below:

The Tax Reform Act of 1986

The Tax Reform Act of 1986 was introduced to try and curb the excessive misuse of tax provisions to avoid paying taxes for rental property income. There were many rental properties that made losses continually and used the losses against future revenues. The Act introduced the Passive Activity Loss (PAL) that was losses made from such activity like rental property. The Act placed a limit on the deductions on the amount of loss from rental income. However, as part of the implementation of this ACT of 1986, the IRS has made adjustments to the Form 8582, Passive Activity Loss Limitations, that captures the Reform Act. The adjustments to this form will take effect in the 2011 tax returns and will require individuals with rental losses even from prior years to submit the form with loss details. Continue reading ‘The IRS Seeks to Increase Monitoring of Rental Income’ »

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If you are working with a financial or investment adviser, you need to be aware of the differences in how they work. Some advisers cost money and it has no direct income tax benefit to you, while others allow you to take qualified income tax deductions for their services provided. Guess what? The qualified ones usually cost less upfront, have no conflicts of interest and their fees are tax-deductible.

There is no free lunch, and this is especially true when working with financial advisers. If an adviser is telling you it won’t cost anything to invest with them… they are not being honest. Having worked on both sides of this discussion, you are either paid by the client or you earn a commission and some even try to do both, which is worse. Continue reading ‘Financial And Investment Adviser Costs – Some Are Tax Deductible – Others Are Not’ »

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