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Are you one of those who are forever on a hunt for quick tips on investment? If so, then it is very likely that the term offshore investment has been tossed at you more often than not.

What is offshore investment? Offshore investment is a way of making one’s money grow by investing in various ventures abroad that is outside your own country of residence.

Why venture into offshore investment? The most popular reason cited for investing in foreign waters is to evade the tax enforcements in one’s own country. Most people who reside in high-tax areas like US, UK, Canada or Japan see domestic investments as a futile exercise because of the heavy tax penalties that one has to pay. While tax is the driving force behind majority of offshore investments, there are others who invest into foreign lands with the intention of earning huge returns and not of evading taxes.

A survey by YouGov revealed that as much as 55% of adult Britons were seriously considering settling in another country. Two factors can be attributed to have triggered this feeling among Britons. The first being, the ever worsening pension situation in the country, which has prompted several Britons to look elsewhere for their retirement savings. The second of course being the universal dream of owning a holiday home Read more…

If you son or daughter had a summer or after-school job this year you should seriously consider opening up a ROTH IRA account.

To be eligible for an IRA your child must have “earned income”, such as wages that are reported on a W-2 or “net earnings from self-employment”. Money you give your child for doing chores around the house won’t count as earned income, but earnings from babysitting or mowing lawns may qualify.

You can contribute 100% of your child’s earnings to the account, up to a maximum of $4,000.00 for 2005. If your son earned $2,400.00 for the year you can contribute $2,400.00 to a ROTH for him. If he earns $4,500.00 you can contribute $4,000.00. You have until April 17, 2006 to open the account and make your contribution for 2005.

If you are self employed you can hire your child to work in your business and pay him, or her, a salary. A sole-proprietor who pays a salary to his or her child who is under age 18 does not have to pay the federal, and probably state, government any payroll tax on the wages. Of course the child must be paid a reasonable salary for doing actual work. You can put the wages, up to the $4,000.00 maximum, into a ROTH IRA.

Your child will not get a current tax deduction for contributions to a ROTH IRA, but then most teen-agers don’t need the deduction. A dependent child can earn $5,000.00, including up to $250.00 in interest, dividends and capital gains, before having to pay any federal income tax.

Distributions from a ROTH, after age 59 1/2, will be exempt from federal and state income tax, assuming, of course, Congress does not change the rules in the future. Even if Congress was to revise the ROTH rules down the road it is very unlikely that any changes would be retroactive, so earnings on a ROTH up to the point of change should remain tax-free.

You can use a ROTH IRA as an incentive to encourage your children to work or to save. If your son earns $4,000.00 in a part-time job put $4,000.00 into a ROTH IRA for him. Or, if your daughter agrees to put $1,000.00 of her salary in a ROTH give her a 3-for-1 match and put in another $3,000.00.

There is nothing in the tax code that says that the money deposited in an IRA for your son or daughter has to come from the child’s funds.

The $4,000.00 maximum applies for tax Read more…

In today?s rapidly changing business environment it makes sense to consider all the options before paying for your business equipment ? whether it?s a photocopier, computer system, computer hardware or software, telephone system, security equipment, office furniture or anything else. Many business people will give great consideration to the actual purchase, getting quotes from different suppliers and considering different choices. When it comes to paying, however, they simply pay cash or use bank finance without fully exploring the available options.

Most businesses will think of leasing for cars, yet don?t consider this option for equipment. Either managements don?t realise that leasing companies will lease items with little or no second-hand value; or they don?t know which way to turn to get expert help or advice. Again they don?t realise that the leasing broker ? a concept pioneered by Technology Leasing ? came into being precisely to meet that need.

The leasing broker gives customers a single point of contact, providing access to many leasing companies (all with different lending criteria) and picking the lender best suited to the client?s individual needs. For example, some leasing companies dislike computer equipment. Others will not lease to businesses with less that five year?s trading to show. Some will lease on software on its own, though, while others will lease to brand-new start-ups. The broker must match the client to the leasing company, which means not only the one with the best rate, but also one which will finance the type of equipment and consider the client?s credit rating on the merits of the case.

Using leasing allows a business valuable leverage. You pay for the equipment as you use and profit from it. There?s and analogy with paying your staff; you wouldn?t hand over three or five years? salary in one lump sum , so why pay for your equipment that way? Leasing enables businesses to get the equipment they need now. Those on limited budgets can acquire what they really want, rather than what the budget dictates. In the case of one firm of consulting engineers in Glasgow, leasing the equipment enabled them to upgrade their computer software and put them in a position to handle larger jobs at lower cost.

Leasing is also 100% tax-allowable. As the user you don?t own the equipment ? the finance company does. This arrangement allows the lease payments to be written off the profit and loss account rather than the balance sheet (where a depreciating item is a liability). The tax saving of up to 40% of the cost of the lease payments goes to the lessor. A large firm of solicitors in London was able with our assistance to lease ?40,000 of furniture, renovating the office and improving its professional image, while making the above 40% tax saving.

Another benefit is that you don?t need to contact your bank when leasing, so there is no need to impress or persuade the bank manager. You need not meet the broker, either. We arrange leases all over the UK for all kinds of different businesses and organisations, with equipment values from ?1000 to ?500,000 ? in most cases without ever meeting anyone from the client. Everything can be done by e-mail, telephone and post, with the cheque going direct to the suppliers of the equipment.

Why increase your exposure to the bank when there is an alternative? The image of the friendly bank manager belongs to the past. Read more…

Are you one of a growing number of people considering buying a second home in the sun, an idyllic home from home abroad or a lucrative investment property overseas? If so you?re not alone! Statistics show that globally we?re all on the move with a recent survey by YouGov revealing that 55% of adult Britons were ?seriously considering settling in another country? and the British Centre for Future Studies predicting that by 2020 one tenth of the current British population will be living or working abroad!

Add to this the fact that there was a 250% increase between 2000 and 2004 in the number of Britons buying property abroad solely for investment purposes, that over one and a quarter million Brits own second homes in Spain and France already and that the Office for National Statistics in the UK recently revealed that 200,000 Britons go overseas yearly with the intention of remaining for at least twelve months, and you can see that the passion for buying that dream home abroad is universal.

But what?s fuelling this ever growing interest in the overseas property market?

Well, despite reports to the contrary the UK housing market is seemingly ever on the up and those Britons who?re acquiring massive levels of equity through their residential property are considering selling up, buying abroad and establishing a pension fund simply on the back of what they have left over from their house sale. Others in Britain can?t actually afford to get on the first rung of the property ladder and some are looking abroad to find more affordable housing.
Then of course there?s the state and confusion surrounding the pensions market which is getting ever worse meaning that a growing number of Britons are considering the option of buying a second property abroad to let out for an income towards retirement. Others just share a commonly held dream of owning a holiday home in the sun or escaping the rat race to get a new life overseas.

Whatever reasons you may have for considering buying property abroad one thing is for certain; before you go ahead and buy you should understand some of the far reaching legal, financial and taxation implications of buying abroad. This article examines ten top points worthy of your consideration.

1) The British national obsession with property prices, equity and re-mortgaging is as foreign a concept in many other countries as mushy peas or vinegar on your chips so don?t just assume that your second home will rise in value and don?t assume that it?ll be easy to sell. Do your homework to see whether the property market you?re interested in can support and sustain your particular hopes and ambitions for it.
In countries such as Northern Cyprus and Bulgaria the real estate market has been suppressed for so long that property prices remain highly competitive and many can see the room for substantial growth in the market. In other countries such as Spain, France and Portugal where the property market has been soaring for years can you expect the same levels of growth to continue? Know that every country?s property market is different. If you decide to compare overseas markets to the UK housing market some may not appear as buoyant, however consider examining the longer term trends. Speak to established estate agencies in your country of choice to find out whether the market is stable or stale. If it?s stable then you?re more likely to enjoy a steady, realistic increase in your property?s value rather than the extreme peaks and troughs that the UK market tends towards. If on the other hand the market is stale you need to consider the economy of the country and whether it?s due a positive correction any time soon.

2) Factor in regular travel costs needed for visiting your second home when you establish your budget. Keep in mind any extra visits you might have to make occasionally to organise repairs and renovation for example. This sounds so obvious but sadly many people are caught out and find that they cannot holiday in their new home as often as they like: or worse still – once they move abroad they find they can?t get ?home? for visits to the family etc. Budget wisely and don?t get caught out!

3) If you intend to rent out your second home you must declare this income to the tax man in your country of residence I?m afraid! Furthermore it may be necessary to declare it in the country in which the new house is located depending on the double taxation agreements in place between the two countries. Make sure you seek solid tax advice before making any concrete buying decisions.

4) If you?re intending to let out your property make sure you know how much it?s going to cost to have an agent manage both the day-to-day running of your property together with organising the rental side of things for you. You?ll need a good agent to make sure your best interests are always protected especially if you?re not going to remain resident in the country the property is located in. Factor these extra costs into your budget or reduce them from your projected rental income to get a realistic idea of the income potential of your property. Remember you?ll still need to pay a management agent during any weeks and months the property remains unoccupied.

5) Consider the local tax implications of buying, owning and selling your property as property and land tax in some countries can make UK stamp duty and council tax pale into insignificance. In Northern Cyprus for example tax rates are not currently excessive but they are subject to change, therefore always get up-to-date tax and fee facts and figures from your estate agent ? furthermore, make sure you check the figures with a local lawyer or accountant.

6) Make a will to cover local inheritance tax laws and make sure your overseas property is also detailed in a will held in your country of Read more…

Every one should have a home inspection before purchasing any property, including new construction. You may think that’s rediculous but there are too many cases that prove otherwise. It is only a couple of hundred dollars and can save you thousands. Most importantly it makes you feel confident about the house.

Remember the horror stories you saw on the local and national news about all the new construction problems? One is leaks which leads to the dreaded word mold, a whole problem in itself. The stories go on and on. Recently a buider filled a dump and built houses on it. Needless to say, when things settle underground, they do above it. The houses were collapsing and the EPA (Environmental Protection Agency) found barrels of some kind of petroleum substance.

he most important thing is that you carefully select your home inspector and be there at the time he/she makes the examinination. You may not know what is supposed to happen but they should go over the property with a fine tooth comb. Every wall, shingle, window, receptacle…..is looked at and tested. The good ones go in the crawl space, attic and on the roof. When you get the report don’t be alarmed. Some things are to be expected, such as outdated electrical systems in older houses and minor settlement.

An assessment is done by a city or county inspector to determine tax bases. Many times they are licensed or certified appraisers but they don’t have to be and often are not. They don’t do an appraisal. They go by public records, quite often wrong data. Some do have pictures and some have sketches. I put a woodstove in my house a few years ago. I went down and paid for a permit and to this day it is not on record. This is also true with additions which of course add square footage as well as value. I read the other night that approximately thirty percent of property is over Read more…

Every year, the IRS issues a list of tax scams. The goal is to alert taxpayers to the lack of merit of certain strategies as well as letting everyone know the IRS will not accept them.

2006 Scams

The IRS has kicked out its annual list of highly dubious tax scams for 2006. Promoters often make these strategies sound credible, but they simply aren?t. If a taxpayer attempts to use one of the scams, the IRS will audit and aggressively attack the taxpayer as well as try to identify the promoter for prosecution.

The 2006 list of scams contains most of the traditional claims. There are, however, three new areas being targeted by the IRS. They and a few others are highlighted in the following list.

Two new schemes have worked their way onto the list in 2006. In recent months IRS personnel have noted the emergence of the two scams???zero wages? and ?Form 843 tax abatement??? in which filers use IRS forms to claim that their tax bills have been wrongly inflated.

Also high on the list in 2006 is ?phishing,? a favorite ploy of identity thieves. Over the past few years, the IRS has observed criminals working through the Internet, posing even as representatives of the IRS itself, with the goal of tricking unsuspecting taxpayers into revealing private information that can be used to steal from their financial accounts.

1. Zero Wages ? A new addition to the list, the zero wages scam is designed to create a log jam in the system. A taxpayer is supposed to file a tax return with no wages claimed and notice of challenges to any W-2 or 1099 wage reports. In essence, the idea is to not pay taxes while the IRS tries to figure out what is going on. Ultimately, the goal is to get the IRS to accept a zero income tax return, which of course requires no payment of taxes.

2. Form 843 Tax Abatement ? The tax abatement strategy is very creative. It is typically used for taxpayers who have failed to file taxes for a few years. In such a situation, the IRS will often assess taxes to the individual based on a variety of factors. The strategy is to abate this assessment and pay not tax by challenging the assessed amount as being calculated incorrectly. The IRS says it doesn?t fly, but it is a very creative strategy.

3. Identity Theft/Phishing. This isn?t so much a tax reduction scam as a nightmare wherein Read more…

How many times have you heard someone say, “I don’t pay any
taxes. My accountant takes real good care of me . . . I
haven’t paid a dime in taxes in years.”

Does that outrageous statement sound familiar?

Maybe it’s your brother-in-law, or a fellow Soccer Mom, or a
co-worker at the office.

And so you think to yourself, “What am I doing wrong? How
come I’m paying taxes and so-and-so says he/she pays
nothing? How do they do it!”

Is it really possible to pay “zero taxes”?

For purposes of this article, let’s give your “no-tax”
friend or relative a name. Let’s call him “Charlie” (or if
he is a she, just think “Charlene”).

OK, what is Charlie up to? What’s his secret?

Charlie has no secret. He’s not doing anything that you
should be doing. Do not be envious of Charlie, and here’s
why . . .

I can think of at least five reasons you should ignore
whatever Charlie says about his “no-tax” situation.

REASON #1: Charlie is a liar. Every family has one, so don’t
feel bad. Let’s face it, some people just like to indulge
in fabrications to make themselves feel good. Charlie is
telling you a big fat lie because Charlie has “issues.”
‘Nuff said?

REASON #2: Charlie is pond scum. OK, hear me out on this
one. I don’t mean to offend you if Charlie is a close and
dear relative, or your best friend, but I’m going to give it
to you straight: Charlie cheats on his tax return, and he
cheats big time. There are plenty of folks out there like
Charlie. He’s one of the reasons that you and I pay so much
in taxes — he doesn’t report all his income, and he deducts
bogus expenses by the thousands.

He and his accountant may even be in cahoots on this.
Charlie brings in his records and his accountant crunches
the numbers, then calls Charlie and says, “You owe $5,000.”
So Charlie rummages around in his files and somehow manages
to come up with another batch of expenses that miraculously
reduce his balance due to zero. It’s like magic!

End result: Charlie’s tax return is a big lie.

Charlie is a thief. Charlie should be put in jail for the
tens of thousands in taxes he has illegally withheld from
the government over the years.

REASON #3: Charlie is stupid. Again, I’m sorry if I’m being
too hard on Charlie. But some people are so clueless about
taxes that if they have no balance due on their return, or
if they are getting a refund, they mistakenly believe they
didn’t pay any tax that year.

And believe it or not, this is actually a very common
misconception that thousands of people cling to. Ah, to be
so blissfully Read more…

1. Throughout the Year, Keep Your Tax Records Organized.
The time it takes to prepare your taxes is dramatically reduced for those who develop a system for organizing their documents, receipts and records. A good theme around which I use to organize my materials is, unsurprisingly, the income, deduction or tax credit items I listed on last year’s return.

2. Don’t Wait ‘Til the Last Minute!
A wise Ben Franklin once said, “Don’t put off ’til tomorrow that which can be done today”! I think it was him who said that. Anyway, I’d like to think he was talking about taxes, because your haste to meet the filing deadline could cause you to not only risk making a real error but, more importantly, it could cause you to overlook some potential sources of tax savings.

3. Visit The IRS Online.
If you haven’t already, you would do well to follow the lead of millions of other taxpayers who’ve visited the IRS website in calendar years 2004 and 2005. Together, they’ve already downloaded nearly 600 million forms, publications and a wide variety of tax-related information. But, don’t worry — there’s always more where that came from.

4. Coffee, Tea or Free Tax Assistance?
They’re not just a bunch of ‘big meanies’ taking our hard-earned dollars — the IRS actually does its fair share of giving. They provide, as a matter of fact, free pre-recorded tax messages on about 150 tax topics. Don’t believe me? Just call the toll-free TeleTax service at 1 (800) 829-4477. Or, if you prefer speaking with humans, call the free, IRS staff helpline at 1 (800) 829-1040 (for individuals) or 1 (800) 829-4933 (for small businesses).

5. More Personalized Assistance.
Speaking of ‘doing its fair share of giving’ — the IRS also provides free personalized help with your taxes at IRS offices nationwide. So, there! For this service, you will probably want to check with your local newspaper or local IRS office to find locations for what they call their ‘Volunteer Income Tax Assistance’ or their ‘Tax Counseling’ sites.

6. Electronic Returns — Faster Than a Speeding Bullet!
Now, this shouldn’t be a surprise to anyone, but just in case — IRS e-file is the fastest, most accurate way to file your tax return, bar none! And yes, if you’re fortunate enough to be due a tax refund — the waiting time for e-filers is about half that of paper filers!

7. Double-Check Your Math for Errors!
Once all is said and done, it’s the little things that matter. So, make sure you double-check your math and make sure you have correctly provided and legibly written the names and Social Security numbers, or other identifying info for your self, your spouse and your dependents.

8. Direct-Deposit Read more…

First, you should determine if you are qualified to contribute to either. You may contribute to either traditional or Roth IRAs only to the extent you have earned income includible in gross income. The maximum contribution for a taxpayer and the taxpayer?s spouse is $4,000 each. Individuals who are at least age 50 will be able to make an additional contribution of $500 ($1,000 for 2006). You have until April 17th, 2006 to make an IRA contribution for the 2005 tax year. You must be less than age 70 ? to purchase a traditional IRA.

In addition to the $4,000 limit mentioned above, contributions to traditional IRAs can be further limited when the individual (or spouse) is an active participant in a retirement plan maintained by an employer. The maximum deductible IRA contribution for an individual who is not an active participant, but whose spouse is an active participant, is phased out when modified adjusted gross income is between $150,000 and $160,000.

The maximum deduction for an individual who is an active participant in a retirement plan is phased out when modified adjusted gross income is between ($50,000 to $60,000 for single and head of household; $0 to $10,000 for married filing separate).

When both spouses are active participants in an employer sponsored retirement plan, tax deductible contributions are phased out when modified adjusted gross income is between $70,000 and $80,000. If your tax deduction is limited by the active participation rules, look to the Roth rules.

Roth IRAs are not subject to the active participation rules. However, contributions to Roth IRAs are phased out when income exceeds the thresholds. Contributions made by single filers are phased out when modified adjusted gross income is between $95,000 and $110,000, and for joint filers with modified adjusted gross income between $150,000 and $160,000, and for married filing separately with modified adjusted gross income between 0 and $10,000.

Roth and traditional IRAs also have different distribution rules, which goes beyond the scope of this article.

So if you qualify for both traditional and Roth, and you are not concerned with the different distribution rules, what is best?

With traditional IRAs, you get an immediate tax deduction. Tax on your contribution is deferred until final distribution. Read more…

Online Tax Preparation makes it easy to ?do it yourself?. With the simplified processes of online tax prep along with the information age of getting more info, you can actually file your income tax without a lot of pain and agony, but? If you file your taxes online, with the knowledge you gain from online resources, and don?t have someone to ?look them over? will you get the most from your deductions? Will you even take them?

Occasionally, I meet someone who filed their tax return online who chose not to itemize their deductions, because they don?t want to be audited. Umm.. Well. An audit is always an option, IRS retains that right if they feel something is amiss, but they do not generally audit authentic deductions, or income. Their purpose is clear, to get the most reasonably from the tax payers. The provisions for deductions are provided to prevent you from paying more than your fair share of taxes.

Your purpose is to get the most benefit from the money you spend. IRS calls these deductions. If you must prepare your own tax return, it is imperative that you organize your income and expense records well prior to preparing the return. Gather your information and put it all together in one place. Read more…