IRS | tax | business | bank

1. Ways to save on taxes
2. Some questions the IRS won't answer in advance
3. Real Estate ownership, one of the best tax shelters known
4. How to take advantage of self-employment loopholes
5. Home Office tax breaks
6. Driving a company car
7. 10 steps to protect yourself from Internal Revenue Service scrutiny
8. How to open a tax advantaged Swiss bank account:
9. What to look for in a Swiss bank:
10. Single premium life ... a taxpayer's dream investment
11. Three things never, ever to do when dealing with the Service
12. What if they makes a mistake?
13. What happens if you just can't pay?
14. Of particular interest
15. Has the IRS sent you a threatening letter? We can help!

1. Shifting tax years; Depending upon circumstances, you postpone income and accelerate expenses, or vice versa.
2. Shifting taxpayers; Use legal strategies to shift income to family members who earn little and are in low tax brackets.
3. Shifting investments; You might, for example, sell losing stocks at year's end to purchase similar (but not the same) shares early in the new year; swap bonds that have posted a paper loss for similar (again, not the same) securities.

• Bonuses. If you're in a position of control in a company and expect an annual bonus, you may want to defer payment until next year.
• Accounts receivable. A savvy taxpayer will -- if he expects next year's income to be lower than this year's -- put off sending bills until after the first of the new year. In an opposite situation, you might begin pressing overdue accounts for payment in the year's last quarter.
• Capital gains and losses. The timing of your stock transaction can sharply impact your investment income in any given year. If you've made lots of money in the market in a given year, you should sell losing stocks to balance gains or hold off selling gainers until the next calendar year, if your tax circumstances warrant. (Remember that capital losses offset only $3,000 of capital gains. If losses exceed that amount, however, they are carried forward to offset gains in a future year.)
• One overlooked year - end tax strategy involves giving appreciated assets to charities, rather than cash contributions. If for example, you (in the 28 percent tax bracket) typically contribute $1,000 to your favorite charity, you gain only a $280 tax deduction, leaving you a net cost of $720.

• Early payment of state taxes . If you owe state or local taxes you can save money by accelerating payment into December, making the payment a current-year deduction. Property taxes you would normally pay in the first quarter of next year also can be paid early.
• Medical expenses . Under the new tax laws, your medical expenses must exceed 7.5 percent of your adjusted gross income to qualify for deductibility. If you've exceeded that amount prior to year's end, you might want to have elective surgery or elective dental work performed to boost the level of your deduction.
• When you're planning on getting married and make a lot more money than your spouse to be. In this case, consider a year-end marriage so that you can file jointly and save money. If, however, you both have big paychecks, you might want to wait until Jan. 2 to avoid the so-called "marriage penalty" tax.

• The impact of estate taxes on the property or assets of a living individual
• The worth of a piece of property or the economic benefits of a transaction
• Questions of fact
• Legal issues still under consideration

• Expenses associated with real estate ownership, including depreciation, can be deducted on the owner's personal income-tax return, thus sharply reducing tax liability. Ownership of your own property, at the same time, does away with a lot of the uncertainty associated with "traditional" tax shelters, which are after all, managed by someone else. Real estate ownership is a real "hands on" investment opportunity.
• The owner of real estate also "owns" some very important estate - planning flexibility in that property can be given to a spouse or child, in a tax-advantaged fashion, without giving you ownership during his lifetime.
• Real estate owners also have the ability to use the property to obtain cash in a tax-advantaged fashion. This can be done through an equity loan, with tax-deductible interest payments.

• A Keogh plan, which allows you to contribute up to $30,000 per year in tax-deferred income
• Hiring your spouse, if your business is unincorporated, so that you need not pay Social Security tax on your spouse's wages. Your spouse's income reduces the amount of self-employment income on which you must pay taxes.
• Hiring your children to perform real work for you in your business, paying them reasonable wages, and deducting their pay as a legitimate business expense. As a sole proprietor you need not pay Social Security tax on wages to a child under the age of 21; your children will be earning money instead of receiving handouts, and you'll be getting help in your business. Why go through the trouble? Take a look at how the long term success this can be to your family. Click for true life case studies

Hi, I'm Ken Evoy, founder of SiteSell.com. I am delighted to provide you with answers to any questions that you may have about Business Planning Site Build It! or simply to help you figure out if SBI! would be of value for what you're planning, and how.

If, for example, you use 20 percent of a 1,500 square foot house solely for business, 20 percent of your home expenses become deductible. A recent IRS ruling holds that this is allowable even if the space used for business is in a room used for other purposes, provided the area for business is used for business only. You can't for example, call an entire bedroom your in-home office if you have a desk and chair occupying 25 percent of the room and use the rest of the room for its more traditional, and personal functions.

At the same time, if you're a salaried employee with an office at home, some expenses (a percentage of such costs as depreciation, utilities, etc.) are deductible, provided your in-home office meets the following requirements:

• Your in-home office must be required by your employer and not just "helpful" at your work.
• That portion of your home used for business must be used solely for business on a regular basis.

After you've determined the percentage of total use devoted to business by using your milage record, you have two possible courses of action to determine the amount of the business deduction you have due.

• If your mileage log shows that you drove a total of 10,000 miles for business purposes while the vehicle logged a total of 15,000 miles during the year, you know that 66.6 percent of its use was for business. You then can multiply total expenses for gas, oil, repairs, insurance and accessories by that percentage and add in such items as business related tolls and parking to determine the amount of your deduction. You determine depreciation by using the same percentage figure and the dollar amounts mandated by law.
• The second, and easier, way to determine the allowed business vehicle deduction is to simply use the standard mileage rate method, by which you can deduct 25.5 cents per mile for the first 15,000 miles of business use each year and 11 cents per mile for each additional mile. (If the car is fully depreciated, deduct only 11 cents per mile. According to the IRS, a car is fully depreciated once business miles exceed 60,000)

1. MAINTAIN A LOW PROFILE. Don't flaunt your wealth. If you crave luxury, purchase it in such a way that it's not easily seen. You might, for example, buy a modest home in a modest neighborhood but furnish it impeccably, or you could buy a Ford or a Chevy and then have it fitted with a luxury interior and an expensive sound system.
2. KEEP RECORDS. Be meticulous in keeping records proving you have a right to the deductions you claim and that your income does not exceed that declared. Keeping records three years is a must; six years is advised.
3. FILE A TAX RETURN AND PAY WHAT YOU OWE. The IRS catches people who don't file and seizes assets of those who don't pay.
4. AVOID "RED FLAG" ITEMS ON YOUR TAX RETURNS. Favorite targets include moving expenses, medical expenses, entertainment and home-office expenses for the self-employed.
5. MAKE SURE YOUR RETURN IS NEAT AND CONTAINS NO ERRORS. Type your return, or better yet, prepare it with a computer program.
6. HAVE A PROFESSIONAL PREPARE YOUR RETURN. By prepare, we mean sign. Get a bookkeeper to prepare the documentation, then pay a CPA to file it.
7. DON'T DECLARE EVERY SINGLE DEDUCTION TO WHICH YOU ARE ENTITLED. This is controversial but it can be very helpful in the case of an audit, when you have the right to bring to the auditor's attention the fact that you did not take deductions to which you were entitled.
8. TAKE THE STANDARD DEDUCTIONS UNLESS ITEMIZING WILL SAVE A SIGNIFICANT AMOUNT. Itemized returns are audited much more frequently than are nonitemized.
9. BE RESPECTFUL OF THE IRS AT ALL TIMES. Tax protestors, including those who write "wise-guy" or obscene comments on their returns, are always given very special scrutiny., including entertainers!
10. KEEP METICULOUS RECORDS OF ALL CONTACTS WITH THE IRS. Send all correspondence by certified mail, return receipt requested. Tape all conversations with agents, both in person and over the phone. (Make sure, over the phone, the agent is aware of the taping.)

The simplest, quickest answer - and one usually given by experts in foreign (offshore) banking - is that it's always a good idea to diversify your holdings by having some money out of the control of your domestic government and immune to any shocks that might hit your domestic economy.

Forex Brokers

• Swiss banking safest financial institutions in the world. Click here
• Swiss banking confidentiality - Swiss banks are world famed in this regard !
• The ability to invest assets, long term, for the benefit of your heirs. Switzerland imposes no inheritance tax on foreign residents and probate delays are minimal.
• The purchase, through the bank and often at a discount, of precious metals in the form of coins or bullions.
• Obtaining investment, portfolio management and foreign currency transaction advise and aid from the bank's experts and specialists.
• Online Forex Trading

• A high liquidity ratio (lots of cash relative to loans)
• Knowledge and experience in dealing with foreign accounts
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• A wide variety of services (including brokerage services and foreign currency transaction services) for clients
• A high-quality and wide range of personal services such as advice about foreign investments

• An application, complete with the personal data and signatures of all account holders
• Signature cards
• Declaration for the Opening of an account -- which states that you are acting for your own account and not for another party
• A form stating you understand the rules governing deposits of precious metals and coins in Swiss banks
• A form stating you understand that Swiss banks have agreed to aid the U.S. Securities and Exchange Commission in its efforts to stop so-called insider trading
• A signature form used to prove to the bank that you are who you say you are ... must be validated by a major bank in your area or by a client of the bank known to you ( internet accounts are much easier)
• A fiduciary agreement in case you ever wish to invest funds in the Euromarket
• A Declaration for mail held by the bank so that mail from the bank to you will be held by the bank awaiting personal pick-up
• Numbered accounts have achieved a great degree of notoriety thanks to the popular press, film and television since every gangster in the world has one. As an individual investor or bank client, unless you have a reason for maintaining your privacy even among bank employees, you probably don't need a numbered account. Your bank business will not be made public even without such an account.

• Your initial investment earns interest, dividends and capital gains tax-free as long as the policy remains in force.
• The beneficiary you name on this policy (which is, after all, still a life insurance policy) receives the insurance benefit, upon your death, completely free of federal income tax. By contrast, a single premium annuity triggers tax consequences on payout.
• You can borrow money from the policy, usually at virtually no cost. These loans are, in effect, tax-free income since the borrowing is not treated by the IRS as a taxable transaction. (Your loan interest payments, however, are not deductible.)
• You enjoy the capability of switching between investment funds without any tax consequences. When you switch within a family of traditional mutual funds, your gains are treated as profits and are taxed as such.
• You can get breaks on your Social Security taxation, since amounts you borrow are not included in the calculations that determine whether up to half of your Social Security benefits will be taxed. This makes single premium life even better than tax-free munis, since interest income from municipal bonds, while not itself taxable, is included in Social Security benefits tax calculations.
• You can provide tax-free income to your spouse. A single premium life policy can be set up in such a way that it will provide, through borrowing, such a benefit to your mate following your death. You can set the wheels in motion by making your spouse the co-owner (contingent owner) of the policy with all your rights passing to him or her upon your death. Your spouse, then, can continue borrowing the policy's earning annually, thereby obtaining income for life!
• With single premium life, you do not at all increase the likelihood of a tax audit. Purchase of the policy and borrowing against the policy are, in fact, not even reported (under current law) to the IRS. Only when the policy is terminated is the Internal Revenue Service made aware of the transaction.

• threaten an IRS employee
• lie to or mislead an IRS employee ... it's a crime!
• attempt to buy off or bribe an IRS employee. It's not only a crime, it doesn't accomplish what you want to accomplish. IRS employees, like all of us these days, are aware of entrapment; an attempted bribe (or even a friendly gesture that's misunderstood) will make you an enemy, not a friend

ABOUT HALF!

What, then, are you to do if you receive one of these frightening notices from the IRS

• Do not, under any circumstances, ignore the notice. Notices are sent in sequence, usually about four to five weeks apart, and go from quasi - friendly to outright threatening. If you don't pay up or take action that ends the problem, you'll ultimately be visited by an IRS agent ready to place a lien on your bank accounts.
• Respond quickly. As soon as you get a notice, check your record to see who is in error. If it's you, correct the situation by sending a check within 10 days and peace will once again rain. If the IRS is wrong, you can telephone your local IRS office. It's a better idea, not to phone but to do business by mail: certified mail, with a return receipt requested.
• Send what the experts call a "sixth-grade letter" -- one that's terse, simple and sharp. Remember that many IRS agents are poorly trained, overworked and underpaid. Sentences should be short and clear, addressed solely to the issue of your notice.
• Don't be outraged, don't ask why "they're not going after the big crooks," don't do anything but address the issues. Remember Joe Friday on "dragnet Just The Facts Ma'am. Make copies of everything.
• Follow up with lots of force. In most cases, your first letter will not end the matter. If, as is often the case, you receive a second notice, send copies of everything you sent the first time, citing the document locator number on the original notice. Include a cover letter stating that you responded to the first notice, evidence enclosed.
• Sadly, the IRS is not in the habit of letting you know when your disagreement has been settled. You'll only know when you stop getting notices in the mail.
• If you get a third notice, it's clear that your responses are not being acknowledged. At this time, you need to contact the problem resolution officer (PRO) at your local district office or service center.

• If you can't resolve the disagreement with figures and documentation you have at hand, or if the disagreement revolves around a technical point, seek outside help.

Frighteningly, the IRS can, 10 DAYS AFTER SENDING YOU A TAX BILL WHICH THEN GOES UNPAID, seize your bank accounts, attach your wages, even sell your house, to satisfy the tax bill. Fortunately, the Service wants money more than it wants headaches and thus will generally work with a taxpayer to set up some kind of reasonable payment schedule.

• File a return, even if you can't pay. Owing money is no crime; not filing is. By filing, you also avoid the big penalties that go along with not doing so.
• Try to pay something (whatever you can) when you file. It shows good faith and also reduces the interest and penalties for late payment you'll end up having to fork over.
• Within a couple of months of your filing, you'll get a bill for the unpaid balance. If you can pay it, do so. If you can't, set up a meeting to work out an installment payment deal.
• Be ready to produce a financial statement showing that you have no assets that can be sold to satisfy the tax bill. If you have assets, such as CDs or stocks, don't expect much sympathy. The IRS will not let you hold stock while a tax bill goes unpaid just because you don't want to take a loss.
• Try to set up a deal that will get you off the hook (and the IRS off your back) in a year or less. They really don't want to have to wait three to five years for their tax money.
• If you are delinquent on more than one tax return, file all before making any kind of an arrangement. All your tax liability should be covered by whatever agreement you work out.
• NEVER miss an agreed-upon payment without first talking with a revenue officer. If you miss just one payment, you're technically in default of the agreement. If you just can't make one of the payments, meet with a revenue officer, explain the situation, and hope some kind of solution can be found.