Monaco and Andorra Tax Havens Raise Entry Price

While Monaco is a able-bodied accepted European tax haven, Andorra has remained little accepted alfresco of the cyberbanking association - admitting adequate the aforementioned tax advantages and arguably added clandestine cyberbanking than her bigger accepted rival.

In contrast to the similar financial benefits both Monaco and Andorra residents enjoy, the two small countries have quite different climates.

Monaco has good all year round weather and is located next to the French Riveria, while Andorra is in the Pyrenees and between early December and late April attracts nearly ten million tourists for ski holidays. Monaco has year round tourists, peaking twice a year in May for the Grand Prix, and September for the Yacht Show.

Neither Andorra or Monaco have their own airports – Nice airport has a helicopter link, a ten minute ride direct to Monaco, Andorra is not so fortunate and the nearest airport is Barcelona, a three hour drive away from the principality.

Both countries have opted to stay out of the EU, preserving their ability to maintain a no income tax policy.

The biggest difference is the entry price for becoming a resident – which entails buying or renting a house or apartment.

One bedroom apartments in Monaco start at 800,000 Euros, but in Andorra the same size apartment starts at less than a third of the price at 250,000 Euros. And while a house in Monaco is a rarity, there is a good choice of houses for sale in Andorra, with prices starting at under a million Euros.

Rising Prices

Given Andorra’s property price advantage for would-be residents choosing between Europe’s primary tax havens, it has come as a surprise to many that the closing costs for buying a property in Andorra has not only been less than half that of Monaco, but also less than buying a property in many other mainland European countries at around four and a half per cent.

But Andorra has just raised property closing costs by introducing a three and a half per cent sale of goods and services tax on property purchases from January 1, 2006 - bringing the tax haven more in line with neighbouring France and Spain.

Demand for property in Andorra and Monaco is unlikely to be affected by the recent increases though, according to European tax haven specialists Tribune Properties.

‘Andorra and Monaco have historically seen an increase in property activity and residency applications when taxes are increasing elsewhere. The new German government has recently increased the top rate of income tax and the United Kingdom has seen an increase in the number of indirect taxes, making the zero per cent personal income tax both Andorra and Monaco offer an attractive preposition to high income earners.

Andorra’s property inflation has been over ten per cent annually for the last three years, and when the 2005 figures are released we would expect it to be four years in a row, with no sign of a levelling off of demand for the year ahead.

With Andorra and Monaco’s high speed cable and broadband internet access more and more company owners are moving their residence to low and no tax countries and running their companies from a distance geographically, while being able to share information with their head office in real time’.

As well as buying a property in Andorra or Monaco, both countries require residency applicants to establish a local bank account and deposit around 50,000 Euros (Andorra) or 100,000 Euros (Monaco), take out private health insurance, and to live there for six months of the year.

Death And Taxes

“In this world nothing can be said to be certain, except death and taxes”
Benjamin Franklin

I, like many other good citizens from this great country of ours, left it to the very last moment to mail off this year’s tax return. As I entered the local post office and saw the long line, I once again promised myself that next year would be different. I really would make the effort to get them off before the last minute rush.

As I moved slowly towards the front of the line, I began wondering, in this day and age is this really the best system our great and wonderful leaders can come up with. After all, we now live in a world that allows a satellite miles above us to read a number plate. We can get the worldwide web on our cell phone, download TV programs that we may have missed or just want to save onto our iPods.

The original tax laws introduced in 1913 were a very simple affair. They began with tax brackets ranging from 1 to 7 percent - a far cry from today’s levels. The IRS tax codes, regulations and guidelines now have well over 9 million words. No wonder there's so much confusion. Is there truly anyone who really understands this monster. Let’s put this into some form of prospective. The Declaration of Independence has a little more than 1300 words. The Constitution which has served us well for more than 200 years comes in around 5000 words and the Holy Bible makes do with less than 800,000 words.

The Office of Management & Budget estimated in 2004 that we as a nation spent over $200 billion on compliance cost. At a time when the nations manufacturing industries, the foundation of any good economy, are all struggling against cheaper imports, shouldn’t our leaders be using that money to create “Jobs” for their citizens. Most experts agree that $200 billion would create well over 3 million jobs, which of course creates sales of consumable goods which creates more jobs and sales taxes.

From the moment we wake up in the morning we are being hit by taxes. Everyone is at it -- turn on the light (electricity taxes), run the shower (utility taxes) and my personal favorite the telephone taxes, all 6 million of them, or that's what it seems to me every time I receive a telephone bill.

Has the time come for a simple Flat Rate Tax, something we can ALL understand. There are many countries all over the world who have used this simple to understand and cost effective way of collecting taxes to revitalize their economies. Let's just imagine for a moment what it would be like if we could complete our tax returns on one simple piece of paper. A Flat Rate Tax for individuals and a Flat Rate Tax for businesses.  The same rules apply to all regardless of size of income. We all pay the same rate. Most of the successful countries have levied Flat Rate Taxes of less than 17%, with a stating level that protects the lower income groups. Could life ever be that simple again?  Would our Leaders really want us to understand what they were up to? And then there's those lobbyist.

Taxes The Texan Way

There is an aphorism that claims that the alone things assertive in activity are taxes and deaths. One could assume that tax laws are as calmly bent and accepted as one identifies death. Back a being stops breath and his academician stops functioning, he's dead. However, this is not the case with taxes. There is annihilation calmly understood, clear, and simple back it comes to tax laws. Thus, added tax troubles appear not because of apathy for the tax laws but because of baloney and confounding of the laws. Tax collectors, indeed, accept actual demanding jobs. Aside from accession taxes from bodies who do not appetite to allotment with their hard-earned money, they additionally accept to ensure that these bodies pay their fair share. Fortunately, Texas taxes, Texas tax laws, and behavior are one of the everyman and acquiescent amid the states. There is no abracadabra in this; Texas artlessly does not allegation assets tax for accompaniment purpose. As a result, Texas taxes are not managed by the CPA of the accompaniment but the IRS.

This instance does not mean that Texas tax laws are lax and lenient. There are still several key events that tax collectors and auditors regularly deal with regarding Texas taxes. For one, there is the matter of tax evasion. Though used interchangeably with tax avoidance, there is an essential difference between the two that makes evasion a crime. Tax avoidance simply merits finding loopholes in Texas taxes, Texas tax laws, and policies, and using these to lower tax burdens by legal means. This ensures that the individual pays the least amount of tax as legally possible. Though this may cause tension between the collector and the taxpayer, this is something that can be easily settled with an audit. If the audit confirms that all tax deductions are valid, the taxpayer can get away with his minimum tax. However, if the audit proves otherwise, and the taxpayer was found out to have employed unlawful means to evade paying taxes such as under-declaring income, he could be charged with tax evasion. The legality of the methods used to lower taxes is the difference between the two.

Even if they lack state tax, Texas taxes, Texas tax laws, and policies require that the IRS conduct regular audits. These audits ensure that the taxpayers honestly meet their obligations. These are done in three ways, and the most employed is randomization. In this method, the IRS randomly selects income tax files from the submitted returns. Since there is a probability and a chance that they would be evaluated, taxpayers are driven to be honest with their tax information, thereby, limiting tax evasion cases. The second method employs a computer program used to spot evasion patterns which are prevalent among tax evaders. Evasion patterns such as unusually large allowances for entertainment are red-flagged. Individuals who are repeatedly tagged for the same pattern are investigated.

Thus, even if Texas does not have state income taxes, stringent Texas taxes, Texas tax laws, and policies, ensure efficient tax collection. Texans do not suffer from burdensome state taxes since the tax collection system employed in the state more than suffice for needs of Texas. Texas proves that added taxes are not guarantees for increasing state income.

Accounting Outsourcing Nitty-Gritty that you need to Know

Are you afraid about allowance the accounting and accounting assignment which has accumulated up in your board in appearance of the abutting tax season? Simply opt for accounting outsourcing to accord with the affair with affluence and perfection. This is the simplest way for accounting firms and CPAs to accord with abundant workload to accommodated chump appeal during the aiguille tax season. Simply adventure accounting outsourcing will not serve your purpose, until you accept able ability about all the aspects of outsourcing.

Imagine you are going to give out your entire business process to be handled by another organization. I am sure you will want to know all you can about this particular aspect. You will surely not want to be caught unaware; if goes wrong with the entire process. Research and more research is the answer for you to meet such eventualities.

Choose the right outsourcing company to do your accounting outsourcing work. Numerous outsourcing come up with attractive and lucrative offers to do the work for accounting firms like yours. Find out carefully as many things as you can about the company before you actually let them do your work.

The internet is a storehouse of information and utilizing it in the best possible manner is in your hands. Check out the services provided by the various companies. Also try to get testimonials from firms who have already done accounting outsourcing from the particular outsourcing company. 

Check out the various security measures put in place by the company to protect your company and customer data. This is an important aspect of with which you must take special care. In this internet age, people have become increasingly skeptical about giving out information about their financial details online. Security measures must be stringent enough to deal with this issue and to also bring back the faith of customers to the entire process of accounting outsourcing.

Your work will be done very quickly and you will be able to meet customer deadlines with plenty of time to spare. Highly qualified professionals are always hired for doing outsourcing work. So this means that you serve your customer’s with the best possible service that you can afford with in your budget. Accounting outsourcing work is done faultlessly by the professionals.         

Monetary wise accounting outsourcing works out just perfectly for your accounting firm. You do not need to undertake any additional financial investment for the process. In fact you can earn through accounting outsourcing. Imagine you do not spend an extra cent and yet end up earning profits. This is just incredible; you must not waste time pondering over pros and cons of accounting outsourcing.

Check to see if the outsourcing firm provides any offers for free trails. You can actually take up this opportunity to see for yourself the quality of the work done by the firm. Based on this work done, you can decide whether you actually want to work any further with the company for accounting outsourcing work or not. 

 Accounting outsourcing can turn out to be beneficial to you in many ways. All of these benefits are subject to your working with the right accounting outsourcing company. So try outsourcing your accounting and experience a faster and more efficient way of doing business today!

How To Contact The IRS Without Breaking Into A Sweat

We all love to criticize the IRS, don't we? It's easy to ridicule a huge organization of government bureaucrats who often seem to be Public Enemy #1.

Our negative attitude toward the IRS can lead to a strong desire to just ignore it altogether. But
self-employed people who ignore the IRS do so at their own peril.

So when it comes to providing free information about taxes, let's not throw the baby out with the bath water. The IRS does provide some excellent resources to help us make the best of a potentially bad situation.

If you need tax assistance and prefer not to pay for it, do not overlook these five ways to obtain help from the IRS:

1. The Internet
http://www.irs.gov

There's a wealth of information just for small business owners and self-employed people at: http://www.irs.gov/smallbiz

Here you'll find everything from how to obtain a federal business tax ID to a free 6-session streaming video presentation of the "IRS Small Business Workshop." Also known as the Small Business Self-Employed Online Classroom, you can access this directly at: www.irs.gov/businesses/small/article/0,,id=97726,00.html

If you prefer to attend an IRS small business workshop in person, check here to see what's available in your state: www.irs.gov/businesses/small/article/0,,id=99202,00.html

Need tax forms and/or their instructions?

Look no further than the IRS website:
http://www.irs.gov/formspubs/index.html

Here you'll find a boatload of links to every tax form imaginable, available as downloadable PDF files or in fill-in format. All form instructions can also be downloaded. http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

The IRS has many free publications that explain virtually every major (and many minor) tax topics in great detail. Sure, IRS "pubs" are not always written in the most entertaining style, but, hey, remember the price. http://www.irs.gov/formspubs/lists/0,,id=97819,00.html

2. Telephone Hotlines.

Special toll-free numbers exist for the following:

-- To order forms & pubs: 800-829-3676 (in case you'd like to receive a paper copy via snail-mail)

-- To ask business tax questions: 800-829-4933

-- To ask personal tax questions: 800-829-1040

Use common sense when phoning the IRS: to avoid long wait times, don't call on Monday morning. And no matter when you call, be prepared! Write out your questions beforehand and have all relevant documentation in front of you, as well as a favorite book or magazine to read during the inevitable wait time. Stay calm; don't yell; treat the IRS employee like a human being and he/she will likely return the favor.

-- Need help with long-standing problems: 877-777-4778

-- Prerecorded messages on 140 topics: 800-829-4477

3. TaxFax Service.
You can receive most IRS forms instructions via fax by calling 703-368-9694 from your fax machine.

4. CD-ROM for Small Business.
This is known as "The Small Business Resource Guide CD-ROM", aka Publication 3207. It includes all the tax forms and publications needed to run a small business. Call 800-829-3676 to request a free copy.

5. Walk-In Offices.
Need some face-to-face tax help? For a complete list of IRS offices in all 50 states, including hours of operation and contact info, check out: http://www.irs.gov/localcontacts

Tax Advantages Of A Limited Liability Company

There are several advantages to establishing a bound accountability aggregation and abounding of these compensations circumduct about the tax advantages. A bound accountability aggregation if generally approved as a third another to basic a association or a partnership. Abounding corporations are formed because they action adorable banned on the claimed accountability that the business may ache due to debts or liabilities. Partnerships don’t action the aforementioned affectionate of protection, but do accommodate bigger tax advantages.

A limited liability company works to combine both these features, providing protection against personal liability while also establishing solid tax advantages. In addition to these selling points, a limited liability company is also often preferable to either incorporation or the formation of a partnership because they provide more flexibility than corporations and also because the legalities involved in running tend to be less formal. It is this lack of formality that leads to the tax advantages inherent in a limited liability company.

When it comes to federal taxation laws, a limited liability company has much more flexibility for choosing particular tax advantages. The default choice when there is more than one owner is for the LLC to be treated like a partnership and file the same form, Form 1065. But a multiple-owner LLC can also choose to be treated as either a C corporation or an S corporation. A single-owner limited liability company can choose to be treated for tax purposes as either a sole proprietorship—which is the default choice made by the IRS—or as either a C corporation or an S corporation.

The primary tax advantages in organizing a business entity as a limited liability company is the avoidance of double taxation. In traditional corporate structure, a company’s income is initially taxed and after the profits are divided in the form of dividends, they are subject to taxes again. But a limited liability company’s income bypasses the initial taxation and instead each member of the LLC is taxed based on individual allocations. One of the other tax advantages of a limited liability company is that dividends are not subject to taxation.

Of course, along with tax advantages come disadvantages. After all, if limited liability companies were perfect, there wouldn’t be any other kind of companies. Some states have chosen to impose franchise taxes on LLCs. Of they may require certain annual fees in order to allow you to operate within that state.

The legal ramifications of choosing to become a C corporation or S corporation or simply a sole proprietorship are dense and complex and certainly shouldn’t be made after reading an article on the internet, even articles that provide much more information that this article. Tax advantages of limited liability companies are certainly a selling point—along with the protection they offer from liability—but before making any decision; it is advisable to consult an experienced attorney. One thing to keep in mind about a limited liability company beyond the tax advantages is that they are a fairly recent innovation and therefore legal precedent is in the process of being set right now. In fact, should you face legal action, your case may be the one that sets the precedent.

Andorra Raises 2010 Entry Price

While Monaco is a able-bodied accepted European tax haven, Andorra has remained little accepted alfresco of the cyberbanking association - admitting adequate the aforementioned tax advantages and arguably added clandestine cyberbanking than her bigger accepted rival.

In contrast to the similar financial benefits both Monaco and Andorra residents enjoy, the two small countries have quite different climates.

Monaco has good all year round weather and is located next to the French Riveria, while Andorra is in the Pyrenees and between early December and late April attracts nearly ten million tourists for ski holidays. Monaco has year round tourists, peaking twice a year in May for the Grand Prix, and September for the Yacht Show.

Neither Andorra or Monaco have their own airports – Nice airport has a helicopter link, a ten minute ride direct to Monaco, Andorra is not so fortunate and the nearest airport is Barcelona, a three hour drive away from the principality.

Both countries have opted to stay out of the EU, preserving their ability to maintain a no income tax policy.

The biggest difference is the entry price for becoming a resident – which entails buying or renting a house or apartment.

One bedroom apartments in Monaco start at 800,000 Euros, but in Andorra the same size apartment starts at less than a third of the price at 250,000 Euros. And while a house in Monaco is a rarity, there is a good choice of houses for sale in Andorra, with prices starting at under a million Euros.

Rising Prices

Given Andorra’s property price advantage for would-be residents choosing between Europe’s primary tax havens, it has come as a surprise to many that the closing costs for buying a property in Andorra has not only been less than half that of Monaco, but also less than buying a property in many other mainland European countries at around four and a half per cent.

But Andorra has just raised property closing costs by introducing a three and a half per cent sale of goods and services tax on property purchases from January 1, 2010 - bringing the tax haven more in line with neighbouring France and Spain.

Demand for property in Andorra and Monaco is unlikely to be affected by the recent increases though, according to European tax haven specialists Tribune Properties.

‘Andorra and Monaco have historically seen an increase in property activity and residency applications when taxes are increasing elsewhere. The new German government has recently increased the top rate of income tax and the United Kingdom has seen an increase in the number of indirect taxes, making the zero per cent personal income tax both Andorra and Monaco offer an attractive preposition to high income earners.

Andorra’s property inflation has been over ten per cent annually for the last three years, and when the 2005 figures are released we would expect it to be four years in a row, with no sign of a levelling off of demand for the year ahead.

With Andorra and Monaco’s high speed cable and broadband internet access more and more company owners are moving their residence to low and no tax countries and running their companies from a distance geographically, while being able to share information with their head office in real time’.

As well as buying a property in Andorra or Monaco, both countries require residency applicants to establish a local bank account and deposit around 50,000 Euros (Andorra) or 100,000 Euros (Monaco), take out private health insurance, and to live there for six months of the year.

Three Dumbest LLC Formation Mistakes

I see a lot of dumb llc formation mistakes. Maybe more than most people because I occasionally teach a graduate tax class on LLC formation.

Some of the mistakes are made by entrepreneurs and investors trying to save money on accountants and attorney fees. And I guess that’s okay--albeit penny-wise and pound-foolish.

But you know what really irks me? Some of these mistakes—in fact, most of them—are made by attorneys and paralegal services… Professionals who should know better.

But enough whining. Without further fanfare, here are the three dumbest mistakes that I see people make again, and again, and again.

Mistake #1: Forgetting about Foreign LLC Registration Rules

Read those tempting advertisements for Delaware or Nevada limited liability companies? The advertisements sound pretty good, but most small businesses shouldn’t use out-of-state llcs or for that matter out-of-state corporations.

Here’s why: If you’re doing in business in, say, New York, you’re not going to be able to avoid state taxes by forming your llc in, say, Nevada. The tax and corporation laws in your state will require you to register your out-of-state, or foreign, llc in the states where your business operates. Those same laws will require you to pay state income taxes in the states where you earn your income.

A couple more quick points: Large businesses do like Delaware for a variety of reasons—mostly having to with how sophisticated the Delaware chancellery courts are. But this applies to really big businesses that will litigate in Delaware—not small businesses. And Nevada does offer corporations a no-income-tax haven—but you need to set up a real business presence there, with an office, employees, property—the whole enchilada.

Mistake #2: Electing to be Treated as a C Corporation

An llc is a chameleon for tax purposes. Which is great. An llc with a single owner can be treated as a sole proprietorship, a C corporation or an S corporation (assuming eligibility requirements are met.) An llc with multiple owners can be treated as a partnership, a C corporation or an S corporation (again, assuming eligibility requirements are met.)

But just because you can do something doesn’t mean you should. And unless you’ve got expert tax advice from an attorney or certified public accountant, you shouldn’t make the election to be treated as a C corporation.

A C corporation is taxed on its profits. When those profits are distributed to shareholders, the profits are taxed again to the shareholders. By electing to be taxed as a C corporation, then, the llc owners create an extra level of taxation. Bummer.

Mistake #3: Electing to be Treated as an S Corporation Too Early

Llcs can also elect to be treated as S corporations—as noted in the preceding paragraphs. And once a business generates profits well in excess of the amounts paid to owners for salaries, an S corporation election saves the owners big money--sometimes tens of thousands of dollars per owner per year.

But you don’t want to elect S corporation status too early--especially if the llc is owned and operated by a single owner.

By electing S corporation status, the llc needs to file an expensive corporate return, needs to begin doing payroll--even if the only employee is the owner, and may need to pay additional payroll taxes like the 6.2% federal unemployment tax. (This tax is levied on the first $7,000 of wages paid to each employee.)

Wait until your business is profitable to elect S status for your llc. You patience will pay off in two ways: simpler accounting and less expensive tax returns.

How To Avoid Double Taxation Of Your Small Business Profits

Have you been cerebration about accumulation your baby business or self-employment activity? The advantages are many!

For starters, you'll be protecting yourself and your family from the possibility of a business ending lawsuit. Forming a corporation is Step One on the path known as "Asset Protection" -- you are moving from the world of unlimited liability to the world of limited liability.

(NOTE: For further insight into the legal advantages of incorporating, check out the article: "It Can Happen To You: Why Any Sole Proprietorship Is A Risky Business" at http://www.YouSaveOnTaxes.com/happen-to-you.html)

From a tax standpoint, there are both advantages and disadvantages to incorporating. Yes, forming a corporation can either reduce your taxes or increase your taxes, depending on what type of corporation you create.

There are two main types of corporations: "C" Corporations and "S" Corporations -- and which type you choose can make all the difference in the world of taxes.

NOTE: The question of "C" Corp vs. "S" Corp has no effect on the asset protection provided by your corporation. This is a tax issue, not a legal issue.

A "C" Corporation can lead you into a Tax Trap known as "double taxation". Yes, income from a "C" Corporation can actually be taxed twice -- once when it's earned on the corporate level and again when it's paid to you, the shareholder, in dividends.

There are several ways to avoid double taxation. Often the easiest way is to tell the IRS that you choose to be an "S" Corp instead of a "C" Corp. The profits of an "S" Corp are not taxable to the corporation; instead, those profits are reported directly on the shareholder's personal income tax return and are therefore only taxed once.

And once is enough, don't you think!

Of course, any article on Choice of Entity must contain the old disclaimer, "Consult your tax professional" -- I am not prescribing a one-size-fits-all approach to this issue. But for many small biz owners and self-employed folks, the "S" Corporation is a good fit because it provides protection from personal liability and avoids the nasty tax trap of double taxation -- two great benefits worth checking into.

Should you incoporate your sole proprietorship and then decide that the "S" Corporation is the right fit, you must inform the IRS that your corporation is choosing "S" Corporation status by filing Form 2553, which is, in effect, an application to become an "S" Corporation.

IMPORTANT:

If you incorporate and do not file Form 2553, you are automatically considered to be a "C" Corporation by the IRS. In other words, to be a "C" Corporation, you just incorporate; there is nothing you have to do to inform the IRS you want to be a "C" Corporation.

There are critical rules regarding how and when to file Form 2553, so be sure to read the instructions carefully, or check with your tax pro.

Failure to file Form 2553 on time or filing Form 2553 incorrectly results in a rejection of your corporation's "S" Corp application, and the corporation is then by default treated as a "C" Corp, subject to double taxation, the very trap you were trying to avoid.

To download a copy of Form 2553, go to: http://www.irs.gov/pub/irs-pdf/f2553.pdf

The instructions for filing Form 2553 are found here: http://www.irs.gov/pub/irs-pdf/i2553.pdf

Tax Invoice

A tax balance is a acknowledged certificate that offers a attending at what the GST is for a transaction. Read on to apprentice about your obligations for issuing, holding, and bartering the altered types of tax invoices.

You can easily learn what the general requirements are for keeping tax invoices and what you can do if you receive a tax invoice too late to claim a GST credit, as well as what the requirements are for issuing tax invoices that are specific to the value of the supplies, and how you can issue duplicate tax invoices.

It is generally true that in order to claim a GST credit for a supply of more than $50, including GST, you must hold a tax invoice.

When you supply goods and/or services to another person who is registered, you must be able to provide a tax invoice within 28 days when the purchaser asks you for one. You could be charged with penalties if you do not supply the purchaser with a tax invoice after such a request is made.

For claims on supplies that are worth $50 or more, you must hold a tax invoice in order to claim a credit. You cannot claim your credit if you do not hold a tax invoice.

This means that you cannot claim a credit for a purchase when your return is due if you do not hold a tax invoice. If this should happen, there is something you can do. You can claim a credit for the purchase in a later return when you actually do receive and hold the tax invoice.

For supplies of $50 or less, including GST, a tax invoice is not needed. It is suggested, however, that you do keep a record of such things as invoices, vouchers, and/or receipts for these purchases. Minimally, you should at least keep a record of the date, description of the supply, the cost, and also the name of the supplier.

When dealing with supplies with a worth of $1,000 or more, including GST, the tax invoice must clearly display several facts. These include the words ‘tax invoice’ in a prominent place, the name, or trade name, and GST number of the supplier, the name and address of the supply’s recipient, the date it was issued, a description of the goods and/or services that was supplied, and also the quantity, or volume, of the goods and/or services that was supplied.

The tax invoice must also include the amount, excluding tax, that was charged for the supply, the GST content, and also the total amount that was payable for the supply. If you don’t have this information, it must include a statement that the GST, if it has been, is included in the final price.

If the tax invoice covers multiple supplies that add up to a total over $1,000, then all the details listed above are required.

For supplies that are valued between $50 and $1,000, including GST, a simplified tax invoice is acceptable.

This type of tax invoice must clearly show the words ‘tax invoice’ in a prominent place, the name and GST number of the supplier, the date that it was issue, as description of the goods and/or services that were supplied, and the total amount that is payable for the supply, as well as a statement that the GST is included.

A tax invoiced is not required for supplies that total $50 or less, including GST.

There cannot be duplicate tax invoices. A registered person is only allowed to issue one original tax invoice for each taxable supply. However, if a purchaser loses an invoice, then the supplier may issue a copy that must clearly be marked ‘copy only’ right on it.

Accountants And Accounting Software

Accounting is the measuring, and acknowledgment or accouterment of affirmation about advice that helps managers and added accommodation makers accomplish ability allocation decisions. How to become an Accountant.

Accountants in the US are called Certified Public Accountants and in the UK and Canada are called Chartered Accountants.

Chartered Accountants in Canada are expected to know all US CPA knowledge as well as a Canadian Accounting body of knowledge. In order to become an Accountant an undergraduate degree is required and then a period of articling is required which can take as long as 5 years with gruelling exams and an exhausting series of finals.

In her notes compiled in 1979, Professor Linda Plunkett of the College of Charleston S.C., calls accounting the "oldest profession"; in fact, since prehistoric times families had to account for food and clothing to face the cold seasons.

Later, as man began to trade, they established the concept of value and developed a monetary system. Evidence of accounting records can be found in the Babylonian Empire (4500 B.C.), in pharaohs' Egypt and in the Code of Hammurabi (2250 B.C.).

Eventually, with the advent of taxation, record keeping became a necessity for governments to sustain social orders. Perhaps the most significant benefits to contemporary accounting has been the introduction of computer programs to assist in the accounting function.

Computer programs were introduced in business and government organizations in the 1950s, and the most important applications of computers have been in the areas of record keeping, balancing , and transaction recording.

Accounting uses various bases of measurement, mainly the cash basis, the accrual basis (or historical cost) and variations of these; all of these functions are greatly assisted by the use of various accounting software programs.

Accounting is tied to the invention and dissemination of the double entry bookkeeping process.

Different Accounting Software Solutions available today:

ACCPAC web-based accounting, launched the ACCPAC Online web site in 1999 which allows end users to run ACCPAC from a simple browser for a small monthly rental fee.

Intuit's QuickBooks for the Web represents a new product from scratch. Microsoft Small Business Manager is a new player on the block which is a scaled down version of Great Plains Accounting Software.

Netledger centralized net computing renamed Oracle Small Business Manager Peachtree. This product was the older Peachtree Office Accounting product and is also a web-based solution. In 2000, Peachtree added a web-based module to its' flagship Peachtree Complete Accounting product called Peachtree Web Accounting.

SAP mySAP - web-based accounting featuring a limited number of SAP modules.

So it appears that there are 2 different types of Accounting Software:

Web Based Accounting: which is one application on a Web Server running everybody's application.
There are of course advantages and disadvantages to this type of application, immediately coming to mind is confidentiality and the security of the Servers being used as well as possible breakdowns.
Advantages are of course in being able to use unlimited Server Resources.

And then there is PC Based accounting which everybody has tried and is Bill Gates favorite.

Advantages;

In-house control of everything but subject to limited resources.

Managing Freelance Tax

According to business analysts, the home-based business trend is on the acceleration and a lot of bodies are jumping assimilate self-employment. The account is not hasty back there are abounding advantages in actuality self-employed and owning your own business. Aside from the actuality that you can absolutely alarm article your own, there is additionally the faculty of accomplishment brought by claimed success. On the applied side, you get to be your own boss, which agency that you adjudge your hours and how abundant accomplishment you'll put into a project. Plus, there are assertive advantages absolute to ambidextrous with cocky active tax, sole freeholder tax, business tax, and added budgetary matters.

Managing your taxes is easy, says Jan Zobel, a freelance tax specialist. Drawing from over 2 decades of tax management experience, she has the following suggestions on how to manage self employed tax, sole proprietor tax, business tax, and other independent taxes. She suggests filing appointment books, daily planners, or calendars with finance materials like taxes and banking records. Zobel tips that there is money in keeping time. Your schedule can be used as proofs to verify and clarify business expenditures like travel mileage, phone bills, and hotel receipts. Presto, instant tax deductions. She advises to log in your travel time and miles driven in business trips in your appointment book. Aside from this, Zobel also warns to take note of financial details. Often, these are the causes of tax troubles. Record those bank account deposits, regardless whether they are loans, gifts or business-related. It is also helpful if you note deposit sources. Keep these notes in a checkbook or a separate file. This way, you can separate business income from loans and gifts which aren't covered by tax. The IRS usually assumes undeclared income if audits reported an income excess even if these came as gifts. Proofs or records of these gifts prevent tax problems from the IRS. Zobel asserts that insisting you can remember everything related to your finances come tax time is unrealistic.

Self employed tax, sole proprietor tax, business tax, and independent taxes benefit greatly from separating business accounts from personal accounts. Zobel advises to keep business money in a separate account and your own money in your own account. Be reminded to write checks for business purposes from the assigned account and vice versa. For those who don't want separate accounts, Zobel suggests to note each check with remarks such as "business" or "personal" each time you write one. Identifying the purpose of the check won't hurt either such as "for office furniture". This tip minimizes mix-up of your personal and business finances. Following this tip, keeping credit cards for personal and business use separately is also preferred. She also reminds that interest in credit cards for business purposes is a hundred percent deductible. Zobel advises keeping credit card and sales receipts. These are especially handy during audits for reference. Consulting tax specialists, professional tax managers, and the internet for tax managing tips are also advised.

Lastly, whether you pay self employed tax, sole proprietor tax, business tax or freelance taxes, keep your records clean and straight. Remember also to settle your taxes on time. Racing after deadlines can make you forget key documents which might cause tax problems.

Determining Your Tax Status

Knowing how to actuate your tax status, and alive the aberration amid anniversary accumulation will advice to accomplish filing your assets tax acknowledgment go smoother. Here we will altercate the means in which you actuate which cachet to book under.

There are five classifications from which you choose to file: single, married filing jointly, married filing separately, head of household or qualifying widower with dependent child. If for some reason, more than one status applies to you, you should choose the status that gives you the greatest tax benefit.

Determining your status as a single filer seems simple enough, but there are different situations that exist that can qualify the taxpayer as single. For example, if you are legally separated even in the last month of the year, you are considered single for the entire year. With no dependents and you are unmarried, you are considered single. Divorce and annulment within the year also qualifies you to file as single.

However, even if you are single, but you have a dependent, or were widowed during the tax year, and you have dependents, your filing status would change to head of household or widowed with qualifying dependent child, not single.

When it comes to determining your status as a married taxpayer, there are simple qualification assessments that establish your legal filing status and if you’re considered married. Obviously, if you are legally married and living together as husband and wife, even for a small part of the tax year, then you would be considered married. If you are living together as common law spouses, and it is legally recognized in the state in which you live, or you lived part of the tax year in the state where the common law marriage began, then your filing status is married. Your filing status is still married even if you are married but not living together, but are not legally separated or divorced.

If you have unique circumstances, it might not be so easy to determine your filing status. If, for example, you were widowed during the tax year and did not remarry, you can file as married with your deceased spouse, and then file as widowed with qualified dependents for the next two years, so long as you do not remarry. If you remarry within the tax year that your spouse passed away, you would file as married with your current spouse, and file with your deceased spouse as married filing separately.

If you are married and want to file a joint return, your tax status is married filing jointly. All income to the household must be included on the one return, and both spouses must sign and date prior to submitting the tax return. All exemptions, deductions, and credits are reported on the joint return, and you share equal responsibility and liability for the information reported on the tax return, as well as any tax money owed. There are ways to ask for release from joint responsibility, either through innocent spouse relief, separation of liability for spouses who have not lived together for the past year, or equitable relief.

There are sometimes reasons that a spouse cannot sign a joint tax return, such as a spouse stationed abroad for the military. In this type of situation, you may sign for your spouse as a proxy, and attach a written explanation.

Choosing your filing status, while lengthy and sometimes complicated, is an important in the process of completing your Federal Income Tax return.

Heath Savings Accounts (HSAs) Mean Big Tax Savings

Concerned about the high cost of healthcare? Worried that your insurance doesn’t cover all your costs? Fortunately, a partial solution may be just around the corner. Since January 2004, taxpayers have had a tax savings tool called Health Savings Accounts, or HSAs. These HSAs may solve many of your healthcare cost problems.

How an HSA Works

In a nutshell, HSAs work like this. You buy a specific type of major medical, or catastrophic coverage, insurance called a High Deductible Health Plan. (This special HSA-compatible insurance is also known by the acronym HDHP.) Then, you annually contribute up to roughly $5,100 for a family and up to $2,600 for an individual--to a special health savings account. (Note that slightly higher deductions are available to taxpayers over the age of 55. Also, annual deductions are indexed for inflation.)

How You Save Taxes with HSAs

HSAs work because you get a tax deduction for the money you contribute to the health savings account. However, as long you spend the money in the account for eligible healthcare expenses—pretty much anything reasonable—you aren't taxed when you withdraw the money. Note that HSAs deductions are not limited by taxpayer incomes.

In effect, the HSA makes all or most of your uncovered healthcare expenses fully deductible. This is a big deal because for most people, healthcare expenses are not deductible.

Just to put the value of an HSA into perspective, a family can save from $500 to as much as $1750 annually in income taxes by using one of these accounts. The final savings, predictably, depend on family income and the state where the family lives.

One other thing. Don’t confuse HSAs with the old style Flexible Spending Accounts, or FSAs. With FSAs, you lost the money you didn’t spend by the end of the year. With HSAs, you don’t lose the money. The unused balance just carries forward to the next year.

Aren’t Medical Expenses a Tax Deduction Anyway?

No, not really. For most people medical expenses are not a tax deduction. Here’s why. Healthcare expenses do count as an itemized deduction for people who don’t use the standard deduction. However, only the portions of one’s healthcare costs that exceed 7.5% of adjusted gross income get deducted. That means that most people never get to use their healthcare costs as tax deductions because their healthcare costs don’t cross the 7.5% threshold.

Another Benefit: HSAs May Also Save Premiums

HSAs sometimes produce another economic benefit. The HDHP insurance itself may save people money because they buy less insurance. This is especially true for people who aren’t already using major medical insurance.

How to Set Up a Health Savings Account

HSA accounts aren't difficult to set up. Essentially, you do just two things. (1) Get medical insurance that qualifies as an HDHP, and (2) Open an HSA account with a bank that offers HSAs. Your current medical insurance provider is a good place to start your search for HDHP insurance. You can also check with your state’s Blue Cross or Blue Shield insurer.

Three Warnings about HSAs

For what it's worth, I am now using an HSA myself. (I got my HDHP from Premera Blue Cross and use an HSA account from HSA Bank.) But let me also share three caveats: First, obviously, you never want to cancel one insurance policy until you're sure you have a replacement policy. Second, you do need to be careful about the fees associated with the HSA "bank account," so shop around. Third, if you withdraw money from an HSA for something other than a valid medical expense, the withdrawal is taxable and subject to a 10% penalty.

Professional bookkeeping and financial accounting services provider help to save 40/50 % US cost

E-accounting actual able-bodied cuts baby the time in use to move the time taken by in adjustment bandy amid the audience and accounting firm. The absolute affective is far added able and abundant faster. The accounting close has activating admission to the sourcing abstracts of the audience firms and can admission anytime any advice it requires from its audience side. E-accounting and online accounting works in internet, back you are activity to assignment on e-accounting services, you may accept added audience assignment or you are alive for added being or an organization. The online accounting arrangement additionally allows the accounting close admission to applicant database from any of the site. Far missing area at the a few clicks on the internet. The time acknowledging banking abstracts is readily achievable to the accounting firm.

Other then the speed and cost of services, online accounting enables better customer service and additional dependability and faith. Accounting firms lately have been bare as in cahoots with some very big clients, commit serious financial crime. In this situation the new do build more clearness too. The online accounting does also give for more opportune communication among the firm and clients. Since the client has more instant access to information and to time sensitive documents with Online Accounting practice, question and evils can be more easily identified and resolved. This translates into increased profits as well as better-off clients!!

Since the clients obtain improved service, they get more worth for the money they spend. It is usually quite cheaper for the business proprietor to outsource the bookkeeping and accounting than to hire and supervise it in-house. Investments for the business owner can be as much as 30% for some clients! Online Accounting is great for such services. The accounting firms also charge now a fee (fixed on a monthly basis) almost five times the average monthly fee (based on billable hours) they charged earlier. Generally the various online accounting processes available are modified for their users where they can choose the menu of features they like. Online Accounting is an outstanding tool for accounting and book keeping, one that is help full for both the accounting firms as well as the clients.
Do you want a solution to all your financing, accounting and bookkeeping problems? If yes then Outsourcing Bookkeeping Services. Is your target for comprehensive financing, accounting and bookkeeping outsourcing services. Bookkeeping financing and accounting are easiest process for any company can in touch of other for any time.
Your benefit to be a part of outsourcing bookkeeping services is that you will get a chance to save your valuable money and you will also be able to save your precious time that you can use for your business development. Out Bookkeeping Software has made Book Keeping processing very simple for every one.

Outsourcing Bookkeeping Services supplies business opportunities to all the companies. Whenever they are small, big, large, very large, national or international company for any services provider field. Because any types of field Container Company need accounting and financial services or some information provider resources. Professional Bookkeeping Services provides accounting & financial service to you for your business development and the development of tour business. Outsourcing Bookkeeping Services Company can understand your accounting and financial position after checking the company status and it is capable for solving and managing accounting activities.

2010 List of Tax Scams Released by IRS

Every year, the IRS issues a account of tax scams. The ambition is to active taxpayers to the abridgement of arete of assertive strategies as able-bodied as absolution anybody apperceive the IRS will not acquire them.

2010 Scams

The IRS has kicked out its annual list of highly dubious tax scams for 2010. 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 2010 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 2010. 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 2010 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 identity thieves try to obtain information from taxpayers by acting as IRS agents. Often they send out email as though they are from the IRS.  The IRS never sends emails to taxpayers, so don’t respond to these emails. If you’re not sure, call the IRS and ask them if there is a problem. You can reach the IRS at 800-829-1040.

4 Credit Repair Companies – You see these companies everywhere. Some are legitimate while others are not. The ones that are not charge high fees and do almost nothing other than putting taxpayers on some kind of a payment plan. The IRS is currently revoking the tax-exempt status of many credit repair companies. 

5. Offshore Strategies – A traditional area of angst for the IRS, offshore strategies continue to be closely watched. The IRS is hyper sensitive to such strategies and tries to shut them down. In 2005, 68 individuals were charged and convicted for promotion offshore tax scams and thousands of taxpayers were audited with nightmarish results.  If you want to go offshore, make sure you get qualified advice from a tax professional and attorney. Don’t buy something off a web site.

There is a fine line between tax evasion and tax avoidance. Tax avoidance is legal while tax evasion is criminal. If you wish to pursue advanced tax planning, make sure you do so with the advice of a tax professional that is going to defend the strategy to the IRS.

When Do You File a Tax Return?

The first known income tax that Americans were legally required to pay was enacted during the 1860s, and the Presidency of Abraham Lincoln.  The Civil War was proving very costly to fund, and the President and Congress created the Commissioner of Revenue and enacted a law requiring citizens to pay income tax.

Originally, the deadline for completing and filing your individual income tax was not April 15th.  In the beginning, it was first set for March 1st.  Then, during 1918, Congress pushed the date out to March 15th.  Then, in the great overhaul of 1954, the date was once again moved forward to April 15th, and this is where it remains today.  But, it has only been set this way for a little over 50 years.  That’s not very long, in historical terms, and it could possibly be changed again.

If you are an individual tax payer, you are required to file either a return or an extension of time to file (Form 4868) by April 15th.  Corporate and other legal entities are required to file their tax return by March 15th, and if not, they also must file an extension of time to file.  What this extension does not do, is to extend the amount of time you have to pay any taxes due the government.  So, if you are unable to ready your personal or business financial information in a timely manner, and have no reasonable estimate as to the amount of tax you may owe, you can expect to pay some form of penalty.

In the years following WWII, the burden of tax responsibility was shared fairly equally by the corporate world and the individual tax payer.  Today, however, the shift has been toward more responsibility on the part of the individual, and less on the business backs.  To demonstrate how special interests have begun to overtake American politics, during 1867, public opinion was so strong, and the outcry of the general public so loud, that the President and Congress repealed the income tax law, and from 1868 until 1913 almost all of the revenue for government operation came from the sale of liquor, beer, wine, and tobacco. 

An interesting time during the formation and eventual taxation of America occurred during 1918.  Until that point in time, the vast majority of revenue for government funding came from alcoholic beverage sales.  In 1919, Congress passed an amendment to the Constitution that made it illegal to manufacture or sell alcohol; what would replace the revenue?  American income tax was the proposed solution, and we’ve been paying since.  Although during the great years known as Prohibition, many “revenue agents” spent their days tracking down “moon shiners” not tax evaders, the American citizen, the individual taxpayer took on the heavy burden of supporting government revenue, and it has become heavier with each passing year.

Then, during 1942, the Revenue Act of 1942 was passed and the “New Deal” era was begun.  Since that point in time, government control, power, and expenditures has continued to increase at a phenomenal rate, and today the American taxpayer supports a trillion dollar giant known as the United States government.  This ravenous beast consumes more than 10% of our earned income each year, and if the Social Security Administration has their way, will continue to consumer even more of our weekly earnings.  We can foresee no other relief in sight.

Currently, all the tax regulations for this country are the responsibility of the Internal Revenue Service, and there are four major divisions of this government office: the Wage and Investment, Small/Business Self-Employed, the Large and Midsize Business and the Tax Exempt and Government Entities.  Each division has responsibilities as they pertain to their individual specialty.

Create Tax Savings And Transfer Wealth To Your Child With A Roth IRA

Parents charge accord austere anticipation to attention their ancestors through acreage tax planning. While activity allowance and trusts should be a allotment of every plan, Roth IRAs can be a simple apparatus for casual money to your adolescent on a tax-free basis.

Roth IRA

First, we need a quick summary of the Roth IRA. A Roth IRA is an after-tax retirement vehicle that produces huge tax savings because all tax distributions are tax-free. That statement can a bit confusing, so lets break it down. The downside of a Roth IRA is the fact that contributions are not tax deductible as with traditional IRAs or 401(k)s. The upside of a Roth IRA, however, is that all distributions are tax-free once the person reaches the age of 59½. So how can you use a Roth IRA to pass money to your child?

Opening A Roth IRA For Your Child

One of the biggest keys to retirement planning is “time”. The more years you spend saving money for retirement, the more you should have when that blessed day arrives. Imagine if you had started saving for retirement when you were 16. How much bigger would your retirement nest egg be? What if you purchased Microsoft stock in 1990 and watched it split eight times? Okay, that was painful example if you missed that opportunity. Nonetheless, why not do for your child what you didn’t do for yourself?

The fundamental goal of estate planning is to pass as much of your estate as possible to your family on a tax-free basis. You can transfer relatively small amounts of money to your child now. If you have a 16 year-old child with a Roth IRA, you can contribute $4,000 in 2005. That $4,000 is going to grow tax-free for 43 years and be worth quite a bit. A ten percent return would result in the account growing to roughly $200,000 and the full amount would be distributed tax-free. There are other practical advantages to opening a Roth IRA for your child.

As a parent, it is vital that you teach your child the value of money. Opening a Roth IRA gives you the opportunity to sit down and teach your child the value of saving and investing, instead of yelling at them to clean their room. While a parental lecture on the need to save money would typically meet with glassy eyes and yawns, your child’s attitude will undoubtedly change when you are talking about their money.

Work and Maturity Issues

Before you rush out to open a Roth IRA for your child, you must determine if your child is eligible to open an account. To open an account, your son or daughter must be working at least part time for an employer that reports their wages to the IRS. Hiring your child to take out the trash each week is not going to cut it, nor will this strategy work for your 5 year-old. Many teenagers, however, have summer jobs that should suffice for IRS consideration. To avoid any trouble, you should consult with your tax advisor.

A more sublime issue concerns the maturity level of your child. Keep in mind that the Roth IRA will be opened in their name. Your son or daughter will have the legal right to do what they will with the account. It is strongly suggested that you clearly explain the consequences of taking money out of the account [taxes, penalties, being cut out of the will, forced to eat healthy food, grounded for life, etc.] but the decision lies with them. As difficult as it is, try to be objective in evaluating how you child will react to knowing the money is sitting in an account. If you have doubts, you should probably investigate other tax saving strategies.

Opening a Roth IRA for your child can be a very effective means of transferring wealth to your child and teaching important life lessons. If your child exercises restraint, your relatively small contribution to their Roth IRA can grow into a sizeable tax-free nest egg.

Tax Haven Raises 2006 Entry Price

While Monaco is a able-bodied accepted European tax haven, Andorra has remained little accepted alfresco of the cyberbanking association - admitting adequate the aforementioned tax advantages and arguably added clandestine cyberbanking than her bigger accepted rival.

In contrast to the similar financial benefits both Monaco and Andorra residents enjoy, the two small countries have quite different climates.

Monaco has good all year round weather and is located next to the French Riveria, while Andorra is in the Pyrenees and between early December and late April attracts nearly ten million tourists for ski holidays. Monaco has year round tourists, peaking twice a year in May for the Grand Prix, and September for the Yacht Show.

Neither Andorra or Monaco have their own airports – Nice airport has a helicopter link, a ten minute ride direct to Monaco, Andorra is not so fortunate and the nearest airport is Barcelona, a three hour drive away from the principality.

Both countries have opted to stay out of the EU, preserving their ability to maintain a no income tax policy.

The biggest difference is the entry price for becoming a resident – which entails buying or renting a house or apartment.

One bedroom apartments in Monaco start at 800,000 Euros, but in Andorra the same size apartment starts at less than a third of the price at 250,000 Euros. And while a house in Monaco is a rarity, there is a good choice of houses for sale in Andorra, with prices starting at under a million Euros.

Rising Prices

Given Andorra’s property price advantage for would-be residents choosing between Europe’s primary tax havens, it has come as a surprise to many that the closing costs for buying a property in Andorra has not only been less than half that of Monaco, but also less than buying a property in many other mainland European countries at around four and a half per cent.

But Andorra has just raised property closing costs by introducing a three and a half per cent sale of goods and services tax on property purchases from January 1, 2006 - bringing the tax haven more in line with neighbouring France and Spain.

Demand for property in Andorra and Monaco is unlikely to be affected by the recent increases though, according to European tax haven specialists Tribune Properties.

‘Andorra and Monaco have historically seen an increase in property activity and residency applications when taxes are increasing elsewhere. The new German government has recently increased the top rate of income tax and the United Kingdom has seen an increase in the number of indirect taxes, making the zero per cent personal income tax both Andorra and Monaco offer an attractive preposition to high income earners.

Andorra’s property inflation has been over ten per cent annually for the last three years, and when the 2005 figures are released we would expect it to be four years in a row, with no sign of a levelling off of demand for the year ahead.

With Andorra and Monaco’s high speed cable and broadband internet access more and more company owners are moving their residence to low and no tax countries and running their companies from a distance geographically, while being able to share information with their head office in real time’.

As well as buying a property in Andorra or Monaco, both countries require residency applicants to establish a local bank account and deposit around 50,000 Euros (Andorra) or 100,000 Euros (Monaco), take out private health insurance, and to live there for six months of the year.

Compromising With The IRS

Few things threaten your well-being like the harassment and anxiety of persistent tax problems. Most people make 3 mistakes that get them in trouble with the IRS. They procrastinate. They attempt to represent themselves. They hire sub-par representation and now are in MORE need of help than ever before.

These are the kind of services a Tax Attorney can provide: Offer in Compromise Cases, Penalty Abatement Petitions, Full Audit Representations Business Strategy Sessions. Preparation and Filing of Tax Returns.

Settle taxes for Pennies on the Dollar owed, Stop IRS wage and bank levies (garnishments), Have property liens lifted, get affordable installment agreements, File bankruptcy against the IRS, Have penalties and interest forgiven, Reduce taxes by running out the IRS' time to collect.

Offer in Compromise: Settle your taxes for Pennies on the Dollar owed Professional law offices can help get you a favorable settlement with an experienced IRS tax attorney. The IRS' Offer in Compromise program allows taxpayers to settle their tax debt.

What is an IRS offer in compromise?

It settles your tax liability for less than the full amount owed, providing you can prove you don't have the ability to pay. Depending on how much you can afford, you really can pay "Pennies on the Dollar Owed" in taxes.

If it is done correctly - this option could save you an enormous amount of money, and is the best strategy for most taxpayers. You should take extreme caution. You should hire a professional with knowledge of the IRS' procedures.

This professional should determine the least amount that the IRS will accept from you. If the Offer is not submitted correctly it will be rejected, or you may be required to pay more than is necessary.

An Offer in Compromise may save you a LARGE amount of money. Do you know that the IRS only has a limited time to collect your back taxes?

Let a Professional Tax Attorney determine when the IRS' time limit to collect taxes runs out.

In most cases the IRS has only a limited time to collect the unpaid taxes. You must CAREFULLY evaluate exactly when that time period will run out.

Your troubles may be solved. and moreover: If the IRS' time has run out, or if it will run out soon, your troubles may be over.

Delaying tactics may be used to stall the IRS while their time runs out. Once the IRS is out of time, they MUST stop ALL collection action against you.

The IRS MUST release all property liens

TAX RETURNS - FAILURE TO FILE

Many people fail to file Individual Income Tax Returns for a variety of reasons. Some reasons are innocent, although the most common is the fact that people can't afford to pay the taxes.

When this happens it becomes difficult to get back into the system. "I filed for 1998. I couldn't pay for 2000, so I did not file. Then I was afraid to file for 2001. I haven't filed since then. What can I do now?"

If you do not file Income Tax Returns you commit a criminal offense. However, no one who has voluntarily filed back returns before being caught has ever been criminally prosecuted. That is the first key: filing BEFORE they catch you.

IRS Penalties
Some IRS penalties can be as high as 100% to 150% of the original taxes owed. Even if you could pay the taxes owed, the extra penalties will make it impossible to pay off the entire balance.

The IRS imposes penalties to punish taxpayers and keep them in line. The IRS does forgive penalties. Before you pay the IRS any penalty amounts, you may want to consider requesting the IRS to not punish you because it wasn't your fault.

The Importance Of Having A College Education With Accountancy

As with many fields, having a college education can drastically affect the kind of success you have with accountancy.  Everything from salary, position, and company you work for can be impacted by the amount of education you have under your belt.  This does not mean you cannot succeed without a master’s degree, but it will certainly help if you do have a college education.

The reason for getting a college education is to gain knowledge and expertise in the field prior to getting your first job.  Throughout the college experience, you may be required to get an internship of some sort along the way.  Having an internship allows you to see first-hand what kind of work is done in this particular industry.

Not only is it much more difficult to get a job without going to college, but it can be difficult to get an internship as well.  Anymore, internships are highly looked upon within the various professions in the world.  It shows a company that you have pursued accountancy and still enjoyed the experience.  This gives a company more assurance that you will not back out on them after a few months.

One thing you have to understand is even with a college education, you cannot expect to start at the top.  It is a highly competitive industry that does require you to work your way up the totem pole.  Many students come out of college thinking they know it all and expect to be making a six-figure income right away.  Little do they know what is ahead of them?

Having a college education technically does not even guarantee you a job.  It all depends on what openings are available and what kinds of competition you have for the job.  You should also be prepared to move out of the state or country to take a position you have been offered.  But you do have to realize the odds are in your favor with a quality education.

Companies are going to look much closer at a student’s resume if they have a college education over a high school education.  The same can be said for a student who has a master’s degree over a bachelor’s degree.  The more experience and education you have in the field, the less the company has to do to get you going.

When first applying for jobs out of college, you are probably going to look for a starting-level job such as a pay clerk or an account clerk in a company or college.  If you do a good enough job with this position, you can expect to be moved up to a much more rewarding accountancy profession.  Many times this is a good supervisory job, but you never know what will be open. 

The difference between a master’s degree and a bachelor’s degree could mean a quicker advancement.  Some coming out of college with a master’s degree can start right at a supervisory position and completely skip the account clerk position.  Within the supervisory position, you can expect to manage accounting functions prepare reports for the company.  After this, you can move on to bigger positions with a higher paying salary.

Over time, it is a goal for most people to become an accounting manager at some big company or business.  Being an accounting manager requires you to work closely with all financial departments in the company.  You have to have experience with everything so you understand how to deal with any problems that may arise.  This is where on the job training, such as an internship, and having a master’s degree come in handy. 

There is no denying the fact that getting the best education possible can help you succeed in accountancy.  If you are not willing to go for a master’s degree, it is vital you at least get a bachelor’s degree in accounting.  This will give you the best chance possible to start a quality career.

Are You Overpaying Taxes If You Use Tax Preparation Software?

For abounding business owners the acknowledgment to this bewilderment is tax alertness software. Fill out a adequately simple interview, bang “print” and out comes a completed acknowledgment that will canyon aggregation with the IRS. The acknowledgment to all your problems…or is it?

Can One Software Program Cover All Businesses?

Take a moment to consider the wide range of businesses that exist in the United States. Now cut that number down to those that can be categorized as “Internet businesses”. If you were asked to write a business plan to provide web design services to each of these services, how long would it be? It would be huge and completely useless because each business would have different needs. A Internet business selling flowers would have completely different needs from an online bank which would have different needs from a hosting company and so on. The only way you could create a practical plan for all Internet businesses would be to offer a collection of general services they could all use on their sites. Tax preparation software designers have the same problem.

There are over 15,000 pages in the tax code and over 100,000 pages of regulations interpreting those pages. Changes are made to the tax code ever year, and new regulations are issued constantly. If one were to create a list of questions for every tax deduction and credit detailed in those pages, the list of questions would be the size of a phone book! Yet, tax software programmers have somehow boiled it all down to a simple 30-minute interview process? Common sense should tell you that doesn’t make sense.

As practical matter, tax software programs are designed to make sure that you claim a general set of deductions that are applicable to businesses across all industries. Most programs try to mask this fact by asking you to identify your business before proceeding. For a lark, you might try selecting another industry and then running through the interview process. You will find that the interview process is modified a bit, but you are still being asked the same basic tax deduction questions.

If you are only claiming general business tax deductions, you are paying more than you should in taxes. Ask yourself if you have seen any of the following questions in a tax software program interview:

Q. Do you store business inventory in your house?

Hint: You may be able to claim hundreds or thousands of dollars in deductions.

Q. Did you start a pension plan for your employees?

Hint: You may be able to claim a tax credit for the next three years totaling $1,500.

Q. Do you have a home-based business and a second office?

Hint: You may be able to deduct your commuting expenses each day. Yes, commuting expenses.

Q. Do you have business meetings at your home?

Hint: Did you charge your business for the space?

Q. Should you claim the standard mileage rate for your auto or the actual costs?

Hint: The standard mileage rate may not the best option.

Q. Did you modify your business location to comply with the Americans with Disabilities Act?

Hint: You may be able to claim a tax credit AND tax deduction for tax savings of $20,000 or more.

Q. Did you refinance your home?

Hint: The points you paid on your original mortgage are fully deductible now, not over the length of the loan.

This represents only the tip of the iceberg of available credits and deductions available to you. Just one of these deductions could save you thousands of dollars in taxes. Yet, you are never going to see these questions raised in a tax software program interview. The tax code and regulations are simply too large to be incorporated into a usable software program.

Your business is unique. You face and overcome issues and problems that are unique to your size, financial situation and particular business needs. Don’t short change yourself by limiting your deductions by using tax software programs.

Learn the tax benefits of a Flexible-benefits Plan

Flexible-benefits Plan (FBP) is an agent allowances plan which helps the employees’ to save ample bulk of taxes by advantageous assertive costs from their pre-tax income. Some of the acceptable costs from pre-tax assets are medical, vision, dental, ancient care, and abased care. All accompaniment advisers who get a approved paycheck are advantaged to participate in the flexible-benefits plan. 

Flexible-benefits Plan mainly boasts three components:

- Health Flexible Spending Account (HFSA)
- Dependent Care Reimbursement Account (DCRA)
- Health insurance premium deduction

Flexible-benefits Plan’s reimbursements are made occasionally, mostly once in a week. You will receive statements which helps you to keep updated on your account. Quick information about your account can be accessed with the help of customer service line or email.

Due to the program’s tax exempt features, the federal government strictly regulates the Flexible-benefits Plan. FBPs are regulated by sections 125 and 129 of the Internal Revenue Code (IRS). Hence it is advisable to review the IRS rules before you enroll. If you wish to enroll in the FBP, then it is better from your part to discuss how the program may benefit you with your financial planner or tax advisor. 

How does a Flexible-benefits Plan work?

On enrolling in a flexible-benefits plan you first have to decide how much amount you need to earmark for your Dependent Care Reimbursement Account and/or Health Flexible Spending Account. After you have fixed a particular amount for your account, your employer will deduct the amount every month from your salary for the flexible-benefits plan. The deducted amount will be immediately credited to your accounts you have already specified. 

Reimbursement

Whenever you had met with an eligible expense, you can submit a claim for reimbursement. While submitting a claim, make sure that you have provided all necessary documents supporting your claim. Reimbursements are generally made weekly.

- Health Flexible Spending Account (HFSA)

While submitting a claim for reimbursement, first submit all your health care claims according to your health care plan. If there is any amount which is not covered according to your health care plan, you can claim those amounts for reimbursement with your Health Flexible Spending Account. While submitting a claim, make sure that you have provided a copy of an Explanation of Benefits (EOB) or your receipt together with your Flexible-benefits Plan Reimbursement Request. 

- Dependent Care Reimbursement Account (DCRA)

You can submit a claim for your dependent care expenses by providing a copy of your receipt to a complete Flexible-Benefits Plan Reimbursement Request. You can also provide a complete Reimbursement Request signed by your dependent care provider.

Monitoring your account

It is advisable to keep a close eye on your account every time you make a claim or when ever you get a Flexible-Benefits Plan reimbursement check. Generally you will also obtain an Explanation of Benefits which displays your up-to-date details of deposits, the claims you had submitted, the claims you were paid, and the remaining amount you have in your account.

Besides this, you will be provided with an Account Status Report, in most cases three months before the end of your Flexible-Benefits Plan year. The report displays your total accounts and reminds you to submit any outstanding claims. This helps you to avoid any forfeiture.

Unused funds

According to the IRS regulations, you need to forfeit any unspent funds in your Flexible-Benefits Plan at the end of each plan year. Hence you must be very careful to plan your contributions and to make sure you have submitted request for all eligible reimbursements. Also make sure that you have submitted your request with all documentary proof. Keep in mind that it is always better to underestimate your eligible expenses than to overestimate them and risk forfeiture.

Tax, Tax And More Tax. What A Bummer! Here's How To Handle It.

When you run a business, it can feel like you spend far too much of your time worrying about tax. Here's a quick guide to the what you need to know about tax.

What Do You Qualify For?

There are all sorts of tax breaks for home and small businesses, to try and make it easier for them to survive. To qualify for them, though, you will need to be using your home as the primary place where you do business. If most of what you do takes place in some space elsewhere that you rent, then you won't qualify for home business tax rules. You also are unlikely to qualify if you haven't set aside a specific part of your home as the 'business area'. Be prepared for the fact that you might be audited, to make sure that you are running a legitimate business from your home.

Records You Need to Keep.

You need to keep records of everything -- literally everything -- you spend on your home business. You should especially keep records of things when their use might be shared between personal and business, such any business-related travel expenses you run up on your car. If you have stock, you need to go through and inventory it at least once a month.

What You Can Deduct from Your Home Expenses.

Because your home office is in your home, you can claim any tax back that you pay on that part of the home. You can also claim back tax on part of your utility bills. For example, if your home is 2,000 square feet and you use 100 square feet for your home office, you can claim back 5% of your utilities. If you rent, then you can claim back this percentage of the rent, and if you have bought the house then you can claim it as a discount off your mortgage interest. Any equipment you have that depreciates (becomes worth less) because you use it in your business may also be eligible for a tax deduction.

Self-Employment Taxes.

When you work from home, you are legally self-employed. This can put you in a sticky situation, meaning that you have to pay for medical and other taxes that your employer would normally pay for you. In the US, for example, you will be responsible for your own social security and Medicare payments, while in the UK you will need to pay national insurance.

Get Tax Software.

If you're not sure where to begin, get some tax software. Choosing your circumstances from its lists and giving any additional information it asks for should show you most of the tax rules that apply to you.

Get an Accountant.

If you want to save as much as you can on your taxes, don't rely on things you read on the Internet, or even on computer software -- get an accountant. They'll be up-to-date with all the latest tax laws, and will know thousands of tips and tricks that there's no space to list here. See if you can find one who will take a percentage of what they save you in tax as payment instead of charging a flat fee -- this is an ideal solution for you and for them.

Do Your Taxes Online.

Most developed countries now give the option to do your taxes online, eliminating a big paperwork headache. You may even find that your tax software can send its tax report directly to the online service, without you doing much more than clicking a button. Of course, if you do things this way, be sure to call and confirm that everything went through alright.

Don't Be Late.

Whatever you do with your taxes, you absolutely must not file them late or pay them late. It's an all-too-easy trap to fall into, but there are automatic fines. Tax collection agencies will look upon you very unfavourably if you pay late, and are likely to start immediately charging interest on any money you owe them. Write your tax dates on your calendar and underline them in red. Twice.

Tax Tips for New Ecommerce Entrepreneurs

New ecommerce entrepreneurs can acquisition them abashed and ashamed by the tax and accounting requirements of their venture. And that’s a shame: If someone’s spotted a abundant new class and auspiciously congenital a web presence, heck, that addition shouldn’t acquisition themselves bogged bottomward with the accounting minutia. The administrator should focus on accretion traffic, accretion margins, and growing banknote profits.

With that in mind, I offer up the following tax and accounting tips:

Tip #1: Don’t Incorporate

A true corporation—whether a C corporation or an S corporation—saddles your business with more complicated tax accounting and a bunch of state filing requirements. You don’t want to deal with this redtape—or at least not until you’re profitable.

Instead, operate your business as a sole proprietorship. If you’re concerned about legal liability protection, note that you can setup a one-owner limited liability company, or LLC. A one owner LLC is treated as a sole proprietorship for income tax purposes.

Tip #2: Start Your Business Before Making Investments

Expenditures you make before you’re actually in business-in other words, before you’ve got a business license and before you’re selling or trying to sell your stuff—aren’t very deductible.

Specifically, you can probably deduct the first $5,000 of these expenses. But any amounts in excess of the $5,000 must be amortized over the next fifteen years.

What this means is that you want to start your business before you start spending money on advertising, training, web development, accountants and lawyers and so on.

Tip #3: Automate Your Bookkeeping & Accounting

By law—and some people don’t know this—you’re required to maintain an accounting system that lets you clearly measure your income. As a practical matter, this means you need to use a product like Quicken or QuickBooks.

But you ought to go one better than simply using desktop accounting software. Make sure that you’re taking advantage of online banking and bill payment features which integrate your accounting system with your banking. As much as is possible, for example, you want to be able to move money from PayPal to your bank to QuickBooks simply by typing a few keys or clicking your mouse a few times.

Tip #4: Hire a Payroll Service Before Hiring Employees

Many successful ecommerce business owners can run their operations without employees. And if that’s true for you, hey, congratulations. If and when you do need employees, however, don’t try to handle the payroll yourself. Oursource the payroll to one of the large payroll service bureaus like ADP, Payroll, or QuickBooks.

These services are expensive. Figure $1000 to $2000 per year. But the services let you avoid the bookkeeping nightmare called payroll and prevent you from getting into payroll tax trouble.

Tip #5: Consider S Corporation Status After You’re Profitable

I’ve written and talked much about how S corporations save taxpayers money and how the right way to set up an S corporation is first create a limited liability company and then ask the IRS to treat the LLC as an S corporation for tax purposes.

Let me review the basics here again, however. Suppose that you’re making $90,000 a year off your web site. If you just treat your business as a sole proprietorship—or an LLC treated as a sole proprietorship—you might pay $12,000 in income taxes on the $90,000 and then another 15.3% self-employment tax, or roughly $13,500 on the $90,000.

If you set up an LLC and have the LLC treated as an S corporation, you’ll still pay the same $12,000 in income taxes. But you’ll only pay the 15.3% self-employment tax on that portion of the profit that you categorize as wages. If you categorize, say, $50,000 of the profits as wages, you’ll pay $7,500 in self-employment taxes. (The other $40,000 in remaining profits, by the way, gets paid out as a dividend-like “distribution.”)

Note, then, that the S corporation saves you roughly $6,000 every year. Sweet, right?

The Legalities And Issues With An IRS Levy

An IRS burden is an adjustment from the Internal Revenue Security administering TVA to abstain a defined bulk of an employee’s pay to amuse a tax debt. If the IRS determines that we owe aback tax again it may affair an IRS burden acute the deductions from the pay till the aback taxes are paid. They may ask the being to assurance an acceding of accord acceding the bulk to be deducted. The IRS burden can acquiesce an bulk to be absolved from denial based on the o employee’s tax filing base and the cardinal of exemptions claimed.

A legal step taken by Internal Revenue System to seize anyone’s property in order to satisfy his debt is IRS levy. They are different from liens. Lien is just a claim used as security for tax debt whereas in IRS levy they actually take the property to do so. If one cannot make arrangements to settle the debts then the IRS seizes or sells any type of personal or real property which one possesses. For example, the IRS can seize and sell property like boats, houses, cars, etc. Even they can levy property that is actually the debtors’ but is help by someone else like the wages wit the employee, balance at the bank account, license, rental income, etc.

An IRS levy is issued only when he requirements are met. The first condition is when IRS sends a notice or demand for the payment of the tax assessed by them. Secondly, when the person refuses or neglects to pay the tax and lastly when a final notice of Intent to Levy i.e. a legal notice of IRS levy is sent 30 days before the levy. A person receives one more notice with this notice known as Notice of Your Rights to Hearing. These notices can be given anywhere at our business place, at home or can be registered with the return receipt.

One may ask the IRS to review the case or can even request to Office of Appeals by filing a request to the IRS officer listed in our notice. This request filing should be done within 30 days of the receipt of the IRS levy notice.

When the IRS levy, levy our wages, salary or bank account, the levy ends when it is released or when on e pays the tax debt or at the expiry of the time of legal collection of tax. When the IRS levy, levies the bank account, the bank holds the funds in deposit for 21 days. This time is given as the relaxation period to solve the problem at hand. After 21 days, the bank sends the money to the IRS along with the interest, if applicable, to the IRS.

If IRS makes any mistake, like while levying bank account, the bank charges are borne by the debtor. In such a condition one is entitled to have the reimbursement for such charges. For this reimbursement one has to file a claim to the IRS within one year after the bank has claimed the charges.

There are two different types of IRS levy programs. One is FPLP i.e. Federal Payment Levy program and the other is SITLP, which is State Income Tax Levy Program. Under the FPLP, the IRS may levy money from the federal payments received like Social Security benefits, retirement from the Office of Personnel Management, federal employee’s salaries, etc. FPLP electronic levies the federal payments made through Department of Treasury, Financial Management services. When these agencies levy through FPLP, they take 15% from each of the payments till the account is resolved. One can call IRS employee for assistance if he is already working with them.

Under the SITLP, IR levies the state tax refund. This implies to individual state tax refunds only. Inclusion of business tax refunds in the future is under consideration. If the state tax refund is levied, the state issues a notice of advice about the levy. If one receives an advice, legally, for the Rights of Hearing then this IRS notice of advising is not issued.

Come and get it…Your Federal Tax Credits

The U.S. Federal Government has created a large number of tax credits, and some tax deductions for homeowners, hybrid and alternative car purchases, and business owners.  The 2005 bill can provide thousands of dollars in tax credits.

Money is like manure; it's not worth a thing unless it's spread around encouraging young things to grow. – Thornton Wilder
The lack of money is the root of all evil. – Mark Twain


Did you know that Congress passed a bill in 2005 that can provide you a tax credit (that’s a dollar for dollar reduction in your tax bill to Uncle Sam!) for items that you may need to purchase for your house or even a new car?

That’s right Congress passed the Energy Policy Act of 2005.  This federal legislation can provide you with up to $500 in tax credits for improvements to your house. Over $3,000 in tax credits for buying a hybrid car, and if you’re a person who wants to help the environment and you install some solar electric panels on your roof or a solar water heater collector on your roof you can get up to another $2,000 for each!!

Wow, where was this bill when I had some home improvements performed on my house two years ago.  And if you’re a business owner you can get tax credits too for your building, company vehicles, and The Energy Policy Act provides a variety of tax credits for businesses, homeowners, home builders, appliance manufacturers, and hybrid/fuel efficient automobiles.  Some of these tax credits expire in December 2007 while others expire in later years.  And even our Congress is looking a spreading these tax credits around to as late as 2015.

So what do I have to do to get qualify for these tax credits and is it really something I need.  Well this all depends on your needs. If you are a homeowner you can qualify for up to $500 in tax credits if installing new items in your home, they are up to $200 for a new furnace or boiler, another $200 for new windows, and up to $300 for a new air conditioner, or new doors, or a water heater, or insulation.

The maximum tax credit you can claim for your house is $500, with the exception of installing a solar electric system (call Solar PV – photovoltaic) or a solar water heating system. Both of these systems can net you another $2,000 each in tax credits.

You can also claim up to $3,400 in tax credits when buying a new hybrid vehicle. The tax credit is based upon the type of vehicle and how much does fuel savings does the hybrid achieve when compared to its non-hybrid cousin. The more efficient hybrids are going to qualify for the higher tax credits and reports from such distinguished periodicals such as Consumer Reports is saying a Hybrid car actually costs less than the non-hybrid version after five years this includes all of the associated maintenance costs and fuel costs over the life of the vehicle.

Depending upon what type of business you own you can qualify for thousands of dollars in tax credits.  If you’re a homebuilder you may qualify for a $2,000 tax credit, and manufactured homebuilders can receive either a $2,000 tax credit or a $1,000 credit.

Congress did not forget the business owner and also provides a tax credit for solar photovoltaic or solar water heating systems and the credit can exceed $2,000.  The owner of a commercial building, including apartment complexes, can also claim a deduction (not a tax credit) on new efficient lighting installed at their facility.

Gas station owners can add an Ethanol system at their station and receive thousands of dollars in tax credits.  The IRS continues to interpret and release notices to the public describing their interpretation of the congressional bill.

Before buying any new product for your house checkout different websites to obtain updated information on the tax credits, what has changed, and what has recently been released through a Notice.

As Thornton Wilder said “it’s not worth a thing unless it’s spread around and encouraging young things to grow.” Congress has spread around tax credits and incentives for us to help this industry grow lets all do our part and remember there may be a tax credit available to you when you make an improvement to your house or buy a new car.