Lets face it a lot of taxpayers make mistakes on their tax returns. It’s also true that there are plenty of other taxpayers that willfully falsify their returns in order to save on their total tax bill. Some people even go as far as to simply skip out on filing a return all together. You should already know how that sits with the IRS.
Of course, the nation’s top tax agency doesn’t take kindly to people who don’t file a tax return when they are obligated by the law to do so. What’s more, they like it even less when one of those individuals or companies decides to argue their case but doesn’t have much of an argument. Taxpayers give all kinds of reason for not filing a return, but if you plan on putting up a fight with the IRS, then you had better have a really good reason; and forget about any argument deemed frivolous. The IRS hates those.
In fact, the tax agency even has a list of such arguments and if you happen to go down that road you can expect serious consequences. That’s because the IRS has the right to add a special frivolous position penalty to your bill under Section 6702 of the tax code. As with all situations associated with the IRS, your best bet is to always just tell the whole truth and nothing but the truth. However, if you aren’t completely truthful to begin with, don’t make it worse with a frivolous argument.
Last week we discussed the best and worst states to retire in when it comes to taxes. So what kinds of factors actually play a role in coming up with those numbers? Choosing a place to call home when you retire is important and there are many factors that can play a role in where you end up. However, speaking strictly in regards to taxes, these are the top four taxes to consider when you’re ready to hang it up and retire.
Of course, your federal income tax will be the same wherever you end up so that is not relevant, but these four other taxes are:
- State income tax – most states charge income tax, but the rates vary. There are seven states, however, that don’t charge any state income tax, which could greatly reduce your retirement taxes.
- Social Security tax – the next tax to look at is the SS tax. There are 13 states that will tax your Social Security benefits; so avoiding these states will reduce your tax bill.
- Sales tax – all but five states have a sales tax but every state’s sales tax rate will differ, so that is another important tax to keep in mind when you retire.
- Property tax – your property tax will also affect your total tax bill so keep this tax in mind when choosing your final home destination, as well.
The bottom line is you should enjoy retirement, no matter where you live. So make sure you choose your location wisely and consider all of these different taxes and how each will affect your personal situation before you make your choice.
No one likes a bully. Bullies can wreck havoc on their victims. From swirlies to stealing lunch money, bullies are a big problem. The same can be said for tax bullies, except they want to steal a lot more than your lunch money. There have been several recent reports from different locations around the country that an old tax scam has resurfaced recently.
Callers, who claim to be with the IRS, are contacting taxpayers and threatening to sue them if they don’t pay their back taxes. Of course, for those who know they don’t owe any back taxes, this call can be simply a nuisance. However, for those who aren’t sure about their tax situation, these calls can be confusing and even quite scary. The callers can appear to be very legitimate and they can leave some of their victims feeling helpless.
The bottom line if you receive a call like this is that it is a scam. The IRS will not call taxpayers and threaten them, no matter how much they might owe in back taxes. They will always first send a letter to inform you of any kind of tax problem or situation. They won’t ask for personal information and they will never threaten to sue you or send you to prison.
If you receive any kind of call like this, don’t be alarmed. Instead, hang up and call the IRS to let them know, as well as your local authorities. The more people that are aware of the scam the fewer the victims the scammers will be able to get.
Tagged with: bullies
, tax scam
Are you planning on retiring soon? There are a lot of things to consider and prepare for when you’re ready to call it quits and start enjoying the so-called “golden years,” especially when it comes to your financial future. One of the most important matters to take care of is how your taxes will affect your retirement. There are many different factors to consider, but one of the most important is simply where you live.
So what are the best states to call home after you hang up your working shoes for good? There’s a reason that Florida is the butt of many senior citizen jokes, but perhaps surprisingly, according to Kiplinger’s Personal Finance, the Sunshine State is only the tenth most tax-friendly state to live in for retirement. Other states in the top 10 on Kiplinger’s list from nine to one include South Dakota, Louisiana, Arizona, Delaware, Georgia, Mississippi and Nevada at number two. Taking home the top spot is Alaska.
On the other end of the spectrum these 10 states scored the worst as far as being tax-friendly goes. In order from 10 to 1 they are: New York, New Jersey, Nebraska, California, Montana, Oregon, Minnesota, Rhode Island, Connecticut and Vermont. So there you have it. If you’re looking for a new tax-friendly place to call home when you decide to retire then consider these lists closely.
Many people are always complaining that the wealthy don’t pay their fair share in taxes. While that is an argument that will never end, it seems that one of the world’s richest men might be guilty. That’s because he was able to avoid paying taxes for more than 40 years. How is that possible? The wealthy taxpayer in question is the founder of IKEA, Ingvar Kamprad, who is reportedly one of the top ten richest people in the world.
Although IKEA is clearly influenced by all things Swedish, the man who built the IKEA empire left his native country more than 40 years ago in the name of tax savings. IKEA is the number one furniture store in the world and in the fiscal year 2014-2015 the company reported 31.9 billion euros. However, taxes have always been a huge part of IKEA’s success. That’s exactly why Mr. Kamprad left the country he loves for Switzerland. He wanted a tax break.
While he did pay taxes in Switzerland during those 40 years, he legally avoided what would have been a much larger bill if he had stayed in Sweden, for both his company and his personal income. Now, after all these years he has returned to his native Sweden and in 2014 he paid what amounted to about $2 million in taxes to Sweden, while his net worth is reportedly worth an estimated $43.2 billion.
What’s your investment strategy? There is no end to the number of different strategies that investors have, and there are plenty of different successful ways to invest in the stock market. Likewise, Wall Street is full of stories of investors that have ended up on the side of the road, kicked to the curb after their investments went wrong.
A lot of people like to invest in large, well-known companies that have a strong track record on Wall Street. These companies provide some security in investing, especially if you’re in it over the long haul. Companies, like Apple, Nike, Disney and Amazon might be very expensive, but investors will usually end up on the positive side of the market. However, those who invest in big name companies and choose to ignore the small companies could be missing out on some great returns.
It’s true that investing in small companies is a risk and it’s not for everyone, but the long-term gains can be substantial, especially when you hit one of those small companies that unexpectedly turn big. Additionally, investing in small companies might not be as risky at one might think. According to a survey from Hiscox USA, nearly three-fourths, 72 percent, of all small businesses questioned in the survey reported growth in revenue over the last year.
So, while the gains might not be as high as they are with many larger, more established companies, chances are most of your small business investments will give you a good return. Thus small businesses do represent a solid opportunity that most investors should not be overlooking.
How valuable is your time? If you’re like most high net worth individuals it’s priceless. However, whether you’re extremely wealthy or just barely scraping by each month the fact is time management is extremely important. For those who have already achieved success they must manage their time well in order to maintain their success. On the other hand, for those still trying to achieve great wealth they must learn how to mange their time in order to be successful.
There are many opinions regarding time management and there are all kinds of strategies to get the most out of your workday. Let’s look at some of the key factors to successful time management. It’s always a good idea to start your day with the most important project you have. This is often difficult and many people are tempted to procrastinate, but by focusing on the top priority first, you can be sure you have enough time to get it done. Plus, when you finish, you won’t have that stress hanging over you anymore, which will allow you to focus on the rest of the day’s tasks.
One excellent way to help you manage your time is to keep to-do lists. With today’s smartphones you don’t even have to write them down anymore. Start with the most important items of the day, week or month and then keep track as you complete each task. Checking email is important, but unless you absolutely have to get to it, it’s better to wait till the day is almost over to review your email than to do it first thing and get distracted with dozens of email responses.
Make sure you don’t over schedule yourself so you can dedicate sufficient time to each project. In fact, if you can give yourself a little extra time for the all the what-ifs, that’s even better. But don’t give yourself too much down time, either. Lastly, make sure your workspace is set up for success. Have things where you need them and make sure your space is organized. Time management is very important and can be crucial to your success. Don’t overlook it. If you need help with time management for your business then contact GROCO. Call 1-877-CPA-2006 or click here.
The ongoing tax saga of soccer star Lionel Messi will continue. That news comes after a judge in Spain ruled that the Barcelona FC star would indeed have to stand trial for tax fraud charges in association with his many endorsement deals with foreign companies. The news comes just days after a report stated that Mr. Messi would not have to go to trial, and that only his father would face the courtroom.
Not So Fast
However, the Spanish judge ruled otherwise and said that Mr. Messi and his father should both have to go to trial. Even though his lawyers argued that Mr. Messi did not have any hands-on dealings with his endorsement contracts, the judge ruled that he “couldn’t have ignored” that a large part of his revenue was coming from foreign companies. If he is convicted, the soccer star could receive a sentence for as long as 22 months.
No Jail Time Likely
However, the good news for Mr. Messi is that even if he is found guilty of the charges he will most likely not spend any time behind bars. That’s because sentences for financial crimes shorter than two years are typically suspended according to Spanish law. In addition, Mr. Messi and his father have reportedly either already paid, or have agreed to pay, the missing tax money, plus interest.
It’s November already. How can that be possible? The more important question is what are you going to do about it? Although it seems like the last tax season just ended a few months ago, the next tax season is just a few weeks away. That means you should already be preparing for your inevitable tax return. So what can you do to start getting ready?
There are many different things to start thinking about if you’re looking to get started on tax preparation right now. One of those things is to consider a Roth IRA. It might be a good idea for some taxpayers to convert their traditional Roth IRA, which is filled with pre-tax money into an after-tax Roth IRA, because those profits can be withdrawn tax-free.
Another thing that could come into play a lot this year is how taxes will affect those in same-sex marriages. Anyone who has filed previous tax returns as a single because their relationship was not recognized in their state can now go back and file amended returns. If you fall into this category then start looking into those past returns now.
Last, but not least, another important item to consider is penalties from Obamacare. For those who did not have health insurance this year the fine has gone up considerably from last year. While it is too late to sign up for insurance for the last 10 months, you can file for a hardship exemption.
The bottom line is it’s time to get ready for taxes. Contact GROCO now for more help with your taxes for the upcoming season. We will get you ready. Click here or call 1-877-CPA-2006.
Tagged with: obamacare
The Coca-Cola, Co. wants everyone to share a Coke and a smile but the IRS just wants the soft drink company to share it’s profits with the government, in the form of it’s tax bill. The IRS claims that the company has skipped out on more than $3 billion in taxes and interest due from money it earned in foreign countries. According to reports, the IRS audited Coca-Cola for the tax years 2007, 2008 and 2009. The IRS claims that the results of that audit show that the soft drink maker owes $3.3 billion in missed taxes.
So far, the IRS has not threatened Cola-Cola with any penalties. However, the agency has reportedly informed the company that it has recommended to its top lawyer that the case be litigated. For its part, Coke says that the agency’s claims have no merit. Coke is not the first American company to face these kinds of charges from the IRS, as the agency continues to fight large U.S. corporations over tax dollars for profits earned overseas. Microsoft and Amazon are also facing similar claims form the IRS.
A Coca-Cola spokesperson said that the company plans to fight the allegations and do whatever it takes legally to resolve this matter with the IRS. U.S. Corporations must pay the IRS as much as 35 percent of their total profits from around the world in taxes. However, they do not have to pay the tax on foreign profits until they move the money to the U.S. But, because the U.S. charges so much in corporate taxes, many companies simply choose to leave their foreign profits in the countries where they were earned.