We all know that death and taxes are two certainties in life. However it seems that we should probably add the argument that the wealthy should pay more taxes to that list of certainties. According to reports, Senator Bernie Sanders of Vermont recently shared his views on a progressive tax for billionaires and multi-millionaires.
According to Mr. Sanders, the current U.S. tax system is not doing enough to tax the wealthy. In a recent speech at an AFL-CIO convention Sanders reportedly said that the country’s billionaires should be paying their fair share of taxes. Mr. Sanders also expressed the need for the country’s tax system to correct the wealth inequality in America.
So how does Mr. Sanders think that these issues should be resolved? He is taking aim at the extremely wealthy. According to Mr. Sanders, taxing the top .25 percent of the richest Americans is the best and fairest way to minimize wealth inequality. He also believes that by going after the country’s wealthiest individuals, the United States would be able to pay for investments in education and infrastructure, as well as reduce the nation’s $17 trillion debt.
However, despite his arguments, other research shows that Mr. Sanders might be completely wrong. According to a recent study by the American Enterprise Institute, making the extremely rich pay more taxes is not nearly as effective as cutting spending when it comes to reducing the national debt.
Almost no one can choose when he or she will die, but everyone can choose how his or her assets will be handled when that time comes. It’s really just a matter of having a current and effective estate plan in place before you go.
Estate planning is a wide subject with many aspects; and its so much more than just have a will in place. While having a will is certainly a smart move, there are many other things people should consider as part of their estate plan. Let’s take a look at some of the important questions you should be asking yourself in regards to your estate plan.
- Is your planning up to date?
- Do you currently have a will?
- Have you planned your entire estate?
- Do you have the right trustee and executor in place?
- Is it time to consider a living trust?
- Do you already have a buy-sell agreement in place for your business?
These are obviously some very important aspects to consider for your estate plan. You can click here to learn more about these questions and others, as well as more about the experience and expertise we can provide.
If you need help planning for your estate, then contact us at GROCO. We have the knowledge and awareness to help you prepare for your loved ones’ future without you. Just call us today at 1-877-CPA-2006 or click here to get in touch with us online.
Although there are still more than two months to go before we turn the page on the year 2014, the end of the tax year is still fast approaching. While it’s true that April 15 may seem like a long ways off, the fact is you only have those precious two months left to still do some tax saving on this year’s bill.
So whether you’re an early filer or you prefer to procrastinate until the deadline, now is the time to really start thinking about your 2014 taxes. To that end, here are a few suggestions to help you get prepared. First, contribute a little more to your retirement plan. By adding a few extra dollars to your retirement savings, you not only increase your overall amount, but you also decrease your taxable income at the same time.
Another helpful tip is to reposition your portfolio, which can help reduce your tax bill. You can do this by selling your poor performing stocks, which can offset the gains you make from your better performing stocks. Another way to reduce your tax bill is by giving more. Instead of giving more money to the IRS, reduce your taxable income by donating more to charity. It’s a win-win as you help those in need, and yourself, at the same time.
Meantime, make sure you don’t overlook possible tax credits, including the earned income credit, the child and dependent care credit, and the residential energy credit. Lastly, consider setting up a health savings account. These are great for helping you cover medical expenses now and for saving up money for the future.
Of course, you can also contact the professionals at GROCO for more tax savings ideas. Just call 1-877-CPA-2006 or click here to contact us online.
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Everyone seems to love things that are automatic. In fact, when it comes to financial transactions, cash is hardly ever involved anymore, these days, as everything happens with either swipes or pushing buttons. The same is true with taxes, including the popular e-file option for millions of taxpayers every year.
It turns out getting your refund isn’t the only way to do things electronically with the IRS. The federal tax agency is also very glad to take your money through electronic means. In fact, according to the IRS, it has now processed more than one million electronic tax payments through its Direct Pay option, for a grand total of more than $1.7 billion.
The IRS’s Direct Pay system allows people to pay their tax bills or estimated tax payments online. It is a free service and payments go directly from your bank account to the IRS. The system is not just for tax season, either. With the tax correspondence season now hitting full steam, additional tax assessments and bills for unpaid taxes will soon be arriving in taxpayers’ mailboxes.
With Direct Pay people can make those payments 24 hours a day, seven days a week and the IRS hopes many people will use this service. If you should mess up you also have the option to fix your mistake so long as the payment hasn’t already been processed. Of course, if you do use Direct Pay, make sure you have money in your account to cover the bill.
If you run an international or multinational business, whether it’s based in the United States or abroad, then you know the different intricacies that this situation can involve. Not only do you have to consider all the business and tax laws for the country in which you are based, but you also have to be attentive to all those same things in the other countries in which you operate.
At Greenstein Rogoff Olsen and Co LLP, we understand the different risks and challenges that you are faced with and we have more than 15 years of experience dealing with international and multinational companies. In fact, GROCO is a member of the MSI Global Alliance, which is a Top 20 ranked, leading international association of independent professional firms.
GROCO also has legal and accounting partners in virtually every foreign market. That means we can help you lower your effective tax rate worldwide. These are a just a few of the issues we can help you with.
- Selecting the right holding company
- VAT and GST considerations
- US compliance
- Cross-boarders mergers and acquisitions
- Expanding outside or into the U.S.
To learn more about our international and multinational tax services click here. You can also contact us at 1-877-CPA-2006, or by clicking here.
Just when you thought your retirement account was safe from the federal government, think again. That’s’ because according to the Government Accountability Office, there are around 9,000 U.S. taxpayers who have a minimum of $5 million in an individual retirement account.
Now some lawmakers are taking a closer look at these accounts because as Senate Finance Committee Chairman Ron Wyden of Oregon puts it: “The IRA was never intended to be a tax shelter for millionaires.” According to the GAO report, these accounts are only possible for someone who has access to investments that are not available to most people or who has an aggressive investment strategy.
Meantime, there were an estimated 1,100 taxpayers that had more than $10 million in their IRAs as of 2001, according to the GAO report. Of those, 314 people had more than $25 million. On the other hand, that means that close to 99 percent of all people who have IRAs have less than $1 million in their accounts.
So what, if anything, is the government trying to do about these types of accounts? For starters, last year, President Obama introduced a proposal that would put limits on these kinds of accounts. Under his proposal no one would be able to add tax-favored contributions after their total account balances accumulated about 3.2 million. However, so far, the president’s proposal has not moved forward in Congress. It remains to be seen if other lawmakers will push harder for changes.
Many wealthy individuals enjoy collecting things, including artwork. While artwork can be a source of income for some, as well as solely a collectible for others, it can’t be used it to pay your taxes. Well, at least not in the United States, anyways. However, there are some countries in which artwork is a completely acceptable way to pay your taxes.
In the United Kingdom, for example, between the years 2009 and 2013 alone, taxpayers used £124.5 million worth of art to reduce their tax bill. UK citizens can even get the full fair market value off their art without having to sale it. Plus they don’t have to pay taxes on any gain. The program used to be mainly for estate taxes, but since 2013 residents of the UK can use it to settle their unpaid taxes.
Meantime, in Mexico, the art-for-taxes program is even sweeter, especially for artists, who can actually donate their works instead of paying taxes. The program allows artists to donate the same amount of artwork as the value of the pieces they sell each year. It not only encourages talented artists to continue creating, but it has also helped the country accumulate a large and valuable collection of some the country’s most recognized artists.
Although this program seems to work well in these countries there is no such program in the U.S. However, for professional artists in the U.S. there are many tax deductions available, which can help reduce their tax bill. So although artists and collectors might not be able to pay the IRS in paintings and sculptors, with the right tax planning help from GROCO they can still come out ahead.
We all know that life isn’t fair, and that means that many specific aspects of life aren’t fair either. Of course, according to most people taxes always fall into the unfair category as well. So just how fair or unfair are your taxes?
No, this isn’t another argument about the rich not paying enough taxes. This actually has to do with the state you live in. That’s because according to a recent survey by Wallet Hub, the country’s fairest and least fair states when it comes to taxes have been identified. This is not just about who pays the most and least taxes either.
To create their rankings, Wallet Hub asked Americans all over the country what they thought was fair and unfair about their local tax systems, including income tax, property tax, sales tax and refundable tax credits. Then, Wallet Hub compared the responses to how close they matched the different locations’ actual tax systems.
Based on the information they received, most Americas think that those with higher incomes should be taxed more, while those with less income should be taxed less. However, although most Americans believe states should follow a progressive tax system, essentially every state follows a regressive tax system.
The top five least fair states, meaning states in which the poor are the most overtaxed are:
The top five fairest states are:
- South Carolina
So there you have it. If you live in Washington then it looks like you can safely claim that your taxes aren’t fair. At GROCO we think that everyone should be treated fairly on his or her taxes. So contact us if you need help making the most out of your tax situation.
April 15 is one of the most dreaded days of the year for many people, with the possible exception of accountants. However, what happens when all the hoopla of April 15 passes as people wake up on April 16 and go on with the rest of their lives?
You’ve filled out and filed your tax return and, of course, you’ve printed or saved an electric copy of your return. So just how long should you save those documents? Can you just toss them as soon as your refund comes? You can, but you shouldn’t. In fact, the law requires you to keep your tax returns, and all the information that goes with them, for three years.
However, throwing everything away after three years could also prove costly if for some reason the IRS thinks you haven’t been accurate in one of your returns. The IRS can go back as many as six years to do an audit, should the agency wish. Therefore, keeping your tax records is very important, whether they are for business or personal.
Of course, there are many types of documents and not all of them are as important as the rest. That’s why at GROCO we have set up a helpful chart to detail which documents you should keep longer and which ones are OK to purge after less time.
You can click here to see this helpful information, which includes details for both business and personal documents, as well as which documents should be kept for a year, three years, six years and forever.
If you have any questions about saving your tax information, then you can always contact us at GROCO as well.
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