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United States Archives - R. Darren Sanford, CPA, CGMA
Jul 312015
 
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The federal highway funding extension bill passed by Congress contains several tax provisions, including changing the due dates for partnership, S corporation, and corporate tax returns, a provision the AICPA has long advocated.

Source: Return due dates changed in highway funding bill

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Jun 022014
 
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June 16 Deadline Nears for Taxpayers Living Abroad

Taxpayers abroad qualifying for an automatic two-month extension must file their 2013 federal income tax returns by Monday, June 16, according to the Internal Revenue Service.

The June 16 deadline applies to U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular April 15 due date. Eligible taxpayers get one additional day because the normal June 15 extended due date falls on Sunday this year. To use the two-month extension, taxpayers must attach a statement to their tax return explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for more information.

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts on their federal income tax return. Separately, U.S. persons with foreign accounts whose aggregate value exceeded $10,000 at any time during 2013 must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR).

Form 114 replaces TD F 90-22.1, the FBAR form used in the past. It is due to the Treasury Department by Monday, June 30, must be filed electronically, and is only available online through the BSA E-Filing System website. This due date cannot be extended and tax extensions do not extend the FBAR filing due date. For details on FBAR requirements, see Report of Foreign Bank and Financial Accounts (FBAR).

To help those with the obligation to report their foreign accounts comply with the FBAR filing requirement, the IRS will hold a free one-hour webinar on Wednesday, June 4, starting at 2 p.m. Eastern time. Those interested in participating in the webinar must register for this event. More information is available on IRS.gov.

Taxpayers abroad can now use IRS Free File to prepare and electronically file their returns for free. This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes (AGI) of $58,000 or less can use brand-name software to prepare their returns and then e-file them for free. A second option, Free File Fillable Forms, the electronic version of IRS paper forms, has no income limit and is best suited to people who are comfortable preparing their own tax return. Check out the e-file link on IRS.gov to find out more about these and other electronic filing options. E-file and Free File will be available until Oct. 15, 2014.

Taxpayers who cannot meet the June 16 deadline can get an automatic extension until Oct. 15, 2014. This is an extension of time to file, not an extension of time to pay. Interest, currently at the rate of three percent per year compounded daily, applies to any payment made after April 15, 2014. In some cases, a late payment penalty, usually 0.5 percent per month, applies to payments made after June 16, 2014.

Taxpayers abroad, regardless of income, can use Free File to request a tax-filing extension. Alternatively, eligible taxpayers can download and file Form 4868, available on IRS.gov.

In some cases, an additional extension beyond Oct. 15 may be available. Details are in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. In addition, members of the military and others serving in Afghanistan and other combat zone localities normally have until at least 180 days after they leave the combat zone to file their returns and pay any taxes due. For details, see Extension of Deadlines in Publication 3, Armed Forces Tax Guide.

Any U.S. taxpayer here or abroad with tax questions can use the online IRS Tax Map and the International Tax Topic Index to get answers. These online tools assemble or group IRS forms, publications and web pages by subject and provide users with a single entry point to find tax information.

Credit:  IRS Newswire

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Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Nov 042013
 
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How To Overcome The Obstacles To Retirement

Retirement Unfortunately, the vast majority of people will not have enough money to overcome the obstacles to retirement and they must continue working well into their 70’s. The reasons it is SO hard to save for retirement are the 4 obstacles that are in the way.

inflationThe first obstacle to retirement is inflation. Inflation is the silent income killer. Every one of us can think of multiple examples of inflation, but probably the easiest one to relate to is the price of gasoline. Most of us remember paying less than a dollar a gallon, now it’s $3 or $4 or more, depending on where you live on when you are reading this. But inflation doesn’t just eat into our current income and keep us from saving enough. It also screws up your planning because the cost of living doubles every 10-15 years. Let’s say you think you need $3,000 a month when you retire. Well, because the cost of living will double a couple of times or more, you may really need $6,000 a month when you’re ready to retire and $10,000 or more a month if you retire at 65 and live to be over 80.

The second obstacle to retirement is taxes. Now don’t get me wrong. I’m not a tax evasion kind of guy. I’m just saying that taxes in all their forms eat up over 30% of most people’s income, especially if they have a regular W-2 type of job.

 

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The third obstacle to retirement is debt. Because taxes reduce the take-home pay of most Americans, they have to go out and borrow what was taken away by Uncle Sam. Let me give you an example. If you make $50,000 a year, you will lose about $18,000 in various taxes and fees, leaving you with $32,000. But, in your mind you feel you have a $50,000 lifestyle, so you borrow the $18,000 on credit cards, car loans, etc., to get back to $50K. But, now, you have to pay back the debt and that reduces your ability to save for retirement.

The fourth obstacle to retirement is less than ideal cash flow decisions. Because inflation, taxes, and debt reduce your cash flow, now you are in a position of making bad decisions. Maybe you pay some bills late and incur late fees and higher interest rates. Maybe you start getting hit with overdraft fees. And what about ATM’s? If you use an ATM that isn’t branded to your bank, you pay a fee to the hosting bank AND your bank. You could be paying up to $6 or more to access that $20. Not too smart.

Cash Flow

So, briefly, what are the 3 things you can do to beat these obstacles to retirement? The first thing you can do is get your money back from the government which was paid primarily in taxes. The IRS website actually says that 114 Million people overpay their taxes during the year and require a refund when they file their taxes. Also, the IRS says that’s a bad plan. You can adjust your withholding by law and get your money put back into your paycheck during the year. Most people can get an extra $40 per week, or $160 a month. Then, you will want to pay down your debts and as each debt disappears, your cash flow continues to increase.

The second strategy is to legally, morally, and ethically reduce your taxes even further by starting some kind of home based business. By having a home based business, you get more tax deductions than you do as an employee. And, paying less taxes while earning a side income increases your cash flow, helps you get out of debt faster, and gives you much more to save for retirement.

The third strategy is to start shifting your income into good investments. You need to get your money working for money instead of you only trading labor for money. Money doesn’t get tired, it doesn’t call in sick, and investment income is usually taxed less than your wages or even your business income.

Overcoming the obstacles to retirement is possible simply by using smart strategies like income shifting. For more details on income shifting, you can find my 3 FREE videos at www.SimpleSteps2Wealth.com.

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Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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