Tax Finance Wisdom

The German Chancellor, Angela Merkel, was voted the most powerful woman in the world, by Forbes Magazine. She is now hell bent on a crusade to rid the world of tax havens, through the governments of the world uniting in a Tax Cartel. Bureaucratic opponents to tax havens, from across the  world, are conceitedly confident their cause is virtuous and are demanding a hard fisted crackdown in what could be called a ‘Holy Tax War’. Tax havens develop because of the need to attract foreign investment to an economy. In particular, third world countries who are willing to vary their tax laws. Countries which able to benefit from the universal requirement for opportunities to engage in avoidance of punitive tax laws and regulations of other jurisdictions.If you are residing in a developed country, your taxes are most likely lower than they were 30 years ago. In 1980 OECD quoted personal income tax as averaging 67%. Top personal taxes now average only 40%. Corporate taxes have gone from 50% in 1980 to a mere 27%. This is thanks partly to the existence of tax havens. They help pressure high-taxed countries to cut down their tax rates. It is this tax competition which drives tax policy in the right direction, creating a liberalizing process.Wealthy people are threatened by oppressive governments. Personal freedom can often only be sustained when personal information is secreted from the government, particularly when it comes to persecution of an ethnic, racial, political, or religious nature. These potential sufferers have an escape route because of the existence of tax havens.Tax havens have been with us since the Vatican City evaded tax in 756. Ancient Greece, around 1100 BC, used some of the Greek islands to avoid a 2% tax imposed by the city-state of Athens. Since the early 1700’s American colonies traded from Latin America, so as to avoid paying English taxes. Taxes rose harshly at the end of World War I, in order to reconstruct the war damaged countries. Switzerland, having remained neutral, didn’t face the same infrastructure rebuilding problems. The twentieth century screamed for new markets, cheap labour and low tax, as the majority of the world’s colonies gained independence. Developing their own tax and trade regimes, they produced universal economic disparities. Between World War 1 and World War 11, tax havens were mainly used to get around personal taxation. From the 1950’s onward, there was a phenomenal growth in the use of tax havens, as corporate giants attempted to reduce their global tax burden. While many claim that tax havens are an open avenue for money laundering, the extensive international regulations in tax havens actually makes money laundering virtually impossible. The surprise is that America could be considered as one of the largest tax havens, in that there is no tax on interest and capital gains for foreigners who invest in America. It is estimated that there is more than $12 trillion of foreign investment in the United States alone.Vanuatu, a tropical island archipelago in the South Pacific, has long been seen as a safe economical and political tax haven. However, the financial status has been a controversial subject during the recent general elections. Many claimed that the high handed tactics of Australia violated the sovereignty of Vanuatu, during the raids on legitimate companies, banks and private homes. Mail boxes were broken into and private letters opened. Well known identities were arrested, claiming they were masterminds of massive tax evasion schemes. All this in the name of a classic movie type sting, in an attempt to catch unsuspecting Vanuatu citizens and residents. People who were law abiding in the framework of Vanuatu, but according to the Australian Tax Office, they were breaking Australian law. Does the constitutional law of the land take precedence in a country, or should a country bow to the laws of a neighbouring country? Finally, when all opposition or completion is demolished, an unhealthy situation arises. There are no checks and balances.

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The need for tax shifting – lowering income taxes while raising taxes on environmentally destructive activities – in order to get the market to tell the truth has been widely endorsed by economists. The basic idea is to establish a tax that reflects the indirect costs to society of an economic activity. For example, a tax on coal would incorporate the increased health care costs associated with breathing polluted air, the costs of damage from acid rain, and the costs of climate disruption.
Nine countries in Western Europe have already begun the process of tax shifting, known as environmental tax reform. The amount of revenue shifted thus far is small, just a few percent. But enough experience has been gained to know that it works.
Among the activities taxed in Europe are carbon emissions, emissions of heavy metals, and the generation of garbage (so-called landfill taxes). The Nordic countries, led by Sweden, pioneered tax shifting at the beginning of the 1990s. By 1999 a second wave of tax shifting was under way, this one including the larger economies of Germany, France, Italy, and the United Kingdom. Tax shifting does not change the level of taxes, only their composition. One of the better known changes was a four-year plan adopted in Germany in 1999 to shift taxes from labor to energy. By 2001, this had lowered fuel use by 5 percent. A tax on carbon emissions adopted in Finland in 1990 lowered emissions there 7 percent by 1998.
Environmental tax reform is spreading, with the reform process now under way in Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Sweden, and the United Kingdom. The United States imposed a stiff tax on chlorofluorocarbons to phase them out in accordance with the Montreal Protocol of 1987. At the local level, the city of Victoria, British Columbia, adopted a trash tax of $1.20 per bag of garbage, reducing its daily trash flow 18 percent within one year.
One of the newer taxes gaining in popularity is the so-called congestion tax. City governments are turning to a tax on vehicles picture of urban traffic entering the city, or at least the inner part of the city where traffic congestion is most serious. In London, where the average speed of an automobile was 9 miles per hour – about the same as a horse-drawn carriage – a congestion tax was adopted in early 2003. The $8 charge on all motorists driving into the center of the city between 7am and 6:30pm immediately reduced the number of vehicles by 24 percent, permitting traffic to flow more freely while cutting pollution and noise.
Environmental tax shifting usually brings a double dividend. In reducing taxes on income – in effect, taxes on labor – labor becomes less costly, creating additional jobs while protecting the environment. This was the principal motivation in the German four-year shift of taxes from income to energy. The shift from fossil fuels to more energy-efficient technologies and to renewable sources of energy reduces carbon emissions and represents a shift to more labor-intensive industries. By lowering the air pollution from smokestacks and tailpipes, it also reduces respiratory illnesses, such as asthma and emphysema, and health care costs – a triple dividend.
When it comes to reflecting the value of nature’s services, ecologists can, for example, calculate the values of services that a forest in a given location provides. Once picture of logging operation these are determined, they can be incorporated into the price of trees as a stumpage tax of the sort that Bulgaria and Lithuania have adopted. Anyone wishing to cut a tree would have to pay a tax equal to the value of the services provided by that tree. The market would then be telling the truth. The effect of this would be to reduce tree cutting, since forest services may be worth several times as much as the timber, and to encourage wood and paper recycling.
Some 2,500 economists, including eight Nobel Prize winners in economics, have endorsed the concept of tax shifts. Former Harvard economics professor N. Gregory Mankiw, who was nominated to be Chairman of the President’s Council of Economic Advisors in early 2003, wrote in Fortune magazine: “Cutting income taxes while increasing gasoline taxes would lead to more rapid economic growth, less traffic congestion, safer roads, and reduced risk of global warming – all without jeopardizing long-term fiscal solvency. This may be the closest thing to a free lunch that economics has to offer.” Mankiw could also have added that it would reduce the military expenditures associated with ensuring access to Middle Eastern oil.
The Economist has recognized the advantage of environmental tax shifting and endorses it strongly: “On environmental grounds, never mind energy security, America taxes gasoline too lightly. Better than a one-off increase, a politically more feasible idea, and desirable in its own terms, would be a long-term plan to shift taxes from incomes to emissions of carbon.” In Europe and the United States, polls indicate that at least 70 percent of voters support environmental tax reform once it is explained to them.
Subsidies, which are essentially “negative taxes,” also must be reformed. Each year the world’s taxpayers underwrite $700 billion of subsidies for environmentally destructive activities, picture of oil rig such as burning fossil fuels, over-pumping aquifers, clear-cutting forests, and overfishing. A 1997 Earth Council study, Subsidizing Unsustainable Development, observes that “there is something unbelievable about the world spending hundreds of billions of dollars annually to subsidize its own destruction.”
Subsidies are not inherently bad. Many technologies and industries were born of government subsidies. Jet aircraft were developed with military R&D expenditures, leading to modern commercial airliners. The Internet was a result of publicly funded efforts to establish links between computers in government laboratories and research institutes. And the combination of the federal tax incentive and a robust state tax incentive in California gave birth to the modern wind power industry.
But just as there is a need for tax shifting, there is also a need for subsidy shifting. A world facing the prospect of economically disruptive climate change, for example, can no longer justify subsidies to expand the burning of coal and oil. Shifting these subsidies to the development of climate – benign energy sources such as wind power, solar power, and geothermal power is the key to stabilizing the earth’s climate. Shifting subsidies from road construction to rail construction could increase mobility in many situations while reducing carbon emissions.
In a troubled world economy facing fiscal deficits at all levels of government, exploiting tax and subsidy shifts with their double and triple dividends can help balance the books and save the environment. Tax and subsidy shifting promise both gains in economic efficiency and reductions in environmental destruction, a win-win situation.
History judges political leaders by whether they respond to the great issues of their time. For today’s leaders, that issue is how to deflate the world’s bubble economy before it bursts. This bubble threatens the future of everyone, rich and poor alike. It challenges us to restructure the global economy, to build an eco-economy.
The choice is ours – yours and mine. We can stay with business as usual and preside over a global bubble economy that keeps expanding until it bursts, leading to economic decline. Or we can adopt Plan B and be the generation that stabilizes population, eradicates poverty, and stabilizes climate. Historians will record the choice, but it is ours to make

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The simplest way to understand Tax Lien Certificates is to realize all real estate is taxed by the county or municipality. Taxes are collected to provide many different benefits to citizens. Every property owner is assessed for property tax one or more times each year. Tax districts & municipalities receive their revenue from property taxes.

In many states, if the property owner does not pay the property taxes the county or municipality will accrue the taxes and penalties for many years. Ultimately, if the property owner does not pay the taxes, the county or municipality will sell or auction the property at a tax sale or auction.

Counties issue a tax lien which in many states are sold at an auction, These certificates allow the counties and municipalities to collect the tax revenue they need to run the government for each year — rather than wait for the property to be auctioned to collect the taxes due.

In other words, the county or municipality sells a tax lien certificate that is nothing more than a certificate that shows the taxes due on “X” property.

The objective in selling the certificates is to allow an investor (rather than the property owner) to pay the property tax on “X” property. This benefits the county with immediate revenue and benefits the investor with a low-risk certificate that has a high-yield interest rate — which could be from 10% all the way to 50%.

Tax Lien Foreclosure is the formal term for the process in which counties or municipalities collect their money. The sales for delinquent property taxes occur at every level of government, from the county to hospital districts, to water districts and to transportation districts. All these government agencies have taxing authority and the taxperson’s ultimate remedy is a foreclosure.

Tax Lien Foreclosure is the formal term for the process in which counties or municipalities collect their money.

The sales for delinquent property taxes occur at every level of govern­ment, from the county to hospital districts, to water districts, to transportation districts.

All these government agencies have taxing authority and the taxperson’s ultimate remedy is a foreclosure.

The basis of our tax system dates back to the foundation of our country. The system was brought over from England. From the English, we learned that the basis of a person’s wealth was land holdings. Consequently the land provided the tax assessor a method of attach­ing the property owner’s wealth. Real property cannot be hidden and it’s easy to assess.

Taxation is a complex science, as the property is not the only thing being assessed. The prop­erty is the security for the tax collector because the owner cannot conceal or move it. Because of this lack of mobility, many agencies attach their payment lien (assessment) to this rigid structure (the property).

Many different authorities assess property owners. Non-payment to these entities could lead to a loss of the asset by the owner to the county or municipality district at a tax lien auction/sale.

Fortunately, most property taxes are assessed at the county level. The various districts aren’t necessarily uniform in their procedures. Your county might issue you one property tax bill that covers all tax authorities in your area. But, there are more than 3,000 counties in the United States, and they don’t act uniformly. The fact that you now know they act independently will be a real competitive advantage for you.

Knowledge is power, and the power of the knowledge you’ll acquire from this book reveal many hidden opportunities in the tax lien certificate arena.

It’s not unusual for different districts to serve their own assessment bills to the property owner. Generally, the county will serve a bill and after collection of that bill, the county administrator will distribute the money to the various districts or agencies of the local government.

To receive a free report on Tax Liens & Tax Deed Certificates, visit us online at www.ultimatetaxlienguide.com or www.tedthomas.com

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France is known for its complex tax and administration systems. But it is not as complicated as it seems. If you own a property in France or intend to buy one, don’t give up because of these administrative steps. All you need is some clues to help you understand how it works.

The first tax I will explain here is the “taxe d’habitation” (understand: French Residence Tax). It is imposed every year on the occupier of a property, in which he/she lived on the 1st January. This means that if you rent your French property out, you won’t pay for this tax but the tenant will have to. Or if you move in in June, for example, the former tenant has to pay for the tax (because he was in the house on the 1st January), unless a private agreement between you both has been made. However, you must keep in mind that provided the property is your second home, even though you don’t live in it on the 1st January, you will have to pay for the French Residence Tax. This is because the tax authority includes properties that are “capable of occupation” and not physically occupied. An interesting thing is that holiday lettings are exempt, but all permanent or semi-permanent stays are liable for the tax. The property being furnished or unfurnished makes no difference. The TV licence (”redevance audiovisuelle”, in French) comes along with the annual Taxe d’habitation. It amounts to €116 a year, for a household, no matter how many television sets you have.

The calculation of the tax is rather complex but in a word it is based on the notional rent a property might achieve (taken into account the condition, size and location of it), without any relation to the actual rent that is paid. The amount of the tax is higher in town than in the countryside. As the formula applied to this notional rent varies with the income the authorities need to raise, the amount of tax will therefore depend on the decisions of the different towns. If you want to check the notional rental value of your French property, you need to ask the local Centre des Impôts Fonciers (Service de Cadastre).

Your property may be exempt from the tax if it is a chambre d’hote or a classified gite. Visit the local mairie to know more about this. The other case of exemption is if you have tried without success to let your property. However, you will have to demonstrate evidence that you have been trying to let it. Lastly, people completely exempt of the tax are those over 60 years, widowed, disabled or infirm (incapable of gainful employment).

The second tax you may have to pay for in France is the “taxe fonciere”, or French Wealth Tax. It is also an annual tax, but imposed on the owner of a property (not on the occupier). Whether it is occupied or rented out makes no difference. In case you sell your French property during the year, you have to pay for the whole year, but don’t worry, you can agree with the new owner to share the costs. It is a common thing, provided you mention it in the sale and purchase agreement.

The basis on which it is determined is the same as that of the Taxe d’habitation. Another tax often comes with the Taxe fonciere: the rubbish collection tax (”taxe d’enlevement des ordures menageres”). Some local councils make a separate charge for it, while in some other towns it is funded from the general budget. Here again, the taxe fonciere is higher in towns than in the countryside. Usually you receive the tax demand (Avis d’imposition taxe foncière) during the third quarter of the year and a payment deadline is specified. All types of property are subject to this tax, that is to say residential, commercial, professional and industrial properties. Even land is subject to the tax, but are exempt: agricultural buildings, new woodland planting and properties built before 1989 where major energy conservation measures are undertaken. Two-year-full exemption to the Taxe fonciere is granted to new buildings, additions to existing buildings and rural conversions. There again, some people are exempt from paying for this tax. They are: people aged more than 75, disabled and those who receive the “minimum vieillesse” (which is a pension for elderly people with low income). Lastly, people aged between 60 and 75 benefit from a €100 (or more) reduction. Keep in mind that these exemptions are granted only if the property is your principal residence. Like for the Taxe d’habitation, you can be granted a relief from paying the tax if you are have been trying without success to sell your property.

Now that you know the most important things (and more!) about the French tax system for properties, you can stress less take the step to buying your dream French property!

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Tax law provides many solutions for resolving tax debt. But if you were to contact the IRS directly, they would only alert you to one solution, and that’s paying the tax debt in full. Here are five popular IRS tax relief solutions you should know about to be more informed.

IRS Tax Settlement

It is possible to settle your IRS tax debt. But there are some pitfalls you need to know. First, take a good look at your assets and finances. If you have assets that can be sold to satisfy your tax debt or enough money in your bank account to pay the tax debt in full, you will not be approved for an Offer in Compromise (IRS Tax Settlement). Do not waste the money or effort if either scenario applies to your financial situation.

After you’ve determined that you have a chance at settling your IRS debt, you will need to fill out Form 656 “Offer in Compromise.” Make sure you fill out every single space, leave nothing out. Make sure to sign the paperwork, as this is a common mistake people make when they submit their own forms. You do not want your tax settlement offer rejected due to simple mistakes because you will have to submit 20% of your offer along with the forms. If your offer is rejected, this money is non-refundable.

You must also keep some common IRS tax settlement roadblocks in mind before you submit your offer. First, are you up to date with filing your taxes? If you are not, your offer will be rejected. The second issue is bankruptcy. If the IRS finds out that you have filed for bankruptcy at or around the same time you submitted your Offer in Compromise, your tax settlement offer will be denied. Finally, you need to remember that an IRS tax lien will not be removed when you submit your offer. Tax liens, with few exceptions, are only released when the tax debt is completely satisfied. The tax lien will remain until after your tax debt is paid off.

Getting an IRS Tax Levy Released

The IRS Tax Levy is a fierce weapon the IRS uses to collect on tax debt. If you do not reply to the IRS’s correspondence requesting payment, chances are high the IRS will use a tax lien or a tax levy on you. However, there are a couple of IRS tax relief solutions to try to get your IRS wage or bank levy stopped.

IRS Bank Levy

The IRS will send you a notice stating they intend to levy your bank account. You bank account is now frozen. After the notice you have only 21 days before the IRS seizes your money for good. Working fast is imperative. If you set up an installment agreement or make any kind of good faith payment before the 21 days are up, you can save the money that is in your bank account, and avoid the impact of the IRS tax levy.

· IRS Wage Levy

If you ignore your tax debt long enough, the IRS can implement a wage levy against you. This means the IRS will remove a set amount from your paycheck until your tax debt is paid in full. It is not unusual for the IRS to take up to 75% of your paycheck, leaving you a minimal amount to meet your own monthly financial obligations. You are certainly in need of IRS tax relief if you are the victim of the IRS wage garnishment. The IRS wage levy can also be released or “lifted” but seeking expert IRS tax help may be prudent as each pay period that passes creates more financial damage.

Installment Agreement

You can make monthly payments on your IRS tax debt. The IRS will calculate your income and assets when you file Form 9456. After the IRS determines you qualify, they will set the amount you can pay each month to pay off your tax debt. When you are approved, you must make sure not to default on your monthly payments. Your plan will be canceled and you will not qualify for another installment agreement for six months to one year. The monthly installment agreement is the most common IRS tax relief solution for payment of back tax debts. As you can see, the IRS provides many solutions for taking care of common tax problems. You have to act fast and make sure you respond to any notices you receive from the IRS as soon as possible. The IRS will not and can not be ignored.

When Negotiations Fail

Most people who call the IRS directly have trouble communicating with the IRS. The IRS is trained to collect money no matter what, so having them release your IRS tax levy is nearly impossible for the ordinary taxpayer. When levies are being implemented, time is limited. It’s a good idea to hire a tax care professional that can negotiate with the IRS for you, on your behalf. That will improve your chances at an IRS tax relief solution that is workable for you!

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Good IRS tax relief is hard to find and for people with complicated tax issues, it is an absolute necessity. But how do you know which tax reduction firm is the best one to try? How can you be sure you’re going to get the tax debt help that you need? And why is it so vital to receive help from professionals?

Settling Your IRS Tax Debt For Less

When your IRS tax debt is spiraling out of control, you’re going to want experienced tax debt help. Without an IRS tax relief agency, your chances of settling your IRS debt for less are slim. In order to qualify for an IRS tax settlement, you have to submit an “Offer in Compromise.” When you submit the Offer in Compromise form you have to detail your complete financial information. You also have to include 20% of the offer you submitted. If this all sounds complicated, that’s because it is! Submitting the Offer in Compromise is only half of the battle. That’s because it’s hard to communicate with the IRS. The IRS is a busy hive of workers and they are trained to do only one thing; and that “one thing” is to collect the balance in full. The IRS is not trained in helping you negotiate a fair tax settlement. But the tax attorneys and CPAs available at IRS tax relief companies are trained in getting you the best offer and providing expert tax debt help.

IRS Tax Levy Help

IRS tax levies have a devastating affect on taxpayers. For those who owe back taxes, the IRS has the power to seize all the money from your bank account, garnish your paycheck, and even seize your property to satisfy the tax debt. And when your bank account is soon to be levied, watch out! You’ll need tax levy help, and you’ll need it fast. This is an urgent situation. The IRS first freezes your account. You then have only 21 days before they seize all of the funds in your bank account “for good”. So if you have already received a “Notice of Intent to Levy Your Bank Account”, the tax levy could strike at any time. It’s important to find an IRS tax relief expert that will provide the urgent tax levy help you need. This IRS expert will work directly with the IRS to have your tax levy quickly removed (released). Calling the IRS directly is a bad idea because they will simply tell you the only way to have your tax levy removed is to pay your tax debt in full. If you need tax levy help, look for qualified professional IRS help.

IRS Tax Penalty Abatement

Many taxpayers are not aware that it is possible to have all of the penalties abated from your IRS tax debt. This is known as Penalty Abatement, and it is available to people who qualify. This is not a “free for all” program and you are required to display “true need”. For example, if you were sick, if there was a natural disaster, or if there was some kind of circumstance that kept you from filing or paying on time you may be likely to qualify. But you have to watch your back. The IRS is not going to give you an easy time about this. You’ll need lots of paperwork and documentation to back up your claims. And if you don’t have it, you will be out of luck. If any of the situations listed apply to you, you should seek professional tax debt help so you can maximize your chances of having undeserved IRS tax penalties removed from your IRS debt.

About Professional Tax Debt Help

Finally, you need to consider how your chosen tax reduction firm is staffed. You want the IRS tax relief firm you’ve selected to be staffed with nothing but experienced IRS professionals. This means you’ll want a tax firm staffed with Tax Attorneys, Certified Tax Professionals, and maybe even former IRS employees who can bring “insider knowledge” to the team. The IRS is the largest collection agency in the world. There is no way that ordinary citizens can know every single tax code there is to insure their rights are protected while they attempt to secure some form of IRS tax relief! It is almost always a good idea to hire qualified professional tax help to address your important IRS tax debt matters.

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There is a common adage that says the only two things that are certain in life are death and taxes. While death is definitely not certain when it comes to a home business, taxes assuredly are. If you are going to operate a home business, there are some things you need to know about taxes or you may find yourself in a world of trouble.

I can not think of one person I know who likes paying taxes, doing taxes or talking about taxes; but the fact of the matter is taxes are an inevitable part of life and if you start a home business, they are probably going to be an even bigger part of your life than they were before.

When you work for someone else, your taxes are taken out of your paycheck and then at the end of the year, you simply file your tax return and you either pay money to the IRS or you get money back. Paying home business taxes gets to be quite more complicated than that. While income taxes are the main concern of those employed by others, home business owners need to worry about use taxes, sales taxes, employment taxes, income taxes and a number of other taxes that may apply to their business.

The first thing you need to take care of in terms of home business taxes is the process of getting an EIN number. A business’ EIN number is much like a social security number for your business. It is the number that is used when reporting taxes to the IRS. Once you have your EIN number and your home business starts generating income, you are going to have to start making estimated tax payments to the IRS.

Unlike the annual tax returns you filed when you were employed by someone else, home business owners have to pay taxes on a quarterly basis. For example, you are going to have to pay taxes on the money you make from January through March in April and for the money you make in April through May, you have to pay taxes on in June. The IRS provides home business tax payers with the Electronic Federal Tax Payment System in order to make paying your quarterly taxes more convenient.

If your home business has employees, you are also going to have to take care of your employees’ income taxes. When you have employees, you are required to withhold their income tax from their paychecks and you must pay that income tax to the IRS. If you have less than one-thousand dollars in income tax liability each year, you can do this annually. However, if your employees’ income tax liability is going to total up to more than one-thousand dollars a year, you are going to need to pay the IRS either monthly or semi-weekly.

Remember, this only applies to you if your home business has actual employees. Independent contractors are not considered employees and taxes do not have to be withheld from payments made to independent contractors.

Home business owners also have to pay self employment taxes. Self employment taxes are taxes self employed people pay to Social Security and Medicare. This tax allows you to receive Social Security and Medicare benefits when you retire.

If you are not sure how to manage your home business taxes, you should hire a small business accountant to consult with you on the best way to approach your tax requirements. Hiring an accountant who is willing to teach you how to do your own home business taxes can be much more cost effective than hiring an accountant who insists on doing all of your taxes for you without any explanation of what is being done.  

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With the current turbulent financial situation and a new chief executive preparing to take the oath of office in 76 days, many of us are wondering what impact our new President will have on our taxes.

Individuals President Elect Obama’s campaign promise was that families earning less than $250,000 should pay no additional federal taxes. However, for those families earning more than $250,000, he has proposed direct federal tax changes including:

Other items of importance for individuals:

During his campaign, President Elect Obama also discussed numerous tax breaks and credits for middle class families. The availability of his proposals may be eliminated based on income phase-outs for many taxpayers, but he has previously discussed numerous items including:

Businesses His campaign proposals regarding business taxes mentioned as revenue raisers:

President Elect Obama also made the following pledges regarding small business growth and the creation of US jobs:

The above represent the tax positions announced by President Elect Barack Obama during his campaign. However, the tax changes that will actually occur during his term of office will depend on numerous factors including the direction of our economy and the tax bills passed by Congress. So please, for now take the above under advice as potential tax trends. However, if the above positions cause you specific concern regarding your tax situation, a transaction or change you are considering, please contact your LBMC tax advisor and we will be glad to work with you to address your concern.

Visit the LBMC Tax Services Web page or contact us directly.

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It’s that time of year again when the taxman wants to know how much you have earned and how much tax you owe him. Don’t forget that your individual tax return has to be returned to the Internal Revenue Service (IRS) by April 15 this year, unless you have applied for, and received an extension. We all want to pay less tax, but instead of looking for loopholes and gray areas, rather focus on managing your tax affairs as efficiently as possible. The following business and personal tips should make the current tax year a little easier on your pocket when completing your return:

1. Travel Expenses It is good practice to keep a mileage logbook of distance travelled, in order to accurately determine you travel deduction. If you have two jobs, you can deduct the cost of traveling from the first to the second, but if you have a single job, you cannot deduct commuting costs because it is considered a personal expense, not a business expense. Travel for business, including costs to go to seminars and conferences are 100% deductible. Deductible travel costs include hotels, airfare, taxis, car rentals, parking fess, tolls and tips.

 2. Medical Expenses Keep records (including invoices and statements) of medical expenses which are not covered by your medical aid, in order to get a deduction for those expenses on assessment. Depending on your income, certain medical expenses including health insurance and dental insurance premiums may be deductible. This deduction is limited to costs over 7.5% of your income. Pursue turning your non-deductible personal medical expenses into a legitimate business expense.
3. Entertainment Expenses Be careful of entertainment allowances. Since March 1, 2002, no deductions can be claimed against entertainment allowances for personal reasons. Make sure your employer is aware of this and that the allowances are taxed in full, otherwise you might end up with a tax liability on assessment. You may however deduct “ordinary and necessary” business meal and entertainment expenses up to 50%.

4. Tax Records
Why not make your life easier and ensure that you don’t miss any deductions by organizing your record keeping system early and keeping it updated. Not only does having organized records make it easier and less frustrating for you to file your tax return, it also enables you to explain an item on your return that the IRS might question, and could prevent you from having to pay additional taxes and penalties for unsubstantiated items. Although legally you need only keep tax records for three years , you should keep a copy of the returns in case you need information from these returns at some point.5. Electronic Filing
If you want your return processed in approximately half the time of a paper return, you should consider filing the forms electronically. IRS E-file makes you life a lot easier as it picks up problems with your returns instantly and provides immediate feedback and confirmation regarding your return.
6. Avoid Refund Anticipation Loans While it would be nice to get your money back in your pocket as soon as possible, it is much better to wait for your refund. The downside of these loans is that the annual interest rates on them are very high, usually between 50% and 500%. So between the loan fee, tax preparation fees and other administrative fees imposed on the loan, you end up losing a big portion of your refund.
7. Deadlines
Be aware of deadlines in order to avoid penalties. Tax returns must be submitted before the due date given by the IRS. If your previous years’ tax affairs are up-to-date, an extension for submission of the return can be requested. However, extensions are granted less frequently, depending on your particular circumstances.
Conclusion
Tax season makes everyone a little nervous. Rather start early to allow yourself time to prepare and to ensure that you are taking full advantage of every eligible tax break.
It might be a good idea to purchase an electronic book or two in order to gain more information, and educate yourself about income tax and submitting your return correctly. The following E-books provide a wealth of tax information as well as tips, stories and explanations of tax laws and how to make the most of them:Planning Your Tax,Save on Taxes,Tax Survival Guide. Additionally, the Official IRS website is a great resource for additional information.

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