Charitable Giving Information

Tax Planning Strategies For Individuals

 

If you have ever endured a dose of ‘Sour Surprises’ from Uncle Sam on April 15, then you already know that smart, strategic tax planning throughout the year is the only way to keep tax headaches away. One small mistake like a missed payment, illegal deduction of expenses or incomplete records is enough to attract a host of penalties; and you can be sure that no tax auditor will take kindly to lame pleas of ignorance.

 

Income tax planning basically refers to examining how to conduct your business in such a way as to eliminate or reduce taxes. As a business owner or individual, you have several methods in which to conduct business; effective tax planning focuses on the method that facilitates the lowest tax liability, legally.

 

There are many tax planning strategies at your disposal. Whichever you use, you will basically be targeting any or all of these results:

Ø Reducing your taxable income

Ø Claiming tax credits, if any

Ø Managing and controlling the time in which to pay tax

Ø Avoiding costly tax planning mistakes

 

There are two ways in which you can manage your financial planning: do it yourself or employ the services of an accountant or a professional adviser.

 

Doing your own tax planning is one of the best ways to learn about tax planning. However, keeping abreast of the latest rules and amendments in income tax can be quite daunting for the average individual. Amendments, rules and explanations run up to approximately 42,000 pages in standard publications, making the tax code in the US particularly complicated. For most people, reading up on tax literature is probably as painful as a bug in the ear. Which is why most companies and individuals turn to specialist tax planners.

 

Specialist tax planning companies assist companies and individuals examine the cornucopia of tax issues facing them. They mitigate risks and advise companies and individuals with high net worth on ways to reduce the amount they pay as taxes every year. They recommend appropriate solutions to knotty problems and work to increase the value of a company’s assets.

 

Whether you employ a personal accountant or use the services of a tax planning firm, you still need to have some basic knowledge of income tax planning. For example, you need to know what kind of records to save throughout the year, how to prepare your tax returns, how to substantiate the information you have provided in your forms, so on and so forth. This you can gain through practice and of course, in consultation with your tax planning service provider.

 

It is important to understand that while you cannot do anything to literally lower your tax rate, you can take certain actions that will reduce the tax figure you attract. Spotting that course of action and following it up will not just push up your bottom line, it will also help you cruise through mid April blues with a smile!

 

 

At Sovereign Group, our main business has been the setting up and management of onshore and offshore companies and trusts to assist with income tax planning – and asset protection including asset management services & protection, capital fund raising, specialized tax advice, credit cards and others.

 

About the Author:

Article Source: ArticlesBase.com – Income Tax Planning

Trader Tax Strategies, Trading Tax Planning, Trader Tax Status

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Inheritance Tax Planning Advice

Inheritance tax (IHT) is something that is unavoidable for most people. And for property owners, the position is likely to be worse than many others, largely because they are likely to have significant assets that cannot easily and quickly be realised, in the event of death, in order to meet IHT charges. These cut in at 40p in every pound, once the threshold has been reached. For 2009-10, the threshold is £325,000.

For married couples (and civil partners) there is no IHT on gifts between them, so it is possible to pass the entire estate without any liability to the tax. Similarly, a recent change in the law means that the value of any money under the threshold not passed outside the relationship on the death of the first ‘partner’ can be passed to the survivor and added to their threshold on death. The calculation is slightly complicated, because it is the proportion of the threshold retained within the relationship that passes over, not the amount.

Are there any reliefs available? Some forms of property obtain 50% (or even 100%) relief against IHT. Buildings owned by a partner or controlling shareholder and used wholly or mainly in the business of the partnership or company immediately before the transfer falls within the 50% category. However, it is most unlikely that HM Revenue and Customs would consider property owned for letting, even if owned by a partnership or company, would qualify. After all, the income generated is not accepted as from a trade profession or employment, for the purposes of justifying pension contributions and the same considerations would apply for IHT.

It is important to understand there are some exemptions against IHT; these are gifts of any size made at least seven years before the death of the donor (called Potentially Exempt Transfers, or PETs) and modest gifts made out or normal income expenditure plus up to £3,000 a year for each donor. Other small gifts and modest amounts paid in consideration of marriage are also exempt.

For most property owners, the exemptions are unlikely to be of much assistance if assets are largely held in property, as this cannot easily be converted into small amounts for early distribution. Giving away properties while retaining the income from them will also prove ineffective from an IHT planning.

Another issue that will affect many property owners is that IHT is generally payable within six months of death. This can often be difficult, given how long it can take to obtain probate, and could involve a ‘forced sale’ in order to raise the required sum – which could be very large from some property landlords. It is normally possible to pay by annual instalments, but in this case interest is charged by HM Revenue & Customs (as in the case of late payment). Having liquid assets, in addition to the property portfolio, can make life a lot easier.

It is important to seek independent professional advice before making any decision about your personal finances, especially which landlords insurance you decide on. You should always ask your insurance advisers what experience they have of dealing in this area.

About the Author:

Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.

Article Source: ArticlesBase.com – Inheritance Tax for Property Owners

Inheritance Tax Planning

Income Tax Planning 2009

Question: How would the economy react if Income Taxes were 0% for 2008, Interest Rates 0.5% ….?

But then in 2009 interest rates will go back to where they are now, and the taxrate will jump up to 1990s-taxrates.

The government would plan on eventually recovering from the taxless 2008 year with 40% rates every year on after, excluding 2008.

Would the short-term relief boost the economy, or would the tax increases for 2009 and after affect the current stock market already?
My prediction:

Immediate short-term: rapid increases in consumer spending, borrowing, investing

A few weeks later: Inflation on the increase, rising prices. Artificially overvalued stock prices. No safe investment.

Eventually: Stock market peaks and plateaus. Fear of market turnaround forces investors to withdraw from market, sharp decline.

Nowhere to go, problem out of Government control, high inflation, no bond market, no stock market, no savings.

Answer: Considering there would be a mad rush to cash out of our treasuries because we'd be printing money to pay all of our bills, and it would scare the crap out of everybody, hyperinflation and economic devastation.

Income Planning - Spotlight November 2009

Giving To Charity And Taxes

Question: How much can I right off when giving to charity?

Ok lets say hypothetically that I gave 50% of my gross income to a charity last year. How much can I right off and not owe taxes on?

Answer: Depending on what you're giving and who you're giving it to, the limits range from 20% to 50% of your AGI. 50% is for total contributions. See IRS Publication 17, Chapter 24 or other IRS documents.

Obviously it is only legal to deduct what you actually gave. You can be asked by the IRS to prove that you actually made the contributions you claim.

Liberals Have Really Big Balls

Charitable Giving Statistics By Country

No matter who you are, what you do, or where you live, chances are you have been personally affected by breast cancer. The statistics are clear and overwhelming; but statistics mean little when faced with the diagnosis of yourself or a loved one.

For those who fight the battle against this cancer on a daily basis, the support of family and friends is just as important as the treatment received – necessary support that widens still the circle of people affected by this disease. This family of patients and supporters
“strong in numbers” often find the wearing of a breast cancer ribbon to be a sign of their connectivity and a larger call for awareness and aggressive strides in research.

We’ve all seen them – the pink breast cancer ribbon that adorns any manner of clothing and is meant to draw attention to the staggering statistics – affecting one in eight women during their lifetime; over a million people throughout the world this year alone; and claiming the lives of 43,000 people a year in the United States.

The wearing or displaying of a ribbon has long been identified with the plight of charitable causes; from the yellow ribbons tied around trees in honor of soldiers far from home, to the looped red ribbon worn in symbol of AIDS activism. The pink ribbon, that is now so inseparable from its cause, had its origins with the Susan G. Komen Breast Cancer Foundation.

The foundation, which began in 1982 as a way to unite women who were suffering with breast cancer in a unified call for better funded research, began holding Race for the Cure in 1990, an annual walk/run event to help raise funds for education, screening, treatment, and research. Participants of the race who were cancer survivors were initially given pink visors to commemorate their fight; but all participants began receiving pink ribbons in 1991.

However, the ribbon really stepped into the limelight in 1992 when Self magazine featured it in its second annual Breast Cancer Awareness Month issue. The magazine partnered with Estee Lauder who handed out over a million pink ribbons at its makeup counters across the country. Attached to each were instructions on proper breast self-examination and information on how to petition the White House for increased funding for better research.

Legend tells us that the pink ribbon was chosen because of its close association with femininity. Meant to empower and inspire women to enact change in their own medical care, the pink ribbon began as a wake-up call for all women; without fully engaging in the network of healthcare, researchers, and government that wield influence in cancer prevention, detection, and treatment, women were at the mercy of those in power. It was time to take an active role and affect change at the highest level.

Today, the power of the ribbon holds fast to its fundamental values with which it was originally introduced. And it continues its work of uniting generations of women and families in the fight against cancer. As research continues and new medical and technological advancements are brought to the table, the ribbon will surely continue in its role as a sign of awareness and an infinite commitment by its wearers.

About the Author:

For more information on breast cancer try visiting http://www.breastcanceranalysis.com – a website that specializes in providing breast cancer related information and resources including information on the breast cancer ribbon.

Article Source: ArticlesBase.com – Honoring Heroes With A Breast Cancer Ribbon

President Obama Speaks in Ghana