Tax Loophole, Eliminate Your Tax Burden, Legally and Ethically

The article below will provide you with more information on how to be rid of taxes (U.S.) legally and ethically.  It's these types of tax loopholes which the general public are not fully aware of.  ANY ONE, can take advantage of this particular tax loophole.  The difference in the wealthy and the not so wealthy, often times is the information.

I live and work offshore.  There are thousands of American taking advantage of the opportunity described below.  Some times, depending on what part of town I'm in, I have to remind myself that I'm in a foreign country and not in the United States.  That's how many Americans living in the same area in which I live.

To learn more about how we made the transition, check out the Offshore Library 

C. Ingraham, RTRP

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The one and only true option for an American to eliminate his or her U.S. tax burden is to work overseas earning no more than US$97,600. Do that and you can avail of the foreign earned income exclusion (FEIE, which is US$97,600 for 2013). You have to qualify for the FEIE. You do this by being a bona-fide resident of another country or by spending 330 days or more in another country.

Remember, though, that, depending on where you live and how your situation is structured, you could be liable for income taxes in the country where you're living and working.

Obviously, this doesn't work for everyone. Not everyone is looking to move overseas and get a job...and, even if that's your goal, the truth is, it's not easy to get a job in a country where you don't hold a passport.

The bigger tax advantage for you as an American going offshore is to take your business offshore with you. In this case, you can work for yourself, thereby qualifying for the foreign earned income exclusion. Structure things properly, and you can also defer taxes on the profits from your offshore corporation until you pay those profits out in the form of salary or dividends.

This tax deferral is, in fact, similar to contributing to an IRA or 401k except that instead of handing your money over to an anonymous money manager, you're reinvesting in your own business. Note, though, that, as U.S. person running your own business offshore, you still could contribute to an IRA or 401k, taking advantage of those tax-deferral strategies, as well, if you'd like.

IRA contributions are limited if you earn a certain level of income. 401k contributions are limited, too, but these can total up to US$67,000 (US$17,000 personally and US$50,000 from the business). Taking those tax deferrals along with your foreign earned income exclusion means you could move up to US$165,000 out of the business tax-free or tax-deferred annually. Then you can leave whatever profits the business earns beyond those levels in the business...again, deferring any potential U.S. tax.

Meantime, you could take your IRA and your 401k funds offshore if you want. To be able to take your IRA funds offshore, you simply need a custodian who allows for offshore investments. The IRS rules for IRAs limit investments that would qualify as "self-dealing." They do not, however, limit the types or locations of most of your investments (other than collectibles).

Mainstream custodians such as Schwab and Fidelity don't allow you to make offshore investments with IRA funds they're managing for you simply because they only make money when you invest in stocks, bonds, or mutual funds. They aren't set up to administer investments in real estate (foreign or U.S., both of which, again, the IRS does allow). That's why you need a custodian who does allow these kinds of "alternative" investments (Midland IRA is one such custodian).

The easiest way to manage your offshore investments in your IRA is to set up an offshore LLC in which your IRA invests. Then you, as the managing member of the LLC, can direct the investments from there. As far as the custodian is concerned, your IRA is invested in the LLC. That's all the custodian knows and that's all the custodian needs to know. This structure keeps your custodian fees low and allows you greater flexibility and control.

You can invest 401k funds in offshore investments, as well, and, in this case, you don't even need a special custodian. With a solo 401k, you can act as the plan trustee. The main difference between investing IRA funds offshore and investing 401k funds offshore is the tax form filing requirements. With an IRA, your custodian handles all the tax form filings. With a 401k, you have to file the forms (Form 5500 or 5500-EZ).

In both cases, it's important to be aware of the investment constraints. Again, no self-dealing or dealing with immediate family is the biggest no-no. Your IRA cannot buy a piece of investment real estate from you personally, for example. Your IRA also can't lend you money. It can, however, lend money to a third party.

As I said, too late to take advantage of any of these strategies on your 2012 tax return due today. But today is also the day to begin taking action so you can benefit from these opportunities starting with your 2013 tax return and beyond.

Lief Simon

Teach Me How to Eliminate My Tax Burden!

The IRS Pays an Ex-Banker $104 Million Dollars for His Help

The IRS Whistle Blower Program is alive and well and to provide it, they have awarded an ex-banker $104 million dollars for offering up information on people who are classifieds as overseas tax cheats.

And the banker is a former Swiss banker, who himself served prison time for a fraud conspiracy conviction.

To learn the details about this most interesting announcement,click here to read the entire article on the IRS's latest million dollar whistle blower

This incident alone should make offshore account holders aware that the IRS is serious about unreported income, which may be housed in offshore bank accounts.  We cannot stress enough the importance of coming clean about offshore accounts.

It is NOT illegal to have offshore accounts, however, it is illegal, NOT to share this information with the IRS.  Are millions of dollars in taxes saved worth prison time?  Make an appointment with an International Tax Attorney and discuss your options.

Tax Benefits, Lower Cost of Living in Retirement

Thinking of joining millions of Americans who are moving offshore in order to live a better quality of life on a set retirement income?  You are not alone.  And this is fast becoming a really hot topic.

For more information on offshore tax havens, cheap and safe places to retire, how to manage your money in offshore retirement, health care and much more, you can visit our sister site: http://forgottosaveforretirement.com/   If you look to the far left of the page, you will find a link which thousands of visitors to this site have clicked on.  It's entitled:  "44 Things You Must Know Before Retiring or Investing Offshore.

We are not encouraging the "investing" offshore until you know what you are doing, and your state side Attorney has has an opportunity to look at the paper work.  However, we are saying that a decision to move offshore, or even to make your primary home offshore, could have some serious and positive end results when it comes to taxes.  Learn more: http://forgottosaveforretirement.com/

Tax Havens, Tax Free, No Taxes Legally - Retirement

To lower your taxes legally during Retirement, you have the option of moving to a no-tax foreign country.  And this is how many Americans make their retirement dollars go a whole lot further.

There are states which do NOT impose state taxes, South Dakota and Texas to name a couple.  However, you can save even more when you move to a no-tax foreign country.

You will need to speak to your Tax Attorney or Enrolled Agent to learn about the details

To learn more about which countries American, Canadians, and individuals from the UK are moving to, you can visit Forgot to Save for Retirement and visit, for sure,

How to Retire On Less Than $740 a Month - Yes, Americans are living well, offshore, for less than $740 per month. 

Note:  I'll give you a hint, ..Malta is a tax haven...Andorra qualifies... So does Belize...and, in some ways, Uruguay and the Dominican Republic. However, the world's most user-friendly tax haven? That would be Panama, and my personal  favorite, the Bahamas.  Now, these are what you call real tax havens.  Not for your business, but for yourself. 

Tax Loophole? An Asset the IRS Does Not Ask About

This is the latest tax loophole people are talking about.  And this article from one of our affiliates is true and correct, at least for now (06/2012)  There are certain assets the IRS does not talk about very often.  And successful investors, who have made big in this market talk even less.

We ran across this information, because, of our Forgot To Save for Retirement website, which talks about retirement options for people who have limited monthly retirement income.  Click here for information and help with making offshore decisions.

An asset the IRS doesn't want to know about

Surprise: Real Estate is an asset that you do not have to report to the IRS…

You know that, as an American, wherever in the world you go, Uncle Sam requires you to report on your worldwide income and assets. But there is an investment that the government doesn't require you to report on. No questions asked. They're simply not interested. What is it?

Foreign real estate.

Yes, you can own a second home (whether for investment or personal use) in a foreign country and you are not obliged to inform the U.S. tax authorities.

And, while new laws may make it easier for the government to get at your bank account overseas, it's a heck of a lot harder for someone (assuming they can track it down in the first place) to physically remove your foreign property.

The beauty of this is that you don't have to be super-rich to take up the idea of buying real estate overseas to protect your wealth. Opportunities to buy land, houses, and apartments, for both investment and personal use, exist at all price levels.

Learn more about offshore retirement options.