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Question by Bad_Boy: How to report Indian stock loss in US tax filing ?
I have some stocks in India and I got loss of around 1 lakh rs. Can I claim that loss as Capital loss in my US tax filing ? If Yes then How ? Please help me with this.

Best answer:

Answer by Jss
Yes, if you are a US citizen or resident. You must report your worldwide income.
Another filing requirement is Form TD F 90-22.1.

Add your own answer in the comments!

Article by Gary Edwards

Individuals and corporations engage in international tax planning in order to legally reduce their taxes. The field of international tax planning is broad and complex but there are three important aspects from which to start. There are three basic means of reducing taxes. They are to change residence, to change the source of income, or to set up legal offshore entities in tax advantaged jurisdictions.

Moving Offshore to Reduce Tax Burden

In the modern world communication across the globe is virtually instantaneous and travel from point to point is increasingly easy. Many parts of what were previously referred to as the “third world” have developed services and infrastructure on a par with Europe, North America, and Japan. Thus moving offshore to reduce tax burden may not mean a lesser lifestyle. In fact, the individual moving offshore may find that his money goes farther and that a better lifestyle is possible away from his country of origin. Thus, the decision to move offshore to reduce tax burden simply has to do with finding an offshore jurisdiction with favorable tax laws.

Tax advantaged jurisdictions will typically not tax income earned in other countries. Many have double tax treaties with countries in Europe and North America so that income from one jurisdiction is not taxed in both jurisdictions. Simply moving “offshore” may be sufficient for many to accomplish a reduction in taxes. This is typically a solution for retirees or those with very substantial wealth who don’t want all of their “eggs in one basket.”

Moving a Business Offshore to Reduce Tax Burden

For individuals or corporations looking to gain more income and not just save it the better solution may well be to start or move a business offshore. By setting up an international business corporation or taking advantage of government issued financial licenses in any of several jurisdictions it is possible to do business in a tax advantaged location. It is possible to take advantage of government issued financial services licenses in any of several offshore jurisdictions in order to provide, and charge for, services such as asset management and protection, trust services, money changing, money transmission, or a Forex business to name a few of the possibilities.

Using Offshore Solutions to Reduce Tax Burden

It is the use of various offshore “solutions” that are the most important aspect of international tax planning. Through judicious selection of an offshore jurisdiction, offshore banking, international business corporations, foundations, and trusts it is possible legally reduce or eliminate taxes as part of a comprehensive asset protection and privacy solution. A vehicle such as a Panama Private Interest Foundation has no owner but has beneficiaries. Such an entity can own an international business corporation or offshore bank account. Any income not gained for doing business in Panama will not be taxed in Panama. An individual can benefit from many aspects of this type of entity and legally reduce taxes at the same time.

Each of the three general aspects of international tax planning has its place. In order to most effectively benefit from any or all options the individual or corporation is well advised to consult with competent counsel regarding offshore choices and solutions.

Question by Going Crazy: What are you planning on doing with your income tax refund this year?
I am getting my daughter a bed and some new chairs for the living room!

Best answer:

Answer by beckoningsubstitutes
Tax refunds are for suckers.. Adjust you expemtions so you’ll pay a little when tax time rolls around. Why let the Gov’t use you money tax free? Take what would have been your refund and have it directly deposited into a savings account.

That’s what the money savvy people do,

Give your answer to this question below!

One of the things my Las Vegas clients ask me often is, “How can you help me more with my tax planning?”, and I think the best answer to that is “I need to talk to you”. Whoever your Las Vegas CPA is, if you let them know what you’re doing before March of the next year, they can often do a lot of things with entity structure, or just planning the deal to make it more tax efficient. Communication is the key with Las Vegas tax planning, but if you only talk to your CPA once a year, in March, you’re missing the boat, and he or she isn’t able to help you as much as they could.

For example: I had a client come to me once that was doing a land deal; they owned some land and they were going to build a building on it. And by talking with us, and letting us understand their particular tax situation, we were able to structure another entity, take the advantages between a partnership and a corporation, and capture most of that gain as long-term capital gain, instead of all as ordinary income. But it’s one of those things that we couldn’t have done if they had started construction and talked to us after the fact.

Make sure that your CPA understands your business and tax situation as early as possible. Give them any information that they might be able to use during the tax planning process, and make sure your Las Vegas accountant really gets to know your and your business.

As a CPA in Las Vegas I want to take just a minute to talk about the service you should expect from someone who is really interested in you, and that is your CPA. Most CPAs in Las Vegas have a perspective of history – they ask you for last year’s tax returns, they ask you for last year’s information for financial statements – but someone who is really worried about you needs to be looking towards the future; needs to be looking to see what the past has in its base of information that will help you reach your goals and objectives in the future.

I have often said that CPAs stand on this line, which is today, and look back, but they should be taking that perspective of seeing what’s in the past and looking forward towards the future; to help you meet your goals and objectives, your wishes and your dreams. That perspective will help you plan for the future and allow you to make the goals that you have for yourself. Most residents of Las Vegas feel like they’re making an educated decision when choosing a CPA, however, they might be looking for the wrong things. While experience and reputation are still very important, you should be focusing on that personal relationship. You want to avoid any CPA who treats you like everyone else, and find the CPA in Las Vegas that will really take a personal interest in you specifically.

I want to take a minute to talk about Las Vegas accounting services that you receive from your CPA. Las Vegas CPAs often provide what we call “compliance services” such as: financial statements that are required for banks or other lending institutions, or tax returns which, of course, our government requires. But the accounting services that really mean the most to clients are those that aren’t required, but that really add value to you and your life. Those services we call “value-added services”.

And so when you’re looking for a CPA and trying to decide how you’re going to employ someone to do those things that have to be done (those compliance services) also find out from them if they have an interest in, or a history of, providing these “value-added services”. These accounting services include: helping you plan for retirement, helping you look for ways out of your business, exit strategies, succession planning, those kinds of things, as well as how to take the money that you make in your business, in your life and retain it so that you can live the life that you like through your retirement years.

The important thing is to make sure that your accountant is offering you the services that are most important to you life. Keep this in mind the next time you meet with your CPA to discuss possible Las Vegas accounting services.

As we all have come to be aware, taxes are our single largest expense in our lives. Our hard earned tax dollars go to bureaucrats that find many creative ways to spend it as well as many creative ways to continue taxing us. However, the really rich find different ways to not pay these taxes by structuring their income sources in various ways.

W-2 wage earners are the people that pay the most in tax because of the type of income they make and because 99% of them do not do proper tax planning to mitigate some of the tax they pay. Getting financially educated on how to structure your income into income sources that reduce the amount of tax you pay is crucial to your financial success, especially when most pay 50%+ in taxes in one way or another. We are already taxed on our income, homes, investments, gasoline, travel, clothing, meals, alcohol, cigarettes, businesses, education, licenses, death, and on and on. You get the picture.

The bureaucrats say that these taxes are good for us and some of them are however they just keep finding additional ways to increase our taxes. The problem with the entire system is that the bureaucrats do not solve our financial problems or even know how to for that matter. They only throw money at the problem and never solve it making the problems bigger and bigger until we have a financial disaster on our hands like Social Security and Medicare. As the problems get bigger we pay more tax to make up for the problems that were never solved. These bureaucrats continue to tax us and take money out of our pockets legally.

Our job is to find creative ways to pay less of a percentage in tax legally. Unfortunately, you have to have a high financial IQ in order to find these creative ways of structuring your income and deductions and most of the low income taxpayers do not have a high financial IQ. Therefore, the low income taxpayers pay the highest percentage of tax relative to their income.

In order to actually keep most of your money instead of paying taxes, your income needs to be structured so that it is portfolio income or passive investment incomes which are at lower tax rates. Earned income, such as those that have W-2 jobs has the highest tax rates with the least amount of deductions. The structure is flawed from the start. As taxes rise to cover the major financial problems currently facing our nation because of the problems the bureaucrats created, the trick to real wealth and not becoming part of the middle class (i.e. the new poor) is to change your income sources and finding creative ways to reduce your tax. This all starts with financial education.

Financial education is lacking significantly in our society as a whole and is not taught in schools. Most teachers live in the W-2 world and are not financially educated so how are they going to educate America’s children. That means it is on the parents shoulders to not only educate themselves financially but take the reins and educate their children as well. You can make ,000 per month or ,000 per month, but without financial education neither is going to get you very far in your accumulation of real wealth without being financially educated.

Question by ajay h: How much is the Wage Tax in Jenkintown, PA? I am planning to move there and I work in Bucks County.?

Best answer:

Answer by Judy
Wage tax for local area is 1% pretty much everywhere in PA except in Pittsburgh and Philadelphia, where it’s higher.

You also pay the state income tax of 3.07%, and whatever your federal income tax is.

Add your own answer in the comments!

Article by Richard A. Chapo

The beginning of a new year is a time for contemplation, reflection and doing a little planning. As 2007 quickly approaches, you need to give some thought to your tax planning for the year.

Tax Planning Tip for 2007 – Income

If you complain because you feel you are paying far too much in taxes, you may be right. So, is the government giving you the once over when it asks for that check in April? Well, it is probably is. On the other hand, there is a person you know much better who is often also to blame. Who? YOU!

The key to minimizing your taxes is to take the time to do tax planning. This planning should be done in January for the upcoming year. “Tax planning” is not sitting down with your accountant on April 14th and trying to reduce your tax bill. If you act proactively, and ahead of time, you can do a lot to keep your money out of Uncle Sam’s hands.

As we enter 2007, you should begin to contemplate your tax planning for the year. At this point, I would typically go into a long spiel about maximizing deductions, retirement accounts and so on. While you should still do all of these things, the 2007 tax year is shaping up to be something a bit different. Why? Politics, my friend.

As you well know, the recent elections resulted in a major political change in Washington. Out went the Republican majority and in came the Democrat majority. In both houses! Regardless of your politics and whether you think this is a good or bad thing, the tax change winds are beginning to blow in the wind.

If you have been watching the fiscal figures for the federal government, you know our national debt has been expanding at an alarming rate. While there are a variety of reasons for this, the combination of tax cuts and an expensive war are certain two of the primary ones. Now that President Bush does not have a friendly Congress and is a lame duck, you should expect an effort to address the red ink. Since no exit from Iraq seems to be on the horizon, it is reasonably to suspect we will see taxes raised. This probably will not happen until later in the year or 2008, but you should be planning for it now.

When putting together you tax plan for 2007, you need to consider how you can best take advantage of the current low income tax rates. Assume you have some source of revenues or assets that trigger income tax payments when you receive the money or sell them. If any of these are going to occur in 2008 or beyond, you might consider trying to move them forward into 2007. By doing so, you can take advantage of the current rates instead of getting caught with your pants down when rates go up.

Question by Kaitlyn E: Injured spouse for tax filing work with 8000 home buyers credit?
My husband owes back child support (he has to pay back his daughter’s birthing expenses since they didn’t have insurance). I bought a house last year (on my own) and I see that the only way to get the full 8000 is to file jointly. Since the house is solely in my name, will filing the injured spouse form grant me the full tax credit amount for the house?

Best answer:

Answer by PsychopathicKids
Sounds illegal. I’d ask a lawyer.

Know better? Leave your own answer in the comments!

Question by littlemamma81: If you are planning to claim bankruptcy and want to keep your tax return, what can you legally spend it on?
That is, if you get the tax return prior to filing for bankrupcy. Anyone else been through this and have any advice?

Best answer:

Answer by Dougaroo
If you haven’t yet filed for bankruptcy, you can spend it on whatever you want. If you spend it on groceries, utilities, gas for your car, insurance, etc;, they court really can’t take it back. If you spend it on tangible items, such as a car, house payments, TV, etc., the court may order that such items be sold and the proceeds go to pay back the lenders who’ve made claims against you.

You should really discuss your situation with your bankruptcy attorney to get a better understanding of the likely outcome and what would be best to do with the refund / stimulus payments

Add your own answer in the comments!

There is a large tax credit available to many households who have a dependent child. This may come as a surprise to many new parents, but it is important to plan for it.

It is worth up to ,000 per child, and one of the real benefits is that it is a tariff credit, not a deduction. Unlike a deduction, a credit reduces your tariff bill dollar-for-dollar.

The reduction is limited to those with certain incomes. First, to qualify you must be able to pass a few governmental tests.

The dependent must be a U.S. citizen or resident who are under age 17 at the end of the tariff year. You can claim your child, stepchild, adopted child, grandchild, or great-grandchild.

You may also be able to claim foster children if they were placed with you by a court or other authorized agency. The child must also live with you for more than half the year in which you are trying to claim the deduction.

The dependent also must not provide more than half of their own support, which is typically only an issue for older dependents. This is also a nonrefundable tax credit, which means that if you do not have enough tariff owed the credit would be reduced so that no refund would be issued.

If you do not qualify for this credit, you may qualify for an addition form. The additional child levy credit is a refundable, and is for those who had a qualifying child and did not receive the full amount of the child tax credit.

Since this is a refundable credit it is possible to get a refund even if you do not have any tariff liability. Qualifying for the additional child tax reduction benefits has the same qualifying and income guidelines.

In addition, if you qualify for the earned income levy reduction benefit, your additional child tariff reduction would be reduced by the earned income credit that you received. There is also the annual gift exclusion tax law to take into consideration.

The annual gift exclusion has nothing to do with the portion of your tax return known as gross income, which includes wages and profits from a business. It actually has to do with gift and estate tariff, or the amount the government charges people if they give away or die with too much money.

In the United States, every person that dies with more than a certain amount is charged a “death tax” on the excess if the money goes to anyone besides their spouse. Currently, the limit is ,500,000 per person.

To keep people from avoiding estate taxation by giving away all their money right before they die, the IRS also puts limits on the amount you can gift in any one year to any one person. There is also a cumulative limit over their lifetime for gifts that exceed the annual exemption amount.

In 2009, this annual gift exclusion was ,000 per recipient, per year. The lifetime gift limit is then maxed out at ,000,000.

Anything you give in excess to ,000 per recipient, per year is essentially subtracted from the lifetime limit of ,000,000. This simultaneously reduces the amount they can be transferred tariff-free at death.

The only time a recipient would ever get taxed is if the donor exceeds their lifetime gift exemption while still alive and refuses to use their credit or to pay the “gift” tariff. Then, in theory, the IRS could ask the recipient to pay it.

There is even more confusion when it comes to paying for college and the annual gift levy exclusion. Anyone is allowed to pay unlimited educational or medical bills of any other person without having to worry about the annual gift limit.

The only requirement is that the payment must be made directly to the educational institution. If an individual puts more than the annual gift limit into a Section 529 account, it may reduce his or her estate tariff exemption.