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Archive for the ‘Tax Advice’ Category

Foreign Earned Income Exclusion

Wednesday, September 14th, 2011


Depending on the country, there are different tax advantages in living overseas. Many countries do not tax their citizens working abroad at all. While Americans living abroad are legally required to file their tax forms, their US tax liability is much lower.

For Americans expats working overseas, the Foreign Earned Income Exclusion is a major benefit. With it, more than $90,000 a year of earned income is legally tax free ($91,500 for the 2010 tax year). Expatriate Tax Advice will take a look at this tax break, how to qualify, why the government grants it and ways to take advantages of it.

One way to qualify for this exclusion is to be a bona fide resident. Taxpayers can qualify for this when they reside in another country for an entire tax year from the first of January through December 31st.

For those who do not meet the bona fide resident test, they can still earn the exclusion from income taxes if they reside overseas at least 330 days in a 12-month period (this does not need to be within a single tax year).

Also, in the case of those who have moved overseas but have not been there long enough yet to qualify for the exclusion, it is still possible to claim it as long as they plan to remain overseas until they do. However, the amount of the exclusion will be prorated for the amount of time spent overseas.

There are reasons many countries give tax breaks to their citizens living abroad. Those living abroad are not using the services of their native countries. Also, since those working abroad usually have to pay taxes in the country they are working in; forcing them to pay taxes in their native countries would result in double taxation. Furthermore, it would make them more expensive to employ. For example, if Americans working abroad had to pay American taxes on top of those in the country they were working in; their real earnings would be much lower than those from other nations. This would make them more expensive to employ since Americans would need to make more to get the same wage.

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How to Get Good Business Tax Advice

Saturday, March 5th, 2011

Since there are many notorious tax advisers out there, ranging from the well meaning but ignorant to the illegal ones, it is hard to know whether you are getting a good business tax advice. Finding a good business tax advice is a sort of trial and error method. Here are ways on where you could get a good business tax advice:

1. A reliable tax adviser will ask for your tax receipts and ask you several questions to help determine your qualifications for deductions, expenses and many more. This ensures that they have your best interests in mind and help you avoid interest, penalties or additional taxes.

2. Find tax attorney or a certified public account in the type of business you operate. Look for references with other businesses in your field. If you must choose between experience and location, go for the experience. You can still get in touch with an adviser even if he or she does not live in the same house through email or phone.

3. Choose an adviser or preparer who will be able to go with you on audits. Keep in mind that only CPAS, lawyers and enrolled agents can represent you before the IRS.

4. Shop around for a tax professional before deciding on one. Inquiries on several professionals will give you a better idea on what you are looking for.

5. Ask your potential tax adviser of his or her qualifications and whether he or she is certified. Make sure to find someone who is really qualified to give you good business tax advice.

6. Choose someone who you fell comfortable working with and someone you feel you can trust.

7. Take into consideration the fees when selecting a tax adviser. While choosing one should be based on the quality of service that he or she provides, another important factor to consider is how much you are expected to pay their services.

8. You can also get good business tax advice online. These sites are approved by the IRS federal tax services. It offers tax-free advice on any business.

9. When you get a list of possible tax advisers, contact them immediately and schedule an interview. If a company is big, determine the person assigned to you. It is necessary to get to know the person since you will be telling him or her regarding your financial issues.