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 * Fact Checks
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RECENT POSTS

 * Plan Ahead for Long Term Care and Retirement
 * The 9 Best Tax Havens in the World
 * Tax Planning Tips for Small Businesses
 * What Americans Want from Tax Reforms
 * How the American Tax Code Favors the Rich


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PLAN AHEAD FOR LONG TERM CARE AND RETIREMENT

February 28, 2020

Living a long and healthy life is ideal for everyone, but unfortunately that is
not always the case. According the to Retirement Research at Boston College, if
you are over the age of 65 and are going into retirement in 2020 you are now
expected to live another 19 years. People are indeed living longer than years
before.



The older we get the more likely we are to face challenges that can be hard to
overcome on our own. Age takes a toll not only physically on our bodies, but
also our minds are not as quick as they used to be. By the year 2050 Alzheimer’s
is predicted to increase to 14 million people. That’s a lot of people who need
help with daily activities and assistance.

It is becoming more relevant and important to not only have Long Term Care
insurance but to make sure that if you are around 40 years old that you start
considering your future. Planning ahead for your retirement and health is highly
important. Planning ahead can have many benefits but with the prices of Long
Term Care Insurance it can be beneficial to get prepared now and make a game
plan. Although you cannot predict the future you can do the next best thing and
that is protect it.

Start looking and researching today what your options are for Long Term Care
Insurance and start preparing for your future by planning ahead.

Be sure to checkout LTC Tree featured on Clark Howard: “These companies should
be on the Long Term Care Insurance Honor Roll”


THE 9 BEST TAX HAVENS IN THE WORLD

January 28, 2020

Generally, there is no standard definition that renders a country a tax haven. A
tax haven is commonly a jurisdiction that offers low taxes, favorable taxes, no
taxes, bank secrecy, and tax exemptions. The most important functions of a tax
haven that attracts businesses from all over are: Provide secrecy of bank
accounts from tax authorities of other countries and also provides a safe haven
for ‘passive investments’. If you are an investor or you want to start a
business here are the best tax havens countries that you should take advantage
of…


BERMUDA



Was placed first on Oxfam’s list 2016 of the worst corporate tax havens
worldwide. There’s no personal income tax rate as well as corporate tax charged
and this has attracted many US companies who rip profits of up to $80 billion.


LUXEMBOURG



From its business and tax-friendly laws, it has attracted hundreds of
international countries to invest there and hence evade billions of taxes.
According to Oxfam, it has zero percent withholding taxes, tax incentives, and
large- scale profit shifting. It is one of the Benelux countries.


NETHERLANDS



It is one of the Benelux countries and was placed third by the Oxfam list of the
worst corporate tax havens. It has become the most famous among the Fortune 500.


SINGAPORE



It has reasonable corporates taxes which it evades through lack of withholding
taxes, tax incentives, and substantial profit shifting as reported by Oxfam.


CAYMAN ISLAND



It has the largest tax evasion for both multinational corporations and
individuals and was placed second on Oxfam lists of the worst tax havens. They
allow a corporation to be established and retain its assets without necessarily
paying taxes.


THE ISLE OF MAN



Located between Ireland and England it has the highest rates of 20% on low
income-tax, has no turnover tax, capital gains or capital transfer tax. Most
people have their employee pension plans here due to its great pension plans
which favor employer-sponsored accounts only and not individual accounts.


MAURITIUS



Mauritius does not participate in international taxation and anti-abuse
transparency initiatives have low corporate tax and no withholding tax. It is a
famous country for investment with many mega corporations like Pepsi, Morgan
Stanley, Goldman Sachs and Citigroup have subsidiaries there.


TAX PLANNING TIPS FOR SMALL BUSINESSES

November 28, 2019

Tax time to many small-scale businesses is usually the most difficult time of
the year. Most people tend to ignore the tax planning process which is a very
important stage that needs to be planned earlier. Instead of rushing and wasting
your time when it’s too late, you can simply take advantage of the tips below
for good tax planning.

Get organized – most people hate the tax period because they are not ready or
organized. If you have a problem with being organized then you can choose a day
in every month so that you can compile all your important documents like the
credit card statements, bank statements, and invoices and this helps you keep
track of your business expenses.

Give to charity – most consumers like above 90% support businesses that play a
charitable role in the community. When it comes to charity, you need to choose a
competent charity to make a donation for the simple fact that time volunteered
is not taxed while any supplies you may sell during that time can be taxed. In
case you donate cash make sure that you keep the receipts received from the
charity well. You can also donate items like clothes, furniture, stocks and
household goods and then claim a deduction for the fair market value.

Maximize your retirement plans – investing yourself is the best thing you are
yet to do now. Deduct your retirement money from your income and this also
reduces taxes. Here are some of the retirement plans that you should consider;
Defined benefit plan, Simple IRA, Solo 401[k], Simplified Employee Pension [SEP
IRA]. You need to consult a professional before opening any of these retirement
plans.

Run an inventory check – depending on your accounting methods you can claim a
deduction if the market value of your inventory drops. Check with your
accountant to make sure that it applies to you.

Take section 179 Depreciation deduction – spend your money on making purchases
of the items your business needs so that you can get maximum deductions. This
deduction allows you in the same year that you bought the item to recover its
full cost, it can be up to $500,000.

File your business taxes – make sure that you file all your business tax returns
on time to avoid penalties. If you want to file your federal returns for free
you can use Turbo Tax, you can also use Turbo Tax to file state tax at a fee and
make sure that receive a confirmation.

Defer income – if you do not want your income to be counted for the current year
then you can shift them to the next year using the help of your accountant and
this can help you reduce your tax bill.


WHAT AMERICANS WANT FROM TAX REFORMS

October 25, 2019

Over 90% of all American citizens want investments tasked as much as wages.
That’s according to a survey conducted by WalletHub. This debate has even been
brought up through the current presidential election debates that are taking
place in the country.  Americans, it appears, want tax equality – and that means
tax reforms.

Critics have argued that there’s worsening income equality under the last two
administrations. This inequality has also been perceived through gender and
marriage rights. Based on the WalletHub study that involved more than a thousand
American taxpayers, below are the most common tax reform issues that people are
interested in.


I. EQUALITY BEFORE ECONOMY

When asked what they thought was the most important among ‘tax fairness’, ‘tax
equality’ and ‘what’s best for the economy’, most respondents in the survey
placed economy at the end of their priority list. Over 60% said that they wanted
tax fairness while about 20% placed a lot of prominence on tax equality. 18%
thought that the economy was the priority issue. This perhaps wouldn’t have been
the response a few years ago during the Great Recession, when a majority of
Americans poured their hearts out to the economy.


II. MORE SIMPLICITY WITH FEWER DEDUCTIONS

Taxation is an expensive affair. In addition to the fact that about 31% of each
American’s annual income goes to local, state and federal taxes, taxpayers spend
billions (and a lot of time for that matter) trying to file returns and comply
with tax regulations. That’s an additional cost that’s brought about by the
complication of the tax code. Most Americans would wish that this code was less
complicated. According to the WalletHub survey, more than 80% of the respondents
think that the tax code has become ‘too complex’. This is compared to only 2%
who think that it’s ‘simple’. Nearly half of polled respondents think that a
simpler and fairer tax code would only have fewer deductions.


III.MORE TAX FOR CORPORATIONS

Wall Street vs Main Street – that’s a rivalry that has decorated the American
taxation debate for years. Many taxpayers, it appears, were enraged by the
government’s bailouts of major firms, including those that contributed to the
recent recession. The fact that corporate profits have bounced much faster than
household incomes typically ‘adds salt to the injury’. Some of the largest and
most profitable American companies are parking overseas in order to avoid hefty
taxation in the U.S. over 90% of respondents in the WalletHub survey said that
investments should be tasked as much as wages are. This piece of information
clearly highlights the current taxpayer sentiment.


IV. MORE TAX FOR WEALTHY AMERICANS

More Americans want a heavier tax burden imposed on the rich. In fact, most
people would prefer a model where tax rates increased steadily based on income.
This view has been held by American taxpayers for quite a long time, and it’s no
surprise it’s brought up every time there’s a looming presidential election!

To sum it all up, American taxpayers really want Uncle Sam to view and treat all
his children equally when it comes to paying taxes.


HOW THE AMERICAN TAX CODE FAVORS THE RICH

August 25, 2019

The American tax system favors the rich. Truly. According to massive economic
experiments and studies on the impact of taxation, the general theory that
guides tax-rate decisions is that ‘lower taxes attract more investment’, leading
to more jobs and increased prosperity. As you file your next annual taxes, this
article shows you exactly why the system is hijacked to favor the rich and super
rich!


A)      POOR AMERICANS DO PAY TAXES

There’s been a lot of media myth speculating that poor Americans don’t pay
taxes. For instance, Fox News host Gretchen Carlson once said that ‘47% of
Americans don’t pay any taxes’. Based on a fact-check ¬¬¬¬though, this is wrong.
Indeed, poor Americans pay lots of taxes! Data obtained from the Tax Foundation
reveals that back in 2008, the bottom half of taxpayers had an average income of
$15,300. This amount was below the tax exemption threshold of about $9,000 for
singles and $18,000 for married couples. Effectively, that means that this group
didn’t pay any INCOME taxes. But they still paid a lot of other taxes, including
sales taxes, gas taxes, utility taxes, federal payroll taxes, etc. Apparently,
no American is tax-free.


B)     THE WEALTHIEST GROUP HAS A LESSER BURDEN

It’s true that the wealthiest 1% of wage earners pay about 40% of all federal
income taxes. But people often forget that income tax is just a small fraction
of the entire total taxation picture. The bottom 90% of wage earners are taking
care of social security, unemployment insurance, and Medicare taxes. People who
hit the $107,000 (roughly) tax mark are no longer required to pay more for
social security. That means if you’re earning rounds off at this figure, you’ll
be paying the same social security tax as Warren Buffet, Bill Gates, Mark
Zuckerberg, and some other big-shot billionaires.


C)      THE WEALTHIER YOU ARE, THE LESSER TAXES

The richest 400 Americans pay less in taxes, despite massive incomes. This is so
thanks to a number of loopholes in the system, allowable deductions and other
instruments of exemption. According to the Internal Revenue Service, the actual
share of their income, that’s paid in taxes is just 16.6%. The majority of
not-so-rich Americans have a federal tax burden that’s more than 20%.


D)     A GOOD PROPORTION OF THE RICHEST DO NOT PAY ANY TAXES AT ALL

Lots of the wealthiest people do live tax-free in America. Donald Trump’s tax
records during his earlier career days suggest that he didn’t pay taxes for a
couple of years. That’s because huge real-estate investors enjoy tax-free
benefits following a 1993 law that was signed by President Clinton.


E)      THE STORY IS THE SAME FOR CORPORATIONS

The biggest corporations have a lesser tax burden, as compared to small,
upcoming firms. This appears to be an increasingly common trend depicting the
national tax picture!

Although a recent study revealed American taxpayer sentiment about this system
that appears to favor the rich, it’s always the same story. Lower taxes for big
earners! It’ll be interesting to see how the tax debate unfolds during the 2016
presidential election campaigns.


6 THINGS EVERY AMERICAN SHOULD KNOW ABOUT TAXES

July 25, 2019

Every day is a tax day in America. Yes, a lot of confusion with tax forms, quick
trips to the mailbox, and a lot of headaches associated with keeping up with
taxation requirements. Every American citizen is subject to local, state and
federal taxation. Nonetheless, there’s still a huge group of people who do not
know anything solid about taxes. Here are 6 things every American citizen should
be aware of when it comes to taxation.


1.    TAXES ARE EXPENSIVE

According to research, taxes (at all levels), eat up about a quarter of the GDP
(gross domestic product) every year. GDP refers to the entire total economic
production value of a national annually. That’s about $4.8 trillion dollars.
It’s no doubt not a trivial amount, and most informed taxpayers will understand
this all too well. Based on information from the Tax Foundation, the average
American citizen will work over three months each year to pay their share of
taxes for the year. This means that up to 31% of all the money you make annually
going to paying taxes. That’s a whole lot, you agree?


2.    DIFFERENT STATES, DIFFERENT TAXES

A significant proportion of American taxpayers still do not know that different
states have different local and state codes. Each state and its local
authorities will structure a tax system that’s best in line with its needs.
States such as New York, California and Wisconsin have greater tax burdens as
compared to others. For instance, the taxation level in New York is nearly
double that in Wyoming. Just so you know, it helps to do a little research to
determine whether you’re paying more in your state that other Americans are
paying in their states!


3.    GOVERNMENT DOESN’T COLLECT ENOUGH MONEY FROM TAXATION

Although the American government and various local and federal authorities
collect a significant proportion of the GDP in taxes, it’s just never enough.
That means the federal spending is more than federal taxation. However, it’s
important to note that in recent years, the federal spending levels have
trickled down especially due to reforms in the budget. But the federal deficit
is predicted to rise in the future decades, as a result of overspending. If you
were perhaps wondering why the government owes China about $1.3 trillion, then
you have your answer.


4.    TAXES AFFECT THE PERFORMANCE OF THE ECONOMY

There’s no doubt that taxes affect the performance of the economy. Based on
studies from multiple sources, there are proven negative effects of taxation on
investment and economic growth. For instance, people often think about the tax
rate when considering where to relocate their family or business. That means
locations with seemingly ‘unattractive’ tax rates could lose potential
investment opportunities.


5.    IT’S EXPENSIVE TO COMPLY WITH TAXATION REQUIREMENTS

Americans spend over $168 billion every year trying to file returns and comply
with tax laws. And that’s before you even consider the money and time spent
complying with local and federal taxes. The full cost of compliance for
businesses and individual taxpayers is massive. Thus, tax compliance is a very
expensive affair!


6.    WHERE DOES ALL THE MONEY GO TO?

Over half of all money collected from taxation goes to Medicare and social
security. About 19% goes to income security and other benefits while national
defense soaks about a whopping 17%. The remaining percentage is divided up
amongst other areas such as education, transportation, etc.

This article emphasizes how taxes impact on your savings, work and investment.
It also highlights just how much of your money goes out to various authorities
at the local, state and federal levels. It’s a great starting point especially
if you’re looking to bolster your tax education.


WILL US-EU TRADE UNDERMINE TAX JUSTICE?

May 25, 2019

This is a controversial question that has been brought up through a new study
report. Based on information from the study, multinational companies in the U.K.
could escape from paying millions of dollars following a secretive deal (labeled
TTIP – Transatlantic Trade and Investment Partnership) between Europe and the
United States that was brought up mid-February. The deal comes under the guise
of free trade, but critics have warned that it would create a loophole through
which major corporations would sue EU member states over measures such as
windfall taxes on exceptional profits.

The deal is still an agreement that is currently being negotiated between the US
and the EU. It has raised alarm bells especially amongst groups that advocate
against unbridled free trade. While the stakeholders put forward the argument
that it will bolster global trade, critics have stood their ground that the
agreement may devastate both environmental and consumer protections while at the
same time benefiting large international companies.

Published by the Transnational Institute in collaboration with Global Justice
Now, the report warns that investor-protection embedded within its terms could
put big companies beyond the reach of national taxation. Mr. Nick Dearden, a
director at Global Justice, says that companies such as Google and Amazon are
already paying minimal taxes in Europe and that this deal could even make this
situation worse. Mr. Dearden has pointed out similar investor-protection in
other deals that potentially prioritized corporate profitability over public
welfare. A key example highlighted in the report was a dispute involving Mexico
and several American agribusiness companies. This dispute reportedly happened in
the early 2000s and centered on sales tax imposed on soft drinks containing
high-fructose corn syrup by the Mexican government. The purpose of this tax was
to reduce the increasing consumption of soft drinks. The tribunal tasked with
addressing this dispute made a ruling that favored the investors. More so,
Mexico was ordered to part with millions of dollars in damages.


5 STRATEGIES TO IMPROVE MANAGEMENT OF REPUTATIONAL RISK IN INTERNATIONAL TAX

February 25, 2019

The world’s is an increasingly global village, with interconnected financial
systems and massive data sharing among various governments and jurisdictions. In
recent times, new tax reporting requirements and the increasing need for tax
information exchange between nations have led to the disclosure of key details
on the tax affairs of multinational companies. Boards of Directors, CEOs, CFOs
and other leaders in multinational organizations are aware of the increasing
reputational risk related to international tax. According to an EY report, over
half of all top executives from major corporations who were included in a study
said that oversight of controversy and task risks had increased over the last
two years.

Indeed, over 80% of tax executives who were interviewed said that they regularly
briefed the company’s CEO and CFO on risks related to taxation. Nearly half of
tax professionals in large companies also regularly briefed audit committees.
This is an interesting piece of information especially at a time when firms are
creating more structured approaches to managing their public tax profile. Below
are some of the top strategies that companies are using to promote transparency
readiness and manage reputational task risks.

 1. Monitoring the Changing Landscape – this involves actively studying and
    understanding the likelihood of increasing tax disclosure requirements. For
    instance, there might be an expansion of existing financial services
    reporting based on policy. Companies leverage their communications and PR
    departments to monitor interest in their tax profiles.
 2. Assessing Readiness to Respond to Risk Threats – more international firms
    are developing board-agreed strategies and plans of action regarding
    readiness This involves regular evaluations to determine that the tax
    function has a clear input into the business strategy and that it’s
    consistently in the scope of all major transactions.
 3. Enhancing Communication – establishing an effective communication strategy
    and approaches for reaching both internal and external stakeholders. At the
    internal level, the firm’s tax function should validate the approach to
    oversight functions such as risk officers, audit committees, public affairs,
    general counsels, and board of directors. The company’s leadership should be
    informed whenever there are any concerns related to taxation so that they
    can weigh them in among other risk factors.
 4. Creating Comprehensive Tax Reports – there’s a smooth flow when tax and
    accounting merge to help assess business motivations behind existing tax
    structures in each area where the firm operates. These reports should create
    a total tax picture that scopes how the firm contributes to the economy and
    much money it pays in taxes. These reports are a great way to trigger
    discussions on global risk management, audit functions, tax resolution
    processes, tax performance processes, etc.
 5. Embedding Reputational Tax Risks in Core Business Strategy – this is all
    about starting a dialog in order to allow the tax function to properly the
    reputational task risks related to ongoing business activities such
    acquisitions and mergers.

Proper tax management has always been an important part of doing business for
large companies. Firms are looking to avoid tax scandals and lawsuits that have
the likelihood to negatively impact their brand. The measures highlighted above
are just a few of the many steps that international firms are taking to make
sure that their tax affairs are in order!


TAX DEDUCTIONS AND LONG TERM CARE INSURANCE

August 25, 2018

The Republicans have just scored a major victory in this last election and while
it is hard to predict exactly how this will affect senior citizens, Howard
Gleckman has some interesting thoughts in an article for Forbes Magazine.
 Typical of democrat scare tactics, Gleckman sees the Republican victory as a
dangerous thing for government health programs. Meals on Wheels and a wide range
of other community living programs have their budgets on the chopping blocks as
the Republicans and even the Democrats look to save money.

The reality is we now have 18 Trillion in debt and of than almost 1/2 of that
created under Obama in the past six years.  Cuts need to be made and if a senior
has a million bucks in the bank, they need to pay for their own long term care.
 Medicaid and government programs are designed for the truly needy, those who
have below $10,000 in savings.  Hard choices must be made if the debt is ever
going to be tamed.

The Older Americans Act of 1965, which brought many of these services into
being, has now been left by the wayside as government spending has exploded.
 The Great Society and War on Poverty was created nearly fifty years ago and
we’ve spent over 50 trillion on trying to attack poverty and the out come has
gotten worse!

Gleckman believes that the Republicans will even push for an increase in
Medicaid premiums. Some Republicans even want to lump Medicaid in with Housing
and Transportation, which many Democrats fear would make it easier for States to
drop these services altogether in attempts to solve our physical crisis.

It is a rough time for seniors who do not have an insurance safety net to fall
back on. The government seems poised to limit nursing home benefits just to the
truly needly, not people trying to scam the system. The senior population is
about to reach unheard of levels as the Baby Boom generation reaches their
golden years.

These senior boomers will need to rely more and more on their own personal
savings, and insurance as the government programs continue to erode. The space
in the work force created by retiring boomers will undoubtedly lead to a smaller
tax base. This will cause the government to find further spending cuts and
reduced assistance for the elderly. The future is uncertain, we will just have
to wait and see what the government is going to do with these programs. There is
a good chance that many of them will survive until we reach old age. The
question is, how effectively will they be running on their reduced budgets?

Buying private Long Term Care Insurance yourself is the best strategy as it will
give you the control on where and when you receive care, not some
government bureaucrat in Washington.. Especially when there are steps we can
take right now to ensure that we are properly cared for in the future. Buying a
Long Term Care policy will help Americans to avoid getting trapped in the red
tape as they take charge of their own future by buying the insurance vs.
depending on the government and being a burden to society.  LTCTree is a site
that we studied and found that will provide you with the tools you need to make
your own decisions on Long Term Care insurance. We match you with policies that
work for your life and your budget. There are no sales people at your kitchen
table twisting your arm. We send you the information and let you make the
decisions at your own pace. It is hard to know what the future will bring, but
it is nice to know that you are covered.

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