Joomla! site syndication http://www.rapidtaxfilings.com 2008-08-28T17:02:40+01:00 http://www.rapidtaxfilings.com http://www.rapidtaxfilings.com/images/M_images/joomla_rss.png text/html 2004-06-12T11:54:06+01:00 http://www.rapidtaxfilings.com http://www.rapidtaxfilings.com/latest/welcome-to-joomla.html Rapid TaxMost people who take up residency, do business with rapid tax or even visit frequently are surprised to learn that the tax system in Costa Rica is much less complicated than many European or North American countries. It is much different than that of United States, mainly because anyone relocating to the country can quickly understand the system. Overall, the basic principle for paying taxes in Costa Rica is based upon level of earnings. If you earn over a certain amount of income, you are liable to pay income tax to the government. There are four main types of taxes that a foreigner moving to Costa Rica will have to pay ? income, government, property, and sales tax. Income Tax Everyone regardless of his or her citizenship pays income tax in Costa Rica. However, the only way in which you would not have to pay income tax coming from abroad, would be if your income was less than eight hundred dollars a month. Any earned income below this amount will not levied income tax. Above this salary however, the income tax you are required to pay will range from 10 to 15 percent, dependant on the amount you earn. In Costa Rica, the tax year ends in September. Government Tax Each area of Costa Rica land is divided into branches of local governments (or municipalities) who oversee the collection of government tax. Just as in the United States, this government tax is used to provide services to the residents such as electricity for streetlights, or garbage removal etc? Each area has its own government tax, at its own levels that to go towards the services that municipality provides. Depending on the price of your home, you will also be required to pay a government property tax. Property Tax The government of Costa Rica has established a Costa Rica property tax equivalent to 0.5 to1.5 percent of the purchase price of a home in Costa Rica. If you are planning to purchase a home in Costa Rica, expect to pay property tax for Costa Rica real estate, at the price similar to that of many states within the United States. With one large exception,?The cost of the home will be considerably less! Sales Tax If you are relocating from the United States, then paying a tax on items purchased will not be a new concept to you. Costa Rica has a sales tax of 13 percent above the cost of each item. However, unlike in the United States in which certain items are exempt from sales tax, Costa Ricans pay sales tax on all goods sold to them. This sales tax can also be levied against certain services in the country. Again, remember though the cost of most goods and all services are drastically lower than what you are used to. When it come to taxes, everyone will have a different situation, and it is therefore important to consult your tax advisor when considering the tax implications in any relocation or that of any foreign country. One thing the Costa Rica government does well is that it goes easy on its own citizens, and relocating residents when it involves prying the tax dollars from them. by David Lovendahl Costa Vista Land is ?developing paradise? in Costa Rica. They purchase large quantities of raw land at discount prices and develop the properties in less than 18 months. Hence, the unique program in which investors can obtain developed land at undeveloped prices and why company President, Brad Hogan says, We are an investment company first and a land sale company second. Parcel choices range from valleys to mountains, to beautiful coastline property. Costa Vista Land encourages investors to visit Costa Rica to view their property and will pay for accommodations, meals and transportation to do so. This lucrative program comes with 100% money back guarantee. Grab your Free 50 minute CD Now by visiting text/html 2004-08-09T08:30:34+01:00 http://www.rapidtaxfilings.com http://www.rapidtaxfilings.com/newsflash/newsflash-1.html That's right, you can take advantage of the IRS tax code and save a lot of money that you'd otherwise send to Uncle Sam by doing what you love. The secret is to simply set yourself up as a small business and take tax deductions for related expenses! This is very easy and inexpensive to do. You can then turn many personal expenses into business one that you can deduct! It doesn't matter if you are retired (in fact this is a perfect time) or just getting started in life. You can start doing a business in virtually any niche or subject that you love or have a passion about. For example, if you are passionate about photography, there are multiple ways to offer a product or service to others for a fee, commission or whatever. I have a retired client that loves to travel to Italy. In fact they are on their way there as I write this for an extended trip. Wouldn't it be nice if the IRS would make virtually all of their travel expenses deductible? There are multiple ways they could accomplish this in return for a little effort. They could write a travel guide to the particular region they will be staying in with reviews on restaurants, museums, stores, things that are a must see or do and other things that are worth skipping and why. It could be just published as a $19.95 e-book. Don't want to write anything? What about organizing a trip for others with you as their guide . Simply organize a trip with friends from church, old schoolmates, etc. You can either become a travel agent or work with one to put together a trip making a profit on the difference between the costs the airlines and hotel charge and the package that you offer it for. If you love horses, you might be able to offer rides for a fee at birthday parties or church events. I could go on and on with potential ideas of taking something that you love to do and making it into a business to enable you to save thousands of dollars on your taxes. But let's discuss how this works in general terms of taking your expenses and deducting them from your tax return. But first you have to set up your business. Yes, you can incorporate (or set up an LLC) and I would highly encourage you to do so. In some states you have to go to the court house and fill out a form known as a DBA . That's for Doing Business As . So you could say... Jane Doe (your name) doing business as Tax Saver and Associates. Your business does NOT have to make a profit in order to legally take those deductions.... but it does need to have a profit motive ! Under the IRS rules, a profit motive is presumed if you earn ANY net income during any 3 out of 5 tax years. In fact, your business need NEVER actually be profitable to keep your business deductions going as long as you can keep proving a profit motive. Did you know that Amazon.com has yet to show a profit after all these years and billions of dollars in sales? But nobody could successfully argue that they don't have a profit objective. There are a number of tests or standards that would indicate that there is the goal to be profitable which nclude the manner in which you conduct your business, the effort and time that you can prove that your devout to uour business, your expertise in that field. Do you have business cards and letterhead? Are you keeping accurate records, have an outline of a business plan written down? Then, you will be able to deduct most or all of your expenses directly related to your business or hobby for profit . If you have a home office, you'll have a number of other partial potential tax deductions such as: office furniture and equipment, deprecation, homeowner's insurance, utilities and more. Like to travel? How would you like for the IRS to help you pay for some or all of your travel expenses? On ANY type of business or niche there are many conventions, conferences, functions or similar businesses that you can meet and learn from -- all over the WORLD - that you can go to. On any given day there are literally hundreds of seminars and such on going on. If you are a little bit creative, you can justify why your business made the decision to invest the money to attend to learn and network with others in your field. If you follow the IRS rules, you can deduct all or much of your travel expenses to get there, your hotel, your food, cab fare and so on. Where and when do you want to go? Just look for something going on that might make sense for your business and let the IRS help you pay for it! Start a business and slash your taxes today!! Since 1997, Mark J. Orr, a Certified Financial Planner, has helped hundreds plan for more financial success through powerful strategies and advice. To get 101 FREE Financial Planning Tips and to Register for his complementary e-newsletter, simply go to: http://www.SmartFinancialTips.com (http://www.smartfinancialtips.com/) text/html 2004-08-09T08:30:34+01:00 http://www.rapidtaxfilings.com http://www.rapidtaxfilings.com/newsflash/newsflash-2.html This is the first of a series of 2007 Tax reference sheets that I'll be sharing with you over the next month or so. This one focuses on some of the major federal income tax key numbers. I'll do future ones for estate planning, retirement planning and business planning in the not too distant future so stay tuned. Since federal income taxes are such a large part of most peoples life or expenditures, I thought that you might like a summary or reference sheet for some of the important figures for 2007. Many people believe that if someone is in the 28% tax bracket, they pay all taxes due at the rate of 28% of taxable income. This is not correct. A couple having a taxable income of $125,000 does not pay 25% federal income tax on ALL of the taxable income... but only on everything over $63,700. The first $15,650 is only taxed at 10%, the taxable income from $15,560-$63,700 would be taxed at 15% and so on. The figures below is taxable income (after deductions and exemptions). I'll start out with the tax brackets for the 2007 tax year. The figures below show the various steps on how the marginal income brackets are progressively taxed higher. Married, Filing Jointly: $zero - $15,650 is taxed at 10% $15,650 - $63,700 is taxed at 15% $63,700 - $128,500 is taxed at 25% $128,500 - $195,850 is taxed at 28% $195,850 - $349,700 is taxed at 33% over $349,700 is taxed at 35% Married, Filing Separately: Note: Often times it make more sense for a married couple to file taxes separately for either tax reduction strategies or for non-tax reasons. Your tax advisor should help you decide if there are important reasons for YOU to take advantage of this filing status. Tax brackets for Married Filing Separately: Simply cut the above taxable figures in half for those six tax brackets Single: $zero - $7,825 is taxed at 10% $7,825 - $31,850 is taxed at 15% $31,850 - $77,100 is taxed at 25% $77,100 - $160,850 is taxed at 28% $160,850 - $349,700 is taxed at 33% over $349,700 is taxed at 35% Single, Head of Household: $zero - $11,200 is taxed at 10% $11,200 - $42,650 is taxed at 15% $42,650 - $110,100 is taxed at 25% $110,100 - $178,350 is taxed at 28% $178,350 - $349,700 is taxed at 33% over $349,700 is taxed at 35% Standard Deduction: Standard Deduction is ONLY for those who do NOT itemize expenses like mortgage interest, charitable contributions, etc. Married, Filing Jointly: $10,700 Married, Filing Separately: $ 5,350 Single: $ 5,350 Single, Head of Household: $ 7,850 Those who are blind or over age 65 can ADD $1,050 (if married) or $1,300 (if single or head of household) to the above Standard Deductions Personal Exemptions: Personal Exemptions are set at $3,400 per allowed person subject to Phaseouts (which are reductions in the Exemptions) based on taxable income. This is not an issue unless your taxable income is at least $117,300 (depending on filing status). Maximum taxable EARNED income subject to FICA tax: $97,500 The Social Security and Medicare combined tax rate is 15.3% on income up to that figure. W-2 employees pay half of the 15.3% and employers pay the other half. Self-employed pay the whole amount. Long-term Capital Gains and Qualified Dividend Rates: For those in the 10% and 15% Income tax brackets only: 5% For taxpayers in the higher tax backets: 15% Capital gains on collectibles (coins, stamps, etc.) 28% One of the important functions of a financial advisor is to help reduce taxes to your legal minimum due by using all appropriate deductions, methods and strategies. A good tax advisor is worth their weight in gold! So go find a pro-active tax advisor, not someone who just files tax returns. And now, hopefully you will have a better idea of what that person is talking about. Since 1997, Mark J. Orr, a Certified Financial Planner, has helped hundreds plan for more financial success through powerful strategies and advice. To get 101 FREE Financial Planning Tips and to Register for his complementary e-newsletter, simply go to: http://www.SmartFinancialTips.com (http://www.smartfinancialtips.com/) text/html 2004-08-09T08:30:34+01:00 http://www.rapidtaxfilings.com http://www.rapidtaxfilings.com/newsflash/newsflash-3.html There exists an incredibly powerful wealth-building strategy that has been around since 1921, and is still used by the country's most savvy real estate investors. Remarkably, the IRS made this tax deferral possible. Put simply, you can defer (possibly forever, if you meet a certain condition which I?ll share in a moment) capital gains taxes on the profits from the sale of a foreign property if you use the proceeds of the sale to buy another foreign property. I?ve helped people perform these types of exchanges (Section 1031 or ?like kind? exchanges) for the past six years. I can help you, too, but first, a couple of caveats: 1. You can?t exchange U.S. real estate into foreign real estate. This is a source of some confusion, probably dating back to a time before ?like kind? property was clearly defined and codified by the IRS. Although there have been cases where a 1031 exchange of U.S. real estate for foreign property has been performed when the replacement property was in Puerto Rico or the U.S. Virgin Islands, the cold hard fact is that today you cannot 1031 exchange U.S. property for foreign real estate in most parts of the world. 2. Unless you perform a 1031 exchange, Uncle Sam will be sitting silently at the closing table with you waiting for his 15% share of the profits, whether the real estate being sold is in Paris, San Miguel de Allende, or Buenos Aires. Please note that you must 1031 exchange the entire proceeds of the sale (less selling expenses), not just the profit or there will be ?cash boot,? and taxes due. Further, if you have a mortgage on the property being exchanged you are required to have a mortgage (for an equal or greater amount) on the new property to avoid ?mortgage boot?. The Good News If you 1031 exchange foreign property it doesn?t have to be in the same country to meet the ?like kind? requirement. For example, you could 1031 exchange the proceeds of a sale from a Paris condo into beachfront property on Roatan. Plus, you can 1031 exchange a single foreign property for multiple foreign properties?or 1031 exchange multiple foreign properties for a single foreign property--so long as the exchange is balanced, i.e. the value of all ?relinquished property? is equal to or greater than the value of all ?replacement property.? So, you could, after 10 years of shrewd buying, sell your Paris condo, Roatan beach home, and Cancun beachfront lot, all worth a total of $1.5 million?and exchange the proceeds for a lovely $1.5 million Tuscany villa complete with vineyard (or visa versa)?and defer the capital gains tax you would otherwise owe Uncle Sam. Remember when I said there was one condition that would allow you to defer the capital gains tax forever? Well, it?s good news for your heirs--that ?condition? is when you die. At that point, your heirs will inherit your property on a ?stepped up basis? meaning at ?fair market value at the time of you death.? Ergo, no capital gains taxes will be paid by them (although they may owe estate tax). Used properly, 1031 exchanging can eliminate equity shrinkage when you sell a property, therefore giving you more money to buy your next property. This can be repeated again and again, until your heirs inherit the property and pay no taxes for your 1031 exchange activities. Thomas Phelan is a Certified 1031 Exchange Specialist. This article first appeared in International Living. (http://www.internationalliving.com (http://www.internationalliving.com/).) Get a free subscription here.