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December 21, 2010

Self Employed Expatriates Must Set Up 401K Pension Plan by End of Year

As a self employed US Expatriate you have until 12/31 to set up a Keogh 401K self employed pension plan to use for  the 2010 tax year if you have not previously established one. You do not have to make the contribution until the extended due date of your personal tax return for 2010.  You can only make a deductible contribution (or any contribution) if the net profit from your self employed business exceeds the foreign earned income exclusion which is $91,500 for 2010.

Best places to set up a 401K plan in short time remaining is on line with Fidelity,  Charles Schwab, Etrade or  other on line broker.

The same rule holds true if you have a US corporation or LLC operating your business but you work for it abroad. Any corporate pension plan must be set up by 12/31, though the contributions need not be made until the extended due date of the entities return.

December 17, 2010

New Tax Reduction Bill Now Passed by Both Houses of Congress - Details Below

The Bush tax cuts were extended for two more years, with some modifications. The new tax law includes the following. 


* Provides a two-year AMT patch
* Provides a one year tax cut on Social Security taxes for individuals
* Increases the estate tax exemption from $3.5 million to $5 million
* Decreases the top estate tax rate from 45% to 35%
* Extends the deduction for school teacher expenses
* Extends the deduction for state and local general sales taxes
* Extends the deduction for qualified tuition and related expenses
* Reinstates the research and development credit
* Extends the credit for energy-efficient appliances
* And more!

Further details about the Tax Relief Act of 2010 is available at the following web sites.


* http://mail.cchtaa.com/t/138601/455109/9443321/0/ 
* http://www.journalofaccountancy.com/Web/20103669.htm
* http://www.csmonitor.com/USA/Politics/2010/1217/House-passes-bipartisan-tax-cut-deal-first-of-Obama-administration
* http://www.bloomberg.com/news/2010-12-17/house-votes-to-debate-obama-s-858-billion-tax-cut-deal-with-republicans.html 

December 10, 2010

IRS COMMISSIONER ANNOUNCES POSSIBLE NEW OFFSHORE DISCLOSURE PROGRAM

The IRS Commissioner has announced the IRS is considering  instituting a new Offshore Disclosure Program which will allow taxpayers with offshore assets, etc. to come forward and not risk criminal prosecution and impose lower penalties for their previous failure to report or disclose foreign assets, or file certain required forms for foreign corporations, bank and financial accounts, foreign trusts, partnerships, etc.  He did state that the terms of that possible new program would not be as favorable as the previous six month program which expired October 15, 2009, in which approximately 15,000 taxpayers came forward and entered the program.