Copyright © 2009 Nick Hodges
President Obama is tagging your Foreign Earned Income Exemption to help pay for huge federal budget deficits. He thinks to hide this motive behind recent White House announcements about U.S. companies, providing smokescreens such as: "I want to see our companies remain the most competitive in the world," and "...the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens."
The reality is that with tax gaps estimated in the $400 billion range, this administration is hard-pressed to come up with new sources of revenues to fill the deficit. It is estimated that offshore tax abuses cause the United States to lose approximately $100 billion each year in tax revenues. Recovering these funds represent a substantial portion of the annual U.S. tax gap, which is why President Obama has authorized an additional $128 million for the 2010 IRS budget, which includes the addition of 800 new IRS agents. Do not be fooled, they have declared war on YOU and are coming after YOUR money.
First, they are going after the companies you work for because they see companies operating abroad as a viable source of additional revenues. Currently, companies with overseas operations pay U.S. taxes only if they bring the profits back to the United States. They can defer paying U.S. taxes indefinitely if they keep the profits offshore. Obama's plan, which would take effect in 2011, cracks down on these loopholes so that companies would no longer be able to write off domestic expenses for generating profits abroad. It is estimated that this change alone would generate $210 billion in new taxes over the next 10 years, making a modest dent in the forecasted $1.8 trillion federal deficit. Rest assured, this administration will encourage any possible avenue to be able to bring these monies back into the U.S.
And, they are coming after YOU. The recently released IRS report on the 2006 tax year indicates that the Foreign Earned Income Exclusion might be another modest source for helping to fill the tax gap. In tax year 2006, about U.S. taxpayers living abroad reported approximately $36.7 billion in foreign-earned income and claimed nearly $18.4 billion in income exclusions. And that was three years ago. There are more Americans living and working abroad now than ever. Can't you just see the wheels turning in the minds of our government leaders? Removing the Foreign Earned Income Exclusion could add billions to U.S. tax coffers.
Perhaps you think they won't find YOU. The historic legal struggle that has cracked Switzerland's renowned reputation for banking secrecy is part of an on-going IRS quest to identify nearly 52,000 suspect offshore bank accounts. When the IRS increases their workforce by 800 new agents, they won't be hiring new college recruits. They have announced that they will be hiring the fancy attorneys and investment advisors that have helped hide those assets offshore. Now, multiply the number of suspected offshore accounts by the $10,000 or possibly $20,000 in allowable fines for non-reporting, and you come up with another modest number toward the filling of the U.S. tax gap. If you have been one of those 'tax evaders' thinking they can hide assets in offshore bank accounts, think again. The IRS is already searching for you, cracking the international bank privacy policies and gearing up to hire professionals to find you.
All of these items add up to making the American Expatriate look like a great big piggy bank to the current administration. While there will likely be a huge fight in Congress regarding closing the corporate loopholes, it is even more likely that the tax benefits associated with your Foreign Earned Income Exclusion will be taken from you. Fines for unreported bank accounts will soon become automatic bills. This means that for you, the individual American Expatriate, the stakes are high and getting higher if you seek to hide your income off-shore or evade paying U.S. taxes on that income.
What action do you need to take as an expatriate? Stay abreast of the latest information that develops about the foreign earned income exclusion. The best way to accomplish this is to work with a reputable advisor who will focus on keeping you out of the scrutiny of the IRS by keeping your activities well above board and within the law. Your advisor must be well-versed in the nuances of expatriate tax law, so check with your advisor about his/her expertise in this arena and be ensure you've chosen your advisor wisely.
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Nick Hodges, President of NCH Wealth Advisors, provides US expatriates with the best tools, strategies and planning techniques to help expats manage their tax and financial goals and dreams on a day-to-day basis regardless of their location. To claim your free gift, ExPat Life Portfolio Kit, visit his site at =======> ExPatCFO.com
Wednesday, August 5, 2009
English Comes to Mexico
By: Khaki Scott
Many Americans and Canadians hesitate to purchase property in Mexico simply because they cannot get over their fear that they may, somehow, be taken advantage of by unscrupulous real estate agents and attorneys because they do not speak Spanish. That is, in reality, probably not a significant problem anywhere in Mexico, since many Mexican attorneys speak fluent English, as do their staff members. However, this innate fear of doing business in a foreign language is now on the way to being completely resolved, especially in states such as Tamaulipas and Nuevo Leon.
Tamaulipas has officially declared itself bilingual and now English is mandatory in public schools for all of its over 300,000 public school children. Nuevo Leon is right behind Tamaulipas and will be officially bilingual in the very near future. Other states, such as Chihuahua and the Mexico City area are also pushing hard to become officially bilingual. Still other states, such as the State of Yucatan, have long required English in their public schools but have not yet begun to talk of becoming officially bilingual.
The reasoning behind the pressure to become bilingual is to provide the Mexican people with the tools necessary to protect themselves in the global English speaking marketplace. Speaking English gives them entre to the world of technology, a wave that Mexico is riding into the 21st century and beyond. Speaking English also allows them to defend themselves in difficult situations when they are in an English speaking area, such as the United States. It is a happy accident that the Mexicans’ ability to speak and write in English is translating into providing Americans and Canadians with the same protective tools necessary to protect themselves when they come to invest in real estate in Mexico.
There is a flip side to the news that the Mexican people in several states are now speaking English, or are moving rapidly in the direction of speaking English in their business environments. That is the risk that potential American and Canadian real estate investors may end up trusting anyone who can speak English, over someone who might be both honest and ethical, but only speaks Spanish. Gringo on gringo fraud and deception has long been a problem in all forms of business in Mexico, and none more so than in real estate. Therefore, it is still strongly advised that every potential investor in Mexican real estate who only speaks English checks with local expat communities and/or local consulate offices for a list of Mexican attorneys who not only speak English, but whom they can trust to always have their best interests at heart
Many Americans and Canadians hesitate to purchase property in Mexico simply because they cannot get over their fear that they may, somehow, be taken advantage of by unscrupulous real estate agents and attorneys because they do not speak Spanish. That is, in reality, probably not a significant problem anywhere in Mexico, since many Mexican attorneys speak fluent English, as do their staff members. However, this innate fear of doing business in a foreign language is now on the way to being completely resolved, especially in states such as Tamaulipas and Nuevo Leon.
Tamaulipas has officially declared itself bilingual and now English is mandatory in public schools for all of its over 300,000 public school children. Nuevo Leon is right behind Tamaulipas and will be officially bilingual in the very near future. Other states, such as Chihuahua and the Mexico City area are also pushing hard to become officially bilingual. Still other states, such as the State of Yucatan, have long required English in their public schools but have not yet begun to talk of becoming officially bilingual.
The reasoning behind the pressure to become bilingual is to provide the Mexican people with the tools necessary to protect themselves in the global English speaking marketplace. Speaking English gives them entre to the world of technology, a wave that Mexico is riding into the 21st century and beyond. Speaking English also allows them to defend themselves in difficult situations when they are in an English speaking area, such as the United States. It is a happy accident that the Mexicans’ ability to speak and write in English is translating into providing Americans and Canadians with the same protective tools necessary to protect themselves when they come to invest in real estate in Mexico.
There is a flip side to the news that the Mexican people in several states are now speaking English, or are moving rapidly in the direction of speaking English in their business environments. That is the risk that potential American and Canadian real estate investors may end up trusting anyone who can speak English, over someone who might be both honest and ethical, but only speaks Spanish. Gringo on gringo fraud and deception has long been a problem in all forms of business in Mexico, and none more so than in real estate. Therefore, it is still strongly advised that every potential investor in Mexican real estate who only speaks English checks with local expat communities and/or local consulate offices for a list of Mexican attorneys who not only speak English, but whom they can trust to always have their best interests at heart
Tuesday, August 4, 2009
You Can Receive Your Social Security Benefits Outside The United States
You Can Receive Your Social Security Benefits Outside The United States
Yes, you can receive your social security benefits outside the United States. If fact, you can have them deposited into your foreign bank account. So, fear of not receiving your social security benefit checks should not deter you from your expatriate living dreams and life abroad.
This concern about not receiving your social security check abroad can be alleviated it you are aware of certain stipulations. This discussion is primarily for U.S. citizens living abroad, since there are specific regulations that relate to citizens of other countries which are eligible for social security benefits because of their work history in the U.S. Three important questions for you to consider carefully before making the move follow:
1. When are you outside the United States? The Social Security Administration says you are considered outside the U.S. if you are not in one of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands or American Samoa. Once you have been out of the U.S. for at least 30 days in a row, you are considered to be outside the country until you return and stay in the U.S. for at least 30 days in a row. If you are not a U.S. citizen, you also may have to prove that you were lawfully present in the U.S. for that 30-day period.
2. How and where can I receive my Social Security benefit checks? The easiest solution is to have your benefit checks deposited into a U.S. bank and use your ATM or debit card to access your money. If you wish to have the money deposited abroad there are other considerations. Presently Social Security lists 44 countries in which you can have your benefits directly deposited to a bank in those countries. There are likewise certain countries to which by law social security benefit checks may not be sent. These can change but as of the time of my writing this, the U.S. Treasury Department forbids sending social security benefits to Cuba and North Korea. In addition, Social Security restrictions prohibit sending payments to individuals in Cambodia, Vietnam or areas that were in the former Soviet Union (other than Armenia, Estonia, Latvia, Lithuania and Russia).
3. Can I lose my benefits by living abroad? Yes, but only if you do not abide by the governmental stipulations that govern your benefits. In that sense, it is no different living abroad than living in the United States. Additionally, you may periodically be sent a questionnaire from Social Security asking for update information. If you fail to send this back in a timely fashion it could result in stoppage of your benefit payments. For the most part, retention of your benefits is no different when living abroad than when living in the U.S.
Detailed information on all regulations for both the U.S. citizen and citizens of other countries who are living abroad can be found on the Social Security Online site. Educating yourself on the complete regulations relating to receiving your Social Security benefits abroad can make your expatriate living much smoother.
Yes, you can receive your social security benefits outside the United States. If fact, you can have them deposited into your foreign bank account. So, fear of not receiving your social security benefit checks should not deter you from your expatriate living dreams and life abroad.
This concern about not receiving your social security check abroad can be alleviated it you are aware of certain stipulations. This discussion is primarily for U.S. citizens living abroad, since there are specific regulations that relate to citizens of other countries which are eligible for social security benefits because of their work history in the U.S. Three important questions for you to consider carefully before making the move follow:
1. When are you outside the United States? The Social Security Administration says you are considered outside the U.S. if you are not in one of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands or American Samoa. Once you have been out of the U.S. for at least 30 days in a row, you are considered to be outside the country until you return and stay in the U.S. for at least 30 days in a row. If you are not a U.S. citizen, you also may have to prove that you were lawfully present in the U.S. for that 30-day period.
2. How and where can I receive my Social Security benefit checks? The easiest solution is to have your benefit checks deposited into a U.S. bank and use your ATM or debit card to access your money. If you wish to have the money deposited abroad there are other considerations. Presently Social Security lists 44 countries in which you can have your benefits directly deposited to a bank in those countries. There are likewise certain countries to which by law social security benefit checks may not be sent. These can change but as of the time of my writing this, the U.S. Treasury Department forbids sending social security benefits to Cuba and North Korea. In addition, Social Security restrictions prohibit sending payments to individuals in Cambodia, Vietnam or areas that were in the former Soviet Union (other than Armenia, Estonia, Latvia, Lithuania and Russia).
3. Can I lose my benefits by living abroad? Yes, but only if you do not abide by the governmental stipulations that govern your benefits. In that sense, it is no different living abroad than living in the United States. Additionally, you may periodically be sent a questionnaire from Social Security asking for update information. If you fail to send this back in a timely fashion it could result in stoppage of your benefit payments. For the most part, retention of your benefits is no different when living abroad than when living in the U.S.
Detailed information on all regulations for both the U.S. citizen and citizens of other countries who are living abroad can be found on the Social Security Online site. Educating yourself on the complete regulations relating to receiving your Social Security benefits abroad can make your expatriate living much smoother.
Sunday, August 2, 2009
Playa del Carmen Real Estate Booming
Playa del Carmen Real Estate Booming
The Playa del Carmen real estate is one of the highest of demand here in the country of Mexico. Many economical factors and general trends over the past two years throughout the North American and European economies are working to place the Mexico real estate market as one of the most attractive for investors throughout the world. Near forty percent 40% of the Riviera Maya Properties are being purchased by Mexican Foreigners with the Americans and Canadians leading the countries with the highest amount of such international real estate investors.
A very popular investment option has been the Mexico condo options. In this real estate opportunity, buyers are able to reserve a condo unit before the construction has been realized. On some occasions, the developer may offer Mexican investment construction options “off the plan” before a parcel of land has even been purchased. The risks are compensated with large discounted prices on the condo units which many international buyers have found extremely attractive given international averages on Ocean Front Condo prices. The procedure normally requires a reservation quantity to be paid ranging from $5,000 up to $10,000 usd. This money is refundable upon request and may reserve a unit for an average of 20 days, enough time for the investor and his legal counsel to study and analyze the promissory contract on the Playa del Carmen Real Estate. If the buyer, upon review of the contract, decides to proceed on the investment opportunity, he will then be required to sign a promissory contract and forward another payment quantity. This hard contract deposit may range from 20% up to 90% depending on the developer or the negotiation of the particular operation. Other payments and payment plans may include monthly transfers or transfers based on construction milestones. Once the property is completed, the developer can proceed on obtaining a Mexico Condominium Regimen, which will then allow for delivery of the physical property as well as transferring the legal rights to the Mexico property.
International buyers are playing a significant role in the demands for Playa del Carmen real estate. With the tourism and occupancy rates higher than years before, and projections stronger than any historical figures on record, the appreciation on Riviera Maya Real Estate continues to grow despite slowdowns in the United States market. As more tourists come to the area, more fall in love with the local Caribbean Beaches, Mexican history, and the warm Spanish hospitality
The Playa del Carmen real estate is one of the highest of demand here in the country of Mexico. Many economical factors and general trends over the past two years throughout the North American and European economies are working to place the Mexico real estate market as one of the most attractive for investors throughout the world. Near forty percent 40% of the Riviera Maya Properties are being purchased by Mexican Foreigners with the Americans and Canadians leading the countries with the highest amount of such international real estate investors.
A very popular investment option has been the Mexico condo options. In this real estate opportunity, buyers are able to reserve a condo unit before the construction has been realized. On some occasions, the developer may offer Mexican investment construction options “off the plan” before a parcel of land has even been purchased. The risks are compensated with large discounted prices on the condo units which many international buyers have found extremely attractive given international averages on Ocean Front Condo prices. The procedure normally requires a reservation quantity to be paid ranging from $5,000 up to $10,000 usd. This money is refundable upon request and may reserve a unit for an average of 20 days, enough time for the investor and his legal counsel to study and analyze the promissory contract on the Playa del Carmen Real Estate. If the buyer, upon review of the contract, decides to proceed on the investment opportunity, he will then be required to sign a promissory contract and forward another payment quantity. This hard contract deposit may range from 20% up to 90% depending on the developer or the negotiation of the particular operation. Other payments and payment plans may include monthly transfers or transfers based on construction milestones. Once the property is completed, the developer can proceed on obtaining a Mexico Condominium Regimen, which will then allow for delivery of the physical property as well as transferring the legal rights to the Mexico property.
International buyers are playing a significant role in the demands for Playa del Carmen real estate. With the tourism and occupancy rates higher than years before, and projections stronger than any historical figures on record, the appreciation on Riviera Maya Real Estate continues to grow despite slowdowns in the United States market. As more tourists come to the area, more fall in love with the local Caribbean Beaches, Mexican history, and the warm Spanish hospitality
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