Premier Tax CFO

Expat Living in Costa Rica: Welcome to Jaco Beach!

As the new owner of a condominium in Jaco Beach, Costa Rica, I am looking forward to sharing my experience abroad with others.  I’m not able to live there full time, so I have invited friends and family to come down and spend some time there.  My children are now in their teens and twenties, so they really don’t want to travel with dear ol’ dad.  They are planning to spend a few weeks at the condo while I am away.  I confess that I am a protective dad and felt I had to ‘explain’ a few things to them before they arrived.  What follows is my letter to them, I hope you enjoy it.

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My Dear Son and Daughter,

Welcome to Jaco Beach!
Since you’ve specifically asked me NOT to come with you, I can’t help but think of some of the differences you will find here.  While many things will look and seem just like the States, they can be very, very different from what you would expect!  For instance, the shower looks like a tiled shower in the States, but the hot water is generated by an electrical heater attached to the showerhead; if you touch it while it’s on or the water’s running, you will be shocked.  I have affectionately dubbed it the “Suicide Shower.”

Expat Living in Costa Rica: You Need Three Best Friends

The legal, tax, and social structures of other countries can be very, very different from those of the U.S.  Though many of the titles and words may seem familiar to us, costly mistakes can be made if incorrect action is taken.  This is where establishing these three best friends can make sure your expat dream does not become a nightmare.

EVERYONE NEEDS A SENOR BOB
After touring Costa Rica, I decided that I wanted a second home in Jaco Beach.  It is advisable to spend some extended time renting in your selected location, so I decided to take my son on a month-long surfing vacation there.  The first item on my list:  Find a place to stay.

Enter:  Bob Johnson (www.oceansiderealty-cr.com)
Talking with Bob Johnson, realtor with Oceanside Realty was a breath of fresh air after my conversations with other rental agencies in Jaco.  Everyone but Bob told me that a month’s rental in Jaco Beach would cost me around three thousand dollars.  Everyone but Bob just wanted to rent to me at the highest possible price.  In talking with Bob, I found out that he wanted more:  he wanted to find me the best deal for my dream to happen.

Expat Taxes: New IRS FATCA Rule is ANOTHER Way to Penalize You $10,000

The IRS continues to roll out new ways to identify Americans holding financial and investment accounts abroad. These disclosure reporting requirements all come loaded with the highest IRS penalties, starting at $10,000 per non-filing or incorrect filing incident.

Many of you are fully aware of the filing requirements of Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). You know if the aggregate value of your foreign bank and financial accounts reach $10,000 in any one year, you must file this report with the Treasury Department (not the IRS) the following year. Non-filing or incorrect filing of this form bears a statutory $10,000 penalty.

The IRS has added ANOTHER required form, Form 8938, to be filed WITH your annual tax return. This form is also loaded with $10,000 non-filing or incorrect filing penalties. Additional penalties may be assessed, up to $50,000 for continued failure to file after IRS notification. A 40 percent penalty on any understatement of tax attributable to non-disclosed assets can also be imposed. A special statute of limitation also applies to the filing of Form 8938. Here are some other points to note:

10 Symptoms You Have Chicken Little Syndrome, 3 Steps for Curing It

1. We talk with folks everyday who are deeply worried about the future.  As we listen, we hear fear on everyone’s lips.  As each question repeats, the level of fear rises, until the pitch drowns out all reasonable thought and historic memory.

What about America?  What about the dollar?  What about my freedoms and privacy?  What about Social Security?  What about my retirement?
    Is the sky really going to fall?

My neighbor says, “Grow your own food and stock up on ammunition.”
My barber says, “Gold is the ONLY standard, always has been – invest in Gold.”
I hear on the news, “The American dollar is on the verge of collapse.”
The political pundits say, “Your standard of living will soon be reduced to that of a third world country.  There will be rioting in the streets.”
Everyone that seems to care about this country is standing around wringing their hands with worry…  No one seems to know what to do.
    Is the sky going to fall soon?

I don’t have the nest egg for retirement I thought I would because of stock market declines.
I am upside down in my home mortgage.
I have investments that I don’t understand.
I have fears that everything I’ve worked for will collapse.
I worry that I will suffer additional financial ruin if things worsen.
    Is the sky already falling?

I can’t tell what I don’t know.
I don’t really know what I fear; I just know that I’m afraid.
I can’t tell the fiction from the facts.
I don’t know who to trust.
    I’m afraid the sky is falling, and I don’t know what to do!

Expat Q&A: 56 Questions You Need to Answer BEFORE You Move Abroad

Many Americans are financially active on an international basis, often preparing to live or work abroad at some point in their career or retirement.  We receive questions everyday from American expats who failed to ask themselves important questions about their plans and now have problems that need to be solved.  We have listed these important questions for you to consider:

Expatriating Your Assets

• Should you expatriate all or some of your assets?
• In which currencies will you need cash assets?
• Which foreign banks in your targeted areas are reputable?
• What are some of the cheaper ways to exchange currency?
• Should you attain an offshore credit card?
• Why should you keep U.S.-based credit cards?
• What disclosures will you be required to file?

Asset Protection Is an On-Going Process

• Do you have a CURRENT working financial plan?
• Do you fully understand your current situation?
• Do you know what it will take to reach your financial goals?
• Are you working your plan or reacting out of fear?
• Are your assets correctly positioned for your overall plan?
• How will your assets be handled in the event of a lawsuit?
• How will your assets be handled in the event of a death?
• Are you hiding assets from the IRS?
• Are you clear on the difference between tax avoidance and tax evasion?

Expat Taxes: 14 Questions You Need to Ask Your Tax Advisor

We receive questions nearly every day from American expatriates.  Most of their emails express confusion and distress surrounding an expat’s reporting and filing requirements.  Don’t be fooled, the IRS Tax Code regarding Americans living and working abroad are some of the most confusing regulations, whose application may be different for each expat.  Be sure you work with a tax professional experienced in helping American expats maximize their tax benefits and minimize their tax liabilities.

Make sure you ask these important questions:

Practice

1. Where are they located?  Even if you never have to meet them face-to-face, the professionalism required of a firm conducting a bona fide business is important.

2. What professional licensure(s) do they hold?  Make sure that the professional you would like to use has an active license in good standing.

3. What is the size of the practice?  Too small, and they will not be able to provide you the support you need.  Too large, and you are just a number, dealing with a junior partner being trained for larger arenas.  Know who is going to be there to help you if the IRS comes knocking at your door.

Establishing State Residency: 36 Ways to Make it Real

Establishing state residency is a highly subjective matter.

A simple checklist of actionable items does not guarantee proof of residency if the taxing authorities from your former state decide to scrutinize your situation.  However, creating a strong history of objective factors can help you credibly challenge an inquiry.

Creating a strong history includes taking actions that involve generating public information documents such as tax returns, shipping or voting receipts, utility and rental bills, banking and investments statements, and letters of instruction or confirmation utilizing your address in the new state.  Listed below are a number of objective, recordable actions you can take to help solidify your intent to establish residency in any state.

Fullerton CPA to Assist at International Event

Fullerton, California – April 11, 2011  Local CPA, Nick Hodges, CPA/PFS, MBA, CFP will bring his 20-years’ experience in American expat tax to an unadvertised session on asset protection.

“What an honor to be asked to fill in a session for someone unable to make it at the last minute,” Nick tells us.  “There are always things I want to tell American expats about managing their assets, whether here or abroad.”

Most Americans take more time planning their vacations than organizing and protecting their assets.   For those Americans seeking to expatriate, there are important decisions that they need to make BEFORE they ever leave the states to pursue their dreams abroad.

In Nick’s session, “Asset Protection:  What You Must Do BEFORE You Leave,” he will expound on these important asset protection topics:

• Asset Protection Starts BEFORE You Move
• 5 Key Tools that Protect Your Assets Here and Abroad
• Why the State You Move FROM is Important
• Tax Evasion:  How to Get FREE Room and Board

The video, audio, and Powerpoint presentations available after the conference.   Contact us at www.expatcfo.com

Whoever Thought a Fullerton CPA Would Be Speaking in Panama!

Fullerton, California – April 8, 2011  Local CPA, Nick Hodges, CPA/PFS, MBA, CFP will be sharing his 20-years’ experience in American expat tax.  The tax regulations and reporting requirements for Americans living and working abroad are some of the most complex and confusing in the IRS code.  Mr. Hodges tells us that he receives emails weekly from Americans abroad that express confusion and distress about what is actually required of them.  Penalties for non-reporting begin in the thousands, surprising the most well-intentioned expats who have not sought the help of a professional experienced in U.S. expat tax.   Nick reports, “I have talked with folks all over the world, who, in the midst of their expat adventure have been unpleasantly surprised with HUGE tax and penalty assessments.  In nearly every situation, it was because they operated on incorrect information – not because they were attempting to evade paying taxes.”

That’s why he is so excited to present, “Expat Tax and Reporting Issues, Opportunities, and Minefields.”  In this session he will help Americans seeking to expatriate learn how they can avoid the tax minefields and maximize the tax benefits of living and working abroad.  Here are some of the tax basics he will be covering in this high-intensity, 30-minute session:

• It’s easier than you think to make a mistake
• It’s costlier than you think to make a mistake
• Avoidance vs. Evasion – What will you choose?
• Understanding the three biggest tax benefits
• 31 Key Questions and Answers for Expats

The video, audio, and Powerpoint presentations available after the conference.   Contact us at www.expatcfo.com

3 Misperceptions that Threaten Your Investing Future

Hour-by-hour, we are bombarded with a whirlwind of conflicting investment information.  We read it on the internet, we hear it in the broadcast media, and we talk about it with advisors, friends, and family.  Somewhere in this mix of choices, information, and opinions, every investor is looking for an advocate:  Someone they can trust.  Someone that will understand their current situation, educate them on their various options, and see them through to accomplishing their lifetime plans.  Let’s take a moment to visit some of the most common misperceptions surrounding the investments arena.

Media Hype
For many individual investors, the print and broadcast media is their main source of investment information.  The nightly news features any number of current financial ‘experts’ to tell you what you should and should not do with your investments.  All sense and sensibility scatter when your chief financial advisor is the current financial media sweetheart.  Remember, the media is not in business to educate you; it’s there to make money on advertising.  Whether it’s a business reporter or financial editor, popular author or radio host, the information presented is sensationalized to keep you engaged through the advertising spots they’ve sold to their sponsors.  Even if there is some truth in their story, it may not be the right information for you.  Extenuating circumstances related to your unique situation can make their financial advice the WRONG advice for you.  I talk with clients throughout the year regarding media stories that focus on the sensational and miss the important, causing them to worry, struggle, or panic about their investment picture.