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Looking for tax shelter(s)

Discussion in 'Business & Tax Advice' started by ArthurDent42, Nov 2, 2009.

  1. ArthurDent42

    ArthurDent42 Newbie

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    OK, so I'm making enough $$$ now that the IRS will want a cut. That pisses me off. I'm not stupid enough to try to cheat them, but I want to know the best ways to avoid paying tax legally. Anyone have any thoughts or advice on this?
     
  2. misterajc

    misterajc Registered Member

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    First of all have you got a corporation set up? That will let you write off all sorts of business expenses. (You can do it as in individual, but it's easier and less likely to get audited if you have a corporation.) You can write off all your computer purchases, ISP fees, software, office supplies, and possibly the use of a room in your apartment as a home office, with a portion of the utility bills. If you only use your cell phone for business you can write that off. And so on. Don't get too outrageous in your write offs, though. Pigs get fat, but hogs get slaughtered.

    You might also want to consider living in another country for a while. There are big tax advantages from that.
     
  3. ArthurDent42

    ArthurDent42 Newbie

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    I know about the biz expenses thing. I do that on my individual tax form, but I guess I should get an LLC. What's the deal on living abroad? Don't you get hlt for tax in both places, the US and where you live?
     
  4. misterajc

    misterajc Registered Member

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    No. First of all you go to live somewhere where they have no local income tax, then you get to deduct what the IRS calls the "Foreign Earned Income Allowance" - currently about $95K per year. That means the first $95K of your income it tax free.

    I lived in the Bahamas for a few years and really miss the tax advantages of that. I hear Belize is also good. I don't know about tax shelters in other parts of the world.
     
  5. ArthurDent42

    ArthurDent42 Newbie

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    Bahamas, huh? What was it like to live there. You need a passport, right? What about visas to stay there?
     
  6. misterajc

    misterajc Registered Member

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    To qualify for the foreign earned income allowance you need to spend 330 days out of 365 out of the states (or jump through a bunch of other hoops - just moving out is easiest). However the Bahamas only lets you stay 90 days on a tourist visa. You can go to the immigration office and renew for another 90, but after that you need to leave the country - a weekend in Miami will do. You could also do a weekend in Havana - you have to pay extra at Cuban immigration to make sure your US passport doesn't get stamped, but the babes in Havana are very keep to meet anyone with hard currency so you can have a lot of fun there.

    If you like the Bahamas you can buy a condo there - you can get a studio on the beach for less than $100K on Grand Bahama - and apply for a homeowners residence permit. That is a bunch of paperwork and $250 a year, but you can stay as long as you like then. You can't get a Bahamian job with that but if you're doing IM you don't need one. Internet connection through Cable Bahamas are good and cheap. Most things are more expensive because of shipping and inport duties, but you can do your shopping for major items on those weekends in Miami.
     
  7. ArthurDent42

    ArthurDent42 Newbie

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    Thanks for all the great information. So what are the babes like in the Bahamas :)
     
  8. misterajc

    misterajc Registered Member

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    Kind of mercenary. They're happy to put out so long as you keep buying them stuff - shoes, clothes, cell phones, etc.

    And then there's Spring Break when we get a lot of drunk college cuties from the US.
     
  9. ArthurDent42

    ArthurDent42 Newbie

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    Sounds like I should spend spring break in the Bahamas and see if I like it. There are a lot of islands there, which one is best?
     
  10. cookz4u

    cookz4u Newbie

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    I got to make a trip to the bahamas soon