Document 234508

C6 Your Money
The Epoch Times
April 14, 2010
How to Save Two-Thirds
of Your Tax Liability
Your Personal
Finance Advisor
Finding a Fit for
Commodities in
Your Portfolio
By CHRISTIAN GENITRINI
CPA, MS, MBA, JD, LLM
If you are a business owner or a
self-employed individual, there is
a good chance you are paying too
much in taxes. In my tax and financial planning practice, I see
hardworking individuals who literally waste money by using the
wrong ownership structure or by
not doing any tax planning.
For example, if you do business as
a sole proprietor, not only do you expose yourself to unlimited liability,
but you also pay self-employment
taxes on the full amount of your net
earnings and you may not maximize your deductions for retirement
purposes. Therefore, just by using a
corporate structure, you would save
thousands of dollars each year (at
least $6,000 in my experience).
Although many business owners have been advised to do business using a LLC, there are many
instances in which a corporation
is a better vehicle to maximize deductions, offer better benefits to
the owners, and minimize overall
taxes.
Before you choose the best legal
entity for your business, some of the
proper questions to ask are:
Ɓ In what industry do you
operate?
Ɓ How much in net income
or losses are you generating
today? What about in the next
few years?
Ɓ In what states are you selling or will you be selling your
products?
Ɓ Are you planning to raise outside capital in the near future?
These questions are extremely
important because based on your
answers, you should set up a different legal entity. It is therefore imperative not to think that a certain
legal entity is best for all types of
businesses—this can be a mistake
that will cost you money each year.
For businesses with assets such
as real estate, plants, machinery,
By ELAINE RACHLIN, CFP
TAX TIME: Consulting with professional tax and accounting advisers can take some of the headache out of tax season.
photos.com
vehicles, and intangibles, there are
many ways to minimize taxes and
liabilities by segregating the ownership of some or all of these assets
into different entities. Such separation can also be utilized when your
business has distinct products or
service lines, as well as when you
serve different geographical markets. For businesses with significant net income, more sophisticated
techniques may involve offshore
entities or multilayered corporate
structures.
Proper tax planning will also allow
you to create very flexible retirement
plans that will allow both significant
tax savings (up to $30,000 per year)
and the ability to create your own
“bank.” In fact, the money accumu-
lated in such plans could then be
accessed during years in which your
business is not doing well or like in
the past year, the credit markets are
shut, and it becomes almost impossible for business owners to obtain
bank financing.
These retirement plans can cover
both business owners and their
families and allow for complete control of the funds by the owner. There
are also ways for an astute business
owner to leverage the money put
into the retirement plan to obtain
additional income.
What is important to understand
is that you do not have to change
your business or your operations
to take advantage of tax planning
options. All the solutions are im-
plemented via the creation of the
proper documentation without interfering with your day-to-day activities. Furthermore, tax planning
can also help you increase your top
line revenue by allowing you to
lower your pricing and still retain
the same profit per unit or hour of
service.
Now that you know that you have
options, doesn’t it make sense for
you to take a few basic steps to retain your hard-earned money and
accumulate wealth for you and your
family?
If you want to receive FREE tax
and financial planning advice, contact Mr. Christian Genitrini, CPA,
MS, MBA, JD, LLM, at 646-2594620 or [email protected]
Recovering From Identity Theft
By LYLE EVANS
Identity theft is on the rise in
America because con artists
want something for nothing.
Unfortunately, many innocent
people get hurt because of the
fraudulent activities of others.
Restoring your good name and
credit can take much longer to
repair than it took to destroy. The
worst part about the whole thing is
that you are the one responsible for
restoring your identity even though
you are not the one who used your
name fraudulently.
We will discuss some of the simple things you can do to get your
identity on the road to recovery and
simple things you can do to keep
it there.
There are varying degrees of identity theft. For example, if someone
uses your credit card once or twice
fraudulently and you find out and
put a stop to it, you may not have
such a hard time repairing the damage. On the other hand, if someone
gets all your information, your Social Security number, your birthday,
and other pertinent information, he
can set up false credit card accounts
and run up large bills in a hurry.
Con artists can use your information over the phone and Internet to
get phone cards and such and to purchase just about anything as long as
they have a credit card in your name.
If this goes on for an extended period of time, it can be very serious
to your credit and large fraudulent
expenses may be incurred.
The size of the fraudulent charges
and the length of time the theft has
gone unnoticed can make it very
difficult to clean up your credit and
identity. Many lending companies
will take responsibility if fraudulent activities are reported quickly.
If the fraudulent activity goes on
for a long period of time with large
expenses incurred, lending companies make it much more difficult to
clear your record and name. There
are many questions and hoops these
institutions will require you to go
through.
If you find yourself a victim of
fraudulent activity, there are some
things you should do immediately.
Call the lending company and put
a stop to the fraudulent activity as
soon as you find out. Depending on
the severity of the fraud, you may
need to have your credit company
cancel your current cards and reissue new ones to you.
If your name and identity have
been used fraudulently on a wide
scale, you will need to contact every
company that you have done business with. This can be large task in
itself, but you need to make them
aware of what is going on. If something looks suspicious to them, have
them contact you.
In cases where your Social Security number has been used fraudulently, contact the government Social
Security office. (The government
Web site consumer.gov/idtheft also
provides a wealth of information on
this topic.) They can help you get
things straightened out. They deal
with this often and know what to do
in order to help you clean up your
credit and Social Security number.
You may also want to contact state
government Web sites where you
will find additional agencies and information to help you.
It is also a good idea to keep good
documentation when you first find
out about the fraudulent activity.
Begin by recording the names of the
people you talk to at the different
institutions you communicate with.
By keeping a good log and documentation, you protect yourself and
can back up what has happened if
needed. Law enforcement may also
find your documented information
useful in prosecuting the individual
or individuals responsible.
There are a number of things you
can do to protect your identity once
you have everything cleared up (or
to prevent it in the first place):
Ɓ Mail payments directly at the
post office; never leave them in
the mailbox.
Ɓ Refuse to give personal information to people who ask for it
in surveys.
Ɓ Be very careful about giving
your information over the Internet. Be sure you know the
IDENTITY THEFT: Simply refraining from sharing your personal information over
the Internet is one way of limiting your risk of identity theft. photos.com
site is secure and reputable.
Ɓ If you normally carry your Social Security card in your wallet,
take it out and put it in a safe
place. If your wallet were to be
lost with that card in it, it would
be an open door for thieves.
Ɓ Dispose of personal information by shredding or burning.
Ɓ Be careful when using credit or
debit cards so that people are
not close enough to get your
personal information (such
as at an ATM, a terminal at a
checkout stand, and so on).
Ɓ If you can afford it, hire a reputable credit watch company to
watch your credit and notify you
of any suspicious activity.
Ɓ Finally, do your best to protect
information and be cautious.
Remember it can take a long
time to get your credit and identity
cleaned up. Be patient in your rebuilding efforts. If your situation is
dire, you may need to seek professional help. Do your homework before choosing an identity restoration
consulting firm. Good luck.
© Simple Joe, Inc.
Lyle Evans is a quality control specialist for Simple Joe, Inc.
These days, advertisements
for investing in commodities
are nearly everywhere. On TV,
radio, and billboards, famous
and not-so-famous people
champion products like gold,
silver, and oil as reliably good
investments.
The appeal is easy to understand. At a time when many
investors are still licking their
wounds from losses suffered
during the Great Recession,
can’t we all sympathize with
the urge to invest in something
that retained its value during
the crisis?
But is there really room
in your portfolio to invest in
commodities? What are the
drawbacks? Are there risks
involved?
You should understand the
characteristics of commodity
investments and determine
an appropriate level to include
in your overall asset mix before making any investment
decisions. Generally speaking, commodities should not
be considered a substitute for
your core investments in stocks,
bonds, and cash-equivalent
instruments.
the complexities of
commodities
Gold and oil are the two most
visible commodities considered
for investment purposes. But a
wide range of commodities fall
into this category, ranging from
natural gas to copper to pork
bellies. Finding investment success in any single type of commodity can be challenging,
particularly for those with little
experience in this market. Commodity prices have a history of
significant volatility. Prices can
change dramatically and with
little notice. That is a recipe for
potential investment disaster if
you are not careful about choosing the right investment.
Consider the volatile nature
of prices on oil futures contracts
on the New York Mercantile Exchange in recent years. Based
on data published by The Wall
Street Journal, in July 2007, oil
was up to $78/barrel. About one
year later, oil futures topped the
$145/barrel mark. By December
of 2008, five months later, the
price of an oil futures contract
fell to just $35/barrel. This type
of price movement is an indication of the risks associated
with investing in a single type
of commodity.
Yet if structured correctly
within a diversified portfolio,
commodities can help reduce
volatility in your overall investment mix. Often, commodity
prices tend to move in a different direction from the stock and
bond markets.
In the period from October 2007 to March 2009, the
stock market, as measured by
the Standard & Poor’s 500 stock
index (an unmanaged index of
stocks), lost 57 percent of its
value. During that same period of time, gold prices (based
on the spot price of gold on
Elaine Rachlin, CFP
Financial Advisor
Ameriprise Financial
Services, Inc.
530 Fifth Avenue,
16th Floor, New York,
NY 10036
Direct: 917.472.2697
ameriprise.com
We shape financial solutions
for a lifetime®
the Commodity Exchange or
COMEX) rose 25 percent, helping to smooth the performance
of a portfolio that included gold
in the mix.
using a cautious approach
While investing in any single
type of commodity may carry
undesirable risk for most investors, a good case can be made
for other approaches that are
readily accessible.
Commodity-focused mutual
funds or exchange-traded funds
(ETFs) are two alternatives to
consider. Funds like these offer
diversification within the marketplace to provide a degree
of protection from the volatile
nature of individual commodities markets. Some funds invest specifically in commodity-related indexes. Others may
invest in companies that participate in selected commodity
businesses, such as oil exploration firms or gold mining
companies.
It makes sense to talk to your
investment advisor and try to
determine the most appropriate way to diversify into commodities within your overall
portfolio.
This column is for informational
purposes only. The information may
not be suitable for every situation and
should not be relied on without the
advice of your tax, legal, and/or financial advisors. Neither Ameriprise
Financial nor its financial advisors
provide tax or legal advice. Consult
with qualified tax and legal advisors about your tax and legal situation. This column was prepared by
Ameriprise Financial.
Financial planning services
and investments offered through
Ameriprise Financial Services, Inc.,
Member FINRA & SIPC.
Investment products, including
shares of mutual funds, are not federally or FDIC-insured, are not deposits
or obligations of, or guaranteed by
any financial institution, and involve
investment risks including possible
loss of principal and fluctuation in
value.
© 2009 Ameriprise Financial,
Inc. All rights reserved.
THEEPOCHTIMES.COM
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