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Often times, offshore accounts have become associated with prohibited doings, but that’s a major misconception. While some use offshore accounts as means to an improper end, that is not the intended purpose for this sort of banking method. Your IRS tax attorney will certainly concur.
The Right Vision
An IRS tax attorney, when asked, will be glad to offer up the official (and very respectable) definition of an offshore account. While visions of palm trees swaying in a place where your money has been stored seems to be the anthem to those not in the know, the reality is that offshore banking is simply a term that suggests you are putting your money in a place other than where you currently live.
So, if you are a United States citizen who opens a bank account in another country like Canada, then Canada is the place offshore you have chosen for your account. Your IRS tax attorney will tell you that a number of countries allow others from outside of their borders to bank or invest there. Not only that, but any investment can often be done on a tax-free basis.
Tax Competition
Foreign investment capital is something anyone can consider – but it is strongly advised to hire an expert to explain the finer points.
Indeed, your tax attorney will likely tell you that buying into an offshore account can be a terrific way to get into any number of investment opportunities that aren’t on offer in the U.S. Also, your tax lawyer will explain that by employing this method, you can be confident that your savings are put into a place that is safe and secure.
That isn’t to say that where you put those funds doesn’t take a lot of foresight and planning – doing your research is critical. Everyone wants to ensure their hard-earned money is safe even without the benefit of FDIC insurance. In fact, this factor could become a point of anxiety for the typical American.
Rules and Regulations
The truth is that every banking transaction in every country in which this is a possibility comes with specific rules and regulations. Knowing what these are and how they apply to you is essential and extremely important. So, it’s crucial to have an expert tax lawyer on board to guide you before making the decision to set up an offshore account.
In order to carry on with setting up your offshore accounts, you will need to take into consideration that there will be taxes to pay on the earnings you make. In addition, the IRS tax unit wants to know about what you are doing. The reason? To ensure you pay the correct amount of taxes based on interest, earnings, or both.
Higher Returns
If your tax attorney suggests you steer your holdings into a direction that will mean starting an offshore account, don’t fear the worst. Rather, look at this as a stellar opportunity to enjoy higher returns than you would otherwise be able to enjoy if you kept all of your money in your home country. As your tax lawyer will likely explain, this concept can be especially enticing, particularly for those who are lucky enough to live off the income that comes solely from their investments of one kind or another.
By Ellen Chadwick

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