You can fill the tax void with a fulfilling pinnacle career.

Pinnacle careers can make life more fulfilling, less taxing and add privacy, asset protection as they create a tax efficient life.

The tax pinnacle we can all reach is a lifestyle that pays for itself and where everything we want to do is tax deductible!

Pinnacle careers do not save tax.  They make your business a vehicle that fills your destiny that is not heavily taxed.

What is a pinnacle career?  Why isn’t it heavily taxed?

A buzz phrase that many financial experts have been touting to boomers is “Encore Careers”.   Many consider them the solution to retirement.

I disagree.  The career we create in our 50s, 60s, 70s or even 80s should not be an encore. They should be the main act!  

Pinnacle Careers!

The golden era in which we have lived has broadened our horizons more than any generation in the era of mankind.  Modern medicine has helped us live longer, clearer and in better health.  Technology favors experience and wisdom over brawn.   Communications and access to knowledge and niche markets tip the advantage towards new, small, leading edge businesses with economies of reduced scale so we can serve without high capital costs.

Pinnacle careers can be created with micro businesses that fit our destinies, are gratifying, fun, serve a niche community and earn a good income as well.

There are numerous economic scenarios that could ruin retirement for many.  Inflation, a falling greenback, another market crash or recession.  Any of these could doom traditional retirement plans and the timing of these events is beyond our control.

That’s okay because diversification into a business that fulfills and serves can be better than stocks and bonds, cash and gold… all put together.

Having your own micro business is a great way to create a pinnacle career.  A Sunday Times articleOver 50, and Under No Illusions” by Diego Ibarra Sanchez  helps us see why.

Here is an excerpt:  It’s a baby boomer’s nightmare. One moment you’re 40-ish and moving up, the next you’re 50-plus and suddenly, shockingly, moving out — jobless in a tough economy.

Too young to retire, too old to start over. Or at least that’s the line. Comfortable jobs with comfortable salaries are scarce, after all. Almost overnight, skills honed over a lifetime seem tired, passé. Twenty- and thirty-somethings will gladly do the work you used to do, and probably for less money. Yes, businesses are hiring again, but not nearly fast enough. Many people are so disheartened that they’ve simply stopped looking for work.  Though there is no single path, there are success stories that offer hope.

The article shares success stories about boomers without jobs who became a franchisee, a real estate renovator and a networker.

Plus the article tells of this inventor.

sunday times photo

Photo from New York Times Magazine (link below)

The article says: Jeffrey Nash, shown with Donna Sanchez, invented the Juppy, a sling that helps children learn to walk.

After 15 years selling men’s clothing for a national retailer, Jeffrey Nash, 58, was earning $90,000 a year and was often the top salesman in his company. But as the recession deepened, he began referring his customers to struggling co-workers. His sales commissions took a hit.

“I kind of softened up,” he says. “My sales went down because I was sharing them.”

His income fell to $65,000. And as shoppers became more cautious during the recession, he knew that it would soon fall even further.

“I was doomed,” he says. “I knew I had to come up with an idea.”

Mr. Nash, who lives in Las Vegas, had invented a device he called the Juppy, a sling that helps toddlers learn to walk more safely and confidently.

“I had already touched base with a patent attorney and had started the ball rolling,” he says. He took three weeks of vacation to see if he could make a go of his invention, telling only a few people about his plans. Their opinions were “really negative,” he recalls.

Undaunted, he drove to Los Angeles and San Diego, selling the Juppy from his trunk and on a televised sales show, and earning $12,000 in three weeks.

“I never went back to work,” he says.

Investing $35,000 of his savings and an additional $9,000 from his father and a friend, Mr. Nash had the device manufactured in China.

“The transition was simple,” he says. “If I’d stayed in my old job, I was going to lose in the end. I was done. I needed a massive change. I needed income of several hundred thousand dollars. I knew I had to take a risk, a massive risk.”

That included selling his home — for $200,000 less than he had paid for it, because of the downturn — and renting a house instead.

“I used to drive a Lexus,” he says. “I let that go. I don’t need it anymore.”

Mr. Nash has since sold $500,000 worth of his product, netting $200,000 in two and a half years, an annual average of $80,000. He is relieved, and proud of having successfully leapt from the familiar into the unknown.

“It’s unbelievable to me that at my age I recognized a need and filled it,” he says.

“We’re having a hard time filling orders right now, we have so much demand.”

Micro businesses are supported in this era of technology.  Individuals are so incredibly empowered by business technology that even operating solo without an official office a person can have a substantial business with huge tax advantages.

There are numerous benefits beyond the savings of tax.

First, from a timing point of view… you can start any time and work through ups and downs.   Your own business can adapt more quickly to your circumstances because it is under your control… not at the whims of a market.

Secondly, a business integrates your energy with an investment so provides maximum income as well as the best tax benefits.

Third, because this is YOUR business, you can do what you love… serving, satisfying, earning and having fun all in one package.  You can find and achieve your destiny with a pinnacle career.

In my mind your own business is not an encore… but the real performance.  The past career was just the warm up act.  What many call an encore is not the end at all. This is the beginning of a pinnacle career.

Two Ways To Organize ….LLC or Chaper C.

One way to organize your pinnacle career is to create a pass thorough LLC, Limited Liability Company.

LLC as a structure for your business.

The LLC provides asset protection and lets tax liabilities and deductions pass through to you personally.

A good asset protection strategy is to have an LLC.

There is one very current and interesting tax aspect as well.  LLCs are as likely to be audited as individuals or corporattions.  At the time this report was written only 6/10s of a percent of LLC returns are being audited.

Here is an outline of some of the asset protection benefits of using a limited liability company.

llc report photo

Outline of Legal Steps for Florida Businesses and FL Corp Law

For specific details contact George Mantzidis at GMantzidis@joebcox.com

The second way is to create a tax pinnacle is with a Chapter C corporation.

You can have exciting… tax deductible lifestyles wherever you choose.

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Does this look like work?   Playing in the Pacific or…

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strolling through lush gardens at a European castle.

Those activities were part of my job and each trip was… truly tax deductible… and fun…… exciting and fulfilling.

Merri and I  feel we are among the luckiest people in the world.  For most of our entire lives we have been able to do what we love… go where we enjoy on a tax deductible basis and get paid (by conducting events) to do it.

I get quite a few emails like this.

“Gary, Your energy level is amazing.  Obviously you enjoy your work and highly active lifestyle and involvement.”

Merri and I (even though we are approaching 70) are busy and fully active but do not feel like we are overworked.   This is because we love what we do.

Here’s another email:  “We would love to plan a trip when you are in NC and would also like to register for the October work shop.  I am very excited to reconnect. I have always loved your spirit and your ability to walk your talk.”

This is because actually we don’t walk our talk, we talk our walk. When one loves the life of serving… this is a very fulfilling process.

And “What an exciting lifestyle you and Merri have. My partner and I want to live this way too”.

A meaningful lifestyle that helps others and provides so many rewards is possible for everyone when you fold your interests into your career.

Take for example a time when Merri and I wanted to learn about shamanic natural health.

Ecuador-shaman

Merri and me conducting during a shamanic ceremony as we conduct an Ecuador shamanic tour.

We could have used after tax dollars to travel around meeting and studying with shamans.

Instead we created and conducted shamanic tours.  All our visits to Ecuador shamans became tax deductible.

We took thousands of delegates on tours… high in the Andes and deep in the Amazon to learn new concepts of thinking about nutrition, health, life.

Doing what we loved created income and tax deductions.

There have been many places that interested us… and these interests were the fabric that wove our tour business.

We took groups to Hungary… Czechoslovakia and Budapest… before the Iron Curtain was totally down.  We have taken them to many places… Belize (20 + years ago)… The Dominican Republic, Puerto Rico, BV Islands, Scotland, Isle of Man, Switzerland, London to name just a few.  These were places where we had been… had felt expanded and believed our clients would as well.

You can have this type of lifestyle as well by enriching your clients lifes by introducing them to other cultures… but just remember to make the experience unique.  You earn in your interesting lifestyle can be filled with tax benefits.

Tax Benefits

There are huge tax benefits from having businesses like this.

A New York Times Magazine article: (linked below – bolds are mine) that says:   If economists ran the tax system, there would be virtually no exemptions or loopholes. But economists don’t run the tax system! Instead, businesses, rich people, Congressmen and attorneys spend a shockingly large amount of time lobbying for tax breaks or exploiting the ones that exist. When the modern income tax was created in 1913, the code was 27 pages long. Last year, it was 5,296 pages. What in the world does it say? After surveying 20 accountants, tax lawyers and policy wonks, we’ve boiled down their arcane knowledge to this short list of things you might want to know.

So what’s the easiest way?  Run your own company.

More specifically, as Greg Kyte, a Utah C.P.A., puts it, be the sole proprietor of a Schedule C business. Then you can buy stuff for yourself and probably write it off as a business expense. “You can look through your receipts for the year and say, ‘Here’s some stuff I bought at Home Depot,’ ” says Kyte (who, for the record, says he never does this). “The I.R.S. would have no idea if I bought that for my house or for my business.”

There were more than 20 million Schedule C returns filed in 2009, with receipts of more than $1.2 trillion.

Upstanding Schedule C filers have options, too. They can legally write off payment for office work done by family members, even if they’re in middle school. “I’ve seen people with infant children claiming that their kids are doing work,” says Howard Rosen, a St. Louis-based C.P.A. “I’m talking about a 3-year-old doing filing,” Rosen says. “He didn’t even know the alphabet.”

That article gives some other clues on how to put the algorithms to work:  “There’s an old saying in the I.R.S.,” says David Lifson, a C.P.A. in New York. “Look at T. and E. and get out by 3.” Because people are aggressive about writing off travel and entertainment expenses — and because regulations for deducting T. and E. expenses are Byzantine — this is low-hanging fruit for auditors.

Another thing that makes people more likely to be audited: being rich. Those with income of at least $1 million are 11 times as likely to be audited as the average taxpayer; those with incomes of $200,000 or more are 4 times as likely.

Having had our own Chapter C micro business for over 25 years I can attest to enormous tax benefits.

There are many tax benefits in a micro business.  A Chapter C corporation provides innumerable ways to reduce tax.

And You Gain Freedom to Do Business Where You Choose.

The stories below show some of the great benefits of having a pinnacle career abroad.

A dying sun-majestic orange drops slowly, in its ancient rite, beneath the sea. The road darkens and an inky dusk shades this winding ribbon as it leads higher and higher, rising from the gloom of lush jungle into a chilled desert air.

Lome, Togo, in the dying heat of the day, on the rugged National Highway. Leading inland from the jungles of this African port, the road struggles a thousand miles upwards over five mountain chains through Togo and into the landlocked nations of Mali and Niger. Truck after truck struggles along the path, rusting, dented hulks, worn and well past their prime, but still hauling, overloaded, pushed by wearied, blurry eyed drivers. This mainstream of transportation is pushed past its limits, the trucks caked in dirt, running on cheap gas and worn out tires. They groan and grind slowly out of the jungle, up 500 miles of mountain into Dapong, Togo, half way through their journey.

There is a lesson in this African scene that explains how to gain opportunity plus increase asset protection and privacy… and in some cases can reduce tax, all at the same time of you wish to live and or travel internationally.

international-adventure

There is adventure and beauty to gain in a global life as well… from Africa to Ecuador. This is our daughter, Francesca, hiking in the Drakensberg Mountains of South Africa and Lesotho.

international-adventure

Such beauty.  The key is to enjoy all this beauty globally and…

international-adventure

like Fran and her husband, Sam, above… also gain opportunity and…

international-adventure

live life to its fullest. Here they are “pooped out” from the hike!  Plus during those years they worked for the UN in Africa to help the less fortunate.

international-adventure

Here I am, hiking with…

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our hound Ma and friends in…

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the Andes near Cotacachi. Beauty is everywhere.  We enjoy it. We profit from our international adventures plus our foundation has been able to donate hundreds of thousands of dollars to help the indigenous people of Ecuador.

For an example of how international business structures can help you profit and help others we return to Lome in Africa….to write about our long time friends and clients. The National Highway through Togo is the only link to the landlocked countries of Niger and Mali. The road is rough and trucks have worn out their tires by the time they reach the city of Dapong, half way up the road. A couple developed this perfect structure because they learned that used tires would sell briskly in Dapong.

However, when they checked out shipping used tires from the U.S., they found freight costs too high. Then they realized there was also a good market in Togo for used shoes as well. They knew that Americans hardly ever wear out their shoes. They then had a brilliant idea to stuff the used tires full of used shoes! Thus, they were able to ship the used shoes inside the used tires and establish a thriving, successful business.

There is more to this story than meets the eye. First, this true tale shows how many ways there are to make money abroad. Who would have thought of selling used tires and shoes from America in Africa? But second and more important this story shows that everyone can have his own international business. The story shows that anyone from any walk of life can get into a real international business. This man and his wife were not business people. They were missionaries. They started the business to raise money just for their mission.

Circle of 100

This brings us to the Circle of 100.  In short if you have a non U.S. business that does not do business in the U.S. that is not controlled (50% shareholders are not U.S. citizens or residents) by U.S. shareholders, that company not only has no U.S. tax liability, but does not even have a U.S. tax filing requirement. (Non U.S. citizens and residents should check their tax laws.)

So the key is to have an overseas business that is 50% owned by non U.S. residents. Yet some people don’t want a business partner. (Keep in mind if you don’t have a partner you get the IRS as your partner by default.) In this case, I recommend donating half the company to non U.S. charities. The more the better. Donate half a percent to 100 charities around the world spread around the world!

Age or circumstances don’t matter either.  In fact if you are active in a business you love, you will probably live longer. For example this delegate in Africa who started the business was in his 80’s and they have now set up a twenty-year business plan!

The time for having your own business has become easier and easier. Rapid improvements in technology have made right now perfect for small businesses. Low cost telephone communication, travel and transportation make global business easy. For example Merri and I now have over 30,000 readers all over the world, but still operate from our home in one of the most remote parts of North Carolina and Ecuador as well as Florida.

So if you are looking for the perfect tax shelter, one that will last and is not likely to be clobbered by Congress the minute it works well, look at doing a real international business. You can enhance your tax savings, gain enormous privacy and asset protection and at the same time improve the wealth and fulfillment in your life.

If you plan to have an international business be sure you have a tax preparer who understands and remains up to date with the rules as they are continually change.

Do not Ignore the Tax Form 8938  

gary-scott-sunrise tags:

The sun always rises somewhere.

Sometimes I have to work hard remembering that every new problem creates an opportunity… especially when there is some added form of really ridiculous government intrusion.   Therefore, I spent extra time watching the sunrise this morning to rebalance my thoughts as I pondered  government intrusion in the form of 8938.

What a pain!

An Ecuador Living Club member recently sent me this note:  Gary,  Can you help on this one? Is Real Estate considered a Foreign Financial Asset for reporting purposes on the new form 8938? Also, I have a construction deal going on where the builder takes payments and a fiduciary holds funds in escrow until completion. Would this be considered a Foreign Financial Asset while being held in escrow? I know you are not a tax expert but probably have been asked this question before.

If you don’t know, could you refer me to someone that can answer? I called the IRS directly and they have not been trained on that one and did not know the answer! Can you believe it?   Thanks for your help.

I did not know and referred this to my friend and tax attorney of decades, Joe Cox.  Joe when it comes to tax attorneys is as good as it gets. He has specialized in the areas of estate planning, insurance, trusts and taxation for over 40 years and is Board Certified in Estate Planning and Administration and in Taxation by the Florida Bar.

In addition to the Board Certifications, Joe is a Fellow in the American College of Trust and Estate Counsel. He is a member of the American and Florida Bar Associations, and is admitted to the Federal Appellate Courts and the United States Tax Court. Joe is a frequent speaker on tax planning topics such as income taxes, insurance trusts, irrevocable trusts and offshore asset protection trusts. He has also written numerous articles and books regarding income tax and irrevocable trusts. Joe is listed in “Who’s Who in America” and “Who ‘s Who in American Law”. He was selected by Florida Trend Magazine as “One of the Top 1.6% of Lawyers in Florida,” and “One of the Top 34 Wills, Trusts, & Estate Planning Lawyers,” and was chosen by Worth Magazine as “One of the Top 100 Attorneys in the Nation.”

Among his community commitments, Joe has served many organizations in a leadership position. These include: Naples Community Hospital, Community Foundation of Collier County, YMCA of Collier County, Community School of Naples, Alzheimer’s Association, Forum Club, and Senior Friendship Centers, Inc. He was also named the Child Advocate of the Year.

Joe repliedGary/Al:  The rules are still not that clear.  But, the penalties are so great we are erring on the side of caution and filing and disclosing.  Real Estate in your own name, no filing is required.  Real Estate in a corporate entity, you should file the 8938.

Foreign financial account that you have an interest in that exceeds $10,000-then you must file TDF 90-22.1 (FBAR/Foreign Bank Account Reporting).

Have your accountant file both forms.  To be safe and big penalty free.   Joe

This is the height of government confusion… an IRS requirement that carries heavy penalties yet even the IRS nor one of the best tax attorneys in the country understands all the rules.

A New York Times article of two days ago entitled “For Americans Abroad, Taxes Just Got More Complicated” by David Jolly agrees. Here is an excerpt:   As income tax filing deadline rolls around, spare a thought for the millions of Americans overseas who have been singled out by Congress for special treatment, with a new form that will add to the hassle of tax time for many and, critics say, set up the unwary for penalties.

“It’s a monstrosity,” Steven R. Horton, whose tax practice in Paris advises American expatriates, said of the new demand from the U.S. Internal Revenue Service: Form 8938, the Statement of Specified Foreign Financial Assets. “It compels every taxpayer to try to find a way that they’re guilty of some kind of omission.”

The new requirement comes courtesy of the Foreign Account Tax Compliance Act, or Fatca, an effort to crack down on offshore tax evasion by U.S. citizens.

The new form requires taxpayers to provide detailed information on their overseas financial accounts, including income derived from them. The penalties for failing to file start at $10,000. Significantly, tax experts warn, filers are subject to major penalties for underreporting — and even where innocent errors are made, they say, it will be up to the taxpayer to convince the I.R.S. examiner of their innocence. The statute of limitations does not expire until after a corrected form is filed.

Proponents say Fatca will bring the U.S. Treasury huge sums each year once the I.R.S. is able to compare individual tax data with reports from foreign financial institutions.

In the United States, financial institutions furnish taxpayers’ account information directly to the I.R.S. Under Fatca, filers overseas have in effect been commanded by Congress to do that themselves, turning over every bit of financial information to the government, something that has never been required before.

Asked how long it would take the average filer to complete the Fatca form, Mr. Ruchelman laughed. “Forever,” he said.

Mr. Horton, who has already helped a few clients fill out Form 8938, said that for most individual filers, “even if we’re talking about a modest set of accounts, it’s going to take a full Saturday to do it.”
And that’s just the new form.

Alone among the citizens of the developed world, Americans have the same tax-filing and tax-payment responsibilities whether or not they reside in the United States. American expatriates still have to file the annual Form 1040, and all the documentation that goes with it — even though most already pay taxes in their countries of residence. (The burden of taxation is softened by a $92,900 exclusion that allows many expatriates to avoid any U.S. liability.)

Expatriates don’t have the same clout in Washington, and beginning this year a single American residing overseas with financial assets of more than $200,000 on Dec. 31, or $300,000 at any point during 2011, must file Form 8938; for a married couple filing jointly, the thresholds are $400,000 and $600,000. (For U.S. residents with accounts overseas, the thresholds are much lower.) Homes are generally outside the remit of the law, pensions and deferred compensation are not.

Not even the I.R.S. is certain how many of the estimated four million to six million Americans living abroad will be affected, but the dollar doesn’t go as far as it once did. Tax experts say far more than just the storied “one percent” will be affected. Failure to file Form 8938 exposes a taxpayer to hefty fines — $10,000 if they do not file within 90 days of I.R.S. notification. That is in addition to FBAR penalties ranging from $500 to 50 percent of the value of the accounts in question.

Some have wondered why U.S. expatriates should have to file both the FBAR and the Fatca, as they gather essentially the same information, though — confusingly — with different language. Why not just one form?

The information gathered by FBAR, it happens, is used by the U.S. Treasury in its efforts under the Banking Secrecy Act to identify crimes like money laundering and terrorist financing. But that information is not shared with the I.R.S. When Congress decided the I.R.S. should have the tools to find foreign accounts and impose penalties in the audit process, it simply ordained that Americans fill out another form: Form 8938.

International tax experts worry that even accidental discrepancies on the new form will expose filers to big penalties. And if examiners do end up comparing information on the FBAR and Fatca forms, which have different filing deadlines and are sent to different offices, they say, it could open the door to more trouble. “It’s going to be a mass of confusion, at least for the first year,” said Edward Tanenbaum, an international tax lawyer at Alston & Bird in New York.

I was having to work hard to find a silver living in this new regulation.

Get a really good tax preparer and work with them to learn how to accurately fill in the 8938.  The silver lining in this… if you are like me is that it forces me to be better organized in my accounts.  We may be small… when dealing with the IRS by simply being properly prepared.  This allows us to be free within the boundaries imposed on us as US citizens.  The IRS hates nothing more than to waste its time with a well prepared tax payer.  Having accounts in order we have learned is extremely important.

That can provide many benefits.  In fact I had been working on this myself and have made an agreement with a tax preparer to refer him to readers (who request) if he will learn all the forms required… work with banks overseas to make sure accounts are coordinated and give readers a good price.  A link to his website is below.

This terrible regulation can force us to be better and this makes the IRS even more overworked and less effective. This means that those who adapt and prepare their tax forms better may be bothered even less.

An excerpt from the article at AccountingToday.com  entitled “The IRS’s burden-Taxypayer advocate sees a threat in the increased IRS workload” by Roger Russell says:   National Taxpayer Advocate Nina E. Olson’s annual report to Congress highlighted the combination of an expanding IRS workload and declining resources as the most serious problem facing taxpayers and recommended that Congress enact a comprehensive Taxpayer Bill of Rights.  “The overriding challenge facing the IRS is that its workload has grown significantly in recent years, while its funding is being cut,” Olson said in releasing the report. “This is causing the IRS to resort to shortcuts that undermine fundamental taxpayer rights and harm taxpayers – and at the same time reduces the IRS’s ability to deliver on its core mission of raising revenue.”

Our tax preparer, Conrad Oertwig, offers an Expatriate Tax Service.

Here is a power point presentation for the

10 Most Expensive Tax Mistakes That Cost Business Owners Thousands_Business Owner Powerpoint 2012

Tax Mart’s website provides information for tax reporting relating to overseas living, tax and accounts relating to:

• Foreign Compliance
• FBAR — TD F 90-22.1
• Rules for filing FBAR
• FATCA — 8938

To read this data or get in touch with our tax preparer, click here.  Tax Mart

For more information contact Conrad Oertwig as CONRAD.EXPRESS@gmail.com

Pinnacle careers can help you fulfill your destiny as they add privacy, asset protection and create a tax efficient life.

Gary

Whatever Pinnacle Career you create, you’ll probably need to Write to Sell.  We can help.

We offer an online course.  Self Fulfilled – How to Write to Sell for $299. See details here.

Even Better!  We offer a year long program including attendance to a Writer’s Camp.  You receive the  online course “Self Fulfilled – How to Write to Sell” free and save $299.

What other readers have shared about us Gary & Merri Scott

See a proposed way to improve tax by A Fair Tax Education Association

New York Sunday Times  Over 50, and Under No Illusions by Diego Ibarra Sanchez

For Americans Abroad, Taxes Just Got More Complicated