Tax Fraud And Some Of Its Examples

When an individual or a company purposefully underpays its taxes, it is called tax evasion. In this article, we will discuss tax evasion and give examples of ways people evade taxes such as that of Myles Haverluck and his company Dauphin Clinic Pharmacy in a bid to help you avoid them in the future.
How Taxes are calculated

The tax code might be complicated, but the general tax procedures are fairly simple. It is a legal requirement that every American citizen files a tax return every year. When filing these returns, they are supposed to state what their expenses were, how much they made, and the size of their families. From the returns, the IRS calculates the total income of each family and then subtracts deductions; therefore, determining the taxes owed and adjusted gross income (AGI).

After determining the AGI and the taxes owed by each family, the IRS then looks to see if there were any special circumstances that would qualify you to pay less tax. If there are, then the IRS reduces the amount of taxes owed by your family by applying credits. These credits are then used by Congress to motivate people to adjust their way of life. For instance, credits may be provided to homeowners who make substantial improvements in their properties such as making them energy efficient in order to encourage more people to do it.
What is Considered Tax Fraud?

Not all mistakes are considered tax fraud. Because the Internal Revenue Code is complicated, and tax forms long, you are bound to make some mistakes when filing your returns. These mistakes may result in underpaying taxes. Though it is important to try and fill your forms as correctly as possible, you do not have to worry about a conviction for tax evasion for a simple mistake. To be convicted, the IRS will have to prove beyond any reasonable doubt that you tried to underpay your taxes deliberately. If the underpayment was as a result of a simple error, you will be required to pay what you should have paid, and in some cases, a fine.
Examples of Tax Evasion

There are many examples of tax evasion. This is because the whole process of taxation is vulnerable to tax fraud. A common type of tax evasion is underreporting income. A famous example of underreporting income is that of Dauphin Clinic Pharmacy. One of this pharmacy’s directors, Myles Haverluck was fined $77,000 in 2013 for evading income tax.

Tips for Hiring a Financial Advisor

financial advisorsDo you have financial goals? Have you established these as tangible goals that you can measure and work toward – such as changing your food product supplier? If not, chances are you need to take the time to begin developing your financial plan. Financial Planning is not just something that happens; but instead something you, along with your financial advisor will have to work to develop. Some tips to help you find a quality financial advisor are highlighted here.

Avoid Cold Calls

If a financial advisor cold calls you, and is a person that you have never heard of and don’t know, then you should avoid using their services. The best thing to do in these situations is simply hang up the phone. A reputable advisor will not have to seek out clients in this manner; instead their clients will seek them out.

Avoid House Calls

If you find an advisor that offers to come to your home, then there is likely something wrong with them, or their services. Successful and reputable financial advisors should not have time to breathe, let alone visit your home.

Visit the Office

You need to make sure that you visit the advisors office prior to hiring them. You should pay close attention to how they maintain their professional area. Does it appear neat and well-organized? Are they busy? These are all good indications you have found a quality financial advisor.

They Ask the Right Questions

When you find a quality financial advisor, they will ask you certain questions. Some of the questions you should watch for, which will be a clear indication of an experienced financial advisor, include:

  • How your current state of health is?
  • If you are currently in debt?
  • Are you caring for your aging parents?
  • Have you developed a trust or will?
  • Will you inherit any money one day?
  • Are you planning to make a major purchase?
  • Have you developed a retirement plan?

These questions will help the advisor determine your financial goals. It will also help them to develop a custom plan based on your needs. When you keep this in mind, you can feel confident that you have found a quality service and that you will be able to work toward your financial goals.

Tips for Creating a Financial Plan

When you develop a personal financial plan, then it will help you to achieve the goals that you have set for yourself r your company. However, Financial Planning is not simply stating a goal, it is also developing a plan to make that goal happen. Some tips to help you develop a financial plan, with or without the services of a financial advisor are highlighted here.

Determine Where You are Going

These are the goals that will become the driving force that exists behind your entire financial plan. The list needs to include the short and long term goals that you have and you should ensure that these are specific and realistic, lets say you want to save on expenses – maybe it’d be better just to hire a food product supplier. Short term goals are considered ones that you will reach within one year, while long term goals are ones that will occur within five years.

Create Milestones

It is extremely helpful for you to create types of “small wins” within your financial plan. These types of small wins will become the primary milestones for your entire financial plan. For example, if you have a goal to pay off your debt that you have accumulated for two of your credit cards in the next five years, then one of the milestones you establish should be to pay off the card with the highest interest rate in two years and the other by the end of the five year period.

Create Your Monthly Goals

Once you have determined the amount you need to save and the amount of time you have to save it, you will be able to create a monthly savings plan. With this you will be able to create goals that fit within your budget. If you discover that you are unable to save as much as your actual goal requires, then you should take another look at what you spend to see if there are adjustments you can make.

When you create a financial plan, you can determine the goals you have for saving. This will help you secure your financial future and ensure you have the money you need to continue living even when retirement approaches. If necessary, you can also use the services of a financial advisor for creating your financial plan.

Sound Financial Planning Makes Charitable Donations Simpler

charitable donationsCharity may begin at home, but it also starts in your bank account. When considering a charitable donation, planning the gift can be just as important as the gift itself. Careful planning will leave you with a greater feeling of gratification, and it will help you maximize your tax breaks. Here, we list tips on putting together a solid charitable giving plan.

Choose Wisely

Everyone has a cause that has personal meaning, such as cultural or socioeconomic issues. It’s important to stand up for what you believe in, but it’s just as important to ensure that the organizations you choose use your money efficiently. When choosing a charity, select one that uses at least 75% of your donation for services and programs.

Organize

If you aren’t careful, you may end up making multiple donations to the same charity, or forget about deductible offerings. When you donate, get a receipt and file it away for tax purposes. For family gifts, monitor what and when you give so you don’t cause them to have to file a “gift tax” return.

Give an Appreciated Asset

Most people automatically reach into their wallet when they want to give, and while cash is easy, it may not always be the best choice. For instance, giving stock to charity allows you to deduct for its value without the capital gains tax that would come from selling and then donating the cash. If you’re giving depreciated assets, such as a vehicle, it’s better to sell it and then donate the cash because you can’t transfer a tax loss to another individual.

Make a Lifelong Plan

Giving shouldn’t be part of a yearly Financial Planning strategy – it should be part of a lifelong plan. You can set aside personal and charitable gifts before you pass on, and in some cases you can eliminate estate tax bills. Designate a person or a charity as a beneficiary of certain accounts, or set up a trust to benefit those interests.

Charitable giving is a rewarding and important part of life. By working with a financial advisor, you can put together a balanced strategy for giving, and an approach that reflects the legacy you want to leave for your family.

Reasons You need to Develop a Financial Plan

It is important to understand that financial planning for Businesses for sale in Calgary, is not just a one-time event, but instead an ongoing, long-term process. In order to reach your financial goals, you have to have a plan. While there are an unlimited number of reasons that you should develop a financial plan, some to help get you started are highlighted here and for more information, see their insurance website.

Determine Your Goal

When you set a financial goal, it is something that has a specific time frame and that is able to be quantified. A goal such as simply stating you would like to have a “comfortable retirement” is challenging to plan for. When you have a specific financial plan, it will help you to define your goals and to quantify them.

Have You been Saving Enough?

No matter your goal, if you want to save for the college education of your kids, retirement, a new home insurance or anything else, the majority of financial goals will mean that you must save periodically. When you create a financial plan, it will help you to identify the amount that you need to save for each of the goals you have established.

Planning for Your Assets after Death

Most people have an idea of who they would like their assets to go to when they pass. However, without estate planning, which is a crucial part of financial planning, you may not be able to ensure this happens when you die. You need to determine if you need a trust or will and designate your beneficiaries.

Do You have Adequate Insurance?

Do you have adequate life insurance, and do you have the proper type of policy for your particular situation? Also, have you thought to purchase long-term care insurance or disability insurance? Are you in need of this type of coverage? When you create a financial plan, you will address each of these questions.

If you are unsure of where you should begin with your financial plan, you may need to bring on the services of a financial advisor. These professionals can ensure you develop a plan that is right for you and your goals. This will also provide you with peace of mind that your future is secure.

Importance of Debt in Financial Planning

debt advisorsDebt is a very important part of Financial Planning. Some of the largest expenses are difficult to afford without getting a loan. For example, most people need to get a mortgage in order to buy a house. Many need to rely on student loans in order to pay for a college education. It is also common for many to purchase a vehicle with an auto loan, especially since car loans have interest rates much lower than home mortgages. That is why debt is an important part of personal finances. A financial advisor can help clients use debt strategically to meet their long term personal finance goals.

Typically, a lot of time will be spent on real estate debt. For example, the advisor might recommend that certain clients refinance their mortgages. The monthly payment can often be lowered by refinancing to a low interest 30 year mortgage. On the other hand, some may want to save as much money as possible on interest. It may be appropriate to move to a 15 year mortgage or an adjustable rate mortgage to get the lowest interest rates available in the market. Over the long run, tens of thousands or even hundreds of thousands of dollars in interest may be saved by switching to the right mortgage. The fee earned by the advisor is well worth it after choosing the right mortgage.

Many clients need financial advice in saving for a child’s college education. Depending on the parent’s income level, it may be possible to factor in fianncial aid that doesn’t have to be repaid such as grants. Many will need to get student loans in order to pay for a college education. An advisor can help clients figure out how college will be paid. In many instances, college will be paid with a mix of work study, grants, scholarships, and student loans. Of course, the advisor will try to minimize the use of student loans as much as possible.

If clients getting financial planning have other debts such as credit card, the advisor will work with clients to get rid of those debts. Interest on credit card debt can be quite high. Even if interest rates are low, they may not last forever if they are teaser rates. That is why most advisors will want clients to pay down credit card debt as soon as possible.