December 2008 Tax Alerts
Client Tax Organizer
The new 2008 client organizer is now available online at www.palazzocpa.com. Returning clients and new clients are encouraged to review, complete and return as soon as possible. The organizer can be used for current tax assistance as well as prior years. Personal assistance is available by emailing or calling our professional staff .
New Client Referral Program
Thanking U.S. Expats for their personal sacrifices never grows old for the staff and families at Palazzo & Company. Therefore we have gone a step further by creating a new client referral cash back program. It’s simple and easy. For every new client we will send the referring person $25.00. To provide adequate credit to the referring person the new client only has to mention the referring person by name in the client tax organizer. Payment will be made after June 15th of each year. There is no limit to the number of new client referrals and the referring person does not have to be a client, it can be anyone. Non clients should provide name and email.
Good News!
Foreign Earned Income Exclusion has increased to $87,600 for tax year 2008. The 2006 TIPRA Act had some good news and some bad news for Expats. The good news was the Foreign Earned Income Exclusion would increase annually. The bad news was your tax rates would also increase. But of course that is also old news. Many U.S. Expats are paying FICA tax for the first time because of an out-of-control liberal Congress, that took aim to punish U.S. Defense Contractors but instead only hurt U.S. Expats and America’s global competitiveness. Once again, good news and bad news for you. The good news is that you are now being credited for Social Security and you are helping fund Medicare. The bad news is you took a 7.65% pay cut. Keep in mind the Foreign Earned Income Exclusion along with the pay and opportunity is much better than what can be expected in CONUS.
Bad News!
The IRS is now beginning to disallow the Foreign Earned Income Exclusion for late filers, even if earned. Where some Expats think they have 180 days to file from the date you leave a combat zone, this is absolutely FALSE. What could happen as a result of new compliance efforts being taken on behalf of a soft economy and an unfriendly Congress. Is that you could see your exclusion denied. On top of that you will have to pay full taxes on all income earned plus pay interest and penalty from the original due date until paid in full.
