March 2010 Tax Alerts
Client Tax Organizer
The new 2009 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.
Extensions
If you think you’ll need an extension for your 2009 tax return, please send us your information as soon as possible. We’ll file the extension for you, and complete your return as soon after April 15 as possible. Any client information received after March 16, 2010 will most likely be placed on extension.
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 $91,400 for tax year 2009, and $91,500 for tax year 2010. 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!
To receive the foreign earned income exclusion, the IRS requires that you file within 1 year from the original due date of the return (determined without regard to any extension). Worst-case scenario – if you file your tax return late and owe a balance, the IRS can disallow your foreign earned income exclusion, even if you have earned it, thus making 100% of your earnings taxable without any benefit of exclusion. The bottom line here is that you should file your tax return as soon as possible, even if you are still working overseas.
