Individual Tax

Setting Up Business Structure Animated Video

Animations is an interesting way to communicate your message.  I am hoping our readers would like this small and simple animation clip.   I am thinking about making an animated video of Sanjiv’s “Joke of the Day”. Please do share your thoughts and leave your feedback about the video.

End of Sales Tax Free Online Sales

Online retailers has been going back and forth to fight the online sales tax collection.  Online retailers and California legislature reached a deal in 2011 that included a one-year grace period. That grace period is now ended.

What will online shoppers do now?  Pay sales tax for online purchases at many online stores including Amazon and eBay. 

What do retailers think about this change?  One of the biggest online retailer Amazon said that company will continue to offer better prices,  and is not worried about this change.   I am sure Amazon customers would disagree.

How about the State of California ? Its Christmas for the law makers.  State is planning to hire more people to ensure the proper collection of online sales tax.

Online retailers have tried their best to avoid this day but its hard to win against uncle sam.

 Why do State of California loves online Sales Tax?

State officials of California are estimating that they can generate over $200 million a year to fill the budget holes by collecting online sales tax.  Under current use tax rule, Californians are supposed to pay the equivalent of sales tax on their state income tax. However, California rarely collects this tax and ends up lossing about $1 billion every year.

Wealth Summit : Sept 15th 2012

Sanjiv Gupta CPA will be presenting at the Indo American Event in Santa Clara on Sep 15th 2012.  This event will be focused on helping individuals and small business owners build wealth.  We will discuss how one can reduce their effective tax rate, secure their estate and grow their income.   You will have an opportunity to meet with Sanjiv Gupta CPA at the event as well.

You can register for this event here.


IRS Wins Foreign Account Case Over Former Mobil Senior Executive

IRS (Internal Revenue Service) has achieved a great victory over the former Mobil senior executive Bryan Williams. He was alleged in a case of offshore tax evasion. He concealed foreign bank accounts of him holding millions from IRS.

In between 1993 and 2000 this former executive opened two Swiss offshore in order to hush up his financial activities. He was also accused for purposely failing to fill out documents like foreign bank and financial account forms aka FBAR.

In recent years IRS has become more stringent about the regulations. Different cases like   this have prompted them to take such an action.  The authority has been petitioning for more financial resource so that they can expand the tax evasion programs effectively. Their focus is now to catch and prosecute law breakers.

Initially the judgement was in favor of Williams. But in the year of 2003 Williams was convicted in a separate case. His case involved fraud and conspiracy. He pleaded guilty for this case. This year finally the fourth circuit court of appeals in Richmond,Virginia ruled in favor of IRS (Internal Revenue Service). According to the court documents he has committed a fraud.

Now IRS will impose heavy penalties on Williams for committing such crime. He will have to pay a huge amount  for each year of evasion.

This is  a great lesson for taxpayers. This is the high time everyone should be concerned about the consequences of such fraud. So it’s better to avoid the ways to take the help of abusive tax shelter. Going with legal tax shelter is quite beneficial way to reduce the taxable amount. Charitable donation is a perfect way of legal tax shelter. Apart from this you can go for investments. Investments in real estate or health insurance are also considered as a better way of tax shelter.

If you are holding an illegal foreign account, then you should stop such a financial activity. Any day and any time IRS authority can accuse for doing such frauds. And the rest you know.


IRS Extends a Helping Hand to Students

Financial aid forms are the things that are responsible for boggling the minds of students and their guardians. In the year of 2009-2010, the Internal Revenue Service has brought a new service for reducing the financial aid form related confusions. This is no doubt a great help for students.

The IRS offers IRS data retrieval tool without any charge. This tool helps to transfer automatically the tax data from the taxpayer’s federal tax return to a FASA form.

The process includes the tax forms from the previous academic year. At first you are directed to the IRS website. Then you need to input some vital personal identification information.  After that you get the chance to fill out the free application for federal student aid (FAFSA). The main advantage of this is that your financial information

From sources like bank balances will be automatically entered.

So gone the days when the first days of college are full of tensions due to registration and form fill ups. The IRS data retrieval tool has made the process much easier. The chances of making errors have also been reduced. Students have now become much relaxed due to this useful tool of IRS.

IRS has brought a great opportunity to cut college costs. This is actually a great way to track expenses. Basically students are in need of financial help. Therefore such steps taken by IRS are helpful indeed. This kind of help is great to manage the price of education.

This initiative by IRS is commendable. This is actually a great effort for student’s fiscal help. Students are now free from the stress of facing the challenge of filling up the vital forms like financial aid form.



So this year if you are going to take admission in college, try to gather knowledge about how to get financial help from authorities like IRS. Your little effort can help you to cut down the cost of your education. Today it has really become easier to file such a demand. So go ahead and take the help of IRS for completing your education without any expense.

How Tax Shelters Help To Reduce Tax Burden?

Tax shelter is a great way of reducing tax. It can effectively reduce your tax burden to the IRS (Internal Revenue Service). But tax shelters can turn to be a problematic issue if the law is violated. So make sure that the tax shelters are legitimate.

Tax shelter is actually a financial arrangement that helps to reduce a taxpayer’s tax burden. Tax shelters accomplish such difficult jobs by decreasing and sometimes eliminating your taxable income. This is also a great tool to create tax-deferred or tax-exempt income.

You have to be very cautious while setting up the tax shelter. It should be legitimate. If it’s proven abusive then it can create a big problem. When the purpose of a tax shelter is avoiding tax, then that is considered as abusive tax shelter. There are many other purposes involved with legal tax shelters.

A legal tax shelter can effectively reduce the taxable income. The main purpose of setting up legal tax shelter is to report the IRS very little of your income. Tax shelters are extremely beneficial for high income professionals. Especially big companies are to take the help of tax shelters for avoiding tax payments.

The most common examples of tax shelters are charitable donations, pension plans, retirement accounts, municipal bonds and so on. Investments like life insurance and health insurance plans can also be considered as tax shelters. Investing in a real estate is also a perfect example of legal tax shelter. So it can be said that tax shelters work great as an incentive for investment.

Tax shelter is actually a great strategy. The more intelligent reason you can show to the IRS the easier will be to reduce the amount of payable tax. Larger firms have no way but to use this subtle way of cutting the taxable amount.


Without much stretching the laws you can really set up a beneficial tax shelter. Charitable donation is a legitimate way to avoid taxation. The authorities of IRS monitor tax shelters efficiently. So going with laws is the best way to reduce your taxable amount. To know the laws better you must visit

Surviving small business ordeals with a friend!

Wow never had you imagined that there will come a time when surviving that business venture with your friend has become so difficult. It has strangely put your friendship at jeopardy too. This was indeed uncalled for.

While starting that business together there were high hopes running on both ends but then tightening of funds, lack of trust and other minor quarrels started to get the better of the two of you ad finally the business. It may be vice versa also. But whatever the case outcome is for the detriment of both. So why not take care of it and nip it right at the bud?

Don’t know how? Well here’s what you should do.

Important Ways To Keep That Venture Rocking!

Talking is rocking for all business – it is extremely important that both the friendly partners engage in honest conversations. It’s absolutely crucial that they talk out their differences and share the solutions to the problems bothering them.

• Have written proof/ agreements – the agreement of your business should be in writing. These come in handy at times of disputes and can effectively put things in order. So this is another aspect to keep the business partnership going.

•Separate attorneys must be made to review the documents separately – in order to gain full knowledge about how the agreement affects you, you must get a separate attorney for yourself ad so does your partner. Whatever may be the case, there should be an attorney’s involvement towards the understanding of the signed document.

•Draw the line between friendly and business communication – Be vocal about any important issues at the work place. Any issue, major or minor must be approached immediately to stop them from going out of proportion. No matter what leave the business in office.

•Bond outside office – discuss issues other than business when not in office – This goes a long way towards saving both the business and the friendship. Mutual respect is enhanced, and tensions avoided.

What ever may be the case it is important to note that the two important aspects of life, that is, work and friendship must not be let go of easily.

Top 3 Deductions for Self Employed | Infographics

Self employed individuals can also take advantage of many tax breaks.  Here are the three most popular tax breaks that can help you reduce your tax bill.  Do you have health insurance ?  You can deduct the cost of your health insurance and of your family.  Do you have an office ?  You can deduct your office expense. Yes, it also includes your home office expenses.  If you are in business for yourself than you must be spending money on supplies.  Most supplies are also tax deductible.  However, there are many tax deductions that can also get you in trouble.  You must watch out for those kinds of tax deductions.
self employed tax deductions

Will Mitt Romney (Republican) File for OVDI 2012 ?

The easiest way to evade tax and pile personal savings is to tuck away money in offshore / overseas accounts. Mitt Romney, the republican presidential candidate is currently enjoying attention for having put away his ‘vast wealth’ into overseas establishments. However it is not Romney alone, who stocks money in Swiss bank accounts, provides fund to third world countries (money laundering) and clever as he is he has allocated all asset listings to a certain omnipresent ‘Uncle Sam’.

But can Romney rest in peace? Can the ‘Uncle Sam alibi’ silence his political foes and also the common mass?  This is infact a warning for the others to take due notice of summons for Tax Justice Network. TJN conceptualized by British Houses of Parliament is a research centre that analyzes and reports on ‘how tax evasion on part of high net worthy investors affects national economy’. In its latest report ‘The Price of Offshore revisited’ it presents a detailed study on financial assets invested in foreign fiscal centres and secrecy structures. It traced $21 trillion (a total of US and Japanese economy combined) as reserved with overseas banks.  This amount is exclusive of non-financial assets like real estate holdings, yachts & bonds and equities etc. if these non-cash assets are added to $21 trillion, the amount increases to $32 Trillion, TJN reports.

The IRS is trying hard to convince high net worthy investors to reveal detailed property holdings in order to clear tax with the US government. Infact the IRS has designed two amnesties to encourage the investors bring back national currency from their foreign bank accounts.  Offshore voluntary disclosure programs this year has brought in more than $5 million as taxes, interests and penalties. Almost 33,000 taxpayers revealed their financial holdings in order to dodge criminal charges for evading taxes.

The offshore voluntary disclosure endeavour is an on going process. Penalty charges for those that have avoided paying taxes for overseas assets has gone up by 27.5 % from 25% in last year’s program. However the amnesty is far better for high net worthy investors for it charges only a penalty fee. On the other hand if the IRS discovers foreign assets after the amnesty period is over then they might as well confiscate all fiscal assets or might even send the investor to federal jail.

Scams in Property Taxes: Please Take a Note

Everyone wants their property taxes reduced. In an attempt to reduce taxes many people fall prey to tax scammers. To be safe from these scammers the taxpayers need to be careful about the following things:

  • Many times you may receive letters that look like they are from government offices but in reality they are usually from the private companies trying to fool you into giving them money.
  • Homeowners should also stay clear from any company that offers to file an assessment challenge in return of an upfront fee.
  • Homeowners should also avoid any kind of services that requires a copy of the property deed or the social security number.

Many of you must have received letters that claim to get your property assessment done for a fee that can be as nominal as a few dollars to a couple of hundred dollars. But in reality these companies just take your money and fill out property assessment form which you can do yourself without any charge. And in some cases these companies just take the money and do nothing at all.

While the government agencies send out their forms sometime in June these scammers send their form much early. In some of the states if the value of the house has gone down from the previously assessed value then the property taxes are automatically reduced. So the scammers usually target those homeowners who are hoping for a reduction in taxes. These companies send their forms or letters earlier than the government agencies and claim that they will reduce the taxes. Many homeowners pay a considerable amount to them and in June their taxes are reduced. What the homeowners fail to realise is that their taxes were naturally supposed to go down and the company has not actually done anything.

But if you are actually looking for one such company to handle your property taxes then it is better that you avoid any company that proposes to do your work for an upfront fee or your property deed or social security number. It is also better to keep away from companies that claim that they are affiliated with government agencies.