Foreign Bank Account Compliance, With Rob Wood, Tax Attorney, Wood, LLP, San Francisco, California

March 11, 2014 Editorial Staff

For those with foreign bank accounts and worldwide income, there is concern that with the Foreign Accounting Tax Reporting Act, or FATCA in place, people will be reported to the IRS. Rob Wood, tax attorney in San Francisco, California with Wood, LLP says that FATCA has been in the news a lot with lots of discussion and even a move to repeal it. However, Wood doesn't feel it will be repealed, having just gone into effect in 2012. FATCA makes foreign banks report on Americans and so, It is bringing people out of the word work with understandable worry, if they've done what they need to do or if there's something they need to fix, Wood explains.

The IRS Amnesty Program is still in effect with the Offshore Voluntary Disclosure Program, or OVDP and the Streamlined Program. OVDP is considered the main program, as the Streamlined Program, while cheaper, is much more limited as it's only for people living outside the U.S. for the last three years. The OVDP remains the gold standard for fixing things, says Wood, because it's so formulaic. No matter how much out of compliance you are, the OVDP is a way of getting into compliance, Wood says, where you have to put eight years up and the penalty structure is very predictable. While it is not the only way to fix things, it is considered the preferred method and most secure in terms of worry level and guarantee of no prosecution.

Wood also warns that FBAR penalties are far worse than tax penalties and regardless, he advises people to do their own research with the many articles and information available on line and to most definitely get professional advice.

For more information on the article written in Forbes magazine about this, click here. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.

When to Take Social Security Benefits

March 4, 2014 Editorial Staff

When deciding when to take social security benefits, there are two very important factors that Thomas Fross, financial advisor and contributor to Forbes.com, considers.

The first thing Fross talks with his clients about is life expectancy. He finds out how long a client's parents lived and gets their medical history so he can make an educated guess on their life expectancy. The second thing he talks about are other income sources a client may have so they can defer social benefit benefits by taking income from other sources. He says it might be more tax-efficient to do so anyway, because they may be able to take that income from non-qualified accounts, thereby keeping themselves in a very low tax bracket until they're 70.

They they take social security benefits too early and they decide to go back to work and make too much money, then 50% over and above a certain level goes back to the government, Fross cautions.

Today, Fross says it's easier than ever to help clients because there are more resources advisors have access to, where we can can plug in a lot of different scenarios to determine the optimal age for the client to begin distribution.

Fross says that if you're in good health and there could be a long life expectancy, it's better to wait. If not, beginning to take those distributions, even if they're not needed and just investing them, makes more sense. This way, they can get something out of the money they made their whole life.

Thomas Fross is a contributor to Forbes.com and more information on wills and trusts in the article he wrote can be found here. Fross spoke with Retirement News Today, providing online, on-demand retirement news video content. Retirement News Today is a featured network of Sequence Media Group.

Wills and Trusts, Choices for Retirees

March 3, 2014 Editorial Staff

When it comes to deciding between setting up wills and trusts, there are some key differences between the two, as described by Thomas Fross, contributor to Forbes.com.

Trusts are more versatile and serve three purposes. The first is that they bypass probate, secondly they give you a larger exemption upon death for estate tax reasons and lastly, they allow you to control money from the grave. Wills on the other hand, don't bypass probate but are simply a ticket into probate and you tell your estate how you want it to be.

Regarding the late actor Phillip Seymour Hoffman, Fross says there has been a lot of talk with how his estate was set up and he's not sure if there's an existing trust, as this information is private, as compared to a will, which is public. Fross says that we do know that his will specified his ex-girlfriend, who's the children's mother, that she would receive money and he said how he wants the money distributed to this son. There's no legal requirement, however, that his significant other has to distribute this money to his son, Fross notes, adding that alternatively, a trust would legally bind her from following through on those terms.

A trust isn't appropriate when one doesn't have assets to pass along, Fross says, or that can be titled. Probate can be avoided by just titling the assets and naming a beneficiary on qualified assets. "Why would one go through the expense of probate when we can bypass probate altogether,?" Fross says.