Longboat Retirement Solutions LLC

Panama Papers Reality Check April 12, 2016

I have heard so much misinformation on offshore accounts and “tax evasion” over the last week, that I felt the need to clarify and give some truths.

Truth number one: The United States taxes its citizens regardless of where the money was made.

Truth number two: It is much harder and much more expensive to open a bank account in a country labeled a tax haven.

Truth number Three: There are reasons other than money laundering and tax evasion to have money in a country other than the United States.

Truth number four: The U.S. government is in bed with the U.S. media.

Truth number five: The U.S. government is filled with rich people.

Truth number six: The U.S. government is also in bed with large corporations.

What to these truths logically lead to:

The U.S. government is telling its citizens, through its media division, that only rich people and terrorists keep money offshore.

This leads us to the lies:

If you have money offshore, you are rich and/or a terrorists.

The only reason people have money offshore is for money laundering or tax evasion.

Of course both of these things are lies. Most people who have money offshore are not either terrorists or fabulously wealthy.

There simply are not terabytes worth of fabulously rich people and terrorists.

The United States and England are the destinations of choice for laundering money and tax evasion.

That is fact; look it up.

So, if you open your eyes to reality and facts, you can easily decipher that the government, through their propaganda arm, are dispensing lies to distract and leverage the current fear and anger of the populace towards the rich people and terrorists to clamp down and take even more freedoms. They will once again get people to beg to take away their freedoms, in the name of “transparency” and “safety”.

Already, I have seen the protests in Europe.  Sad.

If you have ever considered moving some money offshore to real banks, that offer security, diversification, actual interest, and some protection from litigation, you’d better act fast.  It is clear that the big banks want to consolidate all of your money into their crooked institutions.

I guarantee, right now, that there will be investigations, and committees, and other B.S. that creates a new panel, and then new prohibitive laws to restrict money movement.  Currency controls anyone?  Count on it.


Solo 401(k) 2012 Deadlines and Tax-Savings Update: How You Can Cut Your Tax Bill by $10,000 December 28, 2012

Forbes 12/19/2012

BY: Stuart Robertson

Many self-employed and sole proprietors are unaware they can take advantage of an Individual 401(k) plan (aka. a Solo 401(k)) and the substantial tax-deferred benefits these plans offer.  The Solo 401(k) is pretty easy and inexpensive to start and delivers saving advantages that help improve an individual’s bottom line too.  Solo 401(k) plans are an option for any owner-only business.  Multiple owners and spouses can also be included in a Solo 401(k), but if the business adds employees to the 401(k), it will need to convert to a more traditional plan.

The following provides updated tax and savings information from a popular entry I posted here last year.  It also includes important plan setup and contribution deadlines for the 2012 calendar year.

When One Equals Two: Tax-Defer up to $50,000 for Your Retirement

One of the great advantages of a Solo 401(k) is the ability to play the roles of both employer and employee, enabling the owner to contribute up to $50,000 of her annual income tax-deferred in 2012 (or $55,500 if at least 50 years of age).  That’s a generous amount that might even drop the owner into a more advantageous tax bracket that can fast track the owner’s time to retirement.

The high contribution limits, tax savings and easy access to cash via penalty-free loans make the nominal price for solo 401(k)s a savvy financial move for any owner-only business that wants to save more than $5,000 a year (the traditional IRA limit).

In the past, many owner-only businesses have turned to traditional IRAs as a retirement savings strategy – an approach that, compared to a Solo 401(k), provides much lower contribution limits (not to mention penalties if the owner needed to access the money before reaching retirement age).  Solo 401(k)s also offer more flexibility than about any retirement option.  In 2012 for example, just compare a 401(k) to a traditional IRA:


Traditional IRA

Annual Limit per Individual



Age 50+ Catch-up Amount



Roth Income Limit



Penalty-free Access

Yes, loan to self


* Amount you can contribute starts phasing out at $110K and not allowed if making $125K or more.

FYI, the annual limit increases to $51,000 in 2013, or $56,500 if at least 50 years of age.  IRA tax-deferral limit is also increasing $1,000, so it will have a $6,000 limit in 2013.  Given the current discussions on potential tax increases for 2013 going on in DC, a Solo 401(k) may continue to become even more advantageous.

How Many Self-employed Can Save $10,000 in Taxes in 2012

The amount you can tax-defer will vary by your earnings and your tax rate.  In general, for those earning $165,000 or more, protecting $10K or more in taxes is often doable.  For those earning less, the tax savings can still be quite substantial.  Here’s how an owner under 50 years of age can max out his or her retirement savings and lower taxes for 2012:

Sole Proprietor Under 50 Years of Age




    Employee  contribution


    20% of net self-employment contribution


Total Tax-Deferred Savings


Taxable Income


While the owner earned $165,000 in 2012, only $115,000 is taxable by Uncle Sam.  Assuming an adjusted gross income (AGI) tax rate of 20 percent, that’s $10,000, she can now keep for herself (versus paying the taxman) in 2012.  In actuality, the tax savings is likely to be even greater as she may also drop a tax bracket.  For example, the married filed jointly 2012 tax rate increases from 25 percent to 28 percent for income over $142,700.

Must Start a Solo 401(k) by December 31, 2012 to Qualify – Have until April 15th to Contribute

While business owners will have until their tax deadline to contribute to their 401(k) accounts, IRS rules require that their plans must be setup by December 31st to qualify.  Many providers have deadlines well before this date, so setting up sooner rather than later is a smart way to go.

Most businesses will likely have until April 15, 2012 to make contributions for 2012.  But if the company is established as a corporation, the deadline will be March 15.  The good news is that, by setting up a plan by the end of the year, businesses will have plenty of time to determine the optimal amount they can save to best manage their tax and retirement savings.

One last thing to know:  If loan and Roth options are important to you, be sure to setup a full-featured, fully administered Solo 401(k) plan.  Some providers offer a record-keeping-only individual 401(k) that will likely offer more investment options, but will lack Roth and loan options.


How You Can Pull a GE on Taxes December 11, 2012

BY: Brett Arends, Wall Street Journal

There’s been a firestorm this week over the news that General Electric GE +0.75%will pay no tax—at least, no federal corporate income tax—on last year’s profits.  But if you’re like a lot of people, your first reaction was probably: “Hmmm. How can I get that kind of deal?”

You’d be surprised. You might. And without being either a pauper or a major corporation.

I spoke to Gil Charney, principal tax researcher at H&R Block‘s Tax Institute, to see how a regular Joe could pull a GE. The verdict: It’s more feasible than you think—especially if you’re self-employed.

Let’s say you set up business as a consultant or a contractor, something a lot of people have been doing these days. And, to make this a challenge on the tax front, let’s say you do well and take in about $150,000 in your first year.

First off, says Mr. Charney, for 2010 you can write off up to $10,000 in start-up expenses. (In subsequent years it’s only $5,000.)  Okay, let’s say you claim $7,000. That takes your income down to $143,000.  You can also write off all legitimate business expenses.  Mr. Charney emphasizes that this only applies to legitimate expenses.

He didn’t say, but everyone seems to understand, that this can be quite a flexible term. Even if you buy a computer, a cellphone and a car primarily for business use, you can use them for personal purposes as well. If you happen to take a business trip to Florida in, say, January, no one is going to stop you from enjoying the sunshine or taking a dip in the pool.

So let’s say you manage to write off another $10,000 a year in business expenses.  That brings your income, for tax purposes, down to $133,000.  You’ll have to pay Medicare and Social Security taxes (just like GE). Because you’re self-employed, you have to pay both sides: the employee and the employer. That will come to about $19,000.  However, you can deduct half of that, or $9,500, from your taxable income. So that brings your total down to $123,500 so far.

Now comes the creative bit. The self-employed have access to terrific tax breaks on their investment and retirement accounts. The best deal for many is going to be a self-employed 401(k), sometimes known as a Solo 401(k).  This will let you save $43,100 and write it off against your taxes. That money goes straight into a sheltered investment account, as with a regular 401(k).  Why $43,100? That’s because with a Solo 401(k), you’re both the employer and the employee. As the employee you get to contribute a maximum of $16,500, as with any regular 401(k). But as the employer you also get to lavish yourself with an incredibly generous company match of up to 20% of net income.

Yes, being the boss has its privileges. (And if you’re 50 or over, your limit as an employee is raised from $16,500 each to $22,000.)

You can save another $10,000 by also contributing to individual retirement accounts—$5,000 for you, $5,000 for your spouse. If you use a traditional IRA, rather than a Roth, that reduces your taxable income as well. If you’re 50 or over, the limit rises to $6,000 apiece.

If you contribute $43,100 to your Solo 401(k), and $10,000 to two IRAs, that brings your income for tax purposes down to just over $70,000.

We haven’t stopped there either, says Mr. Charney.  Now come the usual itemized deductions. You can write off your state and local taxes. Let’s say these come to $10,000.  You can write off interest on your mortgage. Call that another $10,000. That’s enough to pay 5% interest on a $200,000 home loan.

That gets us down to about $50,000 And we’re not done.  If you’re self-employed, health insurance is probably a big headache. But the news isn’t all bad. You can write off the premiums for yourself, your spouse, and your kids.

And if you use a qualifying high-deductible health insurance plan—there are a variety of rules to make sure a plan qualifies—you get another break. You can contribute $3,050 a year into a tax-sheltered Health Savings Account, or $6,150 for a family. You can write those contributions off against your taxable income. The investments grow sheltered from tax. And if you spend the money on qualifying health costs, the withdrawals are tax-free as well.

So call this $10,000 for the premiums and $6,150 for the HSA contributions. That gets your income, for tax purposes, all the way down to about $34,000.  If you have outstanding student loans, you can write off $2,500 in interest. And you can write off $4,000 of your kid’s college tuition and fees.  Then there’s a personal exemption: $3,650 per person. If you’re married with one child, that’s $10,950.  Taxable income: just under $17,000. That’s on a gross take of $150,000. You’d owe less than $1,700 in federal income tax.

And it doesn’t stop there. Because now you can bring in some of the tax credits. Unlike deductions, these come off your tax liability, dollar for dollar.  GE got big write-offs related to green energy. There are some for you too, although on a small scale. You can claim credits for things like installing solar panels, heat pumps or energy-efficient windows or boilers in your home. Let’s say you use a home equity loan to pay for the improvements and take the maximum $1,500 write-off.  That gets your tax liability down to $200.

Can we get rid of that? Sure, says Mr. Charney.  If your spouse spends, say, $1,000 on qualifying adult-education courses or training programs, you can claim $200, or 20% of the cost, in Lifetime Learning Credits. (The maximum is $2,000.)  That wipes out the remaining liability.

Congratulations. You’ve pulled a GE. You owe no federal income taxes at all.

OK, it’s just an illustration. Few will be quite so fortunate. On the other hand, it’s not comprehensive either. There are plenty of other deductions and credits we didn’t mention. You could have written off up to $3,000 by selling loss-making investments. Your spouse may be able to use a 401(k) deduction as well. There are lots of ways to tweak the numbers.

In this case, you’ve paid no federal income tax, and meanwhile you’ve saved $19,000 toward your retirement through Social Security and Medicare, and $53,000 through your 401(k) and IRAs. You’ve paid most of your accommodation costs (that is, the interest and property taxes on your home), covered your health-care costs and quite a lot of personal expenses through your business account, paid $4,000 toward your child’s college costs and had about $2,000 a month left over for cash costs.

Who says GE has all the fun?