Do you have questions regarding Gun Trusts? (continued)
This is a continuation of a series of blog posts that are relating to Gun Trusts and all the issues that surround them. My goal is to answer many common questions regarding Gun Trusts. Here are a few additional questions:
3) NFA Firearms – How Long Does It Take to Register or Transfer my Firearm?
The registration or transfer process takes approximately 1 to 3 months to complete.
4) What laws must a Gun Trust comply with?
A Gun Trust must comply with federal, state and local laws for firearms not to mention state trust laws.
5) What is all involved in purchasing a Title II firearm?
The purchase must be approved by the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE), you must obtain the signature of the Chief Law Enforcement Officer (unless you purchase through a corporation or a trust), pass an extensive background check to include submitting a photograph and fingerprints, fully register the firearm with BATFE, receive BATFE’s written permission before moving the firearm across state lines, and pay a related tax.
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With Florida unemployment rates at high levels, many displaced employees – executives as well as workers – are examining opportunities to start their own businesses. Deciding on the right structure for that business is an important step in starting the new business off on the right footing.
If you file a joint federal income tax return and a portion or all of your refund is applied against your spouses’ past-due federal tax, state income tax, child or spousal support, or federal nontax debt, you may be entitled to injured spouse relief. To be considered an injured spouse by the IRS, you must have made and reported tax payments or claimed a refund credit and not be legally obligated to pay the past-due amount. Special rule apply to those who live in a community property state. See IRS Publication 555, Community Property for more information about community property laws. You may request your portion of the refund by filing Form 8379, Injured Spouse Allocation, if you are filed a joint return, are not responsible for the debt, and are entitled to a portion of the refund. You can file Form 8379 along with your original tax return or by itself after you are notified of an offset. When filing a Form 8379 with your tax return, write “INJURED SPOUSE” at the top left corner of your Form 1040, 1040A, or 1040EZ. If filing Form 8379 by itself, it must include both spouses’ social security numbers in the same order as they were listed on your income tax return. If you are claiming innocent spouse relief, do not use Form 8379 by itself; instead, file Form 8857, Request for Innocent Spouse Relief. This relief only applies in certain circumstance. The IRS Publication 971, Innocent Spouse Relief, explains the qualifications and how to request the relief. 
Many small business owners realize that they missed opportunities for tax breaks and the effect on their businesses’ future growth too late. The abundant tax-law changes that have come into effect in recent years makes it difficult for business owners and their accountants to stay on top of the changes. Many are complicated, change over time and require a tremendous amount of paperwork backup and justification. Some business owners choose to not take certain tax breaks due to the amount of paperwork involved. Even keeping track of the information for deductions for meals or car mileage proves to be a difficult task and many business owners simply take general deductions or no deduction at all. 
Some families have considered the option of dropping their life insurance due to the changes in estate taxes. However, there are better options available than allowing your coverage to lapse. The amount individuals are allowed to shelter from the estate tax has increased steadily from $675,000 in 2001 to $5 million in 2011 and 2012, causing some families with estates below that to re-examine the need for life insurance. 
The amount of U.S. taxpayers renouncing their citizenship has more than doubled to 1,534 from 2009 to 2010, which is more than the amount of individuals who have renounced in the past three years combined. This increase is due to the U.S. government seeking hidden assets of U.S. citizens around the world. Those who are expatriating must appear before a U.S. consular or diplomatic officer and sign an oath of renunciation. For 2011, those citizens whose net worth is more than $2 million or with an average annual income tax exceeding $147,000 for the past five years are required to pay income taxes on assets as if they were sold the day before the expatriation, benefitting from an exclusion of $636,000. The increase in penalties has caused many U.S. citizens with dual citizenship to view their U.S. citizenship as not worth the stress and hassle of the U.S. tax-filing rules. Starting in 2013, banks overseas will begin to face a 30% withholding tax on income from U.S. assets for failing to share information on American account holders. The uncertainty of the estate tax has also caused wealthy taxpayers to give up their U.S. citizenship. 
As baby boomers are nearing retirement age, they are finding themselves financially unprepared for the future. On average, a household headed by someone 60 to 62 has less than a fourth of what is needed for their retirement. Of those households nearing retirement age, about 60% rely at least in part on 401(k) plans. However, 401(k) plans should be used as a retirement supplement, not as a full retirement plan, especially for baby boomers who were not exposed to them for long enough. Those who are using 401(k)s as their retirement are not contributing enough each year to obtain the amount of savings that will be needed for retirement. If you have fallen behind on saving for retirement, now is the time to save more. Another way to help with retirement is to delay taking Social Security. If a person entitled to benefits at age 66 starts to withdraw at 62, they will only receive 75% of their benefits. But if that person was to wait until age 70, they would receive 32% more than their full benefits. Older individuals are also able to contribute more to their 401(k)s without it being taxed. Rising health care costs also affect how much an individual should save for retirement. Some advisors suggest that 85% or your working income is needed in retirement, while others say 100% needed. With the rising health care costs and unstable housing market, it may be advisable to save 100%. The worst thing that could happen is that you outlive your retirement savings. The sooner you start saving for retirement, the better you will be. 
Many neglect to save for their retirement and have a multitude of excuses to defend this decision. Some excuses are better than others, but saving for retirement should not be something that is put off. 
The all-important conversation about long-term care is avoided by most families until something happens that makes them realize it should have been discussed earlier. Do not wait to have the discussion about what to do until after a stroke, heart attack or some other medical emergency happens. Many avoid the conversation of long-term care with their parents because of the stress or threat to their parent’s independence. 
The Internal Revenue Service is now accepting all 1040 forms. The systems are now up to date and the changes that were made due to the new tax law in December have been put in place. Taxpayers are advised to e-file with direct deposit so they can receive their refunds quicker. The IRS had announced it would delay processing some tax returns while updating the systems. However, for most taxpayers, January started the tax filing season. Any taxpayers claiming deductions and delayed forms file later in the year. Business taxpayers that use the 1040 series can also now file. A future date will be announced for when the IRS will start processing non-1040 business tax forms affected by the recent tax law changes. 
The new tax law in effect only lasts for two years. Therefore, when devising an estate plan, take into account that the tax law will most likely change again in two years. In December, the new tax law was enacted; it included various income, gift and estate tax breaks for individuals with considerable income. Everyone still needs to change their estate plans to flexible plans for the distribution, protection, and management of their assets to adapt to future changes in the tax law. Even if there is a tax provision that seems unlikely to change, it is unwise to not take into account that possibility. Some key provisions enacted in the new tax law that affect high-income or high-net-worth individuals include personal exemption, itemized deductions, capital gains, state and local taxes, alternative minimum tax, retroactive estate tax, state estate taxes and the energy tax credit. 
Many individuals fail to realize that the tax laws, besides being over our heads and confusing, offer basic tools to reduce taxes. Most businesses do not realize that by keeping a mileage log that properly tracks business-related mileage, a deduction of a few hundred to thousands of dollars may result at year’s end for small businesses. As a business owner, it is important to be knowledgeable about the tax laws that are in effect. If there is ever a free or low cost “what you need to know about taxes” class in your area, take advantage and sign up. 
This year homebuyers who took the $7,500 federal tax credit to buy their first homes in 2008 have to begin paying it back. This credit was intended to be like an interest-free loan and those who took the maximum credit of $7,500 in 2008 must add $500 each year for the next fifteen years to their income tax liability. Reminders are also being sent out by the IRS to those who have to start paying back their credit this year. However, due to a change by the government, those who waited until 2009 or 2010 to buy a home that qualified for the credit do not have to pay it back if the buyer remains in the house for at least three years. The stimulus bill enacted in February 2009 included the $8,000, no pay-back tax credit to help jump-start the wavering housing market. The program in 2009 and 2010 was also extended to repeat home-buyers that met other program criteria and was limited to a maximum of $6,500. 
