While the tax code probably constitutes a crime against humanity, there is a silver lining. Every year, the governments tweaking results in new and interesting ways to cut your taxes. This is particularly true when we are about to have a presidential election. While we will have to wait a few years for that, the changes for the 2006 year still offer some nuggets.
Sales Tax Deduction ? Before being booted out of Congress, the Republican majority passed a few interesting laws. This occurred so late that the IRS is now scrambling to include the new info in the 2006 tax forms. One of the goodies is an extension of the sales tax deduction. Simply put, you can choose to deduct the total sales tax you paid in your state in 2006 instead of the income tax you paid. This is excellent news for people in certain states that do not collect income tax. If you live in Florida, Nevada and so on, you should claim your total sales tax to cut your tax bill.
Going Green ? Oil costs a bundle and the planet appears to be melting. The answer? Tax incentives. If you purchased approved energy-efficient appliances and such for your home during 2006, you can deduct up to 10 percent of the cost so long as the total doesn't exceed $500. Polar bears everywhere thank you for your act. Make sure to check up on your specific product as the deduction is lower for some things.
IRA Change ? If you are over 50, you get a break on your IRA contributions. The limit is increased to $5,000 for the 2006 fiscal year. For those of us under the age of 50, we get nothing.
401ks ? Regardless of how old you are, there is good news on the 401k retirement front. You can now stick away a whopping $15,000 for the calendar year 2006. Since contributions are pre-tax dollars, it makes sense to do so.
Charitable Contributions ? Government officials apparently are now shopping at AmVets and such. If you want to contribute items to a charity, it now has to be in good and usable condition if you want to claim a deduction. How the IRS is supposed to enforce this new law is a mystery to me and, I bet, most IRS agents. Sometimes, you really have to wonder about the politicians in Washington.
Well, this represents the key changes you should know about for you 2006 taxes. There are more, but I have a pounding headache from reading the code. Feel free to have a go at it yourself if you feel suicidal!
Andorra is a well known European tax haven, and residents benefit from a zero rated income tax and inheritance tax.
The reason for the introduction of the capital gains tax according to the Andorra authorities is to try to slow down the high property inflation seen in the principality in recent years.
Property prices have risen an average of ten per cent over the last decade, but this has been increasing recently with a 19 per cent rise recorded in 2005, and 16 per cent in 2006, leading to worries that locals might be priced out of the market.
As well as the local market, Andorra property sells to second home buyers and international buyers wanting residency. With property prices a quarter of rival tax haven Monaco, demand has increased from international buyers.
But any hope of the new capital gains tax dampening property prices is unlikely to work, according to Andorra property specialists.
'While there is a large disparity between Europe's top two tax havens - Monaco and Andorra - in property prices, the advantages of buying a property in Andorra, gaining residency and having no income tax far outweighs any capital gains taxes', they say, pointing out that Andorra prices are a quarter of those of Monaco's.
'Besides the increase in property prices that offset any Capital Gains Tax', they continue, 'It's on a sliding scale, with one per cent reduced for each year of residency. So for example if someone maintains residency for ten years, the capital gains tax will be five per cent of the property price increase. If someone stays a resident for fifteen years there will be no capital gains tax at all to pay on the increase of their property value.'
Buying a property in Andorra is often seen as a route to residency, which entitles people to live in Andorra and benefit from her tax haven status.
To obtain residency in Andorra, applications need to be submitted in Catalan. A notarised copy of the applicants passport, birth certificate and a certificate of good conduct from the home country are submitted at the same time. According to an Andorra travel guide residency normally takes between three and six months to be approved.
Once residency is granted, residents are supposed to spend six months a year in Andorra, but this isn't policed.
One of the drawbacks for those looking to become a resident in a tax haven when considering Andorra has been that the country has no airport of its own, and is unlikely to have in the future given that it is located in the Pyrenees. The nearest airports are Barcelona and Toulouse.
Recent improvements in the road from Barcelona to Andorra though have cut the travelling time by some thirty minutes to two hours fifteen minutes.
'Given the tax advantages Andorra has', note the guide, 'A two and a quarter hour trip to the nearest international airport could be viewed as a small price to pay for those who will be saving substantial amounts of money in tax. Especially when you consider that their properties could be rising in value quite significantly in the years to come, and for those who like skiing it's a holiday and tax paradise in one!'
Both Richard A. Chapo & Roger Munns are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Richard A. Chapo has sinced written about articles on various topics from Finances, Tax Deductions and Tax. Richard A. Chapo is with BusinessTaxRecovery.com - providing information on .. Richard A. Chapo's top article generates over 22200 views. to your Favourites.
Roger Munns has sinced written about articles on various topics from Marketing, Family Travel and Cars. Tax and financial information for Andorra can be found at YourAndorra.comFor those visiting Andorra, it includes an .For snowboard and. Roger Munns's top article generates over 201000 views. to your Favourites.