The Year End is Coming: Are You Ready?

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The end of 2014 is approaching. Are you ready?

For non-US investors, this can be a confusing and frustrating time, where it seems that nothing gets done in a timely manner during the period between US Thanksgiving (the last Thursday in November) and December 31st. There is a lot of pressure on government departments to wrap up their funding, finances, employees to complete yearly vacation time allotments, and more. So what can you to do be prepared?

Are Your Business Structures In Order?

If you have been thinking about moving your properties out of your personal name and into a US business structure for asset protection, now is the time to proceed. States will begin to lag in processing time – which is already pretty long in some states, like North Dakota. If you want a business structure, contact us and we can make a plan!

If you have a business structure, have you looked to make sure all annual filings and payments have been made? You should have a registered agent at the very least, and in most states, probably an annual report to file as well. Not keeping these things up to date can create legal and financial penalties.

Have You Applied for Your ITIN?

An ITIN, also known as Individual Tax Identification Number, is how you are identified to the US tax authorities as a foreign taxpayer. Having an ITIN and filing a tax return here can reduce the tax you pay in this country by a large amount. By comparison, owning US real estate that produces income, and NOT filing a tax return can cost you. Expect to leave 30% of your gross income here if you don’t file. With a US ITIN, even after paying the costs to lodge a tax return, you’ll probably take home more money.

ITINs generally can be applied for in two ways:

  1. After January 1st, and at the time you submit your tax return; or
  2. Immediately after creating a US business structure

One benefit to having a US business structure is stepping to the front of the ITIN line. You don’t have to wait, nor do you have to worry about having 30% of your US rental income held back for taxes while you do wait to get an ITIN. Plus, having a US company can often help you with refinancing as well as ensuring you are able to take advantage of as many tax breaks and tax savings as you can – just like US investors do.

Have You Connected with a US Tax Preparer?

Now is a great time to get connected with a US tax preparer who can walk you through your US tax responsibilities and get your tax returns prepared. The US tax year is finally over (last returns are due Oct 15th) and the EAs, accountants, CPAs and other tax preparers and strategists now have time to think and to plan. The first 2015 returns start to come due on March 15th, but if you get your planning in order now, you could move those due dates to September or even October. But that can only happen if you plan ahead. Most strategies can’t be put into place after the fact.

We can help you with all of these things. If you’ve got questions, contact us! We’ve got answers.