Matthew Ledvina

It’s the question that everyone in the industry is asking right now, so we sat down with an expert to hear more. Matthew Ledvina is a cross border tax specialist with an extensive knowledge of PPLI and he was willing to sit down with us and shed light on the GAO’s latest activities: “Firstly, I want to say home important it is that an institution with the reputation and reach of the United States Government Accountability Office is taking this part of the industry seriously. I’ve been warning about the abuse of a number of variable insurance products and the wide-ranging implications such practices are having on the industry.” It’s certainly something of a hot topic right now, so does this mean an end to all offshore arrangements for high net worth individuals? “Absolutely not, this is more of a cleanup as it were. The key thing to note here is the IRS themselves openly acknowledge the legitimacy of many offshore life insurance products and the benefits they offer. What the GAO ...

When it comes to filing the US taxes, it is important to understand the best practices, concepts, and basic terms related to it. You might have hired a professional to file your taxes for you. But, knowing these crucial as pects of taxation will help you know about the steps you can take or reducing your tax bill or getting you more refunds. It will also make sure that you get to dodge any late-payment penalties or failed-to-file fees. Regardless of whether it is the first time you’re filing taxes or you want to improve your present process of filing, the following ideas will come to your aid. Choosing the right ways to file the US taxes Matthew Ledvina , one of the most respected tax advisors in the country, believes that the most important thing is to determine who will file the taxes. You can do it yourself using the online tax filing systems, or you can visit professionals who prepare taxes. If there is nothing complicated about your financial situation, it might be a good ...

As with life insurance, annuities are tax-favored investments under the Code. Unlike life insurance, however, the primary income tax benefit of an annuity is derived from the compounding effect of the tax deferral on the investment gains within the contract, rather than the avoidance of income tax, as with investment in a life insurance policy. Generally, under § 72(a), gross income includes any amount received as an annuity under an annuity, endowment, or life insurance contract. The income tax effect of an annuity depends, however, on numerous factors, such as whether the tax is being applied to a distribution during the a nnuity’s accumulation period or annuitization period and whether the distribution occurs after the death of the holder of the annuity contract or after the death of the annuitant (assuming that the holder and the annuitant are different persons). Section 72: Annuity Contract Defined To qualify as an annuity, the annuity contract must satisfy the requirements o...

Being a high net worth individual allows you to see and do more than you ever dreamed of, but it also produces a number of issues which can require detailed planning. Moving your assets into the US can often feel confusing and overwhelming, and it can be a stressful and time-consuming process if done incorrectly. To give you an idea of how you can tackle the issues involved many overlook, we’ve create a simple guide that talks you through everything you need to know.   The Importance of Avoiding Gray Areas Clarity is the name of the game when it comes to the complex issue of cross-border taxation. Just because something isn’t prohibited doesn’t necessarily mean it’s a good idea, which is why it’s vital to get all of the basics in order in a proven way. Once you have a solid foundation, it’s then much more straightforward to fine tune everything else.   Accounting For State-Specific Taxation The state you move to can have a significant impact on how your assets and esta...

  A huge tax bill not just ruins your day, but even the rest of the month. However, the good news is that there are ways for you to move past the unpleasant surprise of an unexpectedly high tax bill. Here are some of the ways in which you can cut down the tax bills for the year. In many of the cases, you need to itemize and not follow standard deduction to use the strategies. But, that extra effort would be worth it. Find a way out to tweak the W-4 The W-4 is the form that your employer gets from you, whereby, you mention how much tax to be withheld from every paycheck. You have the option to make changes to the W-4 at any time. One of the top US tax advisers, Matthew Ledvina suggests two ways to tweak the W-4: ·          If you have receive a huge bill for this year, and do not want to get the same surprise next year, raise the withholding to make sure you don’t owe an exorbitant amount at the time of filing the tax returns. ·   ...

  N onresidents and residents face a different set of rules when filing their taxes in the United States than those who are citizens. Filers who are not citizens may be excused from declaring definite types of income, based on their circumstances. Resident aliens are not US citizens but they have green cards enabling them to work in the US or they have been in the country for no less than 183 days over a three-year period including the present year. Nonresident aliens are in the United States legally but do not have green cards. They may be tourists or other visitors.   Taxation of Nonresident Aliens Nonresident aliens are needed to pay income tax only on income that is earned in the United States or earned from a US source. They do not have to pay tax on foreign-earned earnings. Investment income comprehended in the US that is not from a US source is taxed at the rate of 30% usually unless otherwise specified by treaty. Nonresident aliens should keep records to show the...

  A U.S. person is entitled to a 100 percent estate tax marital deduction for assets left to his or her surviving spouse if the spouse is a U.S. citizen. This applies also to an NRA who leaves U.S. situs assets to the surviving U.S. citizen spouse. However, in either case, if the surviving spouse is not a U.S. citizen, the estate tax marital deduction is not available unless the assets pass to a qualified domestic trust (QDT). (IRC § 2056 (d)(2)(A))  To qualify, a QDT must meet the following requirements:   1.     The trust must pay all income to the surviving spouse for life. 2.     The trust may not permit principal distributions to anyone other than the surviving spouse during his or her life. Any principal distributions to the surviving spouse (except distributions for hardship) will be subject to estate tax at the time of distribution at the top bracket of the deceased spouse's estate. The remaining principal in the trust on the d...

A. NRAs Generally: Reducing U.S. Taxes  The three cardinal rules for NRAs who wish to minimize U.S. taxes are: 1.     Minimize contacts with the United States to avoid becoming U.S. residents for income or estate tax purposes. 2.     Minimize U.S. situs assets to avoid estate taxation. Typically, this means holding U.S. real estate, tangibles located in the United States and shares of stock of U.S. corporations through non-U.S. corporations (or entities that can elect to be treated as non-U.S. corporations). This step offers no protection from income taxes on U.S. source income; the income is still payable to a non-U.S. entity and thus subject to income tax withholding. Also, the transfer of U.S. real estate to the non-U.S. corporation may have income tax consequences. (In some cases, an irrevocable trust may be structured to serve as an effective estate tax blocker.) 3.     Minimize taxable U.S. source income to avoid U.S. inc...

E state planning for non-U.S. persons differs from domestic planning, not only in the specific rules that apply but also in the mental outlook that the planner must bring to the process. To put it simply, in planning for a U.S. person we begin with the assumption that all income and assets are subject to U.S. income, estate and gift taxes, and we then hunt for exceptions (aka "loopholes") that will shelter some income and assets from these taxes, e.g., municipal bond interest, charitable deductions, the estate tax marital deduction. Non-U.S. persons, on the other hand, start out in an environment in which no U.S. income or estate taxes are payable , and the planner's job is to keep an eye out for pitfalls (U.S. residence, U.S. source income and U.S. situs assets) that may create such taxes. WHO IS A U.S. PERSON? A.    Individuals, Corporations and Trusts. The term "U.S. person" includes U.S. individuals as well as domestic corporations and U.S. trusts. (IRC § ...