It’s common knowledge that we have to pay our taxes as we earn our income. For employees, taxes are withheld from each paycheck, while self-employed folks are required to make quarterly estimated tax payments. But what about the AMT?

Not-so-common knowledge is that the AMT also must be paid throughout the year - if you wait until April 15, 2010 to pay your 2009 AMT, you could be subject to significant underpayment penalties.

Employees - the withholding tables your employer uses do not include any estimate for the AMT. If you want this withheld, you have to make the computation yourself and request an additional amount withheld from each paycheck. With only 9 months left in the year, you already have some catching up to do.

Self-employeds - your quarterly estimates must include your expected AMT liability. With 1st quarter estimates due next Wednesday, April 15, you have some quick calculating to do to avoid risking an underpayment penalty.

How do you know whether you will be paying the AMT in 2009? Some use the ’same as last year’ approach, but this is inexact and carries the underpayment risk. You can forecast your income and expenses for the year and then do an AMT calculation based on this forecast, or you can use an ‘annualization’ approach. IRS Form 1040-ES, available on their web site, walks you through the steps involved.

1. Darryl Strawberry

Dodgers star, Darryl Strawberry first got in to trouble with the IRS in 1994 when he was put under investigation for tax fraud. The IRS tacked him with tax evasion, and he had to pay back $350,000 in back taxes, serve 3 years of probation, six years of home confinement, and complete 100 hours of community service.

2. Lawrence Taylor

Former Giants linebacker, Lawrence Taylor filed an incorrect federal income tax return back in 1990. Taylor pleaded guilty to the tax charges in 1997, and was punished with three months house arrest, five years probation and 500 hours of community service for income tax evasion.

3. Pete Rose

Baseball favorite, Pete Rose, also got in to some trouble with the government in 1990, when he filed a false income tax return. Despite his celebrity status, Rose was sentenced to five months in a correctional facility, three months in a community treatment center, 1,000 hours of community service and a $50,000 fine.

4. Helio Castroneves

The recent controversy around Indy 500 racer Helio Castroneves and his supposed $5 million tax debt has shed light on the tax problems sports stars can get in to. He is currently being tried for evading taxes on a licensing deal that he claims to never have received a dime from. Only time will tell whether the Indy 500 and dancing with the stars celebrity actually committed the tax crime.

5. Willie McCovey

Hall of Famer Willie McCovey, like many other athletes who ran in to tax trouble, did so by forgetting to claim cash made during autograph signing. While McCovey pleaded guilty to the crime, he also claimed to have committed it unknowingly, since he had a professional handle his accounting. He was sentenced to two years of probation and fined $5,000.

6. O.J. Simpson

Although infamous for more than his athletic abilities, O.J. Simpson upset the IRS enough to be put on the California tax shame list. His tax debt was over $1.5 million, and he stayed on the list for more than a year.

7. Jesse Owens

The late 1930’s Olympic winner Jesse Owens got himself into trouble with the IRS. After the Olympics, Owens tried multiple business ventures in the United States to profit off his newly found fame. However, one of his ventures lost Owens a fortune and rendered him unable to pay his full tax liability. As a result, Owens was forced to declare bankruptcy.

8. Boris Becker

Famed tennis player and bad boy, Boris Becker, ran right in to tax trouble when it was discovered his apartment was not his priority residence, as previously claimed. As a result, he was given two years probation, fined $500,000, and ordered to pay expensive court fees.

Roth IRAs have become extremely popular retirement tools, but the minimal Roth IRA contribution limits and participant Roth IRA income limits have prevented many people from using them. The Economic Growth and Tax Relief Reconciliation Act of 2001 provided for designating Roth IRA contributions within a prequalified plan. Now many individuals previously excluded because of Roth IRA rules can take advantage of the tax-free growth of Roth IRA contributions through a Roth 401(k).

The Roth 401(k) is a feature that can be added to a new or existing company-sponsored and defined contribution pension plan, including traditional 401(k)s, safe harbor 401(k)s, and 403(b) tax-sheltered annuities. Employees may elect to designate a portion or all of their elective contributions as Roth IRA contributions. Contributions are included in gross income at the time the employee would have received the contribution amounts in cash if the employee had not made the cash or deferred election. Earnings on the account accumulate tax-free, and distributions, if they are qualified, are tax-free.

A qualified distribution is one that is “seasoned,” or that occurs at least five years after the year of the participant’s first designated Roth IRA contribution - and is made on or after the participant reaches age 59 1/2 , because of the participant’s disability or after the participant’s death.

An individual can choose to make both traditional pretax and Roth IRA-designated contributions in a plan year. In 2008, an individual has a combined elective contribution limit of $15,500 for all designated Roth IRA contributions and traditional pretax Traditional IRA and 401k contributions (with an additional $5,000 if the participant is age 50 or older). The maximum employee and employer combined annual contribution must be the lesser of $46,000 or 100% of compensation.

Employers may match Roth IRA contributions, but these contributions cannot be added to the Roth IRA account. Rather the employer monies must be segregated in pretax fund account that must be kept and accounted for independently and separately. While the employee’s contributions to the employee’s Roth IRA may be withdrawn tax-free, the employer-matched contributions will be treated as ordinary income at the time of withdrawal.

Because the 401(k) plan will allow for pretax contributions that are includible in income when distributes (for traditional and employer-matched contributions) and contributions made with after-tax income that will be distributed tax-free (for Roth IRA contributions), there must be separate accounts and separate recordkeeping for the different types of contributions.

While a traditional IRA could be rolled over into a Roth IRA, there are no rules that allows for converting a pretax elective contribution account under a 401(k) to a designated Roth IRA account. A direct rollover of a distribution from a Roth 401(k) may only be made to another Roth IRA elective deferral account, such as another Roth 401(k) or a Roth IRA.

Roth 401ks are most appropriate for individuals who would like to contribute to a Roth IRA for tax-free growth but are unable to do so because of income limitations or who would like to contribute more than they currently can under the IRA rules. In general, younger individuals saving for retirement and those who expect their tax bracket to increase would benefit greatly from making Roth IRA designations.

If you have a tax debt, you are aware that your bill keeps increasing because of the added penalties and accrued interest. If you could not afford to pay your original tax bill, why would the IRS think you would be able to now with these additions? Remember that the IRS computer system automatically adds the penalties to your tax bill. This means that the IRS does not take into account your personal circumstances. There are options to help you with this IRS Problem.

Reasonable Cause

The IRS can eliminate or reduce your penalties if you can show reasonable cause. What is reasonable cause? The IRS’s definition is ‘Reasonable cause relief is generally granted when the taxpayer exercises ordinary business care and prudence in determining their tax obligations but is unable to comply with those obligations.’ What does that mean?

In a nutshell, what this means is that you tried to pay your taxes on time but something got in your way. To prove this to the IRS you must use both logic and legal arguments.

Here is a list of some of the events that the IRS considers reasonable cause:

1. Ignorance of the law

2. Error or mistake was made

3. Forgetfulness

4. Serious illness, death, or unavoidable absence

5. Inability to obtain records

6. Incorrect advice from tax professional

7. Incorrect advice from the IRS

8. Fire, casualty, natural disaster, other disturbance

9. Acts of God

The IRS will actually accept any reason as long as it shows that you exercised ordinary business care and prudence and was still unable to comply with your tax obligations.

Requesting a Penalty Abatement

When you receive a tax bill that includes penalties, write back immediately and ask for an abatement. You can either write your own letter or use IRS Form 843 (Claim for Refund and Request for Abatement). Make sure you include a copy of your IRS notice showing the penalty and documentation that substantiates your reasonable cause. If possible, include payment of the tax bill which includes a note indicating that the payment is to go toward the tax portion and not the penalty or interest. Also, note this on the check itself. (If you pay the tax, the interest will stop accruing.) Make multiple copies of the letter and enclosures for your records as subsequent billings may be received before you receive a response regarding your abatement request.

For your information: If your penalty abatement is denied you cannot make another request on the same grounds.

Roth IRA on Roids is the Better Alternative to the Traditional IRA and Roth IRA

Roth IRA on Roids is like a savings account deposited with an insurance company, rather than a commercial bank, such as Bank of America. It’s an improved wealth-building tool. The purpose is to grow your retirement nest egg without taxation and be able to withdraw your savings tax-free, in your sunset years. The benefits of the Roth IRA on Roids wealth building tool are that it acts like a Roth IRA but with:

1) No contribution limitations tied to your earned income, marital status, or if you have another pension plan in your business or with your employer.

i) Both, the Traditional IRA and the Roth IRA’s are limited to $5,000 or $6,000 if you’re over the age of 50. With Roth IRA on Roids you can contribute $10,000, $20,000, $50,000, $200,000 or more. The only qualification is that you must be healthy.

ii) With Roth IRA on Roids there are NO earned income, marital status limitations, or age limitations.

2) No arly withdrawals penalties or sur-tax based on your age 59 1/2 or forced distributions after your age 70 1/2. You decide when to begin withdrawals from your savings, without restrictions. Of course the longer you delay your retirement, the better the numbers.

3) No risk of loss with the violent ups and downs of the stock market, the real estate market, commodity market, or any other market. Your principal is guaranteed by the insurance company with a minimum guaranteed tax-free return on your deposit.

In 2008 did you lose money in the market with your Traditional IRA or Roth IRA? Are you afraid to put your money back in the market? With Roth IRA on ROIDS you get a guaranteed tax-free minimum return of 2 percent, and typical but not guaranteed annual tax-free returns of 5 to 9 percent, translating equivalent taxable returns of 8 to 15 percent assuming a 40 percent tax rate.

How does this work? Is the Roth IRA on Roids legal?

Absolutely. The Roth IRA on Roids works because your savings account is deposited with an insurance company, rather than a commercial bank, such as Bank of America.

This savings account is technically “wrapped” by an insurance policy. Insurance companies do not pay income or capital gains taxes on insurance policy returns - and neither will you. As a bonus of having your savings account wrapped by an insurance policy, you get a death benefit included at no additional cost.

1) Roth IRA on Roids is a tax-free wealth building savings account wrapped in a life insurance policy. If you die prematurely, your family will receive a death benefit.

i) Traditional IRAs and Roth IRAs will never own a life insurance policy; it’s one of the restrictions. Roth IRA on Roids has no limitations. In fact, it’s a savings account wrapped inside a life insurance policy designed for tax-free growth and tax-free withdrawals.

Example: At age 52, Dr. Smith contributes to his wealth building Roth IRA on Roids $50,000 for 7 years, for a total $350,000. Beginning his age 65 Dr. Smith begins to withdraw $30,455 per year for 35 years or a total $1,065,925. His death benefit beginning at age 52 to his age 65 is $1,249,976 then is steadily reduced by his withdrawal of $30,455 representing his policy loans against his death benefit.

IRA conversion: My Accountant has been talking to me about converting my Traditional IRA to a ROTH, can I use Roth IRA on Roids as the alternative tool?

Yes. If your accountant, financial planner, investment advisor, lawyer, or other professional advisor has discussed converting your IRA money or other “qualified” retirement money to a Roth IRA by paying the tax now and repositioning to a Roth IRA, you should strongly consider the third tax-free bucket, wealth building tool Roth on Roids™.

1) Roth IRA on Roids has all the similarities of a Roth IRA without the restrictions.

2) Contributions are after tax, tax-free growth, tax-free distribution, and can be passed on tax-free of inheritance taxes.

3) Noteworthy difference between a Roth IRA and Roth on Roids™: Death benefit. (You cannot buy life insurance within a Traditional IRA and a ROTH IRA).

How much does it cost to set the Roth IRA on Roids savings account up?

There are no fees associated with the Roth on Roids.

How can I finance a Roth IRA on Roids the third bucket wealth-building tool

1) Cash or investment dollars.

2) By repositioning your home equity.

i) You borrow from your equity to reposition other people’s money by buying the third bucket.

3) By repositioning your Commercial Real Estate Equity.

4) If you have lost your money in the stock-market? Is it fair to say that you are scared to invest in the stock market today? You can strategically place some of your money in the third bucket by eliminating the risk of losing your money. Risk management by allocating amongst classes of assets.

5) If your tax adviser, investment banker, financial planner, or other professional is talking to you about conversion to a Roth IRA by paying the tax now and reinvesting in a Roth IRA, our third bucket is the better way to go. Our third bucket, accelerated strategy of Roth IRA on Roids is NOT under the control of IRS mandated restrictions.

Many accountants these days help public as well as private limited companies by providing their accounting services. They maintain records, auditing accounts, helps in tax planning, verifying financial documents, budget analysis, legal services and the consulting services for their clients. They ensure about the firm and the company is running efficiently.

Financial services firms’ accountants act as a personal advisor for their clients. They do not help them only with the accounting and the tax planning, they also help them in developing and preparing their personal budgets, manage assets and investments, plan for retirement, and recognize and reduce their exposure to risks. Their role is to meet with all the financial needs for the clients. Their job is limited from providing these services to clients whose financial statements they also prepare.

Mostly accountants like to work in a typical office setting; they also like to do their part of their at home. Mostly accountants or the auditors are hired or the employed by the public accounting firms, government agencies, and organizations with multiple locations. Auditors they may have to travel frequently to perform audits at branches, clients’ places of business, or government facilities.

Most accountants and auditors usually work a standard 40-hour week, but many work longer hours, particularly if they are self-employed and have numerous clients. Tax specialists often work long hours during the tax season especially in the month of February.

In response to recent accounting scandals, new Federal legislation restricts the non-auditing services that public accountants can provide to clients. If an accounting firm audits a client’s financial statements, that same firm cannot provide advice on human resources, technology, investment banking, or legal matters, although accountants may still advise on tax issues. Accountants may also advise other clients in these areas and may provide advice within their own firm.

Accounting services also includes specific jobs duties among the four major fields of accounting and auditing: public, management, government accounting, and internal auditing.

Public Accountants include accounting, auditing, tax, and consulting activities for their clients, which may be corporations, governments, nonprofit organizations, or individuals.

Management accountants are also known as cost, managerial, industrial, corporate, or private accountants. They record and analyze the financial information of the companies for which they work. Their responsibilities also include budgeting, performance evaluation, cost management, and asset management.

Government accountants and auditors work in the public sector, maintaining and examining the records of government agencies and auditing private businesses and individuals whose activities are subject to government regulations or taxation.

Internal auditors verify the effectiveness of their organization’s internal controls and check for mismanagement, waste, or fraud. Internal auditors also have specialty titles, such as information technology auditors, environmental auditors, and compliance auditors. There are many accounting service providing companies which would take care of all the finance and accounts related problems of the firm and would help the firm in order to reduce the taxes also. One such company providing Gold Coast Accounting Services is Joe Walsh & Associates of Australia.