From a tax perspective, we have seen wild swings in tax rates during this period. The 1970s started off as a high Tax Period. The top income tax rate was a staggering 50 percent. The maximum long term capital gains rate was at 39.6 percent. The dividend rate? An absolutely unheard of 70 percent. Yes, 70! These numbers are harsh compared to what we pay today.
This is not the case, however, due to very special circumstances. First, Israel has granted substantial 2290 tax form exemptions to Olim Hadashim and veteran ex-pats to attract them to move to Israel. The essence of these exemptions are that people moving or returning to Israel are exempt from taxation for a period of 10 years for all income that is generated outside of Israel. (Legislation providing investment benefits for this group is being finalized, and worth while exploring as well).
These six things make a huge difference in your profit and make tax lien investing very different in different states. Let me give you three examples from states that are all bid down the interest states, but because of the other 5 factors that we mentioned investing in each of these states is quite different.
But good old Uncle Sam has taken up the banner, to some extent. The IRS will give a tax rebate of $2,000 to anyone who converts his vehicle to HHO. Receipts are necessary as proof, so do keep hold of them. In fact, for a heavy vehicle tax goods vehicle, up to $50,000 can be claimed back on your tax bill.
Earning up to 36 percent interest. Real-estate laws are different in every state. A homeowner is given a redemption period to pay the back taxes plus penalties for a property. For example, the state of Florida has a 22-month redemption period. And interests can reach up to 18 to 36 percent.
Remember, if what you owed on April 15th was a surprise, you have missed the boat on tax planning. Filing for an extension to file your tax returns won't make up IRS Form 2290 for poor tax planning.