In February, an Australian tourist was detained at Ngurah Rai International Airport in Bali, Indonesia, and held for questioning by immigration officers.
The reason? A thumbnail-sized tear in his passport.
After reading a statement that acknowledged that his passport was “of poor quality and/or a fake,” the tourist was eventually allowed into Bali.
But the incident raises an important point: while you might be ready for international travel, your passport might not be.
Indonesia has some of the strictest passport laws in the world.
It expects your passport to be in near-perfect condition, with no tears, stains, or water damage. In some cases, it will even fine airlines up to US$5,000 if they allow passengers with faulty passports to travel.
Indonesia is an extreme case, but it’s not the only country with these types of laws. And the best way to avoid expensive mistakes is to be informed of potential passport pitfalls well before taking a trip.
Here are a few things you need to know about your passport before you take a trip.
Is Your Passport In Good Condition?
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Do a quality control check on your passport to make sure it’s in good working condition, especially if it’s been gathering dust during the past three years of the pandemic.
These Are The Main Things To Look Out For:
- Is there any obvious damage? Are any pages torn, cut, detached, stained, water-damaged, moldy, etc.?
- Are your passport details decipherable?
- Is the biodata page in good condition? Is there any discoloration? Any damage to the lamination?
- If it’s an e-passport, is the chip exposed or damaged?
A bit of wear and tear should be expected, but unfortunately, every country has a different definition of how much wear and tear is acceptable.
Best practice is to keep your passport in as perfect a condition as possible and brush up on the rules and any precedents for rejection that are in place in the country you plan on visiting.
If your passport isn’t in good condition, you’ll need to renew it before your trip at your own expense.
When Was It Issued And When Does It Expire?
You need to be aware of your passport’s issue and expiration dates, as well as the passport validity requirements of the country you plan on visiting.
To visit the EU, for instance, your passport needs to have been issued in the last 10 years. It can’t be due to expire until three months after you’ve exited the EU.
Some places, like Australia, Mexico, Japan, and Barbados, only ask that your passport be valid for the duration of your stay, while others, like Egypt, Singapore, and Thailand, require six months of passport validity.
Passport validity requirements vary from country to country, but assuming that all countries require one year of validity before expiration is a good rule of thumb.
If you have the choice when applying for or renewing your passport, it’s best to opt for 10 years of validity. It just means that the issue and expiry dates are things you have to think about less often.
U.S. passports are generally valid for 10 years at a time. With Canadian passports, you have the choice between a 5- or 10-year validity period.
How Many Blank Pages Do You Have Left?
Make sure you have enough blank space or empty pages in your passport before you head out, especially if you plan on visiting multiple countries in one trip.
At minimum, you need enough blank space to receive immigration entry and exit stamps, assuming you’re just visiting one country.
If you’re visiting a country that issues visas on arrival, like Vietnam, be prepared for them to take up an entire page of your passport with the visa sticker.
Different countries have different rules about how many blank pages your passport needs to have for you to be allowed to visit. For most places, it’s one, but some countries, like Namibia and Brunei, for example, require six blank pages.
In the past, immigration officers may have just stamped over old stamps, but with ever-stricter regulations and controls, this is less likely in 2023. If you run out of blank pages, you’ll have to renew your passport early, again, at your own expense.
When you apply for or renew your passport, opt for the maximum number of pages possible if given the choice.
The standard U.S. passport has 28 pages, 17 of which are blank for immigration stamps, but you can also apply for a 52-page passport with 43 blank pages at no additional cost.
Canada used to give you the option of choosing how many pages you wanted in your passport, but now, all Canadian passports have 36 pages.
What Stamps Does Your Passport Currently Have?
Your travel history can affect your ability to visit a country. A passport stamp from one country may prevent you from entering another if the two countries are on bad terms.
For example, if you have an Israeli stamp in your passport, you can’t travel to certain Middle Eastern countries, like Lebanon or Kuwait, among others. Even a luggage tag or sticker with evidence of having been to Israel can cause problems.
On the flipside, if you’ve been to certain Middle Eastern countries, you may face increased scrutiny at immigration when you try to visit Israel.
A visit to Cuba can affect a non-American or Canadian’s ability to qualify for ETSA. If you’ve been to Cuba since March 1, 2011, you’re disqualified for ETSA and need to apply for a full visa (at a much higher cost than ETSA and including an in-person interview) instead.
Other Things About Your Passport You Should Consider
- Is your passport scannable? Depending on how old your passport is, it may be a regular passport or an e-passport. The latter contains a chip that stores your personal information (name, date of birth, etc.) and can be scanned at certain border-control points, helping you save time at immigration. You’ll know if you have an e-passport because you’ll have a small rectangular icon at the bottom of the front cover of your passport.
- Did you get your passport back? It might sound obvious, but if you’re travel-weary and shuffling many documents around, you could easily walk away from the immigration kiosk without your passport in hand.
- How many days are you staying, and what areas of the country are you visiting? Immigration officers may fill in your passport stamp with the number of days you intend to stay in the country, meaning the stamp has a limited validity. It’s best to tell the immigration officer that you’ll be staying for the maximum number of days a tourist visa allows. If you’re visiting multiple territories within the same country (like the Ecuador mainland and the Galápagos Islands, for instance), make sure you include time spent in those territories when you quote how long you’re staying to the immigration officer.
- Do you have an emergency or temporary passport? If you lose your passport while abroad, you can usually be issued an emergency passport at the nearest consulate. In Canada’s case, a temporary passport is valid for one year, and in the United States’ case, only six months. Don’t try to plan long, multi-trip journeys on emergency or temporary passports.
Your reason for traveling could be another unexpected reason why you might be denied entry at immigration. If you say that you’re visiting to speak at a conference, for instance, but are trying to enter the country on a tourist visa instead of a business visa, you could be denied entry.
Not carrying cash is another reason you could be turned away at immigration. Some countries require you to pay for a visa on arrival, and in some cases, you have to pay in cash. Vietnam, for instance, requires its stamping fee, which can range from US$25 to US$135, to be paid in cash.
Bonds See 2023 Recession, Stocks Aren’t So Sure
The yield curve is one of the most robust recession predictors and has signaled a recession may be coming since mid 2022. In contrast, U.S. stocks as measured by the S&P 500 are up materially from the lows of last October and only just below year-to-date highs, seemingly rejecting recession fears. Yet, fixed income markets see the Fed potentially cutting rates by the summer, perhaps reacting to a U.S. recession.
The Evidence From The Bond Markets
The recessionary evidence, at least from fixed income markets, is mounting. The 10 yield Treasury yield has been below the 2 year yield consistently since last July. That is is called an inverted yield curve and has signaled a recession fairly reliably when compared to other leading indicators.
Building on that, fixed income markets see almost a nine in ten chance that the Federal Reserve cuts rates by September of this year. That’s something the Fed has repeatedly said they won’t do on their current forecasts. Yet, a recession could cause it to happen.
The Stock Market
In contrast, the stock market shows some optimism. The S&P 500 is up 7% year-to-date as the market has shrugged off fears of contagion from recent banking issues. In particular, tech stocks have rallied.
In contrast, more defensive sectors such as healthcare, utilities and consumer goods have lagged in 2023. This suggests that the stock market is taking more of a ‘risk on’ position and is perhaps less worried about the economy.
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That said the stock market is a leading indicator of the business cycle, it may be that stocks see a recession, but are now looking past it to growth ahead and are factoring in the lower discount rates that a recession might bring as interest rates decline. Also, the U.S. stock market is relatively global, so the fate of the U.S. economy is a key factor in driving profits, but not the only one.
Monitoring unemployment data will be key. Though the yield curve is a good long-term forecaster of recessions it is less precise in signaling when a recession starts. Unemployment rates can offer more accurate recession timing. Unemployment edged up in February, suggesting a recession may be near, but we’ve also seen monthly noise unemployment. Two similar monthly unemployment spikes during 2022 both proved false alarms.
However, if we see a sustained move up in unemployment from the low levels of 2022 that may be a relatively clear sign that a recession is here. Economist Claudia Sahm estimates that a sustained 0.5% increase in unemployment rate from 12-month lows is sufficient to trigger a recession. Unemployment rose 0.2% from January to February 2023, so maybe we’re on the way there. Of course, the jobs market performed better than expected in 2022 and it could do so again. Still, fixed income markets do suggest a 2023 recession is coming. Stock markets don’t necessarily share that view.
Which States Have The Highest And Lowest Life Expectancies?
There’s a wide variance of life expectancies among the 50 states in the U.S., according to a recent report prepared by Assurance, an insurance technology platform that helps consumers with decisions related to insurance and financial well-being.
Figure 1 below shows the 10 states with the highest life expectancy, starting with Hawaii, the state with the highest life expectancy.
Figure 2 below shows the 10 states with the lowest life expectancy, starting with Mississippi, the state with the lowest life expectancy.
Assurance scoured life expectancy data prepared in January 2023 by the U.S. Centers for Disease Control and Prevention (CDC). With this data, Assurance created several easy-to-understand graphics that offer information about life expectancies.
Life expectancies are a basic measure of well-being
As measured by the CDC, life expectancies are a basic measurement of well-being in a broad population and not a prediction of how long an individual might live. The CDC measures the expected lifespan for a person born in the year of measurement. This measurement is calculated based on the assumption that the individual will live and die according to the rates of death that are prevalent in the measurement year for each age. There’s no assumed improvement or backsliding in the assumed mortality rates in future years for each age in the life expectancy calculation.
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By contrast, an estimated lifespan for an individual would consider their current age, their gender, and some basic lifestyle information. It might also attempt to project future improvements or backsliding in mortality rates based on key factors.
Significant influences on life expectancy calculations
Leading causes of death in the U.S. are heart disease, cancer, and accidents in that order. These immediate causes are significantly influenced by factors in the population such as poverty rates, educational attainment, rates of obesity and smoking, access to healthcare, prevalence of violent crime, and the support people receive from federal, state, and local governments. All these factors can vary widely among different states, which can be a key reason why life expectancies vary by state.
When you think about it, all these factors also have the potential to influence a person’s quality of life. The measured life expectancy rate rolls up all these factors into one objective measurement of well-being that’s based on population data.
In addition to the factors listed above, mortality rates increased and life expectancies decreased in the past few years due to the Covid-19 pandemic. A recent article titled “Live Free And Die” summarized recent research results that show that life expectancies in most countries around the world rebounded after the Covid-19 pandemic but that they continued to decline in the United States. Many of the reasons cited in the article for the continued decline in U.S. life expectancies are the same or similar to the factors listed above.
Why should retirees care about the life expectancies reported here if these measures don’t predict your own lifespan? Life expectancy calculations indicate the general well-being of the entire population in your area. While the living conditions in your area can influence your own lifespan and quality of life, retirees should focus on their remaining life expectancy given their age. They should also consider how the factors listed above that influence life expectancies in the population might apply to them.
You can obtain customized estimates of your remaining life expectancy at the Actuaries Longevity Illustrator. Part of your planning for retirement is understanding how long you an an individual might live, instead of relying on generalized information about larger populations you see in the media.
IRS Dirty Dozen Campaign Warns Taxpayers To Avoid Offer In Compromise ‘Mills’
Owing taxes can be stressful. Unfortunately, the actions of some companies can make it worse. As part of its “Dirty Dozen” campaign, the IRS has renewed a warning about so-called Offer in Compromise “mills” that often mislead taxpayers into believing they can settle a tax debt for pennies on the dollar—while the companies collective excessive fees.
The “Dirty Dozen” is an annual list of common scams taxpayers may encounter. Many of these schemes peak during tax filing season as people prepare their returns or hire someone to help with their taxes. The schemes put taxpayers and tax professionals at risk of losing money, personal information, data, and more.
Tax Debt Resolution Schemes
“Too often, we see some unscrupulous promoters mislead taxpayers into thinking they can magically get rid of a tax debt,” said IRS Commissioner Danny Werfel.
“This is a legitimate IRS program, but there are specific requirements for people to qualify. People desperate for help can make a costly mistake if they clearly don’t qualify for the program. Before using an aggressive promoter, we encourage people to review readily available IRS resources to help resolve a tax debt on their own without facing hefty fees.”
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Offers In Compromise
Legitimate is a key word. Offers in Compromise are an important program to help people who can’t pay to settle their federal tax debts. But, as the IRS notes, these “mills” can aggressively promote Offers in Compromise—OIC—in misleading ways to people who don’t meet the qualifications, frequently costing taxpayers thousands of dollars.
An OIC allows you to resolve your tax obligations for less than the total amount you owe. You generally submit an OIC because you don’t believe you owe the tax, you can’t pay the tax, or exceptional circumstances exist.
Because of the nature of the OIC—and the dollars involved—the process can be time-consuming. It can also be confusing for taxpayers who may not have a complete grasp on their finances.
First, you must complete a detailed application, Form 656, Offer in Compromise. You must also submit Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-B, Collection Information Statement for Businesses, with supporting documentation (generally, bank and brokerage statements and proof of expenses).
You’ll also need to submit a non-refundable fee of $205 and payment made in good faith. The payment is typically 20% of the offer amount for a lump sum cash offer or the first month’s payment for those made over time. Generally, initial payments will not be returned but will be applied to your tax debt if your offer is not accepted. Payments and fees may be waived if the OIC is submitted based solely on the premise that you do not owe the tax or if your total monthly income falls at or below income levels based on the Department of Health and Human Services (DHSS) poverty guidelines.
The IRS will examine your application and decide whether to accept it based on many things, including the total amount due and the time remaining to collect under the statute of limitations. The IRS will also review your income—including future earnings and accounts receivables—and your reasonable expenses, as determined by their formula. The IRS will also consider the amount of equity you have in assets that you own—this would include real property, personal property (like automobiles), and bank accounts.
Before your offer can be considered, you must be compliant. That means you must have filed all your tax returns and paid off any liabilities not subject to the OIC. After you submit your offer, you must continue to timely file your tax returns, and pay all required tax, including estimated tax payments. If you don’t, the IRS will return your offer.
Additionally, you cannot currently be in an open bankruptcy proceeding, and you must resolve any open audit or outstanding innocent spouse claim issues before you submit an offer.
You can probably tell—it’s a lot to consider. You may want representation. A tax professional can help marshal you through the process and offer practical guidance, while communicating what fees could look like.
By contrast, according to the IRS, an OIC “mill” will usually make outlandish claims, frequently in radio and TV ads, about how they can settle a person’s tax debt for cheap. Also telling: the fees tend to be significant in exchange for very little work.
Those mills also knowingly advise indebted taxpayers to file an OIC application even though the promoters know the person will not qualify, costing taxpayers money and time. You can check your eligibility for free using the IRS’s Offer in Compromise Pre-Qualifier tool.
“Pennies On A Dollar”
What about those promises that taxpayers can routinely settle for pennies on a dollar? Not true. Generally, the IRS will not accept an offer if they believe you can pay your tax debt in full through an installment agreement or equity in assets, including your home. That’s why the IRS tends to reject a majority of OICs that are submitted. The acceptance rate is less than 1 in 3, according to the 2021 Data Book.
The IRS will generally approve an OIC when the amount offered represents the best opportunity for the IRS to collect the debt. It’s true that there’s a formula that the IRS uses to figure out how much they think they can collect from you. But there is some wiggle room to account for special circumstances, including a loss of income or a medical condition. It’s worth noting those are the exceptions, not the rule.
While submitting an OIC may keep the IRS from calling you, it doesn’t stop all collections activities—don’t believe companies that suggest that submitting an OIC will make your tax debt disappear. Penalties and interest will continue to accrue on your outstanding tax liability. Additionally, the IRS may keep your tax refund, including interest, through the date the IRS accepts your OIC.
You may also be liened. In most cases, the IRS will file a Notice of Federal Tax Lien to protect their interests, and the lien will generally stay in place until your tax obligation is satisfied.
An OIC is a serious effort to resolve tax debt and shouldn’t be taken lightly. Be skeptical—if it sounds too good to be true, it likely is. If you’re considering an OIC, hire a competent tax professional who understands the rules and is willing to level with you about your chances of being successful—including other options. Don’t fall into a trap that can make your situation worse.
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