As everyone who has ever filed taxes before knows, you have to get them right the first time. If you fail to claim something or if you don’t include all of your income, eventually the federal government is going to find out. It might not be this year and it might not be next, but eventually you’re going to be audited and they’re going to discover that you haven’t claimed everything in the right way for a long time. At that point they’re going to require you to pay back everything you owe, and if you don’t have it all on hand then you’re going to be stuck making monthly payments or having your wages garnished. It’s a horrible situation to find yourself in, which is why it’s so important that you get it right the first time and that you claim every source of income that you’ve had.
If you think you have to get taxes right the first time, then you definitely have to be accurate when it comes to your arbitrage calculation. For those of you reading this who don’t fully understand the concept of arbitrage, you’re not alone. It’s a complicated type of financial transaction that most people don’t understand fully, which is why most people who engage it hire an outside firm to do their calculations for them. Put as simply as possible, arbitrage is the money that you make when you take the profits you’ve earned from low-yielding and tax-advantaged bonds and you put that money into the stock market or you invest in other things. Those other sorts of investments give people the opportunity to make more money because there’s the chance of them yielding higher profits than the bonds, but they also come with much more risk. You don’t have to be an expert when it comes to the stock market to know that it goes up and down, hence the riskier nature of such investments. Thus, the federal government puts a bunch of regulations and rules in place to try and keep people from using their bond profits in this way. They’d prefer people invest in bonds than stocks, so if you take money from bonds and invest it in stocks, then you’re going to have to pay what’s known as an arbitrage rebate.
Making sure your arbitrage calculation is right the first time around is key because not only does the government regulate it much more strictly than other types of income, but they’re much more likely to take a closer look at arbitrage profits. Thus, you need to be sure that you’re claiming everything that you should be, and that your calculation is completely correct.
Due to the need for accuracy, most people hire a firm like Arbitrage Compliance Specialists that’s an expert at arbitrage compliance. They’ve been in business for more than 30 years and they’ve never made a mistake. Check out their website at www.rebatebyacs.com to see how they can help you remain compliant when it comes to your arbitrage profits.