Taxes! Taxes! How to Save Taxes–Tax Deductions that Make Tax Time Less Taxing
Taxes can be managed. You can save taxes if you do a little planning now. One of the most painful things a citizen does is pay taxes. The government is interested in promoting certain things and so they make them tax deductible. The government wants to grow small businesses so they have passed laws making many tax deductions to help those businesses succeed. This means your own small business can be a treasure trove of tax savings. The government has also passed numerous laws that encourage people to do their personal planning. It is amazing how much you can save in taxes by putting a good estate and asset protection plan in place. Basically, with proper planning and legal structure you not only protect your assets, you can save taxes.
Taxes can be an important part of your estate. An estate plan is more than a will and a trust. You should integrate both your business and personal life. Prestigious attorneys who work for wealthy clients will integrate their “businesses” with their personal legal work. Attorneys and accountants who pigeon hole personal estate planning and business planning into separate categories are missing out on numerous tax planning opportunities. Your estate plan needs to include a total picture. For example, you can use a business to “shift” income to different family members who are in a lower tax bracket. You can change earned income into “passive” income which is taxed differently. You need to see the whole picture and then plan accordingly.
For instance, everyone knows that pens and paper make good business tax deductions. Others know that they can run the business out of their home and deduct parts of their house to save taxes. Most small business owners miss the big tax deductions. The government wants to encourage business owners to take care of themselves and their employees in retirement and during their years of employment. They have passed some great retirement and benefit plan laws.
We all know about the IRA and Roth IRA and what a sweet deal they can be. Did you know there are other such plans that save on taxes? Most retirement advisors are focused on recommending a 401(k), SEP, SIMPLE, or other plan, which translates to an easy mutual fund or annuity sale for the advisor. There are dozens of retirement plans.
Retirement advisors don’t know much about most of them, and they usually don’t know anything about the power of welfare benefit plans. Even most welfare benefit planners focus solely on Section 125 plans or “cafeteria” plans. In all cases, the focus is on selling you mutual funds, annuities, or health/disability insurance, not on the tax planning opportunities under ERISA. This is too bad because they can be great tax saving devices.
If you are interested in using your own small business to save money with these retirement plans, please check out my Benefit Plans and Retirement Plans Library of documents within my Accumulation and Preservation of Wealth System, and the 4 hours of Audio Instructions or my 10 Tax Tactics to see how a small business can save you taxes. Do it yourself! I have written Protecting Your Financial Future to help you do so.
By Lee Phillips, JD – Counselor to the US Supreme Court
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