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Author: Scott Arden

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Advice Best Practices Growth

Unlock Executive Benefits with Corporations and LLC’s: Your Path to Perks and Prosperity

Unlock Executive Benefits with Corporations and LLCs: Your Path to Perks and Prosperity

Imagine enjoying a housing stipend that offsets your living expenses, a vehicle allowance that puts you behind the wheel of your dream car, and access to luxurious corporate jets for your travels. These executive benefits aren’t just for Fortune 500 CEOs—they’re attainable for savvy entrepreneurs who leverage the power of Corporations and LLCs.

1.The Corporate Advantage

Forming a Corporation or LLC opens the door to a world of executive perks that can significantly enhance your lifestyle and financial well-being. By strategically structuring your business, you can enjoy benefits that extend far beyond traditional salaries.

Housing Stipend

As a business owner, you can set up a housing stipend through your Corporation or LLC. This stipend can cover a portion of your rent or mortgage, making it easier to afford a premium living space. This perk not only improves your quality of life but also allows you to reallocate personal funds towards other investments.

Vehicle Allowance

A vehicle allowance provides you with a monthly stipend to cover the costs of a car. Whether you need a reliable vehicle for business purposes or want to drive a luxury car, a Corporation or LLC can offer a tax-advantaged way to achieve this. Plus, it simplifies expense tracking and can lead to significant savings on personal transportation costs.

Solo 401(k) Plans

Solo 401(k) plans are a powerful retirement savings tool for self-employed individuals and business owners. By forming a Corporation or LLC, you can contribute to a Solo 401(k), maximizing your retirement savings while enjoying tax benefits. This plan allows for both employee and employer contributions, providing a higher savings potential compared to traditional retirement accounts.

Corporate Vehicles and Jets

Access to corporate vehicles and jets isn’t just a perk for high-flying executives. With a Corporation or LLC, you can justify the business need for these assets, providing you with the ability to use them for business travel. This not only enhances your business operations but also offers a touch of luxury and convenience to your travels.

Tax Benefits and Asset Protection

One of the most compelling reasons to form a Corporation or LLC is the tax advantages. These entities offer various ways to reduce taxable income through legitimate business expenses, including the executive benefits mentioned. Additionally, Corporations and LLCs provide a layer of asset protection, safeguarding your personal assets from business liabilities.

Ready to elevate your business and lifestyle with these executive perks? At Controllers, Ltd, we specialize in helping entrepreneurs like you unlock the full potential of Corporations and LLCs. Schedule a complimentary call with our Sr. Strategist, Stephan, today to explore how you can take advantage of housing stipends, vehicle allowances, Solo 401(k) plans, and more. Don’t miss out on the opportunity to maximize your benefits and secure your financial future. Contact us now to get started on your path to prosperity! To book an appointment call us at (775) 384-8124 or send us an email to info@controllersltd.com. We look forward to speaking with you!

Categories
Advice Strategy Taxes

How Oil & Gas Investments Can Lower Your Tax Liability: Corporation or LLC?

How Oil & Gas Investment Can Lower Your Tax Liability: Corporation or LLC? **

Are you looking for effective ways to lower your tax liability? Dive into the world of Oil & Gas investments. Not only can these investments provide financial returns, but they also offer significant tax benefits. The question is, should you hold these investments through a corporation or LLC? Let’s explore the advantages of each.

**1. Tax Benefits of Oil & Gas Investments: **

   – **Intangible Drilling Costs (IDCs):**

When you invest in Oil & Gas, a significant portion of your initial investment may be classified as IDCs. These costs can be deducted in the year they occur, providing an immediate tax benefit.

   – **Depletion Allowance: **

As you extract oil or gas, you can deduct a percentage of the revenue as a depletion allowance. This deduction can significantly reduce your taxable income.

   – **Bonus Depreciation: **

Certain Oil & Gas investments qualify for bonus depreciation, allowing you to deduct a substantial portion of the investment in the first year.

   – **Tax Credits: **

Some Oil & Gas investments offer tax credits, such as the Enhanced Oil Recovery Credit or the Marginal Well Production Credit, further reducing your tax liability.

**2. Corporation vs. LLC: **

   – **Corporation: **

Holding Oil & Gas investments in a corporation can provide limited liability protection. However, the tax treatment of these investments in a corporation can be less favorable than in an LLC. Corporations are subject to double taxation, meaning that both the corporation and the shareholders are taxed on profits. This can result in higher overall taxes.

   – **LLC: **

Holding Oil & Gas investments in an LLC allows for pass-through taxation. This means that profits and losses from the investment are passed through to the owners and reported on their individual tax returns. LLCs also provide limited liability protection, shielding personal assets from business liabilities.

   – **Evaluate Your Options: **

Consider the tax benefits and liability protection offered by both Corporations and LLCs. Consult with a tax professional or financial advisor to determine the best structure for your Oil & Gas investments.

   – **Start Investing: **

Take advantage of the tax benefits of Oil & Gas investments by starting your investment journey today. Whether you choose a corporation or LLC, these investments can help lower your tax liability while potentially providing lucrative returns.

Oil & Gas investments offer a compelling opportunity to lower your tax liability while diversifying your investment portfolio. Whether you choose to hold these investments through a corporation or LLC, the tax benefits can be substantial. Evaluate your options carefully and start investing in Oil & Gas to reap the rewards of lower taxes and financial growth.

To discuss this in more detail, schedule a call with one of my experts today www.calendly.com/stephan-controllers or call my office at 775-384-8124.

Categories
Best Practices Growth Strategy

Why Operating as a Sole Proprietor Might be Holding You Back from Creating Generational Wealth

Why Operating as a Sole Proprietor Might be Holding You Back from Creating Generational Wealth

Are you striving to create lasting generational wealth but feel like you’re hitting a ceiling? If you’re operating as a sole proprietor, you might be unintentionally limiting your potential for financial success. Here are five compelling reasons why this business structure could be holding you back.

  1. **No Legal Separation: **

As a sole proprietor, there is no legal distinction between you and your business. This means that your personal assets are at risk if your business faces financial trouble or legal issues. By operating as a corporation or LLC, you can create a legal separation, protecting your personal assets from business liabilities.

  1. **Limited Tax Deductions: **

Sole proprietors have limited tax deductions compared to corporations or LLCs. With only 15-20 deductions available on a Schedule C or Schedule E, you could be missing out on significant tax savings. By transitioning to a different business structure, you can take advantage of a wider range of deductions, reducing your tax burden.

  1. **Inability to Build Separate Credit Profiles: **

Operating as a sole proprietor means that your business and personal credit profiles are intertwined. This can make it challenging to build a strong business credit profile, which is crucial for accessing financing and growing your business. By forming a corporation or LLC, you can establish a separate credit profile for your business, increasing your access to credit over time.

  1. **Higher Tax Brackets: **

Sole proprietors are taxed at individual tax rates, which means that the more money you make personally, the higher your tax bracket. This can result in a higher tax burden compared to operating as a corporation, which may offer more favorable tax rates and deductions.

  1. **Business Succession: **

If you pass away as a sole proprietor, your business dies with you. This can have significant implications for your family and the future of your business. By forming a corporation or LLC, you can ensure that your business can continue to operate after your passing, providing a legacy for future generations.

At Controllers, Ltd, we specialize in corporate structure, compliance, asset protection, tax strategies, and estate planning. If you’re ready to take the next step towards creating lasting generational wealth, schedule a call with one of our experts today. Visit www.calendly.com/stephan-controllers or call our office at (775) 384-8124 to get started.

Don’t let operating as a sole proprietor hold you back from achieving your financial goals. Contact Controllers, Ltd today and discover the benefits of a more strategic business structure.

 

Categories
Growth Leadership Strategy

Unlocking the Augusta Rule: How Incorporating Your Business Maximizes Tax Savings

**Unlocking the Augusta Rule: How Incorporating Your Business Maximizes Tax Savings**

Imagine playing a round of golf and discovering a hidden treasure trove on the 13th hole. The Augusta Rule is the entrepreneur’s equivalent—a little-known gem that can revolutionize your tax strategy.

Entrepreneurs are always on the lookout for ways to minimize their tax burden without skirting the law. One lesser known but incredibly powerful strategy is the Augusta Rule, named after the Masters Golf Tournament’s famed location, Augusta National Golf Club.

The Augusta Rule allows business owners to rent their homes to their corporations or limited liability companies (LLCs) for up to 14 days a year at fair market value. This means that the business can deduct the rental expense, and the homeowner can receive the rental income tax-free.

By incorporating your business as a corporation or LLC, you can take advantage of this rule to unlock significant tax savings. Here’s how:

  1. **Rental Income Exclusion:** When you rent your home to your business for less than 15 days a year, the income you receive is tax-free. This can result in substantial savings, especially if your home is in a desirable location or during peak tourist seasons.
  2. **Deductible Rental Expense:** On the flip side, your business can deduct the rental expense as a business expense, reducing its taxable income. This can lead to a lower tax bill for your business. Your house could be used for an Annual Meeting, Business Promotion, a Networking event or mixer, etc.
  3. **Asset Protection:** By incorporating your business, you also gain the benefit of limited liability protection. This means that your personal assets are protected from any liabilities that may arise from your business activities.

Incorporating your business as a corporation or LLC can offer significant tax advantages, including the ability to take advantage of the Augusta Rule. Consult with a tax professional or legal advisor to determine the best structure for your business and start maximizing your tax savings today.

The Augusta Rule is a powerful tool in the arsenal of tax-saving strategies available to entrepreneurs. By incorporating your business as a corporation or LLC, you can unlock this hidden gem and enjoy significant tax savings. So, tee up your business for success by taking advantage of the Augusta Rule today. Call our office at (775) 384-8124 or schedule a complimentary consultation with one of my Senior Experts at www.calendly.com/stephan-controllers .

Categories
Growth Operations Personal Development

Securing Tomorrow: The Vital Role of Succession Planning for Small Businesses

“Securing Tomorrow: The Vital Role of Succession Planning for Small Businesses”

In the fast-paced world of entrepreneurship, small businesses often find themselves immersed in the daily grind of operations, leaving little time to contemplate the future. Yet, amidst the hustle and bustle, one crucial aspect that can often be overlooked is succession planning. Whether your business is structured as a corporation or a limited liability company (LLC), having a robust succession plan is not just a contingency but a strategic imperative for long-term success. In this article, we delve into the importance of succession planning and offer actionable steps for small business owners to chart a resilient path forward.

Imagine your business as a well-oiled machine – finely tuned, efficient, and thriving. Now, picture what happens if a key player, perhaps even you, were suddenly unable to continue steering the ship. Succession planning is the compass that ensures your business sails smoothly through unforeseen storms, safeguarding its legacy and ensuring a seamless transition to the next generation of leaders.

The Importance of Succession Planning for Small Businesses:

1. **Mitigating Risks and Uncertainties: **

Succession planning is a powerful risk management tool. It helps identify and mitigate potential disruptions caused by unforeseen events such as sudden illness, unexpected departures, or even unfortunate accidents. By anticipating these risks, small businesses can safeguard their continuity and financial stability.

2. **Preserving Business Knowledge and Expertise: **

Your business thrives on the unique knowledge, skills, and expertise of its key personnel. Succession planning ensures that this wealth of information is not lost when key individuals retire or move on. By transferring institutional knowledge to the next generation of leaders, businesses can maintain their competitive edge and adapt to changing market dynamics.

3. **Maintaining Employee Morale and Productivity: **

A well-executed succession plan provides employees with a sense of stability and confidence in the face of leadership changes. Knowing that the organization is prepared for the future fosters a positive work environment, ensuring that productivity remains high and morale intact during times of transition.

Actionable Steps for Succession Planning:

1. **Identify Key Roles and Personnel: **

Begin by identifying critical roles within your organization. Determine which positions are indispensable for the day-to-day operations and long-term success. Identify key individuals who currently hold or are capable of filling these roles.

2. **Develop Talent Within: **

Invest in the development of your current employees. Provide training, mentorship, and growth opportunities to nurture a pool of potential successors. Developing internal talent not only ensures a smooth transition but also boosts employee engagement and loyalty.

3. **Document Processes and Procedures: **

Create comprehensive documentation of your business processes and procedures. This knowledge repository serves as a valuable resource for incoming leaders, facilitating a seamless transition. Documenting critical information also enhances organizational resilience.

4. **Regularly Review and Update: **

Succession planning is not a one-time endeavor. Regularly review and update your plan to align with changes in the business environment, market conditions, and personnel. Flexibility and adaptability are key to ensuring the continued relevance and effectiveness of your succession plan.

As a small business owner, your commitment to succession planning is an investment in the sustainability and prosperity of your enterprise. Start today by contacting Controllers, Ltd, today to assess your organization’s vulnerability and take the first steps toward building a robust succession plan. Remember, the future success of your business lies in your hands today. Secure it with a comprehensive and forward-thinking succession plan.

In conclusion, succession planning is not merely a task to check off a list but a strategic initiative that fortifies the foundation of your small business. Embrace the foresight required to navigate the uncertainties of tomorrow, ensuring that your legacy endures, and your business continues to thrive for generations to come.

Give us a call today at (775) 384-8124 or send us an email at contact@controllersltd.com to schedule a time to discuss your situation with one of my experts.

Categories
Best Practices Skills Taxes

Maximizing Returns: Year-End Tax Strategies for Corporations and LLC’s

As the year draws to a close, savvy business owners are strategically positioning themselves for success in the upcoming tax season. For those utilizing Corporations and Limited Liability Companies (LLCs), there’s a wealth of opportunities to optimize tax outcomes. In this article, we’ll explore some year-end tax strategies that can not only minimize your tax liability but also set the stage for financial prosperity in the coming year.

Picture this: You’ve worked diligently throughout the year to grow your business, and now it’s time to reap the rewards. Year-end tax planning isn’t just about crunching numbers; it’s about unlocking hidden potential and creating a roadmap to financial success. Let’s dive into some powerful strategies that can make a significant impact on your bottom line.

1.  **Accelerate Deductions and Delay Income: **

One tried-and-true strategy is to accelerate deductible expenses into the current tax year while deferring income to the next. This could involve prepaying certain expenses or making additional purchases that qualify for deductions. By doing so, you reduce your taxable income for the current year, ultimately lowering your tax liability.

2.  **Leverage Business Credits: **

Research and identify tax credits applicable to your business. Whether it’s energy efficiency, research and development, or job creation incentives, taking advantage of available credits can lead to substantial tax savings. Reviewing the latest tax laws and credits is crucial to ensure you don’t miss out on any opportunities.

3. **Evaluate Your Entity Structure: **

Assess whether your current business structure (Corporation or LLC) is still the most tax-efficient for your situation. Changes in income, business activities, or ownership might warrant a reevaluation. Consulting with an expert can help you determine if a change in structure could result in significant tax savings.

4.  **Employee Benefits and Bonuses: **

Consider providing year-end bonuses or enhancing employee benefits. Doing so not only boosts morale but can also result in tax savings for your business. Certain employee benefits, such as retirement plan contributions, can be deductible, positively impacting your tax position.

5.  **Invest in Capital Expenditures: **

Take advantage of Section 179 deductions for qualifying capital expenditures. This provision allows businesses to deduct the full cost of qualifying equipment and property in the year it’s placed in service. Investing in necessary assets before year-end can lead to substantial tax benefits.

As the year winds down, now is the time to act. Don’t leave potential tax savings on the table. Consult with one of my experts to tailor these strategies to your specific situation. Every business is unique, and a personalized approach to year-end tax planning can make all the difference. By taking proactive steps today, you’ll not only reduce your tax liability but also position your business for a prosperous and financially sound future.

Year-end tax planning is more than just a routine task; it’s an opportunity to strategically position your business for success. By implementing these tax strategies for Corporations and LLCs, you can not only minimize your tax liability but also pave the way for a more prosperous and financially secure future. Act now, consult with one of my experts, and unlock the full potential of your business’s financial success.

Categories
Entrepreneurship Strategy Wealth

Building Generational Wealth: The Case for a Living Trust

In a world where financial planning often revolves around saving for retirement, investing wisely, and building wealth, there’s a vital component that many individuals overlook – estate planning. While a last will and testament is a common tool for distributing assets upon one’s passing, it may not be enough to protect your family’s wealth for generations to come. In this article, we’ll explore the reasons why everyone, regardless of their financial status, needs a living trust and why it should not be relied on a will alone. If you’re committed to building generational wealth, read on.

Understanding the Basics

Before delving into the advantages of a living trust over a will, let’s clarify what each entail:

  1. Last Will and Testament: A will is a legal document that outlines your wishes for asset distribution after your death. It’s a crucial part of estate planning, but it has limitations.
  2. Living Trust: A living trust, or revocable trust, is a legal entity you create during your lifetime to hold and manage your assets. You can serve as the trustee, retaining control over your assets, and designate a successor trustee to take over when you’re unable or upon your passing.

Now, let’s delve into why a living trust should be an essential part of your generational wealth strategy:

  1. Avoiding Probate

One of the primary benefits of a living trust is avoiding probate. Probate is the legal process through which a court oversees the distribution of your assets according to your will. It can be a lengthy, costly, and public process that can erode your wealth and create family disputes. With a living trust, your assets can be transferred seamlessly to your beneficiaries without court involvement, saving time, money, and privacy.

  1. Maintaining Privacy

Living trusts provide a level of privacy that wills simply cannot match. When a will goes through probate, it becomes a public record, accessible to anyone who wishes to review it. A living trust, on the other hand, remains a private document. This confidentiality can be invaluable, especially when preserving family wealth for future generations.

  1. Contingency Planning

Living trusts offer flexibility and contingency planning. You can specify the conditions under which your beneficiaries receive their inheritance, such as reaching a certain age or meeting specific milestones. With a will, assets are generally distributed as specified without such considerations, potentially putting your wealth in the hands of an unprepared or inexperienced heir.

  1. Protecting Against Incapacity

A living trust not only addresses post-mortem asset distribution but also allows for the management of your assets in the event of your incapacity. If you become unable to manage your financial affairs due to illness or injury, your successor trustee can step in and ensure your family’s financial well-being.

  1. Keeping Wealth Within the Family

Generational wealth is built upon the foundation of preserving assets for the benefit of future generations. A living trust can include provisions that protect your family’s wealth from external threats such as creditors, divorces, or estate taxes. This ensures that your hard-earned wealth remains within your family lineage.

For those seeking to build generational wealth, it is essential to recognize the limitations of a last will and testament and the advantages of a living trust. A living trust not only allows for seamless asset transfer and avoids probate but also provides the flexibility to protect your wealth, maintain privacy, and plan for contingencies.

If you’re serious about preserving and growing your family’s wealth across generations, don’t rely on a will alone. Consider the benefits of a living trust as part of your comprehensive estate plan. To explore your options further and take the first step toward securing your family’s financial legacy, reach out to our team of experts in creating generational wealth at 775-384-8124 or download my FREE estate planning at www.generationalwealthsystems.com Your family’s financial future may depend on it.

Categories
Best Practices Economics Negotiating

How much should I pay myself?

How much should I pay myself?

When people go into business for themselves as a Sole Proprietor, they usually comingle the business’ funds. Meaning they are using Business funds for personal items and personal funds for business items. Sole Prop is the easiest way to start doing business, however, if you choose to setup a Corporation or an LLC, these habits need to change. You and the company are no longer the same. The two of you become 2 separate individuals. The company’s money is not your money, and your money is not the company’s money.
So, the question usually after setting up the Corporation or LLC is: How do I get the money out of the company? How much should I be paying myself? What can the company cover?
The Answer is: You take only what you need, to cover Food, Clothing, Shelter, Personal Entertainment, and Insurance. Let the company pick up the rest. The company should be covering things like, Business Trips, Cell Phones, Internet, Home office expenses, etc. You will never take vacations again. Vacations are not tax deductible, however, business trips are. You will need to make sure that everything is documented. I will discuss what your company should be covering in another article.
Now, usually in the 1st or 2nd years of operation, a business owner has no idea what the company is going to make, so they might take money out as an owner draw rather than a salary. However, around the 3-year mark, the IRS will figure that you have some idea as to how much the company will be making and require you to start taking some sort of salary out of the company.
In addition, if you want your company to cover health insurance, contribute to a qualified retirement plan such as an IRA or SoloK, you will need to be drawing a salary from the company. The contributions will be withdrawn by the payroll company out of each paycheck.
Now you might be thinking, if I need additional money from the company, how do I take it out. Well, if you have an “S” elected Corporation or LLC, you will receive distributions on a monthly, quarterly or annual basis. This will add to your income but won’t be subject to withholdings or self-employment taxes. If your Corporation or LLC is taxed as a “C” elected company, you can either take a dividend which the Corporation has already paid the taxes and now you the individual will also pay taxes. This is commonly referred to as double taxation.
However, your company could loan the money to you personally, which is not considered taxable income. You would then pay the company back out of the wages you take. This can be used as an Asset Protection mechanism. The company, just like any other lender could place a lien against whatever asset you may be purchasing. This will protect the asset from any liability that might affect you personally. This does require a formal written promissory note between you and the company to perfect the process.

Categories
Best Practices Operations Skills

Living Corporate Life

Living Corporate Life

Are you currently a W2 wage earner or 1099/Sole Proprietor?

W2 wages are the highest taxed. The taxes come right off the top and you only have about 3-4 deductions such as a 401k or IRA, Mortgage Interest Deduction, HSA’s. etc.

Sole Proprietors only have about 15-30 different deductions that you can claim on a Schedule C, and you are also subject to Self-Employment taxes.

Are you aware that there is a whole other tax code out there that consists of 81,000 pages! You need to live your life like a business. What do I mean by that. If you live your life inside of a Corporation or LLC or even multiple different companies, you are allowed to take advantage of far more write-offs. The tax code provides Corporations and LLC’s up to 233- 305 different write-offs. This allows you more use of your money upfront which ultimately reduces your overall taxable liability. So what things are deductible? The IRS says what is necessary and reasonable. Below are 43 examples, however as I said, there are far more.

Accounting Fees, Advertising, Air Conditioning, Airplanes, Assistants, Business Promotion, Bad Debts, Boats, Bonuses, Bookkeeping, Alarm Systems, Business Awards, Business Consultants, Disability Plans, Decorating, Business Meals, Legal Fees, General Business Insurance, Vehicles, Corporate Setup Fees, School, Health Clubs, Home Office, Leasing an Office, Research, Medical Bills, Interest Payments, Business Travel, Equipment, Seminars, Technology, Insurance, Braces, Education, Property, Loans, Massage, Gardening, Logo’s, Web Design, Professional Services, Team Building, & Paying your kids*

Through 6 Different deductions, I can show you how to save almost $100k in taxes in your business.

  1. Safety and Longevity awards: = $1,600 each award
    Let me explain these awards. If you are the person in charge of keeping the workplace safe, you could be the one who takes advantage of the Safety Award. If you are the person who has been in the business the longest, you could be awarded the Longevity Award.
    NOW understand this, the Longevity Award cannot be taken year after year by the same person. If the same person were to receive this award again, they would have to wait a period of 5 years. Same goes for the Safety Award. It cannot be taken year after year by the same person. This award cannot be cash or cash equivalent meaning a VISA or Mastercard, gift card and CANNOT BE TRAVEL.  However, if there is something else you would enjoy, like a new set of Callaway Golf Clubs or that new Orbea Bicycle you’ve had your eyes on. The company would cut a check to the merchant for the item. It can then claim it as a deduction and is not considered taxable income to you.
  2. Medical Reimbursement Plan: = Up to $10,000 per person on the plan
     A Medical Reimbursement Plan is a Self-Administered plan that is established by the company. The company may contribute up to $10,000 to plan which is a Tax deduction to the business and is not considered income to you. If you are self-insured, the plan can be used to cover things that aren’t covered by your health insurance such as Premiums, Co- Pays, Deductibles, prescriptions, etc.
  3. Vehicle Deduction = $7,500 per year on average
    Now, I am not talking about taking advantage of the vehicle deduction on your Schedule C. I am saying that your Corporation or LLC can lease your vehicle from you and pay you based upon mileage driven, just like any other employer would do. This means that if you drive 1000 miles per month as an example, and the reimbursement rate for that year was 62.5 cents per mile, the company should be writing you a reimbursement check for a total of $625 for the use of the vehicle that month. This is a tax deduction to the business, however it will be considered income to you. Due to the depreciation of the value the personal vehicle due to business use, this could wipe out that income on your personal taxes. This money can be used to cover things like vehicle payments, insurance, maintenance, fuel, etc.
  4. Retirement Plans (SoloK) = up to $62,000 per person (Husband and Wife)
    I am not a Qualified plan expert by any means, so this information is for informational purposes only. A SoloK plan is a lot like a 401k plan that you would have with an employer. You would establish a SoloK plan for you and your spouse through a Self- Directed Administrator (There are many out there). Based upon your Salary with the company, you could contribute up to $62,000 to the plan which becomes a tax deduction to the business and puts money in a qualified plan for you and your wife. Now the beautiful thing about these plans is that you can borrow against them unlike an IRA. So, if you need a boost in your business, the company could borrow against it. This type of plan also allows you to invest in alternative investments that grow tax deferred. This is not considered investment or Tax advice so if you want to learn more about these types of plans, talk to one of the many Administrators out there. IF you want a referral, we work with several different companies that provide these services.
  5. Education for the growth of your business = $5,250 avg. (Changes from time to time)
    Do you like to attend events to learn new strategies for the growth and development of your business? The IRS code allows you to deduct up to $5,250 per year for tuition to these conferences. You must have a written Educational Assistance Program in place and there are certain requirements. The plan cannot favor highly paid employees. It can’t provide more than 5% of the benefits to shareholders or owners. Employees can’t receive cash or other benefits instead of educational assistance and you must give reasonable notice of the program to employees. If you are the only employee, this makes it easy. Now let’s define employee. In order to take advantage of this benefit, you will need to be drawing a small salary from the company.
  6. Hiring your Children = $12,200 per year*
    The IRS says that we can employ our children starting at the age of 3-18. The duties have to be age commensurate, and the services do have to be performed. What you would need to do is keep a time sheet of the work they did and for how long. This allows you to pay them up to $1,000 per month which is $1,000 less per month that you personally need to draw out of the company. This money can be used for educational expenses, Dance, Band, Sports, etc. Now of this $12,200 over the year, you can also contribute up to $6,000 per year to a ROTH IRA that you establish for your child. Now imagine if you have multiple children how this can be beneficial to you, your family, and a tax deduction to your business.

**If your Corporation or LLC is taxed like an “S” Corp or “C” Corp. you will be required to withhold taxes just like any other employee.**

With these 6 different deductions, I just showed you how to save $98,550.00 per year in your business and as I mentioned above, you have access to 233-305 different corporate write-offs!!

As I always harp on, all of these benefits come with responsibilities, Corporate Compliance. You need to have Minutes & Resolutions that memorialize these transactions.

You might be saying to yourself, my CPA handles that. Are you sure? Have you had your tax returns reviewed by another professional. Our experience is that most CPA’s overlook around $6k – $9k in deductions per year. You see most CPAs are not tax strategists! I make jokes about this all the time. There are two types of CPA’s. 1. CPA stands for Certified Public Accountant which means they are proactive and might offer you ideas to consider where number 2. CPA stands for Cut Paste and Attach. Meaning, it’s just rinse and repeat, and you might hear them say things like “This is what I have done for my clients in the past.” This means they are creatures of history. You need someone who is going to offer guidance and strategy that will enable you to take advantage of all these awesome benefits I have mentioned above. By Living Corporate Life, it allows you to keep more of your hard-earned money and pay a lot less in taxes.

To learn more about how Living Corporate Life may benefit you, call our office at 775-384-8124 or send an email to contact@controllersltd.com. You can also book an Appt with my Sr.
Strategist at www.calendly.com/stephan-controllers

Categories
Advice Management

What is the Qualified Business Income Deduction?

The Qualified Business Income Deduction (QBI), also known as Section 199A, is a tax provision of the Tax Cuts and Jobs Act of 2017. This deduction allows businesses to reduce their taxable income by up to 20% of the business’s qualified business income. QBI applies to certain pass-through entities such as sole proprietorships, partnerships, S corporations, and some trusts and estates.

How does the QBI Deduction Work? In order to qualify for the QBI deduction, first you must have an eligible trade or business. Qualified trades or businesses include those that earn money through income from services performed in fields such as health, law, consulting, athletics, financial services, and more. The deduction can only be used in relation to taxable income generated by these types of services; it cannot be applied to wages earned from a job or other forms of passive income. 

Once you have confirmed that your trade or business qualifies for the QBI deduction, you must then calculate your total qualified business income. To do this, first you need to add up all regular and capital gains net incomes earned by your trade or business throughout the year. Once you have determined your total qualified business income amount, you can subtract 20% of this amount from your taxable income for that year. 

Why would this benefit my business? The QBI deduction offers tangible benefits for small businesses owners who qualify for it. The main advantage is that it helps reduce overall tax liability at the end of each year. A lower tax burden can mean more funds available for reinvestment into your business or other investments such as retirement accounts. Additionally, if you are filing taxes jointly with a spouse who also has qualifying trades or businesses, both parties may be able to take advantage of the full 20% deduction – which could potentially double the savings! 

Schedule a call today with one of my experts http://www.calendly.com/Stephan-controllers or call my office at 775-384-8124. 

Much Success, 

Scott L. Arden, CEO Controllers, Ltd www.controllersltd.com