Tax strategies are NOT just for huge corporations and billionaires. In fact, when it comes to taxes, tax strategies can work for most small businesses and the amount of money you can save can be mind blowing! Small businesses making as little as $40k to $100k that can lower their tax liability by $10,000, $20,000 and more per YEAR through Tax Planning. That’s not just deductions but actual reduction in Federal Income Tax obligation. That’s no small change!
“Most small to medium sized businesses are simply not aware of these legal tax strategies and how to implement them.” -Terry Klein, CPA
Many small businesses prepare their own taxes or use a tax software, while some others may use a tax preparer or CPA. So, all is good, right? Wrong, tax preparation is NOT Tax Planning. Tax preparation is after the fact and there is only so much you can do. Tax Planning is looking at your business and personal situation and finding legal tax strategies that reduce your tax liability going forward. This can add up too many tens of thousands of dollars over just a few years…Enough to put your kid through college or make a nice down payment on a house.
In one case, someone withdrew money from their 401k to start a business and paid taxes and penalties for the withdrawal. Had they Tax Planned they could have used something called the ROBS Plan and not payed any penalties for the withdrawal and saved themselves more than $40,000! In another example, an educational franchise owner that had a CPA doing their tax return for years, saved over $22k in the first two years by taking advantage of tax strategies that they had never heard of. They estimated they had cost themselves more than $60,000 by not doing it sooner. In another case, by utilizing several legal tax strategies, the client can drive a new car paid for by the business, fund $5000 into their IRA and pay $3000 LESS in taxes on the same income of around $100k.
Many small businesses might be taking basic deductions, but they are not taking advantage of more advanced tax strategies. It’s understandable. There are thousands of pages of tax code, statutes, and case law. You need to know what you are doing and make sure you have proper implementation.
There are many factors that go into determining what strategies work for you and your situation. Even the type of corporate entity (LLC, S-Corp, or C-Corp, etc.) can make a big difference. Bottom line, there are literally hundreds of tax strategies. If you own a business and you are making $40k or more, then you should work with an experienced CPA and Tax Consultant– who specializes in Tax.
If you are interested in a FREE Tax Assessment for your business contact Terry@TerryKleinCPA.com.
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