How our Strategic Assessment Meeting Ensures Your Tax Savings Success

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How our Strategic Assessment Meeting Ensures Your Tax Savings Success

Just like anyone else, you want to save money on your taxes, whether it’s for your small business or personally. But how can you ensure your tax savings success? One way is to set up a plan for what you do with your taxes. But what should your plan be? And how do you set it up?

Pull up a chair: Financial Gravity would like to invite you to a strategic assessment meeting. Read more

How does the IRS view the Stormy Daniels hush money?

What does the IRS think of Stomy Daniesl hush money? How should Trump's attorney classify the payment?

Some people spend their whole lives grasping for the white-hot spotlight of fame. Others avoid it like the plague. Still others work to stand out in their field, only to make headlines for entirely different reasons. Porn “star” Stormy Daniels clearly falls into that third group. The 38-year-old performer excels in her craft, with spots in the Night Moves, Adult Video News, and X-Rated Critics Organization Halls of Fame. But despite all that hard work, she’ll go down in history for taking $130,000 in hush money to cover up an affair with the President.

(Of course, “Stormy” isn’t the name her parents gave her. Her real name is Stephanie Clifford, which makes her sound more like a debutante than a girl who started stripping at age 17 – “introducing Stephanie Clifford, of the Main Line Cliffords . . . “)

Politicians and pundits are feverishly debating exactly how and why that money wound up in Stormy’s account. Did the President or one of his associates secretly foot the bill? Is it an illegal campaign contribution or campaign finance violation? Will it find its way into Special Counsel Robert Mueller’s investigation? But really, who cares about that stuff? We want to know what the IRS thinks!

What does the IRS think?

The Tax Code defines gross income as “all income from whatever source derived,” and there’s no section excluding payoffs from presidential candidates. So it’s pretty clear that Stormy’s windfall is taxable. (Minus legal fees, of course. “Hush Money for Porn Stars” isn’t a required law school class – for most schools, it’s a third-year elective. Still, only the best lawyers have that particular expertise under their belts.)
The real question is: how is that windfall taxed? Is it ordinary income? Or could it be capital gains? And what difference would that make?

Most tax professionals would probably include the income in Stormy’s business of being a porn star. If that’s the case, it’s taxed as ordinary income at marginal rates of up to 37%. It’s also subject to self-employment tax, unless Stormy has organized her business as an S corporation and paid herself a reasonable salary to cap that particular liability.

Treat the Property as a Capital Asset!

But there may be another way to skin this particular cat. The settlement agreement itself provides that Stormy is actually selling her rights to certain information and “property.” So why not treat the “property” as a capital asset? In that case, considering the story grows out of an affair that took place in 2006-07, it would be treated as long-term gain, and tax would be capped at 20%. The gain would also be subject to a 3.8% net investment income tax if her adjusted gross income tops $200,000.

Now, what about deducting the payment? If the President’s personal lawyer is telling the truth when he suggests that he paid out of his own pocket, then he can plausibly deduct it as an expense of his law practice. The attorney also claims he originally pulled the cash out of his personal home-equity line of credit, which means he can deduct the interest he pays, too.

Want a free book on the new tax law?

Here at Financial Gravity, we confess we have no experience whatsoever with tax planning for hush money. But we’ve helped business owners just like you save thousands on their taxes. We also just created the first book we are aware of on the implications of the new tax law. The New Tax Law book doesn’t just walk through you the new rules. We explain how to take advantage of the most powerful strategy for paying less tax. And that strategy is planning, proactive planning (not the reactive planning most people do now, which doesn’t work) and most important, strategic tax planning!

How do you get your FREE copy of The New Tax Law? Schedule a FREE assessment call  today with a Financial Gravity Tax Team Member and we will deliver the book to you for FREE. We will even cover shipping, or hand deliver it to you when possible. Schedule your FREE assessment today, get a free book and stop wasting money on taxes you don’t have to pay!

5 Ways to Save Big on Taxes for Your Small Business

5 ways to save big on taxes for your small business

The IRS tax code actually provides many ways for small business owners to save big on their taxes–ways that many of which business owners may not be aware. Here are just five:

Lease Your Home to Your Business for the Maximum Time the IRS Allows

Your home has to be rented for less than 15 days to get the deduction. For example, if you have a board meeting every month, you could host all 12 in your home and claim the deduction. You must also rent your home at a fair rate. The IRS does not allow you to just make up an arbitrary amount to charge your company when you rent your home to your business. It must be commensurate with the average price you would pay to rent another location. You must also issue yourself a 1099 form from your company with the total rent amount paid, which you will then claim on your personal taxes. This will be offset once you list your less-than-15-days deduction. Don’t forget: you must record the minutes of any meetings you have in your home–this will provide further proof to the IRS of the validity of the business conducted there if it is called into question.

Hire Your Children to Work in Your Business as Spelled Out in the IRS Code

A business owner can hire and pay their own child under eighteen tax-free. As long as your child is doing legitimate work and getting paid a reasonable rate, you can pay them up to $6,300 per year before they have to pay a dime in income tax. However, you may still have to pay payroll taxes such as FICA and FUTA, which go towards unemployment and social security benefits. On the other hand, you don’t have to pay payroll taxes for employing your kids if your business is a sole-proprietorship, a single-member LLC taxed as a disregarded entity, or an LLC taxed as a partnership and owned solely by you and your spouse. But if your business is a corporation, you must pay payroll taxes on income to your children. Even in this last case, there may be workarounds, but these are best discussed with a professional tax advisor.

Change Your Health Plan to a Qualified HSA Plan to Save the Most Taxes Possible

HSAs escape taxation by allowing holders to save tax-free money for medical expenses not covered by insurance. Contributions are made into such accounts by employees and/or employers, and unused funds roll over from year to year. The contributions are invested, earning returns over time, thanks to the power of compound interest. Funds can be removed tax-free to pay for qualified medical expenses, including vision and dental. HSA deposits (from an employer or individual) are federal income tax-free and not subject to employment taxes. Secondly, HSA growth from income and investment appreciation is not subject to federal income taxes. Finally, if the HSA funds are withdrawn for qualified medical expenses by the account owner, spouse and/or dependents, such withdrawals are not subject to federal income tax. There is no other place in the tax code which allows ordinary income to escape federal taxation forever. But of course, you have to know the HSA rules and follow them carefully. This is another case where it would be good to consult a tax advisor to help you create the best plan for your business and unique situation.

Maximize Retirement Savings to the Fullest (If You’re Over 50 Chances Are You Are Not)

There are many legal ways to maximize your retirement savings and lower the taxes you pay on them. For example, you could start a diversified retirement plan–the funds will help cut down your tax bill now and grow tax-deferred until you make withdrawals in retirement. In most cases, the cost of opening and administering a plan is pretty small. The four main options for small business owners are a SEP-IRA, a SIMPLE IRA, a Solo 401(k) and a SIMPLE 401(k). For all but SEP-IRAs, a business can be a sole proprietorship, a partnership, a limited liability company or a corporation.

Start a Private Foundation

Establishing a private foundation is a great way to use family funds and property tax-free, all while engaging in charity. However, under the IRS Code, a not-for-profit is not exempt per se from federal income tax. In fact, a private foundation is fully taxable unless and until it applies to the IRS for recognition of its status as a tax-exempt organization; even then, it may lose its tax-favored status if it fails to file annual tax returns with the IRS.

It pays to do your homework–consulting with a tax or financial planner can greatly help with setting up tax savings strategies properly. Find out more about how you can bring on a financial advisor who will truly assist you in not only saving on your taxes but give you a solid plan for the future. Speak today with a Financial Gravity team member, Let’s Talk!

What Is the Tax Blueprint and Why Should I Care?

What Is the Tax Blueprint and Why Should I Care?

It’s safe to assume that most business owners and individuals are overpaying their taxes without even realizing it. Without a clear tax plan to guide you through the year, you’re probably one of them. That’s why Financial Gravity created its unique tool known as the Tax Blueprint in order to help its clients navigate the complex maze of the tax code. Read more

Financial Gravity’s 3-step Process To Help You Save Big And Increase Your Business Revenue

Financial Gravity’s 3-step Process To Help You Save Big And Increase Your Business Revenue

You are almost certainly losing more money than you should to taxes. In fact, you could say that like as not, your business finances are needing a trip to the emergency room. Chances are, you’re losing more revenue than you should. How can you stop overpaying taxes and increase your business revenue? Fortunately, the doctor is in, and Financial Gravity has the 3-step solution to your financial ills.

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5 Things Your Accountant Should Be Telling You About The New Tax Law

5 Things Your Accountant Should Be Telling You About The New Tax Law

The Tax Cuts and Jobs Act of 2017 represents a major overhaul of the tax code. As a business owner, your accountant should be advising you about the upcoming changes to the tax code and how to best use it in order to keep more of your income. Here are five important changes about which your accountant should be informing you that just came out in the new tax law:

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Financial Gravity Tax Announces New Automated Recruiting and Onboarding Systems for New Independent Agent Team; National Sales Force Expanding

Allen, TX – (NASDAQ Wire – October 24, 2017) Financial Gravity Tax, Inc., a subsidiary of Financial Gravity Companies, Inc. (OTCQB: FGCO), announced the launch of a new automated onboarding and contracting system built to grow the national sales force. Chief Technology Officer and Chief Marketing Officer, Jim Reggio, and his team had previously automated the recruiting process in September allowing 24/7 access to its Career Opportunity information page.

Interested salespeople have instant access to information about career opportunities with Financial Gravity and the Tax Blueprint system. The new onboarding system will now allow interested sales representatives immediate access to complete contracting, launch initial training, access materials and supplies, and begin the Quick-Start training process.

Financial Gravity President and Chief Sales Officer, Dan Sundby, noted that the automated system will be invaluable in his efforts to expand the size of Financial Gravity’s national sales force. “The progress Jim Reggio and our technology team has made in automating our recruiting and onboarding processes has perfectly positioned us for growth in the year ahead. This allows us to scale our recruiting efforts so that we have the volume field-force needed to market our proactive tax planning programs to small business owners nationwide,” stated Mr. Sundby.

“I have never seen anything like what our team has built at any of the many firms I have worked with in the past. I am not only excited about what this does to speed up our recruiting efforts, but I am considering what this system will do for other areas of our business. This technology has the ability to automate and solve problems in several areas. This will help us accommodate for the inevitable growth the new sales systems will help us achieve,” stated Financial Gravity’s Chief Executive Officer, John Pollock.

About Financial Gravity Companies, Inc.

Financial Gravity Companies, Inc., a Fractional Family Office ®, provides integrated tax, business, and financial solutions. Clients include small business owners and high net-worth individuals. Services are focused on helping its clients’ personal and professional goals, while building wealth, most often with potential tax savings, lowering costs, and improving efficiency. For details, visit


Financial Gravity Forward-Looking Statements

This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from the current expectations.  No forward-looking statement can be guaranteed. Forward-looking statements in the press release should be evaluated together with the many uncertainties that affect Financial Gravity’s business and Financial Gravity undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.



Jennifer Sanford


New Year, New Organization — Learn How to Make It Work

Red arrow passing over obstacleWelcome to the new year! If you’ve been following our blog series, you can look back at January with relief because you’re already ahead of the game.

  1. You set goals for three years.
  2. You defined one-year goals.
  3. You clarified your Quarterly Rocks.

You’re ready to go, right? Well, wait just a minute.

Before you jump in too quickly, it’s important to take one final step — and this one may sound a little strange. You have to identify issues that might put the brakes on your success.

What “issues” are we talking about?

These are the obstacles, concerns, and problems you face in achieving your vision. Up to now, you have been focused on the “perfect world” scenario and you’ve been avoiding addressing complaints, barriers, and negativity for a reason: You had to be able to see the positive path to your vision.

Now it’s time to take a quick but honest look at what could prevent that vision from becoming reality. The intent of this analysis isn’t to destroy the vision, but to ensure you’re prepared to handle challenges as they come up.

The good news: Typically, only a handful of serious issues affect any business. The better news: The same issues come up over and over again. What has changed is that now you are able to solve them.

In our Traction blog series, we’re exploring how to create a clear vision for your business. Inspired and guided by the concepts in the book Traction: Get a Grip on Your Business, by Gino Wickman, these blogs will walk you through essential steps that will enable you to get traction, grow, and thrive.

The key is creating an environment that smokes out those issues and allows people to bring them up so they can be addressed. This step requires openness and honesty. Your team has come a long way to get to this point, and if dysfunctions remain, this step will expose them pretty quickly.

Making your issues list

With open and honest communication, the issues list becomes a very useful tool.

  1. Start with the issues around your vision, and focus on only those that can be tackled in the first 90 days. They may be:
    1. Technological needs
    2. Office or staff needs
    3. Product ideas
  2. Next, look at the issues within your leadership team, especially those that crop up often (think weekly) and cause distractions. They may be:
    1. Client difficulties
    2. Employee problems
    3. Process failures
  3. Last, examine the issues within your departments; these are on a very localized level and must be tackled in weekly department meetings.

Bring issues into the light

Bringing up issues may not be a comfortable conversation for everyone on your team. They may need to be encouraged, but once the conversation gets started and people feel safe about bringing up issues, the floodgates generally open up.

Your goal is to create an environment in which issues can be brought to the table and then solved through the efforts of your team. This is an ongoing effort, so get good at it early in the game and it will be easier on everyone in the long run.

Knowing the issues you’re going to face gives you power because they can now be solved.

Get help: Contact Financial Gravity at (469) 342-9100, by email, or through our contact page.

Make Your Vision a Reality for All Employees

Businessman Standing on Steps Outside Talking Through a MegaphoneIn 2014, Fortune reported that nine out of 10 startups fail, which is a cold and disheartening statistic when you think about it. The team at Gallup reported that about half of new U.S. companies fail in their first five years. So, what can an organization — and its leadership team — do to buck the statistics and survive?

Let’s imagine two organizations. The first is a place where employees come to work because they have to. They coast blindly through the day, disengaged and believing that what they do hardly matters. Soon enough, they find other jobs that are more meaningful to them.

The second organization is one where employees get an early start to the day because great things are happening. They smile often and talk with one another in the hallways. They go home each night and return the next day energized and ready to connect and share ideas.

Which company is going to be around in five years?

The “seven times rule”
People need to hear something about seven times before it fully resonates. The rule of seven times applies to your vision as well. Employees will need to hear and engage with the vision many times before they embrace it.

Look past the five-year mark

If you’ve been following our blog series over the past few months, you have started working with your leadership team to develop a vision for your company. Once you have your vision, it’s important to share it with every single person in the company.

A Harris Interactive/FranklinCovey poll of more than 23,000 employees shed a bright light on a simple fact:

37% of employees don’t understand the priorities of the organizations for which they work.

Further, only one in five was enthusiastic about the organization’s goals. A similar one in five failed to see a clear connection between everyday tasks and the organization’s goals.

What does that mean for your organization?

  • It means that your team is disengaged (read: checked out).
  • It means they are not working toward the success you’ve outlined.
  • It means they are doing a lot of busy work that will have no impact in the end.
In our Traction blog series, we’re exploring how to create a clear vision for your business. Inspired and guided by the concepts in the book Traction: Get a Grip on Your Business, by Gino Wickman, these blogs will walk you through essential steps that will enable you to get traction, grow, and thrive.

Steps to share the vision

Start the new year off right: Share your vision with your employees and set the stage for success.

The following are steps to communicate the company vision:

  1. Hold a kickoff meeting and unveil the vision; this is your opportunity to showcase it to everyone who wasn’t involved in the process of creating it.
    1. Be prepared for some resistance.
    2. Don’t be afraid to be challenged.
    3. Be open to questions, and answer them clearly and honestly.
    4. Be firm and enthusiastic as you respond to alternative viewpoints.
  2. Every 90 days, have a short (no more than 45 minute) state-of-the-company presentation and share it with all employees.
    1. Share the progress.
    2. Review the vision.
    3. Celebrate successes — even small ones.
    4. Communicate newly established Quarterly Rocks.

Before each quarterly meeting, each department head should review the progress with his or her team and answer questions to clarify the vision for everyone.

Get creative about culture

After the kickoff meeting, you can get really creative about making the vision part of the organization’s culture. Here are some ideas from other companies; use them as a springboard to begin thinking about how you can bring inspiration to your vision communication.

  • Re/Max taught its vision to every employee one-on-one and gave each person a quiz about the company’s Three Uniques.
  • The Professional Group conducted spot checks; whenever an employee could name all the Core Values, he or she received cash on the spot.

These ideas may not resonate with your team, but you know your employees and what works for them, so feel free to get creative!

It can take time, but when everyone — not just your leadership team — is on board, your organization is poised to make your vision a reality.

Get help: Contact Financial Gravity at (469) 342-9100, by email, or through our contact page.

8 Steps, 3 Rules: Set Up Your Quarterly Rocks

Stone stacksYour quarterly “Rocks” are the clear priorities that will govern where each employee puts his or her primary effort every day. Because these are the true action items for your team and all of your employees, it’s critical to follow set processes to establish your Rocks.

In the book Traction: Get a Grip on Your Business, author Gino Wickman lists eight steps for establishing Rocks:

  1. Let your team list everything they want to accomplish in the next 90 days.
  2. Narrow down the list to a few true priorities for the entire company.
  3. Assign due dates.
  4. Assign ownership to each company Rock.
  5. Let team leaders set their own Rocks.
  6. Create a Rock sheet to refer to in weekly progress reviews.
  7. Share the Rocks with the entire organization.
  8. Have each department and each employee establish an individual set of Rocks to support quarterly company Rocks.
In our Traction blog series, we’re exploring how to create a clear vision for your business. Inspired and guided by the concepts in the book Traction: Get a Grip on Your Business, by Gino Wickman, these blogs will walk you through essential steps that will enable you to get traction, grow, and thrive.

In working through this process, your leadership team will naturally start with many priorities and it will be easy to get distracted. To help maintain cohesive focus throughout the quarter, set a few ground rules to guide your engagement.

1. Involve the entire team.
The team meets for a full day every 90 days. At this meeting, you’ll review your vision and the 1-year plan. Ideally, you’ll have made progress that you can briefly reflect upon and verify against the plan, but the goal of this meeting is to identify the priorities for the next 90 days.

Remind the team that less is more when it comes to Rocks; you want a list that is manageable and achievable. On average, most teams start with long lists, covering as many as 20 or more things that they want to accomplish during a 90-day sprint. Discuss and debate which are the most important. Make as many passes as needed to narrow down the list, aiming for between three and seven true priorities. After a little practice, the right Rocks will be apparent to everyone on the team.

2. Establish accountability.
After reviewing the vision and plan and creating the list of Rocks, you’ll assign the Rocks. At the end of the 90 days, all the Rocks are due; you may discover that you can assign intermediate dates along that 90-day stretch.

Remember that a Rock is specific, measurable, and attainable. Some examples of Rocks are:

  • Close 10 new client accounts.
  • Create a visual mockup of the new app.
  • Contact 50 existing clients about new orders.

Each Rock must be so clear that at the end of the 90 days there is no ambiguity as to whether it was achieved. This is how your team creates accountability.

3. Commit to the focus.
At the end of your meeting, the agreement must be clear and upfront that the priorities are set — and no new priorities can be added during the next 90 days.

If the CEO decides she hates the website and wants it updated, wait until the next quarter when it will get discussed and either prioritized or tossed. Send everyone forward with the knowledge that you’ll circle back at the end of the 90 days and examine the completed Rocks.

When your team members know their Rocks and manage their Rocks without fear of disruptions or changes, it creates clarity and the space to be creative with the broader end goals in mind.

Get help: Contact Financial Gravity at (469) 342-9100, by email, or through our contact page.