Before the Tax Cuts and Jobs Act of 2017, the top corporate rate for taxes was 35 percent. This rate was one of the world’s highest federal tax rates, which makes it no surprise that GOP lawmakers made lowering overall taxes a priority. While the new law lowers taxes overall, its main focus is on cutting corporate taxes. After the new tax law, there is a single flat rate of 21 percent. Even with corporate tax rates set, America’s biggest companies employ strategies that enable them to pay a lower tax rate. Strategic tax planning isn’t only for large corporations; businesses of any size can navigate the tax code to legally, ethically, and morally pay less taxes.
How America’s Biggest Companies Use Strategic Tax Planning to Pay So Little in Taxes
Corporate Tax Rates
Even when the tax rate was 35 percent, many large corporations relied on tax experts to help them minimize their taxes. These companies employ tax experts and large tax advisory firms whose sole focus is to help retain more of their funds. That is strategic tax planning at work. While you may have previously thought that smaller businesses don’t have access to this kind of strategic tax-reduction plan, you would be wrong. Financial Gravity makes this type of tax planning accessible to businesses of all size. Think of a Strategic Tax Plan as a true “business fundamental” — and probably one you could use.
Classic Tax Planning Strategies
Business owners and entrepreneurs make the wheels of the economy turn, and that requires capital. To leverage the benefits of the new tax law you must be proactive. The biggest companies already know this, and many are surely planning their 2018 tax strategy already. Fortunately, it’s not too late for your business to benefit from the changes in the tax law.
Strategic tax planning, employed at any time during the year, gives you the opportunity to pay less in taxes. Just like those larger corporations, you could be taking advantage of classic Strategic Tax Planning strategies such as:
- Too Much Self-Employment Tax
- Missing Medical Expenses
- Health Savings accounts
- Rent Your House To Yourself
While filing as an S-corporation to save employment tax, using a Medical Expense Reimbursement Plan, and employing the Augusta Rule (renting your house to yourself) are all tried-and-true strategic tax strategies that America’s biggest companies are already using, they are only the tip of the tax-saving iceberg.
Did you know you may be able to deduct your backyard swimming pool or meals you serve at your home? Were you aware that the standard allowance of 54.5 cents per mile for business use of your car could be costing you? If you have been missing out on these opportunities, you aren’t alone. The vast majority of CPAs are not familiar with this kind of tax planning — simply because they aren’t trained to do so. As a result, while large corporations have been using these strategies to their advantage, many smaller businesses have been unaware of their existence.
Your Tax Blueprint® provides you with a clear strategic tax-reduction plan that is customized for you and your business. At Financial Gravity, we use the IRS Tax Code comprehensively to ensure you pay only what you must. Every tax-reduction strategy we employ is sourced and referenced directly to the IRS Tax Code, ensuring you can be confident that the savings are legal and real.
Build Your Tax Strategy
Think of strategic planning like building a house. Financial Gravity can help you design, build, and live in your strategic tax-planning house. Your comprehensive tax design starts with your Tax Blueprint®, a strategic plan created specifically for you. The build phase is our Tax Operating System®, where we do all the work to implement your plan. The last step allows you to actually live in your house and reap the benefits of the previous two steps. Financial Gravity remains with you to improve and maintain the plan as time goes by.
The biggest companies pay so little in taxes because they know how to use the existing tax law to their greatest advantage. Your business can reap these same benefits with strategic tax planning from Financial Gravity. We know that if you don’t have a Tax Blueprint, you really don’t have a tax plan. Financial Gravity is here to help you keep more of the money you make. Contact us today to schedule your free assessment and start your Tax Blueprint process.