You almost certainly know that you can write off the mileage for business use of your car. That advice is still true. A nice bonus is that it is easier than ever to track your business mileage with a variety of smartphone apps available. Mileage, however, isn’t the only automotive write-off that you should be pursuing. If you use your vehicle for anything work-related, there are deductions that you might be missing out on. Lease payments, oil changes, insurance, repairs, and even car washing and polishing could be written off. Don’t fall for tax myths, fuel your savings with automotive write-offs.
Facebook has been able to boast about many accomplishments, from their acquisition of virtual reality technology company Oculus VR, Inc., to the first time they hosted over one billion users in one day. For the company, it’s likely none of these accomplishments will be as well regarded as one related to their finances. In 2016 Facebook anticipated that their effective tax rate would fall from 40 percent to about 27 percent for the year. With the federal corporate tax rate at 35 percent at the time, this rate would have been considerably lower. Facebook serves as just one example of how large corporations use a strategic tax plan to lower their taxes, saving thousands of dollars every year. How did Facebook, along with other major companies, pay a tax rate lower than your business? The answer is strategic tax planning.
How Do They Do It? Facebook Paid a Lower Tax Rate Than Your Business
Effective Tax Rates
It’s natural that as companies begin to make more money they start thinking more carefully about their taxes. It’s one reason why major corporations employ teams of experts that work together to take advantage of every tax-reduction strategy allowed by the tax code.
While Facebook has declined to comment on the exact strategies used to lower its tax rate, the effective tax rate reported by companies to the SEC is often higher than what the company actually pays. This means, of course, that the 27 percent effective tax rate Facebook expected to pay might be higher than what they actually paid. Some tax experts have estimated that when Facebook was reporting a 40 percent tax rate, they were likely playing closer to 13 percent.
Strategic Tax Planning
Facebook is hardly the only major U.S. company that works to find ways to lower its tax rate. A vast number of companies on the S&P 500 had an effective tax rate of 20 percent or lower, and at least a few of the companies paid essentially zero in taxes. In fact, many of the tax strategies that Facebook and other large companies used have become commonplace among corporations of their size. Just because the big companies use them, however, doesn’t mean these strategies aren’t available to smaller companies.
Facebook being able to lower their effective tax rate is impressive, but it’s not impossible for smaller companies to replicate. It all starts with a strategic tax reduction plan — the Tax Blueprint® from Financial Gravity.
Businesses of all sizes should think of a strategic tax plan as standard operating procedure. This is a business fundamental that far too many businesses are lacking. Businesses want to maximize money coming in, of course, as well as minimize money going out. The easiest way to increase profit is to cut unnecessary expenses, such as overpaying taxes. Strategic tax planning helps you keep more of the money you make.
Make The Tax Code Work For You
It might sound dramatic, but a Tax Blueprint® could change your life. Saving thousands of dollars in taxes every year means more capital that you can put back into growing your business. That additional business growth could be what you need to change the trajectory of your business. Every minute you wait to implement your strategic tax plan means more of your hard-earned money is draining away, being overpaid in taxes you don’t legally, ethically, or morally owe. A quick, free assessment is all it takes to start your Tax Blueprint® process.
Companies like Facebook know how to make the tax code work for them rather than against them. We use the IRS Tax Code comprehensively to ensure you pay only what you must. With your Tax Blueprint in hand, you’ll see exactly how the tax code can work for you and your specific business. Each and every tax-reduction strategy we employ in your Tax Blueprint is sourced and referenced directly by the IRS Tax Code. You’ll see firsthand that every strategy is legal, ethical, and moral. With your implementation plans highlighted and summarized, you can be confident that the savings are real.
Maintaining Your Strategic Tax Plan
Beyond your Tax Blueprint, Financial Gravity can help you implement and maintain your strategic tax plan through our Tax Operating System®. Designed to fit any budget and circumstance, our suite of solutions help you save money via strategic tax reduction. Additionally, you can count on access to our advisors, annual tax-planning assistance, ongoing newsletter, and educational materials.
The truth is that you are likely paying too much in taxes, perhaps thousands more than the law requires. Even if you employ a CPA, many do not know how to take advantage of this level of tax planning because they weren’t trained to do so. To leverage the benefits of the tax code, you need to be proactive and you need to have a plan. Through our Tax Blueprint®, Financial Gravity can provide you with a clear, proactive, strategic tax plan that is customized to your business. Contact us today to schedule your free assessment!
Why outsource/offshore in an America first economy?
There is not a day that goes by that you don’t use a car, use an electronic device or wear clothes that are manufactured internationally. In the tax and accounting business putting numbers in boxes is like a white collar manufacturing business. In many professional service industries, portions of what is done for the client, patient and customers fall into this broad definition of manufacturing. These tasks, if possible can be handled offshore. But shouldn’t we be looking to bring these jobs to the US not take them offshore? Read on…
Years ago, when major companies outsourced service there was a backlash due to communication barrier and inability to solve problems, and the purpose of service is to communicate effectively and solve problems. We would not outsource all of our services. We think this is best kept domestic. But email requests, tracking down answers, process following, and many other functions of our business can be offshored, which in essence will improve service.
3. Intelligence and design
When you buy a new iPhone it used to say designed in Cupertino on the box, that is because they are highlighting that the most important part of the phone, the intelligence that goes into the engineering and design was domestic, no one cares that the high volume manufacturing is done in countries most people can’t find on a map, because the phone would be substantially more expensive and isn’t our goal as a country to have the highest standard of living, that comes from the best paying, highest value jobs as the prize? The US is winning that game. We are NOT outsourcing the engineering or design of the Tax Blueprint®, the Tax Operating System®, Bookkeeping with Purpose ®, Tax Annual Review™, the Wealth Blueprint™, Wealth Annual Review™, etc. We are offshoring putting numbers in boxes, see #1. We are outsourcing the manufacturing of the ‘disc’, the music and movie on the disc (the content), which is the highest value, we are keeping domestically.
4. Domestic Employee Costs are rising, and Domestic Employee Performance is dropping.
Blame it on the millennials, blame in on the lowest unemployment in decades, blame it on entitlement, then why in this case does not matter for me the business owner, that must operate in the environment that exists, not the one I wished existed, what matters is how we serve our clients with the highest level of service with our current environment. Until customers except the excuse, that ‘good help is hard to find’ when we make mistakes or are too slow, or we are too expensive, then we must adapt. So, we are outsourcing #1 and keeping #2 & #3.
5. Lower Taxes
This is our primary goal and we will use technology and systems to be the best. We have no intention of offshoring tax planning, but we are working on making our software Artificial Intelligence-based, this will increase speed, increase accuracy and lower costs. This falls under #3.
6. Numbers that help you run your business and life
This is something we are working diligently on. A real-time dashboard that shows you how you are doing in your business. We want our domestic team focused on helping you interpret the numbers so that you can improve business efficiency and lower your taxes (and other costs, a LOT of services coming in this area). We will be offshoring the production parts of the business wherever we can. See #1.
7. It’s like having elves
Although some of the offshoring happens during domestic hours as well.
We get documents and information in during Pacific – Eastern times. But, our offshore employees are likely on the opposite side of the planet. While we are sleeping the numbers are being put in boxes, we wake up and the work is ready to be triple checked. Many services, like Design Pickle, 99 Designs, Upwork and others like them are great services and work gets done while you sleep, as well.
8. The Robots are coming
Technology is growing at a pace never seen in human history. In the last couple of years, you have heard about driverless cars, in the next two years you will see a driverless car and shortly you will be using one. A driverless car is substantially more complex than putting numbers in boxes. Repetitive tasks are being demonetized, tax preparation and bookkeeping fall into this category. We are moving the company in the direction of #2, #3, #5 and #6. Because if we don’t we will be replaced by Artificial Intelligence and Robots.
9. The tax division is being subsidized
Every business unit needs to stand on its own, the Tax division will be profitable this year due to adding technology, improving internal processes and doing #1. Either we double our fees or manage costs through systems, efficiency, and offshoring, we are choosing the later. Our clients expect more from us than other tax firms, and they expect more at the same prices they pay other accounting firms, offshoring allows us to build something that does not exist anywhere else.
10. One check vs triple check
The new process is our partner puts numbers in boxes, they have a CPA or equivalent (they are only CPA’s in this country, the initials are trademarked and given out by a domestic association/business). Then we look, once again, a third check, once again we are outsourcing #1 and keeping #2, #3, #5 and #6.
Here is a list of the biggest data breaches in the 21st century (http://bit.ly/2DG9FIF). Notice something? They are ALL domestic. The technology we are using is much better than a vast majority of accountants.
12. Security part 2
The nesting doll approach – The biggest data breaches were data extracted from a database or the biggest ‘doll’. But data and documents stored inside a software program, that is stored inside another software program, that is in a world-class cloud service creates a big barrier to nefarious entry. Easier to hack the above mega corporations than us.
13. Security part 3
All your data is in the cloud, every major company has moved to cloud-based computing, the average tax prep, and accounting office is tragically behind technologically, most store all your data on a PC or a client/server environment which is connected directly to the internet, our approach is safer than what most our clients are doing in many other parts of their lives.
14. Security part 4
Your data does not ‘leave’ the country for the numbers to be put into boxes, there are plenty of software options to allow access to software across borders without the data leaving the borders. Also, our partner has no USB ports, no printers and all employees have to put phones in lockers before putting on their headset and logging in to their workstation, data is safer than virtually any business you are working with domestically.
15. Security part 5 – Your wallet
The most amount of risk in your life is in your wallet. The magnet strip on the back of your credit card has more information that a thief can use to impact your life in a negative way. Most people hand their card out several times a day without a thought but are distressed at much safer scenarios.
16. Amazon Effect
We all compete with Amazon now. Not because we are all in the same business, but because they have raised the bar on speed, efficiency, and cost. They have set a standard that things can be cheaper, better and faster at the same time. Amazon is entering every market they think they can improve speed, cost, and quality. If you don’t improve those three things they will get into your business and do it for you.
17. Planned Obsolescence
Intel is famous for starting on the next two generations of chip design as they are releasing the designs they currently have. The 386 and 486 chips were being worked on as the 286 was being released. They competed with their own product because if they didn’t other chip makers like AMD or TI would. We are working at putting the current old business model out of business before a competitor does it to us.
18. Economic/Political shift
In the last couple of years, we have shifted from stagnant employment to a statistical full employment level. Also tightening immigration controls are reducing the labor force further. I’ll let CNBC and Fox News fight over the impact, and whether it is good or bad for the future, but business people must adapt to the real world, not the hoped-for or should be world. We must make business decisions on the way things are not the way things ought to be. That is what we are doing, you should too.
19. America first!?
We are putting America first by focusing our efforts. #5 & #6 will put millions of dollars back into the hands of those that most deserve it, the American small business owner and entrepreneur.
As you can see outsourcing/offshoring is a critical key to our ability to serve you better. As you can also see it was not a haphazard decision, it was thoughtful and it every stakeholder and YOU in mind.
Most small businesses in the U.S. are ”pass-through entities” (partnerships, limited liability companies or S Corporations). Income from these business structures is taxed at individual tax rates, which are changing with the new tax bracket structure. Also, the new tax law is adding a new deduction on Qualified Business Income (QBI). Read more
Do you know how the tax system really works? They say that the way to beat a system is to understand it from the inside out. With that in mind, here’s a quick primer on how your taxes are calculated. Read more
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?
Many people have the dream of becoming wealthy but have no idea how to get started or who to turn to for help. It’s no wonder when there is so much conflicting information out there. On this episode of New to the Street, host Jane King and Financial Gravity CEO, John Pollock, discuss how Financial Gravity is helping small business owners grow their wealth with the help of the tax code and strategic tax planning.
Unless you’ve won the lottery, balancing what you earn vs. what you spend can be a daunting task. But just because something is daunting doesn’t mean it’s impossible. Instead of being paralyzed by phrases like wealth management or tax preparation, we want to give small business owners more time to devote to their craft and themselves. Simply put, Financial Gravity exists so that small business owners can be better versions of themselves. By implementing tools like our Tax Blueprint®, a wealth management plan designed entirely around the tax code, we save small business owners, on average, $20,000 per year on their taxes.
Paying less tax will not increase your chance of being audited. Sure, tax evasion is illegal but tax avoidance is absolutely not. All of the 130+ tax saving strategies we implement are actual laws written into the tax code, which means using them does not increase your risk of being audited. In fact, it decreases the chance. Just like stopping at a red light won’t increase your chances of getting a ticket, lowering your tax liability won’t increase your chances of being audited.
Lower Your Taxes, Grow Your Wealth.
Financial Gravity wants everyone to benefit from integrated financial advice, something that is currently only accessible to the uber-wealthy. We are currently working on digitizing the tax code in order to combine the best of both professions; an accountant (who loves to put numbers into boxes) and a financial services person (who is mostly product focused.) Aside from Financial Gravity, there is no one-stop-shop for all your financial matters. Hence why your head feels like it’s exploding when tax season looms or you have to make a big purchase for the company. Financial Gravity is disrupting the financial services industry as you know it by letting the tax code determine your wealth plan. The result? Legal, moral, and ethical results (and less tax, of course.)
Don’t want to read all 70,000 pages of the tax code to reduce your tax liability? Download this free eBook: http://www.johnpollockinc.com/taxbook
Financial Gravity isn’t just your average run of the mill financial services company whose sole purpose is to create a transaction or sell you a strategy or product. We exist so that we can help small business owners like you lower their personal income taxes, increase their profits, and attain greater wealth. So, how does Financial Gravity help small business owners recapture the hope of financial freedom AND retain more of their hard-earned capital? Strategic Tax Planning.
Strategic Tax Planning is something you most likely aren’t receiving from your CPA. There are a few reasons why this is true.
1/ Accountants only understand a small portion of the tax code. Instead of being future focused, they are more interested in historical record keeping. While some may provide reactive tax advice, they are unaware of how to proactively and strategically make the tax code work in your favor.
2/ Accountants are likely to have Type-A personalities. While that’s great for plugging numbers into boxes, it means they probably aren’t flexible or open to change. A strategic tax planner must take into account the small business owner’s lifestyle, short and long-term financial goals, and spending habits.
3/ Accountants err on the side of caution. Though there are over 70,000 pages of green lights in the tax code, accountants tend to focus on the five pages of red lights to avoid being flagged by the IRS. It’s important to understand, however, that a green light is not the same as a “loophole.” It’s not a “red flag” to go through the intersection and it does not increase your risk of getting a ticket because you “used” this particular law to get through the intersection. Remember, the tax code was meant to be used, not feared.
What does Strategic Tax Planning at Financial Gravity look like? Designed and implemented by our insanely smart tax and wealth professionals, the following two products seek to give small business owners proactive fiduciary-type advice that serves their best interest:
Without a Tax Blueprint®, you don’t have a Tax Plan. After a free 15-30 minute no obligation assessment, Financial Gravity will determine if we can substantially reduce your tax burden. If so, we take 200+ proactive tax strategies and create a personalized Tax Blueprint® just for you. All of our strategies come directly from the IRS Tax Code and are legal, ethical, and moral. The best part is that we guarantee to deliver a tax savings of at least 2x the cost of the Tax Blueprint®, or it’s free. That means you have nothing to lose except overpaying taxes. Your Tax Blueprint® has the potential to return tens or even hundreds-of-thousands of dollars annually to your bottom line.
Tax Operating System
Designed to fit any budget and circumstance, the Tax Operating System® works in coordination with the Tax Blueprint by providing a suite of solutions to save you money. Regardless of which solution you select, you can count on access to our advisors, annual tax planning assistance, ongoing newsletter, and educational materials. Some of the solutions you can choose from including Advisory, Tax Preparation, and Bookkeeping with Purpose®.
Financial Gravity has a national partner network of financial advisors and accounting professionals that help small business owners, like you, attain business and personal goals, reduce their tax burden, and keep more of their hard-earned capital through Strategic Tax Planning. If you are a small business owner who is tired of paying too much in taxes, get in touch today.
Though the initials behind a financial advisor’s name might initially make them appear more professional, intelligent or experienced, that isn’t always the case. You’ll have to dig a bit deeper into the advisor’s business model before you give him or her or stamp of approval (and reigns to your money wagon.) Though some senior designations do imply years of education and experience behind them, most are just used as marketing tools. According to this article by AARP, most states have laws restricting “self-serving or misleading senior designations” but that doesn’t really matter considering most consumers don’t understand the slight differences anyhow.
Let’s take the CFP for example. CFP stands for Certified Financial Planner, but what does that mean exactly? If someone has a CFP behind their name you can bet they have attended a variety of courses and pre-requisites, passed a rigorous exam, had at least three years of financial planning experience, and committed to completing at least 30 hours of continuing education every two years. You can also bet that they have a pretty broad knowledge covering a variety of *exciting* topics such as personal financial planning, portfolio management, budgeting, estate planning and tax. But all that knowledge, experience, and confidence gained means nothing if your CFP works for a company that only sells specific financial products or strategies.
You may have heard us say that we are product-agnostic. That means that we let the tax code determine which products or strategies work best for you, not which commissions are going to make us richer. If you don’t like a product or strategy we recommend, no problem, we will find you another one.
When you are shopping for a financial advisor, make sure you find out the company’s business model before you sign your name on the dotted line. It’s far more important than the initials behind the advisor’s name. If an advisor is merely peddling a high commission product or using their designation as a marketing gimmick, toss their business card in the trash and keep searching for an advisor who has YOUR best interest in mind. Like us.
It’s that time of year again, a time to reflect on all the things you are most grateful for. Similar to raising a child, starting and maintaining a successful business can’t be done unless you enlist the help of an entire village. By implementing some of Financial Gravity’s tax-centric financial advice, small and medium-sized business owners (like you) will receive two things you can be grateful for, for years to come, 1/ time to think about big-picture issues, and 2/ money to invest back into your business.
Below are three clients who are thankful for Financial Gravity’s tax-centric financial advice:
1/ Jeanne Johnston and Bobbie Parker, co-owners of Johnston, Parker & Associates (JPA), are thankful for their retirement plans.
Thanks to Financial Gravity, both Jeanne Johnston and Bobbie Parker, co-owners of JPA associates, now have retirement plans that make sense. In addition to retirement plans, JPA also decided to implement Financial Gravity’s Tax Operating System®, bookkeeping, and payroll services. Outsourcing those functions cleared up their schedules, allowing them more time to “develop their people.”
2/ Dr. Ron Perkins, owner of Perkins Orthodontics, is thankful for real investment diversity without commissions.
Though Dr. Perkins first came to us for investments, he quickly jumped at the chance to save money on taxes with our various tax planning services. Unlike other advisors who are product, commission, or transaction driven, all of our financial advice is tax-centric, meaning we let the tax code call the shots.
3/ Kim Holmes, owner of Holmes Service Company, LLC, is thankful for lower taxes.
Kim Holmes was experiencing excellent success and increased revenue as a small business owner. Unfortunately, that also meant she was experiencing an increased tax liability. By implementing our tax and financial planning services, we prevented Holmes from paying $12,000 too much in taxes.
Receiving good financial advice can be hard to come by when you consider all that is currently wrong with the financial system. Your CPA isn’t trained to help you save money on your taxes, and your financial advisor is more concerned with selling you a product or making a commission than giving you advice that positions your company for success. At Financial Gravity, we are thankful for the Tax Code. It’s over 70,000 pages of “green lights,” or legal, moral, and ethical ways to lower your personal income taxes. If understood and implemented correctly, the Tax Code will save you thousands of dollars in taxes a year.
Having doubts if Financial Gravity can help you? Read these case studies, featuring real customer experiences.
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