You’ve likely heard of a little thing called Black Friday. The day after Thanksgiving is also known as the biggest shopping day in the United States. Stores offer major markdowns, mind-blowing doorbusters, and rock-bottom prices. If you’re a die-hard bargain hunter who goes to great lengths to score the best deals and deepest discounts, Black Friday is where you shine. People stand in line hours before the stores are opened, to grab the bargains of the year. It’s clear that Americans like to save money where we can. So, what if there were a Black Friday sale on taxes? There is, and it’s called strategic tax planning.
Taxes and patriotism have been wrapped up together pretty much since the Boston Tea Party. The consensus has long been that while paying taxes is a patriotic act, overpaying on your taxes is not. The United States has one of the highest rates of tax compliance in the developed world, and while a majority of taxpayers in the United States see taxpaying as their civic duty, there is no reason to overpay what is legally, ethically, or morally owed. A basic business fundamental is to maximize money coming in and minimize money going out. The easiest way to increase profit is to ensure that you aren’t spending money unnecessarily. A strategic tax plan from Financial Gravity is the business fundamental you are missing to make sure you aren’t paying more in taxes than what is required.
There is a common misperception that strategic tax planning is reserved for the ultra-wealthy, a luxury that only they could afford—but nothing could be further from the truth. In fact, that whole idea that strategic tax planning is only for big companies is a tax myth. While it is true that big companies can afford a slew of lawyers all sitting around a table, brainstorming ways to pay less taxes, small business owners can get the same benefits.
The good news is that the new tax law, the Tax Cuts and Jobs Act, includes lower tax brackets and a near doubling of the standard deduction. However, there is also much uncertainty looming regarding the new tax law, as several provisions within the Tax Cuts and Jobs Act (TCJA) remain unclear. Changes to income, confusion regarding itemized deductions for state and local taxes, and other unclear provisions have already caused some taxpayers complications. The new tax law makes strategic tax planning for 2018 more important than ever.
Business taxes don’t happen just once a year, and neither should strategic tax planning. Everyone likes to save money, and you could start saving right away with a Tax Blueprint® from Financial Gravity. Think of your taxes like an illness. You wouldn’t wait to go to the doctor if you were sick, so why are you waiting to start your strategic tax reduction planning?
Now is the Time for Strategic Tax Reduction Planning
Your cure starts with a diagnosis from a Financial Gravity team member to discover what’s causing your tax pain. From there we can create your strategic tax plan, in effect filling your prescription and making a plan to relieve your pain. Once you have your diagnosis, your Tax Blueprint®, we can implement changes that will save you money. The tax code is long, complicated, and overall, not a fun thing to read. Strategic tax planning could be the step you need to take in order to save money in taxes every year.
Proactive Tax Planning
Are you confident that you are taking advantage of every tax break available? The majority of CPAs do not do any proactive training, in fact, most work in reverse. They work historically, completing tax returns that only reflect where you have been, instead of where you want to be going. If you are only looking behind you, then you aren’t planning for the future.
There is no one-size-fits-all approach when it comes to strategic tax planning, which is why the Tax Blueprint® from Financial Gravity is customized specifically to you and your business. The easiest way to increase the profit for your business is to minimize the money going out, ensuring that you aren’t spending any money unnecessarily. While some taxes are necessary, it’s likely that your business is paying more than what is legally, ethically, or morally required, simply because most tax advisors aren’t trained to think proactively. The good news is that you don’t need to wait to start realizing these savings. Every minute you wait means more of hard earned money spent overpaying taxes.
Start Saving Now
For most small business owners, taxes are your single biggest expense. That expense is likely to only grow bigger if you don’t have a sound strategic tax plan in place. If your current accountant, bookkeeper, or tax preparer has not given you at least one idea that saves you a minimum of $1000 in taxes every year, then now is the time for strategic tax reduction planning from Financial Gravity.
We offer strategies that can be implemented right away, from writing off your swimming pool, renting your house to yourself, or hiring your own children. These are surprisingly simple strategies that small business owners can legally use to reduce their taxes. Some strategies will serve you better when you reach a certain threshold, but that’s exactly why your Tax Blueprint® is created specifically for your business. All business owners need a solid strategic tax plan, and we can start working with business owners in their first year of business.
Following our strategies will save you money without increasing your risk for audit. When you receive your Tax Blueprint® you will see every tax reduction strategy we employ sourced and referenced directly to the IRS Tax Code. Along with the tax savings, you will also see implementation plans that are highlighted and summarized so you can be confident that the savings are real and the strategies are legal, ethical, and moral.
Business owners are told a lot of myths surrounding taxes, myths that could be holding them back from bigger business growth. We separate the wheat from the chaff, breaking down the myths that could be sabotaging your business. A Strategic Tax Plan is a true “business fundamental,” and odds are you don’t have one.
Note Changes in Tax Law
The tax code exists to help you pay less in taxes, but you have to know how to utilize it. That’s where strategic tax reduction planning from Financial Gravity comes in. We comprehensively use the IRS Tax Code to ensure you only pay what you must. When you sign up for our Tax Blueprint® you receive a strategic tax reduction plan that is customized specifically to you and your business. The sources of tax savings, directly from the IRS Code, are summarized in your plan so you can be confident that the savings are real.
Don’t procrastinate your strategic tax reduction planning. Start planning now to see the maximum tax benefits. Financial Gravity knows that to leverage the benefits of the tax code you have to be proactive. Contact us today to get your own strategic tax plan and see why it is truly a business fundamental!
Keeping a shoebox full of wadded-up receipts and tax documents and then rushing to your tax preparer at the last moment isn’t going to give you the tax results that you want. No matter how much you dread them, taxes aren’t something you can think about just once a year. Failure to plan is planning to fail. That phrase applies to many aspects of your life, including your taxes. Instead of crossing your fingers and hoping for the best, you can avoid tax-time failure with the right planning. Decide now what you want and how to plan for 2018 taxes.
You’ve got a small business, and it’s finally starting to turn a profit. Your capital gains are rising, and things are looking good. But you’re not out the woods quite yet. There are still multiple ways you can lose money and reduce your capital gains.
Overall, to keep more of what you make, you need to minimize your tax liability. As a small-business owner without a huge accounting department or in-house financial advisors, you’re going to need all the help you can get.
For example, one big area where you might find yourself losing out is through capital gains tax. When you sell capital assets (investments such as real estate and stocks) through your business the difference between the amount you paid for the assets and the amount you sold them for is considered a capital gain or loss. When capital gains are involved, you owe capital gains tax. Effective capital gains management leads to a smaller tax bill, which means you have more working capital and better cash flow. Capital gains tax directly affects how small-business owners deal with assets, which makes proper handling of this tax issue important. Any slip-ups in dealing with capital gains can cost small-business owners valuable tax dollars and result in substantial legal and accounting fees.
10 Unseen Money Losers That Impact Your Capital Gains:
- Not holding on to capital gains for at least 12 months. Short-term capital gains refer to assets that are sold within one year of when they were acquired, and these are taxed at a higher rate than long-term gains. The capital gains tax rate for short-term capital gains is taxed at the ordinary income tax rate, which can be up to 39.6 percent for 2018. Long-term capital gains apply to assets held longer than one year and generally result in a lower tax. In fact, the current top rate for long-term capital gains is 20 percent in 2018 and can be lower, depending on the tax bracket. Due to these substantial differences in tax rates, it is beneficial to refrain from selling an asset that is going to result in a gain 12 months after you have received it so that the gain will be taxed at the lower rate.
- Not taking advantage of installment sales. This method of reporting for a non-dealer is available if at least one payment is to be received after the close of the taxable year in which the sale occurs. The taxpayer can then defer the gain as payments are received in subsequent years. Basically, if you can arrange for an installment payment for capital to have at least one payment to come in after the close of the year, you can defer capital gains tax on it until the following year.
- Not offsetting capital gains with capital losses. If you have excess capital losses of up to $3,000, they can be deducted against ordinary income, and remaining capital losses can be carried forward indefinitely.
- Whether a capital gain is considered capital property or dealer property. Capital property is generally held for investment, whereas dealer property is usually meant for sale. If you are considered to be a dealer in an asset, it will be considered inventory, and capital gains tax treatment won’t be available. Remember: intent is everything. Dealer property versus capital property is the subject of much litigation throughout the history of the tax courts, so much care must be exercised in determining the character of the asset being sold.
- Not doing a Section 1031 exchange. This involves purchasing a “like-kind” piece of property within 180 days of the sale of another. It must be property held for investment or used in the trade or business. The basis and debt of the new property must equal or exceed the basis and debt of the property sold. This law provides the opportunity to defer gains until the subsequent year.
- Not deferring eligible deductions. You might choose to use Section 179 deductions instead of regular depreciation for assets. Section 179 deductions can’t produce or increase a loss and will carry over to next year.
- Not carrying over losses one year forward. Losses in one year can optionally be carried forward to a subsequent year. If your business has a net operating loss of $20,000 this year, you can use that to offset a gain of up to $20,000 in a subsequent tax year. In this way, you can still have a business that’s profitable in one year, (meeting the IRS’s guidelines of showing a profit three out of five years) yet keep the tax advantage from the previous loss. Profit or loss from business is not limited to one year.
- Not taking advantage of business losses that are not deductible in the year when you have the loss. You may be required to, or choose to, deduct these losses in past or future years. It is called a tax loss carryback or loss carry forward, and — it’s something with which you must get a tax professional to help.
- Not structuring your business the proper way. This may be the single most overlooked aspect of tax planning. Most businesses that start out small don’t change the structure of their business when they should. For example, if you have a closely held company in which the income passes through to you, the owner, those are usually set up as an LLC or an S corporation. While there is nothing wrong with those structures, you might be able to gain tax advantages by structuring your company as a C corporation, in which the first $50,000 of your income is taxed at a rate of 15 percent as opposed to a 35 percent rate if you’re in the highest tax bracket.
- Not being proactive about your tax plan. One of the best ways to maximize the benefits of a business loss is to be proactive. You need to look at your business throughout the year and make decisions based on your tax situation. In some cases, making some last-minute purchases can put your business into a state of loss, especially if you’re just on the cusp of profit or loss from business. For example, if you have income from another source, you can also use that business loss to offset your tax burden and keep yourself in a lower tax bracket.
The Tax Blueprint which Financial Gravity’s team members can help you create is that proactive tax roadmap that you can use throughout the year to guide your business tax decisions.
So how can you avoid those money losers and put the tax code to work for you? Call one of our Financial Gravity team members today and make an appointment for a free tax assessment: Let’s Talk!
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:
One of our company-wide goals is to help small and medium business owners retain their hard-earned capital through Strategic Tax Planning. If you think you may need a strategic tax plan, but you still aren’t sure, take this quick tax quiz below to find out.
Financial Gravity Tax Quiz
1/ Are you an SME or SMB owner?
If yes, proceed to question 2.
If you’re not sure, here’s a definition of a Small or Medium Sized Enterprise (SME) or Business (SMB) according to this article on SMBResearch.com. A small business or enterprise has fewer than 100 employees (startups and self-employed peoples fall into this category) while a medium sized business or enterprise can have between 100 and 10,0000 employees. Anything more than 10,000 and you’re jumping into the large enterprise category, aka The Big Dogs.
If not, don’t fret. You can still follow our blog, Twitter, and podcast for tax saving strategies and entrepreneurial inspiration. When you finally open up shop, let us know, we also help with business strategy!
2/ Do you pay more than $20,000 in taxes per year?
If yes, proceed to question 3.
If not, perhaps you’d benefit from our Business Blueprint™. The Business Blueprint™ provides a “jumpstart” for clients struggling to obtain traction with operations to support the owner’s vision. It provides the basic foundations to operate a healthy and happy team and is the beginning of realizing a company’s true potential.
3/ Do you think you’re paying too much in taxes?
If yes, proceed to question 4, if not sure, proceed to question 4 anyway.
If not, are you sure you filed taxes this year? If you are a small business owner, it’s highly likely you’re paying too much in taxes.
4/ Has your accountant, tax preparer, CPA, or financial advisor provided you with a strategic tax plan that saves you more than $1000 per year?
If yes, then congratulations! Call him or her right this minute and invite them out for a drink. You’ve found yourself a rare gem. Most accountants don’t offer strategic tax planning. Here’s why.
If no, it’s time to ditch the zero and get with the hero.
Financial Gravity exists so that we can help small and medium-sized business owners reduce their tax liability, increase their profit, and attain greater wealth. We do that by providing Strategic Tax Planning which is derived from over 70,000 legal tax laws located in the tax code. Our Tax Blueprint™ (a clear tax reduction plan) will never cost more money than it saves you, backed by our 2x guarantee. Without a Tax Blueprint™, you don’t have a Strategic Tax Plan.
Here are your next steps:
1/ Get in touch with us today. After a 15-30 minute no obligation assessment, we will determine if we can lower your tax liability.
2/ Do your happy dance!
The financial planning planet is currently driven by products, commissions, and transactions. Financial Gravity, however, operates in an entirely different universe. Instead of selling products like most financial advisors, we are “product agnostic” –meaning we let the Tax Code determine the best product for you. If you don’t want the product. Fine! We will present the next option. By centering all of our financial advice around the tax code, we remove any chance that you’ll ever receive biased advice. Financial advisors can’t give nonbiased financial advice because they are either product-centric, strategy-centric, or transaction-centric. Bottom line: 99% of Financial advisors are trying to sell you something.
For example, I bet you weren’t aware that your 401k is the most expensive retirement plan you can implement. 401k users may be paying as much as 4% towards hidden fees covering everything from marketing expenses to transaction costs. YUCK. There are retirement plans, however, without Third Party Administrators, without confiscatory fees, and without discrimination rules. These plans have the ability to defer hundreds of thousands of dollars. Some even “self-complete” like a pension, meaning if you die your spouse is entitled to the benefit. If you want to maintain or increase your lifestyle upon retirement, then you need to hire someone who can help you avoid the conventional 401k, 403b, 457, SEP, SIMPLE, IRA in favor of a retirement plan that supports your unique vision of retirement
Maybe you’re thinking, well what about my accountant? They have my best interest in mind, don’t they?
Not so fast. Accountants can’t give financial advice because they aren’t trained to help entrepreneurs and small business owners lower their personal income taxes and then give them numbers to help them run their business. Bottom line: The CPA exam has nothing to do with tax planning. See for yourself here. And furthermore, accountants don’t really care if a tax strategy saves you money. If it creates more work for them, they will likely advise you against it (and may even tell you that it will create a red flag and increase your chances of being audited.)
The tax code has over 70,000 pages of green lights for you to use, so use them!
Financial Gravity is creating a tax-centric universe that is moral, legal and ethical, and not driven by products, commissions, and transactions. We want entrepreneurs, high net worth individuals and small business owners to pay the least amount of taxes required by law (which will then allow them to pump more money back into their business and into the economy.)
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