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Financial Gravity exists in order to save entrepreneurs and small business owners (like YOU) from paying too much in taxes. So, what will you do with all that extra money in your pocket? Whatever you want! The possibilities are endless (although, as shiny as it seems, we don’t recommend buying that diamond encrusted fidget spinner for your child on eBay.) Instead, there are plenty of other ways you can invest that extra money back into your business or into your local economy. By implementing our  Tax Blueprint  you can:

1. Finally open your own brick and mortar restaurant, in lieu of slinging pork belly from the back of your food truck. Livin‘ the dream, folks!

2. Hire a few more managerial positions to assume some of your responsibilities, thus giving you more time to, oh I don’t know, BREATHE? Maui, here you come!

3. Outsource your bookkeeping to us. Bookkeeping with Purpose® manages your books and payroll while giving you the confidence that everything is being managed appropriately to reduce your tax burden. Goodbye Quickbooks-induced migraines!

With all that extra time and money, you’ll finally be able to the things you actually love; like attending your daughter’s softball games, taking spontaneous road trips, or focusing on your business’ bigger picture. If you still aren’t sure if Financial Gravity is right for you, head over here to read about the success our customers have experienced after implementing our tax saving strategies. Our case studies explain how five hardworking small business owners 1. stopped overpaying on their taxes, 2. kept more of their hard-earned money 3. implemented tax saving strategies that positioned their business for future growth and 4. invested that money back into their company, further paving their road to success.  We don’t just save small business owners money on their taxes one time, we implement (legal, moral and ethical) tools and strategies that prevent them from EVER having to shell out too much again.

Photo by Jan Böttinger on Unsplash

Tobias Mueller

Writing off the mileage for the business use of your car is so common now and days that there’s even “an app for that.”

When you reach your destination, you can swipe left if it was a personal trip, or right if the trip was business related. Gone are the days when you had to keep a clipboard on the dashboard to record your every movement. Let’s not mention the headaches involved if you happened to forget to log your mileage for a few weeks (or months.) OH, THE AGONY!

But just because writing off your business mileage is easier than ever, doesn’t mean it’s the only tax write-off you can use for your car. In addition to writing off your mileage, the Internal Revenue Code allows you to write off your leased car (but not a loan.)

Say, what?

Yes, it’s true. Buying a brand new $65,000 Tundra for your landscaping business is unwise, even if you plan on using it as a tax write off. A better option would be to lease the Tundra and then use THAT as a tax write off (and if you don’t want to take the depreciation hit, you can always lease a used car instead.)

So there you have it, paying cash for a car is not always the best decision when it comes to saving money on taxes.

As always, the previous financial advice isn’t a one-size-fits-all approach. If you want your own personalized tax planning strategy, please get in touch with one of our tax professionals today. 


Want to read 10 of the most damaging misconceptions about taxes? Download our free eBook here. 

What is a Meals and Entertainment Expense?

The IRS recognizes that wining and dining customers, vendors, or potential employees is a vital way to grow your business, which is why they offer a 50% deduction of all qualifying Meals and Entertainment expenses. You can deduct food as a business expense if you can 1/ verify that these expenses are business related, and 2/ document these expenses (in case of an audit).

Ok so if there is food involved, then it must be considered a Meals and Entertainment Expense right?

Not necessarily. In some cases, you can deduct 100% of the cost, like this example. A few years ago, I spent over $50,000 on hosting educational seminars to attract clients and grow my business. Though the seminars included food, they were far more educational than entertaining. I was able to claim a 100% deduction because I filed the expense as a marketing one, not a meals and entertainment one.

So, how do I know whether it’s a Meals and Entertainment Expense or not?

Answer the following questions:

1/ Was the food bought as part of a marketing expense?

2/ Was the food bought while traveling?

3/ Did you order pizza for your employees during a “working lunch?”

4/ Did you buy coffee and donuts for an early staff meeting?

Depending on your answers, you might be able to deduct the full amount instead of the standard 50%. Want to find more ways to lower your tax liability? Download our free Tax Myth eBook here.

*image by Gabriel Gurrola

Let me be frank with you, kids are expensive. Not only are you spending your hard earned money on their bare essentials (Capri Suns, iPads, and hoverboards, OH MY!) but then you also have all the extras like hockey lessons, prom hair, and summer camp tuition. Anyone that tells you that the financial burden goes away once your kid is eighteen, is just plain lying to you. On average, American parents spend $20,000 per year to send one child to college (and another $20,000 paying for their weddings.)

Though your kids may continue to give you a sense of purpose, a reason to wake up in the morning, and an indescribable joy, there is no denying the fact that they are also inadvertently putting a huge dent in your wallet. That’s why I want to encourage you to start thinking of your children as assets instead of expenses (or in other words, I want you to hire your kids.)

I know what you’re thinking, “Hiring my kids? That sounds sketchy!”

Actually, it’s not at all. As long as you have a written contract, you are paying your “employee” through the payroll (so the IRS gets their fair share), and the money is being deposited into your “employee’s” account, it’s totally legal, moral, and ethical.

Here’s what it looks like:

  1. 1. Pay your kid $6000
  2. 2. File a return with the standard deduction of OVER $6000
  3. 3. Pay NO tax. (And no, you don’t have to worry about paying their portion of FICA. If you hire your own kid, FICA is waived.)

I couldn’t make this “green light” up if I wanted to! Learn More About the 10 Tax Myths Sabotaging Your Small Business Growth.

Again, I’m sorry to be the bearer of bad news, but if you are a small business owner, and you have an IRA (Individual Retirement Account) or a 401k, you don’t actually have a sufficient retirement plan. Let me explain why:

Saving money is good, but not if that means sacrificing your dreams. Not only do conventional retirement accounts (401k, 403b, 457, SEP, SIMPLE, IRA) contain massive hidden fees but they only work if:

1. Taxes don’t go up.

and

2. Your income decreases upon retirement.

Bottom line, taxes will likely go up between now and the time you retire. And you’re likely planning on increasing (or at least maintaining) your current standard of living, not decreasing it.

Believe it or not, there are actually retirement plans out there without Third Party Administrators, confiscatory fees, or discrimination rules. They allow you to defer hundreds of thousands of dollars and even self-compete like a pension, entitling your spouse to the benefit if you die.

If you want to maintain or increase your lifestyle upon retirement, then you’ll 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.

Photo by Lotte Meijer on Unsplash