Intro to Small Business Tax Planning

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Are you satisfied with the taxes you pay? (Pause – audience will laugh and say “no.”) Are you confident you’re taking advantage of every available break? (Pause again) Is your tax advisor giving you proactive advice to save on taxes? (Pause again) I’ve got bad news and I’ve got good news. The bad news is, you’re right. You do pay too much tax. You’re probably not taking advantage of every tax break you can. And most advisors do a poor job of actually saving their clients money. The good news is, you don’t have to feel that way. You just need a better plan. Today, we’re going to talk about some of the biggest mistakes that business owners make. Then we’ll talk about how to solve them. (At this point, go ahead and introduce yourself and discuss your credentials.)

The first mistake is the biggest mistake of all. It’s failing to plan. I don’t care how good you and your tax preparer are with a stack of receipts on April 15. If you didn’t know you could write off your kid’s braces as a business expense, there’s nothing we can do. Tax coaching is about giving you a plan for minimizing your taxes. What should you do? When should you do it? How should you do it? And tax coaching offers two more powerful advantages. First, it’s the key to your financial defense. As a business owner, you have two ways to put cash in your pocket. Financial offense, of course, is making more. Financial defense is spending less. For most of us in this room, taxes are our biggest expense. So it makes sense to focus our financial defense where we spend the most. Sure, you can save 15% on car insurance by switching to GEICO. But how much will that really save in the long run? And second, tax coaching guarantees results. You can spend all sorts of time, effort, and money promoting your business. But that can’t guarantee results. Or you can set up a medical expense reimbursement plan, deduct your daughter’s braces, and guarantee savings.

I won’t bore you with a detailed discussion of how the tax system works. Here’s all you need to know. Ultimately, there are two kinds of dollars in this world: pre-tax dollars, and after-tax dollars. Pre-tax dollars are great. And after-tax dollars aren’t bad. But they’re not as good as pre-tax dollars .

So here’s the one lesson I want you to take home from me: You lose . . . every time you spend after-tax dollars . . . That could have been pre-tax dollars. Let me repeat that. You lose . . . every time you spend after-tax dollars . . . That could have been pre-tax dollars.

At this point, depending on your available time, you can present a few sentences on each of these mistakes. Consider: #2: “Some (business owners just like you) are afraid of tax planning. They think it means “aggressive” strategies, “gray areas,” or “red flags.” In fact, proactive tax planning isn’t “aggressive” at all. It just means taking advantage of every legal strategy for minimizing your tax.” #5: “If you have children in private school, or sleep away summer camp, you may be missing opportunities to hire them and subsidize those costs.” #6: “If you work from home, you may have heard that the home office is a “red flag” for audits. That’s not true anymore – and there may be ways you can structure your business so the IRS doesn’t even see that you’re deducting it.”

Here is a scorecard of what you will being paying in 2011 in terms of federal and state income taxes. Personal income taxes vary between 10 and 39.6% or more. Payroll taxes of 15.3%. Sate income tax in MO is 6% and another 3.5% unemployment tax. Add it up and that is 34.8 to 51.5% of lost income. Additionally your investments will be subject to 20% capital gains tax and 20% dividends tax. And if you are lucky enough to die with a taxable estate well your good uncle Obama will be needing 55% of that.

For small business owners and investors there is some relief if you have held your small business for 5 or more years and can sell it. If you or another small business owner is serious about the strategies we’ve discussed today, then I suggest you give me a call to arrange a free consultation and review of your particular situation. I offer a money back guarantee on my services that you will save at least double on my services or the plan is free. Thanks for your time.

Now that you see how business owners miss out on tax breaks, let’s go back to that first mistake – failing to plan. Have you all heard the saying “if you fail to plan, you plan to fail”? It’s a cliché because it’s true. Fortunately, our tax planning service avoids the problem. We offer true tax planning. We start with a (30-minute, 60-minute, whatever) consultation/meeting/analysis where we find the mistakes and missed opportunities that could be costing you thousands in taxes you just don’t have to pay. Then we prepare a written tax plan that addresses you family, home, and job, your business, and your investments. We don’t try to impress you with stacks of intimidating spreadsheets. We tell you what to do, how to do it, and when to do it – all in plain English. We’ll even review your last _____ years’ tax returns to see if we can find savings you overlooked. If you’re serious about the strategies we’ve discussed today, then (insert call to action – see me after the presentation to schedule an appointment, call me, etc.)

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Intro to Small Business Tax Planning - Presentation Transcript

Introducing 1040 WEALTH DESIGN$, LLC Proactive Tax Planning John Beidle, EA St. Louis, MO http://www.1040WealthDesigns.com
#1 Mistake: Failing to Plan
- “ There is nothing wrong with a strategy to avoid the payment of taxes. The Internal Revenue Code doesn’t prevent that.”
- William H. Rehnquist
- Tax planning is financial defense
- Tax planning guarantees results
- 1040 Wealth Designs, LLC
Two Kinds of Dollars  Add Taxable Income  minus Adjustments to Income  minus Deductions  times Tax Bracket  minus Tax Credits Pre-Tax Dollars After-Tax Dollars 1040 Wealth Designs, LLC
Today’s “Takeaway” “ You lose every time you spend after-tax dollars that could have been pre-tax dollars.” 1040 Wealth Designs, LLC
More Mistakes
- Mistaking “proactive” for “aggressive”
- Wrong business entity
- Wrong retirement plan
- Missing family employment
- Missing medical benefits
- Missing home office expenses
- Missing car/truck expenses
- Missing meals/entertainment
1040 Wealth Designs, LLC
This is What You Are Being Confronted With
- Current Obama Tax Plan for 2011 (Bush Tax Cuts Expire)
The Only Significant Tax Break
- 75% Exclusion from Capital-Gains Tax for Investors in Small Businesses
#10: Missing Our Service
- True Tax Planning
- Written Tax Plan
- Review Returns
1040 Wealth Designs, LLC
About/Contact
- Click on this link. We welcome all inquiries?
- www.1040WealthDesigns.com