4 Secrets To Lowering Taxes

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4 Secrets Successful Business Owners & Professionals Use to Reduce Taxes and Create Wealth

4 Secrets Successful Business Owners & Professionals Use to Reduce Taxes and Create Wealth

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  • 1. 4 Secrets Successful Business Owners & Professionals Use to Reduce Taxes and Create Wealth Presented By: Ken Shapero, LUTCF Vice President CJA and Associates
  • 2. A Few Questions Before We Start…
    • What type of business entities do they own?
    • How many full time employees?
    • Are any of their businesses a target for lawsuits?
    • How much is too much tax?
      • $100,000+
      • $250,000+
      • $1,000,000+
  • 3.
    • Are they using all the planning available under current tax laws to legally reduce their tax liability, protect their assets and create significant additional wealth???
    • If not, let’s explore the 4 Secrets !
    A Few Questions Before We Start…
  • 4. Secret #1
    • What type of qualified retirement plan do they offer?
      • Is it an employee benefit plan or
      • Is it an EMPLOYER benefit plan?
  • 5. Secret #1 Employer 25% 75% Employees Most companies tend to have employee benefit plans!!!
  • 6. Secret #1 5% 95% Employer Employees Smart Employers offer Employer Benefit Plans in which the owner/owners receive 80% to 95% of the total contributions.
  • 7. Free Feasibility Study
    • Please allow us to offer you and your clients a
    • FREE feasibility study to assist you in discovering what type of plan would work best for their business.
  • 8.
    • What type of employer sponsored benefit plan would allow your clients and a number of their certain key employees to purchase personal life insurance with a 35% discount and have the policy paid up in 5 years ?
    Secret #2
  • 9.
    • Business Pays a tax deductible premium for life insurance for employees of corporation including key employees/owners.
    • Premiums are partially tax deductible to employees based on benefit provided
    • Upon transfer of the policy to the employee, the employee owns policy and all rights associated with policy including future tax-free loans.
    • Tax-free death benefit may be paid to employee’s beneficiary in event of death.
    Section 79 Plans
  • 10. Advantages of Section 79 Plans
    • Contributions to the plans may be tax-deductible.
    • Income tax-free portable death benefit.
    • Tax-deferred accumulation.
    • Tax-free income in later years.
    • Only 60-65% of the contribution is included in taxable income to employees.
    • Benefits of future planning are substantial
      • Supplemental Retirement Income
      • Wealth Transfer
      • Estate and Liquidity Planning
  • 11.
    • 1. How comfortable are you today with our current or proposed health care system?
    • 2. What impact will it have on you, your clients and your families after retirement?
    Secret #3
  • 12. Secret #3 If you could set up a private plan that guarantees you will have a pool of money to draw upon in post-retirement and it would be tax-deductible , tax-deferred , creditor protected and more importantly provide tax free reimbursements for almost any medical expense, would you be interested?
  • 13. Example Total Contribution: $523,580 Husband and Wife, age 62 NRA 65 1 other employee ineligibile due to service $727,500 52.95% $277,223 Owner #2 $646,500 47.05% $246,357 Owner #1 Plan Account Value @ NRA % Of First Year Contribution First Year Contribution Name
  • 14. Secret #3
    • Employers today are using this
    • “ Post Retirement Medical Reimbursement Plan”
    • for themselves and their employees with
    • confidence that no matter what happens with
    • health care reform they will have resources to
    • provide for their needs.
  • 15. Sample Numbers
    • Census
      • Owner, age 62 retiring at age 65, salary $235,000
    • Account at Retirement: $1,374,000
    • Annual Withdrawal: $97,489
    • Total Sum of Withdrawals: $2,437,217
  • 16.
    • Create
    • Your Own
    • Insurance Company
    Secret #4
  • 17. Secret #4 The purpose of creating your own insurance company is primarily to insure or reinsure the risks of the owner.
  • 18. Secret #4: A Little History
    • Around since the 1950’s
    • Currently over 5,000 privately owned small insurance companies
    • Used by nearly 80% of S & P
    • Substantial Case Law & IRS Guidance
  • 19. Why Consider Your Own Insurance Company?
    • Contribute significant Pre-Tax dollars (under IRC 831b) up to $1,200,000 per insurance company
    • Grow the money over flexible periods of time (no 59 ½, no 70 ½, no eventual IRD Tax) on a tax favored basis
    • Asset Protection Structure; protected from the claims of creditors personally & professionally
  • 20. Why Consider Your Own Insurance Company?
    • No contribution for employees
    • Ability to access the money on a favorable tax basis while living and passing assets to loved ones without gift and estate taxes
    • Tax Favored access to assets based on clients & advisors
      • Dividend rates @ 15%
      • Capital Gains rate @ 15%
      • Tax Free
  • 21. Typical Captive Structure Shareholders Shareholders Parent Company Parent Company Premiums Claims
  • 22. Possible Risks
    • Insured
      • Workers Comp
      • Auto Insurance
      • General Liability
      • Property Coverage
        • Deductibles
        • Exclusions
  • 23. Possible Risks
    • Uninsured
      • Administrative Actions
      • Legal Defense
      • Construction Defect
      • Employment Practices
      • Product Liability
      • Product Warranty
      • Terrorism Risk
      • Computer Operations
  • 24. Captive Benefits
    • Insurance is typically a good investment
    • Provides coverage for uninsured risks
    • Lower insurance cost-overhead and profit are a large portion of premium
    • Establishes best risk management practices
    • Provides tax benefits
    • Creates wealth
    • Facilitates wealth transfer
    • Asset Protection
  • 25. To Review
    • Secret #1 : Have an Employer Benefit Qualified Retirement Plan
    • Secret #2 : Buy your personal life insurance with Big Discounts paid for by your company
    • Secret #3 : Set up your own “Post Retirement Medical Reimbursement Plan”
    • Secret #4 : Set up your own Insurance Company
    • Sign Up For A Private Consultation To Discuss Any Of These Plans!
  • 26. Thank You! For Additional Information Contact: Kenneth Akiva Shapero LUTCF 954-775-5514 [email_address]