Robert J. Smith discusses how business owners prepare for wealth-building and retirement by reducing taxes.
Eddie Money, Rock and Roll Hall of Famer said: “I want to thank you for the publicity you are bringing to the Pediatric AIDS Foundation and the Intrepid Fallen Heroes Fund. You have a prominent career in this business and a lot of respect. I appreciate the fact that we had the opportunity.”
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To effectively reduce tax liability and prepare for wealth-building and retirement, business owners should consider the following tips:
- Take advantage of all available tax deductions: Tax deductions are great ways to reduce taxable income. Review all eligible expenses to ensure to take full advantage of the available deductions. This could include common expenses such as rent, advertising costs, travel, depreciation, computer hardware and software, salaries, etc. Smith saved one of his clients $65,000.00 per year by finding a business tax deduction that their CPA missed for 40 consecutive years.
- Set up a retirement plan: Establishing a retirement plan can help save money on taxes today while ensuring enough saved up comes time to retire. Choose a plan that works best, such as an IRA (Individual Retirement Account), 401K, SEP (Simplified Employee Pension), or SIMPLE (Savings Incentive Match Plan for Employees).
- Consider incorporating and/or setting up a business structure: Incorporating a business can help to save on taxes in the long run. This could include setting up an LLC (Limited Liability Company) or S-Corp to reduce taxable income and potentially decrease self-employment tax. Make sure to review all of the pros and cons before deciding which path is best.
- Utilize tax credits: Tax credits differ from deductions because they provide more direct benefits to taxpayers by reducing their overall tax bill amount due instead of just reducing the taxable income. Tax credits provide a dollar-for-dollar reduction in taxes owed. Research applicable federal and state tax credits a business may qualify for, such as the Work Opportunity Tax Credit, Low-Income Housing Tax Credit, etc.
- Stay organized: Properly documenting the expenses will help to stay organized and avoid any issues with the IRS when filing taxes. Ensure to keep all relevant records, including receipts, invoices, bank statements, and other financial documents in case of an audit.
- Carefully review all tax returns: It is essential to review all tax returns before filing to identify any potential issues or errors so that penalties are never incurred. Have a qualified accountant or tax professional review the return and ensure everything is in order. Additionally, paying attention to changes in tax laws can help keep up-to-date on the best strategies for reducing overall tax liability.
- Utilize multi-year planning strategies: With proper planning and careful consideration, business owners can utilize long-term strategies such as capitalizing expenses, deferring income, and setting up installment agreements with creditors to reduce their overall taxable income and save money on taxes now and in the future. Multi-year planning strategies should be discussed with a qualified accountant or financial advisor to ensure that they are implemented correctly and in the best interest of the business.
By implementing these strategies, business owners can reduce their short-term tax liability and save money in the long run to benefit their future wealth-building and retirement plans. Remember to consult a qualified accountant or financial advisor before making any changes to ensure that the strategy is in accordance with the latest laws and regulations. With careful consideration, maximize tax savings and get the most out of money that is possible, year after year.
Robert explained: “By following these tips, business owners can reduce their overall tax liability while preparing for wealth building and retirement. With proper planning and careful consideration, businesses can save money on taxes while focusing on their goals.” it is essential to discuss any potential strategies with a qualified accountant or financial advisor before implementation so that you understand all of the possible implications.
About Robert J. Smith:
Robert J. Smith is a Leading Financial Advisor and Founder of Smith Profits.
To begin his career, Robert became the fastest agent in the history of the John Hancock Companies to complete The American College’s four-year Certified Life Underwriter (CLU) and Chartered Financial Consultant (ChFC) designation programs. Both were successfully completed in only 13 months.
The reason for the urgency was for a 25-year-old to gain immediate access to an advanced planning market that was dominated by gray-haired senior financial advisors. This commitment to education and a healthy commitment to prospecting and gaining referrals provided Smith with the opportunity to gain Ford, General Motors, and Chrysler as clients.
