The Magical Business Entity To Pay Less Tax

Tax is nothing to be scared of. If you approach it the right way, you will save yourself a lot of extra money, especially if you are an entrepreneur or small business owner.

Entrepreneurs and small business owners are the future of our economy, and they have been for a long time because they are engines of innovation, growth and job creation.

Tax law reflects this truth with most tax law being written with the small business owners in mind—meaning the best advantages available for legitimate tax exemptions reside with the business owners.

And yet most individuals and a huge amount of businesses overpay on their taxes.

Usually, because they believe either:

  • They cannot afford tax planning
  • They are doing something illegal and the IRS will hound them!
  • They don’t have the time to file everything

If this is you, then know that all of these beliefs are false…

Owning a business is the best tax shelter left in America. There are many more deductions and tax strategies available to a small business owner than there are to anybody else, period.

The only “trick” is using your business as a vehicle to legally maximize your tax benefits.

The alternative is putting your head in the sand and not knowing how specific tax laws relate to your specific business circumstances… and that course of action is nearly always expensive.

And here’s 3 ways to immediately start putting your business, and your tax planning, on the correct footing to legally shelter the maximum portion of your income from unnecessary taxes.

Shift after-tax dollars into pre-tax dollars.

This is how Warren Buffet and millions of other wealthy Americans pay less tax per year than an employee earning a $60,000 salary!

It’s not unfair; it’s not underhand, it’s right there in the tax law waiting to be applied!

All this means is that you set up your business to pay its expenses first (including wages) before it pays a single dollar in tax to the government—tax is then paid on the amount left after expenses are accounted for.

Owning a Business Allows You to Take Advantage of Tax Credits

In its drive to stimulate economic growth, the government is actively allowing more and more tax credits for businesses, which means you can (and should) be taking advantage of this if you own a business.

There is no big secret to benefiting from tax credits, just get yourself educated on what you are entitled to. You’ll most likely be pleasantly surprised!

In simple terms, Tax credits are dollar-for-dollar tax reductions, regardless of your tax bracket. So, if you’re in the 15% tax bracket, a dollar’s worth of tax credit cuts your tax by a full dollar. If you’re in the 35% bracket, an extra dollar’s worth of tax credit cuts your tax by the same dollar.

Retroactive Tax Benefits

You could be sitting on a big tax return and you wouldn’t even know it!

In some instances, past tax filings can be amended to recover taxes previously paid. The government isn’t going to chase you to claim what you might be owed. The onus is on you to know and apply tax law in your favor.

Many Americans view entrepreneurship as a way to pursue the American Dream, take control of their lives and support their families… for others, it is a choice born out of necessity.

Whatever your reason, make sure you use tax law in your favor.

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