Business Growth By Design

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Tax Planning

Kids are great for tax planning

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We have twins. They are fantastic. Kids are great. They help do chores, they give us so much pleasure and the best part is we get to use them as tax deductions.

I am joking about the best part of course but who wouldn’t want more tax benefits if we could. In this article, I discuss how kids can be a great source of tax savings and wealth building.

Why Kids are Great For Tax Planning

Here’s the story about Jeff and how he was able to take advantage of having kids and using them to save taxes..

Jeff had a printing business. He has two children ages 14 and 16. Joe would like to understand how he might be able to save taxes. If Joe’s kids can both work in the business then Joe can pay them just like any other employee.  The key here is in understanding that a person pays no tax when their income is less than $12,000.

Therefore, if Joe pays each of his kids $12,000, neither of them will have to pay tax on that income.

What’s better is that Joe can deduct the $24,000 he has paid to the kids on his tax return. If he is in the 30% tax bracket that is a tax savings of over $7,000.

Now that the kids have $12,000 each, what are they going to do with it?

  • First, this money can be used for their college education if necessary.
  • Second, the money can be put into an investment account that can grow tax free.  That can make them a millionaire when they are in their 50’s or 60’s.
  • Third, the money can use used for other expenses that you would ordinarily have to pay for clothes, sports or other activities.

In summary, reduce your own income tax, pay no tax on the child’s income and set up a tax-free retirement plan for your child. Yes…kids are great for tax planning!

Are You Taking All of the Deductions Available for Your Business?

Take action by creating a long-range plan for your business that will help you keep more money in your pocket rather than the government’s.

Set up a meeting with one of our tax professionals and discuss ways to position your company for success by giving us a call at (760) 579-0079.

Or you can contact us >>HERE<<

Unless your situation is very straightforward we are well positioned to find ways that will more than compensate you for the time and cost you spend with us.






Critical Actions to Meet Tax Deadlines

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In this article, I cover the 3 critical actions to meet tax deadlines to make sure that you the business owner, are setting yourself up for success.

How can business owners use tax deadlines to their advantage?

Money in your pocket may be of better use than money in someone else’s pocket, in this case, the government. Knowing the rules and deadlines can make a difference.

I am asked about filing deadlines, paying tax, penalties and what choices are available to take advantage of the tax laws.

Tax Deadline Number 1: March 15

Barbara was in a panic. Her bookkeeper was sick, overworked and wasn’t sure if she could get Barbara’s corporate bookkeeping complete before the March 15 deadline for Barbara to get her taxes done.

Barbara called her tax professional…and I calmly talked to Barbara and let her know that because she was an S Corporation there were not taxes to pay and that the March 15 deadline could be extended to September 15.

I also knew that Barbara would have to file her personal income tax return by April 15.

I asked Barbara if she thought she would owe tax based on how this year compared to last year. Barbara thought she might owe some taxes. If so, then I told Barbara while she can extend the filing of the business and her personal tax return she would have to pay whatever tax she thought she might owe by April 15.

Otherwise, she could incur unnecessary penalties that simply cost money. That is not good money management.

Barbara also asked about the $800 she has to pay every to the State of California. U explained that for the benefit of being a corporation the State of California asks for a minimum of $800 even if you make very little money.

I also explained that Barbara had a choice.  

She could pay the $800 by April 15. If she did that she wouldn’t have to pay a penalty. If she didn’t the penalty would be around 32 dollars. This meant that Barbara had the choice of keeping $800 in her pocket and paying 32 dollars extra next year or paying the $800 now. It is simply a cash flow question.  

Tax Deadline Number 2: April 15

As most people know, April 15 is the deadline for filing tax returns for individuals. The same principles apply as just discussed above.

If you are not ready you can extend the filing date to October 15.

If you owe tax that tax should be paid by April 15 or you will incur penalties and interest. If you are getting a refund (paying extra money to the government for no good reason) then filing as quickly as possible is beneficial.

Sometimes, people are waiting for tax information from partnerships and limited liability companies.

The law has changed and now these returns are due March 15 rather than April 15 so it should be easier for you to receive the necessary information before you have to file your personal income tax return.

Individuals also can take advantage of contributing to their regular IRA or their self employed plan if they are operating as a sole proprietor by April 15. This extra time is valuable for individuals and business owners to make last minute adjustments that might lower their taxes.

Tax Deadline Number 3: Estimated Taxes

Estimated taxes are money that you pay to the government in advance for what you estimate your tax to be in order to avoid penalties.

The estimated taxes are due on April 15, June 15, September 15 and January 15 of the year after but applied to the prior year.

The rules relating to whether you will incur penalties are complex and should be discussed with your tax professional to figure out the optimum amount that you should pay to avoid penalties but no so much that you are robbing yourself of your own dollars for use.

Tax laws don’t care who you are. They can and should be used to your advantage wherever possible. Take some time and do proper planning with the tax professionals at Business Growth By Design and keep more of what you make.

Take the Stress Out of Meeting Those Tax Deadlines

Take action by creating a long-range plan for your business that will help you keep more money in your pocket rather than the government’s.

Set up a meeting with one of our tax professionals and discuss ways to position your company for success by giving us a call at (760) 579-0079.

Or you can contact us >>HERE<<

Unless your situation is very straightforward we are well positioned to find ways that will more than compensate you for the time and cost you spend with us.





3 strategies to pay less taxes

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Yes, it is possible to pay less taxes…in this article, I share 3 strategies to pay less taxes that business owners can and should be taking advantage of.

We hear on the news that rich people avoid paying tax. We hear that rich people avoid their fair share of taxes. We hear how the average American is paying a higher and higher share of tax.

I am asked what strategies are available to pay less tax like the rich.

3 Strategies to Pay Less Taxes

Strategy Number 1:  Tax Rates are your friend

Let’s get something clear…. If you are an employee you will be taxed on what you make and there isn’t much you can do about it.

I have clients making 6 figure incomes, they own a home and they get taxed. Let’s get something else clear. The tax laws are laws that apply to everyone and you are either able to take advantage of them or you are not.

John’s story perfectly illustrates this…

John has a photography business. He has a couple of children who are entering their teenage years. John was wondering whether he could do anything to lower his business taxes.

The answer is a resounding yes.

Children are fantastic and for more than just a tax break. When you own a business and have children, there is a way you can use the tax rates as your friend.

One of the simplest tax strategies is to move money over from the person with the higher income tax rate to the person with the lower income tax rate.

The person with the lower income tax rate can receive the money, possibly pay no taxes and have the money invested into a tax-free investment vehicle that can grow to millions over time. That saves taxes and it benefits the entire family business group.

Strategy Number 2: Investments are your friend

Jane works and she had her money invested. The problem is that her investments are costing her money at the highest federal income tax rate which now has been lowered to 37%. The highest federal capital gain rate is 20%.

Her financial advisor told Jane that paying taxes is a good thing because she is making money. She wondered what a tax professional might say.

The highest tax rate on investments that you hold and do not sell is zero.

That means that if you have money in investments which are growing and you keep them and don’t sell them you will pay no tax until you do. If those investments earn income such as dividends or interest you will pay income taxes.

If those investments are owned by your children they will pay income taxes at their income tax rates.

With this information, Jane was armed and went back to her financial advisor. The advisor told her that since she was invested in safe mutual funds that the managers of those investments buy and sell all the time and that’s what ends up on Jane’s tax return.

Jane asked whether the financial advisor could invest in stocks with similar low risk and not have to pay taxes. The financial advisor told Jane that he could put together some options for Jane to consider.

Strategy Number 3: Tax-Free is tax free

If I told you there is an investment out there that is tax free you probably wouldn’t believe me, but there is.

Not only is it tax free, but this investment is a way to increase the wealth of the family. The investment is life insurance. Just the mention of this word might draw groans and skepticism, however, life insurance is a tool that when looked at as an investment, just like stocks, bonds or real estate, its power is undeniable.

If you are a business owner and you think you are paying to much in taxes, we can look at your situation and determine what strategies will work for you to build, grow and sustain your wealth.

Are You Taking All of the Deductions Available for Your Business?

Take action by creating a long-range plan for your business that will help you keep more money in your pocket rather than the government’s.

Set up a meeting with one of our tax professionals and discuss ways to position your company for success by giving us a call at (760) 579-0079.

Or you can contact us >>HERE<<

Unless your situation is very straightforward we are well positioned to find ways that will more than compensate you for the time and cost you spend with us.






Action Guide: 4 Proven Profit Strategies

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Business growth expert Rich Gaines talks about the 4 proven profit-making strategies that you can immediately in your business to make more money.

Business owners work hard and they are passionate about what they do but many times the money they make doesn’t reflect their efforts.

Watch this short video and discover 4 proven profit strategies.

Get your FREE Action Guide here:

http://businessgrowthbydesign/4provenprofitstrategies

3 Biggest Tax Mistakes Businesses Make

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Biggest Tax Mistakes Businesses Make

How do business owners make big tax mistakes that cost them time and money?

The easiest way to avoid getting audited is to make sure that you file tax returns that are accurate and free of red-flag deductions.

In my opinion a, your tax preparer’s job is to make sure you pay the least amount as required by the law.  I also counsel my clients that you want to make sure that you don’t pay too little either…because if you end up getting caught, you’ll wind up paying much more in interest and penalties.

The world today has become more complicated and so have the tax laws.

Filling out tax returns used to be easier, but now the government wants more information from you and the bottom line is that the IRS wants your money.

And, the state you live in wants your money.

It’s your money and we want to help by making sure you are doing everything you can to avoid paying any more than the absolute minimum.

This is how you keep more for those much needed vacations, your children and your future.

I’ve been a tax advisor and handled tax preparation for business owners and I’ve pretty much seen it all.

The Top 3 Biggest Tax Mistakes Businesses Make

Years ago, math errors made up the majority of tax mistakes, however today software has pretty much solved this issue.  

I still see business owners screwing up their returns.

I highly encourage you to sit down with a tax professional to do a little bit of planning to make sure you are doing everything you can end up saving you money.

Here’s a simple analogy….you’re sitting at home on a Sunday afternoon watching your favorite football or basketball team playing hard and ending up losing an opportunity to make the playoffs.

It’s the same with taxes…

Once the tax year is over, the opportunity to plan (or win during the playoffs) has ended. Then, for the most part, it becomes just a matter of recording what has done and, if possible, put your tax affairs in the best possible position.

From my experience working with business owners, I’ve seen how much easier it is to save money than it is to make more money. Once the money is in your pocket, the more we can do to keep it there is a whole lot easier than going out and having to replace it.

A bird in the hand is truly better than two in the bush.

Tax Mistake Number 1: Failing to have good bookkeeping

The person who prepares your taxes has to rely on the bookkeeping.

What I mean here is that junk in ends up being junk out. If the information isn’t good, neither will be your tax return and it’s like throwing money down the drain.

The bottom line is that having a good bookkeeper can save you thousands of dollars.

Let me tell you a quick story that will illustrate this point…I received bookkeeping information from one of our clients.

I found a couple of glaring omissions.

First, it wasn’t clear how much the business owners paid themselves. Second, even worse, was the fact there was no information about whether the business acquired any assets during the year for use in the business.

Without this information it’s like I was running around in the dark.

I had no idea if I could take deductions for the business owner to offset income and save them thousands of dollars; money that could be spent on their family, investments and taking control of their future wealth.

The good news is since I had the right knowledge and experience to ask the right questions, I was able to reduce the business profit resulting in very little tax.

Tax Mistake Number 2:  Failing to use the right tax preparer.

I‘m sure that many of you have hired the wrong person at one time or another.

We kick ourselves, wonder why we did it, and then complain about all the time and money wasted. Using the wrong tax preparer can be excruciating.

No one likes doing taxes.  

We wish we could just close our eyes, kick our heels three times and wish it was done. I want you to spend a little more time with the right professionals who have the right training and background and you will see more money in your pocket.

When it comes to the law, only attorneys are trained to deal with what it means and how it is interpreted.

When it comes to tax law, only tax attorneys are trained in what it means and how it is interpreted. That’s why law school and tax law programs exist. It’s special training.

Looking up how to do your own tasks on Google is like doing your own brain surgery…Not a good outcome.

Having the right tax preparer means having someone in your court who can appropriately advise you on the risks and benefits of certain actions and interpretations.

This is important because if you are the one in front of the IRS or other governmental agency, they don’t really care about what you thought or wanted to do. They look at what you did.

Did you comply or not?

Speaking of compliance, a tax return is only the government’s interpretation of where information should be placed on the return. Needless to say the government doesn’t have your best interest at heart.

A qualified tax professional who understands the depth and scope of the tax law is much better at knowing where on the tax return you can report your activities to serve your best interests.

During this tax season (and at any tax season in the future) the smartest business move you can make is to be sure you use the right tax professional.

Mistake Number 3: Failing to Plan

Like the old saying, failing to plan is a plan to fail.

I’ve found that so many business owners are preoccupied with making sales that planning for their business and taxes ends up going by the wayside. A little planning can go a long way.

Remember…it can be much easier to save money than to make more money.

Let me share this example… if a business owner did some planning and realized that they could pre-pay some state income taxes, money they would have to pay anyway, that would have saved them $4,000 on their federal income taxes.

Why wouldn’t a business owner want to take advantage of that benefit?

Think about it this way. How hard is it to generate $4,000 of income in your business? Yet, simply by making a payment you have to pay anyway you can save money.

Saving is much easier than making.

Tax time is upon us and unfortunately I’ve witnessed the aftermath of haste to get the tax return done, mistakes get  made, deductions overlooked and reliance on people who don’t have the right knowledge and experience is done simply to save a small amount of money.

This can cost you more in the long run than if you were working with the right tax team.

Avoid The Biggest Tax Mistakes Businesses Make

Take action by creating a long range plan for your business that will help you keep more money in your pocket rather than the government’s.

Set up a meeting with one of our tax professionals and discuss ways to position your company for success by giving us a call at (760) 579-0079.

Or you can contact us >>HERE<<

Unless your situation is very straightforward we are well positioned to find ways that will more than compensate you for the time and cost you spend with us.

Straight Talk: Everything You Need to Know About Deducting Mileage on Your Taxes

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Welcome to Straight Talk.  Straight Talk is just that. I don’t mince words. I tell it like it is.
I have reached an age where the nonsense, the B.S. and the snake oil salesman who don’t know what they are talking about just won’t do. I have over 35 years of experience in my industry, advanced degrees and countless hours coming alongside business owners to build rock-solid foundations and use the most advanced business, legal and tax ideas and strategies to save tens of thousands to hundreds and yes even millions of dollars, protect what you have and increase your lifetime net worth.
I appreciate your enjoyment of our insights on growing your business by design, changing your wealth and increasing your choices.

One of the smartest things a business owner can do is to take advantage of the mileage allowance.  If you’re self-employed, you will want to take a business deduction for the business use of your personal car.

They say nothing is free…

I think there may be one exception to this rule.  That is the mileage allowance. The IRS gives you this one, free.  In 2018, the allowance is 54.5 cents per mile when you use your car and drive for business.  

In fact, you get a choice.

You get to compare the actual cost of driving the car plus depreciation on the car against the standard mileage rate.  Whichever is better is the one you get to select.

Whatever selection you make, however, you are locked into that selection and you can’t change it.  

Here is a simple example.  

If you drive 20,000 miles for business you get to take a deduction of 10,450 dollars on your tax return.  If you are in the 30% tax bracket this will save you a little over $3,000 in taxes. Free.

By comparison, if your total out of pocket gasoline, tires, repairs, and insurance costs plus some depreciation total $8,000 during the year, then the standard mileage rate will be a better choice.

The IRS does require one item of proof should you be examined.  

You can use a mileage log, diary or some type of account book.  The mileage log is a record of where you went, when you went, how many miles you drove and the purpose for the trip.  Otherwise, there is no proof that you actually drove the number of miles claimed or the reason for the trip.

The lack of proof is why the IRS will disallow the deduction.  So keep a mileage log.

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