Hopefully, if you’re a parent, you’re enjoying some of the fruits of the Parent Tax (http://onforb.es/1OfmJU8). It is, after all, one of the rare times when we get to be the taxing authorities 🙂
But however you may handle that issue (and that article up there gets really, really geeky about it) … may I suggest that you use these next two months to think carefully about YOU paying less tax in your business?
We’re nearing year-end, and this is the time of the year when people usually ask me“Should I buy more office supplies or computers?” or “Should I hold off billing some clients in December?”.
My response is almost always the same, “Let’s evaluate your current financial statements.”
Because the answer does really depend on a variety of factors.
One of which is your business structure. A quick thought for you, today…
Evaluating Your Business Structure In Long Island and Stamford
“The upside is your future is in your hands. And the downside is your future is in your hands.” – Russ Myers
Many business-owner taxpayers are currently asking me the question which I actually think is the *best* one they can ask if they’re hit with an unexpected tax bill:
“What can I do so I don’t get hit with unexpected taxes next April?”
The answer? PLAN AHEAD!
The window of opportunity to pay less tax in 2015 is closing. Pretty soon, you’ll be stuck with whatever your plan is now.
Here’s a simple formula for you: More time to plan = Better tax plans = Less tax
Sure, there are strategies to pay less tax, find more deductions and above all else, reduce the chances for audit on your returns.
But if you want to really save on taxes, then plan your 2015 tax strategy. There is still time.
Over the last month, there have been times when I have met with a client, who owns a business (usually an LLC or a Sole Proprietorship), and they mention how hard they are getting hit with taxes, year after year. So, as you might expect, I offer to take a look at their tax returns for the past few years, and after doing so, I sometimes say to them,
“Exactly why aren’t you operating as an S-Corp?”
The answer is usually pretty similar, “I don’t know? … Should I be one?,” or “My prior accountant said I wasn’t ‘big enough’ to be an S-Corp,” or “My prior accountant said I ‘didn’t make enough money’ to be an S-Corp or ‘don’t have any risk’ in my business, so I didn’t need to be an S-Corp.”
I have rarely met an S-Corp structure which I didn’t like. But it is true — they don’t necessarily work for everyone. But, if done right, they often can return 4-5 figures of savings per year for a business.
Perhaps it’s an oversimplification, but when it comes down to it, there really are just three different tax rate tables:
1) Individual income tax rates
2) Corporate income tax rates
3) Trust income tax rates
Depending on your business structure, and your business characterization, you might be operating under one, both, or all three of these rate tables.
So let’s take advantage of all of the planning opportunities available to you. If your income is at the higher brackets, you can easily save $10,000 or more per year in taxes just by making some tweaks in your business structure.
Perhaps for you, years ago an LLC made sense, but it doesn’t anymore. And, when you ask your accountant about it and they respond with one of the responses above, well then you know that it is probably time to get a second opinion.
Plan ahead. Reap the rewards.
So if YOU TOO want to challenge the status quo to get your business creating the results you’ve always dreamed for you and your family, we’re a phone call away: (516) 449-2852 or (203) 658-5092.
Feel very free to share this article with a Long Island and Stamford business associate or client you know who could benefit from our assistance — or simply send them our way? These particular articles usually relate to business strategy because, as you know, we are Profitability Consultants also specializing in tax preparation and planning for Long Island and Stamford families and business owners. And we always make room for referrals from trusted sources like you.
Warmly (and until next week),
Michael J. Kessler, CPA
PS–Join us for our show Business Profits In The Real World Saturday afternoons at 4 on 103.9FM WRCN where we bring you Long Island and The New York-Metro’s most successful business owners sharing how you too can bring your business to among the most profitable in your industry. No radio? No problem! Listen live at LINewsRadio.com – or can’t listen live? Hear our past shows at MichaelKesslerCPA.com