I hosted a live webinar a week ago on the topic “3 Simple Tax Strategies That Will help you to keep $20,000 and more in cash." Since I was not able to record a replay, here is a high level summary of what was covered in the live webinar.
In business cash is king and that why I focus on cash flow and what can you do to keep more money in your bank account. We all know the phrase “It’s not how much you make, it’s how much you keep”, and if you’re in business long enough then you will know this statement very well. A business can have cash flow problems due to several reasons, however, one solution for this is tax planning and keeping more money in your bank account and away from the IRS.
The webinar focused on three areas where you as a business owner can save money money and see the actual cash sitting in your bank account.
1) Entity Choice – even with the reasonable salary requirement and other rules. S-Corporation is still the winner for saving cash tax dollars for small business owners. You will still have to follow the rules to keep your S status.
a. With the new limitations for consultants and professional service businesses, you will have to play around with how you pay yourself in order to reap the benefits of the 20% new business deduction.
b. Yes, the tax rate for C-Corporation is extremely low, but don’t forget about double taxation. You will end of paying more in the end.
2) Pulling Tax Free Cash Out of Your Business – I presented 4 options that you can look into:
a. Reimbursements from the business for personal items
b. Rent Free Rule
c. Hire your child and get tax-free cash
d. Husband and Wife Vacation as Board Meetings
3) Maximize Savings for Having Employees with Tax Credits - The big one is retraining credits. Most states have theses and today with use of technology in every business, it is super easy to qualify. The key here is you have to have employees…
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