The Real Definition of Tax Planning

What's the most tax advantaged group in the tax code? The answer may surprise you, especially if you're a business owner. But the answer is simple - you, the business owner are POTENTIALLY the most tax advantaged group in the tax code. Believe it or not, business owners get all the breaks. And no, the tax breaks are not just for the Fortune 500 companies, but the middle market, small business, or family owned business all the same. I would add a caveat to make it a little more believable and accurate. The most advantaged group in the tax code is the INFORMED business owner. If you feel encumbered by the tax code and business laws, and don't see too many breaks coming your way, it's because you fall into the unfortunate group called the UNINFORMED business owners!

So, how do you become one of these favored informed business owners so you can start to see these benefits come your way? The answer is strategic tax planning. Or better yet, you need to find a professional that can provide you with comprehensive, strategic tax planning. To define it, let me first tell you what it's NOT.

Strategic Tax Planning is NOT:

• Tax Compliance - Tax compliance is a necessary evil. Preparing financial statements, filing tax returns, making estimated payments, and so on, is tax compliance. It is a very necessary service, but takes more dollars out of your pocket than what it puts into your pocket. I like to think of tax compliance as the scorekeeper of the football game. Keeping score as the game progresses. But if your team is losing big on any given Sunday - Do you get mad at the scorekeeper? No! And please don't get mad at your scorekeeper / accountant, they are doing exactly what you pay them to do. Tax planning, on the other hand, is the coach that formulates the game plan and develops the strategies throughout the year. Are you and your business missing this planning function?

• The Big Three Tax Ideas - This is my nickname for three practices that sometimes give business owners a bad impression of tax planning. The Big Three are again NOT tax planning. The Big Three are:

1. Buying Equipment solely for the "write-off" - if you need the equipment great. Buying equipment in the most tax advantaged manner is wise, but I have seen too many garages and warehouses full of new, unused equipment. If the equipment is not going to make you money today, don't buy it. Does it make business sense to spend $100 to get a $30 deduction? No!

2. Paying yourself a bonus to pay your taxes. You are actually increasing your taxes (payroll and income) to pay the tax. Again the idea with tax planning is to REDUCE your tax.

3. Writing off obsolete inventory - If you have obsolete inventory, great, write it off. But again, this is not tax planning.

• End of the Year Ideas - "Wow, Mr. or Ms. Business Owner, you've had a great year or worse yet great last year - you owe a lot of tax." "What Can I do?" "Well you made money so you will simply have to pay a lot of tax!" If this sounds familiar you know this is not tax planning. Tax planning cannot simply be performed at the end of the year or the beginning of the next year. Regardless of when the taxes are actually filed, the facts that determine how much tax you pay are history at that point.

• Showing Zero Income - Tax planning is not a matter of the questionable and risky process of wiping out the income "on the books" to pay no tax. This practice severely reduces the value of your business, your ability to get financing without personal guarantees, and your ability to get bonding. The big companies do tax planning while showing a profit and providing shareholder value and return. They need to show the biggest profit possible while reducing one of their biggest expenses - taxes.

• I'm Getting a Refund - Please, once and for all, getting a refund is not a good thing. It doesn't mean you didn't pay tax - it means you gave the government an interest free loan. And since the government is unlikely to give you an interest free loan, don't give one to them. You need to look at the payroll and income taxes that you and your business are paying. For cash flow purposes, you want to pay your taxes timely, but as late in the game as possible.

What Strategic Tax Planning IS:

• Entity Structure Planning - Create the optimal entity structure for your business and you personally to maximize your tax benefits and legal asset protection benefits.

• Compensation and Benefit Planning - Develop strategies that meet your personal and business short and long goals and objectives. Its really about minimizing taxes and out of pocket expenses paid with after tax dollars. The goal is maximize your income and the amount available to the business by minimizing your taxes across the board

• Maximize Advanced Retirement Planning and Income Deferral Opportunities - Business owners must annually capitalize on techniques to maximize monies and continued income streams available for life after the business.

• Utilize Succession, Exit Strategy, and Estate Planning Opportunities - Remember, when you exit your business, it will be a taxable event. Develop a plan to minimize taxes on the transfer to ensure you walk away with as much money as possible.

• Avoid or Eliminate Questionable or "Grey Area" Tax Planning Strategies to reduce Audit Risk - All your tax planning strategies should be supported by the black and white language of the IRS Tax Code and Regulations. For the informed business owner many opportunities exist.

Think About It..... The Need for Tax Planning!

Your business is an S-Corporation to avoid corporate level tax. The business earns $100.00. To put that in your pocket, you must pay employee and employer level payroll tax-15.3%. Your remaining $85.00 is then subject to your personal tax rate-35%. You now have $55.00 in your pocket. Do you dare spend it and reduce it further with sales tax? No, you decide to save it. If you die with that $55.00 in your pocket, the estate tax can tax an additional 45% from you and your surviving family members. You now pass on $30.00 to your family after passing $70.00 to the government in the form of taxes.

If that doesn't offend you - just keep on doing what you're doing.

Timothy Foster, JD, MST, Founding and Managing Member of The Business Wealth Preservation Group, LLC, a professional services firm dedicated to counseling business owners in the areas of strategic tax planning, asset protection planning, exit strategies and wealth building strategies. Tim has earned a Masters Degree in Taxation and a Juris Doctor from Duquesne University School of Law. Timothy's career includes positions with a Big Four national consulting practice where he focused on developing and presenting strategies for Fortune 500 clients and more that 10 years experience in a corporate tax group for a global energy company. For the past decade, he has dedicated his passion and energy to the process of developing and overseeing the presentation of strategies for hundreds of diverse middle market and closely held businesses and their owners. For more information call us toll free 1-888-WE-TAXPLAN or visit us on the web at http://www.businesswealthpreservation.com
Article Source: [http://EzineArticles.com/?The-Real-Definition-of-Tax-Planning&id=3808557] The Real Definition of Tax Planning

San Antonio Real Estate

San Antonio has a very vibrant real estate market. Both the Alamo City's commercial and residential real estate markets are growing at fast pace. A number of factors contribute to the progressive real estate market in the city, including San Antonio's vibrant economy and labor supply, excellent weather, and low cost of living. There are a number of large corporations that have established their headquarters in San Antonio, such as AT&T, Tesoro Petroleum Corporation, Clear Channel Communications, and others.

Meanwhile, the housing real estate markets of San Antonio and surrounding areas are flourishing. Many people are attracted to San Antonio because of the very affordable cost of living. The price of homes within San Antonio is roughly thirty percent below the national average. According to the San Antonio Economic Development Foundation, housing in San Antonio is available at less than a fraction of the cost of housing in other cities in the U.S. More and more investments pour into the city?s real estate market, making San Antonio one of the fastest growing American cities.

And San Antonio still has an enormous room to grow. There is a wide area of undeveloped land within San Antonio. As the city's population increases, demand for affordable housing is going to rise at a fast pace. The excellent weather, and plentiful labor and building materials make real estate a worthwhile investment in San Antonio. If you are interested in investing in San Antonio, or if you are planning to transfer your home or office to the city, you can contact a San Antonio realtor to get the information you need. There are also many resources in the Internet on real estate in San Antonio. Here, you can find home and property listings and other real estate information you need.

San Antonio [http://www.i-SanAntonio.com] provides detailed information on San Antonio, San Antonio Real Estate, San Antonio Jobs, San Antonio Hotels and more. San Antonio is affiliated with [http://www.WetPluto.com/Charleston-SC.html]Charleston South Carolina Real Estate.

Article Source: [http://EzineArticles.com/?San-Antonio-Real-Estate&id=277790] San Antonio Real Estate

Tax Deductions - Tips For Individual Real Estate Investors

Tax deductions are not the top priority for most individual real estate investors. They often work out of their home with no employees, other than those on-site at the property. Challenges (aside from tax deductions) include selecting what property to purchase, screening tenants, repairs, managing expenses, obtaining financing, and deciding when to sell. This article addresses tax deductions sometimes over-looked by real estate owners.

Tax deductions reduce taxable income but do not directly reduce taxes. For example, $10,000 in additional tax deductions will generate $3,500 in federal income tax savings ($10,000 X 35%), assuming a 35% federal income tax rate. Since most require a cash expenditure, increasing actual expenses to increase tax deductions is not desirable. Let's review fine-tuning the depreciation schedule and reclassifying existing expenditures to increase deductions.

Real estate depreciation is a potent but underutilized source of tax deductions. Real estate depreciation schedules are commonly established by just separating land from the improvements. This is analogous to asking a world-class pianist to play a piano which is not tuned and has several keys which are not functioning. The results are just not as good as they should be.

Congress has provided depreciation as a tax deduction to encourage real estate ownership and investment. Numerous court decisions have provided clear guidance for accurately and precisely depreciating real estate. Cost segregation can typically increase real estate depreciation by 50-100% in the first 5-7 years of ownership.

Owners can claim a tax deduction windfall for properties owned more than one year by "catching-up" previously under-reported depreciation. After obtaining a cost segregation report, you can "catch-up" depreciation without filing any amended tax returns.

Another meaningful source of tax deductions is to scrutinize any cash expenditures which are being capitalized. Have minor repairs been capitalized in error? Are there more significant repairs which do not clearly extend the life of a component? Discussing these items with your accountant can yield additional tax deductions Also review items which were capitalized in prior years; can you claim any of them as current year tax deductions?

Child labor can be good when they are your children and you claim a tax deduction. Consult your accountant or CPA but this can generate additional tax deductions of $5,000 per child, upon which they pay no taxes. (If they are feeling generous, they may return the money as a tax-free gift.)

A tax-deductible vacation is an attractive option to make an expenditure deductible. Simply plan a vacation around a business trip for a meeting or seminar. Your airfare and hotel for the business period are deductible. Hotel before or after the business activity and your spouse's airfare (assuming that your spouse is not involved in business) are not deductible. Half of meals during period with business activity are deductible.

Reviewing personal expenditures can generate additional tax deductions. Items used for business such as computer, printer, office supplies, seminars, association dues, and business publications can be deducted. Long distance business phone calls can also be deducted. Self-employed persons can deduct the entire cost of health insurance premiums.

Record keeping for tax deductions does take a modest effort. However, the federal income tax savings make it worth the effort.

Cost segregation produces tax deductions and reduces federal income taxes across the country and in every size market. Below are just a few examples of cities where cost segregation generates meaningful tax deductions.

City:
Las Vegas, NV
Boston, MA
Tampa, FL
Hartford, CT
San Francisco, CA
Memphis, TN
Miami, FL
Denver, CO
Phoenix, AZ
Orlando, FL
Boise, ID
Chicago, IL
El Paso, TX
Oxnard, CA
Rochester, NY
Cincinnati, OH
Jackson, MS
San Jose, CA
Fresno, CA
Charleston, SC
Omaha, NE
Oklahoma City, OK
Buffalo, NY
Albuquerque, NM
San Antonio, TX
Charlotte, NC
Allentown, PA
Austin, TX
Baton Rouge, LA
Jacksonville, TN

Cost segregation produces tax deductions for virtually all property types, including the following:

Property Type:
Used car lot
Research and development
Nursing home
Lumber storage
Truck stop
Tennis club
Hospital
School
Movie theatre
Lodging

Almost every industry, including the following, can generate cost-efficient tax deductions by using cost segregation.

Industry:
Golf courses and country clubs
Textile product mills
Nondurable good wholesalers
Durable good wholesalers
Real estate lesser
Electrical component manufacturing
Textile mills
Laundry facilities
Automotive parts distributors
Plastic and rubber products manufacturing

O'Connor & Associates is a national provider of commercial real estate consulting services including cost segregation studies,insurance valuations, [http://www.collincentralappraisaldistrict.com/Articles/due_diligence.cfm]due diligence, business valuation,tax deduction,tax reduction,property tax,real estate consulting,Denton Central Appraisal District,Tips and Tricks for Appealing Your Property Taxes in Collin,Collin county appraisal and Federal tax reduction. Our appraisers have experience with all types of property including department stores, research and developments, lumber storages, fast food restaurants, convenience stores, retail centers, airplane hangars, lodgings, daycare centers, hotels, truck stops, manufacturing/processing facilities, greenhouses and auto dealers.
Patrick C. O'Connor http://www.poconnor.com/

Article Source: [http://EzineArticles.com/?Tax-Deductions---Tips-For-Individual-Real-Estate-Investors&id=1422212] Tax Deductions - Tips For Individual Real Estate Investors

Top Benefits Of Proper Tax Planning

Author: Abhishek Agarwal

You have been hearing a lot of ideas on how to protect your investments and finances whether from the media or from other people and some from books. They tell you to save up for you to have a good retirement. But one thing that they often miss to discuss is tax planning. The money that you are going to have throughout the year depends on your taxes. For example you set aside filling out the forms to file your taxes and then the next day your fill out the forms in a rush then it results to a large amount of money that you have to pay each year. The way you file your taxes also affects the way you save money. This means that you might be paying a lot more than you are supposed to. But if you have a good tax planning then there is a big chance that you can avoid such problems. Planning may consume a lot of your time and it may be tedious but this will definitely benefit you in the long run. As long as you plan every decision you are going to make then your life will be a lot easier. This also applies to people who are requesting for tax refund. The advantage of this is that you can get more money than the usual. Good tax planning can provide you a great monetary life.

You should practice good tax planning all year round not just the time you are going to file your taxes. One good practice is to save receipts that may contribute on tax deductions. If know you do not practice such this may affect the way you are going to feel in the future. It is better to put some effort now than paying a large amount of money in the future no one will benefit from this but you. Another way to practice good tax planning is to equip your self with expense tracking software. This software will help you keep track of your expenses while you are confident that you are prepared when are going to be audited just in case. Because there are some cases that regular people are audited even if there are no problems with there papers. Every year, the IRS conducts a random audit that is why any one can be audited so make sure that you are prepared when the time comes. So tax planning all through out the year will be a great advantage on your part because you do not have to worry about anything. You can show all the information that the auditor is going to need to prove that your papers are legal.


Article Source: http://www.articlesbase.com/taxes-articles/top-benefits-of-proper-tax-planning-708628.html

About the AuthorAbhishek is a Tax Consultant and he has got some great tips on Filing And Understanding Taxes! Download his FREE 84 Pages Ebook, "Taxes Made Easy!" from his website http://www.Taxes-Guru.com/777/index.htm . Only limited Free Copies available.