Business Is Now Making 7 Figures - Taxes are killing me - Advice?

[Kak]

Or maybe I have 8 figures in assets/investments and the 1 mil in net profits a year is made for the sole purpose of spending and having a great f'ing time.

Me thinks you make too many assumptions ...

Me thinks you are an IRS agent.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Kak]

Clearly his spending habits would argue he has a government job and plans on having a pension. Yup IRS.

 

[GlobalWealth]

Let me clarify for those rational thinkers still following this thread.

Income - expenses = profit
Profit - tax = savings
Savings x interest on investments = wealth

How to increase wealth:

Increase income
Decrease expenses
Decrease taxes
Increase interest on investments

This topic was originally about how to minimize taxes and morphed into an offshore discussion

If you have an online business (there are other options) you "may" have the ability to move that business offshore

If you can move the business offshore, you can pay little/no tax on the business' earnings (decrease tax = increase wealth)

If you can eliminate/defer taxes offshore, you can compound wealth exponentially

If you are hard headed and have a decided you know more than anyone else you are F*cked

I just reread this and want to clarify one point.

Savings x interests on investments = wealth

This example was clearly oversimplified. What I mean is you must first earn money - and save some - in order to invest. Once you invest, you can then earn a return on that investment.

That investment may be in other businesses, real estate, stocks, bonds, private equity or whatever. But the idea is that in order to increase your wealth, you need to have more savings. And for that you must; 1- earn more, 2- spend less, 3- pay less in tax, or ideally all 3.

 

[Tiago]

Have you considered relocating your business to the state of New York? If you're eligible, you could pay 0 taxes for 10 years! NEW YORK
IS TAKING CARE OF BUSINESS

There’s a new advantage to doing business in New York. A big one. START-UP NY, Governor Cuomo’s groundbreaking initiative, is transforming communities across the state into tax-free sites for new and expanding businesses. Now, businesses can operate 100% tax-free for 10 years. No income tax, business, corporate, state or local taxes, sales and property taxes, or franchise fees.
Eligibility

Many different types of businesses are eligible to apply to START-UP NY. In order to participate, your company must:

• Be a new company in New York State
• Be a foreign or domestic company that is relocating to New York State
• Be an existing New York State company that’s expanding — for example, a company creating a new line of business or opening a new advanced manufacturing facility — and not simply moving existing jobs from one location to another location
• Be aligned with the academic mission of the college or university with which you hope to work
• Be able to create new jobs in the first year
• Be able to bring positive and economic benefits

In New York City, Long Island and Westchester County, businesses must be start-ups or high-tech companies.


Non-Eligible Businesses
Certain types of businesses are excluded from the program. These include:

• Retail and wholesale businesses
• Restaurants
• Real estate brokers
• Law firms
• Medical or dental practices
• Real estate management companies
• Hospitality (lodging for travelers or vacationers)
• Finance and financial services
• Businesses providing personal services (including personal care, death care, pet care, or laundry and cleaning services)
• Businesses providing business administrative or support services (unless the business is creating at least 100 new jobs and has received permission to participate)
• Accounting firms
• Businesses providing utilities, or energy production and distribution companies

This is a great opportunity! Not paying taxes for 10 years that's just amazing. I just wanted to share this with you guys, see more at http://startup.ny.gov

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Npard23]

Based on my knowledge, your best bet is a controlled foreign corporation based in Hong Kong or Singapore. With your kind of income, you can afford the $150,000 it would cost to set something like this up and be tax compliant with the IRS. This basically enables you to have a tax free holding company for all of your savings and investments. Only need pay when you want to come back and consume. If you are interested in something like this, I have tax experts in my network that can help so send me a PM.

As for the low interest loan scheme I read in this thread, that won't work. I know two people who got thrown in jail by the IRS by loaning each other six figure sums through their companies and classified earned income as debt repayments. Best bet is to avoid that kind of scheme.

 

[hurrMahGurt]

What a great thread. I've been doing a lot of research into this topic as it's something I've been dealing with the past couple of years.

I've considered renouncing my citizenship and finding a new home. My businesses are completely online and there's no reason to be based out of the US.

I plan on visiting islands in the Indian Ocean later this year to learn more about permanent residence programs and the idea of living permanently outside of the US.

GlobalWealth, do you have any articles/information you would recommend for someone in my position regarding renunciation? What does the average US citizen renouncing his citizenship look like? Mega-millionaires/billionaires?

 

[brandonrush]

Non-Eligible Businesses
Certain types of businesses are excluded from the program. These include:

• Retail and wholesale businesses
• Restaurants
• Real estate brokers
• Law firms
• Medical or dental practices
• Real estate management companies
• Hospitality (lodging for travelers or vacationers)
• Finance and financial services
• Businesses providing personal services (including personal care, death care, pet care, or laundry and cleaning services)
• Businesses providing business administrative or support services (unless the business is creating at least 100 new jobs and has received permission to participate)
• Accounting firms
• Businesses providing utilities, or energy production and distribution companies

That is interesting, but it sounds like only manufacturing businesses will be able to benefit off of this. With that list of excluded businesses, I can't think of anything else that would benefit.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[mememan]

Make less taxable as ordinary income. Hire a manager and become a limited partner. Don't work in the business.

Didn't you know the whole goal of the tax code is to make high earners want to quit their job and invest in passive income to prop up the stock market

 

[GlobalWealth]

What a great thread. I've been doing a lot of research into this topic as it's something I've been dealing with the past couple of years.

I've considered renouncing my citizenship and finding a new home. My businesses are completely online and there's no reason to be based out of the US.

I plan on visiting islands in the Indian Ocean later this year to learn more about permanent residence programs and the idea of living permanently outside of the US.

GlobalWealth, do you have any articles/information you would recommend for someone in my position regarding renunciation? What does the average US citizen renouncing his citizenship look like? Mega-millionaires/billionaires?

hurrMahGurt,

You can click the links in my signature below for info. We have a free newsletter you can subscribe to. We also offer various education and consulting for people who need to make the move. You can also send me a pm.

 

[Leonard Dollars]

What a great thread. I've been doing a lot of research into this topic as it's something I've been dealing with the past couple of years.

I've considered renouncing my citizenship and finding a new home. My businesses are completely online and there's no reason to be based out of the US.

I plan on visiting islands in the Indian Ocean later this year to learn more about permanent residence programs and the idea of living permanently outside of the US.

GlobalWealth, do you have any articles/information you would recommend for someone in my position regarding renunciation? What does the average US citizen renouncing his citizenship look like? Mega-millionaires/billionaires?

Great blog I've personally learned a ton from
http://premieroffshore.com/category/articles/

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[InLikeFlint]

Haven't read all the posts in the thread so it's possible someone has already mentioned this...but if the money/goods/services are only passed internationally (UK to Canada for example) then it could potentially be taxed only as a foreign investment, which would be around 20%, I believe. However, this is assuming you have the ability to establish the international --> international trade of services, which could prove difficult depending on the business.

 

[HenkHolland]

I would be happy to pay 40% income tax.
The majority of my income is in the 52% tax bracket.
We used to have a tax bracket of 72% here in the past (in the seventies and eighties. So, your 40% sounds like a steal to me.

 

[Stephanos83]

I would be happy to pay 40% income tax.
The majority of my income is in the 52% tax bracket.
We used to have a tax bracket of 72% here in the past (in the seventies and eighties. So, your 40% sounds like a steal to me.

Of course that depends on what you're getting for it in terms of services, infrastructure, and leadership. Many countries aren't worth their price tags in this regard. There's usually a lot of waste and abuse of the money taken. Most of it is paid by the middle class or slowlaners. Not a fan of high taxes especially when I have little say over how it gets spent.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[GlobalWealth]

I would be happy to pay 40% income tax.
The majority of my income is in the 52% tax bracket.
We used to have a tax bracket of 72% here in the past (in the seventies and eighties. So, your 40% sounds like a steal to me.

If you would be happy paying 40%, then would you be even happier paying 20%? How about 10%? Or even 0%?