User Power
Value/Post Ratio
213%
- Jan 23, 2014
- 119
- 254
I'm not a Tax Attorney or CPA, This is not advice & you should always consult a professional.
From my understanding your making a full time living off your business & so are a lot of people here. Here are a couple things that I have done to structure & limit my tax burden.
1.) Move to a state with no Corporate Income Tax & Person Income Tax on earned income & dividends.
2.) Take advantage of every deduction that you will benefit you. (Don't just take a deduction for the sake of taking a deduction if it provides no benefits)
3.) Own nothing, Control Everything. All you businesses that are making profits should be owned (NOT BY YOU) but by a central Holding Company or Trust that you control.
ex: I have multiple e-commerce businesses.
(Ecom Company One)-----|
(Ecom Company Two)-----|---Owned By-----| (Trivium Holding Company)
(Ecom Company Three)---|
4.) Pay yourself a reasonable salary (according to the irs) & take the profits that you don't re-invest as Long Term Qualified Distribution. Since you are an S-Corp you will be eligible for Long Term Dividends rates taxed @ (0%,15%,20%).
ex: Company Makes 300k In Profits
100k Salary, 200k In dividends -15% tax = 170k.
5.) Learn to invest your money in cash-producing assetts.
If your accountant says that you should open up a 401k or an IRA punch them in the mouth and find a new accountant.
From my understanding your making a full time living off your business & so are a lot of people here. Here are a couple things that I have done to structure & limit my tax burden.
1.) Move to a state with no Corporate Income Tax & Person Income Tax on earned income & dividends.
2.) Take advantage of every deduction that you will benefit you. (Don't just take a deduction for the sake of taking a deduction if it provides no benefits)
3.) Own nothing, Control Everything. All you businesses that are making profits should be owned (NOT BY YOU) but by a central Holding Company or Trust that you control.
ex: I have multiple e-commerce businesses.
(Ecom Company One)-----|
(Ecom Company Two)-----|---Owned By-----| (Trivium Holding Company)
(Ecom Company Three)---|
4.) Pay yourself a reasonable salary (according to the irs) & take the profits that you don't re-invest as Long Term Qualified Distribution. Since you are an S-Corp you will be eligible for Long Term Dividends rates taxed @ (0%,15%,20%).
ex: Company Makes 300k In Profits
100k Salary, 200k In dividends -15% tax = 170k.
5.) Learn to invest your money in cash-producing assetts.
If your accountant says that you should open up a 401k or an IRA punch them in the mouth and find a new accountant.