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Tax Planning for Entrepreneurs
SUMMARY:
In today’s episode of Sailing Success Online Support’s Podcast, Lyndsay Phillips interviews Diane Gardner, best selling author of five books, speaker, tax coach, and owner of Adept Business Solutions. She saved her clients over $503.000 in tax payments and we are going to discuss some tips on how you can start doing the same in your own business through tax planning.
Main questions asked:
- What are the three biggest mistakes people make regarding tax planning?
- What is an entity structure?
- Are there any monetary caps for when you need to hire a tax coach?
- Tips on how entrepreneurs can save money through tax planning?
KEY LESSONS LEARNED:
Lack of planning
- Without a plan you are not going to go anywhere and you are bound to repeat your mistakes.
- You can make a plan to lower your tax liability instead of simply passing a check every year that costs your several thousands of dollars.
How to mitigate your tax liability
- The best way is to contract a Certified Tax Coach.
Difference between a CPA and a Certified Tax Coach
- CPA are accountants that don’t necessarily specialize in income tax.
- CA are specialized tax professionals certified by the IRS.
- Certified Tax Coach is an elite certification provided by the IRS.
Entity structures
- There are different entity types that a business can operate in.
- Some entities offer a liability structure and you may be losing thousands of dollars if you are in the wrong type structure.
- You should review your entity type every 2-3 years.
Finding a Tax Coach
- Finding your perfect Tax Coach is like dating: he should have the same philosophy as you do (being entrepreneurial).
How to save money
- You should keep your written mileage log; each mile is worth 0.54$ per mile in deductions in 2016.
- Meals can be deductible as long as there is a statement of business intent purpose (it allows it to stand up in audit).
- Hire your kids: you can actually pay them to do things they enjoy such as social media and blogging. The first 6300$ are potentially tax free.
- Create a retirement plan.
- You can deduct health expenses depending on your business.
LINKS TO RESOURCES MENTIONED:
