This article is the last in a series of pieces on how to dramatically reduce your income taxes legally and ethically. If you missed the first two you can review them before moving on to this article; Income Taxes – Beating the Biggest Wealth Drain and Give Yourself A Raise Without Asking Your Boss. These other two articles discuss the hundreds of deductions you qualify for when you own a business as opposed to being an employee. First we show you how everyone can have a small business even if they’re a current employee working for someone else. Specifically we talked about 4 strategies out of those many hundred of deductions that you can start to use immediately to increase your net take home pay. Now let’s talk about the 5th and a special discussion on a superior business structure for successful businesses to lower their taxes by 50% or more.
TAX DEDUCTION 5 $25,000 Vehicle Deduction
Per Section 179, you may be able to expense some or all of your business use of your vehicle. Basically, if your vehicle weighs more than 6,000 pounds, you can expense up to $25,000 the first year the vehicle is used in your business. You also must use the vehicle at least 50% for business in order to qualify. The $25,000 deduction assumes 100% business use. If you use your vehicle 75% for business, you would get 75% of the $25,000 or $18,750.
Car Used Less Than 50% for Business
If the business use of your car drops to 50% or less, there are certain rules that apply. These include:
- You cannot take a Section 179 deduction for your heavy vehicle.
- You must use the straight-line method of depreciating your vehicle. While the five-year period still applies, this will result in a lower depreciation deduction in the earlier years.These 5 strategies are just the tip of the iceberg that I mention here and in the other two articles.
These 5 strategies are just the tip of the iceberg that I mention here and in the other two articles.
If you are already a successful business owner and feel like you are implementing every legitimate tax deduction, but are still paying $150,000 or more in annual income taxes there is a different specific strategy for you. There is a little known company structure that may help you save 50% or more on your income taxes every year. We call this our income efficiency strategy and work in conjunction with a very high level attorney to structure these programs. It is very unlikely your current tax professional will be aware of this business structure but this attorney has been utilizing them for clients since 1998. However, the attorney who sets these up will be happy to have conference calls with your tax professionals to explain the program in depth. This attorney is not trying to replace your current professional but rather work with them to implement this plan for your business.
You will utilize structures that have been around for decades and most tax professionals mistakenly believe are only good for public corporations. These are structures that Lowes®, Southwest Airlines®, and Home Depot® use just to name a few. Now the successful small business owner can utilize the same structures as the big boys thereby dramatically lowering your tax liability.
I don’t want to bore you with details here but if you are in that small group who are paying those kinds of taxes we have a real solution that has been looked at by the IRS several times since 1998 and every time there were no changes required for the client. In other words this is not some kind of a scam or loophole but rather a very specific company structure that will fit into your existing business model to dramatically reduce your income taxes. Send us an email at [email protected] with the subject line “income efficiency strategy” and we will have one of our professional teammates reach back out to you to see if we can help.
Tune in to next week when we talk about investing in real estate even if you have no cash!