British Air announced that its worldwide computers are down, again. Is your small business tax planning like BA’s XP style computer?
Here is the problem with small business tax planning. Your CPA is using the same tax plan as when your computer used Window’s XP. You have updated your infrastructure for your business but not your tax plan. Business in 2016 is nothing like in 1998.
Congress reported that U.S. business that legitimately plan their taxes have a 14% tax rate. And there is more. Half of those business paid legally paid no tax.
My question to you: “Are you paying more than your fair share in taxes?”
Here are four indicators that your CPA is stuck in the 1900’s XP tax planning:
- He does year-end tax planning. Great tax planning is designed for years in advance focusing on each of your sources of income.
- He talks about deducting the cost of new equipment as if he has saved you money. Spending money on new equipment is not a tax plan. It is money lost unless you need the equipment. Then, it is an investment in growth and not a tax plan.
- He has you in an IRA plan. Present value math models show that a 401K plan does not save taxes. IRA plans dramatically increases your taxable income after age 70 causing a net after-tax loss.
- He never mentions a Nevada trust. Not only does a Nevada trust eliminate income taxes, but it also protects your assets (just in case we have another Great Recession).
Internet web-based and e-commerce businesses are saving taxes by using the internet to shift income to a low tax state or even a tax haven. Spend six minutes and listen to first few chapters of my book, below, to learn how the cloud-based and e-commerce businesses are paying less in taxes.
Internet marketing businesses and app companies can quickly shift their income to a no tax state, such as Nevada, or a no tax e-commerce country such as Canada.