Tag Archives: small business tax

Cloud Continues to Disrupt Business – 1,000s of Robots Laid Off

International tax planning compares last century's tax laws to this century's business. Then , it exploits the differences.

International tax planning compares last Century’s tax laws to this Century’s business. Then, it exploits the differences.

Using your knowledge the 1990s and the beginning of this Century will cause you to pay more in taxes and it can put you out of business.

You have to compete with the future. Blockbuster’s demise is old news from the beginning of this century.   Just ten years later, the killer of Blockbuster is dying.   Redbox has closed (laid off) 1,000s of it robotic DVD rental kiosks in the U.S.

 In 2015, it closed all of its DVD rental kiosks in Canada.   Netflix and other video streamers are slaying the king of the DVD rental kiosks. Redbox’s $1 a night became too expensive. Netflix is $10 a month, and you can watch as many hours as you want with 50,000 choices.   With Redbox, you had to rush to the kiosks to return the DVD.

American international tax laws were written and were designed for a 1930 economy.

Offshore tax planning compares the out of date concepts in our tax laws to 21st Century business. Then, it exploits the differences.  Your tax planner must forget last century’s tax planning and learn this century’s.  Even the first ten years of this century is partly obsolete.  

If this was 2005, you would not have a smartphone. Yep, no apps.  I don’t know about you, but I use my iPhone and iPad for business more than I use my landline and my computer combined.   

Great tax planning sees the trends and changes.

With the iPhone came the  streaming of music.  If the computer server hosting the music was located in the Cayman Islands, the income would be foreign source income and not U.S. source regardless of the location of the customer.

Look at banking.   Are ATM’s the next to be laid off?  Do you want to deposit your checks like this,  in the dark watching over your shoulder?

Internet businesses can decide who is going to tax them just by using the cloud.

Internet businesses can decide who is going to tax them just by using the cloud.

Or like this- At home with a smartphone app where it is safe. By changing your business, you not only survive, but you can also completely shift your tax profile.

For example, if you distribute a product, spend some time learning about 3D printing or using a fulfillment center.   If you have an e-commerce business,  consider streaming your product versus providing a mp3 file or a pdf file.  Internet tax planning starts with shifting the source of the income.

For some, it is merely a move to Nevada or Texas to escape California or New York taxation.  For others, it is outside of the U.S., such as Canada (yes, it is an internet tax haven) or Ireland.  By the way, California tax planning and New York tax planning just became more important.  State income taxes are no longer deductible. 

If you want to brainstorm your idea and dream about your future, then call me, Brian Dooley, CPA, MBT, at 949-939-3414 for a free one-hour consultation with you and your CPA,

Why JFK Said Avoiding Taxes is Patriotic & Good for America

tax planning, avoid taxes, small tax business,

President John Kennedy (Democrat) is the most respected president of last century. The President and Supreme Court Justice Hand agreed that patriotism does not mean paying more than your legal share.
Supreme Court Justice Holmes said tax planning means you get as close to that legal line as possible

John F. Kennedy stated,  “My fellow Americans, ask not what your country can do for you, ask what you can do for your country.”

He also said that  “Every dollar released from taxation that is spared or invested will create a new job and a new salary.”

You, the business owner, are the only one that creates real jobs. The more you avoid taxes, the more jobs you can create. Continue reading

How the Rich Pay Lower Taxes and How Can You Do It?

Smart business owners are not too busy to save taxes.

Smart business owners are not too busy to save taxes.

The Wealthy are not like us.  They are willing to spend money to make money.  They are willing to pay their tax team a $1 to save $10 in taxes.

This Wealthy (called the “one percent”) create most of the jobs in the U.S. They pay  half of all income taxes.  But, at the same time, they usually in a lower tax rate than the rest of us. 

The Wealthy use long-term tax strategies.  These strategies tweak their business structure.     Different parts of a business have different tax laws.  For example, if you have a sales force, they should be in a different corporation than your business. Continue reading

What Billionaires are doing that small businesses are not.

best tax plan, small business tax,

Small business pays more in taxes than Big Business due to a lack of tax planning. Small business thinks of year-end tax plans.
Big business thinks of tax strategies. The average tax rate of big business is 14%.

In a recent report, Congress blamed Americans for paying too much tax.  Congress reported that the average tax rate of tax planning businesses is 14% (more on this link).

 Matter of fact, Congress reported most tax planning businesses paid no income taxes. 

  For decades fools .” shelters.  They “invest” their money and are told that the investment will give them deductions or a tax credit. These fools do no work hard to pay the as little taxes as possible.  They just wrote a check.

 This is not what Billionaires do.  Billionaires work hard to pay  fewer taxes. 

They avoid taxes by structuring their business deals in what is known as a “tax efficient strategy.”    This allows all of their profit to be used for growth or for saving for that “rainy day”.  

So, why is the small business owner not taxed at 14%?
– Are they too busy for tax planning?
– Can’t find the right CPA or attorney?
– Don’t want to spend money on professional fees?

Congress’s report has some answers.

Continue reading

tax planning, avoid taxes, small tax business,

Great Tax Savings using the New IRS Regulations on Debt versus Equity

tax planning, avoid taxes, small tax business,

President John Kennedy (Democrat) is the most respected president of last century. The President and Supreme Court Justice Hand agreed that patriotism does not mean paying more than your legal share.
Supreme Court Justice Holmes said tax planning means you get as close to that legal line as possible.

If you were a tax nerd, like me, you would have read many many articles on the new IRS section 385 regulations (debt versus equity transactions).  Nobody like change and that applies to most tax planners.   But for every action, there is an equal reaction.

While corporate tax planning will be more complex with these regulations, small business tax planning is improved.

 This blog looks at shifting income and wealth by valuing a promissory note.  For estate tax planning, you want the note to have a low value.

For small business income tax planning, you want the note to have a high value or a low value. In the example below,  the note had a low value.  
Continue reading