Taxes and rumors of taxes. You’ve probably already heard it. Better look out, your taxes are going up. Maybe WAY, WAY up.
Yep, they probably are. BUT you can do something about it, if you ACT NOW.
Do NOT WAIT. These are things you need to do in the next two months if you want to get ahead of this issue.
That’s what today’s email is all about.
You can ignore it and just wait for you to have less and less money in your pocket. Or you can take action.
It won’t be easy. New habits never are.
But it is possible. What will you choose?
Here we go, if you’re still with me.
The one thing that is certain is change. Hopefully it’s not going to always be as disruptive or adversarial as it has been lately, but change will happen regardless.
One thing I can talk about is taxes. There has been a lot of concern that US law is about to radically change. Maybe Social Security is going to get cut off. There could be new and different taxes that will bankrupt the middle class. Inheritance, estate, income, sales tax….you name it, there is a lot of concern.
It all comes down to one thing.
How can you keep your hard-earned money?
How can YOU determine what social programs and charities you support, instead of letting the government decide how to spend the money you pay them in taxes?
That’s what we talk about at USTaxAid.com. Make more. Keep more. Do more with what you have.
There are five steps you can take IMMEDIATELY if you’re facing financial stress.
#1: See where you really are right now.
A lot of Americans have gotten hammered with job loss and shuttered businesses. Maybe you have renters who aren’t paying the rent and so your cash flow is flowing out of your pocket not in.
Or maybe you’re in one of the businesses that is busier than normal now.
You need to have a clear idea of where you are.
And that means getting accurate financial statements. If you have a business, that means a current and accurate Balance Sheet and Profit & Loss, at a minimum. Real estate investments don’t need the Balance Sheet, necessarily, an accurate Profit & Loss, even on a spreadsheet program will work.
If you don’t have a business, you need an accurate estimate of taxable income for the year, including unemployment, wages, capital gains or losses from selling assets and other incomes. You’ll also need a good guess of the amount of your deductions for the year. If not much has changed for them, use last year’s tax return amount.
And then finally, whether you have a business and/or real estate or have neither, you will need to know how much you have paid in for taxes during the year. This includes your federal and state income tax withholding (dollar amount, not percentage), estimated taxes and mandatory withholding from asset sales.
For example, if you received unemployment and said you wanted to pay 10% in taxes, then you’ll need to know the total dollar amount, not just a percentage.
Step #1 is Know Your Numbers NOW.
This is the step where most people just stop. For whatever reason, they just stop.
Too much work, too much fear, too much need for control, or whatever other limiting belief or habit, they can’t or won’t look at where they are.
Are you brave enough to take that first step now?
If we can help with bookkeeping support, please Click here
#2: Start a business.
If you don’t have a business start an online business.
Five reasons why an online business is better as your first business:
- It’s faster to set up. You can get one going in a couple of days.
- It’s cheaper to set up and run. WAY cheaper. That means more money in your pocket.
- It’s more flexible, so you can make money no matter what is going on with your industry or the economy.
- You can work and live anywhere! Geo-arbitrage is alive and well for online business owners.
- There are more tax deductions available. WAY more. You can legally make $100K or more and pay no taxes.
For years, I’ve told people to start a business if they wanted to control their cash flow, wealth building and when & how much tax they paid.
Then 21 years ago, I started my first online business. And then 7 years later, I took my bricks and mortar CPA practice virtual. We have rental properties which are obviously bricks and mortar, but other than that, we make money online. Period. It’s all virtual.
And thank goodness we had that when this pandemic happened. We were able to keep working without skipping a beat.
I’ve searched for years to find a starter course I could recommend to those who wanted an to start an online business. I found some great courses for people who had already started their online businesses. They usually run $2,500 – $5,000. And there are mentors you can hire for $2,500 – $10,000 upfront PLUS monthly fees ranging from $100 – $750/month.
Honestly, if you have a successful business already, this might be just what you need to kick it up into the next level.
I have had coaches off and on through my whole career. It has always helped my business.
But if you’re just starting, it’s not the right time for help to grow your business.
You have to first START your business.
That’s why I created the Sustainable Digital Empires as part of the coaching program. For $99/month, there are 4 weekly sessions, home study courses and live coaching regarding business, real estate investing and starting , growing & running a digital business.
It also includes all three aspects of a business that is sustainable: sales/marketing, fulfillment and admin/management. Most other online business coaches focus solely on marketing (hence, the term “internet marketing”). It’s vital but if you don’t have the other parts, you’re going to eventually fail. A SUSTAINABLE business needs all 3 parts. Otherwise, your business and cash will inevitably disappear.
There are a couple of ways to learn how to start an online business. The cheapest, fastest way is to join Coaching TODAY.
#3: Set up a tax saving strategy.
There are 4 main things you can do to pay less tax now:
- Reduce your taxable income (NOTE: This doesn’t mean you make less, just less is taxable)
- Increase your tax deductions
- Reduce your tax rate
- Change the timing of when you pay taxes
You can get fancy, and find ways to legally get set up to pay little or no tax.
Recently I helped a client legally pay no tax on an annual income of $100,000. And with a trick from Sustainable Digital Empires, she increased her income by over 20% with no additional expense and very little hassle. (That’s what got her to $100K)
In her case, it was a matter of changing a business structure, increasing some legal tax deductions and reducing the tax rate.
Those are the type of tips that we talk about during the regular coaching classes. Plus our full service tax firm can help you set up to pay less tax and properly file your tax returns.
Join Coaching Now. Find out more about our Full Service Tax Services.
#4: Understand your own unique tax circumstances.
Real estate investing is a great example of how a one size fits all strategy simply doesn’t work.
You may have a real estate business and not a real estate investment. The tax rules are radically different between the two investment types. And it’s possible to switch from one to the other. Which one works best for you?
If you have a real estate tax loss (which often happens with depreciation), you may or may not be able to make use of it. It depends on your own adjusted gross income.
If you have income, can you take advantage of the QBI (20% deduction)?
Are you a real estate professional? Or should you be, for tax purposes?
Those are just some of the things to consider for your taxes if you have real estate.
If you have a business, you will have different opportunities. And those even vary based on the type of business. Plus, we need to factor in where you live and where you sell. States provide unique circumstances themselves.
There is no one size fits all. If someone tries to sell you something that fixes EVERYTHING without asking you any questions, run!
You need tax strategies that fit you, not the other way around.
#5: Don’t buy into the hype without solid information.
Every year there are myths that get bandied around. I don’t know where they get started but wow, they are pervasive. Here are a few I’ve heard recently.
Myth: You can hide from the IRS and/or state tax.
It’s simply not true. They will find you. If they don’t find you in your lifetime (unlikely), they will find your heirs. If you haven’t filed your return, you can catch up and negotiate a settlement. If they find you first, your ability to negotiate goes out the window.
And as bad as the IRS is, some states, like California, are much, much worse. The penalties just don’t stop until you file the returns and formally close out CA entities. Otherwise, they will track you down and periodically sweep out your bank accounts NO MATTER WHERE they are. Other states, other countries. They will find you.
Clean it up first, on your terms.
Myth: This one business structure (trust, C corporation, some super secret whatever) is the answer to everything.
Trusts work in some situations. So do C corporations, S corporations, and partnerships. The “super secret” strategies aren’t anything new. They’ve likely been around for awhile or if they are new, it’s due to new tax law and people like me are already developing strategies.
I am dedicated to taking the strategies that the very wealthiest use, the 1% or even the 0.1%, and make them accessible to anyone who follows the step-by-step plans.
There is no one size fits all. There is no secret formula that no one else in the world knows.
The right plan requires taking steps to find out where you are and deciding where you want to be. It also requires a lot of knowledge that just isn’t taught anywhere else.
Get started with your tax plan now by learning the truth about taxes.