Financial Decisions in Uncertain Times


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Over the last few months, I’ve had the chance to see close-up what has happened to a lot of business owners and real estate investors this past year. And the answer is … there is no one clear cut definition of what is happening economically in the country. For some businesses, and in some areas, business has never been better. I have clients who live and work in a booming real estate market. Others are still in the doldrums. Most seem to be like ours in Phoenix — recovering quickly in certain markets.

What’s In Your Financial Future?

For me, I’m happy that my properties are all rented up in Arizona and Colorado and that my CPA practice and TaxLoopholes Community are growing by leaps and bounds. And, probably the part that makes me happiest is that the clients who have met with me have saved an average of $30,000 per year in taxes AND doubled their return on investments simply by looking at the real numbers behind the hype others had given them.

Even with all the positive signs, I think we can all agree that these are indeed troubled financial times. It’s never been more important to think strategically about our financial decisions. Over the next few posts, I’ll explore 3 strategies for dealing with uncertain times.

Strategy #1: Increase Your Financial Knowledge

I recently received a question through the First Class Lounge that, to be honest, I couldn’t make heads or tails out of. In fact, I wrote a personal message to the writer, with some general suggestions on how to learn about business structures and nexus. The problem was that the writer had asked about how to set up an S Corporation in Nevada to avoid taxes in California. But, the rest of the question was more about how to title real estate to a C Corporation (I think.)

The problem that any advisor faces is that it would be very easy to explain how to set up a NV S Corporation. It’s harder to stop and ask “why?” And, then when you find out that the plan is to avoid California state income tax, you’re forced to talk about some basics of business structures and nexus.

His issue, although he didn’t know it, was that the S Corporation was a flow through entity. It didn’t matter where the corporation was established, if the owner (shareholder) lived in California, the income was going to all get pulled into California. A NV corporation wouldn’t save him a dime. The other, more difficult, conversation was about where the business actually does business. That’s what nexus is.

In fact, nexus is such an important topic that I’m devoting an online workshop to it. Remember the online workshops are included as part of the First Class Lounge. I do a brand new online workshop each week…and sometimes you’ll even get two if I’ve gotten a lot of questions in through First Class Lounge that indicate there is a burning topic out there. If you’re not yet a member of First Class Lounge, please sign up today. Here are just a few of the great topics featured in January’s online workshops:

  • How much salary should you take from your corporation? (And what the IRS is going to do about it if you take too much or not enough)
  • The difference between cash basis and accrual basis and how the choice can make a huge difference in your tax return.
  • Real Estate Professional Status under fire by the IRS! Find out the latest on taking advantage of this loophole and how to avoid issues with an IRS audit because of it.

In these uncertain financial times, there is less room for error. Good financial knowledge is necessary for every business decision and before you invest your hard-earned money in an investment. Plus, with taxes bound to go up over the next few years, increasing your knowledge around fundamental tax issues has never been more important.


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