One of the biggest benefits of having a business is the benefits! If you can get tax-free benefits, so much the better. That means you get to take a deduction at the business side, plus not have to pay taxes on it personally.
The challenge is that too many people focus on the big, flashy benefits, which often aren’t truly tax-free, and ignore the hundreds of smaller ones that can make a huge difference in your business and especially in your taxes.
Tax-free benefit or not? You be the judge!
Here’s an example of one I had to deal with a lot a few years ago. Tax-free or not?
The Case of the Rolex
A very well known financial author used to stand on stage and point to his very expensive Rolex. “My company bought this for me!” he exclaimed.
Was this a tax-free benefit? – Answer at the bottom.
Personal Chef Heats Up the Kitchen
A busy financial planner wanted to work from home, so she built an attached office for her three employees and herself. If you’ve been following USTaxAid, you know that was all deductible.
But, here’s her new question. She hired a personal chef to come in and cook for her and her employees every day. (He also cooked dinner for her family at the same time.)
Tax-free benefit or not? – Answer at the bottom.
Running Fast and Getting Nowhere
An Internet Marketer had a hard time fitting a work-out into his daily life because he had so many projects going. So, he decided to turn his spare bedroom into a gym. Now, when he needs a break to think, he jumps on the treadmill and gets a quick run in.
Was the treadmill a tax-free benefit? – Read on!
Rolex: The Rolex is most likely going to be taxable to the recipient. Gifts can be tax-free, but only if they’re ‘de minimus’ (not a high cost) or fit specific other criteria.
Personal Chef: In this case, the personal chef WAS tax-free for the portion of his fee and cost of food for the lunch he prepared daily. And, it was not subject to the 50% meal exclusion.
On Tues, August 24, 2010, we’ll showcase five strategies to turn your meals into 100% deductions as part of the USTaxAid Coaching Course. SIGN UP HERE It’s just $67 for the complete coaching course for Tax Free Benefits plus the next “Understanding Financial Statements” course. Don’t miss out!
Personal Gym: If you’ve got a C Corporation, you’ve got a tax-free benefit as long as you’re following all the rules. We’ll cover that in the Tax Free Benefits Coaching Course.