The more time you have to plan for your income, the less taxes you’ll pay.
No planning and no time = more taxes.
To pay less tax in 2009, there are three things you must do RIGHT NOW:
( 1) Look at your business structure. If you have a Single Member LLC for your business and haven’t elected tax treatment, you’ll be taxed as a Sole Proprietorship. That means higher taxes, more risk and more chance of IRS audit. Are you ready for a C Corporation? Or, do you need to switch your C to an S?
There are 20 separate business structure items I look at as part of a customized tax strategy when I go through your current and future business building and wealth growth plans.
We also are recommending the layered business structure plans in almost every case these days. It’ll give you improved asset protection and the best tax treatment. You can also use the theory in the more refined Trust Sandwich to significantly reduce state filing fees.
( 2 ) Figure out what you’re going to do in 2010.
Okay, I know, it’s really hard to predict what 2010 is going to be like. But there is one BIG reason why you want to plan for 2010. In 2010, EVERYBODY can have a Roth IRA. That means tax free growth. Tax FREE.
Under the law today, there are a lot of people I have to tell “sorry” to when they want to set up a Roth IRA. That’s because their income is too high. In 2010, there is a one year only window to take care of that!
( 3 ) Meet with your tax strategist as soon as possible to plan your year-end.
When 2009 is all said and done, there will have been more federal tax changes than any other year. At least that’s my prediction. Add in the state changes and there are a lot of things to be concerned about!
In times of change like this, information is power. But it’s only power in your favor, if you take the right steps as soon as possible.