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Category Archives: High Net Worth Tax Planning

Top 10 Strategies for Building A Legacy

Top 10 strategies Legacy Wealth Building uses in our secret treasure chest of tax planning

FROM A FAMILY LEGACY OF ONE HUNDRED MILLION DOLLAR PLAN

 

  1. The Four I’s™  Inflation, Interest, Income Taxes, Insurance
  2. Active business entity vs. passive business entity
  3. Beating the 4 I’s
  4. Recapturing the 65% of your income that’s currently going out in taxes and interest paid to financial institutes
  5. Setting your salary – what’s the big deal with this?
  6. Up streaming income
  7. What happens when your P&L says you have the cash but your bank account says otherwise
  8. Multiple corporation strategies
  9. Growing  100% of your money in tax advantaged environments
  10. Getting the right professionals to support your financial goals and objectives

Coming soon… The answers to each of the top 10!

To your wealth & success now,

Gabby Huguenin

Top 3 Tax Problems That Doctors Have

Admit it. You Don’t Have a Practice – You Have a Job

Many of my tax reduction clients are high-income professionals including doctors, lawyers and even accountants. These are people with unique financial and tax-reduction problems. Having a respectable income isn’t the problem for most of them.

The three primary problems doctors, lawyers, and other professionals have in common are as follows:

1. Working too many hours.

2. No time left for financial planning.

3. Paying too much in taxes and being too tired to enjoy what’s left of their income.

Breaking exhausting cycles like this is not simple. It’s not really difficult but it’s going to take a commitment. Here are a couple of things you can do to shift from having a job to having a business. If you have a true business model that’s working, you can take time off and the business will continue to create wealth for you and your family. If you have a job, you are obligated to be there and you don’t get paid when you are not.

Which do you have? Does your practice allow you to leave without a big dip in income? Does your practice grow without consuming more of your time? If you said “no” to either of those last two questions, you don’t have a business or a practice, you have a job.

There’s nothing wrong with having a job as long as you are aware of that. But a practice that keeps you in the “job” mode is difficult to grow without more of your time. And that takes you back to problem number one. Trying to grow your business, when it’s really a job, means you’ll work too many hours and never get a commensurate reward.

Tax Deductions for Small Business – With all that time spent on the practice, you might have some good revenue coming in but too many doctors, dentists, or lawyers have little time left to do their own financial planning. So, they give it to their spouse, their bookkeeper, or their accountant. And, it’s likely that none of these people are specifically trained in tax-lowering strategies.

So, the money comes in, everyone does the best they can with it and the money goes out. Unfortunately the amount of money going out to Uncle Sam is usually much more than it should be in these situations.

So, my recommendation for anyone facing the endless cycle of work more, spend more, work more is this. Find someone who can help you design a strategy to break this cycle. There are two types of professionals that may be able to help you.

We are not on this planet to figure it all out on our own.

It’s okay to ask for a little help.

GET HELP – First, get a business/marketing consultant to help you find the leverage points in your business. Where is there more profit, less effort, and continuity in your business? Where are the opportunities for exponential growth in your business? Who EXACTLY are your best customers and how can you give them better service in return for greater profits? To turn your job into a business you want to know what your clients are looking for and then give it to them.

Take time this week to work ON your business not IN your business.

Second, get a tax-planning specialist on your team. That person will show you how to utilize legal entities that will protect your hard-earned money and make it work much harder for you. Notice, I said, your MONEY will be working harder, not YOU! Tax planning is beyond checking off the list of business deductions and putting numbers in the right columns. Any accounting person can do that for you.

A true tax specialist will have the ability to help you create a wealth-building plan that will solve the miserable cycle of working too many hours, no financial planning, paying too much in taxes, and being exhausted!

Finally, if you do nothing at all with what you just read, at least do this. Take time this week to work ON your business not IN your business.

That higher perspective will change everything.

 

Have a prosperous day!

Gabby Huguenin

7 Ways To Fire Yourself in 2011

Seven Things You DON’T Have to Do to  Grow Your Business in 2011!

Fire yourself? Yes! Put it on the calendar and fire your lazy, no good, self by the end of 2011! Now that you’re shocked, here are the details.

1. Don’t keep your job! Make it a goal to fire yourself by the end of the year. Work ON your business at least one day a week. You have to work IN your business for now but to grow you must work ON it. Think long-term, strategic, and high level. Get out of the day to day activities more and more. If you are in a production position right now, set a goal to be in a strategic position by the end of the year!

2. Don’t do the TWO STEP. If you take more than two steps from your desk/workstation to do a repeatable activity, you may not have efficient systems in place. If you are reinventing functions on your computer, in your communications, through your marketing, then you have not automated what can be automated. If you can get it down to one step, you’re getting closer to a business that you can leave once in a while! If you can’t leave, you don’t have a business, you have a job!

3. Don’t be a moaner and a loner! If you’re complaining about having to do everything yourself, you haven’t formed the proper team. Whether they’re on staff or outsourced, the only way to grow our biz is leverage! Don’t try do it all yourself. It won’t work. Period.

4. Don’t become a control freak. I’m not talking micromanaging here; I’m talking systems, procedures, best practices, checks and balances. For example is your bookkeeper that you’ve known and loved for years writing checks and reconciling the checkbook? If so, you’re playing with fire. Do you find yourself in a big hassle every time you replace an admin member? Is it because you didn’t have the discipline to set up the desk manual and all the controls that go with that position in a nice little three ring binder? Control is a good thing. Just don’t freak out over it.

5. Don’t forget to water and fertilize. Are you nurturing the controls, systems, vendors AND team members in a way that they are ready for greater growth? Are you training, preparing, and exciting your team for the future? Do they know how to do their jobs and think for themselves or are they more compliant than self-reliant? Your future depends on their ability to think. For themselves.

6. Don’t try to become a marketing maven. Do you depend on outside people to manage your marketing functions? Nothing wrong with that but you need to know enough about the rapidly changing marketing tactics to ask intelligent questions. Do you know how to Tweet? I’m just asking! It’s not necessarily something you should do but you should know what it means! Don’t try to be the expert at everything, be the strategist with the 30,000 foot view and your business stands a better chance of growing in 2011.

7. Don’t try to find Balance. There’s no such thing for the entrepreneur yet you can come from a place of calm more often than you think. Start your next meeting by asking your team to close their eyes and take three deep breathes. Start your next project at your computer with a moment of pause… slow down… breathe… enjoy the ride. Cooler heads prevail. It may never be a perfectly balanced life in your position but you can slow it down for a minute now and then to make sure you’re taking care of yourself so that when you are working on your business you are focused, clear headed and making your best decisions.

Go ahead, take ten minutes right now and walk around the block. You’ve got a lot of things we DON’T want you to do this year. You better get ready!

And, by the way, call me if you want to lower your taxes in 2011!

Have a prosperous day!
Gabby

Wealth Coach

208-263-7202

Die Now, Save Money! Estate and Gift Tax Law Changes for 2011 and 2012

While some women stay up late at night reading romantic novels, I like to get under the covers on a cold winter night and read IRS Tax Code! There are tons of changes in 2011 and 2012 tax laws you should know about. If any of these rules, laws and accounting gibberish confuses you, don’t feel bad, be glad you have strange people like me to help! Drop me a note or sign up for one of our classes and we’ll help you learn how to reduce your tax liability!

Here we go Again! Estate & Gift Tax Law Changes for 2011/2012

But before we get to that, please note the new provision for wages earned in 2011 only:

Keep in mind, these are condensed, generalities of some of the tax law changes for 2011 and 2012 you should be aware of! For remuneration received during 2011, employees will pay a whopping 4.2% Social Security tax on wages up to $106,800 and self employed people will only pay 10.4% Social Security self employment taxes on that self employment income up to $106,800. Luckily, Medicare tax rates are unchanged.

Now, about that good old death tax! Estate & Gift Tax Law Changes for 2011 and 2012

  • A $10,000,000 exemption! Yeah. We like that part.  Increased Estate Tax Exemption and Reduced Top Rate.  The estate tax exemption in increased to $5 million and the tax rate on the excess is reduced to a mere 35%. ( Code Sec. 2010(c) , as amended by Act Sec. 302(a)) O course, the $5 million exemption is per person. Thus, there is a $10 million exemption for a happily married couple. If you don’t have the “happily” part then it’s still $10 million. Plus, there is a new portability feature for married couples on the go.
  • Here’s a little boost. The gift tax exemption increased. It is now unified with the estate tax exemption and is increased to $5 million.
  • Portability of Unused Exemption between Spouses. This new provision adds the unused $5 million exemption of a deceased spouse to the $5 million estate tax exemption for the surviving spouse allowing up to $10 million to pass to the family without the need for credit shelter by-pass trusts.  Yet, not all by-pass trusts should be definitely be eliminated since the income from such trusts need not accumulate in the survivor’s estate. The appreciation of the assets in such a trust is not included in the survivor’s estate.
  • Template for the future. On the flip side, families not expecting their assets will ever exceed $10 million need not have trust provisions in their estate plans and do not need to file trust income tax returns. To receive this tax benefit, an estate tax must be filed for the first spouse to die, even though one would not otherwise be required.  Even though this may act as a template for future tax laws, it does sunset in two years. Since there is little certainty about how these new laws will fare beyond the next two tax seasons, you should be reluctant to abandon estate plans exceeding $1 million assets.
  • This is the time for creativity and flexibility. This is the time to design options and backup strategies into plans to be prepared for future changes in the estate tax laws.
  • Fifty states – fifty ways. State-by-state estate and estate taxes will be a moving target in making solid estate-planning decisions.

Drop me a note or sign up for one of our classes and we’ll help you learn how to reduce your tax liability!

Have a prosperous day!

Gabby Huguenin

Wealth Coach

208-263-7202

Apocalypse 2012 Postponed Due to Extended Tax Breaks

Extended Tax Breaks Providing Tax-Cutting Opportunities!

According to MY calendar, not the Mayan’s, the only apocalypse you’re going to experience is the collapse of your cash flow and the raiding of your pocketbook if you don’t take advantage of your legitimate tax breaks! Remember, I always say…

“Plan like you’re going to live forever but live like this is your last day!”

Now, here are a few more tax tips to discuss with your tax reducing professional. And, if you don’t have a tax-reducing-professional, we should talk!

1.       Deep under Sec. 101 of the now famous, 2010 Tax Relief Act, the tax rate schedules for individuals remain at 10%, 15%, 25%, 28%, 33%, and 35% for a glorious two more years. All the way through 2012. Furthermore, the size of the 15% tax bracket for joint filers and their qualified surviving spouses remains at 200% of the 15% tax bracket for individual filers through the tax year of 2012.

2.       The standard deduction for you married taxpayers, filing jointly, and of course qualified surviving spouses, remains at 200% of the 15% tax bracket for all individual filers through 2012.

3.       There is no 3%/80% limitation on your itemized deductions for both 2011 and 2012.

4.       Parents rejoice! The $1k child tax credit has been extended and allowed to be used against regular income tax for two years, through 2012. But wait, there’s more! The formula for determining refundable child credit, with the earned income threshold of $3k (but not adjusted for inflation) is also extended for two more years, through, yup, you guessed it, 2012!

5.       Go back to school! Why? Because numerous education incentives have been extended two years. Nice incentive to graduate early?

6.       Uncle Sam generously boosted AMT exemption amounts for 2010 and 2011.

7.       Here’s a pile of nonrefundable personal credits. For example:

a. Dependent care credit
b. Credit for disabled and elderly
c. Child credit
d. Interest credit on certain home mortgages
e. Hope Scholarship and Lifetime Learning credits
f.  Non-business energy property credits
g. Residential energy efficient property credits
h. Plug-in electric vehicle credits
i. Alternative motor vehicle credits
j. And there’s more!

I don’t want to take all the credit but you should! Take your credits where you can get them! If you don’t have a money-saving, tax-cutting plan in place, you need to get with our Axe the Tax Program! It’s very simple.

We show you how to cut your taxes, legally, ethically, safely, and quickly to put more glide in your stride, more pride in your ride and more fun in your mun! Okay, that last bit was slightly over the top but my point is – Don’t pay taxes that Uncle Sam says you don’t have to!

Most American’s (especially, busy professionals with great cash flow) pay way too much in taxes because of three reasons.

1.      They don’t know how to reduce their taxes.

2.      They don’t have a plan to reduce their taxes

3.      They don’t have someone they trust to guide them to reduce their taxes.

None of those reasons is acceptable unless you like throwing away $10,000, $50,000, $500,000 in unnecessary taxes!

Remember, the above info is generalized and just for educational purposes. Everyone has a unique situation so talk to your tax planning professional before you do anything.

But REMEMBER! We put the AX in tAX. Please drop me a note if there is anything I can do to help you stash more cash! More tax saving tips from an earlier post.

Keep More – Leave More

Gabby Huguenin

208-263-7202

Tax Planning High Income People Should Think About

“If I am through learning, I am through.”

John Wooden, UCLA basketball coach

Here’s a quote from one of my wealth coaching clients…

“WARNING! BE READY FOR RESULTS! Coach Gabby is a coach who takes action & expects results! Her mentoring has given us the tools to save taxes, create an estate that won’t burden our children & protect us from others taking what we worked hard to achieve! She follows up her calls with action steps like no other coach we’ve had. Thanks Gabby!”
– C Cripps

2011 is going to be a volatile year in many ways. That’s not a bad thing it’s just a, well, a… thing! How will you capitalize on the ups and downs of the market? How will you leverage your company, your practice, your assets to reduce your tax liability and increase your take home pay?

Without a plan you are at the mercy of the market. And, that’s may be a blast. Or not. Why not educate yourself and join one of my coaching programs? I don’t believe in telling people what to do, I believe in teaching people what their options are and helping them make informed financial decisions. Give me a call!

Disclaimer:
This information does not constitute a complete description of all or any one aspect of financial planning. There is no offer to sell or buy any financial product in this video or on our website. Please consult with a qualified financial, legal and/or tax professional before investing or modifying any aspect of your taxes, assets or finances. This information is strictly educational.

Have a prosperous day.

Gabby Huguenin
Wealth Coach

208-263-7202