Wealth Building DNA

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Category Archives: Tax Planning

Powerful Retirement Plan For Small Business Owners

Solo K is A.O.K for Small Business Owners Seeking Lower Taxes and Retirement Contributions.

If you missed out on the millions of bucks sent to the big corps in Uncle Sam’s stimulus program, don’t fret, you still have some options (Although, they don’t involve big financial handouts).

The Solo (k) commonly referred to as Solo K is a retirement plan set up for small business owners. Small business owners drive this economy, (in spite of what the lobbyists in DC would have us believe). As a small business owner, your tax liabilities are the most threatening thing to your financial well being right after the economy. Learning how to reduce your tax liability should be a part of every small business owner’s wealth building strategy. Knowledge is power. Let me re-phrase that, knowledge is money! Continue reading →

Don’t Be Dumb… S.M.A.R.T. Goals Build Wealth!

I spend a lot of time helping very wealthy people keep more of their hard earned money and…

even though I spend endless hours talking about reducing tax liability, creating asset protection strategies, and finding ways to reduce taxes from double digits down to single digits, none of that really matters unless my client has clear goals. The one thing that separates successful people from everyone else is that the wealthy ones are clear about what they want. So, here’s a little tool you can use to begin your legacy wealth building journey.

S.M.A.R.T Goals.

Setting goals is a powerful way to bring your dreams into the real world. Without a vision of where you want to be, how will you know when you get there? In my new Legacy Wealth Building workbook, I give you 60-plus pages of ways to visualize your dream and get there. One of the most important aspects of achieving your dreams is committing them to paper (sign up for the book now, it’s FREE).

But sometimes sitting down and writing out a goal can be difficult. To make it a little easier and more likely to come true, use this simple formula that’s been around for a long time. It’s called a S.M.A.R.T. Goal.

It’s a simple acronym that helps you remember all of the elements needed to create realistic and meaningful goals. Print this little graphic out and sit down with your family and/or business partners and discuss your goals within the context of a proven formula. It’s not any more complicated than that!

Have a prosperous day!

Gabby

The Importance Of Building A Foundation

Think about this! We all say, “I want to be Rich!”

But does that mean I have to be greedy to get there? Is there an inherent conflict of interest between wanting higher levels of success and being satisfied with what I already have?

According to the famous author Dr. Wayne W. Dyer, in his book the Power of Intention, you CAN have success and still be respectful to the well being of others and the planet. Sure, we want to find all the tax deductions we can. Of course, we want to use aggressive business tactics and formulate asset protection strategies that keep the bad guys at bay. And yes, we want to keep our tax rates low. But Dr. Dyer says and I quote, “Let go of your need to have more.”

Here’s a wealth building tip that I think Dr. Dyer would approve of. Go ahead and create great wealth for you and your family and then use it to do good. Create that wealth in respectful and kind ways and be willing to share what you’ve created and what you’ve learned. Create a legacy of wealth for others to learn and prosper from.

When you come from a place of peace and calm as you pursue your dreams you don’t NEED anything. And, in a strange way, that makes it so much easier for prosperity to find you.

Dr. Dyer says, “When you stop needing more of everything, more of what you desire seems to arrive in your life.” Wealth building is not about getting more, it’s about appreciating and caring for what you may already have.

By the way, I know you don’t really NEED to pay more than your fair share of taxes either! Let me know if I can be of assistance!

Have a prosperous day!

Gabby

How Much Creativity is Allowed in Tax Planning?

Creative Tax Planning –

How is it Possible and How Will it Help me?

To some of us, the word creative smacks of illegal or certainly circumventing what is the right thing to do. There is another way to approach both this world and the world of taxes.

It is by focusing on using every single tax deduction permitted by the IRS in as defined and all encompassing way as possible. It is about a true connoisseur of  tax coding and regulations being let loose within your company structure to explore every last nook-and-cranny for you.

Then showing you exactly what you have been missing, and just how much money will be pouring back into your pocket and bank account.

“Tax codes and rules are meant for everyone, not just the rich and powerful.”

Creative Tax Planning is therefore a skill set that is definitely real and definitely works. Luckily for us, there are quite a few of these stellar folk out there who specialize in tax planning techniques for all walks of life, and focus on saving all of us as much money as they can.

Making your money work for you is another side-benefit, and a big one, when utilizing this way of thinking. It means that you get to use your money first, pay your bills first, invest first, replace equipment, offices, whatever you need for your company and pay your taxes last. Quite a concept.

This is how multi-millionaires such as Bill Gates continue to remain in the single digit tax paying brackets. It is not that they are doing anything they should not. Nor is that they are employing people 24/7 trying to find as many tax loopholes as possible. Rather it is that they do work with amazing wealth teams that are focused on utilizing every single deduction that the IRS allows for each and every situation.

There is no reason why you cannot benefit in the same way. Those tax codes and rules are meant for everyone, not just the rich and powerful. There is also no reason why you can not utilize the same forward thinking and create your own reduced tax liability and tax planning techniques.

All you have to do is find your own tax planning specialist. You may want them to be part of your own wealth building team. Perhaps have a coach or mentor, heading up your team and working on your behalf using well thought out strategies to build and protect your wealth. For you and generations to come.

Need help?

Call me at 208-263-7202.
Gabby

12 Tax Deductions For Small Business Owners

More Money Saving, Tax Saving Ideas for Small Business Owners!

The list continues! Check with your tax advisor in your unique situations but ALL of the following should be reviewed by you and/or your wealth team! Here are a few more write offs:

1.    Fees we Hate! Service for processing credit cards is deductible!

2.    Pens and Paper – Office Supplies! Those little things add up.

3.    Bad Debts. As opposed to good debts? The only good in any debt might be its deductibility. If that debt was included in previous income, it may be deductible.

4.    Professional Fees – Even if you felt like you got amateur advice, professional fees are usually deductible. Lawyers, accountants, and other consulting fees are write offs.

5.    Office Equipment – Computers, iPads, cameras, fax machines, as long as it’s part of doing your biz, deductible it iz! You may be able to take it this year or depreciate it.

6.    Furniture – Just like office equipment. Write it off.

7.    Repairs and Maintenance – Keeping that office in tip-top-shape costs money! Deduct it and get some of it back.

8.    Interestingly Enough, Interest is Still Deductible! Mortgage, finance charges, payment plan interest, and other interest may reduce that taxable income! Now, do you despise your credit card company a little less for that 22% interest rate?

9.    Insurance For Sure – Premiums you pay for liability, credit, workers’ comp, malpractice and others is deductible.

10.  Software Anywhere – Whether you got it from the box or downloaded it, generally, software is deductible. Future software apps are evolving to online service products that you don’t need to download and those fees are likely deductible as well.

11. License to Kill – Well, James Bond you’re not but most licenses can be written off. Licenses, fees, regulatory gouges, I mean fees are usually deductible.

12. Taxes – Whoa. That’s weird. Pay taxes. Use them as a tax deduction? It’s a strange taxable world we live in but yes, taxes are a business expense and if you incur them running your business, Uncle Sam says, write ‘em off!

Obviously, we have a little fun talking about taxes but the most fun you can have with your taxes is when you go from paying double digit taxes to single digits. That’s what I do. I want you to pay taxes – but only the ones you are obligated to and most of you are paying taxes that you are NOT obligated to pay!

Why pay for something when you don’t have to? Dang good question! We should tax, I mean, talk. ( I really did type that mistake – oooh, it must be tax season!)

Have a prosperous and deductible day!

Gabby Huguenin

Wealth Coach

Tax Fighter

All Around Fun Gal

P.S. Call me if you want to lower your taxes in 2011!

208-263-7202

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

HURRY! The Tax Man Goes Retro! Tax Savings for 2011 Only!

The Clock has Been Turned Back on Certain Taxes but not for Long!

In my ongoing Axe the Tax campaign, I have been asked by a lot of doctors and other clients what some of the new tax changes will mean to their tax-reduction strategies.  It may seem a little strange but Uncle Sam really does give us ample money-saving opportunities to lower our taxes.  Unfortunately, the tax gods tend to make things a little too complicated for busy small business owners, doctors with thriving practices, and other mere mortals to grasp.

There are tons of new tax deductions available for the tax enlightened out there. So, if you have not been enlightened yet, let me tax-enlighten you a bit! Here are a few Tax Tips to look into and discuss with your tax advisor and/or CPA right now because they are going fast! Literally.

Retroactively Reinstated Tax Break – Extended through 2011

The following tax breaks for individuals that came to a screeching halt at the end of 2009 are back! They’ve been extended through the end of this year. Not perfect, but not bad! Take ‘em while you can get ‘em!

1.       The $250 above-the-line deduction for certain expenses of our beloved elementary and secondary school teachers. Yeah! They deserve a little extra help!

2.       The election to take itemized deductions for local and state general sales taxes instead of the itemized deductions permitted for local and state income taxes.

3.       An increased contribution limit and a carry forward period for contributions of appreciated real property for conservation purposes (may include partial interests in real property).

4.       An above-the-line deduction for your qualified tuition and other related expenses.

5.       This one’s BIG!  URGENT- The provision that permits taxpayers aged 70 ½ or older to make tax-free distributions to charities from their Individual Retirement Accounts (IRA) in amounts up to $100k per tax payer per tax year. In addition, those individuals will be allowed to treat their IRA transfer to charitable organizations during January of 2011 as if it was made back in 2010. Retro is good! Talk to your tax advisor today!

6.       The treatment of any mortgage insurance premiums as a deductible of qualified residence interest and the exclusion of 100 percent of the gains on certain small-business stocks.

7.       Retro-refrigeration news: The energy efficient appliance credits may apply but they will be in new amounts and with some new requirements.

8.       The Code Sec. 25C credit for energy-efficient improvements made to existing homes. Reinstating the credit as it existing prior to the passage of the American Recovery and Reinvestment Act. The standards for which property is eligible under Code Sec. 25C have been updated to reflect improvements in current energy efficiency standards.

That’s the retro news and the tax-saving views from here! The clocks have been set back for a little bit so check with your tax pro and find out which way to go. The list above is far from complete but these are all tax-saving opportunities you should be aware of. Chat with your advisor or give me a call!

Understanding how to use the tax rules to your advantage is what I teach my students in a variety of programs. Find out more about our coaching programs and let’s Axe the Tax from your life! I’ll cover more on the tax changes soon but move quickly, some of these tax savings are only good for January 2011! Here’s more info on tax extensions.

Have a prosperous day!

Gabby Huguenin
Wealth Coach
208-263-7202

Lower Taxes in 4 Minutes, Watch This Video Podcast by Gabby Huguenin

Doctors want to reduce taxes. Attorneys want to reduce taxes.

Everyone wants to reduce taxes but too many of us don’t want to slow down enough to learn the simple secrets of cutting taxes. Lowering taxes, cutting taxes, and reducing taxes for doctors are regular topics on my blog.

Doctors and so many other professionals often put their businesses at risk by not setting up the proper entity structure. Even though you may be a Saint and nothing bad ever happens to you, what if the doctor down the hall (or partner down the hall) screws up and gets his butt sued?

How does that affect you? How does that affect the overall business? Watch this tax saving, hassle reducing video for the next four minutes and save yourself a boatload of money!

Learn how to grow your money in a tax advantaged environment AND learn to protect your assets with the proper legal entity. This is not tax or legal advice, just educational information. AND… information that could save you endless sleepless nights and thousands of dollars!

Have a prosperous day!

Gabby Huguenin

Wealth Coach

208-263-7202.

Six Ways Physicians Can Lower Taxes – Now!

Doctors  Can Lower Taxes If They are Willing to Act…  I say, “Axe The Tax!” Tax reduction for physicians is my specialty. I love doctors. I hate taxes. The problem most doctors have when it comes to taxes is that they don’t want to take the time to slow down and deal with the reality that making a great salary or generating substantial revenue does not automatically equate to more money in your pocket.

“Taxes will always be a bigger threat to your wealth than the markets”

Here are a few tax planning tips for physicians (and other professionals) that want to lower taxes and reduce future taxes:

1.      Get Your Head out of Your Assets. Just because you’ve created a beautiful office and a nice revenue flow doesn’t mean you’ve created a successful business model. Get your feet on the ground, your head out of the clouds and quit looking at the symbols of success and start focusing on the “systems of success.” An asset protection strategy is critical but if you don’t have a strategy you may not have those assets as long as you’d like.

2.      Prescribe a New Entity. After a deeper diagnosis, get serious about what you can and can’t control. You can’t control your patients. You can’t control the market or the economy. But… you CAN control your taxes. One of the best ways to do that is with the proper entity structure. That might be a physician’s corporation, an LLC, a partnership, or another combination of legal structures that allow you to minimize your tax liability.

3.      Pay Yourself first to Pay Less Later – Generating money and keeping it are two different things. Most doctors want to pay fewer taxes but you must pay yourself a little to save yourself a lot. By paying yourself a small salary, your overall tax liability may be lower because you will not have to pay FICA taxes on the dividends taken from a physician corporation.

4.      Be a Little Un-civil – Not your bedside manner of course, what I mean is that civil judgments in most states cannot attack your retirement accounts. So, contribute to your retirement accounts because it will reduce your taxes and it will protect your assets. Retirement plan contributions are not subject to income or FICA taxes so these contributions reduce your tax bill and protect your assets simultaneously.

5.      Did I Mention the Pension? If the physician corporation is the right legal entity for you, as its owner you may be able to establish a physician pension for yourself. Now you can fund a retirement vehicle for yourself and a deductable expense for your business. You do not need to take a significant salary in order to contribute to this type of pension and it does provide additional asset protection from legal predators.

6.      Hire an Expert – Find someone you trust to give you the honest and accurate feedback you need about your unique situation. In business, you must leverage your resources to get ahead or you are just trading your time for money. A wealth coach, a financial adviser, you tax professionals all have the ability to give you the leverage you need to go beyond where you are today. You don’t have to do it all alone and you don’t have to be a victim of the tax systems just because you are able to generate significant revenue.

Of course, all of the above are just education tax-saving tips! Every situation is unique so give me a call if I can be of assistance with any aspect of your wealth building or tax planning education.

Have a prosperous day.

Gabby Huguenin
Wealth Coach

208-263-7202

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.

Legal Entities – Choosing the Right One for Maximum Wealth Building

We had a great call last night with some of my students who are working to discover new ways to grow and protect their wealth. Here are some of the points I shared last night about setting up the right type of entity structure to protect yourself and your assets.
Having the right legal entity structure does two very important things.

1.  Tax Advantages – When set up properly the proper legal entity gives you significant tax advantages. This is what I mean when I talk about creating a tax-advantaged environment.

2. Asset protection – This is so important into today’s litigious society. When you have assets that everyone knows about, you are inviting others to come and get them! It is your legal right to protect what you have worked so hard to earn!

Here are some of the highlights from last night’s Connector call. Key points to remember:

1. The right entity structures separate you from your business. This keeps you and your assets apart so that if one or the other has any legal challenge, your entire financial system is not at risk.

2. Sole Proprietorships are great for startups because they are low cost, simple and still have some tax benefits. There are lots of tax deductions available to this entity. This might be a good structure for a very small business where a person is a freelance writer or a network marketing rep where there is really very little risk. Downside is – very risky if you get sued. Tip – Once you start to make over 60k or so find a more protective entity and have an attorney set it up properly. Another downside to this entity is that there are over 90 million lawsuits filed in the U.S. each year and sole proprietorships are quite vulnerable.

3. The Secretary of State in each state is where you can go to begin your business name search. This is just a starting point. Business names need to be registered in the state where they reside but you will also need to begin the trademark and registration process. Just because a business name is available on a local level doesn’t mean a larger corporation hasn’t registered the name nationally. Use an attorney on this.

4. LegalZoom.com and other similar services may be useful for legal documents when you have enough experience to know what to look for. For example: If you need an operating agreement for a new LLC you are setting up and you’ve done it before, LegalZoom might provide a starting point as a template to save you some time and money. But, be careful. Complicated entities require quality legal advice.

5. Real Estate – Never, ever put it in your own personal name. Always use an LLC or another entity but having real property in one’s name invites trouble. There is a lot of exposure in the real estate world so don’t risk it. No sole proprietorships in real estate.

6. General Partnerships – These are a little like sole proprietorships but require two or more partners. There are some benefits when you are fortunate enough to find a partner who is equally committed and capable of doing his/her share of the work (although that’s rare to find the perfect balance). Great for small business with clearly defined and divided responsibilities.

General partnerships can be easier to raise capital or get loans for a start up. Each partner files their own tax returns and all income and losses flow through to the individual partners. Downside – Some states require termination of the partnership when death, retirement, withdrawal, or resignation occurs.

There are ways around that but that’s fairly typical. More complicated than a sole proprietorship but there’s no double taxation that can occur in a c-corp. Exposure is high as all partners are responsible for the actions of the other partners. You better know your partner real well!

If you want to join our weekly wealth building coaching program to learn how to grow and protect your financial future, drop me a note, give me a call, or visit my site for more info. Of course, all that said, the information I provide here is for educational purposes only so always get appropriate legal and accounting advice from professionals you trust.

Have a prosperous day!

Gabby Huguenin
Wealth Coach

208-263-7202

By the way, if you are facing some tax challenges, cash flow issues, or need a solid asset protection strategy, please give me a call! We have a number of powerful wealth building programs to help you in the process of building financial freedom.