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Category Archives: Tax Planning courses

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

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.

Wealth Building Tips with Jim Britt on our Connector Call

Here are a few more wealth building tips from my Connector Coaching call with Jim Britt!


“How may I help you?”

Jim agreed with me that to build wealth in today’s economy, it’s a good idea to have a job to keep some form of revenue coming in while you look for ways to start your own business or leverage your money in tax advantaged ways.  Here are a few more highlights I’ve paraphrased from that Connector Coaching call interview with the very wealthy and very kind Jim Britt!

  • When starting your business, don’t start desperate. Desperate people push investors away
  • If the business plan says something about catching up on the pickup payments nobody will (nor should they) invest
  • Opportunity stays far away from desperation
  • Start your business to focus on giving others value not on all the money you are going to make. See things from the eyes of your customers. You’ll sleep better and you’ll ultimately make more money. If you focus on value, the money comes to you
  • Network marketing is a way to start a business with little or no overhead. For around $500 there are tons of great businesses you can start. Choose a solid company with good people and a product that is leading the market. Something that is hot and cutting edge is best. Look for a category creator.
  • Jim made hundreds of thousands from numerous network marketing companies and still gets residual checks many years later without much effort
  • Most powerful thing you can do in business… build a network. Keep track of people, offer to help people. Be a resource to people and genuinely try to help others. That’s how you build a network of resources, allies, and friends. Your network is not just for raising money. Always be asking… “How may I help you?”
  • Be responsible. Take responsibility for your life. The good, the bad, the ugly. Then do something about it. Don’t dwell on the past, just learn from it and move forward.

Finally, I asked Jim what he believed was the reason for Jim Britt’s success. He said it was this… “I always try to be the best I can be, notice I did not say to be the BEST but to be the best I can be. Not better than others, just better than I was the last time.”

Have a prosperous day.

Gabby Huguenin
Legacy Wealth Building, LLC

208-263-7202 office directly