"Taxes" Posts
Who Couldn’t Use An Interest Free Loan?
By The importance of tax deferred retirement vehicles (and tax deferrals in general) and how they can positively effect your retirement and your business.
One of the most important considerations in tax planning is not just the avoidance of income tax through strategies to minimize your current tax burden, but also the calculated deferral of income tax liability to future years, where possible. So why is it that some business owners don’t value deferral techniques?
One logical answer, of course, is that they simply don’t understand deferrals or the positive effect they can have on their retirement or business needs. It …
Make Sense For A Change
How to effectively reduce your business taxes
Remember when…Alice fell down the rabbit hole and found that nothing really made sense? Is that how you felt when the only suggestion offered by your accountant to reduce taxes was to buy more equipment? Did you feel like you were spending the proverbial dollar to save a quarter?
For many small business owners, this is the only advice they receive and, sadly, too many choose to follow their accountant’s advice and purchase equipment that is simply not needed in an effort to claim the available “depreciation” deductions. When this advice is followed, …
Navigating The Fog
“All the Congress, all the accountants and tax lawyers, all the judges and a convention of wizards cannot tell for sure what the income tax law says”, said Walter B. Wriston, former CEO of Citibank.
Between the two narrow extremes of complete compliance with tax law and outright tax fraud, is a dense fog of uncertainty. Many business owners consistently make key decisions concerning their business and individual taxes in a fog without being aware of the pitfalls or opportunities. Unfortunately, a misstep in one direction can lead to increased risk of audits and penalties. A misstep in the …
The ABC’s Of The AMT
Why have an alternative minimum tax?
It is difficult to imagine a time when wealthy families did not pay any federal income tax. Instead of paying the U.S. Treasury like the rest of us, these families paid for high-priced legal advice, as well as the services of big accounting firms and other financial advisors, to develop slick strategies that hid money and income where the IRS could neither find nor tax the assets and earnings.
By the late 1960s, the U.S. Congress peeked out from under its see-no-evil blindfold and stopped all the winking and nodding, enacting laws to create …
Maximize Charitable Donations
Choosing a reputable, non-profit organization helps guarantee the gift will be used wisely.
Once contractors reach a certain level of success, they often consider contributing to charitable organizations. Owners may wish to give back to their communities, support a cause they feel strongly about or improve their company’s image.
Whatever the motivation, it’s important to select both the charity and the donation with care. Choosing a reputable, non-profit organization helps guarantee the gift will be used wisely. Planning the type of donation and how it’s made will help your company maximize its tax advantages, improve its bottom line and allow …
Protect Your Legacy
Procrastination – it is characterized as the deferment or avoidance of an action or task to a later time. If you procrastinate on your duty to clean out the garage, the result is a cluttered and dirty space. If you procrastinate on the reviewing and updating of your tax plan, you are costing yourself money. Writing checks to the IRS becomes a painful reminder of that procrastination. If those quarterly checks don’t motivate you, what will?
Would you like to split up to half of your accumulated wealth with the government, jeopardize the future viability of the family business, …
EBITDA
By EBITDA – Frankenstein math for the naive and uninformed.
EBITDA is not the “be-all and end-all” it’s purported to be. In fact, when applied as a single measure of financial performance or value, EBITDA has many inadequacies. Naive and uninformed individuals indiscriminately use EBITDA for whatever purpose they desire, and worse yet, they use deceptive accounting techniques to create mathematical monstrosities as a substitute for sound financial analysis. These individuals do not understand EBITDA’s two basic deficiencies: 1) EBITDA does not equal cash flow; and 2) EBITDA is not a standalone multiple of valuation analysis.
What is EBITDA?
EBITDA is …
Tax planning
By Craig Koop as featured in Smart Business San Diego
How to take fair advantage of state and federal tax codes
All too often, when business owners begin discussing tax planning, what they really end up referring to is the process of tax compliance. Tax compliance is the process of reporting your income to the Internal Revenue Service and, hopefully, accurately ensuring that your tax preparer takes advantage of all the deductions and credits you are entitled to.
“The effects of good tax planning can obviously be foregone without proper reporting and compliance,” says Craig Koop, director of implementation …
Still Time to Reduce Year-End Taxes
By Craig Koop as featured in Home Business
Businesses and individuals, armed with an understanding of changes in the federal tax code, can still make decisions that may significantly impact their 2003 tax liability. There are generally three basic strategies that can be employed to decrease income tax liability: 1) deferring or accelerating income; 2) accelerating expenses; and 3) taking advantage of available tax credits.
Deferring or Accelerating Income
Individuals with relatively stable income, who experience no significant movement between tax brackets, most commonly postpone payment of taxes by deferring income and accelerating deductions. For example, delaying a year-end bonus …