A Proven Way to Pay Less Taxes | Agency Sales Magazine

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Manufacturers and independent manufacturers’ agents are unknowingly overpaying their income taxes and severely cutting their profitability.

Let’s face it, it’s not the revenue that matters, it’s not even your paycheck that matters. What really matters in the end is how much income stays in your pocket. You can control your direct and indirect expenses. You can control your costs. You can control which products to manufacture or which lines to sell. You can actually control just about every aspect of your business. You can choose your customers because not everyone that wants to buy from you will be a good fit for your organization.

Can you control the taxes that you pay on your income? Tough question, right? To have control you would need to have a sound understanding of the 74,608 pages of the federal tax code. Good luck with that. The code has grown to be 1,087 times longer than it was a century ago.

Most taxpayers have relied almost exclusively on their CPA to inform them on what deductions they can legally take. However, the role of many CPAs is to be an expert in preparing and filing tax returns. They are deputized by the Internal Revenue Service. Let’s break down “IRS” into its component parts. The IRS provides a “service” to the federal government to generate “revenue” “internally.” (That means from you and me and everyone else that is working and filing a tax return.) So, the IRS gets at least 39.6 percent of your income right off the top. They are the partner that you never wanted.

Here’s a glimpse into some advanced tax strategies for high-net-worth or accredited investors:

Captive Insurance

Captive insurance is a unique but exceptional cash saving, tax lowering strategy. Captive insurance mitigates risk by providing insurance typically uninsurable or simply too costly. It helps to maximize cash flow by controlling premium payments and the management of those funds, making it perfect for businesses or high-net-worth individuals.

Green Preservation Partnership

A green preservation partnership is a unique and advanced tax strategy that’s ideal not only for land owners who would like to preserve their property, but it’s also perfect for high-net-worth individuals and qualified participants who need significant tax savings in the current year.

Cost Segregation

If you own commercial real estate, cost segregation is an advanced tax strategy you should be using. The cost segregation approach allows you to depreciate your building much faster than 39 years, in fact, the deprecation schedule can be reduced to between 5-15 years. Cost segregation saves you money.

1031 Real Property Exchange

Do you own investment real estate? If so, and you’re ready to sell, there’s a great way to both defer taxes while continuing to create wealth in real estate. Our 1031 tax exchange strategy gives you all the benefits of real estate ownership without the headaches of ownership and management.

Common — But Not Often Used — Tax Deductions

Home Office

If you run a business from your home or even work from home you may be eligible for a home office tax deduction. If you use your home office for managerial or administrative purposes, to see clients or patients, or take meetings, you may qualify for this IRS-approved tax deduction.

Tax Free Rent

Tax free rent is a great way for a business owner to take a deduction for a board meeting, or meeting of principals or directors by using your home instead of a hotel conference facility. Instead of paying hotel charges, the IRS allows you to pay yourself, so this income is tax free to you.

Hire the Kids

Your kids can be the source of your pride and joy, and now they can be a tax deduction too. If you give your children chores, you can turn it into a job. If you run a business you can and should hire them, all of this is IRS-approved.