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The
Biggest Tax Mistake You Can Ever Make
(and
How To Avoid It)
by
Wayne Davies, EA
Have you ever
noticed how American taxpayers everywhere breathe a collective
sigh of relief on April 15?
Does this
sound familiar: “Whew, I’m sure glad another Tax Season is
over!”
Unless you
filed an extension, you've got your tax return done and now you
can forget about taxes for another year.
Yep, that has
a nice ring to it, doesn't it?
It sounds so
good, I think I'll say it again:
"Now you
can forget about taxes for another year."
If you found
yourself agreeing with me there, guess what?
I gotcha!
I just caught
you making the biggest tax mistake you can possibly make -- the
incredibly short-sighted attitude that taxes is a
"once-a-year" thing, something you do only because you
are forced to deal with it every spring, and then you are so fed
up with the whole mess that you gladly forget about it until next
spring, and then, only because you are forced to deal with it
again!
If this is
the way you approach taxes, you are doomed to overpay your taxes
forever!
(Oh, pardon
me for just a second while I climb up on my soapbox, turn up the
volume, and let it rip. I'm goin' to preach this message till the
cows come home!)
And what
message is that, you ask?
My message
today is a simple one, but unfortunately, one that often falls on
deaf ears. So please, I really do hope you are listening with your
ears wide open.
Here it is,
my Post-Tax Season Message (but it is applicable any time of
year):
If you only
pay attention to your tax bill during Tax Season, then I guarantee
you are paying too much tax.
Our tax
system is unbelievably confusing, incredibly convoluted, and
increasingly chaotic. In a word, it's crazy. And it's only going
to get worse.
Even as I
write this, Congress and the President are going round and round
about the next round of tax law changes. So what else is new?
But even with
all its mind-numbing complexity, our tax code has many legal
loopholes you can drive a truck through.
Here's a
startling statistic to drive home the point: It is conservatively
estimated that small business owners and self-employed people are
overpaying their taxes by 160 billion dollars every year.
And the
biggest cause of this situation is the simple fact that small biz
owners and the self-employed are not using all the tax loopholes
they are entitled to.
But you'll
never figure out what those loopholes are by only spending a few
hours, once a year, to the task of filling out the forms.
It's gotta be
a year-round task. And you need to realize that some of the best
tax-reduction strategies require some research on your part.
You've got to do your
homework, check things out, maybe even consult with a professional
to make sure you're not missing something and that all your ducks
are in a row.
Like any
worthwhile goal, it takes time and energy.
In my
experience, there is one small biz tax-reduction strategy that
stands head and shoulders above all the rest: Choice of Entity.
Bear with me
here, as I explain what I mean.
By
"Choice of Entity", I'm referring to what type of
business you own, from a legal standpoint.
Here are your
choices:
Sole
Proprietorship
Partnership
Corporation
Limited
Liability Company
(Note: If you
are self-employed and don't view yourself as owning a business,
guess what: from a tax standpoint, as a self-employed person, you
do own a business. It's called a Sole Proprietorship.)
The purpose
of this article is not to tell you which entity is best for you
and exactly how much money you can save in taxes by picking one of
these entity choices.
I can't do
that in a thousand words.
But what I
can tell you right now is this:
Your Choice
of Entity is the single-most important factor in determining your
annual tax bill.
I can also
tell you this: every year, thousands of small biz owners and
self-employed people save literally thousands of dollars in taxes
because they made a simple one-time change in their Choice of
Entity.
Obviously,
there are many factors that determine how much tax you pay: the
accuracy of your record-keeping, how organized you are, your
knowledge of all the many
available tax deductions, etc.
But the most
important factor of all is this: What entity type are you?
So, now that
Tax Season is a not-so-distant memory and your mind turns to
other, supposedly more important matters, my question to you is
this:
How do you
know that your current Choice of Entity is the best one for you?
Have you done
an analysis of the pros and cons of each entity? Do you know what
the tax consequences would be if your changed your Choice of
Entity? Do you know what it takes to make a change from one entity
type to another?
Let's say you
are a Sole Proprietor: do you know how much tax you would have
paid last year if your business had been a Corporation, a
Partnership, or a Limited Liability Company?
These are not
the kinds of questions you have time to address while frantically
looking for lost receipts and filling out the tax forms on April
14th.
Sooner or
later, you MUST turn your attention to the most important tax
issue of all: Choice of Entity.
And believe me, sooner is better than later.
If you’ve made the wrong Choice of Entity, you are
probably overpaying your taxes by thousands every year.
How do you
get started researching the best Choice of Entity for your
particular situation? Click here to find out:
http://www.YouSaveOnTaxes.com/tax-decision.html
Have
you heard about the recent tax law change that turned a small
business loophole into a crater?
http://www.YouSaveOnTaxes.com/tax-crater.html
Want
to know the biggest tax mistake you can ever make? (And how
to avoid it?)
http://www.YouSaveOnTaxes.com/tax-mistake.html
Do
you know why the most important business decision you
probably never made is the key to paying thousands less in taxes?
http://www.YouSaveOnTaxes.com/tax-decision.html
Hungry for
some tasty Tax Tidbits guaranteed to put at least $2,000 in your pocket?
Check out this 5-article
series:
Tax
Tidbit #1: http://www.YouSaveOnTaxes.com/tax-tidbit-1.html
Tax
Tidbit #2: http://www.YouSaveOnTaxes.com/tax-tidbit-2.html
Tax
Tidbit #3: http://www.YouSaveOnTaxes.com/tax-tidbit-3.html
Tax
Tidbit #4: http://www.YouSaveOnTaxes.com/tax-tidbit-4.html
Tax
Tidbit #5: http://www.YouSaveOnTaxes.com/tax-tidbit-5.html
About The
Author:
Wayne
M. Davies is author of three tax-slashing eBooks for small
business owners and the
self-employed:
** The Tax Reduction Toolkit **
29
little-known but perfectly legal strategies to reduce your taxes,
postpone your taxes, and even avoid taxes altogether -- for small
biz owners & self-employed people only!
http://www.TaxReductionToolkit.com
**
Incorporation Tax Secrets Revealed **
How to save thousands in taxes by
forming a corporation or LLC for your small business or
self-employment activity. Discover the #1 Tax Secret of the Rich!
http://www.IncorporationTaxSecrets.com
**
How To Incorporate Yourself For Free **
How to
avoid paying $500, $1000, $1500 or more in lawyer fees by
incorporating your small business all by yourself...for FREE!
http://www.HowToIncorporateForFree.com
Wayne's eBooks are available separately, or
at a discount as a 3-volume set:
**
The Ultimate Small Business Tax Reduction Guide **
Find out just how easy (and legal) it is to reduce your
taxes by $2,000...$3,000...$4,000 or more!
http://www.SmallBusinessTaxReductionGuide.com
To
receive a free copy of Wayne's 25-page Special Report,
"How
To Instantly Double Your Deductions"
click
here:
http://www.YouSaveOnTaxes.com
www.YouSaveOnTaxes.com
A
Division of Wayne M. Davies Inc.
4660
W. Jefferson Blvd., Suite 220
Fort
Wayne, IN 46804
(260) 459-3858
Wayne@YouSaveOnTaxes.com
http://www.YouSaveOnTaxes.com
http://www.MagneticMarketing.biz
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