7 Secrets to Increased Profits – Part 1
Running a small business and trying to keep up with all the tax regulations and new IRS codes is no joke. Mess this up and you’ll have to pay big penalties, not to mention possibly suffer through a business ending IRS audit!
Let me introduce myself. My name is Bernadette and I run my own small business, too. However, in my business I specialize in knowing the VERY complex tax code we are all required by law to follow. Yes, understanding how to properly send (or receive) money to Uncle Sam by filling out certain specific forms at certain specific times is an ugly business, but someone’s gotta do it!
Truth be told, I actually LOVE helping regular middle to higher income folks minimize tax dollars so you keep more of YOUR money in your pocket! Plus, I really enjoy giving taxpayers real peace of mind, especially small business owners who have to deal with taxes year round, not just on April 15th! You should not have to live or run your business with the constant distraction of Uncle Sam looking over your shoulder month after month after month….
TAXES … Not Much Fun Dealing With The IRS Alone!
New Tax Laws and Regulations … Compliance Issues …Local, State and Federal Taxes … Quarterly Estimated Taxes … Payroll Taxes …Sales Tax … Unemployment Taxes … Personal Property Taxes … Personal and Business Tax Returns …and on and on – WHAT A BUREAUCRATIC MESS!
SECRET TAX TIP #1
“MERP” Offers Tax Benefits For Your Medical Expenses!
In order to get the full benefit from your medical expenses establish a medical expense reimbursement plan (“MERP”). Generally, taxpayers who itemize their deductions can take a deduction for their medical expenses to the extent that the expenses are greater than 7.5% of their adjusted gross income. Taxpayers who do not itemize get no deduction. With a MERP taxpayers can take a dollar-for-dollar deduction whether or not they itemize for their medical care expenditures.
A great tip for keeping track of your medical expenses: Since most people do a really poor job of tracking these kinds of expenses and in most cases are unable to get their hands on this information when tax time comes around, do yourself a favor right now. Go into your storage closet, a kitchen drawer or wherever you keep file folders (if you don’t have any, a short trip to Office Depot or Staples today will do the trick) … then mark “Medical Expenses” on one for these folders. Put this folder in the nearest drawer to your kitchen phone. Now EVERY time you spend any money related to your medical care (even if you are not sure it could be deductible or not), put the receipt in the folder. You will be glad you did next tax season. The money you save in paying less in taxes will be a great incentive all by itself!
SECRET TAX TIP #2
“SIMPLE” Plan Offers Even More Tax Savings Than Regular IRA!
Establish a SIMPLE IRA to boost your tax benefits from your retirement account. Like an IRA, you can reduce your taxable income dollar-for-dollar for the amount you contribute to a SIMPLE plan. A SIMPLE plan, however, comes with the added advantage over a tradition IRA of allowing a taxpayer to contribute even more money. A Taxpayer can contribute up to $10,500 (2007) in a SIMPLE plan, as compared with the $4000 limit for a traditional IRA.
Hey, this is a BIG difference! We’re talking about thousands of dollars more each year – tax free! And as my dad used to say, “Give first, then SAVE for retirement and then pay your bills each month … do this all of your life and wisdom will follow you until the end.” Yes, it IS wise to consistently sock money away, especially tax free! And since the IRS gives you a great incentive to do so, might as well take them up on their offer …
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Tags: profits, small business taxes, tax deductions, Tax Secrets
