Reducing Your Tax Burden as a Small Business Owner

I want to talk to you about one of my favorite subjects: minimizing your tax bill as a small business owner.

Do I have your attention? Would you like to legitimately pay less tax here in Flint or in Ann Arbor? Does saving money on taxes appeal to you?

Let’s say you have $100,000 in net profits as an unincorporated business, a sole proprietorship. If you work as a subcontractor, this applies to you as well.

You will owe roughly $14,200 in Social Security taxes on this income. Period. Ouch.

There is a way you can make exactly the same amount of money and save about $5700 in taxes.

Interested?

What I normally have my clients do is form a Limited Liability Company. It is not terribly expensive to do so here in Michigan, but separates your business assets from your personal assets and protects you from lawsuits.

Then we make the election to treat the LLC as a corporation for tax purposes, followed by a second election to be treated as a small business corporation, an S Corporation. It is here that all the tax savings advantages lie for small business owners.

The IRS expects about a 60/40 split between wages and company profits with an S Corp, so you would have $60,000 wages and $40,000 in company profits…and save around $5700 on your tax bill.

But won’t that cost you more in tax preparation and accounting fees? With my firm it would cost you roughly $450 to $500 more to file the separate business return. $5700 - $500 = $5200 in net tax savings. Even a person netting $20,000 per year can use this strategy and net a significant tax savings over $2000 per year using this business strategy.

I’m wondering: Why has your accountant not suggested this to you? If you are wondering the same thing..

Call me at 1-734-358-6314 so we can help you!

It doesn’t matter if you are located in Michigan or in Seattle, Washington, I can help you set this up and help you with your accounting and tax preparation needs. Our company charges on average half of the national average what other tax professionals charge. Feel free to suggest your friends in other states contact me.

Dan Bosler is an Enrolled Agent (licensed by the Department of Treasury to assist people like you with tax problems). He helped Mill Creek Community Church resolve a $10,000 payroll tax issue for $12.85. While this is unusual, sometimes we can help provide tax resolution services in Flint, Brighton, and Ann Arbor that solve your tax problems for much less than the IRS claims you owe.

Call 1-734-358-6314 NOW; visit my website: www.danbosler.com, or email me at dan@danbosler.com. We at Renie Kate will be glad to help you manage your business so you can put more money in your own pocket.