As real estate agents and business owners, we work hard for our money. If we’re not organized or smart about our taxes, we’ll miss out on a lot of what we’ve earned. How do we dial-in our taxes and legal entities so that we can take advantage of some tax strategies that will put more money in our pockets? How do we choose between an S Corp or an LLC, and what are the benefits? How can we save ourselves up to $9k on taxes?
On this episode, we are joined by expert tax-attorney, best-selling author, and national speaker, Mark Kohler, who shares on 199A Pass-thru Limitations, revocable family trusts, opportunity shifting and more!
The tax planning, asset protection, and estate planning all need to be coordinated. -Mark Kohler
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Three Things We Learned From This Episode
Why you need to be involved in your legal and tax planning process
Even if you think your accountant is doing a good job on your taxes, there are strategies they need to implement with you. There needs to be a conversation about certain things. Be involved enough to call the shots as the captain of the ship.
How to save on over $9k in taxes by making a simple switch
The reality is some people are netting $100k and paying up to $40k in tax. You can make a change that means you end up only paying $6k in tax. You can take an LLC and turn it into an S Corp, and then take a payroll of $40k and make the $60k a draw. You still made $100k but you changed the character of it. You’ll pay $6k in taxes but on the other 60% you avoid the entire 15% of taxes. The beauty of that switch is the more money you make, the more money you save.
The best way to pay family members
If you have kids under 18, you shouldn’t pay them directly out of the S-Corp. You can set up a family management sole proprietorship, and determine good pay levels for your kids helping in your business.
If we’re not intentional about how we’ve set up our business and legal entities, we could be losing up to 50% of our earnings to tax. The reason wealthy people have the money they have is that they take advantage of tax laws that benefit them, and with the new tax code, this is something business owners like us can do. By working with the right tax attorney, participating in the process, and coordinating our operations, holdings and family estate, you can save thousands of dollars. It’s about keeping the maximum amount of money that you can, and keeping the IRS informed to keep them happy.
Mark J. Kohler, M.Pr.A., C.P.A., J.D., is a best-selling author, national speaker, radio show host, writer and video personality for Entrepreneur.com. He's a real estate investor, senior partner in the law firm, Kyler, Kohler, Ostermiller & Sorensen, and the accounting firm of Kohler & Eyre, CPAs. Mark is a personal and small business tax and legal expert, who helps clients build and protect wealth through wealth management strategies, and business and tax remedies often overlooked in this challenging, ever-changing economic climate. His seminars have helped tens of thousands of individuals and small business owners navigate the maze of legal, regulatory and financial laws to greater success and wealth. Go to https://markjkohler.com/ to get his books and listen to his podcast, Refresh Your Wealth. Sign up for his email list and get his book 10 Best Tax Saving Secrets.
To get a free copy another of Mark’s book “Top 10 Legal and Tax Mistakes Made by Entrepreneurs”, go to http://clubwealth.com/cpa/.
Watch Mark’s video “Does the SEP or 401k Strategy Make More Sense?”