Self Employed Individuals will be hit with a higher tax liability. Many individuals are sole stock holders in their LLC, S Corp or Sole Proprietorship. Avoiding the higher tax liability can occur by simply implementing a payroll system or contracting a 3rd party to prepare your pay checks so that you treat yourself as an employee of your company. At Year End your will receive a W 2.
Assets that have been fully depreciated and still in service should be sold to LLC's, S Corp's or Sole Proprietorship's that are in need of depreciation shields. This will start the depreciation clock ticking again and shield future income with non-cash deductions.
Invest in projects or vehicles that provide tax credits. Tax credits offset tax liability. Spend extra cash on vehicles that provide you with lower expenses in the upcoming year and tax credits that offset tax liability such as energy efficient appliances, mechanical, capacitors and solar panels.
Year End Profits should be placed in deferred compensation. Year End IRAs with gold acquisitions would be an excellent direction for your money if year end profits are huge. Year End Real Estate transactions should be executed as 1031 Exchanges to avoid taxes.
More information can be provided by contacting Chet Jones at 770-895-4385.
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