Alan Olsen is the managing partner at Greenstein Rogoff Olsen & Co., a top Bay Area CPA firm. He focuses on developing innovative strategies for business enterprises and individuals. A specialist in income tax planning, he frequently lectures and writes articles on tax issues for professional organizations and community groups. His website is ranked among the top in the nation for accounting firms, featuring tax tools and business leadership articles: http://www.groco.com
If you are a small business owner looking for cost cutting ideas here are ten tax planning ideas that may result in substantial tax savings. The following article highlights planning areas often missed by business owners. You should consult a qualified tax advisor to determine if any of these areas are appropriate for you and your business.
Managing cash flow is what separates good companies from the truly successful ones. Indeed, your ability to monitor the cash flow of your business can be the vital difference between profit and loss.
More and more taxpayers are finding a hidden tax on their individual tax returns. This tax was originally designed to not allow taxpayer in the higher income brackets take advantage of tax driven policy like deducting:
A lot of itemized deductions
High local and state tax deductions
Child exemptions
A Mortgage deduction
April 15th is almost here and if you are owing tax it may pay to take a second look at that return to see if you claimed all medical deductions you are entitled to. Your diligence in keeping track of expenses will pay off. IRS Publication 502 has a complete listing of all medical costs deductible. Following are some of the commonly overlooked medical deductions.
In the year 2002, there were 17.1 million Millionaires in the U.S. By 2013, the number of millionaires will triple due to inheritance. For the rest of you, becoming a millionaire is within reach if you apply a 5 step plan involving the following areas:
1. Health
2. Spending
3. Savings
4. Investing
5. Career
Remember that its not what you make, its what you keep. When evaluating an investment evaluate the cost to generate an investment return. If you are using an investment manager compare the performance of the investment net of fees. Be careful when entering into non-tradition investment vehicles life limited partnership interest. These type of investments tend to have higher management fees and are often illiquid.
You should consider that a well-prepared business plan plays two important roles. First, it is a useful management tool that can help you to plot a course for your company. Second, it is a sales tool that will impress venture capitalists with your planning ability and general competence as a manager. Other things being equal, a well prepared business plan will increase your chances of obtaining the venture capitalist's financial commitment.
Employee stock options can provide you with a substantial source of deferred income and permit you to control the recognition of taxable income. You generally pay no tax when an option is granted because you are not receiving any shares of stock, only the option to purchase shares at a later date.
I suggest that if you are interested in capitalizing on these changes, just look to the trends in the Venture Capital community. Current trends in the Venture Capital community outline three areas that will be the center of focus in the short term: Cleantech, Globalization, and Web 2.0.
In 2010 the estate tax will be repealed and the gift tax rate will fall to 35%. However, this repeal is effective only for that year and the estate tax will be reinstated in some form the very next year (2011). The US Senate is considering options to reduce or eliminate the estate tax. Currently, the estate tax only applies to fortunes over $2 million (at 46%) and is estimated to affect 12,600 taxpayers in 2006.
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