Fucking Taxes

So today, I had my second meeting with my tax attorney. It was ridiculously interesting. His opinion is basically, if you're running a business and you're paying taxes, you're doing something wrong.
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This is true in that your business shouldn't be paying much if any taxes at all. If S-Corp or LLC it flows to your personal, if C corp you should pretty much zero out the corp at the end of the year to avoid double taxation. My primary corp, regardless of how much revenue is generated for the year, never pays more than $500 in taxes.

The trick is at the personal level. I'd like to see how Berto's rockstar CPA could reduce the personal income taxes of someone who made a million dollars in net profits, and wants control of that money now (i.e. not tied up or deferred long term).
 


Berto said:
Oh, I hear you, and I'll cross that bridge when I get to it. I'm nowhere near needing to worry about pensions and insurance.

I just love the style. If I can hide money away from the government now and have my children deal with some bullshit later, that's fine by me.
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What good is "hiding away money now", so your kids get to deal with it and spend it after you die? That doesn't seem like a very good way to enjoy the fruits of your labor. Hiding or tying up most of your profits in long-term tax deferred investments to save taxes is like cutting off your nose to spite your face.
 
dsiomtw said:
This is true in that your business shouldn't be paying much if any taxes at all. If S-Corp or LLC it flows to your personal, if C corp you should pretty much zero out the corp at the end of the year to avoid double taxation. My primary corp, regardless of how much revenue is generated for the year, never pays more than $500 in taxes.

The trick is at the personal level. I'd like to see how Berto's rockstar CPA could reduce the personal income taxes of someone who made a million dollars in net profits, and wants control of that money now (i.e. not tied up or deferred long term).
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Well for 2010 I'm screwed in that aspect - 3/4 of my year was under W-2 so I'm gonna pay unless he gets real creative (making the corp take some nutto loss?)

dsiomtw said:
What good is "hiding away money now", so your kids get to deal with it and spend it after you die? That doesn't seem like a very good way to enjoy the fruits of your labor. Hiding or tying up most of your profits in long-term tax deferred investments to save taxes is like cutting off your nose to spite your face.
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That's AFTER i get through purchasing a house my "toy list" as he put it. Like I said, nowhere near this. And when I'm done enjoying life, this business is up for sale.
 
Berto said:
Well for 2010 I'm screwed in that aspect - 3/4 of my year was under W-2 so I'm gonna pay unless he gets real creative (making the corp take some nutto loss?)
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Well yeah if you're W2 you gotta pay whatever you owe after you deduct whatever personal deductions you have. Not much you can do here. What do you plan on doing differently in 2011 to put the same amount of spendable money in your pockets and pay less taxes?? If you're making a bunch of money it's pretty hard to reduce your tax liability much with standard personal deductions.
 
Just got a bill from my CPA. $750 for corporate taxes and $550 for personal... That's pretty high, right? I basically did all the work for him too.
 
dsiomtw said:
Well yeah if you're W2 you gotta pay whatever you owe after you deduct whatever personal deductions you have. Not much you can do here. What do you plan on doing differently in 2011 to put the same amount of spendable money in your pockets and pay less taxes?? If you're making a bunch of money it's pretty hard to reduce your tax liability much with standard personal deductions.
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Gonna listen to their advice, but it seems that I didn't pay for enough stuff using the 'corporate card' this past year. My personal expenses are pretty cheap when you get down to it.

My biggest expenses are rent (will do a leasing thing with the new S-Corp?), groceries, drinking (gonna do more entertainment expensing), and traveling (always at least half a write-off if I do things proper).

What else do I really need? I live a pretty cheap life besides the rent because I love my location and live by myself 70ft from the sand.

Oh, and the rent... I pay $1700. In this guy's eyes, getting a $3000 mortgage would be the EXACT same effect as paying $1700 rent because that's how much more can be written off. $3000 mortgage could get me a $500k house, which sadly, ain't shit in my hood. I haven't verified the math but it's interesting to know I can currently "afford" a house that's more valuable than my parents'.

Some of you guys know real estate and are on the foreclosureradar and such and may have comments. I will openly admit that I don't know dick about it.
 
I just got my s-corp taxes done and noticed that all my business dinners and business lunch expenses (around $3K for 2010) was not fully written off.

My CPA wrote off $1500. I did some research online and found some people saying that you can only write off 50% of business meals for a S-corp.

Is this true? I always thought business dinners were a 100% tax write off.

I would ask my accountant, but don't feel like getting charged $24 per email + $250 an hour.
 
Berto said:
My biggest expenses are rent (will do a leasing thing with the new S-Corp?), groceries, drinking (gonna do more entertainment expensing), and traveling (always at least half a write-off if I do things proper).

What else do I really need? I live a pretty cheap life besides the rent because I love my location and live by myself 70ft from the sand.

Oh, and the rent... I pay $1700. In this guy's eyes, getting a $3000 mortgage would be the EXACT same effect as paying $1700 rent because that's how much more can be written off. $3000 mortgage could get me a $500k house.
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I don't know the laws on that side, but unless you can prove you use 43% (1300/3000) SOLELY for your business (proved by sq. footage), IRS will eat you up in an Audit.... and I will guarantee nobodies house is 43% office only.

(this is what I've done based on CPA's recommendations)
 
preciseauctions said:
I just got my s-corp taxes done and noticed that all my business dinners and business lunch expenses (around $3K for 2010) was not fully written off.

My CPA wrote off $1500. I did some research online and found some people saying that you can only write off 50% of business meals for a S-corp.

Is this true? I always thought business dinners were a 100% tax write off.

I would ask my accountant, but don't feel like getting charged $24 per email + $250 an hour.
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Your accountant is correct (and a 2 second IRS search finds the rule)

Publication 463 (2010), Travel, Entertainment, Gift, and Car Expenses
 
dmnEPC said:
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now that's my kind of monopoly !
 
Cali is a BITCH about sales tax on cars..if you buy a car while living in one state, you pay the sales tax in that state. If you move to Cali and the car is less than X years old...you must ALSO pay Cali sales tax. Fuck that.
 
papajohn56 said:
Cali is a BITCH about sales tax on cars..if you buy a car while living in one state, you pay the sales tax in that state. If you move to Cali and the car is less than X years old...you must ALSO pay Cali sales tax. Fuck that.
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I think the trick is to keep the vehicle registered in another state or something like that. I had a buddy whose whole family had Nevada plates because they would get deals on cars out there and then bring them back here. Perhaps it wasn't totally legal...don't really know the details.
 
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