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How To Win Over An Investor With Little-known Tax Advantages
There are many ways to capitalize on legal tax situations to create additional income for your corporation. First, choosing the fiscal year for the corporation. If the corporation is profitable right from the start, then end the first fiscal year when the corporation has made $25,000. This prevents paying the surtax for that period. If the corporation is actually losing money, extend the losses for 1-year from the starting date to obtain the biggest possible tax loss carryover. The method of accounting chosen can make or cost money. There is the cash basis or the accrual basis: each has advantages and disadvantages, and depending on your business, one of them can save money for you, so choose carefully. Make sure you include the costs of incorporation in your expenses (by law, they can be amortized out over the first five years); if you fail to do so, you can’t deduct them until the corporation is closed out There are definite tax advantages in medical plans in small corporations. There is a subsection in the Internal Revenue Code that allows smaller corporations to set up a medical plan for corporation affiliate members that makes it possible for the corporation to repay plan affiliate members for all their medical expenses. . . From Their Personal Income Taxes!" On the other hand, the corporation members who receive such payments are NOT required to include such amounts in their gross income. Thus your investor (as a corporation affiliate member) can obtain free medical care for himself and his dependents. You can with little time and expense set up very lucrative retirement funds and pension plans that can be invested and reinvested without tax payments, and the corporation receives full tax deductions from earned income for all payments into the fund. There are many ways to legally defer income tax payments (which amounts to borrowing interest-free money from the federal government). The method of inventory control commonly known as LIFO (Last In, First Out) has MANY built-in tax advantages. The point of all this is simply that a certified accountant can show you many opportunities to offer real tax savings to a potential investor, and each one is another reason for him to put up the capital. Source: http://www.giveawaylegalforms.com/ Terms:
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ere is where your accountant can really excel if he or she knows the tax law.