In "Take the Tax Advantage," Garrett Gunderson brings his ruthlessly compassionate approach to the subject of personal finance and business taxes, offering insights and guidance on for you to consider which may be different from any money-saving suggestions you have encountered before.
Garrett B. Gunderson is the author of the revolutionary personal finance book, "Killing Sacred Cows", a New York Times bestseller. He is also the creator of the popular New Rules to Get Rich program published by Nightingale Conant.
Garrett's goal for you is that you keep as much of your hard-earned savings as possible.
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Video Transcript: "Take the Tax Advantage" A SpendLessTV.com Original video from Garrett B. Gunderson:
Hi! I'm Garrett Gunderson here with Spend Less TV, helping you spend less money, and especially today, in the realm of tax. I mean, look, we love the government many times, we love to help out, but are you maybe giving more than we need, I mean, are they your favorite charity? If not, here's some tips that can save you some dollars, keep 'em in your pocket. And you can choose where to spend them rather than just handing them over.
First, and foremost: If you're not a business and have no business, you're probably paying more in tax than necessary. So if you've got any passion, any hobby that you can translate into any form of income you can incorporate, and all of a sudden you get a lot more write-offs, for your travel, maybe even for a home office. This is something to go talk to a tax professional about, is: what about setting about a business if there's any one you can think of.
Now if you're also a w-2 employee, one thing that people get excited about is refunds. But, here's the deal a refund is an interest-free loan that you've given the government until the refund comes in. So why not increase your exemptions? So go talk to your payroll clerk or your HR Department, and say, "How can I raise the exemptions so I'm not getting money back at the end of the year, but instead I'm keeping those dollars and I can do something along the year or maybe earn some interest or pay off some high interest credit card debts and stop loaning that money."
Another tip when it comes to tax: Really be pro-active and strategize. If you're a business, well, you can strategize and say, "Am I the right kind of corporation?" Depending on the type of corporation you are, you might be able to take a smaller salary, and instead take dividends and avoid self-employment tax; or avoid FICA and FUDA, which is the Social Security taxes. That's something you definitely want to talk to your tax professional about but I want to plant some of the seeds so you have some of the knowledge of what you can do from a tax perspective.
Here's something most people don't think about, but if you're putting money into a retirement plan, like an IRA or other qualified plan, you might be thinking that's benefiting you tax-wise, but it's merely delaying it to some time in the future. Now if you're deferring it, and then in the future you're in a higher tax bracket, which could be because the government's raised the taxes, or because you have more money, then that's not necessarily tax savings. What I want you to look at is tax savings.
Some other ideas might be: If real estate's an area of passion for you, or if you're a business owner who wants to buy your own building, you can go ahead and buy that, and you can depreciate it for tax purposes. You might even get to write-off some interest that you paid. Or, there may be other expenses involved with the building, with maintenance and other things that you can now write-off by owning that building.
I'd also look into, if you're a business owner, called: cost segregation, which allows you to accelerate the depreciation, which by the way I a tax term and doesn't mean you are lowering the value of the building, it means that you are writing things off for using it and saying that one day, it's going to need to be replaced.
So, if you're not a business owner, look into becoming one.
If you are a business owner, make sure you're incorporated the proper way. If you're a sole proprietor, you're probably paying more in tax than necessary than if you were to be a limited liability company, or S corporation, or possibly even a C corporation.
Another tax tip is a health savings account. There are these new plans that are out for medical insurance or new-er plans that if you're paying for medical insurance with after-tax dollars you could get a health saving account, put in pre-tax dollars and by doing that towards a tax-deductible expense towards anything medical. There's also flex-spending accounts, but if you don't use that, you might loose that, so it's a little bit different, but it's also a tax-saving tip.
This is Garrett Gunderson. Spend Less, and hey, while you're at it, save a little bit more and invest a little bit more.
Financial advisor and best-selling author, Garrett B. Gunderson, discloses tax advantages you may not have considered that could help you hold onto more of your hard-earned savings.
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