The Money Game
You are finally making consistent money and then it happens, exponential growth!
What do you need to know to be smart with your money… so you don’t have surprises at tax time and you understand how to make your money work for you?!
It’s a great question, and one I hear quite often.
The first step is to ensure you are in the best entity set up for you.
Often this is the time at which you may choose to become an S Corp and begin to set up payroll for yourself. If you are a sole owner, or it’s just you and your spouse, there are many benefits that you can set up for yourself that will give you nice tax savings.
For example a SEP IRA. While I’m not really a fan of IRA’s, this is one time that the benefits for tax savings are worth it.
How much payroll do you set up?
The IRS says a “reasonable salary” given what you do. I also suggest you choose a number that takes care of everything on the personal side, in other words, it makes your life work financially.
Another benefit of corporate structures is the annual meeting. Remember that trip you have always wanted to take? Well now you can write it off!
Every entity is allowed two meetings per year for planning purposes. What better place to plan that on the beach or in the mountains, where ever your favorite place is.
Purchasing vehicles or equipment in the name of the company will allow for a beautiful deduction called depreciation. While you don’t want to spend just for spending sake, it is better than writing a check to the government for taxes. Why do we get depreciation? Because it makes the economy work.
Once these basics are handled, then we move into investing!
The bottom line is… when generating income is a goal for you, then it’s time to learn the money game.
This is something that takes time to learn about and personal exploration to determine the best avenues for you based on your values and your long term goals.
When you are ready lets talk!
Please share any questions you might have about the ‘money game’ in the comments below, I would love to hear from you!