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Old 01-29-2019, 04:11 PM
 
Location: NJ
23,241 posts, read 29,249,366 times
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from my experience, there are no magic tricks to reducing our company/owner taxes. if i am paying lower taxes, im probably earning less income.

i think that is the case for most people. some business can depreciate real estate/equipment or shift around income from overeas but that isnt most businesses.
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Old 01-29-2019, 04:11 PM
 
Location: Aurora Denveralis
5,218 posts, read 1,731,867 times
Reputation: 7867
Quote:
Originally Posted by CaptainNJ View Post
do you own a business?
Yes. Over 20 years now.

And co-managed a $6M, 100-employee business for about 12 years. Among a few other scattered endeavors.

Quote:
taxation is theft so i would view the above scenario as theft reduction.
Yes, yes, you've said that. Never found any coupons you could triple up on Unca Sam?
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Old 01-30-2019, 10:38 AM
 
Location: North Idaho
21,484 posts, read 26,869,337 times
Reputation: 40799
Quote:
Originally Posted by DonaldJTrump View Post
My family never owned or ran businesses, so I'd like to know what are the many ways business owners use their businness to their advantage when it comes to minimizing income taxes personally and in their business?

You can only deduct legitimate expenses. That's money you have spent, so it might reduce your taxes but it increases your expenses. Roughly. you'll save 30 cents of taxes for every dollar you spend, so unless you really want to run a business, there is no point of opening one just to reduce your taxes.


Depreciation helps reduce the tax bill, but you can't depreciate a thing you didn't buy. In real estate, after you get your nice depreciation, you have to recapture it and pay taxes on it after you sell.


You might (might) be able to depreciate a car, but only for business use. You can't use the business car for personal use and depreciate it.


Some of the suggestions here are not legitimate business expenses to legally reduce your taxes. They are simply tax fraud and if you want to take the chance and lie on your taxes, just lie. You don't have to open a business in order to lie on your tax return.
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Old 01-30-2019, 12:08 PM
 
4,502 posts, read 1,854,426 times
Reputation: 14230
Quote:
Originally Posted by CaptainNJ View Post
from my experience, there are no magic tricks to reducing our company/owner taxes. if i am paying lower taxes, im probably earning less income.

i think that is the case for most people. some business can depreciate real estate/equipment or shift around income from overeas but that isnt most businesses.

You could always leave New Jersey. A client of mine moved their entire operations out of there. Slashed their tax bill. Two years later, he still talks about it how much he saves.

Back to the OP. As someone who has started, grown, and sold several enterprises, your first move should be to hire a good accountant who understands small business and communicate with him/her throughout the year. Towards the end of the year, begin your tax planning. Don't just hand him a shoe box of receipts in February and ask him to work miracles.

As one example, we do our business accounting on an accrual basis, but pay our taxes on a cash basis. As we close in on the end of the year, we convert our income statements, knowing to the penny how we're doing on a cash basis. If we're making a larger profit than expected, we accelerate spending while deferring revenue. One year, my business had billings of around $5 million. However, we had a busy year-end and kept procrastinating when it came to that set of calculations, finally getting around to it the last two days of the business year. We learned that we had about $250,000 in additional profits on a cash basis. Trust me. We were writing a lot of checks on the 31st of December that year.

Of course, with corporate taxes down to a sane and reasonable 20%, I no longer have to go through nearly that amount of shenanigans.
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Old 01-30-2019, 12:15 PM
 
Location: Aurora Denveralis
5,218 posts, read 1,731,867 times
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Quote:
Originally Posted by MinivanDriver View Post
You could always leave New Jersey. A client of mine moved their entire operations out of there. Slashed their tax bill. Two years later, he still talks about it how much he saves.
...that being all there is to do, sitting around in front of the general store in Bofock, NC.

Taxes and QOL tend to go hand in hand.
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Old 01-30-2019, 12:57 PM
 
4,502 posts, read 1,854,426 times
Reputation: 14230
Quote:
Originally Posted by Quietude View Post
...that being all there is to do, sitting around in front of the general store in Bofock, NC.

Taxes and QOL tend to go hand in hand.

That's nice. Stereotype much? You should of explored your theme a little further with references to whittling and Friday night klavern meetings.
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Old 01-30-2019, 03:29 PM
 
Location: Forests of Maine
30,151 posts, read 48,292,680 times
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Have you considered increasing your company health insurance plan? Provide every employee with really good health insurance. That should reduce your taxable profit a good amount.

Are there any 'professional development' seminars anywhere that would sort of apply to the jobs of your employees? Once a year send each employee to a seminar somewhere [Vegas, Miami, Tahoe, Waikiki, etc]. If it is a 3-day seminar, spring for 5-days [the day before and a day after] and include a plus-one with each package trip.
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Old 01-30-2019, 06:17 PM
 
9,699 posts, read 11,592,138 times
Reputation: 13062
Quote:
Originally Posted by DonaldJTrump View Post
My family never owned or ran businesses, so I'd like to know what are the many ways business owners use their businness to their advantage when it comes to minimizing income taxes personally and in their business?
I knew a guy in the car business, he bought a new boat annually. The boat was owned by the dealership and sold each year for a loss but he got to use it, dealership fueled/insured it. Nice perk!
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Old 01-30-2019, 06:48 PM
 
918 posts, read 372,024 times
Reputation: 1784
Quote:
Originally Posted by City Guy997S View Post
I knew a guy in the car business, he bought a new boat annually. The boat was owned by the dealership and sold each year for a loss but he got to use it, dealership fueled/insured it. Nice perk!
probably makes sense to lease a luxury vehicle if i had a business
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Old 01-30-2019, 08:05 PM
 
135 posts, read 59,468 times
Reputation: 129
They either :

1) buy everything in China for 5 cents and sell garbage to the American public or

2) hire Mexicans or under pay people to do the work to make up for taxes or lost profits
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