Wealth Preservation-Tax Planning
There are many tax planning strategies available to business owners, yet far too few take advantage of the tax provisions available. Tax planning is critical – it serves to reduce your tax liability by properly structuring your business transactions so that you mitigate your tax obligation and maximize your after-tax dollars.
Tax planning has to be implemented prior to a taxable event. A properly formulated and executed tax plan affords a business owner the opportunity to protect assets, maximize income, minimize taxes, and create wealth building benefits. The US tax code is about 4 million words long – it is huge and complex – but filled with great opportunities for the informed.
Business Exit Planning
Perhaps the most challenging aspect of exiting your business is learning how to maximize the value that you ultimately realize, after taxes, from the sale of your business. Exiting a business is a taxable event. Proper exit planning puts the business owner in control and avoids any surprise tax implications. We have found that strategies engineered to minimize taxes, increase cash flow, owner compensation and benefits, coupled with improved entity structure and and business practices to better protect assets have a definite impact on the marketability of a business.
A properly designed and executed exit plan addresses all the business, personal, financial, legal and tax issues involved in sellling your privately-held business. Its purpose is to ensure the survival of the business, to preserve wealth for your family, and to provide continuity to your employees, customers and vendors.
Exit planning outcomes have proven that business owners will leave with greater wealth, pay less in taxes, retain more influence and have a smoother transition than if left to chance.
• You will ultimately exit your business, either voluntarily or involuntarily
• Most business owners have a majority of their wealth trapped in their business
• An improperly structured exit could erode over 55% of the gross proceeds of the sale of a business
The only way to build wealth through your business is to continually increase the gap between the money that comes into the business and the money that goes out.
So why do many business owners make money but never progress to the point of building wealth? Because they failed to develop and implement a plan to reduce the assault on wealth by taxes, lawsuits and missed growth opportunities.
A business owner's plan must identify threats that impact income during the year, including taxes, lawsuits, retirement plan, exit and estate plan.