|
Why Millionaires Don't Fear the IRS
So you've finally done it: you started your own business. You're
making money and feeling great, maybe even enough to buy that
new car or home you've been coveting. But wait! What about Uncle
Sam? Doesn't he want his cut of your new pie?
Of course he does. And, that guy who wants to sue you for all
you've got because your product caused his little girl to cry
wants his share as well. What's a small business owner to do?
Loral Langemeier, author of The Millionaire Maker (probably the
best hands-on wealth strategy book written to date) has
experienced it all, and continuously comes out the clear winner
- completely legally.
It turns out that you can, too. But you'll have to get some
help. In her book, Loral explains what she calls the Wealth
Cycle™, a process that's used by millionaires who want to keep
the money they make.
A key part of the Wealth Cycle is what's called "Entity
Structuring." That is, structuring your company as a legal
corporation or company and telling the IRS how you want to be
taxed.
What you might not know is that these legal entities were
created as much for you, the little guy, as for the big
corporations. That's why if you want to be a millionaire, you
need to know a thing or to about entities.
Protecting your butt while saving your bucks
These legal entities are simply business and tax structures.
This includes corporations, LLC's, and Partnerships. It does not
include the sole proprietor. Entities have two components to
them: the legal component and the tax component. The legal
component determines how your business is structured. The tax
component determines how the IRS will tax your company.
Let's take an example. You've probably heard of a "C
corporation", right? This is a business that has decided to
structure itself as a corporation and be taxed under Chapter C
of the IRS tax code. An S corporation, alternatively, is a
corporation that has chosen to be taxed under Chapter S of the
IRS tax code. (See why you'll need help?)
Entities are not something you have to use, but smart business
owners, even and especially sole practitioners, do use them.
Why? Say that someone decides to sue your business. If they win
and you're not a legal company or corporation, they can get your
house, your car, and pretty much everything you own. If you ARE
a legal entity, all they'll get are the assets of your company.
The best part is that if you're doing it right, your legal
entity won't have many assets, and you'll keep more of what you
earn. Tax benefits are pretty straightforward. The more of them
you have, the more you keep of what you earn. The IRS gives
corporations bigger tax breaks by allowing them to write off a
lot more expenses than individuals.
It's not necessary to know all the details about entities -
that's what your accountant and lawyer are for. But you should
certainly get familiar with your options so you can start
managing your life like a millionaire does. "Doing so will be
one of the first steps on your journey to millions," says Loral.
Can you really become a millionaire simply by having a
corporation? No, you can't. In her book, Loral provides numerous
examples of how people use entity structuring to protect
themselves and keep more of their money.
If you DO want to make millions (or at least a lot more than
you're making now), be sure to create, as Loral says in The
Millionaire Maker, the right entities at the right time. The
Wealth Cycle is your real key to success.
So you've finally done it: you started your own business. You're
making money and feeling great, maybe even enough to buy that
new car or home you've been coveting. But wait! What about Uncle
Sam? Doesn't he want his cut of your new pie?
Of course he does. And, that guy who wants to sue you for all
you've got because your product caused his little girl to cry
wants his share as well. What's a small business owner to do?
Loral Langemeier, author of The Millionaire Maker (probably the
best hands-on wealth strategy book written to date) has
experienced it all, and continuously comes out the clear winner
- completely legally.
It turns out that you can, too. But you'll have to get some
help. In her book, Loral explains what she calls the Wealth
Cycle™, a process that's used by millionaires who want to keep
the money they make.
A key part of the Wealth Cycle is what's called "Entity
Structuring." That is, structuring your company as a legal
corporation or company and telling the IRS how you want to be
taxed.
What you might not know is that these legal entities were
created as much for you, the little guy, as for the big
corporations. That's why if you want to be a millionaire, you
need to know a thing or to about entities.
Protecting your butt while saving your bucks
These legal entities are simply business and tax structures.
This includes corporations, LLC's, and Partnerships. It does not
include the sole proprietor. Entities have two components to
them: the legal component and the tax component. The legal
component determines how your business is structured. The tax
component determines how the IRS will tax your company.
Let's take an example. You've probably heard of a "C
corporation", right? This is a business that has decided to
structure itself as a corporation and be taxed under Chapter C
of the IRS tax code. An S corporation, alternatively, is a
corporation that has chosen to be taxed under Chapter S of the
IRS tax code. (See why you'll need help?)
Entities are not something you have to use, but smart business
owners, even and especially sole practitioners, do use them.
Why? Say that someone decides to sue your business. If they win
and you're not a legal company or corporation, they can get your
house, your car, and pretty much everything you own. If you ARE
a legal entity, all they'll get are the assets of your company.
The best part is that if you're doing it right, your legal
entity won't have many assets, and you'll keep more of what you
earn. Tax benefits are pretty straightforward. The more of them
you have, the more you keep of what you earn. The IRS gives
corporations bigger tax breaks by allowing them to write off a
lot more expenses than individuals.
It's not necessary to know all the details about entities -
that's what your accountant and lawyer are for. But you should
certainly get familiar with your options so you can start
managing your life like a millionaire does. "Doing so will be
one of the first steps on your journey to millions," says Loral.
Can you really become a millionaire simply by having a
corporation? No, you can't. In her book, Loral provides numerous
examples of how people use entity structuring to protect
themselves and keep more of their money.
If you DO want to make millions (or at least a lot more than
you're making now), be sure to create, as Loral says in The
Millionaire Maker, the right entities at the right time. The
Wealth Cycle is your real key to success.
About the author:
Sid Smith, Financial Consultant and Writer, offers advice on
building small businesses into larger ones that turn into
multi-stream corporations.. Creating sustainable wealth does not
need to remain a mystery! Order your copy of Loral Langemeier's
book, The Millionaire Maker, today:
http://www.themillionairemakerbook.com
Written by: Sid Smith
|
 |
Home
List of Articles
Recent Articles
Building Your Wealth
So how exactly can you make money? Of course, thereís always the
fact that you need to generate income, either by getting a job
or running your own business. But just how do you keep it? Below
are just some basic tips on managing your money. As...
Don’t Work for Your Money, Make it Work for You!
Well, the New Year is around the corner and so are New Year’s Resolutions! It’s such a great time of year to consider what the past year has brought us and what we want to create in the coming year.
To help you get started thinking about the...
Lottery Winners Lose It All
You have heard it time and again. Lottery Winners lose it all and trust fund babies waste their parent's hard earned cash. In fact, up to 80% of the lottery winners in this country file bankruptcy within five years. Most of us say," That would...
Visit
International Wealth Success, Inc.
for more wealth creation tips.
|
