Tom Wheelwright
Tax Strategy #5 – Put Your Family to Work in Your Business and Investing (Location 909)
My long-time friend and client did this with his 9-year-old daughter. He put her to work doing the bookkeeping for his real estate investments. (Location 915)
In a year, she might earn $4,000. That $4,000 will be a deduction to her parents. She doesn’t earn any other income and the standard deduction plus her exemptions is more than $4,000. So, she doesn’t pay any tax. In my client’s 40 percent tax bracket, that $4,000 in pay to their daughter means a tax savings of $1,600. (Location 918)
My friend gets a tax break on Social Security taxes as well for employing his daughter instead of employing someone else to do the bookkeeping. He doesn’t have to pay any Social Security taxes on her wages. (Location 924)
As long as the purpose of the expense is to produce more income, it can be deductible. (Location 969)
Robert Kiyosaki’s Unfair Advantage: Why the Rich Get Richer, Even in A Financial Crisis. (Location 1016)
Just as I advised with starting a business, start small. Do one small real estate deal, a couple of small stock market trades, or make a small investment in a private company. (Location 1030)
I’m talking about someone who invests their money with an active investor who is working directly in a business, real estate, agriculture or energy— the tax-preferred types of investments. (Location 1036)
The key to good passive investing is a good team. You need a great investment advisor and a stellar tax advisor, as well as a good (Location 1039)
lawyer and a knowledgeable banker. (Location 1040)
The last key to becoming a super taxpayer is excellent documentation. All good tax planning also leads to sound business and investment decisions. One of the best business or investment decisions you can make is to keep good documentation of your income and expenses. (Location 1061)
Every time you spend money you can also reduce your taxes, whether it’s filling up your car at the gas station, going out to dinner with your spouse and business partner, or even going to New Mexico to look at real estate. (Location 1079)
What if you could have all of the tax benefits of a 529 plan without giving the government any control over your money? (Location 1975)
This is the perfect opportunity to have your children pay for their own education without having to rely on Section 529 plans or other tax-deferred, government controlled educational savings plans. Your children can contribute (Location 1978)
their money to an LLC, limited partnership, or S corporation that owns a business or investments. Like a 529 plan, you get a deduction when you pay your child a salary. Like a 529 plan, there is no tax to the child when received. Like the 529 plan, with good planning, especially in real estate, there is no tax on the cash flow from the investment. But unlike a 529 plan, you have full control over the investment. (Location 1979)