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Finally made money now i have to give it away?

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    Finally made money now i have to give it away?

    I've been in business for 4 years and I have been operating at a loss for the past 4 years. I have finally started making money off of my business which should continue to grow over the next few years. However, it looks like we are going to have to give up at least half of the profit.

    To avoid this and to continue to grow faster, is there a way to shelter this money to avoid being taxed? investment property etc?

    lets say the profit for the company a year is now 500,000 could I invest this money into property to avoid paying 42% plus in taxes? Obviously have the money not taxed would make it easier to grow the business.

    You work so hard over the years to finally make money just to have half taken away.

    Thanks

    #2
    answer a few questions

    Originally posted by telecomguy View Post
    I've been in business for 4 years and I have been operating at a loss for the past 4 years. I have finally started making money off of my business which should continue to grow over the next few years. However, it looks like we are going to have to give up at least half of the profit.

    To avoid this and to continue to grow faster, is there a way to shelter this money to avoid being taxed? investment property etc?

    lets say the profit for the company a year is now 500,000 could I invest this money into property to avoid paying 42% plus in taxes? Obviously have the money not taxed would make it easier to grow the business.

    You work so hard over the years to finally make money just to have half taken away.

    Thanks
    How is the business organized (LLC, Corporation, Sole Proprietor)?

    Are you the only owner?

    Do you have a retirement plan?

    Do you need current access to the funds for personal use or business growth?

    I have two other large (multi-million dollar) telecom businesses that I work with, and would be more than willing to assist you if you need help.

    Comment


      #3
      Originally posted by JoshinNC View Post
      How is the business organized (LLC, Corporation, Sole Proprietor)?

      Are you the only owner?

      Do you have a retirement plan?

      Do you need current access to the funds for personal use or business growth?

      I have two other large (multi-million dollar) telecom businesses that I work with, and would be more than willing to assist you if you need help.
      LLC
      I am the only owner,
      roth ira,
      just funds for business growth I don't spend much on personal,

      Comment


        #4
        Welcome to the world of wealth redistribution

        Obviously you are missing the main job of government as it's understood by most people in political power - to redistribute wealth based on the whims of those in power. They sincerely believe they know better how your money should be used that you do, so if you earn "too much" profit they believe it's their duty to tax it away from you and give it to someone else. These elitists justify this immoral behavior by convincing themeslves that they are smarter, wiser, and intellectually superior to you. But your last line needs to b changed. You are not giving the money away - it's being stolen from you through a system of legalized theft by people who dont understand the proper role of government.
        Last edited by JohnH; 09-02-2007, 01:22 PM.
        "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

        Comment


          #5
          Originally posted by telecomguy View Post
          LLC
          I am the only owner,
          roth ira,
          just funds for business growth I don't spend much on personal,
          Find a good accountant in your area and discuss setting up a C-Corporation. If you want to leave the majority of the money in your business to grow, you probably pay the lowest tax possible and can take full advantage of fringe benefits.

          Comment


            #6
            A comment

            Anyone who thinks that wealthy people in this country are over taxed with a goal of redistributing the wealth should consider the number of millionaires we have. Conditions are right here for anyone who wants to work hard and build wealth. It has been obvious to most people since the time of the Civil War that the tax system needs to be graduated so that the wealthy pay proportionately more than the less well off.

            Comment


              #7
              Not me

              Sorry, but it isn't obvious to me.
              I'm in favor of a flat tax rate for everyone, regardless of how much they earn. I call graduated tax rates as a variation on legal theft born of greed & envy.
              "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

              Comment


                #8
                Originally posted by telecomguy View Post
                LLC
                I am the only owner,
                roth ira,
                just funds for business growth I don't spend much on personal,
                Look at a SEP IRA. You can sock away 20% of you income up to $45,000 tax deferred.

                Comment


                  #9
                  Not everyone would agree...

                  Originally posted by erchess View Post
                  Anyone who thinks that wealthy people in this country are over taxed with a goal of redistributing the wealth should consider the number of millionaires we have. Conditions are right here for anyone who wants to work hard and build wealth. It has been obvious to most people since the time of the Civil War that the tax system needs to be graduated so that the wealthy pay proportionately more than the less well off.


                  When men get in the habit of helping themselves to the property of others, they cannot easily be cured of it."
                  -- The New York Times, in a 1909 editorial opposing the very first income tax

                  Comment


                    #10
                    Originally posted by telecomguy View Post
                    I've been in business for 4 years and I have been operating at a loss for the past 4 years. I have finally started making money off of my business which should continue to grow over the next few years. However, it looks like we are going to have to give up at least half of the profit.

                    It could be you have some net operating losses which may used to offset some profits.

                    Comment


                      #11
                      Originally posted by Luis Mopeo View Post
                      Look at a SEP IRA. You can sock away 20% of you income up to $45,000 tax deferred.
                      In addition to that, he can also have an individual 401K and put $16,000 into it.

                      Comment


                        #12
                        well put

                        Originally posted by JohnH View Post
                        Obviously you are missing the main job of government as it's understood by most people in political power - to redistribute wealth based on the whims of those in power. They sincerely believe they know better how your money should be used that you do, so if you earn "too much" profit they believe it's their duty to tax it away from you and give it to someone else. These elitists justify this immoral behavior by convincing themeslves that they are smarter, wiser, and intellectually superior to you. But your last line needs to b changed. You are not giving the money away - it's being stolen from you through a system of legalized theft by people who dont understand the proper role of government.
                        neal boortz would be proud.

                        telecomguy, where are you located at?

                        Comment


                          #13
                          Thanks

                          Boortz's agreement is OK & I like him, but he's an amateur.
                          I hope Thomas Sowell & Walter Williams would approve.
                          "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

                          Comment


                            #14
                            O P needs a tax advisor

                            and in particular one who can draw up pension plans and incorporate a business. It should not be hard to find such an individual, and the fees involved will be inexpensive compared to the tax savings.

                            Comment


                              #15
                              Telecom Guy

                              Telecom Guy - you're getting a lot of sociological opinions, but only a few who have offerred real advice.

                              There are dozens of ways to save on taxes, but just like a CPA cannot install a satellite hookup, you can't do tax planning from a forum or from soundbytes. Find a good tax man or woman in your area. If you don't mind telling us where you operate, there are some 1500 members of this forum, some of whom may live in your area.

                              I've also heard so much of this "redistribution of wealth" via taxes that I've got to jump up and declare that taxes are only part of the story. Without taxes, redistribution of wealth already exists. The wealthy think they are supporting the masses with their tax contributions and providing jobs, but in fact they are also sucking wealth upward from those who have no choice but enter the foodstream at the bottom. Do you like paying $3.00 a gallon to big oil any better than you like paying taxes? Have you ever sought restitition from our court system? Big business is cutting health insurance at every opportunity, and without it two days in the hospital can wipe out your life savings. So hospital administrators, drug companies, doctors, etc. can live in a big house overlooking your town. And if you don't pay them, YOU'RE the crook! If you are in the cable business, does your town's cable company have competition? Maybe 20 years ago, but not now. Your dollars are also being sucked up by forces who have mastered the economy such that you have no choice other than to pay them, without meaningful competition.

                              Look at redistribution of wealth as a two-way street. There is more balance than you think, whether it's right or not.

                              Comment

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