Masonry Magazine August 1992 Page. 36
Idea #1-You make a legitimate business contact on the way to work and the entire trip (to and from work) is now deductible.
Idea #2-The tires on your business vehicles (usually trucks) don't last a year. Say you buy a new truck. You can deduct the cost of all the tires (the spare too) in the year of purchase. Depreciate the balance of the new vehicle in the usual way.
Idea #3-Your business is an S corporation and makes $100,000 per year. You're in a 31 percent tax bracket so you paid $31,000 on that $100,000 of income. If you had been a C corporation, the tax would have only been $22.250. An $8,750 saving! What's that you say? You're a C corporation and made $400,000. That would have cost the corporation $136,000. If you had been an S corporation, the tax bite would have been only $124,000. A $12,000 saving! Work out your own numbers. About half of the corporations in the country that should be C corporations are S's, and vice versa.
IRV BLACKMAN helps you, not the IRS. The most published CPA in the country, he also shares his tax-saving knowledge as a dynamic speaker. He is a partner in Blackman Kalick Bartelstein, a CPA firm specializing in contractors and subcontrators. Blackman consults with readers of this column. Call his Tax Hotline at 312/207-1040.
Idea #4-Is a million bucks a lot of money? How much must you earn to leave your family $1-million? Try $3-million. Why? When you earn $3-million (over a long period of time), the income tax is $1-million. That leaves $2-million. Half of that goes to pay estate taxes when you go to heaven. That leaves a million bucks. Now, if you would create an irrevocable life insurance trust to own a $1-million policy on your life, it would all go to your family tax free. Simply put, the life insurance premiums (also removed from your estate) will do the work of $3-million. Wow! (No, I don't sell life insurance.)
Idea #5-Suppose your business is worth $2-million (put in your real value). You own it all, but want to give each of your two kids about $35,000 worth of stock every year. How much is subject to a gift tax? Under normal circumstances, zero. Why? Because you are entitled to two discounts for tax purposes. First, a discount for general lack of marketability (about 35 percent) and second, a discount for minority interest (about 15 percent). That makes the value of the gift about $19,000 for tax purposes. No gift tax if you are married.
WANT TO LEARN how to capture every dollar of business expense you're entitled to under the law? Send for the special reports; The Complete Guide to Building Your Auto Deductions, The Complete Guide to Building Your Entertainment Deductions, and the The Complete Guide to Building Your Travel Deductions, $19 each 3 for $42... Get the true tax facts about the advantages of electing S corporation status. Send for the companion special reports, A New Tax Superstar-S Corporation, and How To Take Money Out of Your Closely Held Corporation, $25 for one, both for $39... Want to save even more on taxes? Get the new special report "The 25 Best Tax Saving Ideas of the Nineties," $14 Order books from Blackman Kallick Bartelstein, 300 South Riverside Plaza, Chicago, Illinois 60606.