Masonry Magazine December 1992 Page. 19
It's Not Too Late to Reduce Your Taxes
Although overall tax planning should begin early in the year, even now some of the following strategies may save you thousands of dollars in 1992 taxes.
By GARY MANDELL, CFP, CPA, CLU
FOR MOST OF US, our business is one of our most valuable assets, and what happens to it has a large effect on our personal lives, including our finances.
This holds true for the income taxes we pay. The contractor shouldn't ask how much the business will pay in taxes, nor how much his individual tax bill will be. Instead, the question should be "How much will I pay in combined taxes?"
For the unincorporated business owner, business income is typically shown on Schedule C of the individual tax return, and is taxed at the individual's rate. The question therefore becomes moot as to whether the business is incorporated, you may be able to reduce your overall taxes by taking some corporate profits as salary'and leaving some in the business for future investment or distributions.
The 1992 tax rate schedules for individuals consists of three brackets: 15 percent, 28 percent and 31 percent. For a married couple filing jointly in 1991, the 28 percent tax bracket begins with taxable income of $34,000, and the 31 percent bracket begins at $82,150. The corporate tax rate do not reach 34 percent until profits exceed $75,000. Therefore, any profits below this amount left in the corporation would be taxed at a lower rate than if taken as salary.
These figures are adjusted every October to account for inflation. Unfortunately the updated figures were
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MASONRY-NOVEMBER/DECEMBER, 1992 19