Tom's Blog

One of the central themes of the current presidential campaign that will gain even more notice as the compaign continues is taxes. The two candidates seem to have quite opposite viewpoints as to what should happen to the tax system. Currently, it appears that McCain is in favor of the status quo and perhaps even making the Bush tax cuts permanent while Obama wants to revert to the pre-Bush tax rates.

At this point, I am not going to comment on the specific proposals of the two candidates. As the compaign goes on, however, be sure to pay close attention to what each candidate is saying about what they would like to see happen with the tax laws. As we have seen in the past, changes in the tax law can have both a significant impact on our personal tax situation as well as on the economy as a whole.

One thing is for sure. No matter which candidate wins the election, tax planning is sure to be more important than ever. If McCain wins, planning under the current system will be critical to maximizing your after-tax dollars in a difficult economy. If Obama wins and succeeds in implementing his tax changes, even more planning will be required in order to offset his tax increases. Either way, a good Tax Strategy will make a huge difference in permanently reducing your income taxes. Be sure to contact one of our Tax Coaches/CPAs at 866.467.5809 to find out how you can permanently reduce your taxes under either candidate's proposals.

Warmest regards,

Tom

Recently, we sent an email to our database suggesting that many of you might want to form a C corporation in order to take advantage of certain tax benefits in a C corporation. In response to this email, I received the following comment from my friend and respected Arizona attorney, Richard Keyt:

Tom, Arizona law does not have a type of entity called a C corporation. Don't mix the type of entity formed under Arizona law with the method of tax under federal income tax law. The corporation is an obsolete entity type in Arizona except in a few limited circumstances. The term "C corporation" confuses lay people and makes them think they should form an Arizona corporation when most of the time they should form an LLC. If it is appropriate, the members of the LLC can then file an IRS form 2553 and cause the LLC to be taxed under subchapter C of the Internal Revenue Code.

First, I want to thank Richard for his comment because if he found something confusing then chances are that some of you had the same question. Second, let me be clear that when we offer tax advice, we are only offering tax advice and always recommend that our clients speak to their attorney for the legal aspects. And when you do tax planning, you have to think in terms of the Internal Revenue Code. Under the Internal Revenue Code, there is a C corporation and there is no such thing as an LLC. I understand that this can be confusing because income tax law is different from state statutes. We frequently recommend that our clients form an LLC and then elect to tax it as a C corporation (not so in all states, but in many of them, an LLC is preferred to a corporation for asset protection reasons). But let's be very clear that for tax purposes, it is a C corporation we are talking about and recommending.

By the way, Form 2553 is used to elect to be taxed as an S corporation, not a C corporation. You will want to use Form 8832 to elect to be taxed as a C corporation.

Hopefully, this clears up any confusion. If any of you have additional questions, please email me at cs@provisionwealth.com or call our office at 866.467.5809.

If you have not subscribed to our newsletter, please go to http://www.provisionwealth.com/wealthu and sign up to be a member of ProVision's Wealth Strategy U.

Warmest regards,

Tom

Every day I speak to people who want to know how to permanently reduce their taxes. This makes sense, since I am a CPA and I have spent 30 years showing business owners and investors how to permanently reduce their taxes by 10-40%.

Sometime during my conversation with them about taxes, invariably they ask me about how to build long-term wealth. They think I must also know about this because I'm a CPA. The good news is that I do know how to do this. But not because I'm a CPA. Most CPA's I know, in fact, know very little about how to build wealth. I know because I have done it myself.

The reality is that most people are 3-6 months away from bankruptcy and some are only a couple of weeks away. If you lost your job, how long could you live without a paycheck? If it's not at least one year, you are in bondage to your job. As the economy continues to weaken, you are more and more at risk for losing your job, your home and your ability to put food on the table.

Sounds pretty bleak, doesn't it? But I am here to tell you some GOOD NEWS! The American dream is alive and well and will live on throughout any recession or depression we might encounter. During the Great Depression, there were thousands of people who made lots of money and became millionaires. How did they do it?

They had a clear Wealth Strategy. They had built a business around their investing and continued to make money in the worst economy this country had ever seen. They were truly FINANCIALLY FREE! They didn't have to worry about a job, whether they could pay their mortgage, or if they would be able to take a vacation. Because asset values, such as real estate, plummeted, they made even more money than they had before the depression.

YOU CAN TOO!!! But you need a solid Wealth Strategy and a great Wealth Team. How do you develop a Wealth Strategy and a Wealth Team? Let ProVision show you how. We are about to launch our School of Wealth Strategy. Each month, you will learn key concepts about wealth, including leverage, velocity, tax strategy, business, team building and systems. I have taught thousands of people how to do this and how to make more money with less risk than they can with the typical financial advisor.

So join me in our School of Wealth Strategy and learn how to build Permanent Wealth. Coming soon to http://www.provisionwealth.com. Remember that Financial Freedom is Closer Than You Think. You just have to learn the rules.

Warmest regards,

Tom