Autumn continues to descend upon us up here in the Virginia highlands.
Temperatures dropped down into the 40’s for the first time this past weekend. It was a blustery Saturday morning.
From the comfort of our great room we sat and watched many leaves pull free from their trees and gradually flutter to the ground. To me, no television show could ever match that level of entertainment.
This image tracks Fall’s progression up here. The picture from the left is from last week. The one on the right is from yesterday.
We should see peak foliage within the next few weeks. Stay tuned for that.
Shifting gears back to finance…
Yesterday we talked about the power of tax write-offs and smart tax planning. That is absolutely critical these days.
Of course, W2 employees get the standard deduction they can use each year. But that’s not what we’re talking about here.
If you want to maximize your after-tax income, you must utilize business entities like limited liability companies (LLCs). They allow you to tap into the secrets of the U.S. tax code. These are secrets hidden in plain sight.
And here’s the thing – LLCs are incredibly flexible. You don’t need to already have an operating business to use them. You can get started with simply an idea… and begin utilizing tax deductions immediately.
What’s more, you can run your investments through LLCs as well. Doing so is especially powerful when you focus on cash flow investing, as we do in our investment membership The Phoenician League.
If you have investments that are producing monthly income for you – cash flow – you can use LLCs to write off expenses that you would have incurred anyway. This is why the good CPAs out there always say that taxes are fun.
For example, my wife and I are each 50% owners of an LLC together. When we go out to dinner, we inevitably talk about our business. That makes our dinner a business meeting. And business meetings are tax-deductible.
As another example, we also utilize the Home Office deduction. It says that if you run your business from a home office on a regular basis, you can deduct (write off) a percentage of certain home expenses against your business income.
This allows us to write off a percentage of our utility, internet, and cell phone expenses against business income. And guess what? We can write off a percentage of home maintenance expenses using the Home Office deduction as well. Painting… HVAC repairs… even a new roof becomes tax-deductible this way.
And again, these tax write-offs aren’t hard to qualify for. With a little bit of tax-planning, anybody can set themselves up to take advantage of them.
More to come tomorrow…
-Joe Withrow
P.S. If you would like to dive down the tax-planning rabbit hole (among others) in much more detail, check out my new book. It’s titled Beyond the Nest Egg, How to Be Financially Independent Outside of a Broken System. You can find it on Amazon right here.