The IRS clearly states that it is the responsibility of the business owner to deduct expenses and show receipts for the same. (IRS.gov, 2010). So, we recalculated his tax assessment for the year and included all deductible expenses that had proof of receipt. This brought down his tax by about $23,000.
The next step was to determine whether Lee's business was eligible for the health care tax credit approved by the Obama administration. Since Lee had more than 25 full-time employees with an annual average wage of less than $50,000, he qualified for the credit. It is 35% of the premium costs. (IRS.gov, 2010). This further reduced his taxes.
Another move is to give him a salary every month as the CEO of the company. Earlier, this money was retained in the company. This is not a good move because corporate taxes are as high as 15% to 35% whereas personal incomes have lower taxes. So, it is a better idea for Lee to get a salary and pay personal taxes on this income.
Also, section 179 of the IRS code clearly states that there is a tax break of up to $24,000 in equipment purchase and I encouraged Lee to take up this opportunity (Fraser, 2002). This is way better than writing these purchases off as capital expenditure and this brought Lee's taxes further down by about $6,000.
Lee used his car for business purposes also and he can claim these expenses as deductions from his taxable income. Lee had some receipts for gas and other road expenses and this was deducted from his taxable income. I also managed to take off some depreciation for the vehicle since he used it for his business. My charges can also be deducted from his income and he also consulted a lawyer earlier this year to check if he had to do anything to take up outsourcing as another arm of the business. The lawyer's fees was also deducted from his taxable income. He had dinner with some of his customers to know more about their outsourcing plans and how he can go about winning the contract. All expenses related to business entertaining can also be deducted and this further brought down his taxable income. Furthermore, the interest he was paying to the bank can also be deducted from his taxable income and this turned out to be a huge saving for Lee.
In all, these moves brought Lee's taxes to less than $40,000 and he had some additional cash for capital. This was a big financial turnaround for Lee and his company had more money because instead of paying $100,000 in taxes, he had to pay only about $36,568 and he could use the remaining for his immediate operating expenses. Besides, these financial moves would help Lee to pay less taxes and have more residual income in the future years.
Annuity
Annuity is more complex than what many people think. There are two kinds of annuities, namely fixed and variable. Lee invested in the variable annuities and has to face all the problems that comes with it. The primary problem is that it is too complex...
Nursing: Community Nursing ProfileCommunity nurses have a high significance in providing primary health services to the people of the relevant community. They are responsible for educating their people about the health problem, detecting health problems through screening, and offering treatment to reduce patient mortality rates. This paper aims to gather information about a selected community to offer nursing interventions to treat health problems identified in the locality. The completion of
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