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Tom Wheelwright's Articles

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Year-End Checklist for Rental Real Estate Real estate is also one of the most complex areas of the tax law. This makes it easy to overlook important steps, which can lead to missing out on tremendous tax savings. Deducting Your Seminar Expenses This is an area of the tax law that is a prime example of how increasing your knowledge, can decrease your risk. In this case, it can decrease the risk of overpaying your taxes and decrease the risk of having to pay more tax (and penalties and interest) if you are audited. An Opportunity to Convert to a Roth IRA in 2010 2009 is the Time to Start Your Planning If you plan on converting, then now is the time to start planning because your 2009 tax planning may look a little different. For example, you may want to defer deductions until 2010 and accelerate income into 2009 to avoid being pushed into higher brackets in 2010, 2011 or 2012 from large conversion income. 3 Ways Partnerships Give Your Tax Strategy Maximum Flexibility When the business starts, the owners have a profit sharing structure in mind, let's say it's 50/50. Then, a few years down the road, the owners have a need to change their profit sharing structure - maybe their roles have changed or perhaps one wants to work less. 3 Ideas for Business Financing in a Tough Market The form of leverage most people are familiar with is a loan, which is a way to leverage your assets. Leverage in this case may be a mortgage on a piece of property or a line of credit in your business. 3 Tax Planning Tips for S Corporations Recent IRS statistics say that S corporations represent the most popular form of small business corporation. That's understandable. S corporations provide some powerful tax savings benefits for small business owners and investors. Your 15-Point Tax-Return Checklist It's time to start thinking about getting those taxes done. Maybe you're in a panic. Not to worry. Just follow Tom's 15 steps to getting your taxes done, and you'll be much happier. Ready? The Basics of State Tax Planning The first step to turning your state tax exposure into state tax opportunity is to identify the states you or your entities may be required to file state tax returns. How to Use Reporting to Accelerate Your Wealth Reporting is summarizing activity in a clear and concise format. When done correctly, reporting is a helpful and meaningful tool that helps you make timely business and investing decisions. Now, be honest. Some of you saw the word reporting and immediately began trying to convince yourself you don't really need it. I find that most people avoid reporting, even though reporting can help them accelerate their wealth! Top 3 Incorrect Uses of Like-Kind Exchanges If like-kind exchanges are used incorrectly, the result is not just an increase in taxes, but also a slow down in the ability to build wealth. Here are the top 3 ways I see like-kind exchanges used incorrectly Exploding the Myths of Financial Health in a Recession The hot topic on everyone's mind right now, including radio, television and print media is how to cope with the current recession. The worst advice possible in recessionary times, or any other time, for that matter are what a lot of the analysts and talking heads are recommending today, which is businesses and investors pull back, reduce their expenditures, create a budget and save their money. Tax Saving Entity Structures In a perfect world, the tax preparer would have asked the right questions to learn more about Pierre's goals and situation and would have translated "confusing accountant talk" into something clear and understandable. In general, S Corporations are good entities for businesses. But, they can be terrible when there are losses, and losses are common when a business first begins. Why You Must Change Your Mindset Before You Can Reduce Your Taxes The number one reason given for the erroneous overpayment of taxes was the complexity of the tax code. This plays right into molding the mindset that taxes are just too complicated to even try to understand. Reducing Your IRS Audit Risk Accuracy in a tax return simply means that the information provided by the client was reflected on the tax return. It does not mean that the tax return was prepared in the BEST way it could have been prepared. In fact, I RARELY see a tax return from a new client that was prepared the way we would prepare it at ProVision. Forming Your Personal Tax Strategy Think about planning a vacation. Let's say you are going to Hawaii. When you go to book your ticket, you need to know where you are departing from, right? This is your starting point. It is impossible for you to get to Hawaii unless you know where you are starting. The same applies to a personal tax strategy. You must know where you are starting. In your personal tax strategy, this means you must know your current financial position. Rules the IRS Won't Tell You The common theme in all of these questions is the lack of flexibility. Again, I'm not saying don't use an IRA or 401(k), I'm saying be aware of your options in those plans and how they will impact your wealth and tax goals. Creating Permanent Tax Savings Every dollar you spend is certainly not going to be deductible, but it's always shocking how many people don't consider the possibility that an expense may be deductible. The most successful tax strategies include the possibility that any expense may be deductible. It's simply a matter of determining how it can be deducted and if that fits with the strategy. How State Taxes Can Become Very Scary Many business owners (and real estate investors!) get into trouble by not even realizing they aren't complying with the state tax laws. Last Minute Filing Tips for April 15th While it may be tempting to just get it done, you definitely want to make sure you give your CPA time to analyze your tax return. My team and I are often able to find tax savings opportunities during the tax return preparation process, and come up with tax savings ideas for the new year, but you don't give your CPA an opportunity to do this when you file at the last minute. 3 Ways to Prepare for an Audit Before You Are Ever Audited I still find it hard to believe, but I've seen people give up thousands in LEGAL tax savings in an effort to hopefully reduce their audit risk, and many times at the advice of their own accountant! This is often an emotional decision - the fear of an audit. How to Turn Your Investing into Something You Like to Do When I speak on the topic of building permanent wealth, I say repeatedly that money can be made in any type of asset and what works for one person will not work for another. This is why I start with broad categories of investing - it is not so much the specific investment itself but how the investment complements what I like to do. Don't Drive By This Tax Deduction! Have Your Business Reimburse You for Its Use of Your Personal Vehicle Your business can reimburse you for allowing it to use your car - even if you are the one using it in the business! Here's What You Need to Know about the New Tax Law The new tax law enhances the credit by eliminating the repayment obligation for taxpayers that purchase homes on or after January 1, 2009. 5 Reverse Tax Planning Tips What is Reverse Tax Planning? Normally tax planning focuses on reducing taxable income and taxes. Reverse tax planning does the opposite and may actually increase taxes. Why is this a good thing? 3 Tips to Start the New Year with Your Wealth Building on Track It's that time of year when resolutions are made. If you are one of the many who have a resolution that involves your finances, you'll want to read this article. Studies show that less than 50% of resolutions are kept so it's vital to get started on the right track. 3 Tips for Moving Your 401(k) to an IRA In today's business world, people should expect to change employers a few times before retiring. When you change employers, it is common to be asked if you will keep your 401(k) with your former employer or roll it into an IRA. Here are three steps to make your transition easier. 3 Reasons Why You Need to Know the Basics of Bookkeeping One area that almost all of my clients and prospects need to increase their knowledge on is bookkeeping. The issue? They don't understand the rules of bookkeeping. After all, they aren't accountants. Rich vs. Wealthy: The BIG Difference Is There a Difference Between Being Rich and Being Wealthy? I have often thought over the past couple of years about the difference between being rich and being wealthy. Is there a difference? If so, what is it? And how do we become wealthy? True or False: High Income = High Wealth Do you think making more money means having more wealth? Many people do because it seems logical that high income would translate to high wealth. This is not true! The Tax Return Trap Today my team and I are wrapping up the month of October with our annual Halloween office party. It's a nice way to end the month, which is always one of the busiest months at the ProVision office. One of the reasons October is always a busy month is because of the October 15th tax deadline. It's one of the biggest deadlines because for many, it is the absolute last date to timely file many types of returns. The BIG Passive Income Mistake! I've been speaking at several seminars this fall. My topic of choice is wealth strategies because wealth strategies cover it all - not just wealth, but taxes and business too. Plus, the topic of wealth strategies takes me all over the world to speak because wealth strategies cross over international borders. The Financial Markets Rescue Bill and How it Impacts Your Taxes Earlier this month, the President signed into law the Emergency Economic Stabilization Act of 2008. The financial markets rescue plan is one of the main components of the new law, but the new law also includes over 100 tax provisions! Where Is Your Wealth? Whenever someone asks me what to do to build permanent wealth, I answer that question with a question: Where is your wealth? Where is your wealth today and where is your wealth going? The Biggest Mistake With C Corporations and How to Save Taxes Using the C Corporation Double Tax When used correctly, C Corporations are a great way to supercharge a tax strategy. I find that when my clients make the most of their C Corporations, they reduce their taxes by a minimum of $10,000 every year. New Tax Legislation Could Save Dentists $$Thousands$$ in 2008 Have you thought about upgrading your equipment to the newest industry standards but were afraid of the cost? Or perhaps you want to improve your office to make it more comfortable for your patients? Do you need to upgrade your reception area to make it more efficient for your administrative staff or look nicer for your patients? 5 Questions for Your Mid-Year Tax Planning Have you ever met with a CPA or tax preparer and been told you could have done something about a tax problem if only you had acted before the end of the year? And while year end tax planning has its place in a tax strategy, often times there is simply not enough time at the end of the year to get the best tax results. That's why mid-year tax planning is so important. Mid-Year Tax Planning: Do You Need to Add an Entity? Do you need to add an entity to your tax structure? This is such an important question for mid-year planning because knowing the right time to add an entity to your tax strategy can often save as much as $10,000 per year in taxes! 3 Rules to Simplify Your Recordkeeping for Business Travel Summer is here and for many of us that means summer business trips. I love traveling for business. But, my least favorite part about business trips is keeping track of all of my receipts. Inside Secrets of Failed Tax Strategies I have seen the inner workings of hundreds of tax strategies. I recently did a study of tax strategies to reveal the inside secrets of failed tax strategies. I was searching for common causes of the failures. The most common causes all centered around cost, but not in a way you may expect. What constitutes as "Travel Away From Home"? When it comes to business travel, expenses, and deductions, I am frequently asked "What constitutes travel away from home and why is it important?" The Three (3) Pillars of Financial Health This is all about the foundation of financial success: wealth strategy. My key purpose here is to draw a clear, unmistakable distinction between wealth strategy and what usually passes for "financial planning." Three (3) Things You Can Do To Be Prepared For An Audit The number of IRS audits increased in 2007. What is causing this increase and who is targeted? What can you do to be prepared? The number of IRS audits increased in 2007. Remember, the IRS can audit a return 3 years after it has been filed (and 6 years if the tax return filed was considerably incorrect). Is The IRS Sending You a Rebate Check? Find Out If You Are Eligible ARE YOU GETTING A REBATE CHECK? There are two groups eligible to receive rebates. You can only be in one group so if you qualify for both group, be sure to pick the group that results in the highest rebate amount. Group 1: Those who paid taxes in 2007. Group 2: Seniors, disabled veterans and widows of veterans. How the New Tax Law Can Help Your Business: Two Tax Breaks for Businesses Congress recently passed the Economic Stimulus Act of 2008. It's designed to inject $152 billion into the U.S economy. As a business owner, what does this mean to you? The Magic of Depreciation If you ever mailed an envelope containing a monthly payment to a landlord, you qualify as a rent payer. What you might not realize is that the owner of that real estate is getting lots of deductions for expenses related to owning property. Tax Law Changes That Will Impact Your 2007 Tax Return Do you own real estate? At the very end of 2007, Congress passed a bill with several tax law changes impacting real estate. Expect some changes when you file your 2007 tax return! Here are a few highlights from the Small Business and Work Opportunity Act of 2007. Landlords: Looking for the Top Ten Tax Deductions? No landlord would pay more than necessary for utilities or other operating expenses for a rental property. But, every year, millions of landlords pay more taxes on their rental income than they have to. Why? Because they fail to take advantage of all the tax deductions available for owners of rental property. Tax Law Changes That Impact Homeowners With foreclosure rates at an all time high, a new tax law was passed at the end of 2007 to help homeowners avoid unmanageable income tax debt due to income created from a foreclosure. The new law also covers mortgage renegotiations and other real estate related benefits. Building your Wealth Team the three most expensive words in the English language are, "do it yourself." When we try to do things all by ourselves, we are ignoring the fact that we all have only 24 hours in the day. By building a wealth team, we are leveraging those hours into hundreds or even thousands of hours each day. The Fast Track to Your Financial Freedom (Part 2) - Adding Velocity to Your Investments This whole idea of LEVERAGE is great and earning $81,000 on a $20,000 investment over seven years would be terrific. The problem with this is "IT'S STILL TOO SLOW." We can still do much better. Besides leverage, we need to add the principle of VELOCITY. Here's how it works: The Fast Track to Your Financial Freedom (Part 1) - Leveraging Your Money Say you deposit $1,000 into your bank. The bank will happily pay you interest on your deposit, and the longer you leave it there, the higher the interest rate the bank is willing to pay. Did you every wonder why? The bank is very happy to pay you 2% interest when they will lend out up to ten times the amount at, say 6%. So on your $1,000 deposit, they pay you $20 and they earn $600. Not a bad return, considering they are using YOUR MONEY!! Investing in the Lottery over Mutual Funds??? Even though I am not an investment advisor and never hold myself out as one, clients continue to ask me what to do to prepare for retirement. Should I max out my 401(k) contribution? Should I do an IRA? Should I put more in my profit sharing plan or pension plan? My response - putting your money into the lottery may be a better investment. SEP's, IRA's, 401(k)'s and RRSP's My gripe with SEP's, IRA's, 401(k)'s and RRSP's is that the financial institutions and the government push them so hard that people think they are the ONLY alternative. There are many other ways to save taxes that are much better for many people. Are All Tax Returns Created Equally? As we approach Tax Season, I wonder how many people understand the potentially vast differences in the quality of tax return preparation? Are tax returns really the commodity that they seem to be? Is a tax return prepared by the tax service in the mall of the same quality as that prepared by a major CPA firm? What does it mean to have a "quality" tax return? In fact, can a tax return be prepared in such a way as to reduce income taxes? Wealthy or Rich I have often thought over the past couple of years about the difference between being rich and being wealthy. Is there a difference? If so, what is it? And how do we become wealthy?