Client Letter – Critical Tax Planning Deadline

Dear Client:

We are currently contacting our clients so that we can conduct a final review in the 4th quarter to ensure they are proactively prepared for all the tax law changes that will happen January 1.

I wanted to reach out to you because this will be the last chance to proactively incorporate planning ideas to reduce your business and personal taxes.  2012 presents historically unique planning opportunities that will be lost if you do not capitalize on them in 2012.  It doesn’t matter when you file your 2012 tax return; it will be about what is incorporated during the final months of this year.  You will be “grandfathered” out of opportunities to reduce your taxes and increase your income.

Please call me if you have any questions.

As way of background and summary:

The Tax Policy Center, a nonpartisan, non political group that routinely releases factual findings based on current and upcoming legislation or in this case legislation about to expire in 2013.  The tax increases will have a dramatic impact on the business owners that we talk to.  Unfortunately, very few people seem to read these type of articles and depend on the media’s interpretation.  The NY Times and other sources only grab a few pieces and seem reluctant to report negatively on the current administration.

To review, in a nutshell, this is what January will bring to business owners:

1.  Increased Income tax rates

2.  Increased payroll taxes for yourself, and what you pay for each employee

3.  Increased taxes on capital gains

4.  Increased taxes on dividends

5.  Eliminated and reduced tax deductions and tax credits

6.  Reduced itemized deductions

7.  New taxes from Healthcare legislation

8.  Reduced child tax credits

Business owners are likely to see taxes increase substantially in 2013. Overall, they will pay higher tax rates on more income because there will be less offsets (credits and deductions) to reduce the amount subject to tax.  The dollars that ultimately end up in their pocket will be DRAMATICALLY reduced.

S-Corporation business owners will be especially hard hit because their taxes are based on corporate profits, that because of a lack of tax planning, is higher than what they actually take as income. So they will be paying even more taxes on money that they never see.

This is by far the worst time in our history to be a procrastinator!  That’s what needs to be reported.  Compared to 2013, 2012 will seem like tax paradise.  Business owners that aren’t taking advantage of 2012 are making a huge mistake.

I have attached the Tax Policy Center report

Call us for help or with questions!

The Business Wealth Preservation Group is a professional services firm dedicated to providing superior individualized and custom service to individuals and their businesses in the areas of asset protection, tax planning, exit strategies, and wealth building. Simply put – we want to educate you on all relevant opportunities to put more dollars into your pocket, your business and your future.

We focus on leading edge, sophisticated, and safe business strategies that will help business owners structure, operate and maintain their business to take advantage of business and tax laws rather than being encumbered by them. We partner with the business, the accountant, and the attorney to ensure the business owners are capturing all available benefits that align with their business and personal goals.
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