Many business owners are unaware of the opportunities they have in creating wealth through their business. Many owners put too much wealth in their business, where it can be tied up or hard to get out. It also prevents them from accumulating outside retirement funds.
There are several ways to create wealth through your business on a tax-efficient basis which many owners are not aware of.
I would like to share with you the six mistakes that prevent owners from creating more wealth by utilizing the business cash flow.
- NOT IMPLEMENTING A CEEP: (Corporate Executive Equity Plan) for themselves. This is one of the most tax effective methods of creating personal wealth using corporate cash flow. The cost of providing this wealth creating account costs the owner about 30% of the tax cost. Example: if the company bonused $20,000 to the owner for a personal retirement plan, the tax cost would be $6,000 each year. However, under a CEEP arrangement, the cost would only be a $60 the first year, and about $1,200 the 20th year. This is one of the most misunderstood concepts in executive compensation by attorneys, insurance professionals and CPA’S. Consequently, it might be considered under used. However, the executive compensation specialist understands how the plans work and how it can be of great value for the business owner in shifting income from the company to the personal side of the owner.
- NOT TAKING ADVANTAGE OF THE SECTION 412(e)(1): which allows the owner to make a substantial number of tax-deductible contributions into a retirement plan skewed towards the higher paid owner. Example, the owner aged 50 can deposit up to $213,905 fully tax-deductible. Great for good cash flow companies.
- NOT USING THE “SAFE HARBOR RETIREMENT PLAN”: where a substantial amount of the tax-deductible contributions can be allocated to the higher paid participants. Also, included in this arrangement is the “Cash Balance Plan”. These plans create greater tax-deductions for higher paid employees.
- NOT TAKING ADVANTAGE OF A RESTRICTED BENEFIT PLANS (RBP): which is a discriminatory and tax-deductible plan. It can be used to provide valuable benefits to retain key people. The business owner keeps the forfeitures if the employee leaves before vested. This can lock your key group to your company.
- NOT CREATING A DEFERRED COMPENSATION PLAN: This is a flexible, separate, and discretionary retirement benefit that can also become a mechanism for funding the sale of your business in the future and create retirement income. The pot is sweetened when you add a DBO (Death Benefit Only) to the planning.
- NOT CREATING AND NOT FUNDING YOUR BUY AND SELL AGREEMENTS: A disability, long term illness, or death may occur long before the owner planned to exit their business, creating a path to financial disaster not only for the owner, but their family, partners, and employees. This is one of the most egregious mistakes I see business owners make. Many times, it goes unnoticed by the advisors. This is one of the reasons why I am an advocate of check-off lists, “fire drills”, and annual reviews.[i]
Simply Put! By Utilizing These Common Benefits, Owners Can Maximize Their Fullest Potential Business Value!
To help you understand some of the ways to utilize your business cash flow to create more wealth for you and your family, I put together this FREE WHITE PAPER, CALLED “A TAX -FREE LIFESTYLE FOR BUSINESS OWNERS”, AND I would like to GIVE this FREE WHITE PAPER TO YOU.
THIS REPORT will help you understand how you can use your business to take advantage of discriminatory benefits plans for yourself, family members, and key employees. The Tax-Free Lifestyle REPORT is strictly for small business owners who want to grow their business while creating more wealth outside of their business. I designed this white paper to help business owners avoid the COMMON MISTAKES made by other business owners which forced them to work more years, save less retirement, pay more in taxes, and tied up too much wealth in their business, creating more stress, and had no free time for themselves!
You’ll also discover in the TAX-FREE REPORT:
- One simple concept allowing you to retire with more wealth or retire years sooner. (This one simple financial principle is rarely ever talked about on “pop news” financial TV shows or by other so-called “financial planners”.
- 2 proven strategies to increase cash flow and reduce expenses if you really want to sleep at night!
- 3 secret ways to have your business build a tax-free wealth account for your personal and business use!
- “Your Business DNA” Understanding this key allows you to double your savings and retirement investing without making a single dollar more in income or investing in more capital equipment and labor.
- 5 value drivers to prepare your business for a sale, even 20 years in advance!
- How a simple inexpensive benefit plan can keep your key people!
- How creating a Deferred Compensation plan can help finance the future sale of your business.
- How having a benefit plan for you in the future can lower your cost to sell your business?
- Misleading and incorrect “old wives’ tales” about creating wealth in your business.
- Tax saving strategies that 9 out of 10 business owners don’t use and end up paying more taxes
- Much more…
TO RECEIVE YOUR FREE NO OBLIGATION WHITE PAPER Called:
“The Tax-Free Lifestyle for Business Owners”
To request your free white paper
CLICK SUBMIT: Wealth Without Taxes Report
Once you submit your email address, you will receive your report immediately! Enjoy!
Now you may be asking…Why would I spend my own money to send you this FREE WHITE PAPER? Think of it as my personal introduction… a way for you to get to know me better. Nothing more than that!
Often enough, when business owners learn the information in this guide, they decide they want to know more about what we do, and possibly do business with us so they can have our business owner expertise and in-depth knowledge of how business owners think. I know, I am one of them. I know what you think because I think about it all the time. Let’s say 24/7 to be safe! Just as you value the expertise in your business field, I believe working with a financial expert who knows what it is to run a business and knows the business world is critical to your financial health.
That’s it! Let me send you “The Tax-Free Lifestyle for Business Owners”. Do with it what you want. Maybe you’ll want to talk to us further, maybe you won’t. There is no obligation to do so.
Either way, I think you’ll find the information in this report will be immensely valuable to helping deal with the “what if’s, grow your business value, enjoy it more, and create more time for you and your family while creating an almost “stress-free” life with tremendous financial freedom in the future. Oh yes! NO TAXES EITHER! Visit www.yourbusinessworth.com to learn more!
[i] Paul Hood: “Buy and Sell Agreements- the last will and testament for business owners”. Paul discusses his check off list, and his “fire drill”. I am an advocate for these systems to make sure the buy and sell agreement is a perfect of a fit to the entity and owners as possible.