Two Great Myths Regarding Taxes
By Scott Letourneau
Sandy Botkin is a former IRS attorney with real IRS experience, as well as a CPA. He was also a trainer of IRS attorneys. Sandy was involved is a lot of the stuff that goes on with audits and things like that. Plus, he was one of the founding members of the IRS Tax Shelter Committee, which is why the initial IRS attack on tax shelters was really because of Sandy and five other guys.
Mr. Botkin is an author of the best-selling book called Lower Your Taxes - Big-Time, and if you look at it up on Amazon.com, it is the highest-rated tax book on Amazon. You won't find anything rated higher than Lower Your Taxes - Big-Time.
Sandy immediately dove into myth number one during our interview. He stated that some business owners think, "I'm only making $20,000 or $30,000 this year. When I make $150,000, $200,000, $250,000, that's when I'll go to a tax seminar or that's when I'll learn about tax planning".
Sandy went on to explain, "That is so wrong. Because if your business generates a loss, as long as you're running your business like a business, not like a hobby, that loss can be used against any form of income you have - interest, dividends, wages, rents, pensions, anything".
He continued with, "Let's say the loss exceeds your income for the year. You can carry back all business losses up to two years, and get a refund from the federal and state government for the last two years of taxes that you pay. Or, you can carry forward all business losses up to 20 years, and offset the next 20 years of earnings".
Later he explained that the same thing holds true with S-corporation people, except there's a little more planning there because you have to have sufficient basis. But the same rules apply.
This second myth he felt was even bigger than the first one. He described it in only seven words and stated it's the number one financial planning mistake in North America. Sandy then proclaimed, "I will promise you this costs more Americans to lose money than any single financial planning mistake. And yes, you'll never read it in any book around, except in my book, Lower Your Taxes - Big-Time. That myth is; my accountant takes care of my taxes. I have a similar myth; my spouse takes care of my taxes. It can't be further from the truth".
"I sort of equate that with a doctor taking care of our body. Would't it be great if we could eat all of the cholesterol and all of the fattening foods, and once a year we go to a doctor's office and we get one of these rooter-rooter jobs, Scott?"
In less than 4 minutes Sandy had exposed two of the most dangerous myths facing business owners around the country.
Thinking you aren't ready for serious tax help and then thinking that your tax preparation specialist or spouse is going to "take care of everything for you". As you just read; Sandy looks at taxes as a financial planning tool, not just a necessary evil we all must deal with every April 15th.
About the author
Scott Letourneau is the CEO of NCP,Inc. and an authority in helping people form entities,grow their business,and protect the assets of that business. For more info contact: Scott Letourneau at 702-367-7373 or http://www.nvinc.com/save.htm from http://www.FreeArticlesAndContent.com
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