TaxLoopholes Blog

If you have a business and don’t take credit cards, you are missing a big source of immediate cash. In fact, you can count on your sales jumping by about 40% by taking credit cards. But, you can also run into major issues with merchant account processors, if you’re not careful. In this week’s brand new Online Workshop, you’ll learn about the 5 biggest ways credit card processors can take advantage of you - and how to stop them!

Who doesn’t want to pay less tax? Well, I guess there are a few reasons to NOT pay less tax. You might need to show a certain amount of income to qualify for a full doc loan (which is about the only kind you can get today). You might want to have a higher earned income so you can contribute more to your pension plan (realizing this is the most asset protected structure going right now). You might just not want to mess with tax planning and be happy you have enough money to live. (Although if that were the case, I don’t think you’d be at this site.)

For years I’ve talked about the importance of having a tax strategy. It’s a proactive, future-based plan that puts you in the driver’s seat. With enough planning, you can plan WHEN you pay your taxes and HOW MUCH you pay in taxes.

Let me say that again: YOU can choose when and how much you pay in taxes.

But there is a secret, you have to plan in advance. In fact, years in advance to get down to the low tax rates like 16% that Warren Buffet (billionaire) pays. By the way, his secretary makes $60,000 per year and she pays 30%. The difference? A tax strategy.

One of the many challenges for real estate investors in 2008 was the IRS’s ill-timed audit offensive against anyone with real estate losses. Early in 2008, we started getting rumors of audit teams targeting real estate investors who reported losses from real estate. They started in California, but then when they saw just how many returns they could extract gold from, they expanded the program.

There are two strategies you MUST use in 2009 to protect your wealth.

First: Protect. Protect your income and cash from too much tax. Protect your business and assets from judgments and unscrupulous people. A lot of other people have lost this past year. And unfortunately, some of them have decided you’re the one who should pay for the losses they had. Protect what you have.

We’re almost done with 2008. A lot of investors who were in real estate are going to soon be grappling with one big question: How do I write this all off?

If your real estate went down in value and nothing else happened - you didn’t sell, lose the house or otherwise change your ownership - then life goes on. The investment is reported on your tax return just as it always has been.

If your investments went down in value and you didn’t sell them, then same story. The losses are unrealized (ie, you didn’t sell them or close your position) and so there is no gain/loss to report.

If you’ve ever had the pleasure of dealing with Morgan Smith or Aaron Van Trojen with respect to real estate financing, you know how intelligent and knowledgeable they are. If you haven’t, now is the time to find out! Listen to Part 2 of a 5-part series we’re running featuring a fascinating discussion that Morgan and Aaron led at a recent seminar. Learn the state of the mortgage industry from two key insiders.

What do you do when things go wrong? Face it, in today’s economic climate there are a lot of people who have lot a lost of net worth, and maybe lost their houses, savings accounts, investments and businesses as well. If you’re one of them, then this is a very real question.

There are two predominant approaches. First, you could get lost in the depression. You could blame yourself or others. “It was all that partner of mine’s fault.” Or, maybe you justify: “It’s the market, everybody lost.”

I spent a big chunk of my adult life in Reno, NV and so it’s a little nostalgic for me to watch cases that involve taxes and gambling. (Only we called it gaming back in the day.) You can offset gambling losses against gambling wins. And if you qualify as a professional gambler, you have a business with expenses (including losses) just like any other business. Those are two rules that are then subject to a lot of interpretation. A recent court case shot down one attempt at redefining how to apply them.

A couple of months ago I offered FREE! CPA Tax Reviews of past year’s tax returns. That offer is still open. I’ll give you more information on how you can get a FREE! review at the end of this blog post.