IRS.
Put Money Back in Your Pocket—Now
“The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.”
– Mark Twain
As a child, I was always looking for ways to make money. I started my first business venture with a buddy of mine when we were nine years old. We noticed that the marigold flowers had died and gone to seed. Those of you who aren’t green thumbs may not know this, but marigold seeds are some of the easiest things in the world to harvest. All you have to do is rip the top of the flower off and dump a whole slew of seeds into your hand. My buddy and I thought it was pretty cool how easy it was, and we came up with the brilliant idea of collecting all the seeds in the neighborhood, packaging them, and selling the seeds back to our neighbors. It worked like a charm. The same neighbors who allowed us to take the seeds from their garden in the fall bought them back from us in the spring, which proves that business isn’t always about doing something other people can’t do for themselves; it’s doing something they haven’t thought to do for themselves.
…business isn’t always about doing something other people can’t do for themselves; it’s doing something they haven’t thought to do for themselves.
And then there was the neighborhood carnival we decided to hold when we were 11 years old. We created a cupcake walk, a “fish” pond where people fished for prizes, and some other games of skill and chance. We let all of our friends know about the carnival, and we worked hard to get ready for it. In fact, looking back, it was a lot of work. When the carnival was over, we sat down to count our money. We’d made $20. Back then, that was pretty good for a couple of 11-year-olds.
Today, people come to me professionally all the time asking how they can make money. Many of them need cash right away. I’m not a believer in get-rich-quick schemes, and I steer my clients away from those types of folks. My clients are hardworking people who are looking for a better way to increase their cash flow and their wealth. I’m sure you’re looking to do the same thing. And there’s good news. There’s one way to put cash in your pocket almost immediately, as shown in Rule #3: reducing your taxes.
| RULE #3: | The fastest way to put money in your pocket is to reduce your taxes. |
Think about it. By reducing your taxes, you can immediately reduce how much money comes out of your paycheck. Or, if you’re an entrepreneur or investor, you can reduce your quarterly tax payments.
By reducing your taxes, you can immediately reduce how much money comes out of your paycheck.
And you don’t have to wait until tax time to enjoy the benefit of lower taxes. In many countries, including the United States, you can file amended returns anytime, which correct errors on returns for up to the previous three years if you learn that you paid too much in a prior year. Or you can even carry back a loss from the current year to a prior year, use the loss to offset the prior year’s income, and get a refund now.
Notice what I said: you can put money in your pocket by reducing your taxes. The operative word is “you.” You, and only you, have the power and the control over your money and your taxes. Nobody else. This includes your tax preparer and your tax advisor. They cannot reduce your taxes. They can only help equip you to do so.
You may say, “My tax advisor handles my taxes,” but that is a myth about income taxes. Your tax advisor cannot handle your taxes. They can prepare your tax returns. They can give you advice about what to do in a particular situation. Quite possibly they can even tell you some rules that will help you reduce your taxes. But they cannot take the actual steps to reduce your taxes. Only you can do that.
| Don’t Wait for Year-End to Do Tax Planning | |
| 1. | Every day you could be reducing your taxes. |
| 2. | Year-end tax planning is important but year-round tax planning is better. |
The good news is that you can reduce your taxes right now. Anybody can. And you can do it every day of the week. All you have to do to change your tax is to change your facts. There are two simple principles (represented in Rule #4) that you need to keep in mind as you consider how to reduce your taxes: Every dollar, pound, or euro you earn can increase your taxes, and every dollar, pound, or euro you spend can decrease your taxes. And every investment or business deal you do will affect your taxes for good or for ill.
All you have to do to change your tax is change your facts.
| RULE #4: | Everything you do either increases or lowers your taxes. |
You might as well learn how to make everything you do affect your taxes for good, right? Thankfully, it’s not complicated. It’s simply a matter of learning the difference between bad, good, and better income—and then learning how to turn your expenses into tax deductions. And the really cool part is that every expense has the potential to reduce your taxes—really, every expense.
And the really cool part is that every expense has the potential to reduce your taxes – really, every expense
| TAX TIP: | Eat while you work and save taxes. Business meals are a great way to spend time with employees, clients, and customers. You can discuss business and turn your meal expense into a deductible expense. |
Let’s face it, the best part of having money is spending it. But when you can not only spend your money but also decrease your taxes while doing so—well, then you’re really cooking.
I know a lot of people who love to shop for bargains and constantly look for sales and specials. It’s like a professional sport to them. You wouldn’t believe the amount of time, energy, and effort that they put into finding deals and saving money. They’re thrilled with a 20 to 30 percent discount on their purchases. But when it comes to doing their taxes, they don’t want to take the time. I don’t get it—well, actually, I do. Tax returns can be a royal pain. And most people just want to get them done and over with as quickly as possible. But what if you could get a 20 to 30 percent discount on all of your purchases any time of the year? That’s exactly what happens when you change your expenses from a personal expense to a business deduction. The government essentially pays for 20 to 30 percent of your purchase in the form of a tax deduction.
But what if you could get a 20 to 30 percent discount on all of your purchases any time of the year? That’s exactly what happens when you change your expenses from a personal expense to a business deduction.
I like to shop at Costco, a discount store that sells groceries and other everyday items. Costco also sells gasoline. People line up, sometimes waiting for long periods of time, in order to buy their gas at Costco because it’s routinely 10 percent less than other gas stations.
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