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Business owners savings "tricks"
Old 08-08-2014, 03:22 PM   #1
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Business owners savings "tricks"

I dont see much good advice for business owners. So let me ask: if you own a business, what is some of the smartest moves you are making to save for retirement faster. For posterity, you should probably share the business structure you use ( llc,llp, c-corp, s-corp, unincorporated).

Myself, being able to company match 25% of my total salary (and my wife's) and send that money to the 401k's prior to any tax, even FICA, plus knowing that i can withdrawal it without ever paying FICA, well, that was a revelation when I learned it. Not to mention this lowers my overall income and tax burden too. Ridiculous.


I have an scorp, so i can recognize a profit, at personal income rates, and that money is now available to me avoiding FICA taxes too.




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Old 08-08-2014, 04:00 PM   #2
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One little thing you can do is not have a credit card in the name of your business. You don't get any of the protections you get with a personal credit card. I only know that because I listen to Clark Howard, not because I'm a business owner, hehe.
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Old 08-08-2014, 04:29 PM   #3
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Originally Posted by sengsational View Post
One little thing you can do is not have a credit card in the name of your business. You don't get any of the protections you get with a personal credit card. I only know that because I listen to Clark Howard, not because I'm a business owner, hehe.
Disagree with this because if you mix personal with business, you may lose the personal protection afforded by your business type.

My tip is get and use a business credit card that offers rewards or cash back. If adds up very quickly, and at least currently, the rewards are not taxable.
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Old 08-08-2014, 04:43 PM   #4
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My rental business is a bit different than a 'regular' business. I do not have to pay FICA, at all. Just like a stock dividend. Much of my income is sheltered by depreciation. I still get business deductions like any other business.

I just save like a rascal in my after tax accounts.
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Old 08-08-2014, 05:28 PM   #5
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Disagree with this because if you mix personal with business, you may lose the personal protection afforded by your business type.

My tip is get and use a business credit card that offers rewards or cash back. If adds up very quickly, and at least currently, the rewards are not taxable.

Yup, i use a 2% back cap one card. Nothing better charging the client 4k for travel and knowing i get a 2% tip. :-)


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Business owners savings "tricks"
Old 08-08-2014, 05:34 PM   #6
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Business owners savings "tricks"

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My rental business is a bit different than a 'regular' business. I do not have to pay FICA, at all. Just like a stock dividend. Much of my income is sheltered by depreciation. I still get business deductions like any other business.

I just save like a rascal in my after tax accounts.

Yes, because you're not paying a wage to yourself. You also cant leverage retirement accounts. But the money is nearly perpetually tax free, so it's still good.


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Old 08-08-2014, 06:47 PM   #7
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Sole Proprietor. I added an Amex simplycash business card to get 5% back on wireless and office supply stores.
Have been adding to a SEP-IRA for a long time also.
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Old 08-08-2014, 07:35 PM   #8
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I added an Amex simplycash business card to get 5% back on wireless and office supply stores.
For a while US Bank had a card where I got 5% back from home improvement stores. I was doing a remodel at the time. I got back about $3K.

They also had a bonus reward, if you redeem $100 or more, you got back an extra $25 gift card, so $125. It was unlimited. I always redeemed in $100 increments, and got back about 15+ of those $25 cards.

It was a grand scheme, but they switched the program. Probably because of me...
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Old 08-08-2014, 08:01 PM   #9
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Originally Posted by dallas27 View Post
I dont see much good advice for business owners. . . .
Myself, being able to company match 25% of my total salary (and my wife's) and send that money to the 401k's prior to any tax, even FICA, plus knowing that i can withdrawal it without ever paying FICA, well, that was a revelation when I learned it. Not to mention this lowers my overall income and tax burden too. Ridiculous.
Search around this board a bit, there's plenty of good info for business owners. We've covered Solo 401(K)s quite a few times. E.g. :
No tax if all my business income goes to 401K?
Solo 401(k) - Withdrawals at 55
Self-employed 401-K Questions
Individual 401-K

etc.
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Old 08-09-2014, 06:55 AM   #10
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A good source of Tax Advice for Indies can be found here.

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Over the course of her career, June has seen independent professionals grow both in numbers 40 million is a current IRS estimate and in economic importance. A champion of their interests, June has little patience for the way that the self-employed sector has been misadvised.

Indies are neglected, she says.

The tax laws are written as if the self-employed dont exist, and the people who are supposed to look out for their interests give them harmful advice if its not plain wrong, its inappropriate for the level at which theyre operating. Lawyers fancy telling them to incorporate which does not save them taxes, costs more in legal and accounting fees and unnecessarily complicates their lives. Tax consultants tell them not to deduct an office in the home because its a red flag for an IRS investigation another uninformed and expensive bit of advice. Its time to get real about indies.
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Old 08-09-2014, 07:50 AM   #11
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Disagree with this because if you mix personal with business, you may lose the personal protection afforded by your business type.

My tip is get and use a business credit card that offers rewards or cash back. If adds up very quickly, and at least currently, the rewards are not taxable.
I didn't say to replace a business card with a personal one, just that if someone gets your business card number and charges something, it is likely you will never get your money back.
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Old 08-09-2014, 01:37 PM   #12
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I didn't say to replace a business card with a personal one, just that if someone gets your business card number and charges something, it is likely you will never get your money back.

Money back? It's credit, they didn't take you money.


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Old 08-09-2014, 01:45 PM   #13
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Money back? It's credit, they didn't take you money.
I think what sengsational is saying (not to put words in his/her mouth) is that the Card company treats Business Credit Cards like checks/debit cards/cash. The advantage to a Credit Card is that in a dispute the Card Company is on your side while with those other types of transactions (checks/debit cards/cash) you are on your own. This is the reason that I funnel ALL of our purchases through a Credit Card... well, that and the rebates.

I am curious if Business Cards are different than Personal ones in that respect.
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