Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Defer profits from new business
Old 02-11-2008, 10:17 AM   #1
Recycles dryer sheets
Join Date: Oct 2005
Posts: 113
Defer profits from new business

I'm about 3 years away from ER. Once I leave my day job, I'll have a 3.5 year delay until my pension kicks in. While I have some funds set aside to get me through this window, relying completely on them would mean a very frugal lifestyle while waiting on the pension. So, I'm interested in starting a consulting business now, and building it slowly while I'm still working. I've no significant startup or ongoing costs, and have clients lined up, so it would be profitable immediately.

What I'd like to do - defer taking any profits as income from the consulting business until I ER. Not only will I be in the lowest federal tax bracket then, but I'll be in a state with a significantly smaller tax burden as well (personal and business.)

I realize this is a pretty general question, but I've no idea if such a things is even possible. If so, any general pointers/resources anyone can provide that I can research? If not, any suggestions on how to reduce the tax hit I'll take now, while being in a high federal/state tax bracket?

Da Nag is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-11-2008, 11:25 AM   #2
Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
1. Talk to a CPA

2. I would think you could set up a corp and keep profits in the business until you want to take the money as income or a dividend. For your needs, an "S" corp would probably make more sense.
Marquette is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Business Week's inspiring business speak for private equity execs Nords Other topics 24 10-31-2007 08:35 PM
Taking profits in VG funds... acg FIRE and Money 5 12-05-2006 07:31 PM
Small Business Revenues and Profits BabyApe Other topics 1 02-14-2006 07:37 PM
Big Oil Profits renferme FIRE and Money 28 11-15-2005 09:26 AM
Dollar rises, profits fall...? Caroline FIRE and Money 2 06-14-2005 04:57 PM


All times are GMT -6. The time now is 05:33 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.