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Tax Reform Bill Silver Lining: Time To Start Your Business?

by John on 12/20/2017

Tax ReformSure, this is not a great tax reform bill.  You’ve read my critiques here.

Polls say the majority of Americans are not fans.  Well, sometimes you have to know when the game is over.  That doesn’t mean you don’t compete another day.  But you also have to stop complaining and take what the law gives you — whether you like it or not.

And this bill does give — if you’re not a whiner or wound collector.

This tax reform bill could create the perfect time to start that business you’ve been dreaming of.

Remember what the 1986 Tax Reform did: it gave us new digital entrepreneurs like Steve Jobs and Bill Gates which led to the boom of the 1990s.

Here’s what Business self-help guru Jack Canfield says:

“Don’t worry about failures, worry about the chances you miss when you don’t even try.”Jack-Canfield

And now you might have less reason to be squeamish.  One of the biggest reasons is pass-through tax deductions for small businesses.  That means business owners can deduct 20% of their income before it is passed onto the owners giving them less income to tax and more to invest in the company.

Like any business you need to do your homework.

So here’s what you do.

  • Contact your accountant. Your personal tax situation will dictate what you should or shouldn’t do.  What entity you should use to start your business: LLC, S-Corp, or C-Corp.  Matt Swan, of Swan and Gardiner in Las Vegas.  has been with me for nearly 30 years.  Why?  An attorney from a major wealth management company met Matt and later told me, “That is the smartest accountant I ever met.”  Although he is not a lawyer, he has a sharp scrutiny of financial law.  He is also careful – which leads to my next point.
  • matthew-swanWait for the dust to settle on the tax law. Matt told me: “I think there is opportunity there, but I am still reading through everything.”  (Yup, an accountant who is like a lawyer and an investigative journalist.)
  • Figure out what type of business you want to launch. For instance, a freelance business might make more sense: an Uber or Lyft driver, freelance writer, Airbnb host, or distributor in a network marketing company.  These start-ups don’t require massive start-up funding.  Plus you probably won’t be making a windfall which could trigger other taxes.  Again your accountant can help you determine what works best for the venture you want.
  • Consider starting a part-time business while you continue to work full-time as an employee. You could be giving up benefits under your current employer you won’t have working solely on your own.  There is a solution for healthcare that I use for my business: it’s Liberty HealthShare which is medical cost sharing.

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