OP
cowboydoc
Super Member
- Joined
- Dec 23, 2000
- Messages
- 6,725
- Tractor
- JD 8320 MFWD, JD 6415 MFWD, FEL, and cab, John Deere MFWD 4600, John Deere 4020, John Deere 4430, John Deere 455 mower, Deutz, and Gehl 4610 perkins skidsteer
Snowman,
I assure you that it is all completely legal. I have had three different attorneys and two accountants look at this for me. Actually it was one of my friends who is a lawyer recommend this to me. It is basically a tool that was created for the rich, not me, and the insurance industry. The accountant that does this for us basically took the same principle and used it for small businesses. It is very complicated. Shoot I learn new stuff about it all the time. Between the time that I started this barn and put our place up for sale and was worried about having to pay taxes on this place I learned that it is not technically even ours it's the corporations so we aren't subject to personal taxes on it. Our annual report, has to be filed every year, and tax return is about 100 pages every year. There is a slug of regulations that you have to follow. We have to file two returns as well. One for the ESOP and one for the regular corporation. The retirement is also set up very complicated. It is basically a life insurance that is a retirement package, that's why it is able to be funded so highly. But you have control over where the dollars go. I don't even begin to know it all but I know that it is legal. In Clinton's last year in office he tryed to do away with this type of entity. He was lobbyed against heavily by the insurance industry and some others and it didn't get passed. In a sense we are set up like any employee owned company. Company's all the time give their employees houses, cars, insurance, etc. as part of their employee package. This is basically what our company does for it's employees. It just happens that my wife and I are the executive officers. We have guidelines that we have to follow as to what we can do. As long as we stay within those guidelines we are ok. Now the nice thing about being a corporation is that you can have diversified holdings. Every year on my ranch I have to file reports on what was done. If we are not profitable for five years I have to come up with a new business plan and outline how I plan to move the business into the black. This year I was profitable with the ranch. With the profits the accountant and I outlined a new plan for the next five years that included this new place and the purchase of the new mares. I assure what we do is nothing different than any other corporation is america. We are just taking advantage of all the rules that the big boys use. Any small business can do it. It just takes alot of documentation and a smart accountant and on the short end it is much more expensive to do but your tax savings outweigh the cost. Believe me we do still pay plenty of taxes. But when you are self-employed and over 50 cents of every dollar goes to Uncle Sam you look for ways to even that out a little bit.
I assure you that it is all completely legal. I have had three different attorneys and two accountants look at this for me. Actually it was one of my friends who is a lawyer recommend this to me. It is basically a tool that was created for the rich, not me, and the insurance industry. The accountant that does this for us basically took the same principle and used it for small businesses. It is very complicated. Shoot I learn new stuff about it all the time. Between the time that I started this barn and put our place up for sale and was worried about having to pay taxes on this place I learned that it is not technically even ours it's the corporations so we aren't subject to personal taxes on it. Our annual report, has to be filed every year, and tax return is about 100 pages every year. There is a slug of regulations that you have to follow. We have to file two returns as well. One for the ESOP and one for the regular corporation. The retirement is also set up very complicated. It is basically a life insurance that is a retirement package, that's why it is able to be funded so highly. But you have control over where the dollars go. I don't even begin to know it all but I know that it is legal. In Clinton's last year in office he tryed to do away with this type of entity. He was lobbyed against heavily by the insurance industry and some others and it didn't get passed. In a sense we are set up like any employee owned company. Company's all the time give their employees houses, cars, insurance, etc. as part of their employee package. This is basically what our company does for it's employees. It just happens that my wife and I are the executive officers. We have guidelines that we have to follow as to what we can do. As long as we stay within those guidelines we are ok. Now the nice thing about being a corporation is that you can have diversified holdings. Every year on my ranch I have to file reports on what was done. If we are not profitable for five years I have to come up with a new business plan and outline how I plan to move the business into the black. This year I was profitable with the ranch. With the profits the accountant and I outlined a new plan for the next five years that included this new place and the purchase of the new mares. I assure what we do is nothing different than any other corporation is america. We are just taking advantage of all the rules that the big boys use. Any small business can do it. It just takes alot of documentation and a smart accountant and on the short end it is much more expensive to do but your tax savings outweigh the cost. Believe me we do still pay plenty of taxes. But when you are self-employed and over 50 cents of every dollar goes to Uncle Sam you look for ways to even that out a little bit.
