BiggerPockets

Take Action Now To Keep More Of What You Earn

Make a profit on your real estate investment and the tax man has his hand out.

To keep the majority of the profits in your pocket where they belong you must have a personalized tax action plan to reduce your taxes to the minimum.

Would you automatically accept the highest bid from a contractor when another contractor could provide the same quality of work for a lower price?

Of course not!

Congress offers you the same deal. You are in control of the amount of taxes you pay.

Do nothing and willingly pay the highest amount of taxes or, do your research, find a professional (real estate) tax adviser and you will dramatically shrink the taxes you are now voluntarily overpaying.

Is it worth the effort? Here is just one example;

The maximum SE tax (15.3% - 2008) is assessed all the way up to your first $102,000.00 of income.

That means that you are forking over $15,606.00 of your hard earned bucks.

By selecting the proper business entity you can easily wipe out paying self employment tax on a big chunk of your income.

So, if $70,000 could be distributed to you without paying SE tax then you would keep in your pocket $10,710.00

This is just one of many ethical and legal strategies that exit in the tax code.

Here is another crown jewel...

As a real estate investor you may qualify to sock away a combined $102,000 in retirement monies per year for both you and your spouse.

Paying yourself first will result in shaving thousands more off of your tax bill.

In fact the right type of retirement plan will allow you to never, ever have to pay the tax man a penny no matter how much money you amass for the future.

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