Your Business: Piggy Bank or Gold Mine

Feb 11, 2013

Jack had been in business for 30 years. According to him, he went into business to “create a better life for myself and for my family”. Over the years, he had invested considerable time and effort in his business, not to mention plenty of sleepless nights worrying about employee issues, payroll, competition, the economy—you get the picture. You can understand why Jack felt entitled to take out a handsome salary. The salary was nice, but the perks were even better. He paid for as many personal expenses with corporate dollars as he could think of. The only challenge was how to book the withdrawals so he could call them a tax deduction. This was his idea of tax planning. That strategy allowed him to enjoy the perks without an increase in salary which came with additional tax. And then there were the special purchases. He saw things he wanted - cars, boats, planes, fancy vacations, vacation homes, and all sorts of goodies that he felt he “deserved”. After all, he had made many sacrifices. All he had to do was grab cash from the piggy the bank, that is, write himself a check from the corporate account.  Read more ...



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Category: Financial Planning

Joan M. Ridley, CBA, CEPA, CFP™

Joan RidleyPresident of Business Wealth Solutions, a business consulting firm.

"We have identified numerous opportunities to protect and maximize corporate wealth both now and in preparation for ownership transition. In this economy, human and intangible capital are major corporate assets. Absent proper planning, business owners could leave dollars on the table, and face the risk of actually losing their unprotected assets and hard-earned wealth."



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