I was under the impression that it was comparing W-2 to 1099 employees, not business owners who are paying themselves.

As a W-2 employee moving to 1099, I'd need a lot of tax savings to make up for the other benefits I receive as an employee rather than being paid as a contractor.

I guess my main point was it's disingenuous to state there is nothing you can do because of payroll withholding. That's not the reason there is a difference. I'm all for abolishing withholding and making people pay quarterly estimates, but that's a politics question and not a math one. The math works out the same no matter when you pay your estimated tax.

AmericanWealth said:

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BQ you have any income you want.

But W-2 does allow for any tax mitigation to be applied as the taxes are automatically deducted.

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Taxes are deducted based on what you enter on you W-4 and tell your employer to withhold. That's easy to change. It doesn't have any effect on what deductions and credits you have available when you do your tax return. So what are you talking about?

aggiebq03+ said:

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AmericanWealth said:

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BQ you have any income you want.

But W-2 does allow for any tax mitigation to be applied as the taxes are automatically deducted.

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Taxes are deducted based on what you enter on you W-4 and tell your employer to withhold. That's easy to change. It doesn't have any effect on what deductions and credits you have available when you do your tax return. So what are you talking about?

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Just because you adjust your tax withholding doesn't make you any less liable. That income is still reported to your SS# and the taxes are due whether you withhold are not.

Look we aren't a tax deduction, tips and tricks company. We deal with high level tax strategies and coordinate that effort with a clients advisors.

I would refer you to your local H&R Block for your line of questioning.

Following…

AmericanWealth said:

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aggiebq03+ said:

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AmericanWealth said:

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BQ you have any income you want.

But W-2 does allow for any tax mitigation to be applied as the taxes are automatically deducted.

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Just because you adjust your tax withholding doesn't make you any less liable. That income is still reported to your SS# and the taxes are due whether you withhold are not.

Look we aren't a tax deduction, tips and tricks company. We deal with high level tax strategies and coordinate that effort with a clients advisors.

I would refer you to your local H&R Block for your line of questioning.

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If you are a W-2 only individual and do not pay any sort of estimated taxes, then this thread would be interesting, but not informative for managing your tax strategy.

I would be very hesitant to entrust my tax planning to anything other than a well experienced CPA tax firm. The types of firms you get referred to by your business and / or banking relationships.

There is a bit of bad information on this thread that I would also qualify my statements that you must seek advice of a professional and not of a message board "professional".

American Wealth's post remind me of posts from Strategy on here. Not a personal attack, but as others have suggested, you could provide examples. For instance, I have a 412 (e) (3) plan. Mine involves an annuity vs life insurance, but it does allow for higher than usual deferment of taxes. 3 professionals are involved in this for me... the CPA tax firm, my financial advisor, and the broker for the plan. They are all independent of the other.

Many people overpay in taxes if they are not properly advised. That's a shame. However, being overly aggressive or being wooed by a "tax strategy" firm will likely cost you in the long run. You CANNOT patent a tax strategy (that I am aware of) under the rule of "prior art".

I think the term tax strategy is entirely misleading. You can seek professional advice on tax efficiencies and options. But seeking tax avoidance will result in a negative outcome if the IRS comes knocking.

OP, based on your numbers you should find a competent CPA tax firm to work in tandem with a financial advisor to develop the best path for you.

I'll just say that fancy industry jargon and a very vague, wide-ranging explanation of your value is not a great way to attract the ideal client that you say you're looking for

As mentioned previously our firm has licensed Enrolled Agents , CPA's, tax resolutions specialists, and bookkeepers who coordinate and sign off on any tax strategy implemented for a client.
If you had engaged with us and discussed your specific situation they would be at your disposal.

But you haven't.

There is a difference between tax avoidance and tax evasion.

Our clients are proactive in protecting their wealth and exploring every option that exists.

Just an in football, they are constantly evaluating their roster to ensure the highest grade performance for their success.
Pretending your current team could never improve or get any better isn't a winning formula in sports or in business.

If you are paying any amount of tax as a business owner or investor and assuming there isn't more to be done or other solutions available is an extremely costly mindset.
It is always a healthy exercise to see what other professionals can deliver.

We do this upon our first conversation, and also shed light on possibilities on our webinars (with examples) which I would encourage you to attend.
Our next one will be this Tuesday @12:15-12:45. Topic: How to Avoid Taxes in your Retirement Accounts.

Finally, our services extend well beyond tax.
As a family office we use a holistic advisor approach to coordinate a protection plan which complements the client's revenue plan.
This creates a very efficient and focused operation for a much better outcome, especially when high level strategies are applied.

I'm glad you see the value of having a team work together.

We have helped multiple Aggies save millions working this way and are happy to continue to do so.

cjsag94 said:

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I hope you listen to your clients better than you listen to everything you are hearing on here. You are very stubborn and defensive in this forum.. And very "salesy". The tactic, at I've said, feels like a timeshare pitch... "Just get them in the door and I'll close them!".

So, if someone listens to your webinar, I guess they could then come in here and answer on your behalf some of the questions everyone is asking?

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Thanks CJS!

Its unfortunate some posters opt to make judgements without engaging.

We are on here to provide solutions to support Aggies in accomplishing their financial goals.
Much faster and with much better results.
We're not interested in arguing the legitimacy of our firm.

We educate and welcome conversation. If from that time together improvements can be made, great, we will discuss it.

Its really that simple.

Happy to walk through questions and examples. The challenge is that it's not efficient, especially if sharing docs or having multiple staff members on a call.

Our preference is use Zoom for that purpose.

dlp3719 said:

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You did not mention QBI. If you are not aware of QBI, then you may be missing a huge tax deduction for small businesses.

https://www.google.com/amp/s/ttlc.intuit.com/community/credits-and-deductions/help/what-is-the-qualified-business-income-qbi-deduction/00/27455/amp

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This is interesting to me but I'm absolutely out if my depth here. My wife started a business this year and id love to figure out how to minimize any and all taxes but I read that link but its all Greek to me.

And my last post here, we have a family friend who works in wealth management for UBS. Not an Ag, but a good guy. He is located in SE Houston area. Id be happy to pass along his info if anyone is interested. My portfolio doesn't come close to cracking the size of the ones he manages so no direct experience, but I would certainly have full confidence in him.

Sea Speed said:

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I think what seems sketchy is throwing out the appeal to the right. I am far from a Democrat but constantly saying that biden wants to get his hands on your money is a big turn off to me. Unfortunately at this rate I'll never amass enough wealth to need a service like this so I guess it doesn't matter.

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Speed, wish it wasn't true. The assault on retirement accounts has never been seen before, but its happening now. Plus, the hidden taxes in Medicare that reduce your Social Security.

The current administration is coming after every dollar possible to fund their agenda.

We will be talking about how to prevent it tomorrow.

https://texags.com/forums/57/topics/3236187

Thanks for everyone's input and I did not want this thread devolving into an argument. I will definitely seek professional input soon but it looks like a great strategy is to use 300k to convert all of my retirement into a Roth.

So if that 1M goes to 10M in 25 years, I will have tax free money to use. Seems like the cleanest to avoid back withdrawal tax. Just need a form some type of trusts with this to avoid estate tax.

For those saying seek professional advice - I'm in a similar spot, paying hundreds of thousands in taxes a year.

Can some of you please recommend the professionals you use?

EvenPar said:

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For those saying seek professional advice - I'm in a similar spot, paying hundreds of thousands in taxes a year.

Can some of you please recommend the professionals you use?

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Even, our core focus is using tax strategy and estate planning proactively as a business strategy.

Our last Aggie clients had an annual income of $1.3MM with a tax bill of $600k. We reduced that by $300k.

They are now investing the $300k within a tax deferred vehicle that pays for all of their children's expenses (private school, funding 529, cars, clothes, lessons, gifts, etc) with pre-tax dollars.

This move also increased their personal cash flow and put them in control to throttle their tax exposure & tax bracket.

For 2021 they will save even more, and again reinvest the savings with their financial advisor or whatever investment they chose.

They are also leveraged to withstand any new tax code changes.

Will be happy to share more about what our tax and legal professionals can do for you.

EvenPar said:

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For those saying seek professional advice - I'm in a similar spot, paying hundreds of thousands in taxes a year.

Can some of you please recommend the professionals you use?

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How have I missed this username before? Love it. Reminds me of another favorite username I haven't seen in ages: sixiron

I guess that depends. If you view allowing sponsors on this site to reflect an endorsement of sorts by Texags as well, then I'd say at the very least you guys need to make sure they aren't just paying for a sponsorship so they can openly solicit new customers on this forum. That is what AWS does.. in that they provide no details but jump at every chance to solicit a discussion or webinar attendance.

The other alternative, as you hear on the radio, is to take the stance that Texags isn't responsible for the content of it's subscribers or its sponsor. If that is the case, you take their sponsorship money and let them thrive or die by their methods.

What is your opinion/stance Logan?

Nailed it.

Stive said:

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Is this the first green post in B&I history?!?!?

If it's not it's been a LONG time since staff has weighed in on this page.

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I was hoping it was Liucci selecting a very obscure thread to shoot down the Jimbo to LSU rumors.