YEAR-END TAX PLANNING STRATEGIES YOU NEED CALLING ALL ENTREPRENEURS ROSS BRUNSON, CONTRIBUTING WRITER
Health Savings Account (HSA) — If you qualify for an HSA, don’t miss out. It’s an often underutilized tax advantage, with a triple tax benefit — tax-deductible money going in, tax-free growth, and tax-free withdrawals for medical expenses. You don’t have to spend the money each year and you can invest it and let it grow. Think of it like a special medical 401(k). Indexed Universal Life (IUL) — Properly structured, maximum-funded Indexed Universal Life is a powerful vehicle for tax-free growth, access to tax-free income, and ultimately, an income-tax-free transfer of wealth to your heirs. Here’s why this matters for entrepreneurs: You’re building an asset that you can actually use during your lifetime, kind of a tax-free trust fund for you and your business. Think of tax planning like a chess game. It’s not just about this year’s taxes, but building long-term wealth while legally reducing your tax burden. Be sure to work with tax and IUL experts to optimize your strategies and ensure you and your family can enjoy the fruits of your labor for generations to come. INCREASED FOUNDATIONAL WEALTH This is all part of strengthening your Foundational Dimension, something Doug talks a lot about in his book, “Entitlement Abolition.” For a truly full life, Doug encourages us to realize that our foundational assets often require just as much attention — if not more — than our financial assets. He also reminds us that our duty isn’t just to our own well-being, but also that of our family. We can’t just take for granted that our children will be empowered to lead full, productive lives. As we look to the coming new year, we can take the opportunity over the holidays to set goals and put plans in place to nurture our individual and family’s Foundational Dimension wealth. This can help replace any anxieties or fears with clarity, balance, focus, and confidence for a brighter future.
The holidays are a time for gathering with loved ones and, if you’re an entrepreneur, smart year-end tax planning. This often comes down to making informed decisions in the time we have left in the year. Some of these moves take time to set up, so you may not be able to make all of them happen this year, but starting now will get you ready for next year. QUICK ASSESSMENT To start, estimate your total income for the year. Include everything — your main business revenue, any side projects, investments, rental income, etc. This number determines two things: • Which tax bracket you’ll land in • Which strategies make sense for your situation Someone making $200,000 needs different strategies than someone making $2 million. If you’re having a particularly good year, READ THESE 2 BOOKS FOR HELPFUL INSIGHTS TIRED OF FEELING ANXIOUS AND FEARFUL? Think about the times when you’ve felt anxious, guilty, fearful, or sad. Perhaps you’ve tried to avoid or suppress these emotions, but you’re still human, right? We all experience these feelings, and while many of us struggle to confront these emotions, trying to control them may only make matters worse. Instead, as Doug discusses in his article on Pg. 1, work to understand yourself as you really are, and then look to improve by focusing on something you can control — your priorities and your actions.
you might need to act more aggressively with tax planning.
If you’re right on the edge of a tax bracket, there are things you can do to stay in a lower bracket. Or if you know next year will be bigger, you might want to position some income differently.
LOOK AT THESE 3 CATEGORIES Real Estate — Real estate can
provide significant tax advantages for entrepreneurs. You get depreciation benefits, passive income, and long-term appreciation. If you can’t make it happen by year-end, that’s okay, but it should be first on your list for next year’s planning. Keep in mind: Where you hold your real estate matters for tax purposes. You don’t want to just buy property in your personal name. You’ll want to set up the right entity structure. This usually means having an LLC to hold the property (owned by your family limited partnership), and making sure you have the right insurance coverage. BETTER MENTAL HEALTH Mark Freeman’s mental health book, “You Are Not a Rock,” aims to teach readers how to build emotional fitness and overcome their struggles and hardships with different techniques. The book is divided into two sections titled, “The Basics” and “The Transformation.” The first half is about learning basic mental health skills and unlearning ways of thinking about mental health that cause us challenges. The second half focuses on how to create and build what you want to see in your life instead of trying to avoid and control what you can’t see. Freeman cautions that strengthening your mental health is like working on your physical health — you won’t necessarily see instant results. But as you read, you’ll learn how to recognize your problems, practice mindfulness, prioritize and follow your values, and understand your fears.
There are a couple books that may help you on your journey toward better well-being.
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