April 15th has come and gone now and most of you will be breathing sigh of relief that it is over. It is bitter sweet though because of the taxes that most of you had to pay to the IRS. All Americans should pay their fair share of taxes to a fiscally responsible government. But, if there are advantages available to reduce your tax burden then you should take advantage of them. Your fair share of taxes should be paid but not a cent more. The uninformed pay more than their fair share simply because they do not know how to take advantage of the tax law. Here are a few tax secrets that could reduce your tax burden. As always, review them with your tax professional before you implement them. The following tax secrets are listed by IRS Section numbers.

• Section 74: Achievement & Awards – You can receive achievement awards for safety and longevity. The awards have to be in writing and can be up to $1600 each. One person per year per award. You can receive the same award each year or alternate which award you receive each year. It is up to you. Issue the award in the form of a gift like a cruise or big screen TV. Gifts have no FICA and the expense is deductible to the corporation.
• Section 79: Group Term Life Insurance – You can receive up to $50,000 in life insurance coverage paid for by the corporation. The premiums are not considered income to you and it is 100% tax deductible to the corporation.
• Section 105: Health Insurance – If you already have a health insurance plan, the corporation can reimburse you for the premiums you pay. The reimbursement is not included in your income and is deductible to the corporation. There is no limit on this amount.
• Section 106: Insured Medical Plans – The corporation can already have a medical plan and can pay up to 100% of the medical plan for you. The benefit is not included in your income and is deductible to the corporation.
• Section 125: Cafeteria Plan – The corporation can provide a cafeteria plan which may include the combination of benefits from various other sections like 105, 106, 162, or 212. This plan does not affect your gross income and is 100% deductible by the corporation.
• Section 127: Educational Assistance – The corporation can grant you up to $5,250 in educational assistance and this includes graduate level courses. The allotment is not considered as part of your gross income and is deductible to the corporation.
• Section 129: Dependent Care – The corporation can provide up to $5,000 per year for dependent care and it is not considered part of your gross income. Once again, the expense is deductible by the corporation.
• Section 132 (e): De-minimis fringes – This one is open on the amount and covers products and services that have a value too small for which accounting is unreasonable like coffee, a candy bar, and other miscellaneous expenses. The frequency must be in accordance with the code.
• Section 132 (h) (s): Physical Fitness – You can have a physical fitness facility on the premises that is paid for in total by the corporation.
• Section 162: Seminar Expenses – The corporation can pay 100% of the expenses for seminars as well as the lodging required. This is not included in your gross income and is completely deductible by the corporation.
• Section 179: Depreciation – The corporation can deduct or depreciate up to $250,000 in a single year (as of 2008). Note – automobiles are not included and have to be placed on a 5 year plan.
• Section 217: Moving Expenses – The corporation can pay for moving and relocation expenses. Meals are not included but all other reasonable moving expenses are covered in full. This is 100% deductible by the corporation and not included in your gross income.
• Section 243: Dividends – If your corporation receives dividends from another corporation, you can eliminate from 79 to 100 percent of the capital gain. You are only taxed on the 20%.

There you are. Consult with your tax professional and put these IRS tax code sections to work in your favor. If you have more than one corporation, ask your tax and your legal professional about dual corporate strategy and the ability to take advantage of different fiscal year ends.

For more information, I suggest you read Incorporate and Grow Rich which can be found at Barnes and Noble or through Amazon.

We have been following The Fair Tax. After researching The Fair Tax, we believe it to be a viable reform to the current, archaic tax system we currently employ. We believe that, except for a small portion of the population, The Fair Tax will actually be beneficial to the populous at large. The Fair Tax is a consumption based retail tax that is designed to replace the current embedded (22% on average) tax burden currently included in retail items. Here is an excerpt from the AFFT website that describes a few of the high-points of The Fair Tax:

Why the FairTax?

• Every American can keep their entire paycheck.
• All federal income taxes — GONE!
• IRS and 16th Amendment — GONE!
• Completely untaxes low-income families.
• Untaxes tuition.
• Existing and future savings and investments are all tax free as the return on that savings.
• Positive impact on retirees.
• No federal taxes or compliance costs hidden in consumer prices.
• Raises the same amount of revenue as the current system with much lower marginal rates.
• Promotes economic growth and substantial wage increases for working Americans.
• Stops the export of American jobs.

Entrepreneurs are ‘can do’ people with the intestinal fortitude to get things done and have little tolerance for inefficient and/or non-functional systems. So, educate yourself about The Fair Tax and get involved with The Fair Tax movement. To learn more, please visit The Americans For Fair Taxation website.

Either enact change or sit idly by while change enacts upon you.