To put it simply, if you make less than $200,000 annually, Congress has raised your taxes.
The estimated $16.7 Billion in the United States’ new Inflation Reduction Act is coming out of the middle and lower classes’ pockets, and an estimated $14 Billion will be coming out of the pockets of those making between $200,000 and half a million dollars annually.
I’m not getting “political” here, just stating the facts as I’ve read them.
For those of us who own our own businesses, this has to be a wake up call for a variety of things:
- Moving the needle in your business to push you to the relative “safety” of being a higher net-worth individual.
- Maximizing any and all contributions to retirement accounts – definitely those utilizing Roth-based taxation schedules.
- Taking the time now to assess what safe harbors there are for you, your money, your business profits, and mitigating these taxes increases.
I’m not simply talking about taking the easy way out and spending all your money in your business, either. Yes, there are reasons you need to invest in your company, but the challenge of mitigating your tax responsibilities with business expenses (real or … “inflated”) is that you decrease your buying power and the overall net worth of the company when you do that.
In case you hadn’t noticed, in the current economy, those with cash – or access to credit – are going to be the ones who survive and thrive, regardless of how much Uncle Sam takes in taxes.
The good news?
Simple – there are a LOT of ways to legally mitigate your tax bill AND ensure your overall business profitability is still great … but you have to be ready now – not later. Unfortunately, there are going to be a lot of surprises in the months ahead, as the IRA comes online. Some quick hints right now?
Position you, your investments, and your business for continued inflation, additional rate hikes and more volatility in the market. If you’re looking to invest now, smart places are dividend stocks as well as with companies with pricing power – and healthcare stocks seem to always be a good hedge against inflation.
…And even more importantly, now that we’re into the last quarter of the year, we really should schedule time to sit down and really game plan for 2023, before it gets here.
Respond to this email or simply ring up the office to set a time to talk.
All the best-