Aaron Hillman is a Certified Financial Planner at Skyline Financial Northwest. Aaron attended the One year graduate program in Portland for financial planning. Prior joining to Skyline, Aaron worked as an Electrical-Mechanical Engineer for 13 years.
Small businesses always look to improve their profitability, employee retention and to minimize their tax exposure. This can be attained based on thorough evaluation which could be centered around mainly three areas.
Business Entity Selection: Firstly we have to know what their sectors are, should they be formed as LOC (Line Of Credit), S-Corp, C-Corp, and the decision on which form to take and how to be taxed on is very important. This will show up as a big difference in their long term tax picture.
Flow of the Business: Assessing the population of the business, ownership distributed pattern, payment flow, panning of the employee distribution chart and other factors. This will help set up a retirement plan that benefits everybody, and particularly the owner. Retirement plans always maximize the owner’s tax savings and allows them to put a lot of money to work in the market in a tax free account.
An example to state is the 41k, which allows employees to save and invest for their own retirement by offering an investment of choice as an addition to retirement packages.
Another area to look into is by knowing their personal situation and lining up with the company to maximize tax efficiency to reduce risk both for the business and also to the owners if their business were to have problems. This helps in building a rich relationship as people save a lot of money on taxes as they protect themselves for a lot easier and less stressful life.