Politics at its best; Tax Savings is in; we need Distressed Community tax incentives; and the Taxman86 Roars
1. The President Got What He Wanted and Now He Will Compromise
The President and many others want an increase in the Minimum Wage, effective April 1, 2000, to be increased over two years instead of three, and the Republicans and others wanted some tax relief. Now everyone got what they wanted, and will give up some they do not want. That is politics.
The tax benefits are significant, and with other items coming down the pipe it appears that Year 2000 will be significant, so long as you live long enough to see it. Most provisions are effective beginning next year. However, if you have incorporated and have a C Corp. and a fiscal year of 01/31 you can take advantage this year by deferring income to 2001 as we have said many times.
2. Pension Plans are important and they just got better
One of the areas that created some controversy with the Clinton Administration was the size of the pension reforms, incentives if you will, that are contained in the House and Senate Small Business Tax Cut Bills, especially for those over 50. This will be a big Tax Savings Opportunity for home-based business owners, e-lancers if you will, a.k.a. the baby boomers. Retirement Age is now 62 at full benefits, with $160,000 annual benefit, plus inflation, the target. Moreover, the total cost of that pension benefit can be prefunded, if you so desire.
Based on our understanding of the cost of fully funded $160,000 annual benefits at age 62, we are talking about an investment amount of $1M to $1.5M, which may be borrowed back, if planned properly. Thus our mantra, tax savings begins at home, is now in full force.
3. Distressed Communities Need a Lift
We have walked many tough streets, and yesterday we did it again in downtown Los Angeles, call it a ghost town if you will.
Building after building [many are historic] stand empty above the first floor. We have seen that in many cities, and what a waste.
Help may be coming, and that is in the Distressed Communities Provisions. If the tax proposals, as we understand them, make it to the finish line [the Wall Street Journal said yesterday the President and the Speaker are working together] IRC Section 179 deductions will be increased to $100,000 per year for qualified businesses in Federal Empowerment/Renewal Zones, Tax Credits for rehab expenses to old buildings, and the possibility of paying no tax on the sale of a qualified business, as defined.
What does this all mean? It means live/work lofts, which are very popular in some cities [San Diego, San Francisco, New York City, Boston and Chicago] will become the models for revitalizing downtown Los Angeles, and other cities that have not seen the message. It also means that the inner cities can come alive with the arts and entertainment that everyone loves and enjoys.
Today for $1500 plus the cost of an upscale digital camera, another $600 you can make sixty  second movies and put them on your Web Site [We hope the people at Bigstep.com hear that]. One sixty  second spot on a web page can tell a great story, more is less. The younger employees in the family home-based business can now have some real fun. And, if you have the creative one check out ICast.com or AtomicFilms.com, or Ifilm.com to name a few. They are looking for sixty  second and up online entertainment.
4. The Taxman86 Roars
It is always a pleasure to show off our family run and operated home-based business, and this week [March 7, 2000] we made it in the S.F. Gate. Wait till we get our Digital Movie Camera.
'...Congratulations on your featured profile in the SF Gate article! Is that the on-line version of a print story from the Chronicle? (The copyright and 'Page D3' would seem to indicate so.)
Publicity like that is great for both your traffic and your reputation. Congratulations, again. Especially being profiled as a home-based business couple. Folks need to understand that the web opens up opportunities for working couples to be together 24/7, too. That's the 'cup half full' side of the 'tied to your web business 24/7' dynamic that we hear so much about...' TRUE IT IS!!!!
Jim Schneider, LL.M.
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.