Tax Busters for Business Owners

FORT MYERS, FL, October 02, 2010 (Press-News.org) The passage of sweeping financial regulation, unprecedented federal debt & spending, inevitable tax hikes, and 2,500 pages of healthcare has many small to medium sized business owners very concerned about the impact all of this will have on their business and their tax brackets.

Even now with relatively low tax rates, and in states like Florida, where there is no state income tax, business owners will loose roughly 40% of earnings to the government. And the loss will be further compounded if they die with assets that are not properly owned or without proper life insurance coverage. The loss can be significantly more; not only 40% to income tax but another 45% to estate tax as well.

"It can be an enormous shock for people who have not planned for it," said John Heck, President of Adagio Financial Group, Inc., a Fort Myers based Registered Investment Advisor. "Taxes will become even more of an issue to business owners as the impact of all the financial and healthcare legislation is transposed into higher taxation."

Tax liability to the business and the business owner can be lessened through estate and pension planning. In addition to qualified plans, the Section 79 Plan has become a favorite largely due to its tax favorable treatment by the IRS.

Heck uses a Tax-Free Retirement concept and says "a Section 79 Plan is like Tax-Free Retirement on turbo charge. When I tell clients they can obtain a tax deduction for their C Corporation, a tax exclusion for themselves with minimal cost for the rank and file employees, they want to know more."

Creditor protection features are an added benefit as well. "Both life insurance and pension plans are excellent vehicles for asset protection," Heck said. More government spending equals higher taxation. The higher taxes become the more necessary this planning becomes for businesses and their owners.

This is developing into a very specialized segment of financial planning. Heck said, "the financial landscape is changing in our country. It is not enough to just be looking at qualified pension plans any more. Business owners should seek the guidance of an advisor who understands both pension plans and Section 79 plans and has the resources to analyze the tax implications of both."

Contact:
John J. Heck, Adagio Financial Group, Inc.
239-872-8593
jheck@adagiofinancial.com

Adagio Financial Group, Inc. works with it's Business and Individual clients to acquire, manage, protect and transfer wealth.