Frequently asked questions about your tax reduction strategy.

The notion that “my accountant does my taxes” may be the single biggest wealth killer in the U.S. It certainly showers the IRS with more money than any other myth. It’s like saying “my doctor takes care of my body.” Obviously your doctor can only deal with the body that you bring to him/her. If you don’t take care of your body, there isn’t much your doctor will be able to do to fix it. Similarly, if you don’t know what to tell your accountant by the first of every year, or if your documentation is a mess, or worse, nonexistent, there is very little that your accountant can do to save your hard earned money. Using both the tax strategies and the tax diary recommended here will help you to: 1) gain a daily working knowledge of the various tax laws that exist for the specific purpose of allowing you to keep more of your money; 2) properly document each legal deduction taken by you in the course of business operation; 3) provide this information to your tax attorney/accountant in a timely and organized fashion (which will in turn reduce your accounting fees); 4) ask better questions of, and thus have better communication with, your accountant; and 5) take maximum advantage of these beneficial tax laws with the singular goal of reducing your federal and state income taxes. These tax reduction strategies will bridge the gap between you and your accountant and encourage you to run your business like a business. Beyond this, you should not forget the fact that accountants have an unavoidable conflict of interest when preparing tax returns. Your accountant cannot get paid a percentage on the amount of taxes they save you — it is illegal according to their CPA requirements. They only get paid by virtue of the number of returns done — more returns equal more earnings. Thus, accountants do not have a vested interest in helping you save on your taxes. Saving your money is solely up to you!

Question #3:

But, if I learn all these tax laws myself, why would I even need an accountant?

The learning of these tax strategies is not in any way intended to help you get rid of your accountant. If you truly run your business like a bona fide business (rather than a hobby) you ought to be using an accountant. They are trained in the area of "number crunching" and in the mechanics of filling out and filing your return. Furthermore, if you prepare your own tax return, you are likely to increase your chance of being selected for an audit. The IRS just figures that if you do one return per year (your own) you don't know what you're doing — unlike an accountant who might prepare hundreds of returns. It’s not that the IRS is full of jerks, it’s just a truism that people tend to make more mathematical mistakes when they do their own, single return than accountants make preparing returns for a living.

Question #4:

Who is providing the information in this Tax Reduction Series and what is his background?

This program was developed by Sandford C. Botkin, former legal specialist in the Office of Chief Counsel for the Internal Revenue Service. Click HERE to read an excerpt of Sandy's biography.

Question #5:

What can I learn by listening to the program and personalizing my workbook?

This audio series teaches 137 tax strategies that will help you keep thousands of the dollars that you have worked so hard to earn — in your bank account where it belongs — and keep it there. Click HERE to find out some of the details on what you’ll learn.

Question #6:

What is your guarantee?

If you implement these strategies and do not save an extra $1,000 on your next tax return we will refund your purchase price in its entirety!

Question #7:

Does this Tax Reduction Series teach tax evasion?

No! It teaches you how to avoid the taxes that you have no legal obligation to pay. "The avoidance of taxes is the only intellectual pursuit that still carries any reward." — John Maynard Keynes, British Economist and Financier, 1883–1946. Tax evasion is illegal. "The difference between tax avoidance and tax evasion is the thickness of a prison wall." — Denis Healey, former British Chancellor of the Exchequer, 1917–.

Question #8:

If my business didn’t make a lot of money this year do I really need to listen to a tax seminar?

To NOT listen to this series would be a big mistake. If the taking of all legitimate deductions available to you creates a situation where your deductions exceed the income from your business, you may use this “loss” against any other form of income that you have such as wages, dividends, interest, pensions and rents. If the loss exceeds your personal income, you can use it against a spouse’s earnings if you file jointly. If the loss exceeds the combined income that both you and your spouse have earned, you can carry back these losses for two years and offset the last two years of tax that you paid into the IRS or to most state treasuries. If that doesn’t cover all your losses, you can carryover all business losses for twenty years and offset up to the next twenty years of earnings. In summary, even if you didn’t make a lot of money this year, your tax knowledge will always pay you back at some point in time.

Question #9:

Don’t you have to show a profit, or at least show a profit three out of the last five years, to benefit from these business deductions?

This is only partially true. The tax law provides that if you run your business like a business (and not like a hobby) you can use the losses as discussed above. If you are deemed to have a hobby, your losses are limited to the income from your hobby with no carry back or carry over. There is an assumption that if you don't have a profit three out of the past five years, then you don't have a "business profit-motive". However, the important point about this assumption is that it can be rebutted. There is a whole chapter in the series “Tax Strategies for Business Professionals” (click HERE) where this is discussed. In short, however, you need: 1) a five year projection of income and expenses that must project an eventual profit; 2) a marketing plan; 3) a good tax diary with good documentation; 4) evidence of working your business at least 45 minutes a day, four-to-five days a week; 5) evidence of attendance at training and consultation with experts; and 6) evidence of a change the way the activity is marketed from year-to-year, especially if no profit is shown. Thus, this presumption can be overcome with proper knowledge and some simple planning.

Question #10:

Is keeping good records really worth the time or expense?

Absolutely! Sandy Botkin's Tax Reduction Institute estimates that most people can achieve complete “audit protection” by keeping records that would take no longer than 3 minutes a week. This is about 150 minutes or about 2.5 hours a year. This may, at first, seem like a lot of time, but this would save approximately $4,000-to-$15,000 in taxes. Using the $4,000 figure and dividing by 2.5 hours this comes out to be about $1,600 per hour — tax free! In short, tax knowledge can and will benefit anyone at any income. Click HERE to learn more about why documentation is so important.

Question #11:

Where do I record my business expenses?

In a dedicated journal or log book. To learn more about our Tax Reduction Diary, and how it simplifies the process of keeping your records, click HERE. In the “Tax Strategies for Business Professionals” (click HERE) audio set, Sandy Botkin teaches you how to effectively use the Tax Reduction Diary to document your business related expenses and endeavors.

Question #12:

After I buy this Tax Reduction Series is there an expensive seminar that I need to pay for to learn the real tax saving strategies?

Absolutely not! This is it. You don't have to invest one more dime to gain deductions that are legally yours to take.

Question #13:

What if I don't have a home-based business to take advantage of these tax strategies?

The reality is that you should get one as soon as possible! In the “Tax Strategies for Business Professionals” (click HERE) audio set, Sandy Botkin will teach you the in's-and-out's of setting up a home-based business. Click HERE to find out more reasons why you should start your own home-business right away.

Question #14:

Do you have a tax strategy program for people living in Canada?

Yes! Sandy Botkin has created a Canadian version of this material. Contact us if you are interested in purchasing it.

Contact us regarding income tax reduction strategies.