Being supported by the right team is so important when it comes to getting the most your of your money. You need specialized experts in all of the financial areas. Weldon Wulstein is my CFO and an extraordinary tax strategist. This year my clients have gotten back over 2 million dollars with the tax strategies that Weldon has introduced to them. Weldon is here today to talk about entities and why getting incorporated is so critical. The simplest way of explaining this is companies make money, and individuals get taxed. We will be talking about why to get incorporated. We will talk about some of the  myths like you don’t make enough to incorporate. We will touch a little on the new tax laws, but most of that will be in an upcoming episode. Today is really about how critical it is to understand and have a plan for a tax entity. You can find Weldon here: Contact Weldon at Ask Loral Show Notes [02:12] Weldon has been working in accounting since he was a bookkeeper for his parents. He started a CPA firm in 1989. [02:38] He has been creating tax strategies for oil and gas and creating entities and getting more involved with more complex tax strategies. [02:44] He owns companies and he is an entrepreneur. Weldon uses his own strategies within his own businesses. [03:19] You want your wealth team to walk the walk not just talk the talk. [03:43] Converting an S corp from an LLC. Why doesn't your current accountant suggest these money saving techniques. [04:36] Revenue versus intention. Getting a business on the side. [05:11] Sole proprietorship. You file schedule C on your personal return. You have revenues, expenses, and net income. [06:01] The net income is taxed for income and social security and medicare. That is an additional 15.3%. [06:40] Corporations and LLCs [06:56] Limited Liability Company or LLC. The reason these are set up are liability protection. [07:38] Options within an LLC. For tax purposes it can be a disregarded entity. This means it's treated the same as a sole proprietorship and everything is filed on your schedule C tax return. [08:43] If you have a partner, you can create an LLC partnership. Treated as a partnership and filing a 1065 partnership return. Gross revenue, expenses, and split income between partners. It's distributed on a K1 which is similar to a 1099. You report this on your personal return and you still have to pay that 15.3%. [10:05] You could treat the LLC as an S corp. You file an 1120F. You have to pay yourself a wage. A reasonable wage. The 15.3% social security and medicare tax is paid on that reasonable wage. Let's say you make $100,000 and pay yourself $50,000 in a wage and pull out the other $50,000 as a distribution. [11:58] Making the one election to be an S corp can save you half or more on self-employment taxes. [12:20] There is paperwork and a tax return, but most people should have a bookkeeper on their team anyway. [12:57] The importance of hiring a bookkeeper. Don't do the bookkeeping yourself at the end of the year. Getting it off of your plate is good. [14:00] You want a bookkeeping firm that understands analysis and looks at the P&L statement and reaches out to the client. This isn't typical, but being informed can help you make the right decisions. [16:14] Ask your tax preparer what their biggest client is and how many entities they have. This is to see if your tax preparer actually looks at these things. [17:05] Treat your LLC as an association or a C corp. Create a business corporation in Nevada. Treat it as an association that is taxed as a C corp. Revenue and profits get taxed for federal purposes, but there is no state tax. [18:07] This strategy can even be done in different countries. [18:32] Partnerships are a loose...

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