Improving Your Personal Finances

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Improving Your Personal Finances

When I started taking a harder look at my financial situation, I could tell that there were quite a few things that needed to change. It seemed like no matter how hard I tried, I was having problems budgeting my money. After carefully evaluating my finances, I knew that there were a few things that I could do to improve things. It was a really difficult thing for me to realize, but after I started making some changes, things started coming together. Check out this blog for more information about finance, money, and learning how to budget for the first time.

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How To Reduce Your Tax Bill When Selling Your Business

You've spent years building a successful business that now brings in a decent amount of revenue every month. Good for you! But now the day has come that you are looking at retirement, or maybe you just want to move on to a new challenge. If this sounds like your situation, you might be looking to sell your business to another company or person in exchange for one last big windfall on your way out the door. This all sounds great, until you realize that you might owe a significant amount of taxes on the sale. If you want to keep your tax bill down and maximize your profits during this major transaction, here are some tips that might help.

Reduce Your Company's Value By Selling Off Inventory and Equipment Separately

When you sell a business, the IRS might try to collect a capital gains tax on the overall value of your business now compared to what it was when it first launched. If you've been in business for years, this could be a significant amount. But you do have options available to you when it's time to report the sale. One popular tactic is to sell off your company's inventory or equipment separately from the actual sale of the business Start the process of getting rid of all of your tangible stuff a few months before you actually want to close up shop. You can then put many of these items down as sales in the same way you would for whatever product or service your company sells. 

Don't Forget About Depreciation

The building your company exists in will likely suffer wear and tear over time. The computer you bought for $2000 one year ago is no longer worth that much because it is now used and one year old. If you must include some equipment, inventory, or land within the actual sale of the business, don't forget to account for the depreciation of these assets over time. You can even get your business professionally surveyed by an expert to help you calculate the total amount of deprecation. This will reduce the total value of your business and may result in a slightly lower tax bill.

Offset with a New Business

If you are selling your old business so you can launch a new one, you are in luck. You'll want to talk to an expert about this, but in general, the IRS will allow you to offset some of your capital gains tax with the expenses of starting up your new business. Just make sure you launch your new business the same year you sold your old one, and then the gains from the sale and the start-up expenses will both show up on the same tax report. Contact a consultant on selling business and how to minimize tax in order to come up with a strategy.