At some point, (depending on the type of business you run), you might purchase real estate or expensive equipment.
Maybe it’s a fleet of lawnmowers.
You might need some specialized equipment in a factory setting.
Or it could be commercial ovens or freezers.
But did you know that establishing a separate business entity could help you save money on your tax bill and boost your income?
Why a second business entity could save you $5-10K a year
That’s not a typo.
With the right tax strategy, you can set yourself up to save a bundle of money this year.
If you’ve never been an active participant in a tax strategy, you might think this isn’t necessary, or is too much work.
Trust the process.
You can increase your deductions and reduce your tax bill by establishing separate business entities that will own the property or equipment, and then lease it back to the business for use.
4 benefits to establishing a separate entity
- You create an additional layer of liability protection for the assets.
- You can draw income from the assets with rent payments or leases.
- You can refinance your properties and assets to take advantage of any equity you’ve earned.
- You can gift or sell properties without creating a business interest for the gift recipient or buyer.